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EXHIBIT 10.2
Asset Migration Agreement
THIS ASSET MIGRATION AGREEMENT (the "Agreement"), dated as of the 1/st/ day of
June, 2000, is entered into by and between Intermedia Communications, Inc., a
Delaware corporation (hereinafter referred to as "Intermedia"), and Digex, Inc.,
a Delaware corporation (hereinafter referred to as "Digex"). Intermedia and
Digex may be referred to individually as a "Party" and collectively as the
"Parties."
W I T N E S S E T H:
WHEREAS, Intermedia is engaged in the business of remotely managing
firewall products for customers of Digex pursuant to the July Agreement (as
defined herein);
WHEREAS, Digex desires to provide firewall services independent of
Intermedia for all of its customers, including those referred to in the
preceding paragraph, and the Parties have agreed on a transfer of assets from
Intermedia to Digex and on a termination of the July Agreement; and,
WHEREAS, accordingly, Intermedia desires to sell, assign, transfer and
migrate certain assets, including certain licensed software, and equipment to
Digex, and Digex desires to acquire such assets upon the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the above promises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:
ARTICLE 1 -- PURCHASE AND SALE OF ASSETS
1.1 Sale of Assets by Intermedia. On the Closing Date (as hereinafter
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defined) and subject to and on the terms and conditions of this Agreement, Digex
will purchase and accept from Intermedia, and Intermedia will sell, transfer,
convey and deliver to Digex, as the same shall exist on the Closing Date, all of
the properties and assets (tangible and intangible), including all of the
licensed software and equipment specified in Exhibit A, which is attached hereto
and made a part hereof by this reference (the "Assets"), including without
limitation, certain licensed third-party software, machinery, equipment,
and other tangible personal property as specified in Exhibit A, including all of
Intermedia's rights, title and interest in such Assets.
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1.2 No Assumption of Liabilities. Except as set forth in Section 1.3
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immediately following, Digex does not assume and shall not be responsible for
any liabilities and obligations of Intermedia with respect to the Assets, and
Intermedia agrees to pay and discharge all of its liabilities and obligations
incurred in such operations up to the Closing Date, including, without
limitation, costs for utilities, insurance, taxes, operating licenses and other
similar operational costs (the "Operational Costs"). In this regard, Intermedia
shall pay the pro rata portion of any Operational Costs that may be invoiced to
Digex after the Closing Date but that relate to time periods prior to the
Closing Date.
1.3 Description of Assumed Liabilities. From and after the Closing Date,
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Digex agrees to assume and pay all Operational Costs incurred.
1.4 Purchase Price. In consideration of the sale, transfer, conveyance,
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assignment and delivery of the Assets by Intermedia to Digex, and subject to the
conditions set forth in this Agreement, Digex shall pay to Intermedia on the
Closing Date, $4,526,357.00, in cash or by wire transfer of funds to an account
designated by Intermedia (the "Purchase Price"). The Purchase Price is expressly
agreed upon by the Parties in accordance with the Asset values set forth in
Exhibit A,.
1.5 Support Payments. In addition to the foregoing, and in exchange for
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Intermedia's support and consultation during the six (6) months commencing on
July 1, 2000 and ending on December 31, 2000, Digex shall pay Intermedia
$900,000.00 payable in installments of $150,000.00 each. The first such
installment payment is due and payable as of July 31, 2000, and each successive
installment shall be due and payable as of the last day of each successive month
thereafter through and including December 31, 2000. The provision and
availability of such support and consultation shall be at the mutual agreement
of the parties.
1.6 Scripts. Scripts developed by Intermedia for the purpose of automating
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the management and maintenance of firewalls are excluded from the Assets. Digex
has developed and/or acquired certain scripts for the purpose of automating the
management and maintenance of firewalls. The Parties agree and acknowledge that
any similarity between the Intermedia and Digex scripts are purely coincidental.
1.7 Termination of Prior Agreement. The parties had entered into a prior
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agreement titled "Managed Firewall Existing Customers" and including the
document titled "Addendum to Intermedia Secure Managed Firewall Terms and
Conditions," each of which are dated July 13, 1999, and pursuant to which
Intermedia has performed certain managed firewall services for customers of
Digex (hereafter the "July Agreement"). By the terms of the July Agreement,
Intermedia has invoiced Digex, and Digex has paid Intermedia, all due sums for
Intermedia's performance of such services. Upon execution of this Agreement, and
since Intermedia shall no longer be responsible for providing managed firewall
services for Digex customers, the July Agreement shall be terminated and shall
be of no further force or effect. Accordingly, neither Digex nor Intermedia
shall have any further liability whatsoever under the July Agreement.
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ARTICLE 2 -- REPRESENTATIONS AND WARRANTIES OF INTERMEDIA
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2.1 Representations and Warranties. Intermedia represents and warrants
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to, and agrees with, Digex that:
2.2 Corporate Organization; Good Standing. Intermedia is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has been duly qualified as a foreign corporation and is
in good standing under the laws of each jurisdiction in which it conducts its
business or owns or leases its assets.
2.3 Authority. Intermedia has all requisite power and authority to
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execute, deliver and perform this Agreement and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and to
consummate the transactions contemplated hereby in accordance with the
provisions hereof.
2.4 Binding Obligation. This Agreement constitutes the valid and binding
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obligation of Intermedia, enforceable in accordance with its terms.
2.5 Marketable Title. Intermedia has good and marketable title to the
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Assets, free and clear of any liens, charges and encumbrances. Upon Closing,
there shall be vested in Digex good and marketable title to all tangible and
intangible property constituting the Assets, free and clear of any liens,
security interests, encumbrances or restrictions.
2.6 Disclaimer. Except as otherwise provided in this Agreement, the
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foregoing sets forth the entire warranty provided hereunder by Intermedia, and
Intermedia expressly disclaims any other warranty, express or implied,
including, without limitation, any implied warranties of merchantability or
fitness for purpose. Notwithstanding anything to the contrary elsewhere in this
Agreement, Intermedia does not warrant or represent that any of the Assets shall
perform in compliance with any specifications, or that the Assets are functional
or defect free, materially or otherwise; provided, however, that the Assets
shall be in working condition as of the date of Closing. Intermedia shall
assign to Digex at Closing, all assignable warranty coverage it possesses in the
Assets as provided by any manufacturer or seller thereof. Digex shall be solely
responsible, at its sole expense, for conducting its due diligence review of the
Assets in accordance with the terms hereof. Nothing herein shall be construed
as to require that Intermedia repair or replace any Assets based on any
inspection or testing conducted prior to Closing, or based on any failure of, or
defect in, any Assets, patent or latent, discovered after the Closing Date.
ARTICLE 3 -- REPRESENTATIONS AND WARRANTIES OF DIGEX
3.1 Representations and Warranties. Digex hereby represents and warrants
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to, and agrees with, Intermedia that:
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3.2 Corporate Organization; Good Standing. Digex is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, and has been duly qualified as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it conducts its business
or owns or leases its assets.
3.3 Authority. Digex has all requisite power and authority to execute,
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deliver and perform this Agreement, to consummate the transactions contemplated
hereby, and be bound, in accordance with the provisions hereof.
3.4 Binding Obligation. This Agreement constitutes the valid and binding
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obligation of Digex, and is enforceable in accordance with its terms.
ARTICLE 4 -- CONDITIONS TO CLOSING
4.1 Conditions Precedent to Closing By the Parties. The obligations of
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Intermedia and Digex to consummate the transactions contemplated hereby are
conditioned on and subject to the fulfillment of the following conditions on or
before the Closing Date:
4.1.1 The representations and warranties of Intermedia contained in
Article 2 of this Agreement shall be true and correct in all material respects
as of the Closing Date. The representations and warranties of Digex contained
in Article 3 of this Agreement shall be true and correct in all material
respects as of the Closing Date.
4.1.2 Intermedia shall have performed and complied in all material
respects with its obligations under this Agreement to be performed prior to the
Closing Date. Digex shall have performed and complied in all material respects
with its obligations under this Agreement to be performed prior to the Closing
Date.
4.2 Due Diligence. As of the Closing Date, Digex shall have completed all
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inspections and/or testing of the Assets it shall have reasonably deemed
necessary in order to verify the working condition and acceptability thereof.
ARTICLE 5 -- THE CLOSING
5.1 Closing Date; Final Inventory Date. The closing of the transactions
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provided for herein (the "Closing") shall take place at a mutually agreed
location on a date that is on or before June 1, 2000 (the "Closing Date").
Closing shall be complete upon conveyance of the Purchase Price from Digex to
Intermedia in accordance with Section 5.3 below. Upon Closing, all existing
Assets shall become the property of Digex, and all title and risk of loss in
such Assets shall transfer to Digex in accordance with Section 5.2 below.
5.2 Intermedia's Obligations on the Closing Date. At the Closing,
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Intermedia shall deliver to Digex any bills of sale, duly executed by Intermedia
and any other reasonable documentation as may be reasonably required by Digex,
if any, to vest in Digex good and marketable title to the Assets.
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5.3 Digex's Obligations on the Closing Date. At the Closing, Digex shall
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pay to Intermedia the Purchase Price, in cash, by wire transfer or in other
certified funds.
ARTICLE 6 - INDEMNIFICATION AND LIMITATION OF LIABILITY
6.1 Indemnification of Intermedia by Digex. Digex agrees to and does
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hereby indemnify and hold Intermedia, its officers, directors, shareholders,
employees and agents, harmless, from and against any and all liability, loss,
damage or injury and all reasonable costs and expenses relating thereto,
including reasonable legal expenses, arising out of or resulting from (i) any
breach of any covenants, representations and/or warranties made by Digex
pursuant to this Agreement and/or (ii) causes of action or claims of any kind
asserted by unrelated third parties arising from acts or omissions of Digex
relating to the Assets.
6.2 Indemnification of Digex by Intermedia. Intermedia agrees to and does
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hereby indemnify and hold Digex, its officers, directors, shareholders,
employees and agents, harmless, from and against any and all liability, loss,
damage or injury, and all reasonable costs and expenses relating thereto,
including reasonable legal expenses, arising out of or resulting from (i) any
breach of any covenants, representations and/or warranties made by Intermedia
pursuant to this Agreement, and/or (ii) causes of action or claims of any kind
asserted by unrelated third parties arising from acts or omissions of Intermedia
relating to the Assets.
6.3 Limitation of Liability. Notwithstanding anything to the contrary
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herein, neither Party shall be liable to the other for special, indirect,
incidental, consequential, exemplary or punitive damages howsoever arising, and
whether or not either Party was apprised or knew of the possibility or
likelihood of the occurrence of events giving rise to such damages. The
foregoing precludes, without limitation, any liability on the part of either
Party to the other, for lost profits, lost revenue, lost business, cost of cover
or of substitute goods or services, or damage to goodwill.
ARTICLE 7 - MISCELLANEOUS
7.1 Expenses. Each of the Parties hereto shall bear their respective
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expenses incurred in the negotiation and consummation of this Agreement and the
transaction contemplated hereby.
7.2 Waivers. The failure of any Party hereto at any time or from time to
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time to require performance of any other Party's obligations under this
Agreement shall in no manner affect the right of such Party to require
performance of any provision of this Agreement at a subsequent time, and the
waiver by any Party of any right arising out of any breach of any provision of
this Agreement shall not be construed as a waiver of any continuing or
succeeding breach of such provision, a waiver of the provision itself, or a
waiver of any right arising out of any subsequent breach.
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7.3 Successors and Assigns. This Agreement shall be binding on and shall
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inure to the benefit of the Parties hereto and their respective successors,
heirs, representatives and permitted assigns. Nothing contained herein shall
inure to the benefit of any other third party. This Agreement may not be
assigned by either Party hereto without the other Party's prior written consent.
7.4 Severability. The invalidity or illegality of any provision, term or
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agreement contained in or made a part of this Agreement shall not affect the
validity of the remainder of this Agreement.
7.5 Headings. The headings of the sections and subsections contained in
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this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.6 Entire Agreement. This Agreement, and any schedule appended hereto,
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contains all of the terms agreed to by the Parties with respect to the subject
matter hereof and supersede all prior oral or written agreements,
understandings, negotiations and representations made by and between the
Parties. This Agreement may not be amended or modified in any way except by a
written amendment to this Agreement duly executed by the Parties.
7.7 Counterparts. This Agreement may be executed in counterparts by the
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Parties hereto, each of which when so executed shall be an original, but all of
which together shall constitute one and the same instrument.
7.8 Applicable Law. This Agreement shall be governed by, and construed
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(both as to validity and performance) and enforced in accordance with, the laws
of the State of Maryland applicable to contracts made and to be performed wholly
within said State.
7.9 Survivability. All provisions hereof shall survive the Closing Date.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first above written.
Intermedia Communications, Inc. Digex, Inc.
/s/ ROBERT M. MANNING /s/ TIMOTHY M. ADAMS
By: __________________________________ By: ________________________________
Name: Robert M. Manning Name: Timothy M. Adams
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Title: Senior Vice President Title: Chief Financial Officer
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and Chief Financial Officer
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EXHIBIT A
Digex/Intermedia
Firewall Migration Cost Summary Statement
<TABLE>
<CAPTION>
Q3/2000 Q4/2000 Q1/2000 Q2/2000 Total
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<S> <C> <C> <C> <C> <C>
Asset Transfer Costs:
Depreciated Hardware Value $ 533,920 $ 533,920 $ 533,920 $ 533,920 $ 2,135,679
Depreciated Software Cost 13,242 13,242 13,242 13,242 52,966
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Total Asset Transfer Costs $ 547,161 $ 547,161 $ 547,161 $ 547,161 $ 2,188,645
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Service Charge Costs:
Monthly Recurring Costs $ 1,309,998 $ 1,027,714 $ 2,337,712
Start-Up Costs -
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Total Service Charge Costs $ - $ - $ 1,309,998 $ 1,027,714 $ 2,337,712
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Total Migration Costs: $ 547,161 $ 547,161 $ 1,857,159 $ 1,574,875 $ 4,526,357
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</TABLE>
Assumptions
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Depreciation is straight line over 5 years.
All costs are calculated on a daily basis.
All prices are at cost.
