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EXHIBIT 2.5.1.4
TERMINATION, ASSIGNMENT
AND INDEMNIFICATION AGREEMENT
This TERMINATION, ASSIGNMENT AND INDEMNIFICATION AGREEMENT (the
"Agreement") is made as of May 5, 2000 by and between KANAS TELECOM, INC.
("Kanas"), an Alaska corporation, and ADESTA COMMUNICATIONS, INC. ("Adesta")
(f/k/a MFS Network Technologies, Inc.), a Delaware corporation. The signatories
to the Agreement shall be referred to herein as the "Parties."
RECITALS:
WHEREAS, Kanas and Adesta are parties to a Construction
Services Agreement (the "Construction Agreement") and Network Operation and
Maintenance Agreement (the "O&M Agreement" and collectively with the
Construction Agreement, the "Network Contracts") both dated November 1, 1996,
pertaining to the construction, operation and maintenance of a fiber-optic
telecommunications network (the "Network"). The Network was constructed for
Alyeska Pipeline Service Co. ("Alyeska") pursuant to the Telecommunications
Service Agreement effective May 31, 1996, as amended ("TAPS/6220"); and
WHEREAS, Kanas and Alyeska are involved in a dispute under
TAPS/6220; and
WHEREAS, Adesta wishes to be released from certain obligations
in connection with the construction, operation and maintenance of the Network as
of the date of final execution of this Agreement; and
WHEREAS, Kanas is willing to so release Adesta, and assume
responsibilities previously performed by Adesta, consistent with Kanas'
obligations under TAPS/6220; and
WHEREAS, Kanas has retained General Communications, Inc., an
Alaska corporation ("GCI"), for management services, previously provided by
Adesta, and for assistance in resolving the dispute with Alyeska pertaining to
the construction and operation of the Network; and
WHEREAS, Kanas and GCI have been utilizing, and would like to
continue to utilize, certain property of Adesta in connection with the operation
and maintenance of the Network.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth below, the Parties, intending to be legally bound, hereby
agree as follows:
1. TERMINATION OF NETWORK CONTRACTS.
(a) Effective on the execution of this Agreement, the
Network Contracts are terminated and each of Kanas and Adesta does hereby
release and discharge the other party, its
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respective affiliates, parent corporation, subsidiaries, successors and assigns
and its respective directors, officers, employees, and agents, of and from any
and all obligations under the Network Contracts from and after such date. Adesta
shall have no further performance obligations as a designee or subcontractor
with respect to the construction, maintenance and operation of the Network.
(b) Notwithstanding the termination of the Network
Contracts, each Party acknowledges that during the course of the performance of
services thereunder or thereafter, it has been, or will be provided with, and
may otherwise have had access to Confidential Information (defined below). Each
Party, for itself and its affiliates, subsidiaries, officers, directors,
employees and agents agrees that it will keep all Confidential Information
confidential and will not disclose same to any other party except as disclosure
may be required by law.
(c) Confidential Information means and includes, without
limitation, any and all (i) plans, drawings, specifications, photographs,
charts, studies, business plans, computer software and programs (including
object and source codes), databases, concepts and ideas pertaining to the
design, construction, operation and maintenance of the Network; and, (ii)
information pertaining to the business and affairs of Adesta or Kanas, which (A)
is not generally available to the public and (B) has not been disclosed to third
parties (with the exception of Alyeska, shareholders and agents of Kanas,
shareholders and agents of Adesta, or GCI).
2. LIMITED RELEASE OF EXISTING CLAIMS; NO ASSUMPTION OF
LIABILITIES BY KANAS.
(a) Adesta acknowledges and agrees that it remains liable
for any and all claims that Kanas or third parties (including, without
limitation, Alyeska and subcontractors) may have against Adesta, whether such
claims are currently known or unknown, and whether or not such claims have, to
date, been asserted orally or in writing, arising out of the services performed
by Adesta under the Network Contracts through and including the date hereof.
Adesta further acknowledges and agrees that the termination of the Network
Contracts does not constitute an assumption by Kanas of any liability to
subcontractors of Adesta, or other third parties, including Alyeska, who may
have direct or indirect claims against Adesta pertaining to the Network.
(b) Notwithstanding the foregoing provisions of this
paragraph 2, as consideration for Adesta's transfer of Assets provided for in
paragraph 3 below and Adesta's agreement to cooperate with Kanas as provided in
this Agreement, Adesta shall not have any payment obligation either directly to
Kanas or indirectly to Alyeska, in respect of damages, loss, liability or
expense, but exclusive of the fees and expenses of Adesta's own attorneys and
other professionals (collectively, "Losses") arising from alleged breaches by
Kanas of TAPS/6220, or by Adesta of the Network Contracts, and Kanas hereby
agrees to hold Adesta, its parent corporation, subsidiaries, and affiliates, and
their respective directors, officers, employees and agents harmless from and
against any such Losses, until the aggregate amount of such Losses, plus any
amounts expended by Kanas in accordance with paragraph 4(b) below, exceed
Eighteen Million Dollars ($18,000,000).
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3. TRANSFER OF ASSETS.
(a) As consideration for Kanas' release of Adesta in
accordance with paragraph 1 above and Kanas' agreement to indemnify Adesta as
set forth in paragraph 4 below, Adesta does hereby grant, convey, bargain, sell,
assign, set over, transfer and deliver "as is" to Kanas, (i) all of Adesta' s
right, title and interest in and to the property and other assets listed in
Exhibit A hereto; (ii) all "field action requests", as summarized in Exhibit B,
and other claims that Adesta may have against Kanas, Alyeska and third parties
(but excluding claims of Adesta against its subcontractors) arising as a result
of the services performed under the Network Contracts; and (iii) all of Adesta's
right, title and interest in and to all contract and all property rights, real
and personal (in addition to the items specifically listed in Exhibit A), and
all governmental licenses, permits and other authorizations (to the extent that
same are legally transferable) that are necessary or appropriate for the
construction, operation and maintenance of the Network (collectively, the
"Assets").
(b) Adesta agrees to deliver to Kanas such bills of sale,
assignments, endorsements and other recordable instruments of assignment,
transfer and conveyance, in form and substance reasonably satisfactory to Kanas
and its counsel, and as Kanas and its counsel shall reasonably determine, now or
in the future, are necessary to vest in Kanas all of Adesta's right, title and
interest in and to the Assets, free and clear of all liens and encumbrances of
any kind.
4. INDEMNIFICATION FOR EVENTS SUBSEQUENT TO THIS
AGREEMENT; EXPENDITURES BY KANAS.
(a) As additional consideration for Adesta's transfer of
Assets provided for in paragraph 3 and Adesta's agreements to cooperate with
Kanas as provided in this Agreement, Kanas hereby agrees to release, forever
discharge, and indemnify Adesta, its parent corporation, subsidiaries, and
affiliates, and their respective directors, officers, employees and agents
against, and to hold each of them harmless from, any and all Losses including
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any action, suit or proceeding, incurred or suffered by any
such person, arising out of the construction, operation and/or maintenance of
the Network, or the use of any of the Assets by employees or agents of Kanas and
GCI, from and after the execution of this Agreement.
(b) Adesta acknowledges that Kanas may elect to undertake
improvements and upgrades to the Network in order to mitigate damages or claims
resulting from breaches of TAPS/6220 which may be alleged by Alyeska. Kanas
agrees that except to the extent that the Losses and expenditures exceed
$18,000,000, as provided in paragraph 2(b) above, Kanas shall not assert any
claim against Adesta for reimbursement of any expenditures so incurred. Adesta
agrees that the cost of such improvements and/or upgrades may be credited
against the $18,000,000 "hold harmless" amount set forth in paragraph 2(b).
5. AGREEMENT TO COOPERATE. Adesta hereby agrees to
cooperate with Kanas and to provide Kanas such information, assistance and
access to employees and agents of Adesta as Kanas reasonably requires in
collection with any or all of the following: (i) the negotiation and
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implementation of an agreement between Kanas and Alyeska supplementary to, in
substitution for, or in settlement of claims arising under, TAPS/6220; (ii) the
making of repairs and improvements to the Network by Kanas, its agents,
subcontractors or other authorized representatives; (iii) the sale of Kanas or
the Network; and (iv) Kanas' prosecution or defense of litigation with Alyeska
pertaining to the construction and operation of the Network. Adesta further
agrees that it will preserve and protect all Confidential Information and all of
its documents, records, plans and drawings pertaining to TAPS/6220 and the
construction, operation and maintenance of the Network.
6. REPRESENTATIONS AND WARRANTIES. Each of the Parties
represents and warrants as follows:
(a) It is a corporation, validly existing and in good
standing under the laws of its jurisdiction of incorporation. It has full
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and all agreements, installments and documents contemplated
hereby, and all corporate action necessary for such execution, delivery and
performance has been duly taken. This Agreement has been duly executed and
delivered and is a legal, valid and binding obligation of such party enforceable
in accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and subject to general equitable principles and to
limitations on the availability of equitable relief.
(b) The execution and delivery of this Agreement and any
other agreements, instruments and documents to be executed and delivered by such
Party pursuant hereto do not, and the performance and consummation by such Party
of the transactions contemplated hereby and thereby will not, conflict with or
result in any breach or violation of or default, termination, forfeiture or lien
under any terms or provisions of such Party's charter documents or any statute,
rule, regulation, judicial or governmental decree, order or judgment, to which
such party is a party or by which it, or in the case of Adesta, the Assets, are
subject.
(c) No consent, authorization, approval, order, license,
certificate or permit or act of or from, or declaration or filing with, any
foreign, federal, state or local or other governmental authority or regulatory
body or any court or other tribunal to which it, or in the case of Adesta, the
Assets, are subject, is required for the execution, delivery or performance by
such Party of this Agreement or any of the other agreements, instruments and
documents being or to be executed and delivered hereunder or in connection
herewith or for the consummation of the transactions contemplated hereby or
thereby.
(d) Adesta has good and marketable title to the Assets,
free and clear of all liens and encumbrances of any kind. Upon delivery by
Adesta to Kanas of the Assets, Kanas will acquire good and marketable title to
the Assets, free and clear of all liens and encumbrances of any kind.
7. REMEDIES FOR BREACH. In the event of a breach of the
representation and warranty in paragraph 6(d) above, Kanas shall be entitled to
offset against the $18,000,000 "hold
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harmless" amount (i) the value of any Asset, the use of which Kanas is deprived,
and (ii) the amounts paid by Kanas in order to discharge any liens or
encumbrances.
8. SALES, TRANSFER AND USE TAXES. In addition to the
obligations set forth in paragraph 4 of this Agreement, Kanas hereby agrees to
indemnify Adesta and to hold it harmless from and against any claim that may be
asserted for the payment of sales, transfer and use taxes arising out of the
transfer of the Assets.
9. ENTIRE AGREEMENT. This Agreement, including the
Exhibit hereto, contains the entire understanding among the Parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings, express or implied, oral or written.
10. AMENDMENT AND WAIVER. This Agreement may not be
modified, amended or supplemented other than by an agreement in writing executed
by all parties hereto. No waiver shall be binding unless executed in writing by
the Party making the waiver. No waiver of any provisions, breach or default of
this Agreement shall be deemed or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
11. ASSIGNMENT. No Party may assign any of its rights or
obligations hereunder without the prior written consent of the other Party. This
Agreement will be binding upon and inure to the benefit of the Parties hereto
and their respective successors and permitted assigns.
12. NOTICES. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received on the date when
delivered by hand delivery with receipt acknowledged, on the next business day
when sent by overnight mail service or by facsimile, or upon the third day
following deposit in the United States mail, registered or certified with
postage prepaid, return receipt requested addressed as set forth below:
(a) If to Kanas: Kanas Telecom, Inc.
c/o Xx .Xxxxxxxx X. Xxxxxxx
MCI WorldCom, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
with a
copy to: Xxxxx Xxxxxxxxx, Esq.
MCI WorldCom, Inc.
Department of Law & Public Policy
0000 00xx Xx. X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
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(b) If to Adesta: Adesta Communications, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000-0000
Attn: President and Legal Counsel
Facsimile: 000-000-0000
Any Party may alter the addresses to which communications are to be sent by
giving notice of such change of address in conformity with the provisions of
this paragraph 11.
13. GOVERNING LAW. In all respects, including all
matters of construction, validity and performance, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Alaska, without regard to the principles thereof regarding conflict of
laws.
14. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which shall together constitute one and the same instrument.
15. CONFIDENTIALITY. The parties agree that no public
disclosure shall be made by either of them of the terms of this Agreement or the
transactions contemplated thereby without the consent of the other Party;
provided, however, that either Party may make such disclosures as are necessary
to comply with any requirement of law after making good faith efforts under the
circumstances to consult in advance with the other.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.
KANAS TELECOM, INC.
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
ADESTA COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: President
