The Settlement Agreement
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The Litigation T-Cubed claims to have obtained certain rights from Norfolk Southern to install telecommunications infrastructure on railroad corridors occupied by Norfolk Southern. On August 2, 2000, Frederick A. Uhl and Timothy Elzinga, as representative class plaintiffs, filed a lawsuit against T-Cubed seeking a declaration of the rights of T-Cubed and the settlement class members to occupy and use their interests in the real estate underlying the railroad corridors for a telecommunications system. The plaintiffs also sought an award of monetary damages to the settlement class members. The complaint alleges that Norfolk Southern did not own or have the authority to permit T-Cubed to install telecommunications infrastructure on the real estate owned by the settlement class members. The potential members of the settlement class are the landowners owning the real estate underlying or adjacent to the railroad corridors on June 5, 2001, the record date set by the court. |
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The Settlement Agreement On September 22, 2000, the plaintiffs and T-Cubed executed a settlement agreement intended to resolve the disputed rights to install fiber optic cable on the real estate owned by the settlement class members. On April 13, 2001, the plaintiffs and T-Cubed executed the Settlement Agreement, amending and restating the original settlement agreement. The Settlement Agreement is described in detail in the court approved notice to class members (the "Notice"). The court preliminarily approved the Settlement Agreement on April 24, 2001. A copy of the Settlement Agreement and the exhibits to it are available for inspection in the Court Clerk’s office in Indianapolis during normal business hours. The Clerk’s office address is 46 East Ohio Street, Room 105, Indianapolis, Indiana 46204. The telephone number for class members to request a copy of the settlement agreement is 866-653-5344. You may also view and download a copy of the Settlement Agreement at the following web site: The Settlement Agreement provides that class members who do not opt out of the settlement class give up their rights to object to T-Cubed’s use of their interests in the rail corridor over or next to the class member’s land for telecommunications purposes. All class members who do not opt out of the settlement class and who provide the Company with their social security number or tax payer identification number and property ownership information will receive:
The percentage-of-revenue payments will be paid by T-Cubed with respect to the fourth and each successive conduit installed in the corridors. The aggregate percentage-of-revenue payments to the settlement class members will equal a percentage of the gross receipts T-Cubed receives with respect to the fourth and successive conduits as follows:
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Property to be Transferred to the Company We may receive either up to 16 dark fiber optic strands along some or all of the railroad corridors involved in the settlement or $316 for each mile of dark fiber optic strands T-Cubed installs or acquires in a particular railroad corridor. We will receive an option to purchase a conduit installed in the railroad corridors. A conduit is a tube through which fiber optic strands may be run. On the date the judgment and order issued by the court is final, we will receive from T-Cubed a note for each railroad corridor. The note will provide that four years after the date the judgment and order is final, T-Cubed will pay us $316 for each mile of dark fiber optic strands it installs or acquires in a particular railroad corridor. T-Cubed will notify us each time it installs or acquires dark fiber optic strands in conduits. If after the first year but before the end of four years after the judgment and order is final, T-Cubed has leased, sold, licensed or otherwise disposed of its fourth conduit in the telecommunications system for its own account, in lieu of getting the cash payment we may demand that T-Cubed transfer to the Company the lesser of one half of the number of strands controlled by T-Cubed or 16 strands in lieu of payment under the note. When T-Cubed transfers the strands to the Company T-Cubed’s obligation under the note will be satisfied. After T-Cubed has leased, sold, licensed or otherwise disposed of its fourth conduit in the telecommunications system for its own account, T-Cubed may, instead of making the cash payment under the note, transfer to the Company the lesser of one half of the number of strands controlled by T-Cubed or 16 strands. If after the transfer of strands to the Company, T-Cubed at any time controls 32 or more fiber optic strands in a single conduit, the Company may consolidate its dark fiber optic strands by exchanging the fiber optic strands previously transferred to it by T-Cubed for 16 fiber optic strands in that conduit. To the extent the Company owns fiber optic strands, the percentage of revenue otherwise payable to the settlement class members will be reduced on a pro rata basis. In addition, T-Cubed will transfer to the Company rights of access to and use of connecting and splice points, regeneration facilities and other operation and maintenance rights enjoyed by T-Cubed in the same conduit. T-Cubed will also grant to the Company an option or right to purchase from T-Cubed a conduit installed in the telecommunications system. The option term will commence on T-Cubed’s first transfer of a conduit to a third party. The option expires on the later of one year following the date of the transfer or four years after the order and judgment issued by the court is final. The option also expires 60 days after the Company receives notice from T-Cubed that T-Cubed has received a bona fide offer to purchase all conduits in the telecommunications system. The exercise price for the option to purchase a conduit will be equal to the price a third party has most recently paid to T-Cubed upon transfer of a conduit installed in the telecommunications system. The percentage of revenue payments will be based upon the price the Company actually pays. If the price most recently paid by a third party is equal to or exceeds $30,000, the Company may pay the average of that amount and $30,000 per conduit mile. If the Company elects to pay the average price, T-Cubed will have no obligation to pay the percentage of revenue amounts with respect to the transfer of that conduit to the Company. Beginning six months prior to the expiration date or upon the Company’s receipt of the notice from T-Cubed of a bona fide offer to purchase all conduits in the telecommunications system, the exercise price will be reduced by $2,000 per cable mile for each fiber optic strand fewer than 16 that has not been transferred to the Company by T-Cubed as of that date.
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Distribution of Membership Shares The settlement class counsel organized the Company to hold the interests of the settlement class in the property to be transferred by T-Cubed to the Company. Upon distribution of our membership shares after approval of the Settlement Agreement by the court, the settlement class members will own 100% of the Company. Additional shares may be issued in the future to attract management personnel or to raise capital. We will distribute to each member of the settlement class one of our membership shares for each 10 linear feet of real estate owned by the member along the corridors. We will round the number of shares to which a class member is entitled to the next highest whole number. For example, if a member of the settlement class owns 243 linear feet of real estate along a corridor, we will distribute 25 membership shares to that member of the settlement class. |
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Easement Rights Each settlement class member will transfer to the Company an easement and right-of-way over, across and under the real estate owned by the settlement class member in the railroad corridor to construct, operate and maintain a telecommunications system. The Company will sell to T-Cubed a perpetual easement and right-of-way over, across and under the real estate of the settlement class member on the cable side of the corridor. The Company will retain the easements on the non-cable side of the corridor. We believe that the easements will not diminish class members’ use or enjoyment of their adjacent property because the settlement corridors run within existing rail corridors or other existing rights-of-way. The easements will terminate on any corridor where the telecommunications system has not been installed within four years after the effective date of the court’s final order and judgment
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Compensation to Settlement Class Counsel The settlement class counsel will receive compensation for their services. See Certain Transactions. |
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How to Become A Member of the Settlement Class The Notice sets forth in detail the requirements for inclusion in the class. Generally, you will become a settlement class member if:
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Opt-Out Rights The Notice sets forth in the detail the requirements for opting out of the settlement. All members of the settlement class except the named representative plaintiff, Mr. Elzinga, are entitled to "opt out" or exclude themselves from the settlement class. We will not distribute any membership shares to a settlement class member who opts out of the settlement. In determining whether to opt out of the settlement class, you should consider:
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Failure to File Claims We will not distribute any membership shares to a member of the settlement class who is required to, but fails to file a roll registration form within the time period described in the Notice or who fails to provide us with the required taxpayer identification and property ownership information. After final approval of the settlement by the court, we will send to members of the settlement class not opting out a benefit notice requesting the required information. |