EXHIBIT 10.21
AFFILIATED INTEREST AGREEMENT
between
D&E COMMUNICATIONS, INC.
and
DENVER AND EPHRATA TELEPHONE AND TELEGRAPH COMPANY
and
RED ROSE COMMUNICATIONS, INC.
This Agreement, dated June 7, 1996, is entered into by and between D&E
COMMUNICATIONS, INC. (hereinafter, "D&E Communications"), a Pennsylvania holding
company, DENVER AND EPHRATA TELEPHONE AND TELEGRAPH COMPANY (hereinafter, "D and
E Telephone"), a Pennsylvania business corporation, and RED ROSE COMMUNICATIONS,
INC. (hereinafter, "Red Rose"), a Pennsylvania business corporation.
WHEREAS, D and E Telephone is an operating public utility which provides
telecommunications services within portions of Lancaster, Lebanon, and Berks
Counties, in the Commonwealth of Pennsylvania, and is subject to Pennsylvania
Public Utility Commission jurisdiction;
WHEREAS, Red Rose d/b/a D and E Long Distance is an interexchange reseller
of telecommunications services and is subject to Pennsylvania Public Utility
jurisdiction;
WHEREAS, as a result of a corporate restructuring, D and E Telephone and
Red Rose are now each wholly-owned subsidiaries of D&E Communications, a holding
company incorporated in the state of Pennsylvania; and
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WHEREAS, D and E Telephone and Red Rose able to provide services and/or
personnel to assist in the furtherance of D&E Communications; NOW, WHEREFORE, in
consideration of the mutual promises contained herein and intending to be
legally bound thereby, D&E Communications, D and E Telephone and Red Rose hereby
agree as follows:
ARTICLE I
Personnel and/or Services Provided by D and E Telephone and
Red Rose to D&E Communications
A. D and E Telephone and Red Rose shall make certain of their qualified
employees available to become officers of D&E Communications. Such employees may
be appointed by the board of directors of D&E Communications to positions of
president, vice president, secretary, chief financial officer and treasurer or
assistants and to such other positions within D&E Communications as the board
may designate.
B. D and E Telephone and Red Rose shall make available to D&E
Communications such technical, advisory, consultative, legal, and professional
services as may be necessary to assist D&E Communications in achieving its
business purposes, goals, and commitments. D and E Telephone and Red Rose, with
the consent of D&E Communications, may engage a non-affiliated company or person
to provide any services to D&E Communications covered by this Agreement.
C. D and E Telephone shall keep the general books of account of D&E
Communications, including records supplemental thereto, and prepare annual
financial statements and analyses of accounts of D&E Communications and special
accounting and financial reports required by D&E Communications. D and E
Telephone shall prepare, or assist in the preparation of federal, state, and
local tax returns for and to the extent required by D&E Communications.
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D and E Telephone shall maintain documents of D&E Communications such as minute
books, charters, bylaws, contracts, deeds and other corporate records and shall
administer an orderly program of records retention. It shall perform other
corporate secretarial functions as required, including preparation of, notices
of stockholder and director meetings and keeping the minutes thereof. D and E
Telephone shall review, and may assist in the preparation of, documents required
by D&E Communications such as deeds, easements, contracts, licenses, charters,
franchises, permits and regulatory reports.
D. D and E Telephone shall coordinate financial arrangements with the
financial community to arrange and provide for furnishing of D&E Communications'
entire capital needs from other than internally generated sources.
E. D and E Telephone shall assist D&E Communications in cash management and
the development of investment programs.
F. D and E Telephone shall review the insurance coverage of D&E
Communications, recommend the types and limits of insurance adequate for its
protection, assist in the placement of such insurance and investigation
procedures and review claims and proposals for settlement.
ARTICLE II
Payment of Charges for Services Provided by D and E Telephone and
Red Rose to D&E Communications
A. In consideration for the services and/or personnel provided to D&E
Communications under this Agreement, unless such are subject to applicable
tariff, D&E Communications shall pay the market rate when a market exists for
such services and/or personnel. Otherwise, D&E Communications shall pay the cost
incurred by D and E Telephone and Red Rose for such services and/or personnel,
including the salary, wages, fee, and fringe benefit costs attributable to
rendering said services, plus reimbursement for interest, taxes, and
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costs where D and E Telephone or Red Rose incurs such costs. To the extent that
in D and E Telephone's or Red Rose's rendition of services and/or provision of
personnel to D&E Communications, an element of cost cannot be directly assigned
to one party or the other, then the cost shall be allocated between the parties
in accordance with generally accepted accounting principles.
B. Where applicable, the foregoing costs shall be incurred by D and E
Telephone and Red Rose consistent with such cost accounting requirements as may
be imposed by the Pennsylvania Public Utility Commission relating to
transactions between a regulated telephone company and its affiliate.
ARTICLE III
D and E Telephone's and Red Rose's Duty to Provide Service to the Public
D and E Telephone's and Red Rose's obligations under this Agreement shall
remain subordinate to and shall not interfere with its duty to provide utility
service to the public pursuant to the Public Utility Code, 66 Pa.
C.S.(section)101 et seq.
ARTICLE IV
Term of Agreement
After execution, this Agreement shall take effect upon the obtaining of any
required regulatory approval(s), including the approval of the Pennsylvania
Public Utility Commission. This Agreement shall continue in full force and
effect until terminated upon ninety (90) days' written notice effective when
sent. If there is a material breach of a term or condition by a party, then this
Agreement may be terminated by the other party upon five (5) days' written
notice effective when sent.
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ARTICLE V
Release
No party to this Agreement shall be liable to the other for any special,
incidental or consequential damages of any nature or for any reason, even if
advised of the possibility of such damages, nor, except to the extent explicitly
provided for herein, for any claims of any nature against the other by any third
party.
ARTICLE VI
Indemnification
To the extent not prohibited by law, and except as otherwise provided
herein, each party shall indemnify and hold harmless the other party from and
against any loss, costs, claim, injury or liability brought by any person not a
party hereto which relates to or arises out of the negligent or intentional acts
of the indemnifying party or its employees.
ARTICLE VII
Severability
In the event that one or more of the provisions contained herein shall, for
any reason, be held to be unenforceable in any respect, such unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if the unenforceable provision had not been contained herein.
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ARTICLE VIII
Nonassignability
Neither D and E Telephone nor Red Rose shall assign any right or duties
stated under this Agreement without the written consent of D&E Communications.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in
their respective corporate names by their duly authorized officers and attested
to by their respective corporate Secretaries, as of the date first above written
in this Agreement.
D&E COMMUNICATIONS, INC.
ATTEST: By:
/s/ W. Xxxxx Xxxxxxxx /s/ Xxxx X. Xxxxxxxx
--------------------- ------------------------------------------
W. Xxxxx Xxxxxxxx Xxxx X. Xxxxxxxx
Secretary Chairman of the Board,
President, and Chief Executive Officer
Dated: 9/4/96
----------
DENVER AND EPHRATA TELEPHONE
AND TELEGRAPH COMPANY
ATTEST: By:
/s/ W. Xxxxx Xxxxxxxx /s/ G. Xxxxxxx Xxxx
--------------------- ------------------------------------------
W. Xxxxx Xxxxxxxx G. Xxxxxxx Xxxx
Secretary Chief Executive Officer
Dated: 9/4/96
----------
RED ROSE COMMUNICATIONS, INC.
ATTEST: By:
/s/ W. Xxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
--------------------- ------------------------------------------
W. Xxxxx Xxxxxxxx Xxxxxx X. Xxxxxxxx
Secretary Chief Executive Officer
Dated: 9/4/96
----------
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AFFIDAVIT
COMMONWEALTH OF PENNSYLVANIA :
: SS.
COUNTY OF LANCASTER :
XXXXXX X. XXXXXXXX, being duly sworn according to law, deposes and says
that he is Chief Executive Officer of RED ROSE COMMUNICATIONS, INC.; that he
does verify this document to be a true and correct copy of the original
Agreement between D&E COMMUNICATIONS, INC., the DENVER AND EPHRATA TELEPHONE AND
TELEGRAPH COMPANY and RED ROSE COMMUNICATIONS, INC.
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Sworn and subscribed
before me this 4th day
of September, 1996.
Xxxxxx X. Xxxxxxxxxx
--------------------
Notary Public
My commission expires: Feb. 24, 0000
XXXXXXXXX
XXXXXXXXXXXX XX XXXXXXXXXXXX :
: SS.
COUNTY OF LANCASTER :
G. XXXXXXX XXXX, being duly sworn according to law, deposes and says that
he is Chief Executive Officer of DENVER AND EPHRATA TELEPHONE AND TELEGRAPH
COMPANY; that he does verify this document to be a true and correct copy of the
original Agreement between D&E COMMUNICATIONS, INC., the DENVER AND EPHRATA
TELEPHONE AND TELEGRAPH COMPANY and RED ROSE COMMUNICATIONS, INC.
/s/ G. Xxxxxxx Xxxx
-------------------
G. Xxxxxxx Xxxx
Sworn and subscribed
before me this 4th
day of September, 1996.
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Notary Public
My commission expires: Feb. 24, 0000
XXXXXXXXX
XXXXXXXXXXXX XX XXXXXXXXXXXX :
: SS.
COUNTY OF LANCASTER :
XXXX X. XXXXXXXX, being duly sworn according to law, deposes and says that
she is Chairman of the Board, President and Chief Executive Officer of D&E
COMMUNICATIONS, INC.; that she does verify this document to be a true and
correct copy of the original Agreement between D&E COMMUNICATIONS, INC., the
DENVER AND EPHRATA TELEPHONE AND TELEGRAPH COMPANY and RED ROSE COMMUNICATIONS,
INC.
/s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx
Sworn and subscribed
before me this 4th
day of September, 1996.
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Notary Public
My commission expires: Feb. 24, 1997
