MASTER TERMS AND CONDITIONS
CAPACITY LICENSE AGREEMENT
DATED AS OF __________, 199_
These MASTER TERMS AND CONDITIONS (the "Terms") dated as of _______, 1998
shall govern each CAPACITY LICENSE AGREEMENT (each, an "Agreement") entered into
between an affiliated local cable system operator of Time Warner Cable, a
division of Time Warner Entertainment Company, L.P., which affiliate is acting
as licensor of fiberoptic cable capacity ("Licensor"), and an affiliate of Time
Warner Telecom LLC, which affiliate is acting as Licensee of fiberoptic cable
capacity ("Licensee"); each of which such Agreements shall expressly incorporate
the terms and conditions hereof by reference.
RECITALS
WHEREAS, Licensor owns fiberoptic facilities (the "System") within the
geographic area described in the Agreement (the "Service Area"); and
WHEREAS, Licensee desires to provide certain telecommunications services as
specified herein (the "Telecommunications Services") within the Service Area;
and
WHEREAS, subject to the terms and conditions set forth below, Licensor
desires to license the use of certain fiber capacity over the System to
Licensee, and Licensee desires to license the use of such capacity, to enable it
to provide such Telecommunications Services in the Service Area;
NOW THEREFORE, in consideration of the foregoing, and of the promises and
covenants contained in this Agreement, the parties agree as follows:
1. License of Initial Capacity.
(a) Subject to the terms and conditions of the Agreement, Licensor hereby
licenses to Licensee the exclusive use of all capacity (the "Initial Capacity")
of the fiberoptic facilities described on Schedule 1 attached to the Agreement
(the "Initial Facilities"). Licensee acknowledges that it has accepted all the
Initial Capacity as meeting the Acceptance Criteria set forth herein.
(b) The description of the Initial Facilities set forth on Schedule 1
defines fiber counts and either fiber segment routes or "logical rings".
Licensor agrees to deliver copies to Licensee of specific network information
regarding the Initial Facilities from its own maps or schematic documentation
files upon Licensee's request.
2. Licenses of Additional Capacity.
(a) Requests.
(i) At any time during the term of this Agreement, Licensee may
request Licensor to construct fiber optic facilities and/or license to
Licensee the capacity ("Additional Capacity"and together with the Initial
Capacity, the "Capacity") of any of Licensor's fiber optic facilities
("Additional Facilities" and together with the Initial Facilities,
the "Facilities"), whether then existing or to be constructed. Licensor will
not, however, be obligated to fulfill any such request.
(b) Request Submission. Each Request shall contain such information, such
as the routes, the location of splice points, network architecture and diversity
requirements, and the proposed commencement date, as Licensor may reasonably
request to assist it in determining whether it will construct and/or license the
capacity of Additional Facilities. If Licensor agrees to fulfill any Request, it
shall deliver to Licensee a Cost Estimate Schedule, in the form of Exhibit A,
setting forth its good faith estimate of the Allocated Cost (as defined on Annex
A) of constructing such Additional Facilities.
(c) Request Procedures. Upon Licensor's agreement to license to Licensee
Additional Capacity and Licensee's acceptance of Licensor's estimate of the
Allocated Cost thereof (which acceptance shall be evidenced by Licensee's
execution of the Cost Estimate Schedule and its return of same to such Licensor,
not later than twenty-one (21) days after the date specified on such Cost
Estimate Schedule; Licensee's failure to timely return any such Cost Estimate
Schedule shall render its Request null and void), Licensor shall seek to obtain
any required permits or similar authorizations and thereupon commence
construction of such Facilities for Licensee. Upon agreement by Licensor and
Licensee as to the license of Additional Capacity, and Licensee's acceptance of
Additional Capacity pursuant to Section 2(d) below, the parties shall execute a
Final Cost Schedule setting forth the final information regarding such
Additional Capacity as is required by the form of Exhibit B. On the effective
date or dates set forth in such Final Cost Schedule (or if not specified
therein, the date on which the Additional Capacity is accepted by Licensee in
accordance with Section 2(d) below or, if earlier, the date Licensee commences
use of such Additional Capacity), such facilities shall be deemed to be
Additional Facilities and the capacity thereof Additional Capacity, for purposes
of this Agreement. Licensee's payments for any Additional Capacity shall be
calculated as set forth in Annex A attached hereto, and the amount of such
payments shall be set forth on the Final Cost Schedule relating thereto.
(d) Acceptance Criteria. Upon its determination that any Additional
Capacity is ready for acceptance by Licensee, Licensor shall notify Licensee
(not less than two business days in advance of the proposed test) that it will
conduct a test (the "Acceptance Test") of the Additional Capacity, which
Acceptance Test will be conducted in accordance with the procedures set forth on
Annex B hereto. Annex B may be amended from time to time by mutual agreement of
the parties, provided that any amendments therein shall apply only to Additional
Capacity that is agreed to be licensed after implementation of such amendments.
The parties acknowledge that the test provided on Annex B is based on current
fiber optic telecommunications industry standards for technical and performance
specifications, and that any amendments thereto will be designed to reflect
changes in such standards from time to time (the "Specifications"). Licensee
shall have the right to be present during, and to participate in, the Acceptance
Test. Upon completion of the Acceptance Test, Licensor shall provide Licensee
with a test completion certificate in the form of Annex C appropriately
completed. Licensee shall then have ten days to reject the Additional Capacity
but only if test results do not meet Specifications. If Licensee fails to notify
Licensor of its rejection of the Additional Capacity within such period,
Licensee shall be deemed to have accepted the Additional Capacity as of
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the last day of such ten day period. Licensee shall have the right, by giving
written notice to Licensor within such ten day period, to conduct its own test
of the Additional Capacity within such period, and Licensor and Licensee shall
cooperate with each other to conduct such tests in a manner that does not
unreasonably interfere with Licensor's operations. Such tests shall be conducted
at a time that is mutually convenient to Licensor and Licensee, and Licensor
shall have the right to be present during and to participate in such test.
Licensee shall have five days after completion of the re-test to reject the
Additional Capacity, but only if test results do not meet the Specifications. If
Licensee accepts the Additional Capacity or is deemed to have accepted the
Additional Capacity, Licensor and Licensee shall execute and deliver a Final
Cost Schedule with respect to such Additional Capacity. If Licensee rejects the
Additional Capacity, it shall immediately itemize its reasons for the rejection
in writing, and Licensor and Licensee shall make commercially reasonable efforts
to make the Additional Capacity acceptable (including, if reasonable, partial
acceptance). Following any such cure by Licensor to Licensee's reasonable
satisfaction, Licensee shall promptly accept such Additional Capacity.
3. License Subject to Authorizations. Notwithstanding anything herein to
the contrary, all rights granted to Licensee and obligations of Licensor
hereunder are expressly subject to each of Licensor's authorizations to operate
the System, including without limitation governmental or municipal approval,
franchise or authorization, and to each right-of-way agreement, pole attachment
agreement, conduit agreement, lease, license, consent or other agreement
relating to the Capacity.
4. Term. This Agreement shall commence on the date hereof and shall
terminate, with respect to any Capacity, on the earliest of (a) the date that
the legal ability of the Licensor (or its successor or assign) to operate the
Facilities on which such Capacity is provided in the Service Area either
terminates or is materially impaired, (b) the date this Agreement terminates
with respect to such Capacity pursuant to Sections 18, 19, 25 or 26 hereof or
(c) the thirtieth anniversary of the effective date of this Agreement.
5. Payments.
(a) Calculation and Timing of Payments.
(i) Initial Capacity. Notwithstanding anything in this Agreement to
the contrary, the parties acknowledge and agree that Licensor (or its
parent entity) has made a capital contribution to Licensee in the amount
attributable to the payments which would have been due from Licensee
pursuant to this Agreement for the construction costs of the Initial
Capacity. Accordingly, Licensee shall not be obligated to make any payments
to Licensor in respect of the Initial Capacity pursuant to this Section
5(a)(i) or otherwise for the costs of construction of the Initial Capacity.
All other payments provided for in this Agreement with respect to the
Initial Capacity continue to be due and payable as provided for herein.
(ii) Additional Capacity. For any Additional Capacity, Licensee shall
pay Licensor two payments. The first payment with respect to any such
Additional Capacity shall be equal to one-half of the Cost Estimate and
shall be paid upon Licensor's and Licensee's execution of the Cost Estimate
Schedule pursuant to Section 2(c) with respect to such Additional Capacity.
The second payment equal to the remaining balance shall be made within
forty-five
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(45) days after Licensor and Licensee have executed a Final Cost Schedule in
respect of such Additional Capacity pursuant to Section 2(c). After the second
payment has been made in respect of any such Additional Capacity, Licensee shall
not be obligated to make any additional payments to Licensor, except as may be
otherwise specified in Annex D or elsewhere in this Agreement, in respect of
such Additional Capacity, notwithstanding that this Agreement may continue in
full force and effect thereafter.
(iii) Calculation of Payments. The Parties agree that all
payments set forth on any Cost Estimate Schedule or Final Cost
Schedule shall be calculated in accordance with the procedures set
forth in Annex A attached hereto.
(b) Inspection of Records. The amount of the payments set forth on the
Final Cost Schedule relating to any Additional Capacity shall be based on the
good faith calculations of the Licensor of the actual costs of constructing such
Additional Capacity. Licensor agrees that it will, for a period of one year
after the acceptance by Licensee of any Additional Capacity, maintain reasonably
comprehensive records relating to such costs. Licensor will permit Licensee at
any time during such period upon reasonable written notice and during normal
business hours to examine all of such records, to make copies and extracts
therefrom and to discuss such records and other matters relating to such
Additional Capacity with the respective officers, employees and independent
public accountants and other agents of such Licensor. If any discrepancy is
found in such records which leads Licensee to believe in good faith that the
actual cost of constructing the Additional Capacity was less than Licensor's
calculation of such cost as reflected on any Final Cost Schedule, Licensor and
Licensee shall negotiate in good faith to determine whether an overpayment has
been made by Licensee, and if so, then Licensor shall promptly pay to Licensee
an amount equal to the entire amount of such overpayment. Any records of such
Licensor audited by Licensee shall constitute proprietary information under
Section 20 of this Agreement, irrespective of the lack of restrictive notices or
other express communications to the effect that the information in such records
is proprietary.
6. Taxes and Expenses. Licensee shall pay (a) any sales tax, property tax,
transfer tax, use tax, gross receipts tax, excise tax, business and occupation
tax, or other similar Federal, state and local taxes or charges (excluding taxes
imposed on Licensor's net income) imposed by any governmental authority upon
Licensor or its facilities or Licensee in connection with any payments due from
Licensee to Licensor hereunder, or as a result of Licensee's activities under
this Agreement, or imposed upon or with respect to the Capacity or the
Facilities, (b) any additional franchise fees imposed upon or collected from
Licensor or Licensee by any franchising authority as a result of Licensee's
activities under this Agreement (which payment shall be grossed up to make
Licensor whole for any additional such fees owed with respect to Licensee's
payment), and (c) without duplication of the payments required pursuant to
Section 12 and Annex D attached hereto, for its share on an allocated basis of
pole attachment fees, conduit fees and other out-of-pocket rights-of-way
expenses incurred by Licensor in connection with the Facilities, as follows.
Where Facilities are the only facilities utilizing pole attachment rights,
conduit rights or other rights-of-way, Licensee shall bear all the fees relating
thereto. Where there are no Facilities included in Licensor's facilities
utilizing pole attachments rights, conduit rights or other rights-of-way,
Licensor shall bear all the fees relating thereto. Where Facilities and other
facilities of Licensor utilize pole attachment rights, conduits or other rights
of way, Licensor and Licensee shall each bear 50% of the out-of-pocket fees
relating thereto. Further, if and to the
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extent that Licensor is required to pay incremental pole, conduit or other
right-of-way out-of-pocket fees solely due to the nature of Licensee's use of
the Capacity or Facilities, Licensee shall reimburse Licensor for all such
incremental fees. (If at any time Licensor is required to pay such incremental
fees due to a use of the Facilities or other facilities that is made by both
Licensor and Licensee or any third party exercising rights grants by or through
Licensor, the incremental fees shall be allocated to Licensee according to the
relative proportion of the number of fibers subject to such use). Licensee shall
also pay, or reimburse Licensor for, all fines, penalties, late fees or similar
payments or interest charged on late payments to the extent incurred due to
Licensee's failure to pay amounts owed by it hereunder promptly.
7. Use of Capacity. (a) Licensee shall not use the Capacity in violation of
this Agreement, any law, rule, regulation or order of any governmental authority
having jurisdiction, or any franchise, license, agreement or certificate
relating to the System or Licensor's franchises, unless the validity thereof is
being contested in good faith and by appropriate proceedings (but only so long
as such proceedings and Licensee's use of the Capacity do not, in Licensor's
reasonable opinion, involve any risk of the sale, forfeiture, or loss of the
System, any Authorizations (as defined in Section 16(a)(i)), or any part thereof
or any interest therein). Licensee shall not do or permit anything to be done
with respect to the Capacity that would invalidate or conflict with any
insurance policies maintained by Licensor or Licensee covering the Capacity or
the Facilities.
(b) Licensee shall have exclusive control over the Telecommunications
Services it provides over the Capacity, including, without limitation, customer
premise and nodal electronics, sales and marketing, electronics maintenance and
monitoring, and billing and collection.
(c) Licensee shall not use the Capacity, directly or indirectly (through
a subsidiary or affiliate of Licensee or any other person or otherwise), for its
own account or that of another, to engage in the business of providing,
offering, promoting, or branding any Residential Services or to engage in the
business of producing, packaging, distributing, marketing, hosting or otherwise
providing, offering, promoting or branding Content Services.
(d) (i) "Residential Services" shall mean wireline telecommunications
services or other services (including, without limitation, data services) of any
nature provided directly or indirectly to third party end-users at address
locations other than business locations. "Business locations" shall mean (A)
address locations that are used solely for business purposes, including, without
limitation, public spaces within business locations and governmental offices;
and (B) hotels, hospitals, jails and the business offices of residential
facilities within educational institutions and within nursing and assisted
living complexes.
(ii) "Content Services" means entertainment, information or other
content services, whether fixed or interactive, or any services
incidental thereto; provided, however, that Content Services shall not
include acting solely as a carrier of video, audio or data of
unaffiliated third parties by providing transport services, so long as
Licensee has no other direct or indirect pecuniary interest in the
transmitted information or content.
8. Non-Exclusivity. Nothing in this Agreement shall be construed to require
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Licensor to be Licensee's exclusive provider of, or contractor with respect to,
fiberoptic facilities or equipment in the Service Area or to limit in any way
Licensee's right in its own name to apply for and obtain municipal franchises,
authorizations and permits, to construct, maintain and own fiberoptic
facilities, and to apply for and obtain pole attachment agreements, conduit
licenses or other rights-of-way agreements from other rights-of-way providers.
Further, nothing in this Agreement shall imply or require that Licensee be
Licensor's exclusive licensee or lessee of network facilities or capacity.
9. Use of Licensee Capacity by Licensor. (a) If Licensee obtains operating
authority, rights-of-way, building entrance facilities, pole attachment
agreements or conduit rights in the Service Area, constructs and owns fiber
optic facilities in the Service Area and determines, in its sole discretion,
that it has capacity in such facilities, it will, upon request of Licensor,
negotiate in good faith with Licensor for (i) the license of capacity to
Licensor for the provision of cable television and any other services, such
license to the extent possible to include all the applicable terms and
provisions (including, without limitation, Annexes A and D) of this Agreement as
if Licensee were Licensor and Licensor were Licensee hereunder or (ii) the
provision to Licensor of the kinds of additional facilities services specified
in Section 10 hereof.
(b) In furtherance and not in limitation of the foregoing, with regard to
building entrance or riser facilities constructed by Licensee after the date
hereof (but prior to the fifth anniversary of the date of this Agreement),
Licensee shall:
(i) Notify Licensor of buildings in which it obtains rights of
entry or access;
(ii) Use reasonable efforts to assist Licensor in obtaining
similar rights of entry or access; and
(iii) Upon Licensor's request, construct (with the "Allocated
Cost" of such construction, as defined in Annex A, to be paid by
Licensor) up to four fibers for Licensor's ownership (or, if Licensor
cannot obtain the necessary rights of entry or access, Licensee shall
license to Licensor the capacity of such fibers, as described above in
Section 9(a)(i)).
10. Other Services. To the extent Licensor is unable or unwilling to
provide requested Additional Capacity to Licensee pursuant to Section 2 above,
Licensor will, upon request of Licensee, provide Licensee with the following
alternative services, subject to agreement in advance in writing upon
compensation Licensor is to receive with respect thereto, and subject to and in
accordance with any applicable legal, contractual, regulatory or technical
limitations:
(a) permit Licensee (subject to Section 13) to overlash Licensor owned
facilities (which shall become Additional Facilities hereunder) on poles on
which Licensor's facilities are located;
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(b) make available to Licensee any spare capacity, determined in Licensor's
sole discretion, in conduits, ducts, inner ducts, building entry facilities or
building riser facilities owned or leased by such Licensor; and
(c) use reasonable efforts to obtain, in Licensor's name, pole attachment
agreements or conduit licenses and to sublet or assign such agreements or
licenses to Licensee to permit Licensee to construct facilities.
11 Splicing Services. (a) Unless otherwise agreed between the parties or as
provided below, Licensor will perform fiber splicing services on any Facilities
on which Capacity is licensed hereunder. Any splice request shall be in writing
and shall contain information as to the general location of the desired splice
point, number of fibers to be spliced and desired completion date. Splicing
shall occur only at splice points designated or approved in writing by Licensor.
(b) Where the Facilities to be spliced are in a separate sheath from any
other Licensor fibers ("separate sheath Facilities"), Licensor shall use
commercially reasonable efforts to xxxx within six months of the date of this
Agreement the separate sheath Facilities' splice containers for ease of
identification. After such marking is completed, Licensee shall have 24-hour,
365 days access to each splice point for separate sheath Facilities for the
purpose of splicing and maintaining splices of such Facilities.
(c) Licensor and Licensee shall agree upon a set of request and
notification procedures, and response times and procedures (to be subject to
revision every two years), for splicing and splice maintenance (including in
emergency circumstances) where the Facilities are in a sheath shared with other
Licensor fibers ("shared sheath Facilities"). Licensee shall request, and
Licensor shall provide, splicing and maintenance services in accordance with
these procedures; provided that if Licensor fails with regard to any specific
project to provide splicing or splice maintenance service in accordance with
such procedures, Licensee shall thereupon be entitled (as its sole remedy, in
addition to Section 23) to 24-hour, 365 day access to the splice points for
shared sheath Facilities for the purpose of splicing and maintaining splices of
such Facilities with regard to such specific project only.
The compensation to Licensor for any splicing work (other than splicing as
part of construction of Additional Facilities hereunder, which shall be as set
forth in Annex A) shall be as set forth in Annex D. All splicing or maintenance
undertaken by Licensee hereunder shall be solely in accordance with Section 13.
12. Performance and Maintenance. Licensor shall use its commercially
reasonable efforts to maintain the Facilities so that at all times each portion
of such Facilities performs in accordance with the Specifications in effect as
of the date the Capacity of such Facilities was added to this Agreement. In
consideration of the performance of such maintenance, Licensee shall pay
maintenance fees to Licensor in the amounts and at the times set forth in Annex
D. Inspection and maintenance will be provided by the Licensor or its
subcontractors unless prior arrangements have been made between Licensor and
Licensee.
13. Licensee Requirements. Notwithstanding any other provision hereof, for
any project of Licensee agreed to by Licensor that requires access to or
easements over Licensor's
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headends, facilities, network, conduit, hubsites, splice cans or other property,
Licensee shall in each instance comply with all of the following:
(a) Licensee shall only employ and permit access by a contractor that has
been specifically approved in writing by Licensor for work within the Service
Area; provided that Licensor shall not unreasonably withhold or delay approval
of any proposed contractor.
(b) Licensee shall not rearrange any Licensor facilities (including
Facilities) without Licensor's prior written consent.
(c) Licensee shall give Licensor such prior written notice of its activity
as is set forth in the Agreement and Licensor shall be entitled to be present,
at Licensee's expense, and to supervise Licensee and its agents with respect to
its activities regarding the Facilities.
(d) Licensee (or its agents or permittees) shall provide Licensor with a
diagram of the exact configuration of any splice or other work completed.
Licensor shall have no liability of any nature whatsoever hereunder for
maintenance or other work that is improperly performed due to failure of
Licensee to provide Licensor with such diagram and information.
Assuming no Facilities splice point is involved, Licensee shall
not be required to abide by the restrictions of this Section 13 with
regard to its actions on customer premises locations.
14. Title. All right, title and interest in the System and the Facilities
provided by Licensor hereunder shall at all times remain exclusively with
Licensor. All right, title and interest in all facilities and associated
equipment provided by Licensee shall at all times remain exclusively with
Licensee. No such Licensee facilities and equipment shall be placed in any
public rights-of-way unless Licensee has obtained an independent right to do so
from the appropriate public authority. Except as expressly provided elsewhere in
this Agreement, Licensor shall retain full operating control and shall continue
to hold and be solely responsible for all operating authority with regard to the
System. Licensee shall hold and be responsible for all operating authority for
its facilities (other than the Facilities or Capacity) and for the provision of
any services by it, including its use of the Capacity.
15. Liens and Encumbrances. Neither party, directly or indirectly, shall
create, impose or suffer to be imposed any lien on (a) any property interest of
the other, (b) the rights or title relating thereto, or any interest therein, or
(c) this Agreement. Each party will promptly, at its own expense, take such
action as may be necessary to duly discharge any such lien.
16. Representations and Warranties.
(a) Licensor hereby represents, warrants and covenants to Licensee as
follows:
(i) Licensor has made available to Licensee true and correct
copies of each governmental or municipal approval, franchise and
authorization, right-of-way agreement, pole attachment agreement,
conduit agreement and lease, license, consent or other agreement
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relating to the Facilities and/or the Capacity thereof (all of which are
hereinafter collectively called the "Authorizations") obtained by it which
relate to Licensor's ability to license the Capacity and perform Licensor's
obligations under this Agreement.
(ii) Licensor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, is duly authorized to do business in the jurisdiction in
which the Capacity is made available and has full organizational power
and authority to execute, deliver and perform the terms of this
Agreement.
(b) Licensee hereby represents, warrants and covenants to Licensor as
follows:
(i) Licensee has made available to Licensor true and correct
copies of each Authorization obtained by it which relate to Licensee's
ability to use the Capacity and perform Licensee's obligations under
this Agreement.
(ii) Licensee is duly organized and validly existing under the
laws of its jurisdiction of organization, is authorized to do business
in the jurisdiction in which the Capacity is made available and has
full organizational power and authority to execute, deliver and
perform the terms of this Agreement.
17. Compliance with Law. Each party shall perform its respective rights and
obligations hereunder in material compliance with the Authorizations obtained by
it and all applicable laws, rules and regulations imposed by any governmental
authority.
18. Relocation of the Facilities. Licensee recognizes that, from time to
time, Licensor may elect or be required to relocate the Facilities. Where such
relocation is solely for the convenience of Licensor, Licensor shall be solely
responsible for all costs incurred to relocate the Facilities. (Relocations
requested by governmental authorities shall not be deemed for the convenience of
Licensor.) In all other cases (including street widening or improvement
projects), Licensee shall pay (a) 50% of the direct, out-of-pocket costs of the
relocation, if the project involves both Facilities and other facilities of
Licensor, or (b) 100% of the direct, out-of-pocket costs of the relocation, if
the project involves only Facilities; but in either case, only to the extent
such costs cannot be recovered from any third party. Licensee will, however,
have the option of terminating this Agreement with respect to such Capacity and
paying Licensor any as yet unpaid amounts pursuant to Section 5 and any other
amounts which are then due and payable under this Agreement (the "Payoff
Amount"). Licensor will use commercially reasonable efforts to effect any
relocation in a manner that will not cause any material interruption to
Licensee's use of the Capacity. Licensor shall use commercially reasonable
efforts to give Licensee at least six months prior notice of any relocation or
of any governmental proceedings which could reasonably be expected to result in
a relocation, or such lesser amount of notice that Licensor receives from such
governmental authority, and Licensee shall have the right to participate in any
such proceedings.
19. Condemnation and Casualty.
(a) Condemnation. If all or any portion of the Facilities are taken for any
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public or quasi-public purpose by any lawful power or authority by the exercise
of the right of condemnation or eminent domain, Licensee shall be entitled to
terminate the license of the Capacity provided hereunder on such Facilities. In
such event, both parties shall be entitled to participate in any condemnation
proceedings to seek to obtain compensation by either joint or separate awards
for the economic value of their respective interests in the Capacity or the
Facilities and will equitably share any awards as their economic interests
appear.
(b) Casualty. If all or any portion of the Facilities are made inoperable
and beyond feasible repair due to a casualty or other force majeure event (as
that term is defined in Section 27 below), Licensee shall be entitled to
terminate this Agreement with regard to the Capacity affected by such casualty
or other event. In such event, both parties shall be entitled to seek to recover
the economic value of their respective interests in the Capacity or the
Facilities (i) under any insurance policy carried by either party or their
affiliates or any third party, or (ii) in either joint or separate actions, from
any third party which may be legally responsible for causing such casualty. The
parties will equitably share any recoveries as their economic interests appear.
20. Proprietary Information. Each party acknowledges that, in the course of
the performance of this Agreement, it may have access to privileged and
proprietary information claimed to be unique, secret and confidential, and which
constitutes the exclusive property or trade secrets of the other, and the
parties acknowledge that they are in a confidential relationship with each
other. This information may be presented in documents marked with a restrictive
notice or during oral discussions, at which time representatives of the
disclosing party will specify that the information is proprietary. Information
that a party receives from the disclosing party that, while not so marked, would
be reasonably understood by the recipient as confidential or proprietary (such
as customer information) shall also be considered proprietary information
hereunder. Such information shall specifically include, but is not limited to,
this Agreement and all exhibits, annexes, attachments, schedules and addenda
hereto.
Each party agrees to maintain the confidentiality of the proprietary
information and to use the same degree of care as it uses with regard to its own
proprietary information to prevent the disclosure, publication or unauthorized
use of the proprietary information. Neither party may duplicate or copy
proprietary information of the other party other than to the extent necessary
for legitimate business uses in connection with this Agreement. A party shall be
excused from these nondisclosure provisions if (a) the proprietary information
has been or is subsequently made public other than through a breach of this
Agreement or (b) the proprietary information is independently developed by such
party or (c) the other party gives its consent to the disclosure of the
proprietary information or (d) the disclosure is required by law, regulation or
governmental or judicial authority (provided that the compelled party gives
prompt notice of such required disclosure to the original disclosing party to
enable it to obtain a protective order or other relief). Notwithstanding
anything to the contrary in this Agreement, this provision shall survive the
termination or expiration of this Agreement.
21. Indemnification.
(a) Indemnification by. Licensee Licensee will indemnify and hold harmless
Licensor, its affiliates, and all officers, directors, employees, stockholders,
partners and agents of Licensor and its affiliates from and against any and all
claims, demands, costs, damages, losses,
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7liabilities, expenses of any nature (including reasonable attorneys',
accountants', and experts' fees and disbursements), judgments, fines,
settlements and other amounts (collectively, "Damages") arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal, administrative
or investigative (collectively "Claims") relating to or arising out of:
(i) the installation, maintenance or operation of Licensee's
connections to the Facilities or the conduct or management of
Licensee's business with regard to the Facilities or the connections
thereto or the Capacity thereof, except to the extent such Damages are
caused or contributed to by Licensor or its agents;
(ii) any breach by Licensee of any material obligation or
covenants under this Agreement;
(iii) any failure of any representation or warranty made by
Licensee herein to be true in any material respect as of the date made
or deemed made;
(iv) any Claim by any customer of Licensee relating to the
provision by Licensee of services to such customer, over the Capacity
or otherwise; and
(v) any Claim of any third party (other than as described in
Section 21 (b)(iv) below) resulting from the gross negligence or
wilful misconduct of Licensee.
The foregoing indemnification obligations shall not be
construed to broaden the representations and warranties of
Licensee regarding Authorizations as set forth in Section
16(b)(i).
(b) Indemnification by Licensor. Licensor will indemnify and hold
harmless Licensee, its affiliates and all officers, directors, employees,
stockholders, partners and agents of Licensee and its affiliates from and
against any and all Damages arising from any and all Claims relating to or
arising out of:
(i) The installation, maintenance or operation by Licensor
of the Facilities or the Capacity thereof or the conduct or
management of Licensor's business, except to the extent such
Damages are caused or contributed to by Licensee or its agents;
(ii) Any breach on the part of Licensor of any material
obligation or covenant under this Agreement;
(iii) Any failure of any representation or warranty made by
Licensor herein to be true in any material respect as of the date
made or deemed made; and
(iv) Any Claim by any customer of Licensor relating to
Licensor's provision of services over any facilities of which the
Facilities are a part; and
(v) Any Claim of any third party (other than as described in
Section 21 (a)(iv) above) resulting from the gross negligence or
wilful misconduct of Licensor.
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The foregoing indemnification obligations shall not be construed to broaden
the representations and warranties of Licensor regarding Authorizations as set
forth in Section 16(a)(i).
(c) Procedure. No claims for indemnification shall be made by either party
against the other unless the aggregate amount of such claim exceeds the amount
of $5,000. A person seeking indemnification hereunder shall promptly notify the
indemnifying party in writing of any Claim for which indemnification is sought,
provided that any failure to so notify the indemnifying party will not relieve
the indemnifying party from any liability or obligation which it may have to any
indemnified person except to the extent of any material prejudice to the
indemnifying party resulting from such failure.
If the facts giving rise to such indemnification involve any actual or
threatened claim or demand by or against a third party, the indemnifying party
shall be entitled to control the defense, prosecution and settlement of such
claim or demand in the name of the indemnified person, if the indemnifying party
notifies the indemnified person in writing of its intention to do so within
twenty (20) days of the receipt of such notice by the indemnified person.
The indemnified person shall have the right, however, to participate in
such proceeding through counsel of its own choosing, which participation shall
be at its sole expense. Whether or not the indemnifying party chooses to defend
or prosecute such claim, each indemnified person which is not the indemnifying
party, shall, to the extent requested by the indemnifying party and at the
indemnifying party's expense, cooperate in the prosecution or defense of such
claim and shall furnish such records, information and testimony and attend such
conferences, discovery proceedings, hearings, trials and appeals as may
reasonably be requested in connection therewith. The indemnifying party shall
not settle any claim or assertion, unless the indemnified party consents in
writing to such settlement, which consent shall not be unreasonably withheld and
which consent shall not be withheld in connection with any such settlement for
money damages to be paid by the indemnifying party only, which does not admit
the fault of the indemnified party and which does not impose injunctive or other
equitable relief on the indemnified party.
22. Provision of Insurance Coverage. Each Party shall, at its own expense,
secure and maintain in force, throughout the term of this Agreement, the
following insurance coverage and limits of liability with carriers authorized to
conduct business in all states in which any Facilities are located, that have an
A.M. Best rating of B+ or better:
(a) Comprehensive General Liability.
(i) Coverages to include: Products and Completed Operations
Liability, Hazards of Premises/Operations (including XCU),
Blanket Contractual Liability, Independent Contractors Liability,
Fire Legal Liability, Personal Injury (including death), and
Broad Form Property Damage.
(ii) Limits of Liability: $2,000,000 per occurrence,
combined single limit for bodily injury and property damage.
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(iii) With respect to any Facilities or Capacity, Licensor
and Licensee each will name the other as additional insured.
(b) Comprehensive Auto Liabilitv.
(i) Coverage to include: Owned/Leased vehicles, Non-owned
vehicles, Hired Vehicles.
(ii) Limits of Liability: $2,000,000 per accident, combined
single limit for bodily injury and property damage.
(iii) With respect to any Facilities or Capacity, Licensor
and Licensee will name the other as additional insured.
(c) Workers' Compensation - statutory coverage and limits.
(d) Property Insurance.
(i) Coverage: All Risk to property and includes Business
Interruption.
(ii) Limits to be sufficient to cover full replacement cost
of Leased Facilities.
(iii) With respect to any Facilities or Capacity, Licensor
and Licensee will name the other as Loss Payee.
(e) Certificate of Insurance. With respect to any Facilities or Capacity,
Licensor and Licensee each shall provide to the other a Certificate of Insurance
evidencing all coverages outlined in this Section 22. All such insurance
obtained by either Licensor or Licensee, as the case may be, shall require that
the other be notified, in writing, at least thirty days prior to the
cancellation or adverse modification of any such required insurance policy. Any
such notification shall be required to be sent by registered certified mail or
certified courier service.
23. Interruption of Service. Notwithstanding any other provision of
this Agreement, in the event of any interruption of use by Licensee of any
portion of the Capacity through no fault of Licensee, which interruption is the
responsibility of Licensor or its agents and is not a force majeure event, as
that term is defined in Section 27, Licensor's sole obligation shall be to
provide a credit to Licensee against Licensee's obligation to pay maintenance
fees pursuant to Section 12, which credit shall be calculated on a per
occurrence basis at the lesser of (a) an amount equal to the actual damage
suffered by Licensee, and (b) the amount set forth in the following chart:
Length of Outage: Credit:
----------------- -------
2 hours or less: no credit
over 2 hours to 8 hours: $20,000
over 8 hours: $50,000;
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provided, however, that in no event shall the amount required to be credited by
Licensor under this Section 23 in any calendar year exceed the amount payable by
Licensee to Licensor for maintenance fees pursuant to Section 12 in such year.
The remedy provided in this Section 23 shall be Licensee's sole and exclusive
remedy for outages or interruptions of service, unless such outages or
interruptions of service were caused by Licensor's willful misconduct or gross
negligence and except for the termination provisions in Sections 18, 19 and 25.
24. Events of Default. Each of the following events shall constitute an
event of default (whether any such event shall be voluntary or involuntary or
occur by operation of law or pursuant to any judgment, decree, order, rule or
regulation of any court or administrative or governmental body):
(a) the failure of Licensee to make any license payment pursuant to Section
5 hereof within fifteen days of the due date thereof; or any failure of Licensee
to make any maintenance payment pursuant to Section 12 hereof or any other
payment due hereunder within fifteen days after Licensee's receipt of notice
from Licensor of Licensee's failure to make such payment when due;
(b) the failure of either party to perform or observe any material covenant
or agreement (including without limitation, any failure of Licensee to comply
with the use restrictions under Section 7) to be performed or observed by it
hereunder, and such failure shall continue unremedied for a period of thirty
days after written notice is given to the defaulting party by the non-defaulting
party; or
(c) a court or governmental authority of competent jurisdiction shall enter
an order appointing, without consent by the party, a custodian, receiver,
trustee, intervener, or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order
for relief or approving a petition in bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding up, or liquidation of either
party, or if any such petition shall be filed against either party and shall not
be dismissed within sixty days thereafter, or an order shall have been issued
granting either party a suspension of payments under applicable law and any such
order is not dismissed within sixty days thereafter.
25. Remedies. Upon the occurrence and during the continuance of any event
of default, the non-defaulting party may, at its option, declare this Agreement
to be in default and may, in addition to any other remedies provided herein,
terminate this Agreement. Except as expressly provided herein, no remedy is
intended to be exclusive, but each shall be cumulative and in addition to and
may be exercised concurrently with any other remedy available to Licensor or
Licensee at law or in equity. If Licensor terminates this Agreement due to a
Licensee default, Licensee shall pay the Payoff Amount promptly to Licensor. IN
NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES, WHETHER BASED IN CONTRACT, TORT, OR OTHERWISE.
FURTHER, NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, A PARTY'S
CUMULATIVE LIABILITY (AND THE OTHER PARTY'S REMEDY) FOR BREACH OF THIS AGREEMENT
(OTHER THAN FAILURE TO PAY CASH AMOUNTS DUE AND PAYABLE IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT) SHALL NOT EXCEED AN AMOUNT SPECIFIED IN THE
15
AGREEMENT.
26. Additional Termination Rights.
(a) Licensee. Upon the payment by Licensee of the Payoff Amount due with
respect to such Capacity, and upon one hundred eighty (180) days written notice
to Licensor, Licensee may, without further obligation to Licensor, terminate its
license of any reasonably defined portion of the Capacity without cause.
Licensee shall thereupon remove or cause all of its plant and facilities
connected to the related Facilities to be removed at its expense or may, if
Licensor agrees, abandon such plant and facilities in place. If Licensee
abandons any of such plant and facilities, Licensor may, within eighteen (18)
months of its receipt of such notice, remove the abandoned plant and facilities
and xxxx Licensee for the costs incurred by it which are reasonably allocable to
the removal of such plant and facilities, which xxxx shall be payable within
thirty (30) days of receipt.
(b) Licensor. If any governmental agency or third party institutes
proceedings to impose any public utility or common carrier status or obligations
on Licensor or the use of Licensor's capacity or facilities as a result of its
performance of this Agreement, or if any action is brought by any third party
challenging the continued validity or seeking to adversely modify, suspend or
revoke Licensor's operating authority for all or any part of its services or
System as a result of its or Licensee's performance of this Agreement, or if, as
a result of any change in applicable law or regulation (or in judicial or other
official interpretations thereof), Licensor reasonably deems that such a
proceeding is likely and has a significant possibility of success on the merits,
Licensor may, without further liability to Licensee, upon one hundred eighty
(180) days written notice, terminate this Agreement as a whole without cause;
provided, however that Licensor shall not terminate this Agreement or any
Capacity provided by it during the pendency of such proceedings or actions if
Licensee agrees to indemnify and hold harmless Licensor (pursuant to an
indemnification agreement in form and substance reasonably satisfactory to
Licensor) against all liability, claims, fines or damages (including reasonable
attorneys' fees) incurred by Licensor as a result of Licensee's continued
operations and use of the Capacity unless (x) Licensor is required to do so by a
valid and final order of a court of competent jurisdiction, or (y) in Licensor's
opinion, continued performance or activity by Licensee under the terms of this
Agreement would have a present or future material adverse effect on the local
cable or other operations of Licensor, its financial condition or operating
condition or is reasonably likely to result in the imposition of public utility
or common carrier status on Licensor or an adverse modification, suspension or
revocation of such Licensor's operating authority for its services or its System
or the forfeiture of any portion of the System. Licensor shall control the
defense, prosecution and settlement of such claim or demand but shall allow
Licensee the opportunity to participate in such defense through counsel of its
own choosing, which participation will be at the sole expense of Licensee. If
the proceedings or actions would in any event affect only a portion of the
Capacity, Licensor will instead terminate only the license of the Capacity that
is affected thereby. Upon the effective date of such a termination, Licensee
shall terminate its use of the Capacity, remove its plant and equipment (or
abandon the same as provided in Section 26(a) above), and cease operations over
such Capacity.
27. Force Majeure Events. Neither party shall be liable to the other for
any failure of performance under this Agreement due to causes beyond its
control, including but not limited to:
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acts of God, fire, flood or other catastrophes; any law, order, regulation,
direction, action or request of the United States government, or of any other
government, including state and local governments having or claiming
jurisdiction over such party, or of any department, agency, commission, bureau,
corporation or other instrumentality of any one or more of these federal, state
or local governments, or of any civil or military authority; national
emergencies; unavailability of materials or rights-of-way; insurrections; riots;
wars; or strikes, lock-outs, or work stoppages (collectively, "force majeure
events"). If a force majeure event continues for more than 60 days in effect,
the party who has not been receiving performance shall be entitled to terminate
any the License of specific Capacity affected by such force majeure event, upon
written notice to the other party.
28. Orderly Termination: Return of Facilities. Upon termination of this
Agreement in whole or with respect to any specific Capacity (other than
expiration of the term thereof under Section 4(c)), Licensor and Licensee agree
to cooperate in good faith to effect an orderly transition of any
Telecommunications Services provided over such Capacity. Without limitation,
Licensor hereby agrees that notwithstanding such termination it will, to the
extent permitted by applicable law and regulation and governmental authority,
(i) continue to make available to Licensee any portions of the Capacity at the
rates specified herein which Licensee reasonably requires to fulfill its
obligations under existing customer agreements for a period up to three months
after such termination in the case of a termination for Licensee's default, or
twelve (12) months after such termination in all other cases, and (ii) upon
termination under Section 4(c), negotiate agreements with Licensee that are
reasonable in the independent judgment of Licensor and Licensee, pursuant to
which such Licensor may provide fiber optic facilities to Licensee in order for
Licensee to provide telecommunications services in the Service Area. Unless any
alternate arrangements are otherwise agreed, upon termination and expiration of
the applicable transition period, Licensee shall at its expense remove or cause
to be removed all of its plant and facilities connected to the Facilities, or
may, if Licensor agrees, abandon such plant and facilities in place in
accordance with Section 26(a).
29. Network Architecture and Diversity. The parties shall consult and
cooperate with each other with regard to all technical matters relating to
network architecture, diversity and related matters. Each party will designate a
technical engineering representative and each agrees to inform the other party
of all its construction plans as in effect from time to time.
30. Additional Obligations of Licensee. In addition to the obligations of
Licensee set forth elsewhere in this Agreement, Licensee shall:
(a) have full and complete control, responsibility and liability for the
signals distributed over the Capacity by Licensee or for its benefit;
(b) have full and complete control, responsibility and liability for the
purchase, installation, construction and maintenance of the terminals and
peripheral equipment connected to the Capacity utilized by Licensee, provided
that such equipment shall not be located in public rights of way without
Licensee having obtained all necessary rights to utilize such rights of way;
(c) employ its own employees, agents and/or independent contractors in the
17
handling, storage, retrieval, processing, transmitting, and/or receiving of any
electronic signals distributed over the Capacity;
(d) provide all commercial or other power supplies for the operation of the
Capacity (or, if agreed by Licensor and Licensee, Licensee shall instead bear
its Allocated Cost share of Licensor's costs for power supplies), terminals and
peripheral equipment or facilities used with or connected to any System and
located on Licensee's, or its customers', premises; and
(e) have full and complete control, responsibility and liability for
maintaining any operating authority from any Federal, state or local
governmental body or agency that relates to the activities of Licensee under
this Agreement, including Lessee's utilization of Capacity.
31. Interest.All payments due from either party to the other under the
terms of this Agreement which are not paid when due shall bear interest from the
due date until paid at an interest rate equal to the then-current Time Warner
intercompany rate, if both Licensee and Licensor are then Time Warner
affiliates, or if not, the lesser of 1 1/2% per month or the maximum lawful rate
permitted by law.
32. Assignment. Other than as set forth herein, the rights, privileges and
obligations of either party hereunder may not be subleased, sublicensed,
assigned or delegated or otherwise transferred or extended to another party, in
whole or in any part, and any such attempted sublease, sublicense, assignment,
delegation or transfer or extension shall be null and void. Licensor or Licensee
may, however, assign or transfer this Agreement, in whole or in part, to any
affiliate controlling, controlled by or under common control with their
respective parent companies, without approval of the other, upon 30 days notice,
provided such affiliate continues to be under the common control of Licensor's
or Licensee's parent company (as the case may be). Further, Licensor may assign,
delegate or otherwise transfer its rights and obligations under this Agreement,
or any portion thereof, without Licensee's consent, in connection with a sale,
assignment or other transfer of all or substantially all of the System (or any
individual cable system within the System), and its business, assets or equity
interests in connection therewith; provided that such transferee agrees in
writing to assume all of the obligations of Licensor hereunder with regard to
such System (or portion thereof); and provided further that upon such assumption
Licensor shall be released from any obligation with regard to the subsequent
performance of obligations hereunder regarding Capacity or Facilities included
in the transferred System (or portion thereof).
33. Miscellaneous.
(a) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument; and in pleading or proving any provision of this
Agreement, it shall not be necessary to produce more than one complete set of
such counterparts.
(b) Captions: Gender. Article and section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement. Whenever used herein the singular
number shall include the plural, the plural shall include the singular, and the
use of any gender shall include all genders.
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(c) Governing Law and Binding Effect. This Agreement shall be governed by
and construed and enforced in accordance with the law (other than the law
governing conflicts of law questions) and decisions of the State of New York
applicable to contracts made and to be performed entirely therein. This
Agreement shall bind and inure to the benefit of each of the parties and their
successors and permitted assigns.
(d) Waivers and Amendments. This Agreement may not be amended nor shall any
waiver, change, modification, consent or discharge be effected, except by an
instrument in writing adopted, in the case of an amendment, by each party and,
in the case of a waiver, consent or discharge, executed by the party against
whom enforcement of such instrument is sought. Any consent by either party to,
or waiver of, a breach by the other party shall not constitute a waiver or
consent to any subsequent or different breach. If either party shall fail to
enforce a breach of this Agreement by the other party, such failure to enforce
shall not be considered a consent to or a waiver of said breach or any
subsequent breach for any purpose whatsoever.
(e) Relationship Not a Partnership or an Agency. Nothing contained in this
Agreement shall be deemed to constitute a partnership, joint venture or agency
agreement between parties.
(f) DISCLAIMERS. THERE ARE NO AGREEMENTS, WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR
OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE OR USE, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN.
(g) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule or law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
either party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the greatest extent
possible.
(h) Further Assurances. Each party agrees to execute all such further
instruments and documents and to take all such further actions as the other
party may reasonably request in order to effectuate the terms and purposes of
this Agreement.
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