EXHIBIT 10.7
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JOINT VENTURE AGREEMENT
between
RCN TELECOM SERVICES, INC.
and
BOSTON ENERGY TECHNOLOGY GROUP, INC.
Dated as of December 23, 1996
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ARTICLE 1
THE JOINT VENTURE
-----------------
Page
----
1.1 Purpose.............................................................. 1
1.2 Structure............................................................ 1
1.3 Defined Terms........................................................ 2
1.4 Timing of the Joint Venture........................................... 5
ARTICLE 2
CONDITIONS TO CLOSING
---------------------
2.1 Conditions to Obligation of RCN to Close............................. 8
(a) Representations, Warranties and Covenants True at the
Closing Date
(b) H-S-R Act and Other Governmental Approvals
(c) Budget
(d) Other Agreements
(e) Approval by BETG-Sub
(f) BECO Assignments
2.2 Conditions to Obligations of BETG to Close........................... 9
(a) Representations, Warranties and Covenants True at the
Closing Date
(b) H-S-R Act and Other Governmental Approvals
(c) Budget
(d) Other Agreements
(e) Approval by RCN-Sub
ARTICLE 3
NEWCO
-----
3.1 Purpose............................................................. 10
3.2 Form................................................................ 10
3.3 Members and Capitalization.......................................... 10
ARTICLE 4
PRINCIPAL AGREEMENTS
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4.1 Management Agreement................................................ 11
4.2 Telecommunications Services Agreement............................... 11
4.3 Electric Services Agreement......................................... 11
4.4 Registration Rights and Conversion Agreement......................... 11
4.5 Joint Investment and Noncompetition Agreement....................... 11
4.6 MFS Agreement....................................................... 11
ARTICLE 5
COVENANTS
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5.1 Best Efforts........................................................ 11
5.2 Public Announcements................................................ 12
5.3 Confidentiality..................................................... 13
5.4 RCN Telecommunications Services Agreement........................... 13
5.5 Sale of Fiber....................................................... 13
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
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6.1 Representations and Warranties of RCN............................... 13
(a) Organization and Standing
(b) Authority; Enforceability
(c) No Conflict
(d) Consents and Governmental Authorizations
(e) No Brokers
(f) No Undisclosed Partners
(g) PUHCA
(h) Litigation
6.2 Representations and Warranties of BETG.............................. 15
(a) Organization and Standing
(b) Authority; Enforceability
(c) No Conflict
(d) Consents and Governmental Authorizations
(e) No Brokers
(f) No Undisclosed Partners
(g) PUHCA
(h) Litigation
ARTICLE 7
TERMINATION AND EXPENSES
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7.1 Termination......................................................... 16
7.2 Liabilities in Event of Termination................................. 17
ARTICLE 8
MISCELLANEOUS
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8.1 Survival............................................................ 17
8.2 Successors and Permitted Assigns; Assignment........................ 17
8.3 Notices............................................................. 17
8.4 Amendments and Waivers.............................................. 19
8.5 Governing Law; Severability.......................................... 19
8.6 Arbitration......................................................... 19
8.7 Specific Performance................................................ 20
8.8 Expenses............................................................ 20
8.9 Counterparts; Effectiveness......................................... 21
8.10 Headings............................................................. 21
8.11 Entire Agreement.................................................... 21
8.12 Interpretation...................................................... 21
8.13 Expiration.......................................................... 21
SCHEDULES
1.1(a) Relevant Market
1.2(b) RCN-Sub
1.2(c) BETG-Sub
1.3(a) BECO Authorizations
1.3(b) IRU Terms
1.3(c) NEWCO Authorizations
1.3(d) RCN Authorizations
EXHIBITS
1. Initial LLC Agreement
2. Operating Agreement
3. Management Agreement
4. Telecommunications Services Agreement
5. Electric Services Agreement
6. Registration Rights and Conversion Agreement
7. Joint Investment and Noncompetition Agreement
JOINT VENTURE AGREEMENT
-----------------------
THIS JOINT VENTURE AGREEMENT (the "Agreement") is made as of this 23rd
day of December, 1996, by and between RCN Telecom Services, Inc, a Delaware
corporation, and Boston Energy Technology Group, Inc., a Massachusetts
corporation and wholly-owned subsidiary of Boston Edison Company, a
Massachusetts corporation ("BECO").
The parties hereto agree as follows:
ARTICLE 1
THE JOINT VENTURE
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1.1 Purpose. The purpose of this Agreement is to set forth the terms
and conditions upon which RCN Telecom Services, Inc., directly or indirectly
through one of its Affiliates to be designated by it (collectively, "RCN"),
and Boston Energy Technology Group, Inc., directly or indirectly through one
of its Affiliates to be designated by it (collectively, "BETG"), will
organize, finance and participate in an entity that will: (i) create, own and
operate a communications network and (ii) provide voice, video, data, other
communications services and the communications support component of
energy-related customer services offered by BECO, in the cities and towns set
forth on Schedule 1.1(a) attached hereto (the "Relevant Market"). For
purposes of this Agreement, the entity to be formed by RCN and BETG is
referred to as "NEWCO," and the network of agreements to be established among
RCN, BETG, NEWCO and their Affiliates is referred to as the "Joint Venture."
1.2 Structure. (a) Each of RCN and BETG shall invest in NEWCO,
subject to the fulfillment (or waiver) of each of the conditions specified in
this Agreement. Each of RCN and BETG shall invest through a vehicle to be
formed separately by RCN and BETG for such purpose under the laws of
Massachusetts or another state in the United States (such separate entities
hereinafter referred to as "RCN-Sub" and "BETG-Sub", respectively), all of the
equity of which will be held, directly or indirectly, by RCN and/or BETG,
respectively.
(b) RCN will, prior to the Closing Date (as hereinafter
defined), determine the details of the organizational form and ownership of
RCN-Sub, and, upon such determination, the form and details regarding such
entity shall be prepared by RCN and set forth on Schedule 1.2(b) to be
attached hereto. Such organizational form may include a structure in which RCN
and RCN-Sub have a common parent entity, directly or indirectly.
(c) BETG will, prior to the Closing Date, determine the details
of the organizational form and ownership of BETG-Sub, and, upon such
determination, the form and details regarding such entity shall be prepared by
BETG and set forth on Schedule 1.2(c) to be attached hereto. Such
organizational form may include a structure in which BETG and BETG-Sub have a
common parent entity, directly or indirectly.
1.3 Defined Terms.
(a) As used herein, the following terms have the following
meanings:
"AAA" means the American Arbitration Association.
"Affiliate" means, as to any Person, any other Person Controlling,
Controlled by or under Common Control with that first Person.
"Basic Agreements" means this Agreement, the Initial LLC Agreement, the
Operating Agreement, the Registration Rights and Conversion Agreement, the
Joint Investment and Non-Competition Agreement, the IRU Agreement, the
Management Agreement, the Telecommunications Services Agreements and the
Electric Services Agreement, provided that the form of the Basic Agreements
shall be revised to the extent necessary to be consistent with the terms of
the IRU Agreement.
"BECO Assignments" shall mean the agreements pursuant to which BECO and
its Affiliates will assign to BETG-Sub the ownership of, or the right to use,
the portions of the BETG Facilities owned by them or which they have the right
to use.
"BETG Authorizations" means all regulatory consents, authorizations and
approvals with respect to BETG and its Affiliates that may be necessary for
BETG and its Affiliates to enter into and perform their obligations under the
Basic Agreements as set forth on Schedule 1.3(a) and for BECO to enable
BETG-Sub to perform such obligations.
"BETG Contributed Assets" has the meaning set forth in the Operating
Agreement.
"BETG Facilities" shall have the meaning to be set forth in the IRU
Agreement.
"Business Plan" shall have the meaning set forth in Section 2.1(c)
hereof.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee which
would, in accordance with GAAP, be required to be classified and accounted for
as a capital lease on a balance sheet of such Person.
"Control" of an Entity means power to direct or cause the direction of
the management or policies of such Entity, whether through the ownership of
voting securities, by agreement or otherwise.
"Closing Date" shall have the meaning set forth in Section 1.4(c).
"DPU" means the Massachusetts Department of Public Utilities, or any
successor thereto.
"Entity" means any corporation, limited liability company, general
partnership, limited partnership, venture, trust, business trust, estate or
other entity.
"FCC" means the Federal Communications Commission, or any successor
thereto.
"FERC" means the Federal Energy Regulatory Commission, or any successor
thereto.
"Final Order" means a consent, authorization or approval of a regulatory
authority with respect to which no appeal, petition for rehearing,
reconsideration, or stay, and no other administrative or judicial action
contesting such consent, authorization or approval is pending and as to which
the time for filing any such appeal, petition, or other action has expired or,
if filed, has been denied, dismissed, or withdrawn and the time for
instituting any further legal proceeding has lapsed.
"GAAP" means the generally accepted accounting principles in the United
States of America in effect from time to time.
"Holding Company" means a Holding Company as defined in Section 2(a)(7)
of PUHCA.
"H-S-R Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Initial Agreements" means this Agreement and the Initial LLC Agreement.
"Initial LLC Agreement" means that certain operating agreement of NEWCO
between BETG and RCN, of even date herewith, a copy of which is annexed hereto
as Exhibit 1.
"IRU Agreement" shall mean the agreement to be entered into between
BETG-Sub and NEWCO, in form and substance satisfactory to RCN and BETG,
incorporating the concepts set forth in Schedule 1.3(b) hereof.
"Liens" shall mean, as to any Person, any mortgage, lien, pledge,
adverse claim, charge, security interest or other encumbrance in or on, or any
interest or title of any vendor, lessor, lender or other secured party to or
of such Person under any conditional sale or other title retention agreement
or Capital Lease with respect to, any property or asset owned or held by such
Person, or the signing or filing of a financing statement which names such
Person as debtor, or the signing of any security agreement authorizing any
other party as the secured party thereunder to file any financing statement.
"MFS" means Metropolitan Fiber Systems/▇▇▇▇▇▇▇, Inc., a Delaware
corporation or an Affiliate thereof.
"Network" means the communications system to be constructed by or on
behalf of NEWCO, and operated by NEWCO, for the provision of the Services.
"NEWCO Authorizations" means all regulatory consents, authorizations or
approvals with respect to NEWCO that are necessary for NEWCO to conduct the
business of the Joint Venture as set forth on Schedule 1.3(c).
"Operating Agreement" shall mean the Amended and Restated Operating
Agreement of NEWCO to be entered into by BETG-Sub and RCN-Sub, substantially
in the form attached hereto as Exhibit 2.
"OVS" or "Open Video System" means a facility consisting of a set of
transmission paths and associated signal generation, reception, and control
equipment that is designed to provide cable service which includes video
programming and which is provided to multiple subscribers within a community,
provided that the Federal Communications Commission has certified such system.
This definition is intended to comply with the Communications Act of 1974, as
amended, Section 651 et. seq., 47 U.S.C. Section 571 et. seq. and the rules
and regulations promulgated by the Federal Communications Commission, 47
C.F.R. 76 1500 et seq.
"Person" means any natural person or Entity.
"PUHCA" means the Public Utility Holding Company Act of 1935, as amended
from time to time, 15 U.S.C. Section 79-792-6.
"RCN Authorizations" means all regulatory consents, authorizations and
approvals with respect to RCN that may be necessary for RCN to enter into and
perform its obligations under the Basic Agreements as set forth on Schedule
1.3(d).
"RCN Contributed Assets" has the meaning set forth in the Operating
Agreement.
"Services" means the provision of data, voice, video, other
communication services and the communications support component of
energy-related customer services offered by BECO, to residential and
commercial customers in the Relevant Market or elsewhere.
"Subsidiaries" means each corporation or other Person in which a Person
has Control.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
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Arbitration Notice 8.6(c)
BETG 1.1
BETG-Sub 1.2
Business Plan 2.1(c)
Electric Services Agreement 4.3
Joint Investment and Non- 4.5
Competition Agreement
Joint Venture 1.1
Liens 1.3
Management Agreement 4.1
NEWCO 1.1
OVS 1.1
RCN 1.1
RCN-Sub 1.2
Registration Rights and Conversion
Agreement 4.4
Relevant Market 1.1
Representatives 5.3
Telecommunications
Services Agreement 4.2
1.4 Timing of the Joint Venture. (a) Concurrently with the
execution and delivery of this Agreement,
(i) RCN and BETG have agreed on the Basic Agreements
(other than the IRU Agreement).
(ii) RCN and BETG have caused NEWCO to be formed by filing a
Certificate of Organization with the Secretary of
State of the Commonwealth of Massachusetts and have
executed and delivered the Initial LLC Agreement, as
the initial members of NEWCO, as contemplated by
Section 3.3(a).
(iii) This Agreement, the other Basic Agreements to which
RCN and BETG are parties and the consummation of the
transactions contemplated hereby and thereby have been
approved by the respective Boards of Directors of RCN
and BETG.
(b) Promptly following the execution and delivery of this
Agreement by the parties,
(i) RCN shall file, or shall cause NEWCO to file, all
necessary applications for the NEWCO Authorizations,
and shall diligently prosecute such applications and
use its best efforts to obtain such NEWCO
Authorizations as expeditiously as possible.
(ii) BETG shall file (or cause to be filed) all necessary
applications for the BETG Authorizations, and shall
diligently prosecute such applications and use its
best efforts to obtain such BETG Authorizations as
expeditiously as possible.
(iii) RCN shall file (or cause to be filed) all necessary
applications for the RCN Authorizations, and shall
diligently prosecute such applications and use its
best efforts to obtain such RCN Authorizations as
expeditiously as possible.
(iv) NEWCO shall engage in such other activities as RCN and
BETG shall agree.
(c) As soon as practicable after the satisfaction of the
conditions set forth in Article 2 (the "Closing Date"), the parties shall
execute the Basic Agreements that were not previously executed and fund
NEWCO's initial capital requirements (the "Closing"). At the Closing,
(i) RCN shall deliver, or cause to be delivered, the
following:
(A) To all counterparties, the executed Basic
Agreements (other than the Initial Agreements).
(B) To NEWCO, such instruments of conveyance,
transfer or assignment as shall be sufficient to
convey, transfer and assign to NEWCO the RCN
Contributed Assets, free and clear of any Liens.
(C) To BETG, an opinion of RCN's counsel, in form and
substance reasonably satisfactory to BETG dated
as of the Closing Date, with respect to the
organization and authority of RCN, the
enforceability of the Basic Agreements against
RCN, the inapplicability of PUHCA and the
receipt of all governmental approvals required
for NEWCO, RCN and RCN's Affiliates to satisfy
their obligations under the Basic Agreements.
` (D) To NEWCO, an Instrument of Adherence, signed by
C-Tec Corporation, relative to the Joint
Investment and Non-Competition Agreement, in
form and substance reasonably satisfactory to
BETG.
(ii) BETG shall deliver, or cause to be delivered, the
following:
(A) To all counterparties, the executed Basic
Agreements (other than the Initial Agreements).
(B) To NEWCO, such instruments of conveyance,
transfer or assignment as shall be sufficient to
convey, transfer and assign to NEWCO the BETG
Contributed Assets, free and clear of any Liens.
(C) To RCN, an opinion of BETG's counsel, in form and
substance reasonably satisfactory to RCN, dated
as of the Closing Date, with respect to the
organization and authority of BETG, the
enforceability of the Basic Agreements against
BETG, Massachusetts transmission tower law
(Chapter 166 Section 25A), the inapplicability
of PUHCA and the receipt of all governmental
approvals required for BETG and its Affiliates
to satisfy their obligations under the Basic
Agreements.
(D) To NEWCO, an Instrument of Adherence, signed by
BECO, relative to the Joint Investment and
Non-Competition Agreement, in form and substance
reasonably satisfactory to RCN.
(iii) RCN-Sub and BETG-Sub shall deliver to NEWCO by wire
transfer of immediately available funds the initial
capital contributions set forth in the Budget and in
Section 4.1 of the Operating Agreement.
ARTICLE 2
CONDITIONS TO CLOSING
---------------------
2.1 Conditions to Obligations of RCN to Close. The obligations of RCN
under Section 1.4(c) of this Agreement are subject to the fulfillment and
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any one or more of which may only be waived in writing, in whole
or in part, by RCN:
(a) Representations, Warranties and Covenants True at the
Closing Date. (i) All representations and warranties of BETG contained in
this Agreement and in the other Initial Agreements shall be true and correct
in all material respects at and as of the Closing Date as though such
representations and warranties had been made or given on such date (except to
the extent such representations and warranties speak as of an earlier date),
except (x) for changes contemplated by this Agreement and (y) where the
failure to be true and correct does not and can not have a material adverse
effect on the business, property, financial condition, shareholders' equity,
results of operations or prospects of BETG and its Affiliates, taken as a
whole, or a material adverse effect on the Joint Venture; (ii) BETG shall have
performed and complied with, in all material respects, its obligations under
the Initial Agreements that are to be performed or complied with by it prior
to or on the Closing Date; and (iii) BETG shall deliver a certificate signed
by one of its duly authorized officers certifying as to the fulfillment of the
conditions set forth in the foregoing clauses (i) and (ii).
(b) H-S-R Act and Other Governmental Approvals. (i) The
pre-transaction filing and waiting period requirements applicable to the Joint
Venture under the H-S-R Act shall have expired or shall have been terminated
or there shall have been available an exemption therefrom; (ii) any necessary
federal, state or local regulatory approvals (including the RCN
Authorizations, the BETG Authorizations and the NEWCO Authorizations) shall
have been obtained and (iii) there shall not be any governmental or
nongovernmental litigation or proceeding pending that restrains, prohibits or
prevents or, with respect to governmental litigation or proceedings, threatens
to restrain, prohibit or prevent the parties from consummating the
transactions contemplated by any of the Basic Agreements.
(c) Business Plan. RCN and BETG shall have agreed on a one-year
business plan (a "Business Plan"), including (i) an operating budget, (ii) a
budget for capital expenditures for NEWCO's first fiscal year, (iii) the
initial capital contributions required from both parties, (iv) sales and
marketing plan, (v) financial pro forma balance sheet, income statement and
statement of cash flows and (vi) performance milestones.
(d) Other Agreements. Each of BETG and its Affiliates shall
have executed and delivered all of the Basic Agreements to which it is
required to be a party.
(e) Approval by BETG-Sub. This Agreement and the other Basic
Agreements shall have been approved by the Board of Directors of BETG-Sub.
(f) BECO Assignments. The BECO Assignments shall be reasonably
satisfactory to RCN in form and substance.
(g) IRU Agreement. BETG-Sub shall have entered into the IRU
Agreement.
2.2 Conditions to Obligations of BETG to Close. The obligations of
BETG under Section 1.4(c) of this Agreement are subject to the fulfillment and
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any one or more of which may only be waived in writing, in whole
or in part, by BETG:
(a) Representations, Warranties and Covenants True at the
Closing Date. (i) All representations and warranties of RCN contained in this
Agreement and in the other Initial Agreements shall be true and correct in all
material respects at and as of the Closing Date as though such representations
and warranties had been made or given on such date (except to the extent such
representations and warranties speak as of an earlier date), except (x) for
changes contemplated by this Agreement and (y) where the failure to be true
and correct does not and can not have a material adverse effect on the
business, property, financial condition, shareholders' equity, results of
operations or prospects of RCN and its Affiliates, taken as a whole, or a
material adverse effect on the Joint Venture; (ii) RCN shall have performed and
complied with, in all material respects, its obligations under the Initial
Agreements that are to be performed or complied with by it prior to or on the
Closing Date; and (iii) RCN shall deliver a certificate signed by one of its
duly authorized officers certifying as to the fulfillment of the conditions
set forth in the foregoing clauses (i) and (ii).
(b) H-S-R Act and Other Governmental Approvals. (i) The
pre-transaction filing and waiting period requirements applicable to the Joint
Venture under the H-S-R Act shall have expired or shall have been terminated
or there shall have been available an exemption therefrom; (ii) any necessary
federal, state or local regulatory approvals (including the RCN
Authorizations, the BETG Authorizations and the NEWCO Authorizations) shall
have been obtained and (iii) there shall not be any governmental or
nongovernmental litigation or proceeding pending that restrains, prohibits or
prevents or, with respect to governmental litigation and proceedings,
threatens to restrain, prohibit or prevent the parties from consummating the
transactions contemplated by any of the Basic Agreements.
(c) Business Plan. RCN and BETG shall have agreed to the
Business Plan.
(d) Other Agreements. Each of RCN and NEWCO shall have executed
and delivered all of the Basic Agreements to which it is required to be a
party.
(e) Approval by RCN-Sub. This Agreement and the other Basic
Agreements shall have been approved by the Board of Directors of RCN-Sub.
(f) IRU Agreement. NEWCO shall have entered into the IRU
Agreement.
(g) MFS. NEWCO shall not be restricted by any non-compete
agreement with MFS.
ARTICLE 3
NEWCO
-----
3.1 Purpose. The purpose of NEWCO shall be (a) before the Closing
Date, (i) to apply for the NEWCO Authorizations and to hold the NEWCO
Authorizations, and (ii) to engage in such other activities as RCN and BETG
shall agree and (b) from and after the Closing Date (i) to enter into the
Basic Agreements to which it is a party, (ii) to purchase, construct, lease
and operate the Network to provide the Services, and (iii) to market the
Services to business and residential customers in the Relevant Market.
3.2 Form. NEWCO shall be a Massachusetts limited liability company,
and shall be governed initially by the Initial LLC Agreement and, from and
after the Closing Date, by the Operating Agreement.
3.3 Members and Capitalization. (a) On the date hereof, NEWCO will be
constituted under the Initial LLC Agreement as contemplated by Section
1.4(a)(ii) and shall have the following membership interests:
Member Membership Interest
------ -------------------
RCN 51%
BETG 49%
(b) If the Closing occurs pursuant to Section 1.4(c), RCN will assign
its membership interest in NEWCO to RCN-Sub, BETG will assign its membership
interest in NEWCO to BETG-Sub, and RCN-Sub and BETG-Sub will enter into the
Operating Agreement and make capital contributions to NEWCO in the amounts and
upon the terms set forth in the Operating Agreement.
(c) The parties agree that, prior to the Closing Date, NEWCO's sole
purpose shall be as set forth in clause (a) of Section 3.1, and its cash
requirements shall be satisfied by loans from RCN and BETG, such cash
requirements and the terms on which such loans may be made to be mutually
agreed by RCN and BETG.
(d) In the event that this Agreement is terminated and the Joint
Venture abandoned prior to the Closing Date, RCN and BETG shall cause any
loans made by them to NEWCO to be repaid and NEWCO to be dissolved.
ARTICLE 4
PRINCIPAL AGREEMENTS
--------------------
4.1 Management Agreement. On the Closing Date, NEWCO, RCN Operating
Services, Inc. and BETG-Sub shall enter into a Management Agreement
substantially in the form attached to this Agreement as Exhibit 3 (the
"Management Agreement").
4.2 Telecommunications Services Agreement. On the Closing Date, NEWCO
and BECO shall enter into a Telecommunications Services Agreement
substantially in the form attached to this Agreement as Exhibit 4 (the
"Telecommunications Services Agreement").
4.3 Electric Services Agreement. On the Closing Date, NEWCO and BETG
shall enter into an Electric Services Agreement substantially in the form
attached to this Agreement as Exhibit 5 (the "Electric Services Agreement").
4.4 Registration Rights and Conversion Agreement. On the Closing
Date, C-Tec Corporation and BETG-Sub shall enter into a Registration Rights
and Conversion Agreement substantially in the form attached to this Agreement
as Exhibit 6 (the "Registration Rights and Conversion Agreement").
4.5 Joint Investment and Noncompetition Agreement. On the Closing
Date, NEWCO, RCN-Sub and BETG-Sub shall enter into a Joint Investment and
Noncompetition Agreement substantially in the form attached to this Agreement
as Exhibit 7 (the "Joint Investment and Noncompetition Agreement"), and will
deliver appropriate adherence agreements from BECO and RCN.
4.6 MFS Agreement. NEWCO may enter into an agreement with MFS upon
terms and conditions approved by BETG in accordance with Section 7.1(g) hereof.
ARTICLE 5
COVENANTS
---------
5.1 Best Efforts. (a) Upon the terms and subject to the conditions of
this Agreement and the other agreements, documents and instruments pursuant to
which the transactions contemplated hereby are to be consummated, RCN and BETG
will use their best efforts to take, and to cause RCN-Sub and BETG-Sub,
respectively, to take, all other actions, and to do, or cause to be done, all
other things necessary, proper or advisable to carry out its obligations under
this Agreement and to consummate and make effective the transactions
contemplated hereby and by the other Basic Agreements, including, without
limitation, the following:
(i) as soon as practicable following the execution of this
Agreement, to make all applications and filings and to use its best
efforts to obtain all other authorizations and consents required to be
obtained by such party or its Affiliates in connection with the
consummation of the transactions contemplated by this Agreement and by
the other Basic Agreements;
(ii) in the event any changes in the structure or the terms of
the transactions or agreements contemplated by this Agreement or by any
of the other Basic Agreements are required to facilitate obtaining the
authorizations required in order to achieve the purposes of the Joint
Venture, to use their best efforts to accommodate such changes to the
extent they would not adversely affect such party's rights or
obligations hereunder (or under any other agreement, document or
instrument contemplated hereby), or have an adverse effect on the
proposed businesses or prospects of the Joint Venture, or such party's
proposed investment in NEWCO; and
(iii) subject to Section 6.1(h), in the event any claim, action,
suit, investigation or other proceeding by any governmental authority or
other person is commenced which questions the validity or legality of
any of the transactions contemplated hereby or by any of the other Basic
Agreements or any injunction or other order is issued in any such
proceeding, to cooperate with the other party hereto regarding the
defense of such proceedings and the removal of any such impediment to
the consummation of such transactions and to use its best efforts to
have such injunction or other order dissolved.
(b) Each of the parties hereto agrees to keep the other parties
hereto informed as to all material developments and communications relating to
the transactions contemplated by this Agreement.
(c) The parties hereto shall use their best efforts to agree on
the Business Plan within 30 days of the date hereof.
(d) The parties hereto shall use their best efforts to agree on
the form of the IRU Agreement within 30 days of the date hereof.
(e) RCN shall use its best efforts to cause MFS to enter into an
agreement on terms and conditions satisfactory to BETG, acting reasonably.
(f) BETG shall use its best efforts to obtain from BECO all
rights necessary to satisfy all of its obligations under the Basic Agreements.
5.2 Public Announcements. Except as required by law, any governmental
agency or any securities exchange, the parties hereto agree to obtain the
prior approval of each other before issuing (or allowing their Affiliates to
issue) any press release, public disclosure or other announcement with respect
to this Agreement or any of the transactions contemplated by this Agreement.
In the event either party hereto is so required by law, any governmental
agency or any securities exchange to make a public disclosure or other
announcement as aforesaid, it shall use its best efforts to afford the other a
reasonable opportunity to review the form and content of the announcement or
disclosure prior to making same.
5.3 Confidentiality. Each of the parties hereto will hold, and will
use its reasonable, good faith efforts to cause its respective shareholders,
partners, members, directors, officers, employees, accountants, counsel,
consultants, agents and financial or other advisors (collectively
"Representatives") to hold, in confidence, all information (whether oral or
written), including this Agreement and the documents contemplated herein,
concerning the transactions contemplated by this Agreement furnished to such
party by or on behalf of any other party in connection with such transactions,
unless legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand or similar process, or by order of a
court or tribunal of competent jurisdiction, or in order to comply with
applicable rules or requirements of any stock exchange, government department
or agency or other regulatory authority, or by requirements of any securities
law or regulation or other legal requirement) to disclose any such information
or documents, and except to the extent that such information or documents can
be shown to have been (a) previously known on a nonconfidential basis by such
party, (b) in the public domain through no fault of such party or (c) acquired
by such party on a nonconfidential basis from sources not known by such party
to be bound by any obligation of confidentiality in relation thereto.
Notwithstanding the foregoing provisions of this Section 5.3, each party may
disclose such information to its Representatives in connection with the
transactions contemplated by this Agreement or any of the other Basic
Agreements and to its lenders in connection with obtaining the financing for
the transactions contemplated by this Agreement so long as such
Representatives and lenders are informed by such party of the confidential
nature of such information and are directed by such party to treat such
information confidentially, and to certain governmental agencies in connection
with the procurement of governmental authorizations contemplated by this
Agreement. The obligation of each party to hold any such information in
confidence shall be satisfied if such party exercises the same care with
respect to such information as it would take to preserve the confidentiality
of its own similar information. If this Agreement is terminated, each party
will, and will use its reasonable, good faith efforts to cause its respective
Representatives and lenders to, destroy or deliver to the other party, upon
request, all documents and other materials, and all copies thereof, obtained
by such party or on its behalf from the other party hereto in connection with
this Agreement that are subject to such confidence.
5.4 RCN Telecommunications Services Agreement. In the event that RCN
or any of its Affiliates should procure telecommunications services which
NEWCO can provide, NEWCO and RCN or such Affiliate of RCN shall enter into a
telecommunications agreement with NEWCO upon substantially the same terms and
conditions as the Telecommunications Services Agreement.
5.5 Sale of Fiber. Without the prior written consent of RCN, BETG
shall not, and shall not permit BECO to, sell, lease or transfer any part of
its existing fiber optic network.
ARTICLE 6
REPRESENTATION AND WARRANTIES
-----------------------------
6.1 Representations and Warranties of RCN. RCN represents and
warrants, as of the date hereof, and, as of the Closing Date, as follows:
(a) Organization and Standing. RCN is a corporation duly
incorporated, validly existing and in corporate good standing under the laws
of the State of Delaware.
(b) Authority; Enforceability. RCN has the corporate power and
authority to execute and deliver the Initial Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. Such execution, delivery, performance and
consummation have been duly authorized by all necessary corporate action on
the part of RCN. The Initial Agreements have been duly executed and delivered
by RCN and constitute valid and legally binding obligations of RCN, enforceable
against RCN in accordance with their terms except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization,
or other laws affecting creditors' rights generally or by the availability of
equitable remedies.
(c) No Conflict. The execution, delivery and performance by
RCN of each of the Initial Agreements (i) do not contravene any provision of
RCN's charter or by-laws; (ii) do not violate or conflict with any law,
regulation or contractual restriction to which RCN is subject; and (iii) shall
not result in the creation of, or violate or conflict with, any Lien upon or
with respect to any of its properties.
(d) Consents and Governmental Authorizations. Except for the RCN
Authorizations and NEWCO Authorizations, no consent, order, approval or
authorization or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution,
delivery and performance by RCN and NEWCO of any of the Basic Agreements and
the consummation of the transactions contemplated thereby.
(e) No Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission, or to the
reimbursement of any of its expenses, in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
RCN.
(f) No Undisclosed Partners. RCN has no obligation or
agreement, either actual or contingent, to share any portion of its interest
in NEWCO with any Person.
(g) PUHCA. RCN is not a Holding Company or otherwise subject to
regulation under PUHCA and the execution and delivery of the Initial
Agreements do not cause RCN to become a Holding Company or otherwise subject
to PUHCA.
(h) Litigation. There is no action, suit, proceeding, or
investigation pending or, to the best knowledge of RCN, threatened, against or
affecting RCN, or its properties, assets or business, in any court or before
or by any governmental department, board, agency or instrumentality, or any
arbitrator, that materially affects or impairs RCN's ability to enter into
this Agreement or any other Basic Agreement, or to consummate the transactions
contemplated hereby or thereby.
6.2 Representations and Warranties of BETG. BETG represents and
warrants, as of the date hereof, and, as of the Closing Date, as follows:
(a) Organization and Standing. BETG is a corporation duly
incorporated, validly existing and in corporate good standing under the laws
of the Commonwealth of Massachusetts.
(b) Authority; Enforceability. BETG has the corporate power
and authority to execute and deliver the Initial Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. Such execution, delivery, performance and
consummation have been duly authorized by all necessary corporate action on
the part of BETG. The Initial Agreements have been duly executed and
delivered by BETG and constitute the valid and legally binding obligations of
BETG, enforceable against BETG in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization, or other laws affecting creditors' rights
generally or by the availability of equitable remedies.
(c) No Conflict. The execution, delivery and performance by
BETG of each of the Initial Agreements (i) do not contravene any provision of
BETG's charter or by-laws; (ii) do not violate or conflict with any law,
regulation or contractual restriction to which BETG is subject; and (iii)
shall not result in the creation of, or violate or conflict with, any Lien
upon or with respect to any of its properties.
(d) Consents and Governmental Authorizations. Except for the
BETG Authorizations, no consent, order, approval or authorization or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
BETG of any of the Basic Agreements and the consummation of the transactions
contemplated thereby.
(e) No Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission, or to the
reimbursement of any of its expenses, in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
BETG.
(f) No Undisclosed Partners. BETG has no obligation or
agreement, either actual or contingent, to share any portion of its interest
in NEWCO with any Person.
(g) PUHCA. BETG is not a Holding Company or otherwise subject to
regulation under PUHCA and the execution and delivery of the Initial
Agreements do not cause RCN to become a Holding Company or otherwise subject
to PUHCA.
(h) Litigation. There is no action, suit, proceeding or
investigation pending or, to the best knowledge of BETG, threatened, against
or affecting BETG or its properties, assets or business, in any court or
before or by any governmental department, board, agency or instrumentality, or
any arbitrator, that materially affects or impairs BETG's ability to enter into
this Agreement or any other Basic Agreement, or to consummate the transactions
contemplated hereby or thereby.
ARTICLE 7
TERMINATION AND EXPENSES
------------------------
7.1 Termination. Notwithstanding anything herein or in any of the
Initial Agreements, this Agreement may be terminated and the Joint Venture
abandoned at any time prior to the Closing Date:
(a) by mutual consent of RCN and BETG;
(b) by either RCN or BETG, if either RCN or BETG receives a
Final Order denying an RCN Authorization, a BETG Authorization or NEWCO
Authorization;
(c) by either RCN or BETG, if the Closing shall not have
occurred on or before June 30, 1997, unless such failure so to consummate
shall be due to the failure of the party seeking to terminate this Agreement
to perform in all material respects each of its obligations under this
Agreement required to be performed by it on or prior to the Closing Date
pursuant to the terms hereof (unless such failure to consummate is due to the
failure to obtain the BETG Authorizations, RCN Authorizations or NEWCO
Authorizations in which case such date shall be extended for an additional
three months);
(d) by RCN, if there has been a material breach of a
representation or warranty in any Initial Agreement by BETG, and BETG fails to
cure such breach within 15 days after notice thereof from RCN, or a material
breach by BETG of any covenant set forth in any Initial Agreement or a failure
of any condition to which the obligations of RCN are subject, and such breach
or failure has not been waived expressly in writing;
(e) by BETG, if there has been a material breach of a
representation or warranty in any Initial Agreement by RCN and RCN fails to
cure such breach within 15 days after notice thereof from BETG or a material
breach by RCN of any covenant set forth in any Initial Agreement or a failure
of any condition to which the obligations of BETG are subject, and such breach
or failure has not been waived expressly in writing;
(f) by either RCN or BETG if a Business Plan is not agreed upon
within 60 days after the date hereof;
(g) by BETG if NEWCO has not presented to BETG a form of
agreement with MFS satisfactory to BETG, acting reasonably, within 60 days
after the date hereof; BETG shall approve or disapprove of such form of
agreement not later than 10 days after presentation by NEWCO; such agreement
shall be signed, in the form so approved, within 20 days after the date of
such approval;
(h) by either BETG or RCN if the form of IRU Agreement has not
been agreed to by them within 60 days after the date hereof; or
(i) by either BETG or RCN if they shall not have determined the
Agreed Value (as defined in the Operating Agreement) of the RCN Contributed
Assets and the BETG Contributed Assets within 60 days after the date hereof.
7.2 Liabilities in Event of Termination. In the event of the
termination and abandonment of this Agreement and the transactions
contemplated hereby, this Agreement shall become void and have no effect, and
RCN, BETG and their respective directors, officers, employees and shareholders
shall have no obligation or liability to each other hereunder, except (a) for
those obligations set forth in Sections 5.2 and 5.3, (b) for any obligations
of RCN and BETG arising from the activities of the Joint Venture prior to such
termination and (c) that nothing herein shall relieve any party from liability
for any breach of this Agreement.
ARTICLE 8
MISCELLANEOUS
-------------
8.1 Survival. The representations and warranties of each of the
parties contained in this Agreement shall survive until the Closing.
8.2 Successors and Permitted Assigns; Assignment.
(a) Subject to Section 8.2(b), the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and to the extent applicable heirs,
executors, administrators and legal representatives.
(b) Neither party may assign, delegate or otherwise transfer any
of its rights or obligations under this Agreement without the prior written
consent of each of the parties hereto. Notwithstanding the foregoing, a party
may assign its rights and obligations under this Agreement to an Affiliate
provided that the assigning party will continue to be responsible for its
liabilities and obligations hereunder.
8.3 Notices. All notices, requests and other communications hereunder
shall be deemed to have been duly delivered, given or made to or upon any
party hereto if in writing and delivered by hand against receipt, or by
certified or registered mail, postage prepaid, return receipt requested, or to
a courier who guarantees next business day delivery or sent by telecopy (with
confirmation), to such party at its address set forth below or to such other
address as such party may at any time, or from time to time, direct by notice
given in accordance with this Section 8.3.
if to RCN:
RCN Telecom Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Manager
and
C-TEC Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, Esq.
if to BETG:
Boston Energy Technology Group, Inc.
c/o Boston Edison Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., Assistant General Counsel
with a copy to:
Posternak, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
The date of delivery of any such notice, request or other communication shall
be the earlier of (i) the date of actual receipt or (ii) three business days
after such notice, request or other communication is sent if sent by certified
or registered mail, (iii) if sent by courier who guarantees next business day
delivery the business day next following the day such notice, request or other
communication is actually delivered to the courier or (iv) the day actually
telecopied.
8.4 Amendments and Waivers. (a) Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement,
or in the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
8.5 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT
REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF
ANOTHER JURISDICTION. If any provision of this Agreement or its application
to any Person or circumstance is held invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provision to other
Persons or circumstances is not affected and such provision shall be enforced
to the greatest extent permitted by law.
8.6 Arbitration. (a) In the event of any dispute between the parties
hereto as to a matter referred to herein or as to the interpretation of any
part of this Agreement, including but not limited to this Section 8.6 or as to
the determination of any rights or obligations or entitlements arising from or
related to this Agreement or as to the calculation of any amounts payable
under this Agreement, the parties shall refer the matter to their respective
chief executive officers for resolution.
(b) Should the chief executive officers of the respective
parties fail to resolve the dispute within 20 days from such referral, the
parties agree that such dispute will not be referred to any court but will be
referred to binding arbitration, and the provisions of this Section 8.6 shall
apply.
(c) The arbitration shall be governed by the AAA Commercial
Arbitration Rules (the "Rules"), as modified by this Section 8.6 and by the
United States Arbitration Act, 9 U.S.C. Section et seq. (the "Arbitration
Act"). Any conflict between the Rules and the Arbitration Act shall be
decided in favor of the Rules. The party wishing to submit such matter to
arbitration shall give written notice (the "Arbitration Notice") to the
other party (the "Respondent") of its intention to arbitrate. The place of
the arbitration shall be Boston, Massachusetts. The arbitration shall be
conducted, and the final resolution of the dispute (the "Award") shall be
rendered by one arbitrator (the "Arbitrator") to be mutually selected by
the parties. If the parties cannot agree to a mutually acceptable
Arbitrator within seven days of Respondent's receipt of the Arbitration
Notice, the Arbitrator shall be selected in accordance with rule 13 of the
Rules.
(d) All hearings shall be held within 30 days following the
appointment of the Arbitrator. At a time designated by the Arbitrator, each
party shall simultaneously submit to the Arbitrator and exchange with each
other its final proposed Award, and in rendering the final Award, the
Arbitrator shall be limited to choosing the Award proposed by either of the
parties without modification. The Arbitrator shall issue the final Award no
later than 15 days from the completion of the hearings. The Award of the
Arbitrator shall be final and binding. Judgment on any Award may be entered
in any court having jurisdiction thereof.
(e) To the extent that the parties pursue a judicial remedy in
aid of arbitration, each party consents and submits to the non-exclusive
jurisdiction of and venue in the federal courts located in Boston,
Massachusetts (or, in case such a federal court does not have jurisdiction,
the state courts located in Boston, Massachusetts). Each party consents to
service of the notice of arbitration, and any other paper in the arbitration,
by registered mail or personal delivery at its address specified in Section
8.3 hereof. Nothing in this subsection (e) shall limit the jurisdiction of
other courts for purposes of enforcement of a final arbitral Award.
(f) The fact that any party has invoked the provisions of this
Section 8.6 shall be considered to be confidential information under Section
5.3 of this Agreement and shall not relieve either party of any obligations it
may otherwise have to continue performance in accordance with the provisions
of this Agreement.
(g) This agreement to arbitrate a dispute in accordance with
this Section 8.6 and any Award made hereunder shall be binding upon the
successors and assigns and any trustee or receiver of each Member.
8.7 Specific Performance. The parties agree that irreparable damage
will result if this Agreement is not performed in accordance with its terms,
and the parties agree that any damages available at law for a breach of this
Agreement would not be an adequate remedy. Therefore, the provisions hereof
and the obligations of the parties hereunder shall be enforceable in a court
of equity, or other tribunal with jurisdiction, by a decree of specific
performance in aid of arbitration, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies and all other
remedies provided for in this Agreement shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies that the parties may
have under this Agreement, at law or in equity.
8.8 Expenses. All expenses incurred by any party hereto in connection
with the negotiation, preparation and consummation of this Agreement and the
transactions contemplated hereby shall be borne by such party except as
otherwise expressly provided in any provision of this Agreement.
8.9 Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signature thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received counterparts hereof signed by all of the other parties hereto.
8.10 Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.11 Entire Agreement. This Agreement, the Exhibits attached (or to be
attached) hereto and the agreements, documents and instruments contemplated
hereby, constitute the entire agreement between the parties with respect to
the subject matter hereof, and supersede all prior agreements and
understandings, whether oral or written, between or among any of the parties
hereto with respect to the subject matter hereof.
8.12 Interpretation. In any dispute concerning the construction or
interpretation of any provision of this Agreement or any ambiguity thereof,
there shall be no presumption that the Agreement or any provision hereof be
construed against the party who drafted this Agreement.
8.13 Expiration. This Agreement shall be superseded at the Closing by
the Basic Agreements (except the Initial Agreements) and all terms and
conditions of this Agreement shall expire and terminate at such time.
8.14 Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each party shall execute and deliver any
additional documents and instruments and perform any additional acts that may
be necessary or appropriate to effectuate and perform the provisions of this
Agreement and such transactions.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
as of the date first set forth above.
RCN TELECOM SERVICES, INC.
By
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
BOSTON ENERGY TECHNOLOGY
GROUP, INC.
By
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Duly Authorized Signatory
SCHEDULE 1.1(a)
Relevant Market
Areas Included in Relevant Market
---------------------------------
The following cities, towns or local municipalities (See Attached Map).
Acton Lexington Walpole
Arlington Lincoln Waltham
Ashland ▇▇▇▇▇▇▇ Watertown
Bedford Medfield Wayland
Bellingham Medway Weston
Boston Millis Westwood
Brookline ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Burlington Natick Woburn
Canton Needham
Carlisle ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Norfolk
Dedham ▇▇▇▇▇▇
▇▇▇▇▇ Sherborn
Framingham Somerville
Holliston Stoneham
Hopkinton Sudbury
Note: Boston shall be defined to include Allston, Brighton, Charlestown,
Dorchester, East Boston, Hyde Park, Jamaica Plain, Mattapan, Roslindale,
South Boston and West Roxbury.
Note: The parties, by mutual agreement, may expand the Relevant Market to
include the municipalities of Cambridge, Belmont, Concord, Wellesley,
▇▇▇▇▇▇▇, Braintree, Quincy and Weymouth.
SCHEDULE 1.3(a)
BETG AUTHORIZATIONS
I. Authorizations for BECO
1. DPU approval of an increase in BECO's investment in BETG
2. DPU approval of the Telecommunications Services Agreement with
NEWCO
II. Authorizations for BETG
1. Expiration of the H-S-R waiting period
III. Authorizations for BETG-Sub
1. FCC approval of "exempt telecommunications company" (ETC) status
SCHEDULE 1.3(b)
IRU TERMS
A fundamental premise of the NEWCO joint venture is the
contribution by both parties of their special assets and capabilities.
Accordingly, at the Closing RCN shall contribute certain assets to NEWCO,
including its customer base, and will furnish its skill in a cost effective
and timely manner in managing NEWCO. Similarly, at the Closing, BETG's
contribution will be the construction of the Network, utilizing the benefits
which BETG can provide, and the availability of the Network (including the
portions already built) to NEWCO's existing and future customers.
The IRU Agreement shall detail these fundamental contributions by
BETG and its Affiliates. The basic concepts shall be as follows:
1. BETG-Sub shall provide construction services to build out
the Network in a timely and cost-effective manner, as requested by NEWCO from
time to time, so long as such activity does not interfere with BECO's
provision of electric service. The details of the ownership of, and
compensation for, the Network shall be as agreed by the parties.
2. BETG-Sub shall make available to NEWCO, and NEWCO shall
acquire from BETG-Sub, on terms to be negotiated, through an indefeasible
right of use, (a) all of the available capacity of BECO's existing fiber
backbone and (b) the ability to utilize all of the real estate, poles or other
easements, rights-of way, leases, licenses, locations or other interests which
BECO and its Affiliates have contracted or otherwise been granted, or will
contract or be granted hereafter, to the extent necessary for the construction
and operation of the Network.
3. BETG-Sub shall make the Network available to NEWCO through
December 31, 2050 or, if sooner, the termination of the business contemplated
by the Joint Venture Agreement.
4. BETG-Sub shall maintain the Network, as requested by NEWCO.
SCHEDULE 1.3(c)
NEWCO AUTHORIZATIONS
(a) The issuance by the FCC of all necessary authorizations for NEWCO to
provide interstate and international telecommunications services and OVS; and
(b) The issuance by the DPU of all necessary authorizations for NEWCO to
provide intrastate telecommunications services.
SCHEDULE 1.3(d)
RCN AUTHORIZATIONS
(a) Expiration of the H-S-R waiting period.