Exhibit 10.32.1
SUPPLEMENT AGREEMENT
LEASED FIBER PATHWAYS
This Supplemental Agreement ("Agreement") dated this 26 day of September, 1997,
is made and entered into by and between TENNESSEE VALLEY AUTHORITY, a corporate
agency and instrumentality of the United States ("TVA"), and DELTACOM, INC.
(formerly CONSOLIDATED COMMUNICATIONS CORPORATION prior to merger into DeltaCom,
Inc., its wholly owned subsidiary, on December 31, 1993) ("DeltaCom"), having
its corporate headquarters at 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxx 00000.
RECITALS
WHEREAS TVA and Consolidated Communications Corporation ("CCC") have previously
entered into an agreement dated March 6, 1990, and identified as TV-79915T (the
"TV-79915T Agreement"), enabling TVA and CCC to construct, operate, maintain,
and replace a fiber optic cable system; and
WHEREAS CCC, an Alabama corporation, has merged into Delta Communications, Inc.,
an Alabama corporation and one of CCC's wholly owned subsidiaries, effective
December 31, 1993; and
WHEREAS Delta Communications, Inc., changed its name to "DeltaCom, Inc.,"
simultaneously with said merger effective December 31, 1993; and
WHEREAS TVA has reserve capacity within an interconnected fiber system. Subject
to regulatory approval, TVA desires to lease to DeltaCom and DeltaCom desires to
lease from TVA a portion of the optical pathways through the adjoining fiber
system ("Leased Fiber Pathways") on the terms and conditions set forth in this
Agreement; and
WHEREAS DeltaCom has assumed all rights and obligations of CCC, effective
December 31, 1993.
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
Section 1. ASSUMPTION BY DELTACOM. DeltaCom hereby assumes all rights and
---------
obligations of CCC provided for in the TV-79915T Agreement, effective December
31, 1993. The foregoing notwithstanding, all payments made to or by CCC or
DeltaCom under the TV 79915T Agreement up to the effective date of this
Agreement reduce, to the extent actually made, TVA's obligation to pay CCC or
CCC's obligation to pay TVA, as appropriate, sums under the TV-79915T Agreement.
Section 2. CERTAIN DEFINITIONS. As used in this Agreement:
---------
"Acceptance Date" means the date upon which the Leased Fiber Pathways are
accepted by DeltaCom in accordance with Section 6.
"Acceptance Test" has the meaning set forth in Section 5.
"Affiliate," with respect to any person, means any person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with the person specified as a result of ownership of
more than 50 percent of the voting capital stock or other voting securities of
such person.
"Associate," with respect to any person, means any corporation or other business
organization of which such person is an officer or partner or is the beneficial
owner, directly or indirectly, of 10 percent or more of any class of equity
security, any trust or estate in which such person has a substantial beneficial
interest or as to which such person serves as a trustee or in a similar capacity
and any relative or spouse of such person or any relative of such spouse, who
has the same home as such person.
"Availability Date" means the date on which TVA provides DeltaCom access to the
Leased Fiber Pathways.
"Effective Date" has the meaning set forth in Section 3.
"Event of Default" has the meaning set forth in Section 18.
"Government Authority" means any court, tribunal, authority, agency, commission,
official or instrumentality of the United States (but not TVA), any foreign
country or any domestic or foreign state, county, city or other political
subdivision.
"Leased Fiber Pathways" has the meaning set forth in Section 4.
"Rent" has the meaning set forth in Section 8.
"Service Affecting Outage" means any interruption or reduction in use of Leased
Fiber Pathways in use by DeltaCom that materially affects DeltaCom's ability to
conduct its business on the Leased Fiber Pathways.
"Term" has the meaning set forth in Section 7.
Section 3. CONDITION PRECEDENT. All obligations of the parties hereto are
---------
subject to and conditioned on the receipt of all governmental and regulatory
approvals required for the execution, delivery, and performance of this
Agreement. Each party agrees to use its best efforts to obtain all such
approvals applicable to the execution, delivery, and performance of this
Agreement as promptly as practicable. The date on which such condition is
satisfied (or waived, as the case may be) is referred to in this Agreement as
the "Effective Date."
2
Section 4. LEASED FIBER PATHWAYS AND POLE ATTACHMENTS.
---------
a. TVA hereby leases to DeltaCom TWO optical fiber cable pathways that
originate at TVA'S ARAB 161-KV SUBSTATION and terminate at TVA's HUNTSVILLE 161-
KV SUBSTATION, a distance of 27 V&H miles (the "Leased Fiber Pathways").
(Vertical and Horizontal grid coordinates are used to calculate the "airline
distance" between any two rate centers.)
b. For the purpose of this Agreement, TVA grants to DeltaCom the right to
attach, at its expense, an interconnecting fiber cable from DeltaCom's Arab, AL
Communication Hub, currently located at 000 Xxxxx Xxxx Xxxxxx in Arab, Alabama,
along TVA's Xxxx-Xxxx Xxxxxxxx 00-xx Transmission Line to TVA's Arab 161kV
Substation along the route and in accordance with the standards described in
Exhibit A (the "Interconnecting Fiber Cable"). DeltaCom will supply the fiber
cable for the Interconnecting Fiber Cable. Title to the optical fiber cable to
be installed along the Leased Fiber Pathways (except that portion of fiber cable
between 000 Xxxxx Xxxx Xxxxxx in Arab, Alabama, and the substation located at
12th Avenue, N.E. in Arab, Alabama) shall pass to TVA upon delivery to and
acceptance by TVA. TVA grants to DeltaCom an irrevocable right to use all but
two optical fibers in the fiber cable along the Interconnecting Fiber Cable.
The remaining two optical fibers shall be TVA Capacity. All maintenance,
operation or restoral of the Interconnecting Fiber Cable shall be at DeltaCom's
expense. Procedures for the maintenance, operation, and restoral for the fiber
cable along the Leased Fiber Pathways shall be those set out in the TV-79915T
Agreement.
Section 5. ACCEPTANCE TEST. TVA shall notify DeltaCom of the Availability
---------
Date. Promptly after receipt of such notice, but not later than 15 days after
--------------------------------
the notice, TVA and DeltaCom shall jointly conduct a test ("Acceptance Test") of
----------
the Leased Fiber Pathways to determine that the fiber pathways meet the
specifications described in Exhibit "A" of the TV-79915T Agreement. Within 10
calendar days after completion of the Acceptance Test, DeltaCom shall give TVA
written notice of any failure of the Leased Fiber Pathways to satisfy the
Acceptance Test. If the Leased Fiber Pathways fail to satisfy the Acceptance
Test, TVA shall use its best efforts to promptly correct such failure or provide
alternate fiber pathways originating and terminating at the same locations as
described in Section 4 above, whereupon DeltaCom and TVA shall jointly conduct
another Acceptance Test. The procedure set forth in this section shall be
repeated until DeltaCom accepts the Leased Fiber Pathways pursuant to Section 6.
If, after the use of the best efforts of the parties, no fiber pathways pass the
Acceptance Test, this Agreement shall terminate with no liability of one party
to the other.
Section 6. ACCEPTANCE BY DELTACOM. DeltaCom shall be deemed to have accepted
---------
that portion of the Leased Fiber Pathways upon which the first of the following
occur:
3
(a) satisfaction of the Acceptance Test for some or all of the Leased Fiber
Pathways pursuant to Section 5;
(b) DeltaCom uses some or all of the Leased Fiber Pathways for any of the
purposes described in or permitted by Section 9.
(c) DeltaCom acknowledges acceptance of some or all of the Leased Fiber
Pathways in writing; or
(d) DeltaCom fails to give TVA written notice of any failure of the Leased
Fiber Pathways to satisfy any Acceptance Test on or before the tenth (10th) day
after completion of such Acceptance Test.
For purposes of this Agreement, the first date on which any of the events
described in Sections 6(a), 6(b), 6(c), or 6(d) occurs shall be the Acceptance
Date.
Section 7. TERM. The original term of this Agreement (the "Original Term")
---------
shall commence on the Acceptance Date and end on the date DeltaCom's original
term expires under the TV-79915T Agreement. So long as no Event of Default
exists with respect to DeltaCom's obligations under this Agreement, DeltaCom
shall have the right and option to extend the term of this Agreement from the
date upon which it would otherwise expire for up to four (4) consecutive periods
of five (5) years each. Such options to extend the Agreement shall be deemed to
have been exercised by DeltaCom upon written notice to TVA no later than six (6)
months or earlier than twelve (12) months prior to the expiration of the
Original Term or of any Renewal Period, as applicable. TVA will give DeltaCom
notice that this Agreement is about to expire during the first ninety (90) days
of the twelve (12)-month period immediately preceding the expiration of the
initial term or of any Renewal Period; provided, however, that in the event TVA
fails to provide this notice and DeltaCom in turn fails to notify TVA with
respect to the Renewal Period, DeltaCom shall have sixty (60) days from learning
of its failure to provide the foregoing written notice to notify TVA with
respect to the Renewal Period. The Original Term and any Renewal Terms are
collectively referred to herein as the "Term."
Section 8. RENT
---------
(a) RENT. Commencing on the Acceptance Date, DeltaCom shall pay to TVA
annual rent ("Rent") (i) during the Original Term equal to $75.00 per fiber
------
pathway per month, per V&H mile of the Leased Fiber Pathways, payable on the
Acceptance Date and upon the anniversary of the Acceptance Date each year of the
--------------------------------------------------------------------------------
Original Term thereafter, at the address specified in Section 22 in lawful money
------------------------
of the United States by electronic fund transfer, provided; however, that no
Rent shall be due and payable until the Acceptance Date. If the termination
date of this Agreement is other than the last day before the anniversary of the
Acceptance Date, the Rent to be paid for such partial year shall be prorated by
months. Rent for
4
Renewal Terms shall be negotiated to reflect the market value for the terms of
the renewal.
(b) INTEREST. Rent shall become overdue if not paid within 30 days after
the date on which it became due ("Overdue Rent"). Overdue Rent shall begin to
accrue interest daily beginning on the 31st day after it became due until paid
at an annual rate equal to the prime rate of interest published in the Wall
Street Journal, as the same shall be published on the day on which the Overdue
Rent begins to accrue interest (or, if the prime rate of interest is not
published on such date, the next business day thereafter on which the prime rate
of interest is published in the Wall Street Journal), plus three percent.
(c) NO SETOFF. The obligation to pay Rent is independent of any other
covenant or obligation in this Agreement. DeltaCom shall not be entitled to any
setoff or counterclaim against the payments owed hereunder for any act or
omission (excluding the failure to provide the Leased Fiber Pathways as herein
agreed) of or on account of any claim DeltaCom may have against TVA, unless
agreed to by TVA in writing.
(d) RENEGOTIATION OF RENT DeltaCom and TVA agree that the market for
leased fibers may increase or decrease such that the rental amount no longer
reflects the market value of the rent of the Leased Fiber Pathways.
Accordingly, after the expiration of the Original Term either party on 180 days
written notice to the other can request a renegotiation of the rental amounts in
Section 8(a). The renegotiation would cover the rental amounts for the then
current Renewal Term and any remaining Renewal Terms. The Rent for the fiber
pathways may also be renegotiated as part of a future fiber project between TVA
and DeltaCom. In the event the parties are unable to agree on a reasonable
rental amount after ninety (90) days, the disagreement shall be resolved in
accordance with the procedure established in Section 19.
Section 9. USE OF LEASED FIBER PATHWAYS. DeltaCom shall be entitled to use the
---------
Leased Fiber Pathways for any lawful purpose, including subleasing or providing
telecommunications services to other persons.
Section 10. TITLE. Title to the Leased Fiber Pathways shall at all times
----------
remain with TVA exclusively.
Section 11. ACCESS TO LEASED FIBER PATHWAYS. DeltaCom shall be permitted
----------
access to TVA's Arab 161-kV and Huntsville 161-kV substations with TVA's
oversight and prior approval for (a) connection and maintenance of DeltaCom's
use of the Leased Fiber Pathways, (b) conducting the Acceptance Test and the
correction of any failures to satisfy the Acceptance Test pursuant to Section 5,
(c) any inspection, test, repair, replacement, operation, or other activities
involving or affecting DeltaCom's use of the Leased Fiber Pathways, and (d) the
removal of
5
DeltaCom's connecting fibers after the expiration of the Term or upon earlier
termination of this Agreement or DeltaCom's right of possession as provided in
Section 20, hereto.
Section 12. OBLIGATIONS OF TVA
----------
(a) MAINTENANCE. TVA shall be responsible, at its sole cost and expense,
for the operation, maintenance, and repair of the physical components of the
Leased Fiber Pathways, including all necessary splicing. Without limiting the
generality of the foregoing, TVA shall comply with the maintenance standards and
be responsible for the maintenance procedures set forth in Exhibit A of this
Agreement.
(b) PROPERTY TAXES. TVA shall be responsible for the cost of all
applicable property taxes or payments in lieu of taxes that are based upon the
installation cost, depreciated cost, or fair market value of the physical
property that comprise the fiber system in which the Leased Fiber Pathways are
placed. DeltaCom shall be responsible for paying all taxes that are assessed or
in any way based upon the value, the amount, or the revenue derived from the
communications that occur along or within the Leased Fiber Pathways.
Section 13. OBLIGATIONS OF DELTACOM
----------
(a) EXPENSES. DeltaCom shall be responsible for, and shall bear all costs
associated with the furnishing, installation, testing, operation, use,
maintenance, repair, replacement, and other aspects of all electronics,
communications and other equipment, facilities, and items required for
DeltaCom's interconnection with or use of the Leased Fiber Pathways. DeltaCom
shall not be responsible for any costs and expenses incurred by TVA in
connection with the fiber system containing the Leased Fiber Pathways,
including, but not limited to, the rerouting of the fiber system (if in its
discretion, TVA ever deems rerouting the fiber system to be necessary or
appropriate), except as expressly provided in this Agreement or as otherwise
agreed to by and between TVA and DeltaCom.
(b) REGULATORY COMPLIANCE. DeltaCom shall, at its sole expense, make all
required filings and registrations with, and shall obtain all required permits,
licenses, approvals, certificates, franchises, consents, and authorizations
from, the Federal Communications Commission, the Alabama Public Service
Commission, and each other applicable Governmental Authority in connection with
its use of the Leased Fiber Pathways, and shall at all times hold, operate and
use the Leased Fiber Pathways in accordance with all applicable Federal, state,
local, and foreign laws, statutes, rules, regulations, ordinances, and orders.
6
Section 14. INTERRUPTION OF USE.
----------
(a) Except as provided in clause (b) herein, TVA shall not be liable to
DeltaCom for any interruption or reduction in the use of the Leased Fiber
Pathways by DeltaCom or any other person caused, in whole or in part, by:
(i) acts of God or any other cause or force beyond the reasonable
control of TVA, including but not limited to, flood, earthquake, storm,
lightning, fire, strike, epidemic, war, riot, civil disturbance, labor
disturbance, sabotage, power outages, accidents, explosions, shortages of
equipment or supplies, or unavailability of transportation; or
(ii) construction, maintenance, repairs, replacements, installation of
equipment, investigations, and inspections of or on the fiber system
performed (A) by or at the direction of DeltaCom or (B) to the extent
reasonably necessary, by or on behalf of TVA; provided, however, that TVA
or its agents shall inform its line crews periodically of the location of,
and shall use its best efforts to cause such crews to avoid damage to, the
Leased Fiber Pathways.
(b) Notwithstanding clause (a), TVA shall use its reasonable best efforts
to restore or assist in restoring DeltaCom's use of the Leased Fiber Pathways as
promptly as practicable. Without limiting the effect or generality of the
foregoing, if the interruption or reduction in use is a Service Affecting
Outage, TVA will use its reasonable best efforts to restore DeltaCom's use of
the Leased Fiber Pathways within six (6) hours after receipt of notice from
DeltaCom of the Service Affecting Outage.
(c) In addition, each party shall use its best efforts to give the other
party advance notice of work that may cause an interruption or reduction in the
other party's use of its portion of the fiber system containing the Leased Fiber
Pathways and, in the event of such interruption or reduction, to restore the
other party's use of such portion of the fiber system containing the Leased
Fiber Pathways as promptly as practicable. Except to the extent such action is
delayed by an event set forth in clause (a)(i) or (a)(ii) above, all
maintenance, repairs, replacement, installation of equipment, investigations
and/or inspections shall be performed in accordance with a mutually agreed upon
schedule, so as to minimize inconvenience to both parties hereto.
(d) DeltaCom hereby agrees to provide (i) written or oral notice to TVA of
the number of Leased Fiber Pathways in use by DeltaCom within five (5) business
days after some or all of the Leased Fiber Pathways are first placed in use and
(ii) written or oral notice of any subsequent change in the number of Leased
Fiber Pathways in use by DeltaCom within five (5) business days after any such
change.
7
Section 15. LIABILITY; INDEMNIFICATION.
----------
(a) DeltaCom and TVA each hereby release the other and shall indemnify and
save harmless the other from any and all claims, demands, or causes of action
for personal injuries, property damage, or loss of life or property, including
the fiber optic ground wire in which the Leased Fiber Pathways are located, and
all reasonable costs and expenses, including reasonable legal fees, incurred in
connection with actions arising out of or in any way connected with their
respective activities regarding the use, operation, maintenance, repair, defect,
or failure of the fiber optic ground wire in which the Leased Fiber Pathways are
located, except for those personal injuries, property damage, or loss of life or
property caused or occasioned solely by the other's negligence.
(b) DeltaCom shall indemnify and hold TVA harmless from and against any and
all liability, losses, damages, claims, or causes of action and expenses
connected therewith (including reasonable attorney's fees) asserted by them or
any of their customers by reason of any outage or interruption in the
telecommunication services provided to DeltaCom's customers via the Leased Fiber
Pathways, including any failure to transmit messages accurately, even if such
outage, interruption, or failure was occasioned in whole or in part by TVA, its
agents, or employees; provided, however, that such indemnity shall not extend to
willful misconduct or gross negligence.
(c) Neither party shall be liable to the other party for consequential or
incidental damages, including lost profits.
(d) The obligations of the respective parties under this Section 15 shall
survive the Expiration Date in respect to any occurrences within the term.
Section 16. INSURANCE. Promptly after the Effective Date, DeltaCom shall
----------
present to TVA certificates of insurance, reasonably acceptable to TVA,
evidencing the following insurance coverage:
(a) worker's compensation insurance coverage complying with the laws of the
State of Alabama and employers liability insurance with limits of not less than
$500,000 per occurrence;
(b) comprehensive, general liability insurance coverage, with broad form
endorsement attached, for a combined bodily injury and property damage limit of
not less than $1,000,000 per occurrence, which coverage shall include blanket
contractual, products and completed operations liability coverage;
(c) comprehensive automobile liability insurance coverage, with a combined
bodily injury and property damage limit of not less than $1,000,000 per
occurrence, which coverage shall include all owned, non-owned, and hired
vehicles; and
8
(d) umbrella liability insurance coverage applying in excess of the limits
set forth in clauses (b) and (c) above, subject to a limit of not less than
$1,000,000.
All such coverage shall provide for not less than thirty (30) days prior written
notice or cancellation or material change. DeltaCom shall maintain such
coverage in force at all times during the term of this Agreement. All such
policies of insurance (other than policies with respect to the insurance
coverage set forth in clause (a) above) shall include TVA, the United States, to
the extent and only to the extent that TVA holds real property in the name of
the United States, and their employees as additional insureds with respect to
the activities of DeltaCom. Moreover, all such policies of insurance (other
than policies with respect to the insurance coverage set forth in clause (a)
above) shall include a waiver of subrogation of claims against TVA, the United
States, to the extent and only to the extent that TVA holds real property in the
name of the United States, and their employees.
Section 17. TERMINATION.
----------
(a) EVENTS OF TERMINATION. This Agreement and the lease created hereby may
be terminated and abandoned:
(i) upon the mutual written agreement of DeltaCom and TVA;
(ii) by either party, upon written notice to the other, in the event
that an injunction or other final order or judgment is entered in any
lawsuit or regulatory proceeding restraining TVA's performance under this
Agreement declaring or otherwise rendering TVA's performance unlawful or
compelling removal, discontinuation or divestiture of all or part or the
fiber system and such injunction, order or judgment has not been vacated,
reversed or stayed within thirty (30) days from the date of entry thereof;
(iii) by either party, if any of the transactions contemplated by
this Agreement are finally disapproved of by any Government Authority whose
approval is required to consummate such transactions.
(b) NOTICE. The power of termination provided for in this Section 17 may
be exercised only by written notice signed by the party exercising such power
and forwarded to the other party in accordance with the terms of Section 22.
(c) EFFECT OF TERMINATION. Upon the occurrence of an event of termination
set forth in Section 17(a), except as provided below, this Agreement shall be
terminated and neither party nor any of its directors, officers, stockholders,
Affiliates, general partners, or limited partners shall have any continuing
liability to the other party or its directors, officers, stockholders,
Affiliates, general partners, or limited partners under this Agreement;
provided, however, that obligations of the parties under Section 15 of this
Agreement, and the obligations of DeltaCom to pay Rent accrued through the
effective date of such termination, shall remain in full
9
force and effect, and no termination pursuant to this Section 17 shall entitle
DeltaCom to the return of any Rent theretofore paid or afford to DeltaCom any
defense to the payment of Rent then due and payable.
(d) TERMINATION OF THE TV-79915T AGREEMENT. In the event the TV-79915T
Agreement terminates, this Agreement shall automatically terminate, except as
provided in Section 7.
Section 18. DEFAULT.
----------
(a) Default.
(i) An event of default ("Event of Default") by DeltaCom shall exist
if any one or more of the following events shall occur and be continuing:
(A) DeltaCom shall admit in writing its inability to pay its
debts as such debts become due;
(B) DeltaCom shall (1) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee, or
liquidator of itself or of all or a substantial part of its property,
(2) make a general assignment for the benefit of its creditors, (3)
commence a voluntary case under the U.S. Bankruptcy Code, (4) file a
petition seeking to take advantage of any other law relating to the
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (5) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the U.S. Bankruptcy Code, or
(6) take any action for the purpose of effecting any of the foregoing;
(C) a proceeding or case shall be commenced, without the
application or consent of DeltaCom, in any court of competent
jurisdiction, seeking (1) its liquidation reorganization, dissolution
or winding-up, or the composition or readjustment of its debts, (2)
the appointment of a trustee, receiver, custodian, liquidator or the
like of DeltaCom or of all or any substantial part of its assets, or
(3) similar relief in respect of DeltaCom under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, which is not dismissed within ninety (90) days
thereafter;
(D) DeltaCom shall fail to perform any material obligation under
this Agreement (other than the obligation to pay Rent) and such
failure shall continue for a period of thirty (30) days following
written notice from TVA to DeltaCom specifying such nonperformance;
provided that if such failure cannot be cured within such thirty (30)
day period with the exercise of reasonable due diligence, TVA shall
10
grant a reasonable additional period of time in which to cure such
failure;
(E) DeltaCom shall fail or refuse to remit to TVA within sixty
(60) days following the due date thereof, any Rent then due and
payable; or
(F) except as provided in Section 9 hereof, DeltaCom shall cause
or permit the encumbrance of all or any part of its interest in this
Agreement or the Leased Fiber Pathways, without the prior written
consent of TVA; PROVIDED, that nothing herein shall be construed to
require TVA to give consent to such encumbrance or to prevent TVA from
withholding its consent to such encumbrance for any or no reason
relating to the Leased Files Pathways or for any or no reasonable
reason relating to all or any part of DeltaCom's interest in this
Agreement.
(ii) (Currently, TVA is not a debtor entitled to seek protection under
bankruptcy law. Any reference to bankruptcy law as it relates to TVA in
this section is a recognition that laws change over time.) An Event of
Default by TVA shall exist if any one or more of the following events shall
occur and be continuing:
(A) TVA shall (1) apply for or consent to the appointment of, or
the taking of, possession by a receiver, custodian, trustee, or
liquidator of itself or of all or a substantial part of its property,
(2) make a general assignment for the benefit of its creditors, (3)
commence a voluntary case under the U.S. Bankruptcy Code, (4) file a
petition seeking to take advantage of any other law relating to the
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (5) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the U.S. Bankruptcy Code, or
(6) take any action for the purpose of effecting any of the foregoing;
(B) a proceeding or case shall be commenced, without the
application or consent of, in any court of competent jurisdiction,
seeking (1) its liquidation, reorganization, dissolution or winding-up
or the composition or readjustment of its debts, (2) the appointment
of a trustee, receiver, custodian, liquidator or the like of TVA or of
all or any substantial part of its assets, or (3) similar relief in
respect of TVA under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts,
which is not dismissed within ninety (90) days thereafter;
11
(C) TVA shall fail to perform any material obligation under this
Agreement (other than restoring use by DeltaCom of the Leased Fiber
Pathways as provided in Section 14 of this Agreement) and such failure
shall continue for a period of thirty (30) days following written
notice from DeltaCom specifying such nonperformance; provided, that if
such failure cannot be cured within such thirty (30)-day period with
the exercise of reasonable due diligence, DeltaCom shall grant a
reasonable additional period of time in which to cure such failure; or
(D) an interruption of the Leased Fiber Pathways by DeltaCom that
continues for a period of thirty (30) days following written notice
from DeltaCom to TVA of the interruption or reduction in use, provided
that if use of the Leased Fiber Pathways is not restored within such
thirty (30) day period with the exercise of reasonable due diligence,
DeltaCom shall grant a reasonable additional period of time in which
to restore use of the Leased Fiber Pathways.
(b) RIGHTS UPON DEFAULT.
(i) Upon the occurrence of an Event of Default by DeltaCom, subject to
the provisions of Section 21 below and Section 18 (a)(i)(A) through (F)
above, TVA shall be entitled to immediate and exclusive possession, use,
and control of the Leased Fiber Pathways and may forthwith terminate this
Agreement by written notice to DeltaCom. Upon the occurrence of an Event
of Default, DeltaCom's right to possession and use of the Leased Fiber
Pathways by any lawful means shall terminate, without demand or notice of
any kind to DeltaCom, except as may be required by law, and without
terminating this Agreement or the lease created hereby;
(ii) Upon the occurrence of an Event of Default by TVA, subject to the
provisions of Section 21 below and Section 18 (a)(ii)(A) through (D) above,
DeltaCom shall be entitled to terminate this Agreement by written notice to
TVA.
Section 19. REMEDIES. TVA and DeltaCom may xxx from time to time to recover
----------
any amounts due or enforce any rights under this Agreement, and no suit or
recovery shall bar any subsequent action brought for any amount not theretofore
reduced to judgment in favor of TVA or DeltaCom, as the case may be. Except as
otherwise provided by law, no repossession of the Leased Fiber Pathways by TVA
shall be construed as an election by TVA to terminate this Agreement unless a
written notice of such intention is given by TVA to DeltaCom pursuant to Section
23; and no receipt of monies by TVA from DeltaCom shall reinstate this Agreement
or DeltaCom's right of possession. All remedies provided in this Agreement are
cumulative and not exclusive and are in addition to any remedies available at
law
12
or in equity. All remedies may be exercised and enforced concurrently or
sequentially as often as occasion therefor may arise.
Section 20. EXPIRATION-SURRENDER. Within fifteen (15) calendar days after the
----------
expiration of the Term as provided in Section 7 or within fifteen ( 15) calendar
days after earlier termination of this Agreement or DeltaCom's right of
possession, DeltaCom shall remove its personal property, equipment, and trade
fixtures, perform all restoration made necessary by the removal of such items,
and peacefully yield up the Leased Fiber Pathways to TVA in good order, repair,
and condition, except to the extent that the order, repair, and condition of the
Leased Fiber Pathways are not DeltaCom's obligation. If DeltaCom fails or
refuses to remove any of its personal property, equipment and trade fixtures,
DeltaCom shall be conclusively presumed to have abandoned the same, and title
shall thereupon pass to TVA without setoff, credit, allowance or other cost to
TVA, and TVA may, at its sole option, accept title to such property by written
notice thereof to DeltaCom or, at DeltaCom's expense, may remove the same or any
part thereof in any manner TVA may choose, and store, destroy, or otherwise
dispose of the same without incurring any liability to DeltaCom or any other
person. Except as specified in Section 7, no notice shall be required from
either party to terminate the lease created by this Agreement upon the
expiration of the Term as provided in Section 7.
Section 21. SUBORDINATION. DeltaCom acknowledges and agrees that the lease
----------
created by this Agreement is and shall be subject and subordinate to all
mortgages which may now or hereafter affect the fiber system, all permits,
licenses, rights-of-way and easements covering the route of the fiber system,
and all leases and points of presence in the fiber system, and shall execute
such instruments as may reasonably be requested to confirm such subordination.
TVA hereby agrees to give written notice to DeltaCom of any claim to the fiber
system that affects the right or ability of DeltaCom to use the Leased Fiber
Pathways as contemplated herein. If, as a result of any such claim, DeltaCom
must abandon use of the Leased Fiber Pathways within nine (9) months after
receipt of such notice, TVA hereby agrees to pay DeltaCom an amount equal to the
product of the Rent multiplied by the number of months by which the period of
notice of any such claim that was provided to DeltaCom by TVA is less than nine
(9) months.
Section 22. NOTICES. Any written notice, demand, or request required or
----------
authorized by this Agreement shall be deemed properly given if delivered by
certified mail, return receipt requested, or by hand or overnight courier, with
delivery acknowledged, as follows:
13
if to TVA, to:
Vice President, Marketing - HR1 3K-NST
Tennessee Valley Authority
XX Xxx 000000
Xxxxxxxxx, XX 00000-0000
Fax: (000-000-0000)
with copy to:
General Counsel
Tennessee Valley Authority
000 Xxxx Xxxxxx Xxxx Xxxxx - XX 00X
Xxxxxxxxx, XX 00000
Fax: (000-000-0000)
(b) if to DeltaCom, to:
Vice President, Network Engineering
and Support
DeltaCom, Inc.
000 Xxxx 0xx Xxxxxx
X.X. Xxx 000
Xxxx Xxxxx, XX 00000
Fax: (000) 000-0000
with copy to:
Assistant General Counsel
DeltaCom, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
provided, that emergency notices of impairments in service may be given by
telephone by TVA to the person designated by DeltaCom and by DeltaCom to the
person designated by TVA. All such telephone notices shall be confirmed in
writing. The designation of the person to be notified, or the address or
telephone number of such person, may be changed at any time and from time to
time, by notice in accordance with this Section 22.
Section 23. ASSIGNMENT--PARTIES IN INTEREST. This Agreement shall be binding
----------
upon and inure solely to the benefit of the parties hereto and their successors,
legal representatives and assigns, but is not assignable in whole or in part by
either party without the prior written consent of the other party, which consent
shall not
14
be unreasonably withheld. Except as expressly provided in Section 15, nothing in
this Agreement express or implied is intended to confer upon any person not a
party hereto any rights or remedies of any nature whatsoever under or by reason
of this Agreement. Notwithstanding the foregoing, either party may assign its
rights and obligations hereunder to any entity controlled by, controlling, or
under common control with such party or to any successor by merger or
consolidation, or to any purchasers of all or substantially all of the assets or
business of such party provided the assignee agrees in writing to the assumption
of all rights and obligations of the assignor of this Agreement. In addition,
either party may assign and pledge its interest under this Agreement as security
for indebtedness without the other party's written consent; provided, however,
that such an assignment or pledge shall not relieve the assignor from any of its
obligations under this Agreement or increase or decrease the rights and
obligations of the non-assigning party under this Agreement.
Section 24. ENTIRE AGREEMENT--AMENDMENT. This Agreement constitutes the entire
----------
agreement between the parties hereto with respect to the use by DeltaCom of the
Leased Fiber Pathways and cancels and supersedes all prior agreements,
proposals, negotiations, representations, discussions, and correspondence,
either written or oral, with respect to the subject matter hereof. No
alteration, changes, or amendments to this Agreement shall be effective unless
in writing and signed by both parties hereto.
Section 25. WAVIER. No waiver of a breach of any provision of this Agreement
----------
shall constitute a waiver of any other breach or of the future performance of
such provision.
Section 26. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
----------
IN ACCORDANCE WITH THE FEDERAL LAWS OF THE UNITED STATES OR, IF THE FEDERAL LAWS
OF THE UNITED STATES DOES NOT PROVIDE A RULE FOR DECISION, THE LAWS OF TENNESSEE
WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE OF LAW. ANY ACTION
TO ENFORCE THIS AGREEMENT SHALL BE BROUGHT IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE OR THE NORTHERN DISTRICT OF ALABAMA.
Section 27. SEVERABILITY. If any one or more of the provisions contained in
----------
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein unless any party would thereby be deprived of material benefit.
Section 28. NO WARRANTIES. TVA MAKES NO WARRANTY OF ANY KIND WHATSOEVER
----------
CONCERNING THE LEASED FIBER PATHWAYS. ALL
15
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
HEREBY DISCLAIMED BY TVA AND ARE EXCLUDED FROM THIS AGREEMENT.
Section 29. NO BROKERS. Each party represents and warrants to the other that
----------
no broker or finder is entitled to any brokerage, finder's or other fee or
commission in connection with this Agreement and the transaction contemplated
hereby based upon arrangements made by or on behalf of such party.
Section 30. INTERPRETATION. Unless otherwise explicitly stated, all references
----------
to sections or subsections refer to sections or subsections of this Agreement.
The terms "hereof," "hereto," "hereby," and terms of similar import refer to
this Agreement. Whenever the words "include," "includes," or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Section, subsection, and other headings are for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
TENNESSEE VALLEY AUTHORITY DELTACOM, INC.
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxxxx
------------------------ --------------------------
Name Xxxx X. Xxxxxxx Name Xxxxxxx X. Xxxxxxx
------------------------ --------------------------
Title Executive Vice President Title Sr. Vice President and CFO
------------------------ --------------------------
Date September 26, 1997 Date September 17, 1997
------------------------ --------------------------
16
