EXHIBIT 2.5.5
ASSUMPTION AND INDEMNITY AGREEMENT
ASSUMPTION AND INDEMNITY AGREEMENT, dated as of July 2, 1998, by and
among ABLE TELCOM HOLDING CORP. ("Able") and its permitted successors and
assigns (collectively with Able, "INDEMNITORS"), and WORLDCOM, INC., MFS
COMMUNICATIONS COMPANY, INC., MFS INTELENET, INC., MFS DATANET, INC., MFS
TELECOM, INC., and MFS COMMUNICATIONS, LIMITED and their successors and assigns
(collectively, "ASSUMPTION AGREEMENT BENEFICIARIES").
Indemnitors and the Assumption Agreement Beneficiaries hereby agree as
follows:
1. CERTAIN DEFINITIONS. The parties to this Assumption and Indemnity
Agreement hereby agree that, in addition to other terms defined in this
Assumption and Indemnity Agreement, the terms set forth below in this paragraph
1 shall have the following meanings ascribed to them, and that variants and
derivatives of such terms shall have correlative meanings:
a. "AETNA" is Aetna Casualty and Surety Company.
b. "AETNA BONDS" are those Bonds with respect to which Aetna is
listed as the bonding company under the column headed "Bonding
Company" on the list of Bonds attached hereto as Exhibit A and
all other Bonds, or
renewals or continuations thereof, which may be already or
hereafter issued or executed pursuant to the Aetna Indemnity
Agreement.
c. "AETNA INDEMNITORS" are, collectively and individually, MFS
Communications Company, Inc., MFS Intelenet, Inc., MFS
Datanet, Inc., MFS Telecom, Inc., and MFS Communications,
Limited, and MFS Network Technologies, Inc. and any other
person or entity included within the definition of
"Indemnitors" in the Aetna Indemnity Agreement.
d. "AETNA INDEMNITY AGREEMENT" is that certain agreement between
the Aetna Indemnitors and Aetna, dated December 21, 1994, a
copy of which is attached hereto as Exhibit B.
e. "ASSUMPTION AGREEMENT" is that agreement set forth herein
under the terms of which Indemnitors agree to assume
Assumption Agreement Obligations.
f. "ASSUMPTION AGREEMENT OBLIGATIONS" is that obligation
undertaken by Indemnitors
i. to pay and fully discharge at the Indemnitors'
expense all of the liabilities and obligations of the
Assumption Agreement Beneficiaries under the Credit
Lyonnais Guaranty Agreement; and
ii. to pay and fully discharge at the Indemnitors'
expense all of the liabilities and obligations of the
Assumption Agreement Beneficiaries under any Surety
Indemnity Agreement, Bond, or Contract; and 1.
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iii. at Indemnitors' expense to settle or defend, with
counsel approved by Assumption Agreement
Beneficiaries (which approval shall not be
unreasonably withheld), any actions or proceedings
brought against MFS Network Technologies, Inc., or
any other Principal, any Surety, and Assumption
Agreement Beneficiaries arising out of any Contract,
Bond, Surety Indemnity Agreement or the Credit
Lyonnais Guaranty Agreement ("Proceedings"), and to
pay any judgment entered in any such Proceeding.
g. "ASSUMPTION AND INDEMNITY AGREEMENT" is this agreement
including all attached Exhibits.
h. "BONDS" are those certain bid, payment, performance, permit
and/or other bonds listed on Exhibit A and all other bonds
which heretofore have been or hereafter are executed and
issued under any of the Surety Indemnity Agreements, or any
renewal or continuation thereof.
i. "CONTRACTS" are the various contracts, including any
amendments and change orders, for the work for the various
projects listed under the columns headed project number and
project name on Exhibit A attached hereto and any other
contract with respect to which a Bond has been executed and
issued.
j. "CREDIT LYONNAIS" is Credit Lyonnais, New York Branch, one of
the lenders under that certain Credit Agreement, dated
November 1, 1996,
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among Kanas Telecom, Inc., Administrative Agent and Lenders
with respect to which the Credit Lyonnais Guaranty Agreement
relates.
k. "CREDIT LYONNAIS GUARANTY AGREEMENT" is that certain guaranty
agreement (a copy of which is attached as Exhibit F) by MFS
Communications Company, Inc. in favor of Credit Lyonnais, New
York Branch as Administrative Agent for Lenders under that
certain Credit Agreement, dated November 1, 1996, among Kansas
Telecom, Inc., Administrative Agent for Lenders, and the
Lenders dated the 1st day of November, 1996.
l. "EVENT OF DEFAULT" is the failure of Indemnitors to perform
any Assumption Agreement Obligations.
m. "GUARANTY OBLIGATIONS" are those obligations assumed by MFS
Communications Company, Inc., under the Credit Lyonnais
Guaranty Agreement.
n. "GUARANTOR" is MFS Communications Company, Inc., in its
capacity as guarantor under the Credit Lyonnais Guaranty
Agreement.
o. "LOSS" is all reasonable out-of-pocket damages, expenses,
costs, the full amount of professional and consulting fees,
attorney fees (however incurred, including on appeal),
calculated after taking into account any proceeds of insurance
received in respect thereto, incurred or paid by Assumption
Agreement Beneficiaries, court costs and fees, and interest
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at the rate of 8% on all sums due from the date of Assumption
Agreement Beneficiaries' disbursement of said sums, whether or
not interest has been awarded by a court, which Assumption
Agreement Beneficiaries may sustain, pay, or incur.
p. "NORTHERN" is Northern Indemnity, Inc.
q. "NORTHERN BONDS" are those Bonds with respect to which
Northern is listed as the bonding company under the column
headed "Bonding Company" on Exhibit A and all other bonds
which may be already or hereafter executed pursuant to the
Northern Indemnity Agreement, or any renewal or continuation
thereof.
r. "NORTHERN INDEMNITORS" are WorldCom, Inc., MFS Communications
Company, Inc., MFS Transportation Systems, Inc., MFS
TransTech, Inc., MFS Network Technologies, Inc., SIRIT
Technologies, Inc. and SIRIT Corp. and any other person or
entity included within the definition of "Indemnitors" in the
Northern Indemnity Agreement.
s. "NORTHERN INDEMNITY AGREEMENT" is that certain agreement
between Northern Indemnitors and Northern, a copy of which is
attached hereto as Exhibit C.
t. "NORTHERN PRINCIPALS" are SIRIT Technologies, Inc. and SIRIT
Corp.
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u. "OBLIGEE" is that entity (or its assignee) for whose benefit a
Bond was issued.
v. "PLEDGE AGREEMENT" is the Stock Pledge Agreement, dated as of
July 2, 1998, between Able and MFS Communications Company,
Inc.
w. "PRINCIPAL" is the Surety Indemnitor identified on a Bond as
the principal or contractor.
x. "RELIANCE" collectively is Reliance Insurance Company, United
Pacific Insurance Company, Reliance National Indemnity Company
and Reliance Surety Company.
y. "RELIANCE BONDS" are those Bonds with respect to which
Reliance or "United Pac" is listed as the bonding company
under the column headed "Bonding Company" on Exhibit A and all
other bonds which may be already or hereafter are executed or
issued pursuant to the Reliance Indemnity Agreement, or any
renewal or continuation thereof.
z. "RELIANCE INDEMNITORS" are WorldCom, Inc., MFS Communications
Company, Inc., MFS Transportation Systems, Inc., MFS
TransTech, Inc., and MFS Network Technologies, Inc. and any
other person or entity included within the definition of
"Contractors" in the Reliance Indemnity Agreement.
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aa. "RELIANCE INDEMNITY AGREEMENT" is that certain agreement
between Reliance Indemnitors and Reliance, dated September 22,
1997, a copy of which is attached hereto as Exhibit D.
bb. "SATISFACTORY RELEASE" as to any Bond and any obligations or
liabilities of WorldCom and the Subsidiaries respecting such
Bond, is the receipt by WorldCom of (i) written releases, in
form and content reasonably satisfactory to WorldCom, whereby
all of the parties to whom WorldCom and the Subsidiaries are
obligated or otherwise liable respecting such Bond
unconditionally, irrevocably, and fully release WorldCom and
the Subsidiaries from any obligation or liabilities respecting
such Bond, or (ii) other evidence reasonably satisfactory to
WorldCom that such Bond and any obligations or liabilities of
WorldCom and the Subsidiaries respecting the Bonds have
expired in accordance with their terms.
cc. "SUBSTITUTED CONTRACT PERFORMANCE" is as defined in paragraph
8.
dd. "SURETY" is, as appropriate, Aetna, Northern, Reliance, or
USF&G and is the party who acts a co-obligor with the
Principal on a Bond.
ee. "SURETY INDEMNITORS" are Aetna Indemnitors, Reliance
Indemnitors, Northern Indemnitors and USF&G Indemnitors.
ff. "SURETY INDEMNITY AGREEMENTS" are those certain indemnity
agreements identified as Aetna Indemnity Agreement, Reliance
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Indemnity Agreement, Northern Indemnity Agreement and USF&G
Indemnity Agreement.
gg. "USF&G" is United State Fidelity & Guarantee Company, Fidelity
& Guarantee Insurance Company, and Fidelity & Guarantee
Insurance Underwriters, Inc.
hh. "USF&G BONDS" are those Bonds with respect to which USF&G is
listed as the bonding company under the column headed "Bonding
Company" on Exhibit A and all other bonds which may be already
or hereafter are executed pursuant to the USF&G Indemnity
Agreement, or any renewal or continuation thereof.
ii. "USF&G INDEMNITORS" are WorldCom, Inc., MFS Network
Technologies, Inc., MFS Transportation Systems, Inc., and MFS
TransTech, Inc., and any other person or entity included
within the definition of "Undersigned" in the USF&G Indemnity
Agreement.
jj. "USF&G INDEMNITY AGREEMENT" is that agreement between USF&G
and USF&G Indemnitors, dated August 18, 1997, a copy of which
is attached hereto as Exhibit E.
2. CONSIDERATION. Contemporaneously herewith Able is purchasing from
MFS Communications Company, Inc. all of the assets and assuming substantially
all of the liabilities of MFS Network Technologies, Inc. pursuant to a Agreement
and Plan of Merger, dated as of April 26, 1998, as amended by an Amendment
thereto, dated as of
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July 2, 1998 (the "Merger Agreement"). The execution and delivery of this
Assumption and Indemnity Agreement is an express condition to the closing and
consummation of the transactions contemplated by the Merger Agreement.
Indemnitor hereby acknowledges the receipt and sufficiency of adequate
consideration for Indemnitors' execution, delivery and performance of this
Assumption and Indemnity Agreement including, without limitation, the closing
and consummation of the transactions contemplated by the Merger Agreement and
the covenants and agreements made therein by the parties thereto.
3. ASSUMPTION AGREEMENT. In consideration of the foregoing and in
consideration of MFS Communications Company, Inc.'s agreement to cause MFS
Network Technologies, Inc. to sell all of the assets of the NT Business (as
defined in the Merger Agreement) under the Merger Agreement, Indemnitors hereby
jointly and severally agree to, and hereby do, assume and agree to pay and fully
discharge at their expense the Assumption Agreement Obligations.
4. PAYMENT. Payments of amounts due Assumption Agreement Beneficiaries
as a result of an Event of Default shall be made by Indemnitors to Assumption
Agreement Beneficiaries upon demand made by any Assumption Agreement
Beneficiary.
5. DUTY TO NOTIFY. The Assumption Agreement Beneficiaries agree to
forthwith provide written notice to Indemnitors if any of them has knowledge of
the occurrence of an Event of Default or of circumstances which with the passage
of time will constitute an Event of Default. Notwithstanding anything herein to
the contrary, the failure by Assumption Agreement Beneficiaries to provide the
notice provided for
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herein shall not affect the determination of whether an Event of Default has
occurred hereunder nor shall the failure to provide the notice provided for
hereunder relieve Indemnitors of their obligations under this Assumption and
Indemnity Agreement.
6. ASSUMPTION AGREEMENT BENEFICIARIES RIGHT TO SETTLE, DEFEND. If there
has been an Event of Default, Assumption Agreement Beneficiaries shall have the
exclusive right, in their sole and absolute discretion, to determine whether any
claim, demand, suit or judgment on the Credit Lyonnais Guaranty Agreement or any
Surety Indemnity Agreement shall be paid, settled, defended, prosecuted,
compromised or appealed and to investigate, pay, settle, defend, prosecute,
compromise, or appeal any such claim, demand, suit or judgment. Assumption
Agreement Beneficiaries shall be entitled to reimbursement for any Loss incurred
as a result of having investigated, paid, settled, defended, prosecuted,
compromised or appealed any such claim, demand, suit, or judgment under a good
faith belief that: (a) Assumption Agreement Beneficiaries were or might be
liable therefor; or (b) such payments were necessary or expedient to protect any
of Assumption Agreement Beneficiaries' rights or to avoid or lessen Assumption
Agreement Beneficiaries' liability or alleged liability, whether or not such
liability, necessity or expediency existed and whether or not such payments were
negligent. An itemized statement of Loss sworn to by any officer or authorized
representative of Assumption Agreement Beneficiaries, or voucher or other
evidence of such Loss shall be final, conclusive and binding upon Indemnitors in
any claim or suit and all matters arising between Indemnitors and Assumption
Agreement Beneficiaries. Without in any way limiting the foregoing, Assumption
Agreement Beneficiaries shall make reasonable efforts to provide information to
Indemnitors as to the status of any such claim, demand, suit or judgment.
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7. CONTRIBUTION. Indemnitors and Surety Indemnitors who are not also
Assumption Agreement Beneficiaries shall have no rights of contribution, rights
of offset, rights of recoupment, or similar rights by virtue of having performed
any Assumption Agreement Obligation, or any obligation under any Bond, Contract,
or Surety Indemnity Agreement as respects Assumption Agreement Beneficiaries, or
as respects any Contract liability, or Contract funds, or any other obligation
or liability under any agreement between Assumption Agreement Beneficiaries and
Indemnitors or Surety Indemnitors who are not also Assumption Agreement
Beneficiaries.
8. SUBSTITUTED CONTRACT PERFORMANCE. In the event a Principal
materially fails, refuses, or is unable to observe or perform any of its
material obligations under a Contract, and Indemnitors fail, refuse or, in the
judgment of Assumption Agreement Beneficiaries, are unable to perform Assumption
Agreement Obligations, Assumption Agreement Beneficiaries may, in the exercise
of their reasonable discretion and, upon five days' prior written notice to
Indemnitors, referring specifically to this paragraph 8, take any, some, or all
actions which Assumption Agreement Beneficiaries believe appropriate to attempt
to minimize the Loss which they may have otherwise sustained, including, without
limitation, performing the Contract on behalf of the Principal (herein called
"Substituted Contract Performance") if and to the extent permitted by the
Contract. Any election by Assumption Agreement Beneficiaries to undertake
Substituted Contract Performance, and any undertaking thereof, shall not
release, amend, modify, limit, restrict, or otherwise affect (a) Principals'
obligations under the Contract, or (b) Indemnitors' Assumption Agreement
Obligations, even if the amount of the Loss is increased by any such
undertaking. In the event Assumption Agreement Beneficiaries elect to undertake
Substituted Contract Performance, the affected Principal and Indemnitors shall
fully cooperate with Assumption Agreement Beneficiaries, shall
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provide Assumption Agreement Beneficiaries with access to the Principal's books,
records, tools, employees, agents, professionals, suppliers, and subcontractors,
and shall assign to Assumption Agreement Beneficiaries the Contract or other
agreements as Assumption Agreement Beneficiaries reasonably request to
facilitate Assumption Agreement Beneficiaries' efforts to undertake such
Substituted Contract Performance if and to the extent permitted by the Contract.
Assumption Agreement Beneficiaries shall hold confidential information received
by them in the course of such access. Assumption Agreement Beneficiaries shall
be entitled to reimbursement of any Loss incurred by it as a result of
undertaking Substituted Contract Performance and an itemized statement of Loss
sworn to by any officer or authorized representative of Assumption Agreement
Beneficiaries, or voucher or other evidence of such Loss shall be final,
conclusive and binding upon Indemnitors in any claim or suit and all matters
arising between Indemnitors and Assumption Agreement Beneficiaries. Nothing
contained in this Assumption and Indemnity Agreement shall require Assumption
Agreement Beneficiaries to undertake any Substituted Contract Performance.
9. SECURITY. As collateral security for Indemnitors' undertakings
hereunder, Able hereby agrees to deliver to Assumption Agreement Beneficiaries
the Pledge Agreement.
10. TERM/NO RELEASE. The term of this Assumption and Indemnity
Agreement shall extend until Satisfactory Releases shall have been obtained for
all of the Bonds. Notwithstanding the generality of the foregoing, the
termination of this Assumption and Indemnity Agreement shall not release, amend,
modify, limit, restrict, or otherwise affect Indemnitors' indemnity obligations,
covenants, or agreements hereunder, which obligations, covenants, and agreements
shall survive forever.
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11. NO WAIVER. No failure on the part of Assumption Agreement
Beneficiaries to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, or remedy by Assumption Agreement
Beneficiaries preclude any other or further exercise thereof or the exercise of
any other right, power, or remedy.
12. NOTICES. All notices or other communications which are required or
permitted herein shall be in writing and sufficient if delivered personally, or
sent by overnight air courier, or sent by facsimile followed by overnight air
courier, addressed as follows:
If to Assumption Agreement
Beneficiaries: WorldCom, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
with copies to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 and
Attention: Xxxxxxx Xxxx, Esq., and
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Fraser, Stryker, Vaughn, Meusey, Olson,
Xxxxx & Xxxxx, P.C.
000 Xxxxxx Xxxxx
000 Xxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
If to Indemnitors: Able Telcom Holding Corp.
0000 Xxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
with a copy to: Gunster, Yoakley, Xxxxxx-Xxxxx
& Xxxxxxx, P.A.
Xxxxxxxx Point
000 Xxxxxxx Xx., Xxxxx 000 Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx. 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if delivered
personally or sent by facsimile, or on the first business day after dispatch if
sent by overnight air courier.
13. FURTHER ASSURANCES. Indemnitors agree to execute and deliver such
additional conveyances, assignments, agreements and instruments, as Assumption
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Agreement Beneficiaries may at any time reasonably request in connection with
the administration or enforcement of this Assumption and Indemnity Agreement or
any part thereof or in order better to assure and confirm unto Assumption
Agreement Beneficiaries their rights, powers, and remedies hereunder as
determined by legal counsel for Assumption Agreement Beneficiaries.
14. ASSIGNMENT; BINDING AGREEMENT. None of the parties to this
Assumption Agreement may assign or delegate this Assumption and Indemnity
Agreement or its obligations, covenants or agreements hereunder to any person or
entity without the prior written approval of the parties. This Assumption and
Indemnity Agreement, and the terms, covenants and conditions hereof, shall be
binding upon and inure to the benefit of the parties hereto and permitted
successors and assigns.
15. AMENDMENTS. Neither this Assumption and Indemnity Agreement nor any
provisions hereof may be amended, modified, waived, discharged or terminated
orally, but, rather, only by an instrument in writing duly signed by or on
behalf of Assumption Agreement Beneficiaries.
16. SEVERABILITY. If any term or provision of this Assumption and
Indemnity Agreement or the application thereof to any person or circumstances
shall to any extent be invalid or unenforceable, the remainder of this
Assumption and Indemnity Agreement or the application of such term or provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be effected hereby, and each term and provision of this
Assumption and Indemnity Agreement shall be valid and enforced to the fullest
extent permitted by law.
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17. COUNTERPARTS. This Assumption and Indemnity Agreement may be
executed in one or more counterparts, each of which shall be an original but all
of which, taken together, shall constitute a single agreement.
18. GOVERNING LAW. This Assumption and Indemnity Agreement shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Delaware and the United States of America, without regard
to the principles of conflict of laws thereof, and may only be enforced in the
courts of the State of Delaware, or the United States District Court for the
District of Delaware, the jurisdiction of which courts each Party hereby
irrevocably subjects itself to.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
ABLE TELCOM HOLDING CORP.
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx, President and CEO
WORLDCOM, INC.
By: /S/ XXXX XXXXXXXX
--------------------------------------
MFS COMMUNICATIONS
COMPANY, INC.
By: /S/ XXXX XXXXXXXX
--------------------------------------
MFS INTELENET, INC.
By: /S/ XXXX XXXXXXXX
--------------------------------------
MFS DATANET, INC.
By: /S/ XXXX XXXXXXXX
--------------------------------------
MFS TELECOM, INC.
By: /S/ XXXX XXXXXXXX
--------------------------------------
MFS COMMUNICATIONS,
LIMITED
By: /S/ XXXX XXXXXXXX
--------------------------------------
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EXHIBITS (Omitted)
Exhibit A - List of Bonds
Exhibit B - Aetna Indemnity Agreement
Exhibit C - Northern Indemnity Agreement
Exhibit D - Reliance Indemnity Agreement
Exhibit E - USF&G Indemnity Agreement
Exhibit F - Credit Lyonnais Guaranty Agreement
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The Company agrees to provide copies of any omitted exhibit(s) supplementally to
the Commission upon request.
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