Exhibit 10.55
TRANSITIONAL SERVICES AGREEMENT
THIS TRANSITIONAL SERVICES AGREEMENT, executed this 19th day of November,
1999, is among Advanced Communications Group, Inc. a Delaware corporation, and
its subsidiaries ("ACG"), and IONEX Telecommunications, Inc. f/k/a Compass
Telecommunications, Inc., a Delaware corporation ("CTI").
RECITALS
A. ACG owns all the shares of Xxxxx Long Distance Service, Inc., a Kansas
corporation, FirsTel, Inc., a South Dakota corporation, Telecom Resources,
Inc., a Texas corporation, and Valu-line of Longview, Inc., a Texas
corporation (collectively, the "TELECOMMUNICATION SUBSIDIARIES").
B. Pursuant to a Stock Purchase Agreement dated July 13, 1999 (the "STOCK
PURCHASE AGREEMENT") among CTI, ACG, and the Telecommunication
Subsidiaries, ACG wishes to sell, and CTI wishes to buy, all the
Telecommunication Subsidiary Shares owned by ACG.
C. The parties have agreed that ACG will provide various transitional services
directly to the Telecommunication Subsidiaries on an interim basis pursuant
to the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements, and warranties herein contained, the parties agree as follows:
1. SERVICES.
1.1 SERVICES TO BE PROVIDED. In accordance with this Agreement, ACG
shall provide the following services (collectively, the "SERVICES") to the
Telecommunication Subsidiaries:
(a) Accounting services (including advice with respect to the
reporting of financial results in accordance with past
practice, and activity-based costing);
(b) Production of payroll services, and, if any, related
employee benefit plan administration, insurance claim
management and stock option related services; and
(c) Other ancillary services of and relating to those described
in (a) and (b) above.
1.2 IMPLEMENTATION OF SERVICES. ACG shall provide all personnel and
computer or other technical systems necessary to provide to the
Telecommunication Subsidiaries the Services in a manner consistent with the past
practices of the Telecommunication Subsidiaries with respect to such personnel,
computer or technical systems.
1.3 COST. In consideration of the performance by ACG of its
obligations under this Agreement, CTI shall pay the following upon the
completion of the term of this Agreement to ACG (collectively, the "COSTS"):
(a) All reasonable expenses (including travel and incidental
expenses) incurred by the personnel of ACG in the provision
of Services under this Agreement;
(b) Wages and the cost of benefits actually provided under the
plans described in Schedule 1.3(b) (attached hereto) during
the thirty (30) day term of this Agreement for Seller
personnel providing Services under this Agreement (pro
rated, if applicable, to reflect the amount of time less
than 100% actually spent on business matters directly
related to the Telecommunication Subsidiaries), and the
reasonable and customary travel expenses, if any, actually
incurred by such personnel in the course of providing
Services to the Telecommunication Subsidiaries supported by
documentation acceptable to CTI; (In the case of the
Advanced Communications Group Section 401(k) plan, the "cost
of benefits actually provided" during the thirty (30) day
term of the Agreement shall be the employee matching
contributions specifically attributable to the employee
elective deferrals made with respect to compensation earned
during such thirty (30) day period.); and;
(c) The actual cost of any equipment and supplies acquired by
ACG in connection with the provision of Services under this
Agreement.
1.4 PAYMENT. At the end of the Initial Term, and at the end of each
extension of the Initial Term, if any, ACG shall produce an invoice recording
the Costs in reasonable detail and deliver such invoice to CTI. The amount due
as stated on the invoice shall be due thirty (30) days from the date of CTI's
receipt of such invoice. Any proper invoices not paid on time shall bear
interest at a rate of eight percent (8%) per annum until paid.
1.5 BOOKS AND RECORDS. ACG shall keep any and all comprehensive,
true and accurate records and accounts required by law of the provision of the
Services under this Agreement and shall provide copies of such records and
accounts if requested by CTI.
2. DELEGATION. ACG may at any time or from time to time, upon written
notice to CTI, delegate some or all its duties to perform the Services
hereunder; provided, however, that ACG shall remain liable for performance of
this Agreement.
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3. WARRANTIES AND LIMITATION OF LIABILITY.
3.1 QUALITY OF SERVICES. In performance of the Services, ACG will
employ methods, procedures and utilities of a quality at least equal to those
employed when ACG performs similar services for their own business and affairs.
3.2 NO OTHER WARRANTY. ACG EXPRESSLY DISCLAIMS ALL WARRANTIES IN
CONNECTION WITH THE SERVICES IT SHALL PROVIDE TO CTI HEREUNDER, EITHER EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THOSE OF WORKSHIP, DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND INFRINGEMENT.
3.3 LIMITATION OF LIABILITY. ACG shall not be liable to CTI by
reason of any error of omission or commission, performance or failure to perform
or delay in performing any Services under this Agreement, for any damages,
including, but not limited to, special, incidental or consequential damages
suffered by CTI beyond a refund to CTI of all charges paid by CTI for the
Services that caused such damages, unless such damages are caused by willful
breach or willful misconduct on the part of ACG.
3.4 FORCE MAJEURE. ACG shall not be liable to CTI for any claims,
damages, losses, or expenses arising out of the non-performance of any of ACG's
obligations under this Agreement if such claims, damages, losses, or expenses
are due to causes that are in whole or in part beyond the control of such party,
including, but not limited to, computer and associated equipment outages, acts
or omissions of any common carrier in the provision of regulated common carrier
services, telecommunications disruptions, outages, failures, downtime and/or
delays in processing information due to causes other than the negligence of ACG,
fire, explosion, earthquake, lightning, pest damage, power surges or failures,
water, acts of God, the elements, civil disturbances, acts of civil or military
authorities or of the public enemy, strikes, or labor disputes.
4. CONFIDENTIAL INFORMATION.
4.1 "CONFIDENTIAL INFORMATION" DEFINED. For purposes hereof,
"Confidential Information" means any and all information of CTI that might
reasonably be considered confidential, secret, sensitive, proprietary or
private. To the extent practicable, Confidential Information shall be marked
"proprietary" or "confidential." Confidential Information shall include the
following:
(a) Data, know-how, formulae, processes, designs, sketches,
photographs, plans, drawings, specifications, samples,
reports, lists, financial information, studies, findings,
inventions and ideas, or proprietary information relating to
either party or the methods or techniques used by either
party;
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(b) Data, documents, or proprietary information employed in
connection with the marketing and implementation of each
party's products, including cost information, business
policies procedures, revenues and markets, distributor and
customer lists, and similar items of information; and
(c) Any other data or information obtained by either party
during the term of this Agreement which is not generally
known to and not readily ascertainable by proper means by
third persons who could obtain economic value from its use
or disclosure.
4.2 NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) ACG shall treat as confidential all Confidential Information
that comes into ACG's knowledge through its provision of
Services to CTI under this Agreement. ACG shall take any
reasonable steps necessary to prevent disclosure of any
Confidential Information to any third person as it would
take in protecting its own proprietary or confidential
information and shall not use any portion of the
Confidential Information for any purpose not authorized
herein.
(b) No person receiving Confidential Information shall be under
any obligation imposed by this Section with respect to any
Confidential Information (i) which is, at the time of
disclosure, available to the general public, (ii) which
becomes at a later date available to the general public
through no fault on its part and then only after said later
date, (iii) which it can demonstrate was in its possession
before receipt from the discloser, (iv) which is disclosed
to it without restriction on disclosure by a third party who
has the lawful right to disclose such information, or (v)
after fifteen years from the date of disclosure.
5. STATUS AS INDEPENDENT CONTRACTOR. ACG is, and shall remain at all
times, an independent contractor of CTI in the performance of all Services
hereunder, and all persons employed by ACG to perform such Services shall be and
remain employees solely of ACG by which they are employed and subject only to
ACG's respective supervisory personnel.
6. INDEMNIFICATION. CTI shall indemnify and hold harmless ACG, its
employees, its subsidiaries, and its subsidiaries' employees from and against
all claims, damages, losses and expenses (including reasonable attorneys' fees)
arising from ACG's provision of the Services to CTI in accordance with the terms
of this Agreement. Notwithstanding the foregoing, CTI shall have no obligation
to indemnify ACG against any claims, damages, losses, or expenses, in connection
with the Services provided arising from the gross negligence or willful
misconduct of ACG, its employees, its subsidiaries, or its subsidiaries'
employees or for any other liability, loss, or damage ACG might suffer as a
result of ACG's breach of this Agreement.
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7. TERM.
7.1 TERM GENERALLY. This Agreement shall commence on the Closing
Date and shall continue for thirty (30) days, (the "Initial Term"), unless
extended for up to two additional 30-day periods by mutual consent of CTI and
ACG, which consent of either party shall not be unreasonably withheld.
7.2 AUTOMATIC TERMINATION FOR BREACH. Notwithstanding the
foregoing provision, this Agreement may be terminated (a) by the
non-breaching party upon the material breach by ACG or Newco of this
Agreement or (b) by the non-breaching party upon the material breach by ACG
or the Buyer of the Stock Purchase Agreement, provided that the non-breaching
party has provided the breaching party ten (10) days' prior written notice of
the breach and the non-breaching party's intention to terminate this
Agreement and the breaching party has failed to cure such breach within such
period.
7.3 SURVIVAL OF CERTAIN PROVISIONS. Articles 3, 4, and 6 shall
survive the termination of this Agreement.
8. MISCELLANEOUS.
8.1 AMENDMENT. This Agreement may be amended, modified or
supplemented but only in writing signed by each of the parties hereto.
8.2 NOTICES. Any notice, request, instruction or other document to
be given hereunder by a party hereto shall be in writing and shall be deemed to
have been given (a) when received if given in person or by courier or a courier
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission or (c) six (6) Business Days after being deposited in the U.S.
mail, certified or registered mail, postage prepaid:
(a) If to ACG, addressed as follows:
Advanced Communications Group, Inc.
Xx. Xxxxxxx X. Xxxxx
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx, LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
(b) If to CTI, addressed as follows:
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Compass Telecommunication, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
8.3 WAIVER. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or
of any breach of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in writing, and no waiver in any one or
more instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
8.4 DEFINITIONS. Capitalized terms used herein, unless otherwise
defined, shall have the meaning ascribed them in the Stock Purchase Agreement.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed an original, but
all of which together shall constitute one and the same instrument.
8.5 INTERPRETATION. The headings preceding the text of Articles and
Sections included in this Agreement are for convenience only and shall not be
deemed part of this Agreement or be given any effect in interpreting this
Agreement. The use of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement. The use of the terms "including" or
"include" shall in all cases herein mean "including, without limitation" or
"include, without limitation," respectively.
8.6 APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without giving effect to the principles of conflicts of law thereof.
8.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective successors, affiliates, directors,
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officers, employees, agents and representatives, and no provision of this
Agreement shall be deemed to confer upon other third parties any remedy,
claim, liability, reimbursement, cause of action or other right.
8.8 ENTIRE UNDERSTANDING. This Agreement set forth the entire
agreement and understanding of the parties hereto and supersede any and all
prior agreements, arrangements and understandings among the parties.
8.9 JURISDICTION OF DISPUTES; WAIVER OF JURY TRIAL. In the event
either party to this Agreement commences any litigation, proceeding or other
legal action in connection with or relating to this Agreement or any matters
described or contemplated herein or therein, with respect to any of the matters
described or contemplated herein or therein, the parties to this Agreement
hereby (a) agree under all circumstances absolutely and irrevocably to institute
any litigation, proceeding or other legal action in a court of competent
jurisdiction located within the City of Dallas, Texas, whether a state or
federal court, (b) agree that in the event of any such litigation, proceeding or
action, such parties will consent and submit to personal jurisdiction in any
such court described in clause (a) of this Section and to service of process
upon them in accordance with the rules and statutes governing service of process
(it being understood that nothing in this Section shall be deemed to prevent any
party from seeking to remove any action to a federal court in Dallas, Texas, (c)
agree to waive to the full extent permitted by law any objection that they may
now or hereafter have to the venue of any such litigation, proceeding or action
in any such court or that any such litigation, proceeding or action was brought
in an inconvenient forum, (d) designate, appoint and direct CT Corporation
System as its authorized agent to receive on its behalf service of any and all
process and documents in any legal proceeding in the State of Texas, (e) agree
to notify the other parties to this Agreement immediately if such agent shall
refuse to act, or be prevented from acting, as agent and, in such event,
promptly to designate another agent in the City of Dallas, Texas, satisfactory
to ACG and CTI, to serve in place of such agent and deliver to the other parties
written evidence of such substitute agent's acceptance of such designation; (f)
agree as an alternative method of service to service of process in any legal
proceeding by mailing of copies thereof to such party at its address set forth
here in for communications to such party; (g) agree that any service made as
provided herein shall be effective and binding service in every respect; and (h)
agree that nothing herein shall affect the rights of any party to effect service
of process in any other manner permitted by Law.
EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN
CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY
MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND
ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
(The remainder of this page is left intentionally blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
ADVANCED COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Name: /s/ Xxxxxxx X. X'Xxxx
Title: CEO Chairman and Acting
Chief Executive Officer
IONEX TELECOMMUNICATIONS, INC.
By: /s/ R.C. Xxxx Xxxxx
Name: R.C. Xxxx Xxxxx
Title: Chief Executive Officer
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SCHEDULE 1.3(b) TO THE TRANSITIONAL SERVICES AGREEMENT
1. Advanced Communications Group, Inc. Retirement Savings Plan.
2. Advanced Communications Group, Inc. See SCHEDULE 3.17 of the Stock Purchase
Agreement.
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