AGREEMENT FOR PURCHASE AND SALE OF CUSTOMER ACCESS LINES
SH
10/17/05
AGREEMENT
For
PURCHASE AND SALE
of
CUSTOMER ACCESS LINES
Dated as of October __, 2005
By and Among
SPRINT COMMUNICATIONS COMPANY, L.P.,
SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC.,
And
AGREEMENT FOR PURCHASE AND SALE OF CUSTOMER ACCESS LINES
This Agreement for Purchase and Sale of Customer Access Lines (this “Agreement”) is made and
entered into this [___] day of October, 2005, by and among Sprint Communications Company, L.P., a
Delaware limited partnership (“Sprint”), Sprint Communications Company of Virginia, Inc., a
Virginia corporation (“Sprint Virginia”) and Trinsic, Inc. (formerly known as Z-Tel Technologies,
Inc.), a Delaware Corporation (“Buyer”). Sprint and Sprint Virginia are sometimes referred to
herein individually as a “Seller” and collectively as “Sellers”).
RECITALS
A. Sellers currently provide wireline telecommunications services to certain retail and
commercial customers to whom Buyer’s affiliate, Trinsic Communications, Inc., formerly known as
Z-Tel Communications, Inc., provides maintenance and other ancillary services (the “Customers”)
pursuant to the Agreement for Resale of Local Wireline Telecommunications Service and Provision of
Ancillary Services between Z-Tel Communications Inc. and Sprint Communications Company L.P. dated
as of February 4, 2003 (the “Service Agreement”). Sellers have certain contractual rights and
obligations with respect to the Customers receiving such services.
X. Xxxxxxx desire to sell, convey, assign, transfer and deliver to Buyer, and Buyer desires to
buy, assume and accept from Sellers, all of Sellers’ rights and obligations to provide and operate
wireline telecommunication services to the Customers under the Customer Contracts all as set forth
hereinafter.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sellers and Buyer agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
PURCHASE AND SALE OF ASSETS
1.1. Purchase and Sale of Transferred Assets. Upon the terms and subject to the conditions
hereinafter set forth and any possible adjustment pursuant to Section 6.1.3 hereof, at the Closing
described in Article 3, Sellers agree to sell, convey, transfer and assign to Buyer the
“Transferred Assets,” and Buyer agrees to purchase and receive such Transferred Assets from Sellers
and pay Sellers the Purchase Price (as defined in Section 1.3 below). Sellers shall retain the
Excluded Assets.
1.2. Assumption of Obligations by Buyer. Buyer covenants and agrees that, on the Closing
Date, it shall execute and deliver to Sellers an Assumption Agreement in substantially the form
attached as Exhibit A (the “Assumption Agreement”) pursuant to which Buyer will assume and agree to
perform and discharge the Assumed Liabilities as and when due. Except for the Assumed Liabilities,
the parties agree that Buyer will not assume any liability or obligation of either Seller,
including any liability relating to the Excluded Assets or any events (including
events related to the use, conduct or operation of the Transferred Assets) arising prior to the
Closing Date. All such liabilities not assumed by the Buyer pursuant to this Section 1.2 shall be
retained by the Sellers and shall hereafter be referred to as the “Retained Liabilities.”
1.3. Purchase Price. Buyer shall pay to Sellers as consideration for the sale of the
Transferred Assets and the assumption of the Assumed Liabilities, subject to the adjustment set
forth in Section 1.3.3 below, a total purchase price (the “Purchase Price”) equal to the product of
(i) One Hundred Dollars ($100.00), multiplied by (ii) the number of active In-Service Customer
Access Lines at the close of business on the day immediately preceding the Closing Date. For
purposes hereof, “In-Service Customer Access Lines” shall mean all Customer Access Lines being
serviced by Buyer or its affiliate under the Service Agreement that are active and are not in
either a suspend or post-close treatment status, as determined by the parties and otherwise
consistent with past practices for establishing the number of Customer Access Lines being serviced
by Buyer or its affiliate under the Service Agreement. In the event that Buyer elects to proceed
with a partial closing of the transaction contemplated herein pursuant to Section 3.5 based on an
agreed upon Partial Closing Schedule, then the “In-Service Customer Access Lines” shall include
only those Customer Access Lines included on the Partial Closing Schedule that are active and are
not in either a suspend or post-close treatment status, as determined by the parties and otherwise
consistent with past practices for establishing the number of Customer Access Lines being serviced
by Buyer or its affiliate under the Service Agreement. The Purchase Price shall be paid as
follows:
1.3.1. Cash Payment at Closing. Buyer shall pay to Sellers at Closing by wire transfer of
immediately available funds an amount equal to the product of (i) Twenty-Five Dollars ($25), times
(ii) the number of In-Service Customer Access Lines at Closing, as determined above. Such cash
payment at Closing will be funded partially with the escrowed funds established pursuant to Section
3.b. of the Letter of Intent (the
“Letter of Intent”), dated July 29, 2005, between Buyer and Seller (the “Escrowed Funds”).
This portion of the Purchase Price will be paid by Buyer to Seller in immediately available funds
to a bank account designated by Seller.
1.3.2. Post-Closing Payments. Beginning on the last day of the month immediately following
the month in which the Closing Date occurs, Buyer shall pay to Sellers, by wire transfer of
immediately available funds to a bank account designated by Sellers, 15 equal monthly installments
equal to the product of (i) Five Dollars ($5), times (ii) the number of In-Service Customer Access
Lines at Closing as determined above.
1.3.3. Adjustment to Per Line Purchase Price. In the event that the Attrition Rate for any
two (2) consecutive calendar months during the period beginning on the date which is thirty (30)
days after the public announcement by Buyer of the execution of this Agreement and ending on the
Closing Date (the “Post-Execution Period”), exceeds the Pre-Execution Average Attrition Rate by (i)
between 30% and 39.99%, the price set forth in Section 1.3(i) above shall be reduced from One
Hundred Dollars ($100) to Eighty Dollars ($80), (ii) between 40% and 49.99%, the price set forth in
Section 1.3(i) above shall be reduced from One Hundred Dollars ($100) to Sixty Dollars ($60), and
(iii) 50% or more, the price set forth in Section 1.3(i) above shall be reduced from One Hundred
Dollars ($100) to Forty Dollars ($40). For purposes of this Agreement, “Attrition Rate” means with
respect to any month, the percentage of Customer
2
Access Lines lost during such month as compared to the month immediately preceding such month
derived by dividing (i) the number of Customer Access Lines existing on the last day of such month
by (ii) the number of Customer Access Lines existing on the last day of the immediately preceding
month, and “Pre-Execution Average Attrition Rate” shall mean the average of the Attrition Rates for
the three consecutive calendar months ending with the full calendar month ending immediately
preceding the date that Buyer publicly announces the execution of this Agreement. For purposes of
calculating both the Attrition Rate for any month during the Post-Execution Period and the
Pre-Execution Average Attrition Rate, the 4,800 customer access lines in Louisiana that have been
lost due to Hurricane Xxxxxxx (or that have been identified by Sprint as reasonably likely to be
terminated due to extended loss of service as a result of Hurricane Xxxxxxx) shall be excluded from
the calculation and shall be treated as never having been in service.
1.4. Prorations. All taxes imposed on a periodic basis (including personal property taxes, ad
valorem taxes, franchise fees or taxes and similar taxes and assessments with respect to the
Transferred Assets), all utility payments and all other periodic charges and expenses arising from
the operations of the Business shall be prorated between Buyer and Sellers as of 11:59 p.m.,
central Time, on the Closing Date. With respect to measurement periods that include (but do not
end on) the Closing Date (all such periods of time being hereinafter called “Proration Periods”),
Sellers shall be responsible for the portion of any such liabilities that relates to the portion of
such Proration Period ending on the Closing Date, which shall be deemed to be the amount of such
liability for the entire Proration Period multiplied by a fraction, the numerator of which is the
number of days in the portion of the Proration Period ending on the Closing
Date, and the denominator of which is the number of days in the Proration Period. Buyer shall
be responsible for the portion of any such liabilities that relates to the portion of such
Proration Period beginning after the Closing Date, which shall be deemed to be the amount of such
liability for the entire Proration Period multiplied by a fraction, the numerator of which is the
number of days in the portion of the Proration Period beginning on the day following the Closing
Date, and the denominator of which is the number of days in the Proration Period. On the Closing
Date, Buyer shall reimburse Sellers, on this prorated basis, for Buyer’s portion of any such
Proration Period liabilities that have been paid before the Closing Date. Sellers shall reimburse
Buyer, on this prorated basis, for Sellers’ portion of any such Proration Period liabilities paid
on or after the Closing Date within five (5) business days of Sellers’ receipt of an invoice
(including reasonable support for the calculation of the invoiced amount) from Buyer for such
liabilities, but no earlier than five (5) days prior to the due date for the payment of any such
liability. To the extent that Buyer or Sellers have not reimbursed the other party for such a
Proration Period liability for which Buyer or Sellers are responsible by the due date for such
reimbursement, the amount of such reimbursement payment shall bear simple interest at the rate of
8% per annum.
1.5. Allocation of the Purchase Price for Tax Purposes. Sellers may, in their discretion,
make an allocation (the “Allocation”) of the Purchase Price, the Assumed Liabilities and other
relevant items to the individual assets or classes of assets comprising the Transferred Assets in
accordance with Section 1060 of the United States Internal Revenue Code of 1986, as amended (the
“Code”). Buyer agrees not to make any filing or take any position with any Governmental Authority
that is inconsistent with the Allocation.
3
1.6. Transfer Taxes. Buyer and Sellers shall equally bear and be responsible for any Transfer
Taxes imposed by any Governmental Authorities in connection with the sale, transfer or assignment
of the Transferred Assets or otherwise on account of the Transactions, regardless of whether Buyer
or Sellers are assessed therefore. Buyer and Seller shall each pay their share of such Transfer
Taxes directly to the taxing authorities unless the parties mutually agree to coordinate the
payment of such taxes in a different manner. If either party pays any Transfer Taxes directly,
such party shall provide to other within ten (10) days of each such payment written evidence of
receipt of such payment by the appropriate taxing authority.
ARTICLE 2
ACCESS
2.1. Access to Books and Records. Upon execution of this Agreement, Sellers, upon reasonable
notice from Buyer, shall permit Buyer and its authorized representatives reasonable access during
customary business hours at Sellers’ place of business to the books and records, contracts, permits
and other relevant data, information and things pertaining to the Transferred Assets.
2.2. Access to Customer Data. Upon execution of this Agreement, Sellers shall provide Buyer
with all customer information and data relating to the Transferred Assets as reasonably requested
by Buyer that pertains to the Transferred Assets, including but not limited to, customer test files
and universal service order code definitions. Upon the request of Buyer, Sellers shall provide
Buyer with a complete computer download of all customer service records for Customers (including
the feature sets, pricing and packages sold to the customer).
ARTICLE 3
CLOSING
3.1. Closing. Upon the terms and subject to the conditions of this Agreement, the
consummation of the purchase and sale of the Transferred Assets and the assignment and assumption
of the Assumed Liabilities (the “Closing”) shall take place at such location, date and time as the
parties may mutually determine, within three (3) days following the satisfaction or waiver of all
the conditions precedent to Closing, including, but not limited to: (i) the conditions precedent to
Closing set forth in this Article 4, and (ii) the receipt of all necessary Governmental Approvals.
The date that the Closing actually occurs is referred to as the “Closing Date.” In lieu of
attending the Closing, the parties may consummate the Closing by exchanging documents via e-mail,
facsimile and overnight courier in a mutually acceptable manner. The Closing shall be deemed to
have occurred as of 11:59 p.m., Central Standard Time, on the Closing Date.
3.2. Deliveries by Sellers to Buyer. At or prior to the Closing, Sellers will deliver to
Buyer:
3.2.1. A duly executed Interim Process Agreement (as defined in Section 6.2.6. below);
4
3.2.2. A duly executed Assignment and Assumption Agreement in substantially the form attached
as Exhibit A;
3.2.3. A duly executed closing certificate of each Seller signed by the appropriate officer of
the Seller certifying as to the fulfillment of the conditions set forth in Sections 4.1.1 and 4.1.2
of this Agreement is substantially the form attached as Exhibit B;
3.3. Deliveries by Buyer to Sellers. At or prior to the Closing, Buyer will deliver to
Sellers:
3.3.1. The Purchase Price as required by Section 1.3, together with any proration payment
required to be paid on the Closing Date pursuant to Section 1.4, and the amount of any Transfer
Taxes to be paid by Sellers as provided in Section 1.6;
3.3.2. A duly executed closing certificate of Buyer signed by the appropriate Officer or Buyer
certifying as to the fulfillment of the conditions set forth in Section 4.2.1 and 4.2.2 of this
Agreement in substantially the form attached as Exhibit C;
3.3.3. A duly executed Interim Process Agreement; and
3.3.4. A duly executed Assignment and Assumption Agreement in substantially the form attached
as Exhibit A.
3.4. Further Assurances. Except as otherwise provided herein, all instruments of conveyance,
assignment or transfer referred to herein, all sums of money, and all records and data to be
delivered as specified in this Agreement shall be delivered at or prior to the Closing. The
parties agree following the Closing to execute and deliver such further instruments of conveyance,
assignment and assumption as may be reasonably necessary to consummate the Transactions and to give
effect to the transfer of the Transferred Assets and the assumption of the Assumed Liabilities.
3.5. Partial Closing. In the event that the parties do not receive all of the Governmental
Approvals required to transfer all of the Customer Access Lines originally contemplated to be
transferred pursuant to this Agreement, Buyer shall deliver to Sellers a schedule listing the
Customer Access Lines with respect to which the necessary Governmental Approvals have been received
(the “Partial Closing Schedule”). Within two (2) business days of receipt of such Partial Closing
Schedule from Buyer, Sellers shall provide any objection to Buyer in writing and shall provide
written evidence of any such Governmental Approval that has been obtained with respect to any
Customer Access Line Sellers believe should be included on the Partial Closing Schedule. The
parties agree to use commercially reasonable efforts to resolve any dispute that may arise with
respect to the Customer Access Lines to be included on the Partial Closing Schedule. Upon final
determination of the Partial Closing Schedule, Buyer and Sellers shall proceed to a closing with
respect to those Customer Access Lines included on the Partial Closing Schedule. In the event of a
partial closing pursuant to this Section 3.5, Buyer shall only accept and purchase from Sellers and
Sellers shall only sell and transfer to Buyer those Customer Access Lines with respect to which all
required Governmental Approvals have been received and which are set forth on the Partial Closing
Schedule. Buyer and Sellers agree, for a reasonable period following any partial closing, to use
commercially reasonable efforts (i) to
5
obtain the necessary Governmental Approvals required to transfer those Customer Access Line not
transferred as part of such partial closing and (ii) to effect such transfer of the remaining
Customer Access Lines upon receipt of such Governmental Approval.
ARTICLE 4
CONDITIONS
4.1. Conditions to Buyer’s Obligations. The obligation of Buyer to consummate the
Transactions shall be subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by Buyer in writing:
4.1.1. Representations and Warranties. All representations and warranties of Sellers made in
this Agreement shall be true and correct in all material respects as of
the Closing Date, except for such representations and warranties that are made expressly as of
an earlier date which shall be true and correct as of date made.
4.1.2. Covenants and Agreements. Sellers shall have performed and complied in all material
respects with all covenants and agreements required or contemplated by the Transaction Documents to
be performed by it on or prior to the Closing Date.
4.1.3. Governmental Approvals. The Governmental Approvals shall have been obtained and shall
be in full force and effect; provided, however, that Buyer shall be permitted to waive this
condition as it relates to having received all Governmental Approvals and proceed with a closing
pursuant to Section 3.5 of this agreement with respect to those Customer Access Lines with respect
to which such Governmental Approvals have been received.
4.1.4. Legal Proceedings; No Injunction. No action or proceedings before any court or
Governmental Authority shall be pending or threatened wherein an unfavorable judgment, decree or
order would (a) prevent the carrying out of this Agreement, or any of the transactions contemplated
herein, (b) declare unlawful the transactions contemplated by this Agreement, (c) cause such
transactions to be rescinded, (d) permit consummation of the transactions contemplated herein or
therein subject to the imposition of substantial damages on Buyer, or (e) materially affect the
right of Buyer to own the transferred Assets.
4.1.5. Certificates and Other Documents. Sellers shall have executed and delivered the
certificates and other documents required by Sections 3.2 and 3.4.
4.1.6. No Material Adverse Effect. Subsequent to the date hereof, there shall have occurred
no casualty or other event or change, not subsequently cured by Sellers, which has resulted in a
Material Adverse Effect.
4.2. Conditions to Sellers’ Obligations. The obligation of Sellers to consummate the
Transactions shall be subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by Sellers in writing:
4.2.1. Representations and Warranties. All representations and warranties of Buyer made in
this Agreement shall be true and correct in all material respects as of the Closing
6
Date except for such representations and warranties that are made expressly as of an earlier date
which shall be true and correct as of date made.
4.2.2. Covenants. Buyer shall have performed and complied with all covenants and agreements
required or contemplated by the Transaction Documents to be performed by it on or prior to the
Closing Date.
4.2.3. Governmental Approvals. All Governmental Approvals shall have been obtained and shall
be in full force and effect.
4.2.4. Legal Proceedings; No Injunction. No action or proceeding before any court or
Governmental Authority shall be pending or threatened wherein an unfavorable judgment, decree or
order would (a) prevent the carrying out of this Agreement or any of the transactions contemplated
herein (b) declare unlawful the transactions contemplated by this Agreement (c) cause such
transactions to be rescinded, or (d) permit consummation of the transactions contemplated herein
subject to the imposition of substantial damages on Sellers.
4.2.5. Certificates and Other Documents. Buyer shall have delivered the certificates and
other documents required under Sections 3.3 and 3.4.
4.2.6. Purchase Price. Buyer shall have delivered the Purchase Price to Sellers in the manner
specified in Section 1.3.1.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1. Buyer’s Representations and Warranties. Buyer represents and warrants to Sellers that:
5.1.1. Organization. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full authority: (i) to execute and deliver
the Transaction Documents, to consummate the Transactions and to perform all of its obligations
under the Transaction Documents, and (ii) to own, lease or otherwise hold the assets owned, leased
or held by it. Buyer has obtained all approvals necessary to authorize the execution, delivery and
performance of this Agreement, and Buyer has obtained, or will have obtained prior to Closing, all
approvals necessary to consummate the Transactions and authorize the execution, delivery and
performance of the Transaction Documents.
5.1.2. Authority. This Agreement has been, and when executed by Buyer each of the other
Transaction Documents will be, duly and validly executed and delivered by Buyer and the
authorization referenced in Section 3.3.2 has been obtained by Buyer. This Agreement constitutes,
and when executed by Buyer each of the other Transaction Documents will constitute, the valid and
binding agreement of Buyer enforceable against Buyer in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other Laws relating to creditors’ rights generally and by principles
of equity.
7
5.1.3. No Restrictions Against Transactions. The execution, delivery and performance of this
Agreement and the Transaction Documents by Buyer do not, and the fulfillment by Buyer of its
obligations under this Agreement and the Transaction Documents will not, conflict with, violate or
result in the breach of any provision of (i) the Articles of Incorporation or Bylaws (or comparable
governing documents or instruments) of Buyer or (ii) any contract, agreement, instrument or other
legally binding arrangement to which Buyer is a party or by which any of Buyer’s assets are bound.
The execution, delivery and performance of this Agreement and the Transaction Documents
by Buyer will not violate any Law. Except as set forth on Schedule 5.1.3 and except for the
FCC Approvals and PUC Approvals the parties contemplate obtaining pursuant to Sections 6.2.3 and
6.2.4 of this Agreement, Buyer’s execution, delivery and performance of this Agreement and the
Transaction Documents do not require authorization or approval of, or filing with, any Governmental
Authority.
5.1.4. Brokers. Buyer has not paid or become obligated to pay any fee or commission to any
broker, finder, investment banker or other intermediary in connection with the transactions
contemplated by this Agreement in such a manner as to give rise to a valid claim against Sellers
for any broker’s or finder’s fees or similar fees or expenses.
5.1.5. Litigation. As of the date hereof there are no actions, suit, proceedings, claims,
arbitrations or investigations, either at law or in equity, of any kind now pending (or to Buyer’s
Knowledge threatened) against Buyer (i) that question the validity of any of the Transaction
Documents or the Transactions; or (ii) that seek to delay, prohibit or restrict in any manner any
actions taken or contemplated to be taken by Buyer under the Transaction Documents.
5.1.6. Funding. Buyer will have adequate funding to deliver the Purchase Price at Closing as
contemplated in the Agreement.
5.2. Sellers’ Representations and Warranties. Each of the Sellers represents and warrants to
Buyer that:
5.2.1. Organization. Sprint is a limited partnership duly validly existing and in good
standing under the laws of the State of Delaware and Sprint Virginia is a corporation duly and
validly existing and in good standing under the laws of the State of Virginia. Sellers have full
power and authority to execute and deliver the Transaction Documents, to consummate the
Transactions and to perform all of its obligations under the Transaction Documents. Sellers have
obtained all corporate and partnership approvals necessary to consummate the Transactions and
authorize the execution, delivery and performance of the Transaction Documents.
5.2.2. Authorization, Execution and Delivery. This Agreement has been, and when executed by
Sellers each of the other Transaction Documents will be, duly and validly executed and delivered by
Sellers. This Agreement constitutes, and when executed by Sellers each of the other Transaction
Documents will constitute, the valid, legal and binding agreement of Sellers enforceable against
each Seller in accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws relating to
creditors’ rights generally and by principles of equity.
8
5.2.3. Transferred Assets. Sellers have good title to all of the Transferred Assets free and
clear of all Encumbrances.
5.2.4. Governmental Authorization. Except as set forth on Schedule 5.2.4 and except for the
FCC Approvals and PUC Approvals the parties contemplate obtaining pursuant to Sections 6.2.3 and
6.2.4 of this Agreement, Sellers’ execution, delivery and
performance of this Agreement and the Transaction Documents do not require authorization or
approval of, or filing with, any Governmental Authority.
5.2.5. Litigation. As of the date hereof there are no actions, suits, proceedings, claims,
arbitrations or investigations, either at law or in equity, of any kind now pending (or to Sellers’
Knowledge threatened) against either Seller (i) that relate to the Transferred Assets; (ii) that
question the validity of any of the Transaction Documents or the Transactions; or (iii) that seek
to delay, prohibit or restrict in any manner any actions taken or contemplated to be taken by
either Seller under the Transaction Documents.
5.2.6. Tax Matters. All taxes and assessments, including interest and penalties thereon, of
any kind whatsoever accrued with respect to the Business through the Closing Date (other than
Transfer Taxes and taxes subject to proration pursuant to Section 1.4) have been or will be paid in
full by a Seller. There are no liens for federal, state or local taxes upon the Transferred
Assets, except for statutory liens for taxes or assessments not yet delinquent or the validity of
which is being contested in good faith by either Seller in appropriate proceedings, the ultimate
liability for which shall remain the obligation of Sellers. Sellers have timely filed, or will
cause to be timely filed, all material federal, state and local tax returns and reports of any kind
(including income, franchise, sales, use, excise, employment and real and personal property) which
either Seller is obligated to file with respect to the Business for all periods up to and including
the Closing Date.
5.2.7. No Material Violation. The execution and delivery by Sellers of the Transaction
Documents and the consummation by Sellers of the Transactions will not: (i) violate any provision
of the Articles of Incorporation or Bylaws (or comparable governing documents or instruments) of
either Seller; (ii) violate any applicable Law issued, enacted, entered or deemed applicable by any
Governmental Authority having jurisdiction over a Seller or any of the Transferred Assets; (iii)
result in a violation or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give another party any rights of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of the Customer Contracts; or (iv) result in the
creation or imposition of any Encumbrance on any of the Transferred Assets.
5.2.8. Customer Contracts. Except as set forth on Schedule 5.2.8, each of the Customer
Contracts is in all material respects valid, binding and currently in full force and effect and is
enforceable by Sellers in accordance with its terms. Except as set forth on Schedule 5.2.8, neither
Seller is in breach or default in any material respect under any of the Customer Contracts, and to
Sellers’ Knowledge, no other party is in breach or default under any of the Customer Contracts.
9
5.2.9. Brokers. Neither Seller has paid or become obligated to pay any fee or commission to
any broker, finder, investment banker or other intermediary in connection with the transactions
contemplated by this Agreement in such a manner as to give rise to a valid claim against Buyer for
any broker’s or finder’s fees or similar fees or expenses.
5.2.10. Customer Deposits and Residual Payments. Neither Seller has received any customer or
security deposits or any pre-payment of fees or charges for any amount from any Customers with
respect to the Customer Contracts. Neither Seller owes any residual payments or other similar fees
to any party with respect to the Customer Contracts or the identification of Customers or the sale
of services to Customers.
5.2.11. Customer Access Lines and Partnership Programs. Schedule 5.2.11(a) lists all of the
Customer Access Lines included in the Transferred Assets. Schedule 5.2.11(b) lists each
Partnership Program relating to the Customer Access Lines currently in affect between Seller and
any third-party, and Schedule 5.2.11(c) lists all of the Partnership Customer Access Lines covered
by any such Partnership Program.
5.2.12. Slamming, Cramming and Xxxx Presentation. Except as set forth in Schedule 5.2.12,
Neither Seller is in violation of, nor has either Seller received any written notice of any alleged
violation of, any Law, including any Law relating to “slamming,” “cramming,” or “xxxx
presentation,” relating to the Transferred Assets.
5.2.13. Disclosure. No representation or warranty of the Sellers in this Agreement contains
an untrue statement of a material fact with respect to the Sellers or omits to state a material
fact necessary to make the statements therein with respect to the Sellers, in light of the
circumstances under which they were made, not misleading.
ARTICLE 6
COVENANTS
6.1. Covenants of Sellers.
6.1.1. Satisfaction of Conditions. Sellers will each use its commercially reasonable efforts
to cause to be fulfilled and satisfied all of the conditions to the Closing to be performed or
satisfied by Sellers.
6.1.2. Maintenance and Conduct of Business. Between the date of this Agreement and the
Closing Date:
6.1.2.1. Sellers shall carry on the Business in the ordinary course and substantially in the
same manner as heretofore conducted, including, without limitation, Sellers shall maintain their
current mean time to repair and its average answer time, hold time and call service levels.
6.1.2.2. Sellers will use their commercially reasonable efforts to (i) preserve its
relationships with its Customers in substantially the same manner as it has done so to date and
(ii) facilitate a smooth and positive transition of services to Buyer.
10
6.1.2.3. Sellers shall not sell, assign, transfer, lease, sublease, pledge or otherwise
encumber or dispose of any of the Transferred Assets, provided, however, that Sellers shall
terminate Customer Contracts due to delinquent payment or inappropriate behavior by the Customer in
substantially the same manner as Sellers have done so to date.
6.1.2.4. Sellers shall continue their collection methods, customer service policies and other
policies affecting the Customers in the same manner they have done so to date.
6.1.2.5. Sellers shall not make any negative or unsupportive comments to the Customers
regarding Buyer and the transfer of the Transferred Assets to Buyer.
6.1.2.6. Sellers shall maintain their books and records in the normal and usual manner.
6.1.3. Seller Rate Changes. Sellers shall not make any adjustments to customer rates within
one-hundred and twenty (120) days of the Closing Date except to the extent such adjustments (i)
relate to existing fees or taxes and (ii) are mandated by Law. In the event that any adjustments
mandated by Law create newly imposed fees, newly imposed taxes or other rate increases, that are
material, Buyer shall have the option to (x) refuse the purchase of the Customer Access Lines
affected by such adjustment and terminate this Agreement as it relates to such Customer Access
Lines; provided, however, that in order for Buyer to terminate this Agreement pursuant to this
clause (x), Buyer shall deliver written notice of its intention to do so to Sellers no later than
December 31, 2005, or (y) to purchase such Customer Access Lines at price per line to be negotiated
with Sellers. The parties agree to use commercially reasonable efforts to reach an agreement with
respect to any amendment to the per line price pursuant to clause (y) in the preceding sentence.
In the event that the parties fail to reach an agreement with respect to the amended price per
line, the parties agree to select an arbitrator who has no affiliation to the Buyer or either
Seller from the American Arbitration Association’s Roster of Neutrals to conclusively determine the
per line price with respect to those Customer Access Lines effected by any newly imposed fees,
newly imposed taxes or other rate increases. If any such adjustments are imposed on any Customer
Access Lines and Buyer agrees to purchase such lines after negotiation with Sellers as provided
herein, Section 1.3 of this Agreement shall be automatically amended to reflect the amended price
per line agreed to by the parties pursuant to this Section (or as set by any such arbitrator
pursuant to the foregoing).
6.1.4. Buyer Audit Rights. Sellers shall permit Buyer or its authorized representatives to
enter Sellers’ customer service centers or other call centers upon reasonable request and at
reasonable intervals during normal business hours to inspect and audit all the Sellers’ relevant
operations, procedures and records including records relating to call volumes, response times and
other quality assurance related items as they pertain to the Transferred Assets. Sellers shall
also permit Buyer to inspect those records relevant to Sellers’ service of the Customer Access
Lines during normal working hours to the extent necessary to evaluate Sellers’ compliance with the
terms of its covenants on other obligations under this Agreement.
6.1.5. Post-Closing Changes to Seller Incentives. Sellers agrees that they will not
discontinue, modify or alter in any way that is detrimental to the Customers any incentives,
11
discounts, special offers or service packages that Sellers currently have with any of its
customers that are also Customers of a Seller being transferred as part of the transaction
contemplated by this Agreement, including, without limitation any such incentives, discounts,
special offers or service packages that either Seller has with its PCS customers, but excluding any
of Sellers’ Partnership Programs, which will be discontinued.
6.1.6. Consent to Assignment. At the Closing, Sellers will transfer to Buyer all Customer
Contracts and Permits that are by their terms assignable. Sellers shall also request assignment to
Buyer of those Customer Contracts and Permits that are not by their terms assignable. To the
extent that the assignment of any Customer Contract or any Permit shall require the consent of
another person, this Agreement shall not constitute an agreement to assign the Transferred Customer
Contract or Permit if an attempted assignment would constitute a breach thereof. Prior to the
Closing, both parties shall use commercially reasonable efforts (excluding the payment of money) to
obtain the consent of any other party to the assignment of such Customer Contracts or Permits to
Buyer.
6.2. Mutual Covenants.
6.2.1. Public Announcements. The parties agree that immediately following the execution of
this Agreement, Buyer will issue the press release attached hereto as Exhibit D. Except as set
forth in the preceding sentence, neither party may publicly announce the signing of this Agreement
and the Transactions contemplated herein before of after the Closing without the prior written
approval of the other party, except as and to the extent that such party is required to so disclose
such information by Law or rule of any stock exchange. In such event, such disclosing party shall
advise the other party of the disclosure required and shall provide the other party with a copy of
the disclosure to be made, and shall use commercially reasonable efforts to cause a mutually
acceptable release, announcement or filing to be made.
6.2.2. Cooperation. Except as expressly provided otherwise in this Agreement, each party
covenants to use all commercially reasonable efforts to take or cause to be taken all actions, and
to do or cause to be done all things, that are necessary, proper or advisable under applicable Laws
and regulations, expeditiously and practicably to consummate and make effective the Transactions,
including but not limited to (i) using its commercially reasonable efforts to resolve any
disagreements between Buyer and Sellers with respect to any applications for governmental or
regulatory approval prior to application for such approval, (ii) obtaining all necessary actions,
waivers, consents and approvals from third parties or Governmental Authorities, and (iii) effecting
all necessary filings with Governmental Authorities.
6.2.3. PUC Filings. Promptly after the execution of this Agreement, each of the parties will
take such reasonable actions as may be necessary or helpful (including, but not limited to, making
available witnesses, information, documents, and data requested by the PUC) to apply for and
receive approval by the PUC for the transfer of the Transferred Assets and Authorities to Buyer.
Sellers and Buyer will jointly prepare the applications and slamming waivers to be filed with the
PUC. Sellers shall take the lead in preparing petitions to discontinue current service offerings
as required.
12
6.2.4. FCC Filings. The parties agree to promptly file after execution of this Agreement such
applications and to take such reasonable actions as may be necessary or helpful to apply for and
receive approval by the FCC for the transfer of the Transferred Assets and the Authorities to Buyer
and the change in the provider of telecommunications services to the Customers. Sellers and Buyer
will jointly prepare the applications and slamming waivers to be filed with the FCC. Sellers shall
take the lead in preparing petitions to discontinue current service offerings as required.
6.2.5. Buyer State Filings. Buyer shall be responsible for filing any required affidavits
regarding its status as the “acquiring carrier” as well as any future tariffs relating to new rate
plans.
6.2.6. Interim Process Agreement. No later than October 31, 2005, Sellers and Buyer shall
have entered into an Interim Process Agreement that will govern the relationship of the parties and
provide for the orderly transition of the Customer Access Lines to Buyer (the “Interim Process
Agreement”). The Interim Process Agreement shall address, among other item, the items set forth on
Schedule 6.2.6.
ARTICLE 7
TERMINATION
7.1. Termination By Buyer. If any condition precedent to Buyer’s obligation to effect the
Closing set forth in Section 4.1 shall become incapable of satisfaction through no fault of Buyer
and such condition is not waived by Buyer, Buyer shall not be obligated to effect the Closing and
may terminate this Agreement by written notice to Sellers. If either Seller materially breaches
any provisions of this Agreement, and such breach remains uncured for thirty (30) days after notice
from Buyer, Buyer may terminate this Agreement upon written notice to Seller.
7.2. Termination By Seller. If any condition precedent to Sellers’ obligation to effect the
Closing set forth in Section 4.2 shall become incapable of satisfaction through no fault of Sellers
and such condition is not waived by Sellers, Sellers shall not be obligated to effect the Closing
and may terminate this Agreement by written notice to Buyer. If Buyer materially breaches any
provisions of this Agreement, and such breach remains uncured for thirty (30) days after notice
from Sellers, Sellers may terminate this Agreement upon written notice to Buyer.
7.3. Termination By Buyer or Sellers. If (i) a final, non-appealable order is issued by any
Governmental Authority to restrain, enjoin or prohibit the consummation of the Transactions, or
(ii) the Closing shall not have occurred on or March 1, 2006, then either party may terminate this
Agreement by written notice to the other. Notwithstanding the foregoing, if a non-appealable order
is issued by a state PUC to restrain, enjoin or prohibit the consummation of the Transactions, then
within ten (10) days of the date such an order becomes final and non-appealable, the Buyer and
Sellers will initiate good faith negotiations to modify the Agreement to address the terms of the
PUC order. If the
parties are unable to successfully modify the Agreement, either party shall, at its option,
have the right to terminate this Agreement by written notice to the other party.
13
7.4. Effect of Termination. In the event of the termination of this Agreement pursuant to
this Article 7, this Agreement shall thereafter become void and there shall be no further liability
on the part of any party hereto or its respective shareholders, directors, officers or employees in
respect thereof, except as follows: (i) nothing herein shall relieve any party from liability for
any intentional breach of this Agreement, (ii) the obligations of the parties hereto set forth in
Sections 12.3, 12.4, 12.5, 12.11, 12.12 and 12.14 shall not be affected by a termination of this
Agreement, and (iii) the Escrowed Funds and any interest earned thereon shall be either immediately
released to the Buyer or retained by the Sellers, as applicable, in accordance with Section 3.b. of
the Letter of Intent.
ARTICLE 8
ADDITIONAL MATTERS
8.1. Pre-Closing. In order to effectuate an orderly Transition in the provision of
telecommunications services to Customers on the Closing Date, Buyer and Sellers agree to utilize
the measures set forth below:
8.1.1. Collection of Receivables. Prior to the Closing Date, Sellers will provide service and
collect receivables related to such Customers. Beginning on the Closing Date, all Customers shall
become the responsibility of Buyer, and Buyer will, as of the Closing Date, be primarily
responsible for collecting receivables related to service provided both before and after the
Closing Date. The parties agree that as part of the notices provided to the Customer with respect
to the Transition, Customers will be instructed that all payments to be delivered after the Closing
Date, whether for services before or after the Closing Date, will be made to a newly established
lock-box under the control of Buyer. Buyer will collect all payments made following the Closing
Date and will within sixty (60) days of the Closing Date transfer to Sellers all payments received
by Buyer relating to services provided before the Closing Date. Any payments received by Buyer
relating to services provided before the Closing Date after the sixty (60) day period referred to
in the preceding sentence will be forwarded by Buyer to Sellers no more than ten (10) business days
after receipt thereof. Any payments received by either Seller following the Closing Date will be
forwarded by such Seller to the lock-box no more than ten (10) business days after receipt thereof.
8.1.2. Notice to Customers. Buyer and Sellers agree that Buyer, in cooperation with Sellers,
will deliver multiple written notifications to the Customer in order to meet requisite regulatory
standards and to facilitate an orderly transition of services to Buyer with as little attrition as
possible. All such written notifications shall be provided to Seller in advance of any use thereof,
and shall be reasonably acceptable to Sellers. In no less than the final xxxx delivered to each
Customer, the Customers shall be informed that the applicable Seller will no longer be the
Customer’s telecommunications provider and Customers shall be provided the name, address and
telephone number of Buyer, including the payment information relating to the newly established
lock-box and
a statement that all such payments due on the final xxxx must be directed to the new payment
location.
8.1.3. Customer Records. To the extent not previously provided to Buyer, Sellers shall use
commercially reasonable efforts to maintain all billing and service records for
14
goods sold or services provided, including any third-party verifications, to Customers prior to
Closing until the later of one year from the Closing Date or the maximum time required by Law.
Sellers shall use commercially reasonable efforts to make available, upon reasonable request from
Buyer, all such billing and service records. Such records will be provided without cost to the
Buyer and will include access to third party verifications and letters of authorization associated
with end user subscriptions.
8.1.4. Carrier Access Billing. Sellers shall render their own final carrier access bills to
its interexchange carriers for minutes, messages and other applicable charges. Sellers shall be
responsible for collecting and settling any disputes associated with its final carrier access
xxxxxxxx to interexchange carriers, and there shall be no adjustment to the Purchase Price for any
bad debts of these interexchange carriers. All carrier access xxxxxxxx, revenue, and bad debt
associated with usage incurred after Closing shall be the benefit or obligation of Buyer as the
case may be.
8.2. New Customer Service Orders and Service Change Orders. After customers are transitioned
to Buyer on the Closing Date, Buyer shall be responsible for processing all new customer service
requests and service change order requests submitted by customers or applicants for service. After
the Closing Date, Sellers shall forward within three (3) business days any new customer service
orders or service change orders received by either Seller to Buyer for service.
8.3. Access to Books and Records.
8.3.1. After the Closing, Sellers will retain all Retained Books and Records for a period of
three (3) years.
8.3.2. After the Closing, upon reasonable notice the parties will give to the representatives,
employees, counsel and accountants of the other party reasonable access during normal business
hours, to books and records relating to the Business, the Transferred Assets and the Assumed
Liabilities, and will permit such persons to examine and copy such records, in each case to the
extent reasonably requested by the other party in connection with tax and financial reporting
matters (including any tax returns and related information, but not attorney work product), audits,
legal proceedings, governmental investigations and other business purposes (including such
financial information and any receipts evidencing payment of taxes as may be requested by Sellers
to substantiate any claim for tax credits or refunds); provided, however, that nothing herein will
obligate any party to take actions that would unreasonably disrupt the normal course of its
business or violate the terms of any contract to which it is a party or to which it or any of its
assets is subject. Sellers and Buyer will cooperate with each other in the conduct of any tax
audit or similar proceedings involving or otherwise relating to
the Business (or the income therefrom or assets thereof) with respect to any tax and each will
execute and deliver such powers of attorney and other documents as are necessary to carry out the
intent of this Section 8.3.2.
8.4. Bulk Sales Laws. Sellers and Buyer waive compliance with applicable laws under any
version of Article 6 of the Uniform Commercial Code adopted by any state or any
15
similar Law relating to tile sale of inventory, equipment or other assets in bulk in
connection with the sale of the Transferred Assets.
ARTICLE 9
INDEMNIFICATION
INDEMNIFICATION
9.1. Survival. The representations and warranties made in this Agreement, the Schedules and
the certificates to be delivered by the parties shall survive for a period of eighteen (18) months
following the Closing Date (except for Sections 5.2.3 (“Title to Purchased Assets”), which shall
survive indefinitely, and Section 5.2.6 (“Taxes”) and 5.2.12 (Slamming, Cramming and Xxxx
Presentation), which shall survive for the applicable statute of limitations), except to the extent
such party, at or prior to the Closing Date, shall have actual knowledge of a breach or inaccuracy
of a representation or warranty of the other party. No claim may be made for the breach of a
representation or warranty made in this Agreement unless notice of such claim has been delivered to
the breaching party prior to the expiration of the representation or warranty.
9.2. Indemnification and Payment of Damages by Sellers. Subject to the limitations set forth
in Section 9.6, each of the Sellers will indemnify and hold harmless Buyer and its respective
representatives, stockholders, controlling persons and affiliates (collectively, the “Indemnified
Persons”) for, and will pay to such Indemnified Persons the amount of, any loss, liability, claim,
damage expense (including costs of investigation and defense and reasonable attorneys’ fees),
whether or not involving a third-party claim (collectively, “Damages”), arising, directly or
indirectly, from or in connection with (a) any breach of representation or warranty made by either
Seller in this Agreement, (b) any breach of any covenant or obligation of a Seller in this
Agreement; (c) the Excluded Assets or the Retained Liabilities; (d) any liabilities for taxes
arising before the Closing Date or relating to events occurring before the Closing Date; or (e) any
claim by any person for brokerage or finder’s fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by any such person with a Seller (or any
person acting on its behalf) in connection with any of the contemplated transactions.
9.3. Indemnification and Payment of Damages by Buyer. Subject to the limitations set forth in
Section 9.7, Buyer will indemnify and hold harmless Sellers and their Indemnified Persons for, and
will pay to such Indemnified Persons the amount of, any Damages arising, directly or indirectly,
from or in connection with (a) any breach of representation or warranty made by Buyer in this
Agreement; (b) any breach of any covenant or obligation of Buyer in this Agreement; (c) the use,
conduct or operation of the Transferred Assets from and after the Closing Date solely to the extent
that any such Damages result from events occurring after the Closing Date, (d) the failure of Buyer
to perform any of the Assumed Liabilities, and (e) any claim by any person for brokerage or
finder’s fees or commissions or similar payments based upon any agreement or understanding alleged
to have been made by such person with Buyer (or any person acting on its behalf) in connection with
any of the contemplated transactions.
9.4. Procedure for Indemnification — Third Party Claims.
9.4.1. Promptly after receipt by an Indemnified Person under Section 9.2 or 9.3 of notice of
the commencement of any claim (a “Proceeding”) against it, such Indemnified
16
Person shall, if a claim is to be made against an indemnifying party under such section, give
notice to the indemnifying party of the commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any liability that it may have to any
Indemnified Person, except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the Indemnified Person’s failure to give such notice.
9.4.2. If any proceedings referred to in Section 9.4.1 is brought against an Indemnified
Person and it give notice to the indemnifying party of the commencement of such Proceeding, the
indemnifying party shall, be entitled to participate in such Proceeding and, to the extent that it
wishes (unless the indemnifying party is also a party to such Proceeding and the Indemnified Person
determines in good faith that joint representation would be inappropriate) to assume the defense of
such Proceeding with counsel reasonably satisfactory to the Indemnified Person and, after notice
from the indemnifying party to the Indemnified Person of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be
liable to the Indemnified Person under this Article 9 for any fees of other counsel or any other
expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the
Indemnified Person in connection with the defense of such Proceeding, other than reasonable costs
of investigation. If the indemnifying party assumes the defense of a Proceeding, (i) no compromise
or settlement of such claims may be effected by the indemnifying party without the Indemnified
Person’s consent unless (A) there is no finding or admission of any violation of legal
requirements or any violation of the rights of any Person and no effect on any other claims that
may be made against the Indemnified Person, and (B) the sole relief provided is monetary damages
that are paid in full by the indemnifying party; and (ii) the Indemnified Person will have no
liability with respect to any compromise or settlement of such claims effected without the consent
of such Indemnified Person. In no event will the Indemnified Person consent to the entry of any
judgment or enter into any settlement with respect to a Proceeding without the prior written
consent of the Indemnifying Person, which consent shall not be unreasonably withheld.
9.5. Procedure for Indemnification — Other Claim. A claim for the indemnification for any
matter not involving a third-party claim may be asserted by notice to the party from whom
indemnification is sought.
9.6. Limitations on Sellers’ Indemnification of Purchaser. Notwithstanding any other
provision to the contrary, Sellers shall be obligated to indemnify Buyer and its Indemnified
Persons only to the extent that the amount of such Damages, when aggregated with the total amount
of other claims for indemnification under Section 9.2, does not exceed $1,000,000, and (ii) any
such claims are made upon a Seller in writing prior to the close of business on the second
anniversary of the Closing Date.
9.7. Limitations on Buyer’s Indemnification of Sellers. Notwithstanding any other provision
to the contrary, Buyer shall be obligated to indemnify Sellers and their Indemnified Persons only
to the extent that the amount of such Damages, when aggregated with the total amount of other
claims for indemnification under Section 9.3, does not exceed $1,000,000, and (ii) any such claims
are made upon Buyer in writing prior to the close of business on the second anniversary of the
Closing Date.
17
ARTICLE 10
WAIVER OF TRIAL BY JURY
WAIVER OF TRIAL BY JURY
10.1. Waiver of Trial by Jury. Each party waives its right to a jury trial in any court
action arising between the parties, whether under this Agreement or otherwise related to this
Agreement, and whether made by claim, counterclaim, third party claim or otherwise. If for any
reason the jury waiver is held to be unenforceable, the parties agree to binding arbitration under
the applicable commercial rules of the American Arbitration Association and 9 U.S.C. § 1, et seq.
Any arbitration will be subject to the Governing Law provision set forth in Section 12.10.
Discovery in the arbitration will be governed by the Federal Rules of Civil Procedure. The
determination of the arbitrator shall be final, binding and conclusive upon the parties and
enforceable in a court of competent jurisdiction. The agreement of each Party to waive its right
to a jury trial will be binding on its successors and assignees.
ARTICLE 11
CERTAIN DEFINITIONS
CERTAIN DEFINITIONS
11.1. Defined Terms. For purposes of this Agreement, certain terms used in this Agreement and
not otherwise defined herein shall have the meanings designated below:
“Accounts Receivable” means all customer accounts receivable with respect to goods sold and/or
services provided to Customers by a Seller and its Affiliates prior to the Closing Date.
“Affiliate” of a specified entity means any legal entity directly or indirectly controlling,
controlled by, or under the common control with the specified entity. The term “control”
(including “controlling,” “controlled by” and “under common control with”) of an entity means the
possession, directly or indirectly, of the power to (i) vote 50% or more of the voting securities
or other voting interests of such person, or (ii) direct or cause the direction of the management
and policies of such entity, whether through the ownership of voting shares, by contract or
otherwise.
“Agreement” means this Agreement for Purchase and Sale of Customers Line’s, together with all
Schedules and Exhibits hereto, as any of the foregoing may be amended, modified or supplemented in
writing from time to time.
“Assumed Liabilities” means any and all of the following liabilities and obligations of
Sellers or their Affiliates.
(a) to the extent arising exclusively out of events occurring after the Closing Date, all
liabilities and obligations of Sellers or their Affiliates arising under the Customer Contracts and
the Permits pursuant to Sellers’ existing Tariffs;
(b) All liabilities and obligations arising out of litigation and claims relating to the
Customer Contract arising out of events occurring after the Closing Date.
“Assumption Agreement” is defined in Section 1.2.
18
“Attrition Rate” means with respect to any month, the percentage of Customer Access Lines lost
during such month as compared to the month immediately preceding such month.
“Business” means Sellers’ business of providing wireline telecommunication services to the
Customers in respect of which the Buyer or its affiliates currently provide service pursuant to the
Service Agreement as of the date of this Agreement.
“Buyer” is defined in the preamble of this Agreement.
“Buyer’s Knowledge” means the actual knowledge of Buyer after reasonable investigation.
“Closing” is defined in Section 3.1.
“Closing
Date” is defined in Section 3.1.
“Code” is
defined in Section 1.5.
“Customer” means each end user identified on the applicable Customer Contract (or as
identified in the Sellers’ or Buyer’s databases) of the telecommunication services provided by
Sellers, prior to Closing, and Buyer, following the Closing.
“Customer Access Line”
means each customer access line as set forth on
Schedule 5.2.11(a).
“Customer Contracts” means all contracts, agreements, instruments and other legally binding
arrangements (and all amendments and modifications thereto) relating to the provision of wireline
telecommunication service by Sellers to a Customer in respect of which Buyer or its affiliate
currently provides service under the Service Agreement and is associated with a Customer Access
Line that is transferred to Buyer pursuant to this Agreement, and all such contracts, agreements
and instruments entered into by a Seller in the ordinary course of the Business between the date of
this Agreement and the Closing Date relating to the provision of services to the Customers.
“Encumbrances” means any and all security interests, liens, charges or similar restrictions,
except for (i) liens for taxes not yet due and payable or that are being contested in good faith,
(ii) liens of workers, carriers or materialmen or similar liens arising by operation of Law in the
ordinary course of the Business in respect of obligations that are not yet due and payable or that
are being contested in good faith, and
(iii) any liens, defects or irregularities that are the result of Buyer’s or its
representative’s actions.
“Escrowed Funds” is defined in Section 1.3.1.
“Excluded Assets” means, any of the following:
(a) all assets, properties and rights of either Seller and its Affiliates that are not used
exclusively in connection with the Business;
19
(b) this Agreement and all rights of either Seller under this Agreement;
(c) the Retained Books and Records;
(d) all cash or cash equivalents of Sellers and its Affiliates, including, without limitation,
checks or drafts received by the Business for which a Seller has not received funds on or prior to
the Closing Date, certificates of deposit, time deposits and marketable securities; and all of the
right, title and interest in the bank accounts, safe deposit boxes and checking accounts of either
Seller, its Affiliates and the Business;
(e) all rights to refunds of all federal, state, local and foreign taxes relating to a Seller
or its Affiliates, the Transferred Assets or the Business to the extent such taxes relate to a
period ending on or prior to the Closing Date and were not paid or assumed by Buyer;
(f) all Accounts Receivable, inventory and fixed assets of a Seller and its Affiliates,
(g) all real property and interests in real property owned by a Seller and its Affiliates; and
(h) all policies of insurance and fidelity, surety or similar bonds and the coverages afforded
thereby of a Seller and its Affiliates, and any and all claims or rights thereunder;
“FCC” means the Federal Communications Commission or any other Federal agency which succeeds
in whole or in part to its jurisdiction so far as the subject matter of this Agreement is
concerned.
“FCC Approval” means the issuance on the release date of the FCC public notice of the FCC’s
grant of consent to the assignment of the FCC Authorities.
“Governmental Approval” means the PUC Approval, the FCC Approval and all consents and
approvals of, filings and registrations with, and notifications to any other Governmental Authority
necessary to consummate the transaction contemplated by this Agreement.
“Governmental Authority” means any United States, state or local governmental entity or
municipality or subdivision thereof or any authority, department, commission, board, bureau,
agency, court or instrumentality thereof.
“In-Service Customer Access Lines” is defined in Section 1.3.3.
“Interim Process Agreement” is defined in Section 6.2.6.
“Law”
or “Laws” means any statute, rule, regulation or ordinance of any Governmental
Authority.
“Letter of Intent” is defined in Section 1.3.1.
“Material
Adverse Effect” means a materially adverse effect on the Business or the Transferred
Assets, taken as a whole, other than effects relating to or arising from (i) the execution of this
Agreement, (ii) the United States economy generally or (iii) events or
20
circumstances that affect the Business in the same manner and to the same extent as other
businesses in the industry generally.
“Partnership Customer Access Lines” shall mean those Customer Access Lines set forth on
Schedule 5.2.11(c) and relating to the Partnership
Programs set forth on Schedule 5.2.11(b).
“Partnership Program” shall mean those incentive programs with Sellers’ customers as set forth
on Schedule 5.2.11(b).
“Permits” means all permits of any Governmental Authority relating to the Transferred Assets.
“Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated association, corporation, entity or government (whether
federal, foreign, state, county, city or otherwise, including any instrumentality, division, agency
or department thereof).
“Post Closing Payment Adjustment” is defined in Section 1.3.3.
“PUC” means the Public Utility Commissions or any state’s equivalent regulatory body.
“PUC Approval” means the issuance of the required consents or approvals of the PUC with
respect to the assignment of the Authorities to Buyer.
“Proration Periods” is defined in Section 1.4.
“Purchase Price” is defined in Section 1.3.
“Purchase Price Adjustment” is defined on Section 1.3.3.
“Purchase Price” is defined in Section 1.3.
“Purchase Price Adjustment” is defined on Section 1.3.3.
“Retained Books and Records” means, collectively, all corporate records and stock books of
Sellers and their Affiliates, the general ledger, all records required by Law to be retained by
Sellers and all books and records relating to (i) tax returns and tax records; (ii) the Excluded
Assets; (iii) the organization, maintenance and existence of either Seller as a corporation or
partnership; and (iv) attorney work product; provided that where reasonably necessary or prudent,
Retained Books and Records shall also include copies of the Transferred Books and Records.
“Retained Liabilities” is defined in Section 1.2 of this Agreement.
“Seller(s)” is defined in the preamble of this Agreement.
“Sellers’ Knowledge” means the actual knowledge of either Seller after reasonable
investigation.
“Service Agreement” is defined in the preamble of this Agreement.
“Sprint” is defined in the preamble of this Agreement.
21
“Sprint Virginia” is defined in the preamble of this Agreement.
“Transactions” means the purchase and sale of the Transferred Assets as contemplated by this
Agreement and all other transactions contemplated by the Transaction Documents.
“Transaction Documents” means this Agreement and each document to be executed in connection
with the Closing of the Transactions. When used with respect to Sellers or Buyer, “Transaction
Documents” means this Agreement and such documents as are required to be executed by such party
with respect to the Closing of the Transactions.
“Transfer Taxes” means any and all federal, state, county, municipal, foreign or other taxing
jurisdiction sales, use, transfer, gross receipts, consumer levy, privilege or similar taxes,
duties, excises or governmental charges, including any penalties and interest thereon, arising out
of the sale of the Transferred Assets by Sellers to Buyer hereunder.
“Transferred Assets” means all of either Seller’s right, title and interest in and to the
following assets:
(a) the Customer Contracts and the associated Customer Access Lines, provided, however, that
if the parties proceed with a partial closing pursuant to Section 3.5 of this Agreement, this
definition of Transferred Assets shall include those Customer Access Lines identified on the
Partial Closing Schedule and the Customer Contracts relating thereto;
(b) the Permits, to the extent assignable or transferable and in accordance with Section
6.2.3; and
(c) the Transferred Books and Records;
but excluding from the foregoing the Excluded Assets.
“Transferred Books and Records” means Sellers’ customer lists and records, accounts and
billing records, plans, blueprints, specifications, drawings, surveys and engineering reports that
relate to the operation of the Business, except for the Retained Books and Records.
“Transition” means the transfer of Customers and the related Customer Access Lines from
Sellers to Buyer.
11.2.
Interpretation. Unless the context otherwise requires, (i) all references to
Sections, Articles or Schedules are to Sections, Articles or Schedules of or to this Agreement,
(ii) the term “primarily” means primarily or exclusively, and (iii) the term “including” means
including without limitation.
ARTICLE 12
GENERAL
12.1. Time of the Essence. Time is of the essence with respect to each and every term,
condition, obligation and provision hereof, and failure to timely perform or remedy any of the
22
terms, conditions, obligations or provisions hereof by either party shall constitute a material
breach of and a non-curable default under this Agreement by the party so failing to perform (but
which may be waived by the non-breaching party).
12.2. Notices. All notices hereunder will be in writing and served by certified mail, return
receipt requested. Notice shall be deemed to have been duly given on the earlier of the date
received or the fifth business day following the date mailed by the notifying party using first
class mail, postage prepaid. Notices shall be sent as follows:
If to Sellers:
Sprint Communication Company, L.P.
0000 Xxxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxx
Attn: Xxxx X. Xxxxxxx
VP of Business Development
Facsimile: 913-315-[___]
0000 Xxxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxx
Attn: Xxxx X. Xxxxxxx
VP of Business Development
Facsimile: 913-315-[___]
with a required copies (which shall not constitute notice) to:
Sprint Law Department
0000 Xxxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxx
Attn: VP of Marketing and Sales
Facsimile: 000-000-0000
0000 Xxxxxx Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxx
Attn: VP of Marketing and Sales
Facsimile: 000-000-0000
If to Buyer:
with a required copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx LLP
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: 000-000-0000
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: 000-000-0000
12.3. Waivers. No failure of a party to enforce a provision of this Agreement will be
construed as a general or a specific waiver of that provision, or of a party’s right to enforce
that provision, or of a party’s right to enforce any other provision of this Agreement. No waiver
of any breach of any covenant or other provision herein contained shall be deemed to be a waiver of
any preceding or succeeding breach, or of any other covenant or provision herein contained. No
23
extension of time for performance of any obligation or act shall be deemed to be an extension of
the time for performance of any other obligation or act.
12.4. Payment of Expenses. Except as otherwise provided herein, each of the parties shall pay
all costs and expenses incurred or to be incurred by it in the negotiation and preparation of this
Agreement and in consummating and carrying out the Transactions, whether or not the Transactions
are consummated.
12.5. Headings. The subject headings of the sections and subsections of this Agreement are
included only for purposes of convenience, and shall not affect the construction or interpretation
of any of its provisions.
12.6. Counterparts; Facsimile. This Agreement may be executed in counterparts, each of which
shall be deemed an original and, when each of the parties hereto has executed and delivered a
counterpart to the other party, this Agreement shall be binding and effective even though no single
counterpart has been executed by both of the parties. This Agreement may be executed and delivered
by facsimile transmission, and a facsimile of this Agreement or of a signature of a party will be
effective as an original.
12.7. Successors and Assigns. This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their permitted successors and assigns; provided, however, that
no assignment shall be permitted except as provided for in this Agreement.
12.8. Assignment. The rights and obligations of the parties to this Agreement or any interest
in this Agreement shall not be assigned, transferred, hypothecated, pledged or otherwise disposed
of without the prior written consent of the nonassigning party, which consent may be withheld in
such party’s sole discretion; provided, however, that Buyer or Sellers may, without the prior
consent of the other party, assign its rights under this Agreement to any Affiliate.
12.9. Additional Instruments and Assistance. Each party hereto shall from time to time
execute and deliver such further instruments, provide additional information and
render such further assistance as the other party or its counsel may reasonably request in
order to complete and perfect the Transactions.
12.10. Governing Law. To the extent that federal law does not apply exclusively, this
Agreement shall be construed in accordance with the laws of the State of Delaware (without
reference to the choice of law provisions of any jurisdiction).
12.11. Severability. If any term or provision of this Agreement is held or deemed to be
invalid or unenforceable when applied to any person or circumstance, the remaining provisions of
this Agreement and the enforcement of such provision to other persons or circumstances shall not be
affected thereby, and each provision of this Agreement shall be enforced to the fullest extent
allowed by Law.
12.12. Amendments. This Agreement may not be modified, changed, supplemented or terminated,
nor may any obligations hereunder be waived by a party, except by written instrument signed by the
party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted
herein.
24
12.13. No Construction Against the Drafting Party. Each party hereto acknowledges that such
party and its counsel have reviewed this Agreement and participated in its drafting. This
Agreement shall not be construed against either party for having prepared it.
12.14. Entire Agreement; No Third Party Beneficiaries. This Agreement, including all
schedules and exhibits attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof, and there are no agreements, understandings, warranties
or representations between the parties with respect to such subject matter except as set forth or
noted herein. The parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto.
25
IN WITNESS WHEREOF, the parties to this Agreement for Purchase and Sale of Customer Access
Lines have executed it as of the date first above written.
| BUYER: | ||||||
| TRINSIC, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
| SELLERS: | ||||||
| SPRINT COMMUNICATIONS COMPANY, L.P. |
||||||
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
| SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC. |
||||||
| By: | ||||||
| Name: | ||||||
| Its: | ||||||
26
EXHIBITS
and
SCHEDULES
to
AGREEMENT
For
PURCHASE AND SALE
of
CUSTOMER ACCESS LINES
Dated as of October __, 2005
By and Among
SPRINT COMMUNICATIONS COMPANY, L.P.,
SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC.,
And
Exhibit A Assumption Agreement
This Assignment and Assumption Agreement (this “Assignment and Assumption Agreement”) is made
and entered into on October ___, 2005 by and among Sprint Communications Company, L.P., a Delaware
corporation (“Sprint”), Sprint Communications Company of Virginia, Inc., a Virginia corporation
(“Sprint Virginia”) and Trinsic, Inc., a Delaware corporation (“Assignee”). Sprint and Sprint
Virginia are sometimes referred to herein individually as an “Assignor” and collectively as
“Assignors”).
WHEREAS, Assignors and Assignee are parties to that certain Agreement for Purchase and Sale of
Customer Access Lines dated as of October ___, 2005 (the “Purchase Agreement”), by and among
Assignors and Assignee;
WHEREAS, pursuant to Section 1.1 of the Purchase Agreement, Assignors have agreed to sell and
the Assignee has agreed to purchase all of the Assignors’ right, title and interest in the
Transferred Assets (as defined in the Purchase Agreement), including the Customer Contracts and
Customer Access Lines (as defined in the Purchase Agreement) which include the Customer Access
Lines as set for on Schedule 5.2.11(a) of the Purchase Agreement; and
WHEREAS, pursuant to Section 1.2 of the Purchase Agreement, Assignors have agreed to assign to
Assignee and Assignee has agreed to assume, perform and discharge when due the Assumed Liabilities
(as defined in the Purchase Agreement).
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants contained
herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt,
adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. Capitalized Terms. Capitalized terms used but not defined herein shall have the meanings
given such terms in the Purchase Agreement.
2. Assignment. Effective as of the Closing Date, each Assignor hereby assigns, conveys, sells
and transfers to Assignee (i) all of such Assignor’s right, title and interest in the Transferred
Assets, including the Customer Contracts and Customer Access Lines, and (ii) all of the Assumed
Liabilities.
3. Assumption. Assignee hereby accepts the foregoing assignment and assumes and agrees to
observe and perform all duties and obligations of each Assignor or its affiliates arising under the
Assumed Liabilities. Assignee assumes no liability of either Assignor except the Assumed
Liabilities. The parties hereto agree that any and all such liabilities, including the Retained
Liabilities, shall remain the sole responsibility of the Assignors.
4. Terms of the Purchase Agreement. The terms of the Purchase Agreement, including but not
limited to the parties’ representations, warranties, covenants, and indemnities
relating to the Assumed Liabilities, are incorporated herein by this reference. Assignors and
Assignee acknowledge and agree that the representations, warranties, covenants and indemnities
contained in the Purchase Agreement shall not be superseded by this Assignment and Assumption
Agreement but shall remain in full force and effect to the full extent provided therein. In the
event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms of
this Agreement, the terms of the Purchase Agreement shall govern.
5. Further Actions. Each of the parties hereto covenants and agrees, at its own expense, to
execute and deliver, at the request of the other party hereto, such further instruments of transfer
and assignment and to take such other action as such other party may reasonably request to more
effectively consummate the assignments and assumptions contemplated by this Assignment and
Assumption Agreement.
6. Benefit and Assignment. This Assignment and Assumption Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and assigns.
7. Counterparts. This Assignment and Assumption Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart were upon the same
instrument.
8. Choice of Law. This Assignment and Assumption Agreement shall be interpreted according to
the laws of the State of Delaware, excluding any choice of law provisions or conflict of law
principles which would require reference to the laws of any other jurisdiction.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of
the date first above written.
| ASSIGNEE: | ||||||
| TRINSIC, INC. | ||||||
By: |
||||||
Name: |
||||||
Title: |
||||||
| ASSIGNORS: | ||||||
| SPRINT COMMUNICATIONS COMPANY, L.P. | ||||||
By: |
||||||
Name: |
||||||
Title: |
||||||
| SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC. | ||||||
By: |
||||||
Name: |
||||||
Title: |
||||||
Exhibit B
Sellers Closing Certificates
Sellers Closing Certificates
SPRINT COMMUNICATIONS COMPANY, L.P.
CLOSING CERTIFICATE
Reference is made to the Agreement for Purchase and Sale of Customer Access Lines dated as of
October , 2005 (the “Agreement”), by and among Sprint Communications Company, L.P., a Delaware
corporation (“Sprint”), Sprint Communications Company of Virginia, Inc., a Virginia corporation
(“Sprint Virginia”) and Trinsic, Inc., a Delaware corporation (“Buyer”). All capitalized terms
used herein without specific designation shall have the meaning set forth in the Agreement.
Pursuant to Section 3.2.3 of the Agreement, the undersigned hereby certifies that:
1. All representations and warranties of Sprint contained in the Agreement are true and
correct in all material respects as of the date hereof, except for those representations and
warranties that are made expressly as of an earlier date, which were true and correct as of the
date made.
2. Sprint has performed and complied with all covenants and agreements required or
contemplated by the Transaction Documents to be performed by Sprint on or prior to the Closing
Date.
IN WITNESS WHEREOF, the undersigned have each signed this certificate.
Dated: October , 2005
| SPRINT COMMUNICATIONS COMPANY, L.P. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC.
CLOSING CERTIFICATE
Reference is made to the Agreement for Purchase and Sale of Customer Access Lines dated as of
October , 2005 (the “Agreement”), by and among Sprint Communications Company, L.P., a Delaware
corporation (“Sprint”), Sprint Communications Company of Virginia, Inc., a Virginia corporation
(“Sprint Virginia”) and Trinsic, Inc., a Delaware corporation (“Buyer”). All capitalized terms
used herein without specific designation shall have the meaning set forth in the Agreement.
Pursuant to Section 3.2.3 of the Agreement, the undersigned hereby certifies that:
1. All representations and warranties of Sprint Virginia contained in the Agreement are true
and correct in all material respects as of the date hereof, except for those representations and
warranties that are made expressly as of an earlier date, which were true and correct as of the
date made.
2. Sprint Virginia has performed and complied with all covenants and agreements required or
contemplated by the Transaction Documents to be performed by Sprint Virginia on or prior to the
Closing Date.
IN WITNESS WHEREOF, the undersigned have each signed this certificate.
Dated: October , 2005
| SPRINT COMMUNICATIONS COMPANY OF VIRGINIA, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Exhibit C Buyer Closing Certificate
Reference is made to the
Agreement for Purchase and Sale of Customer Access Lines dated as of
October ,
2005 (the “Agreement”), by and among Sprint Communications Company, L.P., a Delaware
corporation (“Sprint”), Sprint Communications Company of Virginia, Inc., a Virginia corporation
(“Sprint Virginia”) and Trinsic, Inc., a Delaware
corporation (“Buyer”). All capitalized terms
used herein without specific designation shall have the meaning set forth in the Agreement.
Pursuant to Section 3.3.2 of the Agreement, the undersigned hereby certifies that:
1. All representations and warranties of Buyer contained in the Agreement are true and correct
in all material respects as of the date hereof, except for those representations and warranties
that are made expressly as of an earlier date, which were true and correct as of the date made.
2. Buyer has performed and complied with all covenants and agreements required or contemplated
by the Transaction Documents to be performed by Buyer on or prior to the Closing Date.
IN WITNESS WHEREOF, the undersigned have each signed this certificate.
Dated: October , 2005
| TRINSIC, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Exhibit D Press Release | ||||
FOR IMMEDIATE RELEASE
|
Contact: | Xxxxxx Xxxxxx | ||
| Corporate Counsel | ||||
| xxxxxxx@xxxxxxx.xxx | ||||
| (000) 000-0000 |
TRINSIC SIGNS DEFINITIVE AGREEMENT TO ACQUIRE SPRINT LINES
TAMPA, Fl.
— (October ___, 2005) — Trinsic, Inc., (NASDAQ/SC: TRNCD), a leading provider of
traditional and IP telephony services, announced today it has entered into a definitive agreement
to acquire from Sprint Nextel Corp. (NYSE: S) substantially all the Sprint local UNEP access lines
for which Trinsic currently provides services under a wholesale, “private-label” arrangement.
According to Trinsic, it currently provides wholesale services for approximately 187,000 Sprint
local lines, located mostly in the eastern U.S. The closing is anticipated for early 2006 pending
regulatory approvals. The Agreement sets the purchase price at $100 per line, of which 25% will be
due at closing. The remainder will be due in 15 equal, monthly installments. The transaction
satisfies criteria contained in the Company’s recently issued Series H Convertible Preferred Stock
that the Company must enter into a definitive agreement to acquire no less than 150,000 UNE-P
subscriber lines and, accordingly, sets the price for the conversion of the Series H Preferred
Stock into the Company’s common stock at $3.90 per share.
Xxxx Xxxxx, Trinsic chief executive officer, remarked “We’re delighted to sign this agreement.
It adds to our subscriber base, will have the effect of increasing our average per line margins and
settles the pricing issue of our Series H Convertible Preferred Stock. While this transaction will
effectively end our wholesale relationship with Sprint, we believe it will improve the visibility
of the revenue stream these lines provide, as well as improve their profitability.”
Forward-Looking Statements
This news release contains forward-looking statements made pursuant to the Private Securities
Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” and “projects”
signify forward-looking statements. Forward-looking statements are not guarantees of future results
and conditions but rather are subject to various risks and uncertainties. Some of these risks and
uncertainties are identified in Trinsic’s periodic filings with the Securities and Exchange
Commission. Should any risks or uncertainties develop into actual events, these developments could
have material adverse effects on Trinsic’s business, financial condition, and results of
operations. Trinsic assumes no obligation to update these forward-looking statements.
-MORE-
About Trinsic
Trinsic offers consumers and businesses traditional and IP telephony services. Trinsic’s
products include proprietary services such as Web-accessible, voice-activated calling and messaging
features that are designed to meet customers’ communications needs intelligently and intuitively.
Trinsic is a member of the Cisco Powered Network Program and makes its services available on a
wholesale basis to other communications and utility companies. Trinsic, Inc. changed its name from
Z-Tel Technologies, Inc. on January 3, 2005. For more information about Trinsic and its innovative
services, please visit xxx.xxxxxxx.xxx.
- END -
-MORE-
Schedule 5.1.3
Required Approvals
Required Approvals
None
Schedule 5.2.4
Required Approvals
Required Approvals
None
Schedule 5.2.8
Customer Contracts
Customer Contracts
None
Schedule 5.2.11(a)
Customer Access Lines
Customer Access Lines
See Attached Computer Disc
Schedule 5.2.11(b)
List of Partnership Programs
List of Partnership Programs
| Sprint Partners with Sprint Complete Sense |
||
| Partners | USAA | |
| America WestAirlines | USAA | |
| United Airlines | USAA Service | |
| US Air | ||
| Virgin Atlantic Airways | ||
Schedule 5.2.11(c)
Partnership Customer Access Lines
Partnership Customer Access Lines
The Partnership Customer Access Lines consist of those Customer Access Lines on the computer disc
attached to Schedule 5.2.11(a) that are identified with a partner ID in COMX with the following
codes 14, 15, 20, 21, 22, 23, 26, 27, 30, 31, 32, 34, 36
The Partnership Customer Access Lines are represented in the aggregate as follows:
| # OF | ||||||||||||||||
| # OF LINES | # OF ACCTS | LINES | # OF ACCTS | |||||||||||||
Airlines* |
15,685 | 14,310 | 9.84 | % | 9.17 | % | ||||||||||
USAA (5% dis) |
21,881 | 20,244 | 13.73 | % | 12.98 | % | ||||||||||
Non-Partner |
121,780 | 121,418 | 76.42 | % | 77.85 | % | ||||||||||
| 159,346 | 155,972 | 100.0 | % | 100.0 | % | |||||||||||
USAA / Sprint partnership officially ended in September 2005; discounts continue until closing
| * | There are less than 1,200 additional lines that were associated with partnership programs that were terminated in 2005 or earlier that are not included in these numbers. |
Schedule 5.2.12
Slamming, Cramming and Xxxx Presentation Claims Received
by Sprint Prior to Execution of Agreement
Slamming, Cramming and Xxxx Presentation Claims Received
by Sprint Prior to Execution of Agreement
Sprint has received a claim or notice of claim with respect to the following phone numbers:
NY
|
7168421810 | 7168421810 | XXXXXX XXXXXX | |||||||
PA
|
2152262579 | 2152262579 | XXXXXX XXXXXX | |||||||
PA
|
7244957391 | 7244957391 | XX XXXXXX | |||||||
MD
|
4104801068 | 4104801068 | XXXXXXXX XXXXXXX | |||||||
CA
|
7074442842 | 7074442842 | XXXXXX XXXXXXXX | |||||||
TN
|
8654089984 | 8654089984 | XX XXXXXXX | |||||||
NJ
|
8566860436 | 8566860436 | XXXXXX XXXXXXXX | |||||||
WI
|
0000000000 | 0000000000 | XXXX XXXXXXX | |||||||
WA
|
4256431324 | 4256431324 | XXXXX XXXXXXXX | |||||||
CA
|
5102624623 | 5102624623 | XXXX XXXXXXX | |||||||
NY
|
2122557680 | 2122557680 | COCO XXXXXXXXX | |||||||
MD
|
3014327338 | 3014327338 | XXXXXXX XXXXX | |||||||
WA
|
3604120435 | 3604120435 | XXXXXXX SALVAGE | |||||||
VA
|
0000000000 | 0000000000 | XXXXXX XXXX | |||||||
NY
|
7184576575 | 7184576575 | XXXXXXXX XXXX | |||||||
NY
|
5185833057 | 5185833057 | XXXXXXXX XXXXX | |||||||
CO
|
0000000000 | 0000000000 | XXXXXX XXXXXXXXXX | |||||||
IL
|
7083670354 | 7083670354 | XXXX X. XXXXXXX | |||||||
AZ
|
4804968910 | 4804968910 | L C ACCOUNTING SERVICES | |||||||
MI
|
3133680813 | 3133680813 | XXXXX XXXXXXXX | |||||||
PA
|
7249815641 | 7249815641 | XXX XXXXXX | |||||||
PA
|
7179448224 | 7179448224 | XXXXXXXX XXX | |||||||
NY
|
7185432728 | 7185432728 | XXXXXXX KAVASHANSKY | |||||||
PA
|
4128810302 | 4128810302 | XXXXXXXX XXXXXX | |||||||
NJ
|
8568813995 | 8568813995 | XXXXXXX XXXXXXXX | |||||||
NY
|
7187650658 | 7187650658 | XXXXX XXXXX | |||||||
IN
|
3178990010 | 3178990010 | XXXXXX X XXXXXX | |||||||
TX
|
2814122584 | 2814122584 | XXXXX XXXXXXX | |||||||
IL
|
7083453083 | 7083453083 | XXXXXXXXX XXXXXXXXX | |||||||
OH
|
7402646669 | 7402646669 | XXXX XXXXX | |||||||
NY
|
7188375093 | 7188375093 | XXXXX XXXXX | |||||||
NY
|
5168678256 | 5168678256 | XXXXX XXXXX | |||||||
IL
|
7736850815 | 7736850815 | XXXXX XXXXXX | |||||||
KY
|
5024544007 | 5024544007 | XXXXXX XXXXX | |||||||
TX
|
7139471274 | 7139471274 | XXXXXXXX XXXXXXX | |||||||
NJ
|
6096450507 | 6096450507 | XXXXX XXXXXXX |
BTN =
Billing Telephone Number
WTN = Working Telephone number
WTN = Working Telephone number
Schedule 6.2.6
Items to be Covered by Interim Process Agreement
Items to be Covered by Interim Process Agreement
Interim
Process Agreement:
Provided is a list of concepts to be completed by the buyer and the seller in facilitation of a thorough and complete transition of the previously defined customer base by the closing date.
Provided is a list of concepts to be completed by the buyer and the seller in facilitation of a thorough and complete transition of the previously defined customer base by the closing date.
Order Management
| • | Sprint Access to customer’s accounts for remainder of statue of limitations related to legal and regulatory policies for slamming and cramming, or other policies. | ||
| • | Need to agree on how we shut down automatic file exchanges and when | ||
| • | EarthLink Dial-Up accounts transitioned to EarthLink Direct Billing with cooperation of EarthLink |
Collections:
| • | All Collections and Receivables < or > 90 days will transfer to Trinsic for collection on Sprints behalf | ||
| • | Voice connectivity and call routing changes will modified | ||
| • | Data connectivity needs to be modified or shut down completely. | ||
| • | Resp org changes for 800 numbers as needed |
Service and Repair
| • | Define a process for handling outstanding PUC escalations or complaints | ||
| • | Determine how to handle existing open repair tickets — includes ILEC and Volt tickets | ||
| • | Create customer facing message that agents can use regarding this transition | ||
| • | Staffing model estimates for service and repair | ||
| • | Resp Org changes for 800 numbers as needed |
Regulatory
| • | Detail out Federal and State Filing requirements | ||
| • | Tariff new plans for Trinsic Local & State levels |
Customer Communications
External Communications (customer facing):
| • | Develop timeframes for Customer Communications | ||
| • | Coordinate content of customer communications (messages) | ||
| • | Develop method of communication by state (i.e. Xxxx insert, Letter, etc..) | ||
| • | Voicemail transition |
Internal Communications:
| • | Develop internal scripting for call centers and customer facing employees | ||
| • | Coordinate IVR and Call Transfer strategies |
| Portfolio Management |
| • | Detail process to mirror current Sprint tariffs, rates, and product names |
| • | Develop timeline to transition Sprint customers to Trinsic’s OCN and LD PIC | ||
| • | Resp orgs for customer 800#s (small biz) | ||
| • | Detail out transition of Inside Wiring program | ||
| • | Remove Sprint branding, names and trademark information from all customer and internal facing elements: i.e. invoices, IVRs, online links, etc. | ||
| • | Determine ability to transition Travel cards or need to reissue new cards from Trinsic (Foncard) | ||
| • | Migration plan for transition of accounts (phased approach or flash-cut) |
LEC
| • | Develop process to reconcile LEC bills post closing | ||
| • | Convert Sprint OCNs to Trinsic OCNs | ||
| • | Convert LD to Trinsic PICC for intra and interlata services (where applicable) | ||
| • | Review impending needs regarding any changes to Carrier Access Billing |
Miscellaneous
| • | Coordinate access for Trinsic to Sprint TPV/ ELOA files | ||
| • | Transition / Provide Access to Lifeline certification files | ||
| • | Coordinate taxes pre and post closing | ||
| • | Alpha Accounts to be notified of intent to remove alpha status prior to Close Date |
Volt
| • | Inside Wire Maintenance customer contracts | ||
| • | Repair Tickets |
Reporting
| • | Monthly churn reporting to be established to define the account level churn from Trinsic data | ||
| • | One time data pull of all consumer and small business lines with associated partner identification on January 31, 2006 at midnight. |
Online
| • | Define web strategic approach incorporating: |
| ° | Redirect online visits to Trinsic web portal | ||
| ° | Set-up static redirect pages | ||
| ° | Remove Sprint domain names | ||
| ° | Re-brand the C — around the current Sprint Pages | ||
| ° | Review and remove any Sprint specific links and language from pages | ||
| ° | Determine customer access strategy with user names and passwords | ||
| ° | Online account payment services [Speedpay] redirected to Trinsic lock-boxes |
TABLE OF CONTENTS
| Page | ||||||
ARTICLE 1
|
PURCHASE AND SALE OF ASSETS | 1 | ||||
1.1.
|
Purchase and Sale of Transferred Assets | 1 | ||||
1.2.
|
Assumption of Obligations by Buyer | 1 | ||||
1.3.
|
Purchase Price | 2 | ||||
1.4.
|
Prorations | 3 | ||||
1.5.
|
Allocation of the Purchase Price for Tax Purposes | 3 | ||||
1.6.
|
Transfer Taxes | 4 | ||||
ARTICLE 2
|
ACCESS | 4 | ||||
2.1.
|
Access to Books and Records | 4 | ||||
2.2.
|
Access to Customer Data | 4 | ||||
ARTICLE 3
|
CLOSING | 4 | ||||
3.1.
|
Closing | 4 | ||||
3.2. |
Deliveries by Sellers to Buyer | 4 | ||||
3.3. |
Deliveries by Buyer to Sellers | 5 | ||||
3.4. |
Further Assurances | 5 | ||||
3.5.
|
Partial Closing | 5 | ||||
ARTICLE 4
|
CONDITIONS | 6 | ||||
4.1.
|
Conditions to Buyer’s Obligations | 6 | ||||
4.2.
|
Conditions to Sellers’ Obligations | 6 | ||||
ARTICLE 5
|
REPRESENTATIONS AND WARRANTIES | 7 | ||||
5.1.
|
Buyer’s Representations and Warranties | 7 | ||||
5.2.
|
Sellers’ Representations and Warranties | 8 | ||||
ARTICLE 6
|
COVENANTS | 10 | ||||
6.1.
|
Covenants of Sellers | 10 | ||||
6.2.
|
Mutual Covenants | 12 | ||||
ARTICLE 7
|
TERMINATION | 13 | ||||
7.1.
|
Termination By Buyer | 13 | ||||
7.2.
|
Termination By Seller | 13 | ||||
7.3.
|
Termination By Buyer or Sellers | 13 | ||||
7.4.
|
Effect of Termination | 14 | ||||
-i-
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||
ARTICLE 8 |
ADDITIONAL MATTERS | 14 | ||||
8.1. |
Pre-Closing | 14 | ||||
8.2. |
New Customer Service Orders and Service Change Orders | 15 | ||||
8.3. |
Access to Books and Records | 15 | ||||
8.4. |
Bulk Sales Laws | 15 | ||||
ARTICLE 9 |
INDEMNIFICATION | 16 | ||||
9.1. |
Survival | 16 | ||||
9.2. |
Indemnification and Payment of Damages by Sellers | 16 | ||||
9.3. |
Indemnification and Payment of Damages by Buyer | 16 | ||||
9.4. |
Procedure for Indemnification — Third Party Claims | 16 | ||||
9.5. |
Procedure for Indemnification — Other Claim | 17 | ||||
9.6. |
Limitations on Sellers’ Indemnification of Purchaser | 17 | ||||
9.7. |
Limitations on Buyer’s Indemnification of Sellers | 17 | ||||
ARTICLE 10 |
WAIVER OF TRIAL BY JURY | 18 | ||||
10.1. |
Waiver of Trial by Jury | 18 | ||||
ARTICLE 11 |
CERTAIN DEFINITIONS | 18 | ||||
11.1. |
Defined Terms | 18 | ||||
11.2. |
Interpretation | 22 | ||||
ARTICLE 12 |
GENERAL | 22 | ||||
12.1. |
Time of the Essence | 22 | ||||
12.2. |
Notices | 23 | ||||
12.3. |
Waivers | 23 | ||||
12.4. |
Payment of Expenses | 24 | ||||
12.5. |
Headings | 24 | ||||
12.6. |
Counterparts; Facsimile | 24 | ||||
12.7. |
Successors and Assigns | 24 | ||||
12.8. |
Assignment | 24 | ||||
12.9. |
Additional Instruments and Assistance | 24 | ||||
12.10. |
Governing Law | 24 | ||||
12.11. |
Severability | 24 | ||||
-ii-
TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||
12.12.
|
Amendments | 24 | ||||
12.13.
|
No Construction Against the Drafting Party | 25 | ||||
12.14.
|
Entire Agreement; No Third Party Beneficiaries | 25 | ||||
iii
