EXECUTION COPY
ASSET ACQUISITION AGREEMENT
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ASSET ACQUISITION AGREEMENT (this "Agreement") dated as of June 24,
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1997, among TELCO COMMUNICATIONS GROUP, INC., a Virginia corporation
("Parent"), TELCO NETWORK SERVICES, INC., a Nevada corporation and an indirect
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wholly owned subsidiary of Parent ("Network"), TELCO SWITCH ACQUISITION, INC.,
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a Nevada corporation and an indirect wholly owned subsidiary of Parent
("Switch"; Network and Switch are collectively referred to as the "Sellers"
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and individually as a "Seller"), and INTERMEDIA COMMUNICATIONS INC., a
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Delaware corporation ("Purchaser").
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RECITALS:
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The Sellers desire to sell to Purchaser and Purchaser desires to
acquire from the Sellers, all right, title and interest of the Sellers in and
to certain assets and properties owned by the Sellers, all upon the terms and
subject to conditions contained herein.
Parent is entering into this Agreement to induce Purchaser to acquire
such assets and properties and to enter into this Agreement. In addition, on
the date hereof, Parent, Telco Holdings, Inc. ("Holdings") and Purchaser are
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entering into a Right to Use Agreement (the "Right to Use Agreement").
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NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties hereto hereby agree as follows:
1. ACQUISITION
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1.1 ACQUIRED ASSETS.
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(a) In consideration of the payment by Purchaser of the relevant
portion of the Acquisition Price (as defined in Section 3.1 below), (i)
Network hereby sells, assigns, transfers, conveys and delivers to Purchaser,
and Purchaser hereby purchases, acquires and takes assignment and delivery of,
all the right, title and interest in and to the assets and properties of
Network listed on Schedule 1.1(a)(i), (ii) Switch hereby sells, assigns,
transfers, conveys and delivers to Purchaser, and Purchaser hereby purchases,
acquires and takes assignment and delivery of, all the right, title and
interest in and to the assets and properties of Switch listed on Schedule
1.1(a)(ii) and (iii) Parent, Holdings and Purchaser are entering into the
Right to Use Agreement (all of such assets and properties and the Right
to Use Agreement being referred to herein as the "Acquired Assets").
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(b) Except as set forth on Schedule 1.1(b), all of the Acquired
Assets are being sold, assigned, transferred, conveyed and delivered to
Purchaser free and clear of all encumbrances, security interests, mortgages,
pledges, restrictions, charges, or liens of any kind, including, without
limitation, tax liens ("Liens").
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1.2. EXCLUDED ASSETS. Notwithstanding the foregoing, the Sellers
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are not selling, assigning, transferring, conveying or delivering, and
Purchaser is not purchasing pursuant to this Agreement, and the term "Acquired
Assets" does not include, any assets or properties of the Sellers not included
in the Acquired Assets (the "Excluded Assets").
2. LIMITED ASSUMPTION OF LIABILITIES
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2.1. ASSUMPTION OF LIABILITIES. Except as expressly provided
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herein, Purchaser does not assume or agree to pay, perform or discharge, any
debts, liabilities, obligations, claims, expenses, taxes, contracts, accounts
payable, or commitments of any kind, character or description, whether accrued
or fixed, absolute or contingent, matured or unmatured or determined or
undetermined (collectively, "Liabilities") of any of the Sellers. Subject to
the terms, conditions, representations and warranties contained herein,
Purchaser hereby assumes and agrees to pay, perform and discharge when due all
Liabilities incurred and arising after the date hereof with respect to leases,
contracts and agreements set forth on Schedule 2.1 (the "Assumed Liabilities")
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and no other Liabilities of the Sellers.
2.2. EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
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and regardless of whether any of the following may be disclosed to Purchaser
pursuant to Section 4 hereof or otherwise, or whether Purchaser has knowledge
of same, Purchaser does not assume, and shall have no liability for any
Liabilities arising out of any act or omission occurring, or any state of
facts existing, prior to the date hereof (the "Excluded Liabilities")
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including, without limitation, any Liability of any Seller relating to or
arising from: (i) the breach of any Seller's obligations under the leases,
contracts and agreements assigned to Purchaser; (ii) any infringement by any
Seller on the rights of others in connection with the business and operations
of such Seller; (iii) taxes, including, without limitation, any income,
capital gains, sales, use or transfer tax arising from the operations of any
Seller through the date hereof, including any thereof that may be due in
connection with the transactions contemplated hereby; (iv) any damages, fines,
interest or
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penalties assessed by any federal, state, county, city or municipal government
or governmental agency or authority; or (v) any current or long-term debts,
payables or amounts owing to any Seller's officers, directors, shareholders or
any of their affiliates or any other third party. Each Seller retains, and
shall pay, perform and discharge when due all Excluded Liabilities.
3. ACQUISITION PRICE
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3.1. ACQUISITION PRICE; ALLOCATION OF ACQUISITION PRICE. The
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acquisition price for the Acquired Assets shall be $38,030,962 (the
"Acquisition Price"). The Acquisition Price is hereby being paid by delivery
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of cash by wire transfer of immediately available funds.
The sum of the Acquisition Price and the Assumed Liabilities shall
be allocated among the Acquired Assets as of the date hereof in accordance
with Exhibit A. For all tax purposes, Purchaser, Parent and the Sellers agree
to report the transactions contemplated in this Agreement in a manner
consistent with the terms of this Agreement, including the allocation under
Exhibit A, and that none of them will take any position inconsistent therewith
in any tax return, in any refund claim, in any litigation, or otherwise.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND THE SELLERS.
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As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Parent and the Sellers,
jointly and severally, represent and warrant to Purchaser as follows:
4.1. ORGANIZATION AND AUTHORITY OF PARENT AND THE SELLERS. Parent
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and each of the Sellers is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
has all necessary power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parent and each of
the Sellers, the performance by Parent and each of the Sellers of its
obligations hereunder and the consummation by Parent and each of the Sellers
of the transactions contemplated hereby have been duly authorized by all
requisite action on the part of Parent and each of the Sellers. This
Agreement has been duly executed and delivered by Parent and each of the
Sellers and constitutes a legal, valid and binding obligation of Parent and
each of the Sellers enforceable against Parent and each of the Sellers in
accordance with its terms.
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4.2. NO CONFLICT. Assuming all consents, approvals,
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authorizations and other actions described in Section 4.3 have been obtained
and all filings and notifications listed in Schedule 4.3 have been made, and
except as may result from any facts or circumstances relating solely to
Purchaser, the execution, delivery and performance of this Agreement by Parent
and the Sellers do not and will not (a) violate or conflict with the
certificate of incorporation or By-Laws of Parent or the Sellers, (b) conflict
with or violate any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award applicable to Parent or any of the Sellers, or
(c) except as set forth on Schedule 4.2, result in any breach of, or
constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Lien on any of the Acquired Assets pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or arrangement to which Parent or any of the
Sellers is a party or by which any of the Acquired Assets is bound or
affected.
4.3. CONSENTS AND APPROVALS. The execution, delivery and
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performance of this Agreement by Parent and Sellers do not and will not
require any consent, approval, authorization or other action by, or filing
with or notification to, any governmental or regulatory authority, except (a)
as described in Schedule 4.3 and (b) as may be necessary as a result of any
facts or circumstances relating solely to Purchaser.
4.4. SOLVENCY. None of Parent or any Seller is currently
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insolvent, as such term is defined in Title 11 of the United States Bankruptcy
Code or any state statute relating to insolvency, and none of the execution
and delivery of this Agreement by Parent and the Sellers, the performance of
their obligations hereunder or the consummation by Parent and the Sellers of
the transactions contemplated hereby will render Parent or any Seller
insolvent or result in Parent or any Seller being unable to pay its debts as
they become due.
4.5. COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.5,
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none of Parent or any Seller requires any license, permit or authorization
issued by the Federal Communications Commission or any other governmental or
regulatory authority with respect to the operation of the Acquired Assets.
The Acquired Assets have been maintained in full compliance with all statutes,
laws, treaties, rules, codes, ordinances, regulations, licenses, permits,
certificates or orders of any governmental or regulatory authority and all
judgments, decrees, injunctions, writs, orders or like actions of any court or
other judicial or quasijudicial tribunal applicable to the Acquired Assets,
except where a
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failure to do so would not materially adversely effect the Acquired Assets or
the ability of Purchaser to immediately use the Acquired Assets in the manner
in which they are currently being used (a "Material Adverse Effect");
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provided, however, that none of Parent or the Sellers is making any
representation or warranties regarding Purchaser's ability to function as a
common carrier.
4.6. COMPLIANCE WITH ENVIRONMENTAL LAWS. To the best knowledge of
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Parent and each Seller, except as would not have a Material Adverse Effect,
(i) none of Parent or any Seller is in violation of any Environmental Laws,
and no Lien has been attached to any of the Acquired Assets pursuant to any
Environmental Laws nor are there any circumstances that could reasonably give
rise to such a Lien, (ii) Parent's and each Seller's utilization of haulers
and transporters to dispose of any Hazardous Substance has been in compliance
with Environmental Laws, (iii) there has been no disposal or release of any
Hazardous Substance by any person on any property which at any time was owned,
operated or leased by Parent or any Seller except in compliance with
Environmental Laws, and (iv) there are no sites, locations or operations of
Parent or any Seller or used in connection with any of their businesses at
which Parent or any Seller is currently undertaking, or has completed, any
remedial or response action relating to any such disposal or release as
required by Environmental Laws. Except as would not have a Material Adverse
Effect, Parent and each Seller has obtained, and is in compliance with, all
permits, licenses, authorizations registrations and other consents required by
Environmental Laws and no suspension of them is, to the best knowledge of
Parent and the Sellers, threatened. Except as would not have a Material
Adverse Effect, there are no civil, criminal or administrative claims,
actions, suits, hearings, investigations or proceedings pending, or to the
best knowledge of Parent and the Sellers, threatened that are based on any
Environmental Laws applicable to the Acquired Assets. For purposes of this
Agreement, "Environmental Laws" means any federal, state, provincial,
regional, territorial, municipal, local or foreign statute, code, ordinance,
rule or regulation (including the requirement to register underground storage
tanks), any permit, consent, approval or license issued by an environmental
regulatory agency, and any judgment, order, writ, decree, injunction or other
authorization, in each case relating to (i) emissions, discharges, releases or
threatened releases of Hazardous Substances into the natural environment,
including into ambient air, soil, sediments, land surface or subsurface,
buildings or facilities, surface water, groundwater, publicly owned treatment
works, septic systems or land, (ii) the generation, treatment, storage,
disposal, handling, manufacturing, transportation or shipment of Hazardous
Substances, or (iii) otherwise relating to the pollution or protection of
health or safety or the
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environment or to solid waste handling, treatment or disposal. For purposes
of this Agreement, "Hazardous Substances" means (i) petroleum and petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain polychlorinated biphenyls, and radon gas, (ii) any other
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar import, under
any applicable Environmental Law, and (iii) any other chemical, material or
substance exposure to which is regulated by any governmental or regulatory
authority.
4.7. LITIGATION, ETC. Except as set forth on Schedule 4.7, there
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are no judicial or administrative actions, suits, proceedings or
investigations pending or threatened, relating to or affecting the Acquired
Assets, or which question the validity of this Agreement or challenge any of
the transactions contemplated hereby or the use of the Acquired Assets after
the date hereof by Purchaser. To the best knowledge of Parent and each
Seller, there are no facts or circumstances that may give rise to any of the
foregoing. None of the matters disclosed in Schedule 4.7 has had or could
have a Material Adverse Effect.
4.8. OWNERSHIP AND TRANSFER OF ACQUIRED ASSETS. (a) Each Seller
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has good and marketable title to, or in the case of leased or subleased
Acquired Assets, valid and subsisting leasehold interests in, or, in the case
of licensed or sublicensed Acquired Assets, valid and subsisting licenses or
sublicenses in, all of the Acquired Assets being sold to Purchaser by such
Seller, free and clear of all Liens (other than permitted Liens set forth on
Schedule 1.1(b)). Except as contemplated by Section 7.2, each Seller has the
unrestricted right to sell, transfer, assign, convey and deliver to Purchaser
all right, title and interest in and to the Acquired Assets being sold to
Purchaser by such Seller without penalty or other adverse consequences.
(b) The Acquired Assets are in good operating condition and fit for
operation in the usual course of business, ordinary wear and tear excepted.
(c) Following the consummation of the transactions contemplated by
this Agreement, Purchaser will own, pursuant to good and marketable title, or
lease, under valid and subsisting leases, the Acquired Assets.
4.9. MATERIAL CONTRACTS. (a) True and complete copies of all
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contracts, agreements, leases, subleases, licenses,
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sublicenses, commitments and arrangements (including, without limitation, oral
and informal arrangements) included in the Acquired Assets (the "Material
Contracts") have been made available to Purchaser by the Sellers.
(b) Except as disclosed in Schedule 4.9, each Material Contract: (i)
is valid and binding on the respective parties thereto and is in full force
and effect and (ii) upon consummation of the transactions contemplated by this
Agreement, except to the extent that any consents set forth in Schedules 4.2
or 4.3 are not obtained, shall continue in full force and effect without
penalty or other adverse consequence. No Seller is in breach of, or default
under, any Material Contract. Except as set forth in Schedule 4.9, none of
Parent or the Sellers has received any notice alleging a breach of, or a
default under, any Material Contract.
(c) Except as disclosed in Schedule 4.9, to the best knowledge of
Parent and the Sellers, no other party to any Material Contract is in breach
thereof or default thereunder and none of Parent or the Sellers has provided
to any other party any notice alleging a breach of, or a default under, any
Material Contract.
(d) Except as disclosed in Schedule 4.9, there is no contract,
agreement or other arrangement granting any person any preferential right to
purchase any of the Acquired Assets.
4.10. BROKERS, FINDERS, ETC. All negotiations relating to this
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Agreement and the transactions contemplated hereby have been carried on
without the participation of any person or entity acting on behalf of Parent
or the Sellers in such manner as to give rise to any valid claim for any
brokerage or finder's fee, commission or similar compensation.
4.11. FULL DISCLOSURE. None of Parent or the Sellers is aware of
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any facts pertaining to the Acquired Assets which affect adversely the
Acquired Assets and which have not been disclosed in this Agreement or the
Schedules hereto or otherwise disclosed to Purchaser by Parent or any Seller
in writing.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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As an inducement to Parent and the Sellers to enter into this
Agreement and to consummate the transactions contemplated hereby, Purchaser
represents and warrants to Parent and the Sellers as follows:
5.1. INCORPORATION AND AUTHORITY OF PURCHASER. Purchaser is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and
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has all necessary power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser, the
performance by Purchaser of its obligations hereunder and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized by
all requisite action on the part of Purchaser. This Agreement has been duly
executed and delivered by Purchaser, and constitutes a legal, valid and
binding obligation of Purchaser enforceable against Purchaser in accordance
with its terms.
5.2. NO CONFLICT. Assuming all consents, approvals, authorizations
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and other actions described in Section 5.3 have been obtained and all filings
and notifications listed in Schedule 5.3 have been made, and except as may
result from any facts or circumstances relating solely to Parent and the
Sellers, the execution, delivery and performance of this Agreement by
Purchaser do not and will not (a) violate or conflict with the Certificate of
Incorporation or By-Laws of Purchaser, (b) except as would not prevent
Purchaser from performing any of its obligations under this Agreement,
conflict with or violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award applicable to Purchaser, or (c)
except as would not prevent Purchaser from performing any of its obligations
under this Agreement, result in any breach of, or constitute a default (or
event which with the giving of notice or lapse of time, or both, would become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance
on any of the assets or properties of Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or arrangement to which Purchaser is a party or by which any
of such assets or properties is bound or affected.
5.3. CONSENTS AND APPROVALS. The execution, delivery and
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performance of this Agreement by Purchaser do not and will not require any
consent, approval, authorization or other action by, or filing with or
notification to, any governmental or regulatory authority, except (a) where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not prevent Purchaser from performing any
of its obligations under this Agreement and (b) as may be necessary as a
result of any facts or circumstances relating solely to Parent and the
Sellers.
5.4. BROKERS. Except for Bear, Xxxxxxx & Co., Inc. ("Bear,
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Xxxxxxx"), no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement
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based upon arrangements made by or on behalf of Purchaser or any of its
affiliates. Purchaser shall solely be responsible for all of the fees and
expenses of Bear, Xxxxxxx.
6. INDEMNIFICATION
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6.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
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representations and warranties made by Purchaser, Parent and the Sellers shall
survive the signing and consummation of the transactions contemplated by this
Agreement for a period of 18 months, except for any such representations and
warranties relating to tax matters, which shall survive to the applicable
statute of limitations. All representations and warranties made by or on
behalf of Parent and the Sellers in this Agreement shall be deemed to have
been relied upon by Purchaser (notwithstanding any investigation by
Purchaser).
6.2. INDEMNIFICATION. (a) Purchaser and its shareholders,
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affiliates, officers, directors, employees, agents, successors and assigns
(each a "Purchaser Indemnified Party") shall be indemnified and held harmless
by Parent and the Sellers, jointly and severally, from and against any and all
Liabilities, losses, damages, claims, costs and expenses, interest, awards,
judgments and penalties (including, without limitation, attorneys' and
consultants' fees and expenses incurred by the Purchaser Indemnified Party in
any action or proceeding between the Sellers and/or Parent and the Purchaser
Indemnified Party or between the Purchaser Indemnified Party and any third
party or otherwise) actually suffered or incurred by them (including, without
limitation, any action or proceeding brought or otherwise initiated by any of
them) (hereinafter a "Loss"), arising out of or resulting from:
(i) the breach of any representation, warranty, covenant or agreement
made by Parent or the Sellers contained in this Agreement or any related
document; or
(ii) any claim or cause of action of any third party (including,
without limitation, any federal of state government entity), whether commenced
before or after the date of this Agreement, to the extent arising out of any
action, inaction, event, condition, Liability or obligation of Parent or any
Seller occurring or existing prior to the date hereof (regardless of whether
or not referred to on a Schedule to this Agreement or otherwise disclosed or
known to Purchaser as of the date hereof); or
(iii) any fines or penalties assessed by any federal, state, county,
city or municipal government or any governmental agency or authority to the
extent arising out of any action,
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inaction, event, condition, Liability or obligation of Parent or any Seller
occurring or existing prior to the date hereof (regardless of whether or not
referred to on a Schedule to this Agreement or otherwise disclosed or known to
Purchaser as of the date hereof); or
(iv) failure to pay, perform or discharge any obligation, Liability,
agreement or commitment not assumed by Purchaser pursuant to this Agreement,
including, without limitation, the Excluded Liabilities.
(b) Parent, the Sellers and their respective shareholders, affiliates,
officers, directors, employees, agents, successors and assigns (each a "Parent
Indemnified Party") shall be indemnified and held harmless by Purchaser from
and against any and all Losses arising out of or resulting from:
(i) the breach of any representation, warranty, covenant or agreement
made by Purchaser contained in this Agreement or any related document; or
(ii) any claim or cause of action of any third party (including,
without limitation, any federal of state government entity), commenced after
the date of this Agreement, to the extent arising out of any action, inaction,
event, condition, Liability or obligation of Purchaser arising after the date
hereof; or
(iii) any fines or penalties assessed by any federal, state, county,
city or municipal government or any governmental agency or authority to the
extent arising out of any action, inaction, event, condition, Liability or
obligation of Purchaser occurring or existing after the date hereof; or
(iv) failure to pay, perform or discharge any Assumed Liability.
6.3. NOTICE OF CLAIMS. An indemnified party shall promptly (and,
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in any event, within five business days) give the indemnifying party notice of
any matter which an indemnified party has determined has given or could give
rise to a right of indemnification under Section 6.2, stating the amount of
the Loss, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in respect of which such right
of indemnification is claimed or arises. The obligations and liabilities of
the indemnifying party under Section 6.2 with respect to Losses arising from
claims of any third party which are subject to the indemnification provided
for in Section 6.2 ("Third Party Claims") shall be governed by and contingent
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upon the following additional terms and conditions: if an indemnified party
shall have received notice of any Third
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Party Claim, the indemnified party shall promptly (and, in any event, within
five business days) give the indemnifying party notice of such Third Party
Claim; provided, however, that the failure to provide such notice shall not
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release the indemnifying party from any of its obligations under Section 6.2
except to the extent the indemnifying party is materially prejudiced by such
failure and shall not relieve the indemnifying party from any other obligation
or liability that it may have to any indemnified party otherwise than under
Section 6.2. If the indemnifying party acknowledges in writing its obligation
to indemnify the indemnified party hereunder against any Losses that may
result from such Third Party Claim, then the indemnifying party shall be
entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its intention
to do so to the indemnified party within five days of the receipt of such
notice from the indemnified party; provided, however, that if there exists or
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is reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified party for the same
counsel to represent both the indemnified party and the indemnifying party,
then the indemnified party shall be entitled to retain its own counsel, in
each jurisdiction for which the indemnified party reasonably determines
counsel is required, at the expense of the indemnifying party. In the event
the indemnifying party exercises the right to undertake any such defense
against any such Third Party Claim as provided above, the indemnified party
shall cooperate with the indemnifying party in such defense and make available
to the indemnifying party, at the indemnifying party's expense, all witnesses,
pertinent records, materials and information in the indemnified party's
possession or under the indemnified party's control relating thereto as is
reasonably required by the indemnifying party. Similarly, in the event the
indemnified party is, directly or indirectly, conducting the defense against
any such Third Party Claim, the indemnifying party shall cooperate with the
indemnified party in such defense and make available to the indemnified party,
at the indemnifying party's expense, all such witnesses, records, materials
and information in the indemnifying party's possession or under the
indemnifying party's control relating thereto as is reasonably required by the
indemnified party. Such Third Party Claim may be settled by the indemnifying
party if it contains a full release of the indemnified party and such Third
Party Claim may be settled by the indemnified party if it contains a full
release of the indemnifying party.
7. ADDITIONAL AGREEMENTS
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7.1. Confidentiality. (a) Parent and each of the Sellers agrees
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to, and shall cause its agents, representatives, affiliates, employees,
officers and directors to: (i) treat and hold as confidential (and not
disclose or provide access to any
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person to) all information relating to trade secrets, processes, product
development, price, customer lists, pricing and marketing plans, policies and
strategies, details of client and consultant contracts, operations methods,
product development techniques, business acquisition plans, and all other
confidential information with respect to the Acquired Assets, (ii) in the
event that Parent or any Seller or any such agent, representative, affiliate,
employee, officer or director becomes legally compelled to disclose any such
information, provide Purchaser with prompt written notice of such requirement
so that Purchaser may seek a protective order or other remedy or waive
compliance with this Section 7.1, (iii) in the event that such protective
order or other remedy is not obtained, or Purchaser waives compliance with
this Section 7.1, furnish only that portion of such confidential information
which is legally required to be provided and exercise its best efforts to
obtain assurances that confidential treatment will be accorded such
information, (iv) promptly furnish to Purchaser any and all copies (in
whatever form or medium) of all such confidential information in the
possession of Parent or any Seller or any of its agents, representatives,
affiliates, employees, officers and directors and destroy any and all
additional copies then in the possession of Parent or any Seller or any of its
agents, representatives, affiliates, employees, officers and directors of such
information and of any analyses, compilations, studies or other documents
prepared, in whole or in part, on the basis thereof; provided, however, that
this sentence shall not apply to any information that, at the time of
disclosure, is available publicly and was not disclosed in breach of this
Agreement by Parent, the Sellers, their agents, representatives, affiliates,
employees, officers or directors.
(b) Purchaser agrees to, and shall cause its agents, representatives,
affiliates, employees, officers and directors to: (i) treat and hold as
confidential (and not disclose or provide access to any person to) all
information relating to trade secrets, processes, product development, price,
customer lists, pricing and marketing plans, policies and strategies, details
of client and consultant contracts, operations methods, product development
techniques, business acquisition plans, and all other confidential information
with respect to Parent and the Sellers, (ii) in the event that Purchaser or
any such agent, representative, affiliate, employee, officer or director
becomes legally compelled to disclose any such information, provide Parent
with prompt written notice of such requirement so that Parent may seek a
protective order or other remedy or waive compliance with this Section 7.1,
(iii) in the event that such protective order or other remedy is not obtained,
or Parent waives compliance with this Section 7.1, furnish only that portion
of such confidential information which is legally required to be provided and
exercise its best efforts to obtain
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assurances that confidential treatment will be accorded such information, (iv)
promptly furnish to Parent any and all copies (in whatever form or medium) of
all such confidential information in the possession of Purchaser or any of its
agents, representatives, affiliates, employees, officers and directors and
destroy any and all additional copies then in the possession of Purchaser or
any of its agents, representatives, affiliates, employees, officers and
directors of such information and of any analyses, compilations, studies or
other documents prepared, in whole or in part, on the basis thereof; provided,
however, that this sentence shall not apply to any information that, at the
time of disclosure, is available publicly and was not disclosed in breach of
this Agreement by Purchaser or its agents, representatives, affiliates,
employees, officers or directors.
7.2. SUBCONTRACTS. To the extent that any Material Contract is not
------------
assignable without the consent of a third party, this Agreement shall not
constitute an assignment, sublease or license or an attempted assignment,
sublease or license thereof if such assignment, sublease or license or
attempted assignment sublease or license would constitute a breach thereof.
Parent and the Sellers agree to use best efforts to obtain the consent of such
third party to the assignment of such Material Contract in all cases in which
such consent is or may be required. If any such consent shall not be
obtained, Parent and the Sellers shall cooperate fully with Purchaser in any
reasonable arrangement designed to provide to Purchaser the benefits intended
to be assigned, subleases or licensed to Purchaser under the relevant Material
Contract, including, without limitation, enforcement at the cost and for the
account of Purchaser of any rights of Parent or the Sellers against the other
party thereto arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent such arrangement cannot be made,
Purchaser shall not have any obligation with respect to any such Material
Contract and the parties shall negotiate in good faith to determine an
appropriate refund of a portion of the Acquisition Price to cover the costs
and expenses of Purchaser's replacement of such Material Contract.
7.3. RECORDS. (a) In order to facilitate the resolution of any
-------
claims made against or incurred by Parent or the Sellers prior to the date
hereof, for a period of seven years after the date hereof, Purchaser shall (i)
retain the books and records for the Acquired Assets relating to periods prior
to the date hereof in a manner reasonably consistent with the prior practice
of the Sellers and (ii) upon reasonable notice, afford the officers, employees
and authorized agents and representatives of Parent or the Sellers reasonable
access (including the right to make, at Parent's or the Sellers' expense,
photocopies), during normal business hours, to such books and records.
13
(b) In order to facilitate the resolution of any claims made by or
against or incurred by Purchaser or for any other reasonable purpose, for a
period of seven years after the date hereof, each of Parent and the Sellers
shall (i) retain the books and records of Parent and the Sellers which relate
to the Acquired Assets for periods prior to the date hereof and which have not
otherwise been delivered to Purchaser and (ii) upon reasonable notice, afford
the officers, employees and authorized agents and representatives of Purchaser
reasonable access (including the right to make, at Purchaser's expense,
photocopies), during normal business hours, to such books and records.
7.4. EMPLOYEE MATTERS. Within 30 days after the date hereof,
----------------
Purchaser may, at its option, offer employment to any of the individuals
listed in Exhibit B. Purchaser shall not be under any obligation to offer any
employment to any employees listed on Exhibit B, but shall notify Parent
promptly upon Purchaser's making of such an offer. Purchaser and Parent shall
cooperate with each other on the employment start date for any such employee
hired by Purchaser. With respect to the employees listed on Exhibit B, the
terms of any offers will be in the sole discretion of Purchaser. Until the
expiration of the nine month period following the date hereof, none of Parent
or any Seller shall, directly or indirectly, offer employment to or employ any
person listed on Exhibit B without the prior written consent of Purchaser,
which shall not be unreasonably withheld.
7.5. ADDITIONAL SERVICES. (a) From and after the date hereof,
-------------------
Purchaser shall provide to Parent and the Sellers the services set forth in
Exhibit C at the rates specified in Exhibit C. In addition, Purchaser shall
offer such services at such rates to Advantis.
(b) From and after the date hereof, at the request of Purchaser,
Parent shall offer co-location services to Purchaser or its affiliates to the
extent space for such services is available in Parent's sole discretion.
Purchaser and Parent shall negotiate in good faith the terms and rates for
such co-location services as and when requested by Purchaser based upon the
reasonable and customary standards and rates for the industry.
7.6. FURTHER ACTION. Except as provided in Section 7.2, each of
--------------
the parties hereto shall use all reasonable efforts to do, or cause to be
done, all things necessary under applicable law to carry out the provisions of
this Agreement and shall execute and deliver such documents and other papers
as may be required to carry out the provisions of this Agreement. In
addition, the parties shall use all reasonable efforts to obtain
any and all documentation necessary to qualify for bulk sale, casual sale,
occasional sale or resale certification.
8. GENERAL
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8.1. EXPENSES. All costs and expenses, including, without
--------
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
8.2. NOTICES. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by cable, by telecopy, by telegram, by telex or by
registered or certified mail (postage prepaid, return receipt requested) to
the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent or the Sellers:
TELCO COMMUNICATIONS GROUP, INC.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, COO
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx & Berlin, Chartered
0000 X Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
if to Purchaser:
INTERMEDIA COMMUNICATIONS INC.
0000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, CFO
Telecopy: (000) 000-0000
15
with a copy to:
Kronish, Lieb, Weiner & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
8.3. PUBLIC ANNOUNCEMENTS. Unless otherwise required by law, or
--------------------
the rules of the Nasdaq Stock Market, no party to this Agreement shall make
any public announcements in respect of this Agreement or the transactions
contemplated herein or otherwise communicate with any news media with respect
thereto without prior written approval of the other party, and the parties
shall cooperate as to the timing and contents of any such announcement.
8.4. HEADINGS. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.5. SEVERABILITY. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by reason of any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon the
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.
8.6. ENTIRE AGREEMENT. This Agreement constitutes the entire
----------------
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
Parent, the Sellers and Purchaser with respect to the subject matter hereof.
8.7. ASSIGNMENT. This Agreement shall not be assigned by operation
----------
of law or otherwise.
8.8. NO THIRD-PARTY BENEFICIARIES. Except as provided in Section
----------------------------
6.2, this Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
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8.9. AMENDMENT; WAIVER. This Agreement may not be amended or
-----------------
modified except by an instrument in writing signed by the parties hereto.
Waiver of any term or condition of this Agreement shall only be effective if
in writing and shall not be construed as a waiver of any subsequent breach or
waiver of the same term or condition, or a waiver of any other term or
condition of this Agreement.
8.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS EXECUTED IN AND TO BE PERFORMED IN THAT STATE.
8.11. WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY
-----------------------
WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR
AGAINST IT ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.
8.12. CONSENT TO JURISDICTION. Each of Parent, the Sellers and
-----------------------
Purchaser hereby irrevocably submits to the exclusive jurisdiction of any
Delaware State or federal court sitting in Wilmington, Delaware in any action
or proceeding arising out of or relating to this Agreement, and each of
Parent, the Sellers and Purchaser hereby irrevocably agrees that all claims in
respect of such action or proceeding shall be heard and determined exclusively
in such Delaware State or federal court. Each of Parent, the Sellers and
Purchaser hereby irrevocably waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of such action
or proceeding. As an alternative method of service, each of Parent, the
Sellers and Purchaser also irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing of copies of such
process to it at its address specified in Section 8.2. Each of Parent, the
Sellers and Purchaser agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 8.12 shall affect the right of Parent, the Sellers or Purchaser to
serve legal process in any other manner permitted by law or affect the right
of Parent, the Sellers or Purchaser to bring any action or proceeding not
arising out of or relating to this Agreement against the other party or its
property in the courts of any other jurisdictions. The consents to
jurisdiction set forth in this Section 8.12 shall not constitute general
consents to service of process in the State of Delaware and shall have no
effect for any purpose except as provided in this Section 8.12 and shall not
be deemed to confer rights on any person other than Parent, the Sellers,
Purchaser and the third party beneficiaries of this Agreement specified in
Section 8.8.
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8.13. ATTORNEYS' FEES. In any action, proceeding or counterclaim
---------------
arising out of or in any way connected with this Agreement, the prevailing
parties shall be entitled to recover reasonable attorneys' fees and
disbursements incurred in connection therewith.
8.14. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
8.15. SPECIFIC PERFORMANCE. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Purchaser, Parent and the Sellers have caused this
Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
INTERMEDIA COMMUNICATIONS INC.
By: /s/Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title:SVP & CFO
TELCO COMMUNICATIONS GROUP, INC.
By: /s/Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Operating Officer &
Secretary
TELCO NETWORK SERVICES, INC.
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
TELCO SWITCH ACQUISITION, INC.
By: /s/Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Secretary
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