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HomeMy WebLinkAbout14 District Fiber Agenda Item ## 14 TRUCKEE DONNER CTION To: Board of Directors From: Stephen Hollabaugh Date: December 07, 2011 Subject: Consideration of Actions Related to the District Fib er Asset: a) Consideration of a Settlement Agreement with AT&T b) Consideration of a Contract for the Sale of the District Fiber Asset 1. WHY THIS MATTER IS BEFORE THE BOARD The purpose of this memorandum is to provide the Board with an update long haul fiber assets and request authorization pate on the District's q zation to approve the Settlement Agreement and Mutual Release with AT&T and approve the Assignment and Assumption Agreement with Electric Li ghtwave LLC. pt on and Assumption 2. HISTORY A Workshop was presented at the November 16, 2011 that provided District's long haul fiber assets and the statusP ed an update on the of efforts to sell this asset. 3. NEW INFORMATION AT&T and the District Dispute: A dispute arose between AT&T and the District over the Agreements proper location of the end-points of the dark fiber in Reng ments arising out of the o and Sacramento and both parties made numerous claims and arguments related to this dispute.pute. • AT&T and the District (the Parties) agreed to mediate the Dispute with the assistance of Honorable Judge James R. Trembath (retired). The District and � }• AT&T have negotiated a Settlement Agreement (Attachment to the Dispute where the basic details are. 1) • AT&T consented to the District's assignment of all of its htwav rights, privileges and obligations to Electric Li g e, LLC DELI}, • AT&T assured to provision the fiber strands to ELI a locations in Reno, NV and Sacramento, CA, t certain specified • ELI has agreed to accept the assignment of District and privileges and obligations under the AT&T/Di strict Agreements; and • ELI agrees to comply with all of AT&T's requirements f equipment usage necessaryto r q or collocation and for ELI. provision the fibers at the specific location Assi nment and Assumption A reement between the District and ELI (Attachment 2 District a ( )' r• gees to transfer all interest in the long haul dark fiber(fiber) to ELI for a sum of one million one hundred thousand dollars ($1,100,000) • ELI desires to assume the Dark Fiber IRU Agreement between AT&T and the e • ELI shall assume annual payment obligations to AT&T of $13,333.33 annual) from 2012 through 2022 for a present value PV of$123 368. y 4. FISCAL IMPACT The total value of this transaction to the District is $1,223,368 • $1,100,000 lump sum payment • Present value of the avoided cost to AT&T is $123,368 • District Counsel has reviewed the Settlement Agreement, and the Assignment and Assumption Agreement 9 ent 5. RECOMMENDATION a) Approve and authorize the Board President to sign the Settlement Agreement Mutual Release between Truckee Donner Public Utility District g Bement and and AT&T in substantially the form presented and approved by District Counsel. b) Approve and authorize the Board President to sign the Assignment htwa g and Assumption Agreement between Electric Li g ve, LLC and Truckee Donner Public Utility District in substantially the form presented and approved b District Counsel. unsel. T Stephen Hollabaugh Assistant General Manager Michael D. Holley General Manager Attachment 1 SETTLEMENT AGREEMENT AND MUTUAL RELEASE THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE(hereinafter "SettlementAgreement") is made and entered into this day of December, 2011 ("Effective Date"),by and between Truckee-Donner Public Utility District, a California local public agency("District"), and AT&T Corp., a New York corporation("AT&T"). The District and AT&T may be referred to herein individually as "Party"or collectively as "Parties" as the context requires. RECITALS A. Whereas, on July 16, 2003, the District entered into a Dark Fiber IRU Agreement ("Dark Fiber IRU Agreement")with Sierra Pacific Communications, a Nevada limited liability company("SPC"), whereby the District acquired an indefeasible right of use("IRU") in four(4) strands of dark fiber extending from Reno, Nevada to Sacramento, California; and B. Whereas,pursuantto the Dark Fiber IRU Agreement, the District and SPC agreed to the requirements and procedures set forth in the Maintenance Specifications and Procedures ("Maintenance Agreement"), `which, among other things, describes the maintenance activities that must be performed on the strands of dark fiber and provides for payment by the District to SPC for maintenance services; and C. Whereas,on July 16, 2003, the District entered into a Conduit Purchase and Sale Agreement with SPC, whereby SPC acquired from the District 16.5 miles of conduit running from the eastern to western border of the City of Truckee, California ("Conduit Purchase and Sale Agreement"); and D. Whereas, there is no dispute between the Parties that, AT&T is the successor-in- interest to SPC with respect to the Dark Fiber IRUAgreement, the Maintenance Agreement and the Conduit Purchase and Sale Agreement(collectively, the "AT&T/District Agreements") attached hereto as Exhibit E; and Page 1 {00232764.DOC 2} E. Whereas, a dispute arose between the Parties over these Agreements arising out ofthe proper locations of the endpoints of the dark fiber in Reno,Nevada and Sacramento, California, and both parties made numerous claims and arguments related to this dispute, including the provision of the facility, the timeliness of such provisioning, and the respective responsibilities (the"Dispute"); and F. Whereas, the Parties agreed to mediate the Dispute with the assistance of the Honorable Judge James R. Trembath(retired); and G. Whereas, the District and AT&T have negotiated a settlement of the Dispute; and, H. Whereas, as part of the settlement, the District has requested that AT&T consent to the District's assignment of all of its rights,privileges and obligations in and to the AT&T/District Agreements to Electric Lightwave, LLC, a Delaware limited liability company. ("ELI"), and that AT&Tprovision the fiber strands to ELI at certain specified locations in Reno, Nevada and Sacramento, CA; and points in between as specified in Schedule A to the Dark Fiber IRU Agreement. I. whereas, AT&T has agreed to accept the assignment of all of District's rights, privileges and obligations in and to the AT&TDistrict Agreementsto ELI as evidenced by its execution of the Consent to Assignment and Estoppel Certificate attached hereto as Exhibit C and to provision the fiber strands to ELI at certain specified locations in Reno, Nevada and Sacramento, CA, andcertain specified locations between Reno, Nevada and Sacramento, CA. J. Whereas, pursuant to that certain Assumption and Assignment Agreement effective upon the execution of this Settlement Agreement, and attached as Exhibit DELI has agreed that it will accept the assignment of District and assume all of District'srights, privileges and obligations under the AT&T/District Agreements; and K. Whereas, ELI has entered into a IRU Fiber Space license Agreement with AT&T for collocation and equipment usage necessary to provision the fibers at the specific locations for ELI; and Page 2 f 00232764.DOC 2 1 L. Whereas, the Parties desire to formalize the terms and conditions of such settlement by entering into this Settlement Agreement. NOW, THEREFORE, in consideration of the mutual covenants, promises and representations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Settlement Terms. In consideration of the agreements set forth herein, the Parties have agreed, as of the Effective Date as follows: a. The Parties agree to amend the Dark Fiber IRU Agreement as follows: i. Section 1.5.1 is amended to state in its entirety: "Long Haul Dark Fiber means four(4) continuous strands of Dark Fiber installed within Fiber Owner's Fiber Optic Facilities beginning at an AT&Tjunction splice located near 200 South Virginia Street, Reno,Nevada, continuing through the Truckee, Blue Canyon and Auburn amplification sites and terminating at ELI's LGX panel on the 8th floor of AT&T's POP site located at 1423 J Street, Sacramento California as more precisely set forth in Schedule A, Route Description. Such Dark Fiber has been installed and is being maintained precisely as specified in Schedule A, Route Description, Schedule B, Fiber Cable Splicing, Testing, and Acceptance Procedures and Schedule C, Maintenance Specifications and Procedures. ii. Section 5.3 is added to read as follows:"After the end of the Term,including all extension periods(Second Term and Third Term), in Section 5.1 , District's assignee ELI may receive, upon written request to AT&T,a license to continue to use the Long Haul Dark Fiber strands for a period not to exceed five(5) years; PROVIDED, HOWEVER, that the Dark Fiber IRU Agreement and Maintenance Agreement shall terminate prior to or at the time of AT&T's grant of the license and during the license period of up to five (5) years(1)AT&T shall not be responsible in any matter to maintain, upgrade, or provide any repair to the strands of Page 3 {00232764.DOC 2} fiber in the Long Haul Dark Fiber; (2)AT&T shall not in any way guarantee or be responsible for the operability of the Long Haul Dark Fiber; and, (3)upon the operational failure of any strand of the Long Haul Dark Fiber, the license shall terminate as to that strand, and if all four fibers fail, the license in its totality shall be immediately terminated. iii. Section 6 is amended to state in its entirety: FIBER OWNER shall maintain CUSTOMER's Strands in accordance with the requirements and procedures set forth in Schedule C (Maintenance Specifications and Procedures"). CUSTOMER shall cooperate with and assist, as many be reasonably required, FIBER OWNER in performing said maintenance. iv. Schedule A. Route Description is amended to state in its entirety, "• Originates at Manhole MH 9-003Rin front of 200 South Virginia Street, Reno,NV; • Runs approximately 28 miles west to Hirschdale regeneration site(hard splice or patch panel jumper patches); • Runs approximately 10 miles west to manhole located in front of Truckee Donner PUD offices located at 11570 Donner Pass Road, Truckee, California, 96161 (hard splices or through fibers); • Runs approximately 43 miles to Blue Canyon regeneration site(to be delivered on existing patch panels pursuant to the Collocation Agreement between AT&T and ELI("Collocation Agreement"), a copy of which is attached hereto and referenced herein as Exhibit A; • Runs approximately 39 miles to Auburn regeneration site(hard splice or patch panel jumper patches); • Runs approximately 40 miles and terminates at ELI's LGX panel on the 8th floor of AT&T's POP located at 1423 "J" St., Sacramento, California, where the fiber would bedelivered inside ELI's LGX panel Such termination point shall be created by, subject to, and governed by the terms and conditions ofthe Common Interface Agreement between AT&T and ELI ("CIA Agreement"), a copy of which is attached hereto and referenced herein asExhibit B; PROVIDED, HOWEVER, that AT&T shall not impose the one-time charge for the initial installation The initial installation charge shall only be imposed for the purpose of this Settlement Agreement only, and this one-time exception will not entitle the District or y ELI to waiver of any charges for any reason in the future nor may it be interpreted as a waiver of AT&T's rights to impose such charges. b. AT&T hereby consents to District's Assignment of the AT&T/District Agreements, including the applicable schedulesand exhibits to such agreements to ELI pursuant to Section 19.2 of the Dark Fiber IRU Agreement, so long as and Page 4 (00232764.DOC 2} only to the extent that(1) such assignment is effective after the mutual execution of this Settlement Agreement, so that ELI receives the rights,privileges, and obligations of the Dark Fiber IRU Agreement as amended in this Settlement Agreement, the Maintenance Agreement andConduit Purchase and Sale AgreementThe District specifically agrees to indemnify, defend and hold harmless AT&T from and against any and all injury, loss, damage, or liability(or claims arising from or relating to any injury, loss, damage, or liability) costs or expenses (including attorneys' fees and court costs) that may arise from any claim, demand, litigation, action, or threat of action by ELI based on any claim arising under or as a result of the AT&T/District Agreements, this Settlement Agreement, and/or all other transactions and agreements taking place as a result of this Settlement Agreement. C. [ 2. Mutual Release of Claims: Except for the duties created by this Settlement Agreement, each of the Parties with respect to the otherParty, on their own behalf and on behalf of their respective predecessors, successors and assignees, insurers, agents, employees, directors, , officers, owners,partners, shareholders, members, attorneys, corporate affiliates,parents, subsidiaries, and all other affiliates, hereby release and forever discharge each other and each other's predecessors, successors and assignees, insurers, agents, employees, directors officers owners,partners, shareholders, members, attorneys, corporate affiliates,parents, subsidiaries, and all other affiliates, and each of them, from any and all claims, debts, actions, demands liabilities, obligations and causes of action, of whatever kind or nature arising prior to the date hereof, which they may have, hold, or may hold in the future, whether known or unknown suspected or unsuspected, liquidated or unliquidated, asserted or not asserted, in law or equitythatrelate to or arise from the Dispute(collectively, the"Released Claims").This mutual release shall survive the termination of thisSettlement Agreement. 3. Civil Code § 1542 Waiver. Except as set forth above, the Parties forever waive any and all benefits and rights they may have, now hold or in the future may hold that concern arise from or relate to the Released Claims by reason of California Civil Code Section 1542 which provides: Page 5 (00232764.DOC 2 1 "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." The Parties understand that if the facts giving rise to this Settlement Agreement are found later to be other than or different from the facts now believed by them to be true, or if new facts come to the attention of the Parties, or either of them, they accept and assume the risk of such possible difference in the facts and agree that the releases mutually agreed to above shall be and will remain effective, notwithstanding such different or new facts. 4. Representations and Warranties.Except for the Assignment from District to ELI referenced above, the Parties represent to each other,that as of the Effective Date, they have not assigned,transferred, conveyed or otherwise disposed of any interest in or arising from the Dispute or related to the subject matter thereof, and that the individuals signing this Settlement Agreement for the entity parties have full authority to do so and to thereby bind all persons and entities referenced in Paragraph 2 above who are being released therein. 5. Miscellaneous. (a) Knowledge and Consent of Parties. Each of the Parties warrants and represents to the other that such Party has read and understands this Settlement Agreement, and has been represented by counsel of his,her or its own choice in the negotiation and re aration p p of this Settlement Agreement and that this Settlement Agreement is executed voluntarily and without duress or undue influence on the part of, or on behalf of, any of the Parties. (b) Entire Agreement. This Settlement Agreement contains the entire agreement and understanding between the Parties with respect to the entire subject matter of this Settlement Agreement, and any and all prior, related discussions, negotiations, representations, p , commitments and understandings are merged into this Settlement Agreement. No representations, oral or otherwise, express or implied, other than those written and contained herein have been made or relied upon by any of the Parties. (c) Waiver. Modification and Amendment. No provision of this Settlement Agreement may be waived or modified unless in writing signed by all Parties and only with a specific written reference to this Settlement Agreement. The Parties further agree that a waiver Page 6 f 00232764.DOC 2} of any term or condition of this Settlement Agreement will not be deemed to be, and may not be construed as, a waiver of any other term or condition hereof. (d) Sever ability. If any provision of this Settlement Agreement is held invalid or unenforceable, the remainder shall not be affected unless such holding deprives one of the Parties of a material and substantial benefit of this Settlement Agreement. (e) Subsequent Execution of Documents and Other Acts. The Parties agree to execute all documents and to take all responsible actions (directly and through their attorneys) which are necessary or helpful to effectuate the purposes of this Settlement Agreement. (f) Collaborative Drafting. Neither this Settlement Agreement, nor any provision within it, shall be construed against any Party or its attorney because it was drafted in full or in part by any Party or its attorney. (g) Execution. This Settlement Agreement may be executed in one or more counterparts. The signature pages of the various counterparts may be collected with one copy of the balance of the Settlement Agreement, which, together with all collected and signed signature pages, shall constitute a true and correct copy of this Settlement Agreement. Photocopies or telecopies or electronically transmitted images of this Settlement Agreement(including signature ature pages)may be used in place of originals for any and all purposes. (h) Titles and Captions. Paragraph titles or captions contained in this Settlement Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Settlement Agreement or any provision within it. (i) No Admissions. The Parties acknowledge and agree that nothing herein contained, and no act of any Party, shall be treated in any way as an admission of liability on behalf of such Party as to any claim, contention or cause of action in any court or other proceeding. 0) Governing Law. This Settlement Agreement shall be governed by, and construed and enforced in accordance with, the internal substantive laws of the State of California, without regard to principles of choice or conflicts of laws except for provisions applying California substantive law and granting jurisdiction and venue to the courts of California. Page 7 f00232764.DOC 2} (k) Attorneys' Fees and Costs.Should any Party commence an action to enforce or interpret this Settlement Agreement, the prevailing Party therein shall be entitled to recover its reasonable attorneys' fees and costs incurred therein. IN WITNESS WHEREOF, the undersigned have executed this Settlement Agreement as of the Effective Date first set forth above. Truckee-Donner Public Utility District: AT&T Corp.: Dated: Dated: By: By Michael Holley, General Manager Page 8 (00232764.DOC 2} Exhibit "A" Collocation Agreement Page 9 J00232 764.DOC 2} Exhibit "B" Common Interface Agreement Page 10 (00232 764.DOC 2} Attachment 2 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement is executed on this day of December 2011 (the "Effective Date"), by Electric Lightwave, LLC, a wholly-owned subsidiary of Integra Telecom Holdings, Inc., ("ELI") and Truckee Donner Public Utility District ("Utility"). WITNESSETH: WHEREAS, Utility desires to transfer to ELI, and ELI desires to assume from Utility, all of Utility's rights and obligations under the Dark Fiber IRU Agreement as amended ("IRU Agreement") dated July 16, 2003, between AT&T, Corp., AT&T Services, Inc. (collective) "AT&T") and Utility a copy of which is attached as Exhbit A• y NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Assignment and Assumption Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Assumption. ELI hereby assumes all rights and obligations of the IRU Agreement as of the Effective Date hereof. 2. Pavments. (a) To AT&T. Utility has made all payments through 2011 for the indefeasible right to use two (2) strands of dark fiber under the terms of the IRU Agreement. In return for the transfer from Utility to ELI of the indefeasible right to use the two (2) strands of dark fiber under the terms of the IRU Agreement, ELI shall assume a ent obligations under the IRU Agreement as of the Effective Date with the f p first payment owing to AT&T on , 2011, and all payments thereafter, all in accordance with the terms of the IRU Agreement. (b) To Utility. In return for the transfer from Utility to ELI of the indefeasible right to use two (2) additional strands of dark fiber apart from the two strands identified above in paragraph 2 (a) under the terms of the IRU Agreement, ELI shall a to Utility the sum of one million one hundred thousand dollars and no cents thirty 30 days of acceptance (�1 pay ,100,000.00) within Y ep e by ELI of the indefeasible right of use in the two 2 additional strands of dark fiber. ) (c) The payments required by subsections (a) and (b) of this 3 represent the total amount of the purchase price of the indefeasible paragraph nght to use the four (4) strands of dark fiber under the terms of the IRU Agreement. 3. Representations and Warranties of ELI. ELI represents and warrants to Utility as follows: Y (a) Existence and Good Standin ELI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has the power 1 and authority to own, lease, and operate its properties and carry on its business as now being conducted by it. (b) Authorization. This Assignment and Assumption Agreement has been duly authorized, executed and delivered by ELI, and constitutes the legal, valid and binding obligation of ELI. Under applicable law, no approval, authorization, consent, clearance, order or other action of(other than those already obtained), or filing (other than notice) with, any person, firm or corporation, or any court, administrative agency or other governmental authority, is required in connection with the execution and delivery by ELI of this Assignment and Assumption Agreement or the performance by it of the transactions described herein. 4. Representations and warranties of Utility Utility represents and warrants to ELI as follows: (a) Existence and Good Standin Utility is duly organized and in good standing under the laws of California. (b) Power and Authority; Authorization. Utility has full power and authority to enter into, execute and deliver this Assignment and Assumption Agreement, and to perform each of its obligations hereunder. This Assignment and Assumption Agreement, and the performance of Utility's obligations hereunder, have been duly authorized, executed and delivered by Utility, and constitute the legal, valid and binding obligations of Utility. Under applicable law, no approval, authorization, consent clearance order y or other action of (other than those already obtained), or filing (other than notice) with, any person, firm or corporation, or any court, administrative agency or other governmental authority, i o g y, s required in connection with the execution and delivery by Utility of this Agreement or the performance b it of the transactions described herein. y (c) Obligations Under IRU Agreement. Utility has fully performed each and all of its obligations under the IRU Agreement as of the Effective Date. (d) Functionality of Fiber Strands. As of the Effective Date, to the best of its knowledge, Utility does not know of any defects in the fibers strands that would impair communications transmissions over the fiber strands. Notwithstandingp the foregoing, ELI acknowledges that any such defects discovered after the Effective Date are addressed in accordance with the terms of the IRU Agreement.. 5. Covenants. Each party will use all commercially reasonable efforts to take or cause to be taken, all actions and do, or cause to be done, all other things necessary, proper or appropriate to consummate and give full force and effect the transact p p transactions contemplated by this Assignment and Assumption Agreement. 6. Indemnification by ELI. ELI covenants and agrees to indemnify, defend protect and hold harmless Utility and each of its respective directors officers m managers, members, assigns, successors and affiliates (individually, a "Utility Indemnified respect Party" and collectively, "Utility Indemnified Parties") from, againstp and in res of. 2 all damages suffered, sustained, incurred or paid by any of the Utility Indemnified Parties in connection with, resulting from or arising out of, directly or indirectly: (A) any nonfulfillment or breach of any covenant or agreement on the part of ELI in this Assignment and Assumption Agreement; or (B) the violation, conflict, breach of or default under (or omission or commission of any action, condition or event which, after notice or lapse of time or both, would result in any such violation, conflict, breach of or default under) the IRU Agreement arising from any acts or omissions of ELI following the Effective Date. ELI covenants and agrees to indemnify, defend, protect and hold harmless AT&T and each of its respective directors, officers, managers, members, assigns, successors and affiliates (individually, an "AT&T Indemnified Party" and collectively, "AT&T Indemnified Parties" from, against and in respect of: ) all damages suffered, sustained, incurred or paid by any of the AT&T Indemnified Parties in connection with, resulting from or arising out of, directly or indirectlyan nonfulfillment or breach of any covenant or agreement on the Y �' part of ELI in this Assignment and Assumption Agreement. 7. Indemnification by Utility. Utility covenants and agrees to indemnify, defend, protect and hold harmless ELI and each of its respective directors, officers, managers, members assigns, successors and affiliates (individually, an"ELI Indemnified Party" and collectively, "ELI Indemnified Parties") from, against and in respect of: (a) all damages suffered, sustained, incurred or paid by any of the ELI Indemnified Parties in connection with, resulting from or arising out of, directlyor indirectly: (ii) any nonfulfillment or breach of an covenant Y or agreement on the part of Utility in this Assignment and Assumption Agreement; or(ii) the violation, conflict breach of or default under(or omission or commission of any action, condition or event which, after notice or lapse of time or both, would result in any such violation conflict breach of or default under)the IRU Agreement arising from any acts or omissions of Utility prior to the Effective Date. (b) any and all costs, fees, or amounts demanded from ELI by AT&T or an third party relating to any cause of action or any amounts owing, from Y reason, that arose from an Utility whatever cause or y ity actions or omissions or are based upon any matter arising prior to the Effective Date. S. Procedure for Indemnification. (a) In the event a Party intends to seek indemnification pursuant to the provisions of Sections 6 or 7 hereof(the "Indemnified Part " , the Indemnified y ) Party shall promptly give notice hereunder to the other Party(the "Indemnifying_Party") after obtaining written notice of any claim or the service of a summons or other initial legal process in any action instituted against the Indemnified Party as to which recovery may be sought against the Indemnifying Part because of the indemnification Y Y emnification provided for in Section 6 or 7 hereof, and, if such indemnity shall arise from the claim of a third Part the Indemnified Party shall permit the Indemnifying Part to assume Y� Y g y e the defense of any such 3 claim and any litigation resulting from such claim; provided that the Indemnified Party shall not be required to permit such an assumption of the defense of any claim or litigation which may reasonably be expected to result in nonmonetary damages or relief, or which, if not first paid, discharged or otherwise complied with, could reasonably be expected to result in a material interruption or disruption of the business of the Indemnified Party or any material part thereof. Notwithstanding the foregoing,the right to indemnification hereunder shall not be affected by any failure of the Indemnified Party to give such notice(or by delay by the Indemnified Party in giving such notice)unless, and then only to the extent that, the rights and remedies of the Indemnifying Party shall have been prejudiced as a result of the failure to give, or delay in giving, such notice. (b) If the Indemnifying Party assumes the defense of such claim or litigation resulting therefrom, the obligations of the Indemnifying Party hereunder as to such claim or litigation shall include taking all steps necessary in the defense or settlement of such claim or litigation and holding the Indemnified Party harmless from and against any and all damages caused by or arising out of any settlement approved by the Indemnifying Party or any judgment entered in connection with such claim or litigation. If the Indemnifying Party assumes the defense of such claim or litigation resulting therefrom, the Indemnified Party shall not settle the claim without the prior written consent of the Indemnifying Party. The Indemnifying Party shall not, in the defense of such claim or any litigation resulting therefrom, consent to entry of any judgment(other than a judgment of dismissal on the merits without costs) except with the written consent of the Indemnified Party(which consent shall not be unreasonably withheld, delayed or conditioned) or enter into any settlement(except with the written consent of the Indemnified Party(which consent shall not be unreasonably withheld, delayed or conditioned)unless (i) there is no finding or admission of any violation of law and no material adverse effect on any other claims that could reasonably be expected to be made against the Indemnified Party, (ii)the sole relief provided is monetary damages that are paid in full by the Indemnifying Party or applied against the Deductible, and (iii)the settlement shall include the giving by the claimant or the plaintiff to the Indemnified Party a release from all liability in respect to such claim or litigation. (c) If the Indemnifying Party assumes the defense of such claim or litigation resulting therefrom, the Indemnified Party shall be entitled to participate in the defense of the claim,but the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it. (d) If the Indemnifying Party does not assume the defense of any such claim b a third Party or litigation resulting therefrom after receipt of notice from Y p the Indemnified Party, the Indemnified Party may defend against such claim or litigation in such manner as it reasonably deems appropriate; provided that the Indemnified Party may not settle the claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, delayed or conditioned. The Indemnified Part 's reasonable attorneys' fees and costs of the action shall be aid b the Indemnifying Y p y nifying party. 4 9. Notices. All notices, demands and other communications provided for hereunder shall be in writing and shall be given by personal delivery, via facsimile transmission(receipt telephonically confirmed),by nationally recognized overnight courier(prepaid), or by certified or registered first class mail,postage prepaid,return receipt requested, sent to each Party, at its/his address as set forth below or at such other address or in such other manner as may be designated by such Party in written notice to each of the other parties. All such notices, demands and communications shall be effective when personally delivered, one(1) Business Day after delivery to the overnight courier,upon telephone confirmation of facsimile transmission or upon receipt after dispatch by mail to the Party to whom the same is so given or made: If to Utility: With a copy to: If to ELI: Electric Lightwave, LLC 1201 NE Lloyd Blvd. Suite 500 Portland, OR 97232 Attn: Department of Law&Policy 10. Governing Law and Choice of Forum. This Assignment and Assumption Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to otherwise applicable conflicts of laws principles. 11. Remedies Cumulative. Remedies herein provided are cumulative and not exclusive of any other remedies provided by law. 12. No Waivers. No purported amendment, modification or waiver of any provision of this Assignment and Assumption Agreement or an of the documents Y , instruments or agreements to be executed by the parties pursuant hereto shall be effective unless in a writingspecifically referringto this Assignment p p y gnment and Assumption Agreement and signed by all of the parties. 13. Dispute Resolution. In the event of any dispute arising out of or related to this Assignment and Assumption Agreement or the performance thereof, the Parties shall first attempt, for a period of thirty (30) days, to resolve the dispute through good faith negotiations prevailing between the parties. In addition to all other relief, the i g p g party y n any action shall be entitled to recovery of its attorneys fees and litigation expenses. Nothing herein shall prevent either party from commencing an action for injunctive relief duringthe e pendency of any dispute. 5 14. Successors and Assigns. This Assignment and Assumption Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns, but except as hereinafter provided in this Section, nothing in this Assignment and Assumption Agreement is to be construed as an authorization or right of any Party to assign its rights or delegate its duties under this Assignment and Assumption Agreement, except to an affiliate or successor in interest,without the prior written consent of the other parties hereto, which consent shall not be unreasonably withheld. No such assignment shall relieve any Party of its obligations hereunder. 15. Expenses. Except as otherwise provided in this Assignment and Assumption Agreement, each party hereto shall be responsible for and bear all of its own costs and expenses (including the expenses of its representatives) incurred at any time in connection with the negotiation,preparation, execution and delivery of this Assignment and Assumption Agreement. 16. Taxes. Utility shall be responsible for, and indemnify ELI against, any taxes, franchise fees, surcharges or other government-imposed fees, or charges ("Taxes"), arisingfrom: (i) Utility's indefeasible right of use to the four 4 fiber strands pursuant ( ) p to the IRU Agreement; and/or (ii) Utility's rights and obligations under the IRU Agreement in so much as such Taxes are assessed for or on time periods prior to the Effective Date of this Assignment and Assumption Agreement. 17. Severability. In the event that any provision of this Assignment and Assumption Agreement is declared or held by any court of competent jurisdiction to be invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceabilit shall not be construed to have any effect on, the remainingprovisions of this A y p Assignment and Assumption Agreement, unless such invalid or unenforceable provision goes to the essence of this Assignment and Assumption Agreement, in which case the entire Assignment and Assumption Agreement may be declared invalid and not bindingupon � p any of the parties. 18. Parties in Interest. Except as hereinafter expressly set forth, nothing expressed or implied in this Assignment p p gnment and Assumption Agreement is intended or shall be construed to confer any rights or remedies under or by reason of this Assignment and Assumption Agreement upon any Person other than the parties hereto and their respectivep successors and permitted assigns. Nothing in this Assignment and Assumption Agreement is intended to relieve or discharge the Liabilities of any third Person to the parties hereto. 19. Waiver. The terms, conditions, warranties, representations and indemnities contained in this Assignment and Assumption Agreement, including the documents, instruments and agreements executed and/or delivered by the parties pursuant hereto, may be waived only b a written instrument executed by the Party waivingcompliance. y y y p Any such waiver shall only be effective in the specific instance and for the specific purpose for which it was given and shall n be deemed a waiver of any other provision hereof or of the sameof breach or default upon any recurrence thereof. No failure on the part of a Party hereto to exercise and no delayin exercising any right hereunder shall operate as a waiver thereof nor shall an single g y ngle or partial exercise of 6 s Q any right hereunder preclude any other or further exercise thereof or the exercise of any other right. 20. Entire Agreement; Modification. This Assignment and Assumption Agreement, including any schedules and exhibits hereto, constitutes the entire agreement between the parties p hereto with respect to the subject matter hereof, superseding, g, all prior negotiations, correspondence and understandings between the parties. No amendment or modification of this Assignment and Assumption Agreement shall be binding on the parties unless made in writing and duly executed by all parties. There are no oral or implied agreements and d p gr' no oral or implied warranties between the parties hereto other than those expressed herein. 21. Counterparts. This Assignment and Assumption Agreement may be executed in counterparts, all of which taken together shall constitute one instrument. 22. Miscellaneous. This Assignment and Assumption Agreement and the obligations of the parties hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns. In confirmation of their consent and agreement to the terms and conditions contained in this Agreement and intending to be legally bound hereby, the parties have executed this Agreement as of the dates set forth below. Truckee Donner Public Utility District By: Title: Date: Electric Lightwave,LLC By: Title: Date: 7