North American Datacom Inc. Contracts
Sample Business Contracts
Mississippi Right-Of-Way Sublease Agreement - Tishomingo Railroad Co. Inc. and North American Infotech LLC
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
RIGHT-OF-WAY SUBLEASE AGREEMENT
THIS RIGHT-OF-WAY SUBLEASE AGREEMENT ("Sublease") is made and entered
into as of the 6th day of July, 2000 (the "Effective Date"), by and between
TISHOMINGO RAILROAD COMPANY, INC., a corporation organized and existing under
the laws of the state of Mississippi, with an office at 751 County Road 989,
Iuka, Mississippi 38852 ("Tishomingo"), and NORTH AMERICAN INFOTECH, L.L.C., a
limited liability company organized and existing under the laws of the State of
Delaware, with an office at 751 County Road 989, Iuka, Mississippi 38852
("NAIT").
RECITALS
WHEREAS, Tishomingo, has been accorded certain rights and privileges
with respect to certain property owned by the State of Mississippi, including
the right to Sublease to others the State of Mississippi right-of-way
constituting the Segment, by the State of Mississippi;
NOW, THEREFORE, in consideration of the foregoing, the covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINED TERMS
In, and for the purposes of, this Agreement, certain terms shall have
the meanings assigned to them as follows:
"Additional Documentation" shall have the meaning set forth in Section
3.06.
"Cable" means a fiber optic cable, the optical fibers contained therein
and any protective casing, and associated splice connections, splice boxes and
vaults to be installed as part of the Project. "Cable" does not include any
electronics or optronics necessary to create telecommunications capacity on
fibers in a Cable.
"Conduit" shall mean a structure containing one or more Ducts.
"Conduit System" shall mean any system of telecommunications Conduit,
including pull boxes, handholes, manholes, markers and other related facilities,
which is to be established in the Segment, and which will be owned by NAIT.
"Conduit System Specifications" means the maps, drawings, plans and
specifications for the construction and installation of the Conduit System and
related facilities for the Segments, showing, by way of example and not of
limitation: (i) the proposed location of all Fiber Optic Facilities, including
the Conduit System, and their respective distance from the nearest railroad
- 1 -
<PAGE> 2
track; (ii) the number and size of Conduit(s) and Ducts to be installed; and
(iii) the total mileage for the Segments. The Conduit System Specifications are
set forth in Schedule B hereto.
"Duct" shall mean a single enclosed pipe, raceway or inner-duct
suitable for the installation of Cables and shall include pull boxes, handholes,
manholes, markers and other related facilities.
"Equipment Shelter" means any structure utilized to house regeneration,
amplification, electronic, optronic or other equipment to be used in connection
with the establishment and operation of telecommunications capacity on the
Conduit System.
"Fiber Optic" or "Optical Fiber" shall mean a strand of optical
waveguide permitting the transmission of communications signals.
"Fiber Optic Facilities" means a fiber optic telecommunications
transmission system and certain appurtenant equipment and structures.
"Project" means the totality of the undertakings of the parties under
this Agreement.
"Regen Site" means the site of an optical signal device, which
regenerates, amplifies or extends optical signals through optical fiber,
together with any associated equipment, facilities, and power source, and the
Equipment Shelter in which it is housed.
"Segment" means the Railroad right-of-way segments specified in Section
4.01.
ARTICLE 2
TERM
Section 2.01. Initial Term. The initial term of this Sublease (the
"Initial Term") shall commence on the Effective Date and shall expire at 11:59
p.m. on July 5, 2030.
Section 2.02. Renewals. Provided that (a) NAIT is not in default
hereunder, and (b) Tishomingo, upon expiration of the Initial Term or the first
Renewal Term, has the right to renew this Sublease or otherwise make available
the Segment to NAIT, NAIT shall have the option to renew this Sublease for two
(2) five-year terms (the "Renewal Terms" and together with the Initial Term the
"Term") commencing on the expiration of the Initial Term and the first Renewal
Term. Subject to the provisions of Section 4.02, NAIT's renewal options shall be
exercisable by notice given to Tishomingo not more than one (1) year nor less
than six (6) months before the expiration of the Initial Term or the first
Renewal Term, respectively.
ARTICLE 3
GRANT OF SUBLEASE
Section 3.01. Grant of Sublease. Tishomingo, to the extent its rights,
title and interest permit, hereby grants unto NAIT a non-exclusive Sublease
permitting NAIT to occupy and use,
- 2 -
<PAGE> 3
during the Term, such portions of that section of the State of Mississippi's
right-of-way more fully described in Exhibit A hereto (the "Segment"), as is
necessary for the purpose of installing, maintaining and operating the Conduit
System and any associated equipment subject to the terms and conditions set
forth or referenced herein. The parties intend that this Sublease (i)
constitutes a Sublease of tangible property for tax purposes and (ii)
constitutes a "section 467 rental agreement" within the meaning of section 467
of the Internal Revenue Code of 1986 (the "Code") and the regulations
promulgated thereunder.
Section 3.02. Limitations on Grant. NAIT acknowledges that the grant of
a Sublease hereunder is a quitclaim grant, made without covenants,
representations or warranties in respect of Tishomingo's (i) title in the
Segment, or (ii) right to use or make available the Segment to others for the
purposes contemplated herein. NAIT further acknowledges (a) that the Segment may
be subject to (1) the State of Mississippi's or Tishomingo's determination of
its needs for orderly and efficient rail operations, (2) any prior commitments
by The State of Mississippi as to the use of the State of Mississippi
right-of-way, (3) conditions, covenants, easements, encroachments, Subleases,
licenses, mortgages, indentures, reversionary interests, zoning restrictions and
other burdens and limitations, of record and not of record, and (b) that the
rights granted hereunder are subject and subordinate to each and all of the
foregoing. Additionally, NAIT recognizes that any of the State of Mississippi
right-of-way documents, including, but not necessarily limited to, maps and
drawings, supplied by Tishomingo were not prepared for use as real estate title
maps. Tishomingo does not represent or suggest that the property lines and
right-of-way boundary lines shown on such documents are accurate or that any
other information contained on such documents is correct.
Section 3.03. Use of Segment. NAIT shall have the right to install and
maintain the Conduit System through the Segment. NAIT also shall have the right
to construct, without additional compensation due hereunder, underground
connections in, upon, over, under, across, along and through the State of
Mississippi right-of-way, between the Conduit System and points-of-presence,
customer facilities, and other NAIT telecommunications facilities.
Section 3.04. Exclusions. This Sublease does not include or convey any
rights to (i) any space or land along or adjacent to the Conduit System, or (ii)
any other property or facilities associated with the State of Mississippi
right-of-way ("Excluded Items") and, absent any additional written agreement
between the parties, such Excluded Items shall not be available to NAIT for the
installation, maintenance or operation of any fiber optic facilities or
equipment. By way of example, and not of limitation, Tishomingo is not conveying
to NAIT any right to use electrical power purchased by or available to either
Tishomingo or the State of Mississippi. NAIT shall be solely responsible for
securing, purchasing, separately metering, and paying for all electrical power
used in connection with the installation, operation, maintenance, and repair of
the Conduit System, whether such electrical power is used for normal activities
or for emergency purposes.
Section 3.05. Ownership of Conduit System. The Conduit System is and
shall remain the personal property of NAIT. NAIT shall have the right to file
and maintain public notice of the
- 3 -
<PAGE> 4
presence of the Conduit System pursuant to and in compliance with the Uniform
Commercial Code.
ARTICLE 4
COMPENSATION
Section 4.01. Prepaid Rent for Initial Term. NAIT, as of the date of
this Sublease, has assigned to Tishomingo a two-percent (2%) membership interest
in the NAIT LLC, valued at $2 million, which is the sum the parties have
mutually assigned to the value of the right of way segment over thirty (30)
years, contemplating multi-conduit use, in consideration for the occupancy and
use of the Segment during the Initial Term. Tishomingo will also contract with
NAIT for the use of up to two (2) locomotives for NAIT's rail plow operation at
then-present market rates, the terms of which contract will be negotiated and
memorialized in a separate writing. Tishomingo will have the option to provide
additional locomotives upon request by NAIT at then-present market rates.
Section 4.02. Renewal Term Rent. The rent to be paid to Tishomingo by
NAIT during the Renewal Term ("Renewal Term Rent") shall be negotiated and
determined by the parties hereto prior to the inception of the Renewal Term.
ARTICLE 5
NAIT ENTRY AND PRESENCE
NAIT may enter upon, and may cause its employees, agents and
contractors to enter upon, the Segment only for the purpose of installing,
operating and maintaining the Conduit System, in accordance with all safety
rules established by Tishomingo, the State of Mississippi and all other federal,
state and local authorities in existence at the time of entry.
ARTICLE 6
CONDUIT SYSTEM
Section 6.01. Installation of Conduit System. Before NAIT performs any
work on the Conduit System in the Segment, including, without limitation, any
installation of Cable, NAIT and Tishomingo shall confer on the general nature of
such work.
Section 6.02. Additional Permits. NAIT, at its sole cost and expense,
shall secure and maintain in effect all federal, state and local permits and
licenses required for the installation, operation, maintenance, repair,
reinstallation, replacement, relocation or removal of any Conduit System located
in the Segment, including, without limitation, zoning, building, health,
environmental or communication permits or licenses, and shall indemnify
Tishomingo against payment of any costs thereof and against any fines or
penalties that may be levied for failure to procure, or to comply with, such
permits or licenses, as well as any remedial costs of curing violations thereof.
All environmental assessments and feasibility studies necessary to satisfy
federal, state or local environmental agencies in connection with permitting or
construction, or to
- 4 -
<PAGE> 5
secure for NAIT the right to install or operate telecommunications facilities in
the Segment or any portion thereof, shall be obtained by NAIT at its sole cost
and expense. Tishomingo shall cooperate with NAIT's efforts to obtain (i)
environmental approvals and (ii) any permits, licenses or approvals of
governmental agencies or authorities necessary for the use of any structures or
facilities (including streets, roads or utility poles) along or across the
Segment, and which are not solely owned by Tishomingo or The State of
Mississippi.
Section 6.03. Tishomingo's Cooperation. In order to facilitate the
design and engineering of the Conduit System and help minimize the need for
future relocations, which the parties acknowledge is in their mutual interests,
Tishomingo agrees to provide reasonable cooperation to assist NAIT in preparing
and implementing its technical plans for its telecommunications system in the
Segment. Such cooperation may include: (i) meeting in person and conferring by
telephone with NAIT to discuss NAIT's plans and the prosecution of NAIT's work;
(ii) escorting NAIT on inspection trips of the Segment; (iii) providing maps,
charts, engineering data, and plans relating to the Segment which are reasonably
accessible and not of business sensitivity or subject to confidentiality
protections; (iv) providing reasonable access, at Tishomingo's and its
affiliates' document storage facilities to applicable title documents, licenses
and other documents evidencing rights held by third parties in the Segment; (v)
allowing NAIT to perform work within the Segment so long as such work can be
performed consistent, in Tishomingo's sole judgment, with the safe and timely
operation of the State of Mississippi's and Tishomingo's businesses. NAIT
acknowledges that maps and other materials supplied by Tishomingo may not have
been prepared as real estate title maps, and that the property lines,
right-of-way lines and other information may not be accurate or correct. NAIT
further acknowledges that the absence of markers or monuments on such maps or on
or about the Segment indicating the presence of subterranean facilities or other
occupations does not constitute a warranty or representation by Tishomingo that
none exist. NAIT accepts this Sublease and Tishomingo's cooperation hereunder
cognizant of the fact that NAIT's engineering and construction costs may
increase by reason of undisclosed occupations or obstructions of the Segment,
and NAIT agrees to accept sole responsibility for such costs.
Section 6.04. System Costs. NAIT shall bear the entire cost and expense
of designing and installing its Conduit system, including, without limitation,
any Cable, electronics and optronics. Tishomingo shall have the right to post
notices of nonresponsibility along the Segment, and to otherwise notify any
entity or person supplying services or materials in connection with NAIT's
activities in the Segment that Tishomingo is not responsible for the cost
thereof.
Section 6.05. General Engineering Specifications. The parties adopt the
following general engineering specifications for all Conduit System placed in
the Segment, which specifications may be modified only upon Tishomingo's
approval. No materials or equipment used in the Conduit System shall be placed
within 10 feet of the center line of any track. Such fiber optic facilities
shall be installed below ground level and shall not use structures, fixtures or
improvements located on or about the State of Mississippi right-of-way, except
as approved in writing by Tishomingo. NAIT shall install and maintain monuments
and markers separated by no more than 500 feet showing the location of the
Conduit System and changes in direction of the Conduit System.
- 5 -
<PAGE> 6
Section 6.06. Relocation of Conduit System. In the event that
Tishomingo or the State of Mississippi determines that any construction,
alteration or removal of railroad facilities necessitates relocation of the
Conduit System, NAIT, at its sole expense and following receipt from Tishomingo
of notice of Tishomingo's plans to relocate the Conduit System, shall, within 60
days (or, in the event the relocation involves 2.5 or more miles of the Segment,
within such period as may be mutually agreed by the parties), also relocate the
Conduit System from the affected portion of the Segment to such other location
within the Segment or other nearby rights-of-way to which Tishomingo has or can
obtain access as Tishomingo may designate. NAIT shall bear the entire expense of
such protection or relocation of the Conduit System.
ARTICLE 7
PROTECTION OF SEGMENT
AND TELECOMMUNICATIONS SYSTEMS
Section 7.01. Compliance with Tishomingo's and The State of
Mississippi's Directions and Laws Governing the Segment. NAIT acknowledges that
control and supervision of the Segment shall remain with Tishomingo and the
State of Mississippi at all times during the Term. NAIT shall at all times
conform to, and cause all persons using or occupying the Segment to conform to,
all applicable laws, ordinances, rules, orders and regulations, including those
relating to health, safety, noise, environmental protection, waste disposal and
air and water quality.
Section 7.02. Access to Conduit System. For purposes of installing,
inspecting, testing, maintaining, repairing, replacing and removing its Conduit
System and related equipment, NAIT shall have access to the components of the
Conduit System dedicated to the Conduit System. To confirm NAIT's compliance
with the terms and conditions of this Sublease, Tishomingo shall be permitted
reasonable access to the Conduit System and the splice enclosures and equipment
vaults utilized by NAIT. Tishomingo, at its sole discretion, shall have
unrestricted access to all other components of the Conduit System. Tishomingo
agrees not to disturb the Conduit System without making a good faith effort to
give prior notice to NAIT. Upon receiving such notice, NAIT may request, and
Tishomingo shall make a good faith effort to accommodate such a request, to be
present during any activities posing a risk of disturbance to the Conduit
System; provided, however, that under no circumstances shall Tishomingo or the
State of Mississippi be obligated to postpone or delay their activities on the
Segment to accommodate NAIT's presence.
Section 7.03. Non-Interference with Rail Operations. NAIT acknowledges
that a major factor in Tishomingo's agreeing to the terms and conditions of this
Sublease, is NAIT's representation and acknowledgment that the Conduit System in
the Segment is to be installed, operated and maintained in a manner so as to not
interfere with Tishomingo's use of the Segment for its operations.
Section 7.04. Risk of Harm from Rail Operations. NAIT understands that
the presence of the Conduit System within the Segment involves risk as a result
of railroad operations and maintenance activities, and NAIT agrees to assume
such risks. It is agreed that Tishomingo may take whatever actions it deems
necessary to restore rail services or to replace or rebuild any
- 6 -
<PAGE> 7
structure or to clear or restore the railroad operations in the Segment in the
event of any derailment, failure or collapse of the right-of-way or other event
which impairs rail service. It is agreed that during the conduct of such work,
Tishomingo may damage NAIT's Conduit System without liability to NAIT for such
actions. Tishomingo acknowledges the serious and essential nature of the
functioning of NAIT's services, and agrees that it will take reasonable
precautions to avoid such harm. Whenever practicable, Tishomingo shall notify
NAIT in advance of any activities that may reasonably be foreseen as risking
harm to the Conduit System in the Segment, and shall afford NAIT an opportunity,
reasonable under the circumstances, to establish temporary or alternate
facilities.
ARTICLE 8
TAXES LIENS AND INSURANCE
Section 8.01. Taxes. In addition to any rent, NAIT shall pay and
discharge all taxes, general and special assessments and other charges of every
description (collectively, "Impositions") (i) which may be attributable to,
separately levied upon or assessed against NAIT's permitted occupancy of the
Segment, (ii) for which Tishomingo may become liable as a result of NAIT's
occupancy, or (iii) which arise out of the execution and delivery of this
Sublease (other than Tishomingo's income tax). NAIT shall have the right to
contest the amount or validity of any such Impositions by appropriate legal
proceedings, but this right shall not be deemed or construed in any way as
relieving, modifying or extending NAIT's covenants to pay such Impositions.
NAIT shall give Tishomingo prior written notice of any contest.
Section 8.02. Liens. NAIT shall discharge any liens or encumbrances
filed with respect to the Segment as a consequence of work, labor, services,
goods or materials supplied to or for the benefit of NAIT. If NAIT fails to
discharge any such liens within 45 days following notice, Tishomingo may pay
such sums as may be necessary to discharge the liens and such sums shall be
immediately due and payable by NAIT, and shall bear interest at 15% per annum
until paid.
Section 8.03. Insurance. NAIT shall at its expense obtain and maintain
during the Term, in a form and with companies satisfactory to Tishomingo, a
Commercial General Liability Insurance with a combined single limit of not less
than $2,000,000 per occurrence for injury to or death of persons and damage to
or loss or destruction of property. Such policy shall be endorsed to provide
contractual liability coverage for liability assumed under this Sublease. In
addition, such policy shall be endorsed to name Tishomingo as an additional
insured, as its interests may appear, and shall include a severability of
interests provision, and the State of Mississippi Protective Liability Insurance
with limits of not less than a combined single limit of $5,000,000 for each
occurrence and $10,000,000 in the aggregate.
ARTICLE 9
INDEMNIFICATION
Section 9.01. General Obligations of NAIT. In addition to any
indemnification obligations stated elsewhere herein, and except to the extent
the following claims are caused by the negligence
- 7 -
<PAGE> 8
or intentional misconduct of the indemnitee hereunder, NAIT hereby agrees to
hold harmless, defend and indemnify Tishomingo, its affiliates and each of its
officers, directors, agents, employees, invitees and contractors or
subcontractors (collectively, "Tishomingo Indemnitees") against any loss, cost,
damage, expense (including reasonable attorney's fees) and any and all liability
for (i) any personal injury, including death, to any person, including, without
limitation, trespassers, which occurs on the Tishomingo right-of-way, (ii) any
damage (including environmental damage), defacement or destruction of the
Tishomingo right-of-way or other property, (iii) any violation of any law, rule,
regulation, order, notice ordinance or any other requirement of a public or
governmental authority, including, without limitation, NAIT's failure to obtain
any necessary approval, consent or permit, and (iv) any libel, slander,
infringement of copyright, or unauthorized use of any trademark, trade name or
service mark, incident to or resulting from, or in any manner caused by, the
actions or omissions of NAIT, its agents, affiliates, employees, contractors,
subcontractors or others for whom NAIT is legally liable, arising out of or
incident to the terms of this Sublease; NAIT's occupancy and use of the Segment;
the design, construction, installation or use of any Conduit System; or any
transmittal or reception of any material, data, information or other content
through use of the Conduit System, whether or not caused by the joint or
concurrent negligence of the Tishomingo Indemnities.
Section 9.02. General Obligations of Tishomingo. In addition to any
indemnification obligations stated elsewhere herein, and except to the extent
the following claims are caused by the negligence or intentional misconduct of
the indemnitees hereunder, Tishomingo hereby agrees to hold harmless, defend and
indemnify NAIT, its officers, directors, agents, employees and contractors or
subcontractors (collectively, "NAIT Indemnitees") against any loss, cost,
damage, expense (including reasonable attorney's fees) and any and all liability
for property damage, personal injury or both, incident to or resulting from the
actions or omissions of Tishomingo, its agents, affiliates, employees,
contractors or subcontractors, arising out of or incident to the terms of this
Sublease, whether or not caused by the joint or concurrent negligence of the
NAIT Indemnitees.
Section 9.03. Notice and Defense of Claims. The parties agree to
promptly provide each other with notice of any lawsuit, judicial, administrative
or other dispute resolution action, proceeding or claim of which it becomes
aware and which it believes may result in an indemnification obligation
hereunder (each, an "Action"); provided that the failure to provide any such
notice shall not affect the indemnifying party's indemnification obligation
unless the indemnifying party is actually prejudiced by the failure to receive
such notice and then only to the extent of such prejudice. After receipt of any
such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of this indemnity in connection with such Action, then the indemnifying party
shall be entitled, if it so elects (i) to take control of the investigation and
defense of such Action, (ii) to employ and engage attorneys of its own choice,
which are reasonably acceptable to the indemnified party, to handle and defend
the same, at the indemnifying party's cost, risk and expense, unless the named
parties to such action or proceeding include both the indemnifying party and the
indemnified party and the indemnified party has been advised in writing by
counsel that there may be one or more legal defenses available to such
indemnified party that are different from
- 8 -
<PAGE> 9
or additional to those available to the indemnifying party, in which case the
indemnified party shall also have the right to employ its own counsel in any
such case with the reasonable fees and expenses of such counsel being borne by
the indemnifying party, and (iii) to compromise or settle such Action, which
compromise or settlement shall be made only with the written consent of the
indemnified party, such consent not to be unreasonably withheld or delayed,
provided, however, such consent of the indemnified party is not required if such
settlement, compromise or consent includes, as an unconditional term thereof
given by the claimant or the plaintiff to the indemnified party, a full release
from all liability in respect of such indemnifiable claim. Notwithstanding
anything in this Article 9 to the contrary, (i) if there is a reasonable
probability that an indemnifiable Claim may materially adversely affect the
indemnified party, other than as a result of money damages or other money
payments, the indemnified party shall have the right to participate in such
defense, compromise or settlement, and the indemnifying party shall not, without
the indemnified party's written consent (which consent shall not be unreasonably
withheld or delayed), settle or compromise any indemnifiable claim or consent to
entry of any judgment in respect thereof unless such settlement, compromise or
consent includes as an unconditional term thereof given by the claimant or the
plaintiff to the indemnified party a full release from all liability in respect
of such indemnifiable claim. In all such cases, the indemnified party shall
cooperate in the defense of the Action.
Section 9.04. Limitation on Claims. Notwithstanding any other provision
of this Sublease, neither party shall be liable to the other for any special,
indirect, punitive, exemplary, incidental, or consequential damages of any type,
whether foreseeable or not, due to claims (including, but not limited to, any
claims (i) for lost revenues or profits, (ii) by customers for lost services,
(iii) for cost of capital, or (iv) for any cost of replacement facilities or
services) arising under this Sublease or from any breach or partial breach of
any provision of this Sublease.
Section 9.05. Claims Against Other Parties. Except as set forth herein,
and subject to the terms of any underlying agreements between Tishomingo and any
third person, nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against any third
person, including indirect, special or consequential damages, based on any acts
or omissions of such third person as such acts or omissions may affect the
design or construction of the Conduit System, including the Conduit System;
provided, however, that each party hereto shall assign such rights of claims,
execute such documents, and do whatever else may be reasonably necessary to
enable the other party to pursue any such action against such third person.
Section 9.06. Saving Provision. In the event that applicable law limits
in any way the extent to which indemnification may be provided to any person or
entity, this Article, and any other indemnification obligations stated elsewhere
herein, shall be automatically amended, in keeping with the express intent of
the parties, as necessary to render all the remainder of this Sublease valid and
enforceable, and so as to permit the indemnifications provided herein to extend
and be effective to the maximum extent permitted by such law.
- 9 -
<PAGE> 10
ARTICLE 10
CONDEMNATION
Section 10.01. Permanent Taking. In the event of the permanent taking
or condemnation by any competent authority for any public or quasi-public use or
purpose of the whole or a material part of the Segment or the Conduit System at
any time during NAIT's use thereof, this Sublease shall terminate upon vesting
of title in the condemnor or the taking of possession by said condemnor,
whichever first occurs, and NAIT shall receive compensation only for the taking
and damaging of any Conduit System, including the Conduit System, relocation
expenses and loss of business or interference with NAIT's operations, and, as to
the last three such items, only to the extent separately awarded by the court or
tribunal fixing the award, and not as a deduction from the value of the land or
the right to use the portion of the Segment taken. The remaining award balance
and interest thereon, as well as the award for the land value and interest
thereon, shall belong to Tishomingo or the State of Mississippi. Under no
circumstances shall NAIT be entitled to any portion of the award representing a
"bonus value" or difference between the value of the right to occupy the Segment
and any sums paid or due hereunder. For the purposes of this Section, a taking
which directly results in NAIT being unable to operate the Conduit System in the
Segment shall be deemed a material taking.
Section 10.02. Temporary Taking. If the whole or any material part of
the Segment or the Conduit System be taken or condemned by any competent
authority for its or their temporary use, this Sublease shall not terminate by
reason thereof.
ARTICLE 11
ASSIGNMENT AND TRANSFER
Except as noted below, this Sublease may not be assigned and the rights
conveyed hereby may not be mortgaged or encumbered by NAIT without the prior
written consent of Tishomingo, which consent may be withheld for any reason or
be contingent upon an increase in the compensation payable hereunder.
ARTICLE 12
TERMINATION OR EXPIRATION OF AGREEMENT
Section 12.01. Actions upon Termination or Expiration. Upon the
expiration of the Term or other termination of this Sublease, NAIT, without
further notice, shall deliver up to Tishomingo the possession of the Segment.
Thereupon, NAIT shall remove from the Segment the Conduit System and other
property belonging to NAIT, and shall repair any damage to the Segment caused by
such removal. Upon NAIT's failure to comply with the foregoing removal and
repair obligations, Tishomingo may engage in self-help by (i) paying or causing
to be paid any reasonable sum, or (ii) taking or causing to be taken any
reasonable action, necessary to cure such failure, and NAIT shall reimburse to
Tishomingo such reasonable sums paid, or reasonable costs and expenses of acts
taken, together with all costs of collection, including reasonable attorneys'
fees. Notwithstanding the foregoing, Tishomingo, in its sole discretion, may
elect to purchase at
- 10 -
<PAGE> 11
fair market value the Conduit System by giving notice to NAIT of that election
within 30 days after termination or expiration of this Sublease, specifying a
proposed purchase price. If Tishomingo elects to purchase the Conduit System,
and Tishomingo and NAIT cannot agree on fair market value within 30 days of
Tishomingo's notice, either party may invoke arbitration under Article 15
without need for further negotiations. In the event Tishomingo elects to
purchase the Conduit System, NAIT, upon request by Tishomingo, shall provide
Tishomingo with a bill of sale conveying title to said facilities on a quitclaim
basis. NAIT shall be relieved of its removal, restoration and reimbursement
obligation hereunder upon conveyance to Tishomingo of title to the Conduit
System. Any obligation of the parties relating to monies owed, as well as those
provisions relating to limitations on liability and actions, shall survive
termination or expiration of this Sublease.
Section 12.02. Termination upon Bankruptcy. Either party shall have the
option to terminate this Sublease, upon written notice to the other, if a
receiver is appointed for such other party (or any material portion of such
party's property), if such party makes an assignment for the benefit of its
creditors, or if a petition is filed by or against such party under any
bankruptcy or insolvency law and such petition is not stayed or dismissed within
ninety 90 days and any of the following occur:
(i) such party's obligations under this Sublease are not assumed
by the Receiver, Trustee or Debtor-in-Possession in any such
proceeding within 90 days after the filing of the petition,
(ii) such obligations are so assumed, but such party's subsequent
obligations are not met in accordance with the terms hereof or
such party is otherwise subsequently in violation of this
Sublease, or
(iii) such other party is dissolved or otherwise ceases to exist as
an ongoing business concern (but not including: a change in
the ownership of such party; a change in such party's
jurisdiction of organization or organizational form, such as a
change from a limited liability company to a corporation (or
vice versa); or such party's merger into another entity of
similar or greater size and/or creditworthiness as of the date
hereof, or similar events).
Section 12.03. Abandonment of the Conduit System. If at any time NAIT
elects to abandon any or all of the Conduit System in the Segment, or a portion
thereof, NAIT shall promptly notify Tishomingo of such abandonment and shall
comply with the requirements set forth in Section 12.01 in regard to removal of
the Conduit System and the repair and restoration of the Conduit System and
Segment upon expiration or termination of this Sublease. Any abandonment of the
Conduit System shall not affect NAIT's obligation to comply with any other
obligation hereunder.
- 11 -
<PAGE> 12
ARTICLE 13
DEFAULTS AND REMEDIES
Section 13.01. Defaults and Remedies. Each of the following shall be an
"Event of Default" under this Sublease:
(i) Failure of NAIT to pay when due the Renewal Term Rent or any
other sum due hereunder within ten 10 days following notice
from Tishomingo;
(ii) The subjection of any right or interest of NAIT hereunder to
attachment, execution or other levy or to seizure under legal
process, if not released or bonded within sixty 60 days;
(iii) The filing of a mechanic's or materialman's lien against all
or any part of the Segment because of acts or omissions of
NAIT or its agents unless released or bonded within 45 days
following demand by Tishomingo;
(iv) Except as permitted under Article 11, the pledge, transfer,
sale, conveyance, mortgage, assignment or encumbrance of this
Sublease or any interest of NAIT hereunder unless released
within 30 days following demand by Tishomingo;
(v) Failure of either party to perform any non-monetary obligation
within thirty 30 days following notice from the other party;
provided, however, that if such default cannot reasonably be
cured within thirty 30 days, the defaulting party shall have
such additional time as is reasonably necessary to complete a
cure (not to exceed 120 days) provided such party commences
cure within the 30 day period and proceeds diligently
thereafter.
Section 13.02. Termination upon Failure to Cure. If any Event of
Default shall continue uncured following notice of default as required
hereunder, the non-defaulting party may terminate this Sublease by giving the
defaulting party notice of termination. In the event Tishomingo terminates this
Sublease due to an Event of Default caused by NAIT, NAIT shall promptly remove
its property in the manner prescribed in Section 12.01 with regard to removal of
the Conduit System and the repair and restoration of the Segment upon expiration
or termination of this Sublease, and depart from the Segment. If, in such event,
NAIT fails to remove the Conduit System within 30 days' notice in writing from
Tishomingo, Tishomingo may arrange for removal at NAIT's expense.
ARTICLE 14
REPRESENTATIONS AND WARRANTIES
Section 14.01. Tishomingo's Representations and Warranties. Tishomingo
represents and warrants to NAIT that: (i) it has full right, power and authority
to execute this Sublease; (ii) it has been duly incorporated and is validly
existing as a corporation in good standing under the laws
- 12 -
<PAGE> 13
of the state of its incorporation and is duly qualified to do business in each
state in which it is required to be so qualified to perform its obligations
hereunder; (iii) no litigation or governmental proceeding is pending, or
threatened in writing, against it which might have a material adverse effect on
this Sublease, the transactions contemplated hereby or the rights of the parties
hereunder; (iv) the execution and delivery of this Sublease, and the performance
of its obligations hereunder, have been duly authorized by all necessary
corporate actions and do not violate any provision of law or its certificate of
incorporation or bylaws, or its telecommunications services agreements with The
State of Mississippi; and (v) it has duly Subleased the Segment from The State
of Mississippi.
Section 14.02. NAIT's Representations and Warranties. NAIT represents
and warrants to Tishomingo that: (i) it has full right, power and authority to
execute this Sublease; (ii) it has been duly formed and is validly existing as a
limited liability company in good standing under the laws of the state of its
formation and is duly qualified to do business in each state in which it is
required to be so qualified to perform its obligations hereunder; (iii) no
litigation or governmental proceeding is pending, or threatened in writing,
against it which might have a material adverse effect on this Sublease, the
transactions contemplated hereby or the rights of the parties hereunder; and
(iv) the execution and delivery of this Sublease, and the performance of its
obligations hereunder, have been duly authorized and do not violate any
provision of law or its certificate of formation, operating agreement, bylaws or
other organic document.
ARTICLE 15
DISPUTE RESOLUTION
Section 15.01. Matters Subject to Arbitration. The parties adopt the
following arbitration provisions to avoid the problems of litigation or deadlock
in the event they cannot resolve any dispute between them, including any failure
to reach mutual agreement under any provision of this Sublease which requires,
permits or conditions the occurrence of any event or the exercise of any right
upon mutual agreement of the parties; provided, however, that any matter left to
a party's sole discretion or judgment shall not be subject to arbitration
hereunder. If a dispute arises from or relates to this Sublease, the parties
agree that upon request of either party they shall try in good faith to settle
the dispute within 60 days of such request, following which either party may
commence arbitration using the procedures set forth herein.
Section 15.02. Appointment of Arbitrators. Any dispute as to which a
party commences arbitration shall be referred to a panel of arbitrators
consisting of 3 disinterested, competent persons, one selected by Tishomingo,
one selected by NAIT, and one selected by the aforesaid two, who shall have the
power of an umpire. If the parties cannot agree on a third arbitrator, the third
arbitrator shall be appointed by the Arbitration Committee of the American
Arbitration Association.
Section 15.03. Arbitration Proceeding. After the appointment of the
arbitrators, all proceedings shall be in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The decision and
award of such arbitrators, or any two of them or, in
- 13 -
<PAGE> 14
case of disagreement among all arbitrators, of the umpire, shall be conclusive
and binding. In any judicial proceeding to enforce this agreement to arbitrate,
the only issues to be determined shall be the existence of the agreement to
arbitrate and the failure of one party to comply with that agreement, and these
issues shall be decided by the court without a jury. All other issues shall be
decided by the arbitrators, whose decision shall be final and binding. The
parties agree that there shall be no appeal of an order completing arbitration
except as part of an appeal concerning confirmation of the decision of the
arbitrators.
Section 15.04. Arbitration Venue Other. The location of the arbitration
shall be Jackson, Mississippi, at a site designated jointly by the parties, or
failing that, by the arbitrators. Either party may apply to the arbitrators
seeking injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either party also may, without waiving any
remedy under this Sublease, seek from any court having jurisdiction any interim
or provisional relief that is necessary to protect the rights or property of
that party, pending the establishment of the arbitral tribunal (or pending the
arbitral tribunal's determination of the merits of the controversy). Except as
may be required by law, neither a party nor an arbitrator may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties.
ARTICLE 16
CONFIDENTIALITY
Section 16.01. Treatment of Confidential Information. During and after
the term of this Sublease, Tishomingo and NAIT (including their respective
directors, officers, employees and agents) shall treat as confidential and
proprietary and not disclose without the prior written consent of the other
party (except as necessary to perform the services contemplated by this
Sublease, and then only on a basis satisfactory to both parties) any
information, whether oral or written, or any description (including any
technical information, experience or date), of either party's plans, operations
or customers, which may come within its knowledge.
Section 16.02. Compelled Disclosure of Confidential Information. In the
event either party is required by subpoena, court, or administrative order to
disclose any confidential or proprietary information, it shall give immediate
written notice to the other party. Thereupon, the party whose information is
subject to disclosure may interpose all objections it may have to such
disclosure. The foregoing obligation shall survive the termination or expiration
of this Sublease, and shall continue until a written release is given by the
other party.
ARTICLE 17
NOTICES
Section 17.01. Notices. Any notices or demands by or from Tishomingo to
NAIT, or NAIT to Tishomingo, shall be in writing and shall be deemed given upon
(i) personal delivery to the addressee, (ii) 5 days after deposit into United
States mail. postage prepaid, certified mail, return receipt requested, or (iii)
1 day after delivery to United States Postal Service Express Mail
- 14 -
<PAGE> 15
or similar overnight delivery service. Until notified of a different address,
all notices shall be addressed to the parties as follows:
If to Tishomingo: If to NAIT:
----------------- -----------
Tishomingo Railroad Company, Inc. North American Infotech, L.L.C.
751 County Road 989 751 County Road 989
Iuka, Mississippi 38852 Iuka, Mississippi 38852
Attn: Attn:
With a copy to: With a copy to:
ARTICLE 18
MISCELLANEOUS
Section 18.01. Binding Effect of Sublease. Each of the covenants,
conditions and obligations in this Sublease shall inure to the benefit of and
shall be binding upon the successors in interest of Tishomingo and, subject to
the restrictions set forth herein, the permitted assigns and successors of NAIT.
Section 18.02. Cumulative Remedies. The rights and remedies provided by
this Sublease are cumulative and the use of any one right or remedy by any
person shall not preclude or waive its right to use any or all other available
remedies. The rights and remedies hereunder are given in addition to any other
rights the parties may have at law or equity, by statute, ordinance or
otherwise.
Section 18.03. Failure to Pursue Remedies. The failure to seek redress
for violation of, or to insist upon the strict performance of, any provision of
this Sublease shall not prevent a subsequent act, which would have originally
constituted a violation. from having the effect of an original violation.
Section 18.04. Force Majeure. Whenever a period of time is prescribed
in this Sublease for the taking of any action, the party subject to such
prescription shall not be liable or responsible for, and there shall be excluded
from the computation of such period of time, any delays due to strikes, riots,
acts of God, shortages of labor or materials (not caused by the party seeking
the benefit of this Section), war, governmental laws, regulations or
restrictions, or any other cause whatsoever beyond the control of the party.
Section 18.05. Governing Law. This Sublease and the rights hereunder
shall be interpreted in accordance with the laws of the state of Mississippi,
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
Section 18.06. Integration. This Sublease constitutes the entire
agreement pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining
- 15 -
<PAGE> 16
thereto. Any amendment, change, modification or waiver of the terms, conditions
or obligations of this Sublease shall be made in writing and signed by the
parties' duly authorized representatives.
Section 18.07. Interpretation. All references herein to "Articles" and
"Sections" shall refer to corresponding provisions of this Sublease. Whenever
the words "include," "includes or including" are used in this Sublease, they
shall be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Sublease shall refer to this Sublease as a whole and not to any particular
provision of this Sublease.
Section 18.08. Recordation. Neither party hereto shall record this
Sublease without the written consent of the other party; however, upon the
request of either party, the other party shall join in the execution of a
memorandum or "short form" of this Sublease, giving notice of the parties'
respective rights hereunder, for recordation in each county in which any portion
of the Segment is located. The memorandum or short form shall describe the
parties and the Segment and shall incorporate this Sublease by reference.
Section 18.09. Severability. The invalidity or unenforceability of any
particular provision of this Sublease shall not affect the other provisions
hereof, and this Sublease shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 18.10. Survival of Obligations. Any termination or expiration
hereunder shall not relieve either party from any obligation incurred, or
covenant or representation made, to the other party under the terms of this
Sublease.
- 16 -
<PAGE> 17
IN WITNESS WHEREOF, Tishomingo and NAIT have executed this Sublease in
multiple original counterparts, each of which shall be deemed an original.
Witness: TISHOMINGO RAILROAD COMPANY, INC.
-------------------------------- By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Witness: NORTH AMERICAN INFOTECH, L.L.C.
-------------------------------- By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
- 17 -
<PAGE> 18
EXHIBIT A
SEGMENT DESCRIPTION
- 18 -