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Exhibit 10.12
EXECUTION COPY
ASSET PURCHASE AGREEMENT
AMONG
PACIFIC GATEWAY EXCHANGE, INC.
PACIFIC GATEWAY EXCHANGE (BERMUDA) LIMITED
AND
METROMEDIA FIBER NETWORK SERVICES, INC.
May 2, 2000
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ASSET PURCHASE AGREEMENT
Agreement entered into on May 2, 2000, by and among METROMEDIA FIBER
NETWORK SERVICES, INC., a Delaware corporation (the "Buyer"), PACIFIC GATEWAY
EXCHANGE, INC., a Delaware corporation ("PGE") and PACIFIC GATEWAY EXCHANGE
(BERMUDA) LIMITED, a Bermuda limited-liability company (the "Seller"). The
Buyer, PGE and the Seller are referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase the assets of the Seller listed on Schedule A hereto in return for cash
and the assumption of the liabilities related to such assets.
Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" means the assets listed on Exhibit A hereto.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgements,
orders, decrees, damages, dues, penalties, fines, costs, reasonable amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with the first Person. A
Person shall be deemed to control another Person if the first Person directly or
indirectly owns 10% or more of the equity interests in the second Person, has
the right to designate one or more of the members of the second Person's
managers or board of directors or similar governing body, or has the actual
ability to control the actions of the second Person.
"Assumed Liabilities" means the liabilities and obligations of the
Seller (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due) with respect to the Acquired
Assets, including (a) the liabilities of the Seller with respect to the Acquired
Assets for unpaid taxes with respect to periods prior to the Closing (excluding
any Income Taxes of the Seller), and (b) all other liabilities and obligations
of the Seller with respect to the Acquired Assets set forth in the Disclosure
Letter; provided, however, that the Assumed Liabilities shall not include (i)
any liability or obligation of the Seller under this Agreement (or under any
other agreement or instrument between the Seller on the one hand and the Buyer
on the other hand entered into on or after the date of this Agreement), or (ii)
any liabilities of the Seller for income, transfer, sales, use, and other taxes
arising in connection with the consummation of the transactions contemplated
hereby.
"Bankruptcy-Remote Subsidiary" means a special purpose Subsidiary of
PGE, formed either in the United States of America, Bermuda or another foreign
jurisdiction, which other
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foreign jurisdiction shall be approved by the Buyer. Each such Subsidiary would
have as its sole authorized purpose the ownership of TAT-14 Cable Network
capacity and related backhaul capacity and the sale or lease of that capacity,
either to unrelated customers or to other PGE entities, but in the latter case
the capacity would not be permitted to be resold or subleased without the
consent of all managers or directors of such Subsidiary. In addition, each such
Subsidiary would be required, pursuant to its operating agreement or charter, to
have one director or manager designated by the Buyer, and would not be
authorized to incur indebtedness or to file a petition under the U.S. Bankruptcy
Code or any similar statute of another jurisdiction or to amend such provisions
of its operating agreement or charter without the consent of all managers or
directors.
"Buyer" has the meaning set forth in the preface above.
"Capacity Sales Agreements" means the agreements Seller entered into
for the sale of fiber optic cable capacity with various parties, as listed in
the Disclosure Letter.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments).
"Closing" has the meaning set forth in ss.2(e) below.
"C&MA" means the TAT-14 Cable Network Construction & Management
Agreement.
"Disclosure Letter" has the meaning set forth in ss.3 below.
"Indemnified Party" has the meaning set forth in ss.8(d) below.
"Indemnifying Party" has the meaning set forth in ss.8(d) below.
"Knowledge" means actual knowledge.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"PGE" has the meaning set forth in the preface above.
"Purchase Price" has the meaning set forth in ss.2(c) below.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under
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capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Seller Party" means the Seller and each of its Affiliates, including,
without limitation, PGE and its Subsidiaries.
"STM-1" means a digital loop of 155,520,000 bit/sec digital line
section in each direction with an interface in accordance with ITU-T
Recommendations G.707 "Network Node Interface for Synchronous Digital Hierarchy"
Issue 1996 (STM-1).
"Subsidiary" of a Person means another Person, if the first Person owns
more than 50% of the equity interests in the second Person, has the right to
designate a majority of the members of the second Person's managers or board of
directors or similar governing body, or has the actual ability to control the
actions of the second Person.
"Third Party Claim" has the meaning set forth in ss.8(d) below.
2. The Transactions.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified in ss.2(b)
and (c) below.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing. The Buyer will not assume or
have any responsibility, however, with respect to any other obligation or
liability of the Seller not included within the definition of Assumed
Liabilities.
(c) Purchase Price. The Buyer agrees to deliver the capacity to the
Seller and to pay to the Seller at the Closing the amounts set forth on Exhibit
B hereto (the "Purchase Price") by (i) delivery of cash for the cash portion of
the Purchase Price payable by wire transfer or delivery of other immediately
available funds and (ii) delivery of capacity, as appropriate.
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxx, Xxxxx &
Xxxxx in New York, New York, commencing at 9:00 a.m. local time on the business
day following the satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Parties may mutually determine (the
"Closing Date").
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in ss.6(a) below; (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in ss.6(b) below;
(iii) the Seller will execute, acknowledge (if appropriate), and deliver to the
Buyer such
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instruments of sale, transfer, conveyance, and assignment as the Buyer and its
counsel may request; (iv) the Buyer will execute, acknowledge (if appropriate),
and deliver to the Seller such instruments of assumption as the Seller and its
counsel may request; and (v) the Buyer will deliver to the Seller the Purchase
Price specified in ss.2(c) above.
3. Representations and Warranties of the Seller. PGE and the Seller
jointly and severally represent and warrant to the Buyer that the statements
contained in this ss.3 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this ss.3), except as set forth in the disclosure letter delivered by
the Seller on the date hereof (the "Disclosure Letter"). The Disclosure Letter
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this ss.3.
(a) Organization of the Seller. Each of PGE and the Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
(b) Authorization of Transaction. Each of PGE and the Seller has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of the Seller
has duly authorized the execution, delivery, and performance of this Agreement
by the Seller and no other authorization is required. This Agreement constitutes
the valid and legally binding obligation of each of PGE and the Seller,
enforceable in accordance with its terms and conditions, subject to applicable
bankruptcy, insolvency, moratorium and other similar laws relating to creditors
rights generally and to general principles of equity.
(c) Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court or governmental or arbitral tribunal to which any
Seller Party is subject (and, in the case of any injunction, judgment, order,
decree, ruling or charge of a court or governmental or arbitral tribunal, of
which a Seller Party has been informed) or any provision of the charter or
bylaws of any Seller Party or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which any Seller Party is a party or by which it is bound or to which any of
its assets is subject (or result in the imposition of any Security Interest upon
any of its assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or Security Interest would not have a material adverse effect on the financial
condition of PGE and its Subsidiaries taken as a whole or on the ability of the
Parties to consummate the transactions contemplated by this Agreement. To the
Knowledge of the Seller, the Seller does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in ss.2 above), except where the failure to give notice,
to file, or to obtain any authorization, consent, or approval would not have a
material adverse effect
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on the financial condition of the Seller or on the ability of the Parties to
consummate the transactions contemplated by this Agreement.
(d) Legal Compliance. Each of PGE and the Seller has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), except where the
failure to comply would not have a material adverse effect upon the financial
condition of the PGE and its subsidiaries taken as a whole or on the ability of
the Parties to consummate the transactions contemplated by this Agreement.
(e) Contracts. ss.3(e) of the Disclosure Letter lists all written
contracts and other written agreements to which any of the Seller Parties is a
party the performance of which will involve any of the Acquired Assets. The
Seller has delivered to the Buyer a correct and complete copy of each contract
or other agreement listed in ss.3(e) of the Disclosure Letter (as amended to
date). Except for the C&MA, none of such written contracts and other written
agreements constitutes an Assumed Liability.
(f) Litigation. ss.3(f) of the Disclosure Letter sets forth each
instance in which the Seller, with respect to the Acquired Assets (i) is subject
to any outstanding injunction, judgment, order, decree, ruling, or charge or
(ii) is or may be a party to any pending, or, to the knowledge of PGE and the
Seller, to any threatened action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction, except where the injunction,
judgment, order, decree, ruling, action, suit, proceeding, hearing, or
investigation would not have a material adverse effect on the financial
condition of PGE and its Subsidiaries taken as a whole or on the ability of the
Parties to consummate the transactions contemplated by this Agreement.
(g) Disclaimer of other Representations and Warranties. Except as
expressly set forth in this ss.3, the Seller makes no representation or
warranty, express or implied, at law or in equity, in respect of any of the
Acquired Assets, liabilities or operations, including, without limitation, with
respect to merchantability or fitness for any particular purpose, and any such
other representations or warranties are hereby expressly disclaimed. The Buyer
hereby acknowledges and agrees that, except to the extent specifically set forth
in this ss.3, the Buyer is purchasing the Acquired Assets on an "as-is,
where-is" basis. Without limiting the generality of the foregoing, the Seller
makes no representation or warranty regarding any assets other than the Acquired
Assets or any liabilities other than the Assumed Liabilities, and none shall be
implied at law or in equity.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in this ss.4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this ss.4).
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
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(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement has been duly authorized by all requisite corporate
action of the Buyer. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions, subject to applicable bankruptcy, insolvency, moratorium and other
similar laws relating to creditors rights generally and to general principles of
equity.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions referred to in ss.2
above).
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
ss.6 below).
(b) Notices and Consents. The Seller will give any notices to third
parties, and the Seller will use its best efforts to obtain any third party
consents, that the Buyer reasonably may request in connection with the matters
referred to in ss.3(c) above. Each of the Parties will give any notices to, make
any filings with, and use its best efforts to obtain any authorizations,
consents, and necessary approvals of governments and governmental agencies, if
any, in connection with the matters referred to in ss.3(c) and ss.4(c) above.
(c) Additional Sales of Capacity. The Seller will not enter into any
transaction for further sales of capacity with respect to the Acquired Assets.
(d) Transition. The Seller will not take any action that is designed or
intended to have the effect, or could have the reasonably foreseeable effect, of
discouraging any potential provider of backhaul capacity with respect to the
Acquired Assets from providing such capacity to the Buyer and its Affiliates
after the Closing.
(e) Notice of Developments.
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(i) The Seller shall promptly notify the Buyer of any
development which would constitute a breach of any of its
representations and warranties in ss.3(d)-(f) above. Unless the Buyer
has the right to terminate this Agreement pursuant to ss.7(a)(ii) below
by reason of the development and exercises that right within the period
of 10 business days referred to in ss.7(a)(ii) below, the written
notice pursuant to this ss.5(e)(i) will be deemed to have amended the
Disclosure Letter, to have qualified the representations and warranties
contained in ss.3 above, and to have cured any misrepresentation or
breach of warranty that otherwise might have existed hereunder by
reason of the development.
(ii) Each Party will give prompt written notice to the other
Party of any material adverse development which would constitute a
breach of any of its own representations and warranties in ss.3(a)-(c)
and ss.4 above. No disclosure by any Party pursuant to this
ss.5(e)(ii), however, shall be deemed to amend or supplement the
Disclosure Letter or to prevent or cure any misrepresentation or breach
of warranty.
(f) Exclusivity. The Seller will not solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition the Acquired Assets; provided, however, that the Seller, and its
directors and officers, will remain free to participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing to the extent they are advised in
writing by their outside counsel that their fiduciary duties so require, and
provided, further, that the Seller shall immediately notify the Buyer of the
existence of any such discussions or negotiations.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth inss.3 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) (A) The Seller shall have obtained confirmation from the
TAT-14 Management Committee that Seller is in good standing under the
TAT-14 C&MA, (B) the Seller shall have obtained the written consent of
the TAT-14 Management Committee, and (C) the Buyer, Buyer's
Subsidiaries, the Seller, PGE and Bankruptcy-Remote Subsidiaries of
PGE, as appropriate, shall have entered into the IRU Agreement in form
and substance as set forth in Exhibit C hereto and the same shall be in
full force and effect;
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(v) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above
inss.6(a)(i)-(iv) is satisfied in all respects;
(vi) the Seller shall have delivered to the Buyer evidence of the
amounts paid and investments made to date, and the latest available
estimates of the future amounts payable and investments made to date,
with respect to the Acquired Assets; and
(vii) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this ss.6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.4 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above
in ss.6(b)(i)-(iii) is satisfied in all respects;
(v) the Buyer, PGE and the Seller, as appropriate, shall have
entered into the IRU Agreement in form and substance as set forth in
Exhibit C hereto and the same shall be in full force and effect; and
(vi) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this ss.6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. The Parties may terminate this Agreement
as provided below:
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(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing in the event (A)
the Seller has within the then previous ten (10) business days given
the Buyer any notice pursuant to ss.5(e)(i) above;
(iii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event
the Seller has breached any material representation, warranty, or
covenant contained in this Agreement (other than the representations
and warranties in ss.3(d)-(f) above) in any material respect, the Buyer
has notified the Seller of the breach, and the breach has continued
without cure for a period of thirty (30) days after the notice of
breach or (B) if the Closing shall not have occurred on or before July
31, 2000 by reason of the failure of any condition precedent under
ss.6(a) hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in
this Agreement); and
(iv) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event
the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Seller has notified the Buyer of the breach, and the breach has
continued without cure for a period of thirty (30) days after the
notice of breach or (B) if the Closing shall not have occurred on or
before July 31, 2000 by reason of the failure of any condition
precedent under ss.6(b) hereof (unless the failure results primarily
from the Seller itself breaching any representation, warranty, or
covenant contained in this Agreement).
(b) Effect of Termination. (i) If any Party terminates this Agreement
pursuant to ss.7(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party then in breach), except as set forth in
ss.7(b)(iv) below.
(ii) There shall be no breakup costs as a result of termination
of this Agreement, except as set forth in ss.7(b)(iv) below.
(iii) If this Agreement is terminated by the Seller, or by the
Buyer pursuant to ss.7(a)(ii) or (iii)(A), the Seller shall be
restricted from selling the assets so affected for a period of six (6)
months from the date of termination.
(iv) If the Buyer terminates this Agreement pursuant to
ss.7(a)(ii) or (iii) above, the Buyer shall have the option to acquire
all of Seller's capacity on the TAT-14 Cable Network at Seller's
per-unit acquisition cost, except for twenty-eight (28) STM-1s, to
which Buyer will have no rights or options to acquire. This option will
be enforceable against any Seller Party and any acquirer or successor
in interest to any relevant Seller Party's interest in Seller's rights
with respect to the TAT-14 Cable Network.
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8. Indemnification and Survival of Representations and Warranties.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Seller contained in ss.3(d)-(f) of this
Agreement shall survive the Closing (unless the Buyer knew or had reason to know
of any misrepresentation or breach of warranty at the time of the Closing) and
continue in full force and effect for a period of two years thereafter. All of
the other representations and warranties of the Buyer and the Seller contained
in this Agreement (including the representations and warranties of the Seller
contained in ss.3(a)-(c) thereof) shall survive the Closing (unless the damaged
Party knew or had reason to know of any misrepresentation or breach of warranty
at the time of the Closing) and continue in full force and effect forever
thereafter (subject to any applicable statutes of limitations).
(b) Indemnification of Seller.
(i) In the event the Buyer breaches any of its representations,
warranties, and covenants contained in this Agreement, and, if there is
an applicable survival period pursuant to ss.8(a) above, then the Buyer
agrees to indemnify the Seller from and against the entirety of any
Adverse Consequences the Seller shall suffer through and after the date
of the claim for indemnification (but excluding any Adverse
Consequences the Seller shall suffer after the end of any applicable
survival period) caused by the breach.
(ii) The Buyer agrees to indemnify the Seller from and against
entirety of any Adverse Consequences the Seller shall suffer caused by
any liability of the Seller which is an Assumed Liability.
(c) Indemnification of Buyer.
(i) In the event the Seller breaches any of its representations,
warranties, and covenants contained in the Asset Purchase Agreement,
and, if there is an applicable survival period pursuant toss.8(a)
above, then the Seller agrees to indemnify the Buyer from and against
any Adverse Consequences the Buyer shall suffer through and after the
date of the claim for indemnification (but excluding any Adverse
Consequences the Buyer shall suffer after the end of any applicable
survival period) caused by the breach; provided, however, that the
Seller shall not have any obligation to indemnify the Buyer from and
against any Adverse Consequences caused by the breach of any
representation or warranty of the Seller contained inss.3(d)-(f) of the
Asset Purchase Agreement: (A) until the Buyer has suffered Adverse
Consequences by reason of all such breaches in excess of a $250,000
aggregate threshold (after which point the Seller will be obligated to
indemnify the Buyer from and against all such Adverse Consequences) or
thereafter (B) to the extent the Adverse Consequences the Buyer has
suffered by reason of all such breaches exceeds a $60,000,000 aggregate
ceiling (after which point the Seller will have no obligation to
indemnify the Buyer from and against further such Adverse
Consequences).
(ii) The Seller agrees to indemnify the Buyer from and against
any Adverse Consequences the Buyer shall suffer caused by any liability
of the Seller which is not an Assumed Liability (including any
liability of the Seller that becomes a liability of the
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Buyer under any bulk transfer law of any jurisdiction, under any
common law doctrine of de facto merger or successor liability, or
otherwise by operation of law).
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this ss.4, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing, provided
that the failure of an Indemnified Party to give prompt notice shall
not relieve the Indemnifying Party of its indemnification obligations
except to the extent that the Indemnifying Party shall have been
materially prejudiced thereby.
(ii) Any Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with
counsel of his or its choice reasonably satisfactory to the Indemnified
Party; provided, however, that the Indemnifying Party will not consent
to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless the judgment
or proposed settlement involves only the payment of money damages and
does not impose an injunction or other equitable relief upon the
Indemnified Party.
(iii) Unless and until an Indemnifying Party assumes the defense
of the Third Party Claim as provided in ss.8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any
manner he or it reasonably may deem appropriate, and such reasonable
defense costs shall remain indemnifiable hereunder.
(e) Exclusive Remedy. The Buyer and the Seller acknowledge and agree
that the foregoing indemnification provisions in this ss.8 shall be the
exclusive remedy of the Buyer and the Seller with respect to the transactions
contemplated by this Agreement.
9. Miscellaneous.
(a) Press Releases and Public Announcements. Neither Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Party;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Party and obtain its
consent, which consent shall not be unreasonably withheld or delayed, prior to
making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings,
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agreements, or representations by or between the Parties, written or oral, to
the extent they related in any way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party, except that the Buyer may assign this Agreement, or specific
rights hereunder, to any Affiliate, and that upon consummation of the
transactions contemplated hereby, the Buyer may assign the rights obtained
hereunder without restriction (other than restrictions to which such rights may
be subject pursuant to their terms).
(e) Counterparts; Fascimile Signatures. This Agreement may be executed
in one or more counterparts, and by facsimile transmission, each of which shall
be deemed an original but all of which together will constitute one and the same
instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Seller: Pacific Gateway Exchange, Inc.
000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 phone
(000) 000-0000 facsimile
Attention: Chief Operating Officer
Copy to: Bank of America, N.A.
000 X. Xxxxxxx Xxxxxx
XX XX 0000-000-00
Xxx Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Copy to: Xxxxxxx, Xxxxxxx & Xxxxxxx, P.C.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
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If to the Buyer: Metromedia Fiber Network Services, Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
(000) 000-0000 phone
(000) 000-0000 facsimile
Attention: Chief Financial Officer
Copy to: Metromedia Fiber Network Services, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
(000) 000-0000 phone
(000) 000-0000 facsimile
Attention: General Counsel
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. The Seller may consent to any such amendment at any time
prior to the Closing with the prior authorization of its board of directors. No
waiver by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Buyer and the Seller will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
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(m) Incorporation of Exhibits, Schedules and Disclosure Letter. The
Exhibits, Schedules and Disclosure Letter identified in this Agreement are
incorporated herein by reference and made a part hereof.
(n) Bulk Transfer Laws. The Buyer acknowledges that the Seller will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
METROMEDIA FIBER NETWORK SERVICES, INC.
By:
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Title:
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PACIFIC GATEWAY EXCHANGE, INC.
By:
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Title:
---------------------
PACIFIC GATEWAY EXCHANGE (BERMUDA) LIMITED
By:
---------------------
Title:
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