ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of June 1, 2000, by and between Ursus Telecom Corporation, a Florida
corporation ("Buyer"), and Justice Telecom Corporation, a California
corporation ("Seller").
R E C I T A L S
A. Seller is engaged in the telecommunications business, including,
without limitation, the re-origination of international retail telephone
traffic (the "International Re-Origination Business").
B. Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, on the terms and conditions set forth under this Agreement,
certain specified assets and properties of Seller relating to Seller's
International Re-Origination Business, as more specifically set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. Effective as of June 1, 2000 (the "Closing
Date"), subject to the terms, conditions and consideration set forth herein,
Seller hereby sells to Buyer, and Buyer hereby purchases from Seller, all of
Seller's right, title and interest in and to the following (collectively, the
"Assets"):
(a) All information regarding the customers, sales
representatives and resellers of Seller's International Re-Origination
Business contained on TeleDesq and TeleScript, as such terms are defined
below, (the "Customer Base") and such other information regarding the Customer
Base as may be reasonably required in order for Buyer to continue the
International Re-Origination Business of Seller; (As used herein, the terms
'TeleDesq" and "TeleScript" shall refer to the software licensed to Seller
under that certain Trilogy Telemanagement Service Agreement date June 21,
1999, between Seller and Trilogy Telemanagement L.L.C. (the "Trilogy
Agreement")).
(b) Subject to Section 1.3 below, all rights and obligations
of Seller under all contracts or agreements with the Customer Base (the
"International Re-Origination Contracts");
(c) Subject to Section 1.6 below, all advance payments,
prepayments, prepaid expenses, deposits and the like paid to Seller by the
Customer Base in connection with the International Re-Origination Business
("Prepaids") which are held by Seller as of the Closing Date;
(d) Certain specified assets related to the International Re-
Origination Business of Seller set forth on Exhibit A (the "Exhibit A Assets")
including, subject to Section 1.3 below, all rights and obligations of Seller
under the agreements set forth on Exhibit A-1 (the "Exhibit A Contracts");
(e) Certain specified assets related to the International Re-
Origination Business of the Seller set forth on Exhibit B (the "Exhibit B
Assets") including, subject to Section 1.3 below, all rights and obligations
of Seller under the agreements set forth on Exhibit B-1 (the "Exhibit B
Contracts");
(f) All telecommunications and computer software developed
solely by Seller and specific to Seller's International Re-Origination
Business and not used any other activities of Seller; and
(g) A non-exclusive, perpetual, assignable license to use all
telecommunications and computer software developed solely by Seller and used
both in Seller's International Re-Origination Business and in the other
activities of Seller, but only to the extent such software is required to
conduct the International Re-Origination Business.
1.2 Excluded Assets. Notwithstanding anything herein to the
contrary, the Assets shall not include any of the following assets ("Excluded
Assets"):
(a) All accounts receivable and work in progress attributable
to amounts billed (or to be billed) to the Customer Base with respect the
period ending on (but excluding) the Closing Date, and all other rights of
Seller under or relating to any of the Assets arising before the Closing Date
(but not any rights arising on or after the Closing Date);
(b) All tangible personal property of Seller other than the
Exhibit A Assets and the Exhibit B Assets; and
(c) All trademarks, trade names, service marks, logos and all
other intellectual property of Seller, whether or not related to the
International Re-Origination Business except as specifically set forth in
Section 1.1 above.
1.3 Assumption of Contracts. Effective as of the Closing Date for
all periods on and after the Closing Date, subject to the terms and conditions
of this Agreement, Seller hereby assigns and Buyer hereby assumes (as of the
Closing Date) on a going forward basis all the International Re-Origination
Contracts, the Exhibit A Contracts and the Exhibit B Contracts, and all rights
and obligations relating thereto, in each case to the fullest extent the
foregoing are assignable pursuant to their terms (as interpreted under
applicable law). In the event that any of the International Re-Origination
Contracts, the Exhibit A Contracts or the Exhibit B Contracts cannot be
assigned to Buyer for any reason, Seller shall, at the request of Buyer with
respect to any such contract, (i) use its reasonable best efforts to either
obtain any necessary consents or cause the other party to such contract to
terminate the existing contract with Seller and enter into a replacement
contract with Buyer under the same terms and conditions as the contract with
Seller or (ii) use its reasonable efforts to cooperate with Buyer in finding
an alternative arrangement with respect to such contract acceptable to Buyer
including, where Seller may legally do so without incurring any cost or
liability, keeping such contract in full force and effect in Seller's name and
granting Buyer the sole right to exercise all of Seller's rights under such
contract.
1.4 Assumption of Liabilities. As partial payment and consideration
for its purchase of the Assets, on the terms and subject to the conditions set
forth in this Agreement, effective as of the Closing Date, Buyer hereby
assumes and agrees to pay, perform, defend and discharge in due course all
liabilities and obligations of Seller under the International Re-Origination
Contracts, the Exhibit A Contracts, the Exhibit B Contracts and any additional
liabilities set forth in Schedule 1.4 which pertain to or are to be performed
during any period commencing on or after the Closing Date (collectively, the
"Assumed Liabilities"); provided, however, that Assumed Liabilities do not
include and Buyer shall not assume or otherwise be liable for any of the
following (collectively, "Excluded Liabilities"):
(a) All liabilities, debts and obligations of Seller incurring
or arising prior to the Closing Date (to the extent relating to any period
ending before the Closing Date), including, without limitation, trade payables
and liabilities for operating expenses whether or not incurred in the ordinary
course of business;
(b) Any liability to the extent arising out of any actual or
claimed breach by Seller of any International Re-Origination Contract, Exhibit
A Contract or Exhibit B Contract before the Closing Date; and
(c) Any action, claim, suit, proceeding, hearing, inquiry,
proceeding, complaint or investigation, pending or threatened against Seller
on or before the Closing Date.
1.5 Additional Deliveries. On the Closing Date, Buyer and Seller
shall execute and deliver each of (a) the Xxxx of Sale substantially in the
form attached hereto as Exhibit C, (b) the Xxxx of Sale substantially in the
form attached hereto as Exhibit D, (c) the Assignment and Assumption Agreement
substantially in the form attached hereto as Exhibit E, (d) the Assignment and
Assumption Agreement substantially in the form attached hereto as Exhibit F
and (e) the Non-Competition Agreement substantially in the form attached
hereto as Exhibit G. On each of the Closing Date, the Initial Payment Date,
and the Contingent Payment Date, Buyer shall deliver to Seller (along with the
consideration payable on each respective date) a certificate executed by Buyer
or on its behalf by a duly authorized representative, dated each respective
date, to the effect that each of the representations and warranties of Buyer
contained in this Agreement (i) shall have been true and correct when made and
(ii) shall be (A) in the case of representations and warranties that are
qualified as to materiality or material adverse effect, true and correct and
(B) in all other cases, true and correct in all material respects, in the case
of clauses (A) and (B), as of each respective date with the same force and
effect as though made on and as of each respective date.
1.6 Purchase Price. Subject to the terms and conditions of this
Agreement, the aggregate purchase price to be paid by Buyer to Seller for the
Assets shall consist of the Exhibit A Assets Consideration, the Exhibit B
Assets Consideration, the Initial Consideration and the Contingent
Consideration (each as defined below), each of which shall be payable as
follows:
(a) Exhibit A Assets Consideration. As soon as practicable
after the Closing Date, subject to the terms and conditions of this Agreement,
Buyer will pay and deliver to Seller the sum of $95,337.50 (such sum, referred
to herein as the "Exhibit A Assets Consideration").
(b) Exhibit B Assets Consideration. As soon as practicable
after the Closing Date, Buyer shall transfer to Seller 33,000 shares of
Buyer's common stock, $0.01 par value ("Buyer Common Stock") as payment for
the Exhibit B Assets (the "Exhibit B Assets Consideration").
(c) Initial Consideration. After the Closing Date, but no
later than July 17, 2000 ("Initial Payment Date"), subject to the terms and
conditions of this Agreement, Buyer will pay and deliver to Seller the sum
(such sum, referred to herein as the "Initial Consideration") of three (3)
times the gross revenue billed to the Customer Base in connection with the
International Re-Origination Business (net of any amounts retained by
resellers, as mutually agreed to by the parties hereto) for the month of June,
2000 (the "June Revenue").
(d) Contingent Consideration. No later than December 31,
2000 ("Contingent Payment Date"), subject to the terms and conditions of this
Agreement, Buyer will pay and deliver to Seller an amount equal to three (3)
times the difference, if positive, between (i) the June Revenue and (ii) the
average of the monthly gross revenue billed to the Customer Base in connection
with the International Re-Origination Business (net of any amounts retained by
resellers, as mutually agreed to by the parties hereto) for the months of
September, October and November 2000 (the "Contingent Consideration").
(e) Form of Payment. Buyer shall pay the Exhibit A Assets
Consideration to Seller by wire transfer. Buyer shall pay the Exhibit B
Assets Consideration to Seller in shares of Buyer Common Stock. Buyer shall
pay the Initial Consideration and the Contingent Consideration, respectively,
on each of the Initial Payment Date and the Contingent Payment Date to Seller
at Buyer's option in either (i) cash, or (ii) if, on the relevant payment
date, shares of Buyer Common Stock are listed on the NASDAQ National Market
System or any national securities exchange or trading system, (A) Buyer Common
Stock or (B) a combination of cash and Buyer Common Stock. For the purposes
of this Agreement, Buyer Common Stock shall be valued at the average Closing
Price (as defined below) for the Buyer Common Stock for the twenty (20)
consecutive trading days (X) ending and including July 15, 2000 for the
Initial Consideration Payment and (Y) ending and including November 15, 2000
for the Contingent Consideration Payment. "Closing Price" shall mean, with
respect to any shares of Buyer Common Stock, the closing price of such
security's sales on the principal domestic securities exchange on which such
security may at the time be listed, or, if there have been no sales on any
such exchange on any day, the average of the highest bid and lowest asked
prices on such exchanges at the end of such day, or, if on any day such
security is not so listed, the average of the representative bid and asked
prices quoted in the NASDAQ System as of 4:00 P.M., New York time, on such
day, or, if on any day such security is not quoted in the NASDAQ System, the
average of the highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization; provided that if such
security is listed on any domestic securities exchange, the term "business
days" as used in this sentence means business days on which such exchange is
open for trading.
(f) Registration. In the event that Buyer elects to deliver
Buyer Common Stock as payment of all or any part of the Initial Consideration
or the Contingent Consideration, Buyer shall, at Buyer's sole costs and
expense, use its best efforts to register fifty percent (50%) of such
delivered shares of Buyer Common Stock (such shares of Buyer Common Stock to
be registered, the "Registration Shares") under the Securities Act of 1933, as
amended (the "Securities Act"), via Form S-3 and cause such registration to
become effective, all (i) within 120 days of the Initial Payment Date with
respect to any Registration Shares delivered in connection with the Initial
Consideration and (ii) within 120 days with respect to any Registration Shares
delivered in connection with the Contingent Consideration. The remaining
fifty percent (50%) of such shares of Buyer Common Stock and the Buyer Common
Stock delivered as payment of the Exhibit B Assets Consideration shall be
restricted stock in accordance with Rule 144 of the Securities Act.
(g) Listing. Buyer shall use its best efforts to cause all
Registration Shares delivered to Seller hereunder to be listed on the NASDAQ
National Market System or other national securities exchange or trading system
on which Buyer Common Stock primarily trades on or prior to the effective date
of the registration thereof pursuant to Section 1.6(f) above.
(h) Remedies for Failure to Register and List. In the event
Buyer should fail to so register (and cause such registration to become and
remain effective until such time as Seller shall have sold all Registration
Shares covered by such registration statement) or so cause the listing (or
eligibility for trading) of any or all of the Registration Shares in
accordance with applicable laws and regulations within the relevant time
periods specified above, then Buyer shall, at Seller's option, either (i) buy
back for cash all such Registration Shares at a price per share calculated
pursuant to Section 1.6(e) above for the relevant payment date plus interest
at a rate of five percent (5%) per annum on such amount from the Closing Date
through and including the date payment is actually received by Seller or (ii)
pay interest to Seller on such price at the rate of 1.5% per month commencing
on the 120th day after the payment date on which such Registration Shares were
delivered to Seller through and including the date on which the registration
statement relating to such Registration Shares becomes effective.
1.7 Prepaids. In the event the aggregate receivable due to Seller
from the Customer Base as of the Closing Date is less than the aggregate
Prepaids as of such date, Buyer shall pay to Seller as soon as practicable
after the Closing Date an amount equal to such shortfall. In the event the
aggregate receivable due to Seller from the Customer Base as of the Closing
Date is greater than the aggregate Prepaids as of such date, Seller shall pay
to Buyer as soon as practicable after the Closing Date an amount equal to such
excess.
1.8 Proration of Expenses. The parties shall, on the Initial Payment
Date, prorate any expenses (to the extent assumed by Buyer under Section 1.3)
related to the Customer Base, the Exhibit A Assets, the Exhibit A Contracts,
the Exhibit B Assets and the Exhibit B Contracts as to which a payment made
before the Closing Date relates to any period on or after the Closing Date
(which expenses shall be the sole responsibility of Buyer) or a payment made
after the Closing Date relates to any period before the Closing Date (which
expenses shall be the sole responsibility of Seller). The net amount of any
such prorations shall be paid in cash by the relevant party to the other
party, as appropriate, on the Initial Payment Date. Notwithstanding the
foregoing, Buyer's reimbursement for costs relating to Seller's International
Re-Origination Business for the month of June 2000 shall be limited to the
following: (i) all direct retail payroll costs related to Buyer's traffic
(determined to be $82,456), (ii) 15% of Seller's selling, general and
administrative expenses to reimburse Seller for support functions (determined
to be $20,000), (iii) the actual cost of in-house and external sales
commissions (provided that such commissions shall be consistent with the past
business practices of Seller), (iv) the actual third party cost of shipping
and (v) Seller's actual cost of retail goods sold, including, but not limited
to, domestic and international termination, DIDs, X.25, ITFS, Internet
bandwidth, domestic inbound 800, local lines and dedicated facilities (such
terms to have the meanings generally ascribed to them in the
telecommunications industry). Any special projects requested by Buyer to be
performed by Seller beyond normal day-to-day operations shall require the
prior agreement of both parties.
1.9 Transferee Liability. The parties hereto acknowledge and agree
that:
(a) all other consent fees, sales tax and assignment or
transfer fees, and other fees and charges and taxes payable in connection with
the transactions contemplated hereby, if any, shall be paid by the Buyer
provided that if the aggregate of the fees and other charges required in order
to assign the Exhibit A Contracts and the Exhibit B Contracts exceed $15,000,
Buyer may, at its option, treat such agreements (as cause the aggregate of
such fees and other charges to exceed $15,000) as non-assignable and such
agreements shall be accorded the treatment set forth in Section 1.3 above; and
(b) all Federal and state income taxes, if any, incurred by
Buyer or Seller shall be borne by the party incurring such taxes.
In the event that Seller pays any fees, charges or taxes which it is not
required to pay hereunder, Buyer agrees to reimburse Seller immediately in the
amount of such fees, charges or taxes paid by Seller. In the event that Buyer
pays any fees, charges or taxes which it is not required to pay hereunder,
Seller agrees to reimburse Buyer immediately in the amount of such fees,
charges or taxes paid by Buyer.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, the Seller hereby represents and
warrants to Buyer as follows:
2.1 Organization and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California, with full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated thereby.
2.2 Consents and Approvals; No Violations; Absence of Conflicts.
Neither the execution and delivery of this Agreement by Seller and the
agreements attached hereto as Exhibits, the compliance by Seller with the
terms and conditions hereof nor the consummation by Seller of the transactions
contemplated hereby will (a) conflict with any of the terms, conditions or
provisions of the articles of incorporation, by-laws or other charter
documents of Seller, (b) violate any provision of, or require any consent,
authorization or approval under, any law or administrative regulation or any
judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to Seller, the Assets or the International Re-
Origination Business, or any governmental permit or license issued to Seller,
(c) except for any consents required under any of the Exhibit A Contracts and
Exhibit B Contracts, result in a violation or breach of, or constitute (with
or without giving of notice or passage of time or both) a default or give rise
to any right of termination, amendment, cancellation or acceleration under any
of the International Re-Origination Contracts, the Exhibit A Contracts or the
Exhibit B Contracts. Notwithstanding the foregoing, Seller has received the
consent of Trilogy Telemanagement L. L. C. required to assign the Trilogy
Agreement to Buyer and the consent of U. S. TelePacific Corp. ("TelePacific")
required to assign to Buyer the DID's granted by TelePacific to Seller.
2.3 No Defaults. To the knowledge of Seller, with such exceptions
as, individually or in the aggregate, have not had, and would not reasonably
be expected to have, a material adverse effect on the International Re-
Origination Business, (i) each of the Exhibit A Contracts and Exhibit A
Contracts is valid and in full force and effect and (ii) Seller is not in
violation or any provision of, and has not committed or failed to perform any
act which, with or without notice, lapse of time, or both, would constitute a
default under the provisions of any such contract. To the knowledge of
Seller, no counterpart to any Exhibit A Contract or Exhibit B Contract has
violated any provision of or committed or failed to perform any act which,
with or without notice, lapse of time or both, would constitute a default or
other breach under the provisions of any such contract, except for defaults or
breaches which, individually or in the aggregate, have not had, or would not
reasonably be expected to have, a material adverse effect on the International
Re-Origination Business.
2.4 Power and Authority.
(a) Seller has full power and authority to execute, deliver
and carry out all the terms and provisions of this Agreement and to perform
its obligations under this Agreement. On or prior to the Closing Date, Seller
shall have taken, or caused to have been taken, all necessary corporate action
to authorize the Seller's execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby.
(b) This Agreement constitutes, and upon the execution and
delivery by Seller of the other agreements between the parties referred to
herein and each instrument and certificate delivered by Seller pursuant
hereto, such agreements, instruments and certificates shall constitute, the
legal, valid and binding obligations of Seller (as appropriate), enforceable
against Seller in accordance with their respective terms, except as such
obligations and enforceability are limited by bankruptcy, insolvency and other
similar laws of general application affecting the enforcement of creditors'
rights and by equitable principles.
2.5 Brokers' Fees. No broker, finder or similar agent has been
employed by or on behalf of Seller in connection with this Agreement or the
transactions contemplated hereby, and Seller has not entered into any
agreement or understanding of any kind with any person or entity for the
payment of any brokerage commission, finder's fee or any similar compensation
in connection with this Agreement or the transactions contemplated hereby.
2.6 Title to Assets. Except as set forth on Schedule 2.5, Seller has
good and marketable title to Exhibit A Assets and the Exhibit B Assets and on
the Closing Date, Buyer will receive good and marketable title to the Exhibit
A Assets and Exhibit B Assets and such assets will be free and clear of any
liens.
2.7 Litigation. Except as otherwise disclosed in writing to Buyer,
there is no action or judgment outstanding or any claim, suit, litigation,
proceeding or labor dispute ("Action") pending or, to the knowledge of Seller,
threatened or anticipated against or relating to or affect the International
Re-Origination Contracts, the Exhibit A Assets, the Exhibit B Assets or the
transactions contemplated by this Agreement in each case which could
reasonably be anticipated to have a material adverse effect on the
International Re-Origination Business.
2.8 No Infringement. Except as otherwise disclosed to Buyer in
writing, to Seller's knowledge, the intellectual property transferred to Buyer
hereunder does not infringe on any right or interest held by any third party
in each case which could reasonably be anticipated to have a material adverse
effect on the International Re-Origination Business.
2.9 Exhibit A Assets; Exhibit B Assets. As of the Closing Date,
except as set forth in Schedule 2.8, Seller has no actual knowledge of
material defects with respect to any of the Exhibit A Assets or Exhibit B
Assets. Buyer agrees that Buyer is purchasing the Exhibit A Assets and the
Exhibit B Assets "as is" and that Seller makes no warranty of merchantability
or fitness for any particular purpose with respect to such assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
3.1 Organization and Good Standing. Buyer has been duly organized
and is existing as a corporation in good standing under the laws of the State
of Florida with full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
3.2 Absence of Conflicts. Neither the execution and delivery of this
Agreement by Buyer, the compliance by Buyer with the terms and conditions
hereof nor the consummation by Buyer of the transactions contemplated hereby
will (a) conflict with any of the terms, conditions or provisions of the
articles of incorporation, by-laws or other charter documents of Buyer, (b)
violate any provision of, or require any consent, authorization or approval
under, any law or administrative regulation or any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable to,
or any governmental permit or license issued to Buyer, or (c) conflict with or
result in a breach of or require any consent, authorization or approval (other
than those required to be obtained which have been duly obtained or prior to
the Closing Date will be obtained by Buyer) under, any indenture, mortgage,
lien, lease, agreement or instrument to which Buyer is a party or by which it
is bound.
3.3 Corporate Power and Authority.
(a) Buyer has the corporate power and authority to execute,
deliver and carry out all the terms and provisions of this Agreement and to
perform its obligations under this Agreement and, on the Closing Date, Buyer
shall have taken, or caused to have been taken, all necessary action,
corporate or otherwise, to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby.
(b) This Agreement constitutes, and upon the execution and
delivery by Buyer of the other agreements between the parties referred to
herein and each instrument and certificate delivered by Buyer pursuant hereto,
such agreements, instruments and certificates shall constitute, the legal,
valid and binding obligations of Buyer, and this Agreement and each such other
agreement, instrument and certificate is and will be enforceable against Buyer
in accordance with its terms, except as such obligations and enforceability
are limited by bankruptcy, insolvency and other similar laws of general
application affecting the enforcement of creditors' rights and by equitable
principles.
3.4 Brokers' Fees. No broker, finder or similar agent has been
employed by or on behalf of Buyer in connection with this Agreement or the
transactions contemplated hereby, and Buyer has not entered into any agreement
or understanding of any kind with any person or entity for the payment of any
brokerage commission, finder's fee or any similar compensation in connection
with this Agreement or the transactions contemplated hereby.
3.5 Seller's Representations and Warranties. Buyer hereby
acknowledges and agrees that, except as expressly set forth herein, Seller
makes no representations or warranties with respect to the Customer Base, the
International Re-Origination Contracts, the Exhibit A Assets, the Exhibit B
Assets, the Exhibit A Contracts and the Exhibit B Contracts.
3.6 Buyer Common Stock. All shares of Buyer Common Stock to be
delivered to Seller pursuant to the terms of this Agreement (i) have been duly
authorized and adequately reserved in contemplation of issuance thereof to
Seller pursuant to the terms of this Agreement by all necessary corporate
action on the part of Buyer, (ii) shall be (when issued in accordance with the
terms of this Agreement) (A) validly issued and outstanding, (B) fully paid
and non-assessable and (C) free and clear of all liens, with the exception of
any restrictions on transferability under applicable securities laws, and
(iii) shall not be subject to any preemptive rights of the holders of any
other class or series of the capital stock of Buyer.
3.7 Commission Filings; Financial Statements. (a) Buyer has filed
all reports, registration statements and other filings, together with any
amendments or supplements required to be made with respect thereto
(collectively, the "Commission Filings"), that it has been required to file
with the Securities and Exchange Commission (the "Commission") under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As of the respective dates of their filing with the
Commission, the Commission Filings complied in all material respects with the
applicable provisions of the Securities Act and the Exchange Act and did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the historical consolidated financial statements
of Buyer (including any related notes or schedules) included in the Commission
Filings (the "Buyer Financial Statements") was prepared in accordance with
United States generally accepted accounting principles (except as may be
disclosed therein), and complied in all material respects with the rules and
regulations of the Commission. Such Buyer Financial Statements fairly present
the consolidated financial position of Buyer and its subsidiaries as of the
dates thereof and the consolidated results of operations, cash flows and
changes in stockholders' equity for the periods then ended (subject, in the
case of the unaudited interim financial statements, to normal, recurring year-
end audit adjustments). Except as and to the extent reflected or reserved
against in Buyer Financial Statements, none of Buyer nor any subsidiary of
Buyer has any material liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise, and whether due or to become due,
for the periods covered thereby.
3.8 Material Adverse Change. Except as disclosed in the Commission
Filings, since the date of the most recent audited Buyer Financial Statements
included in Commission Filings, there has not been any event, occurrence or
development of a state of circumstances or facts that has had, or could have
reasonably been expected to have, (i) a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations
of Buyer and its subsidiaries, taken as a whole or (ii) a material adverse
effect on the ability of Buyer to perform its obligations under this
Agreement.
ARTICLE IV
BUSINESS TRANSITION; COVENANTS
4.1 Access and Information. From and after the Closing Date, Seller
shall afford to Buyer and to Buyer's accountants, counsel and other
representatives, reasonable access (during normal business hours and subject
to reasonable notice) to Seller's documents and information concerning the
Customer Base, the International Re-Origination Contracts, the Exhibit A
Assets and the Exhibit B Assets and to Seller's management, in each case as
reasonably requested by Buyer; provided, that the Buyer enter into a
reasonable confidentiality agreement with regard to the disclosure and use of
any information disclosed to or obtained by Buyer in connection with the
foregoing. Likewise, from and after the Closing Date, Buyer shall afford to
Seller and to Seller's accountants, counsel and other representatives,
reasonable access (during normal (during normal business hours and subject to
reasonable notice) to Buyer's documents and information concerning the
Customer Base, the International Re-Origination Contracts, the Exhibit A
Assets and the Exhibit B Assets and to Buyer's management, in each case as
reasonably requested by Seller and with respect to periods on or before the
Contingent Payment Date; provided, that the Seller enter into a reasonable
confidentiality agreement with regard to the disclosure and use of any
information disclosed to or obtained by Seller in connection with the
foregoing.
4.2 Transition of Customer Base. Seller and Buyer shall cooperate
fully with each other for purposes of effecting a smooth transition of the
Customer Base. In connection with the foregoing, Seller shall, if requested
by Buyer and at Buyer's cost and expense, use its reasonable best efforts (a)
to provide assistance related to the Customer Base, the Exhibit A Assets and
the Exhibit B Assets for purposes of continuation of the International Re-
Origination Business by Buyer in the same manner as conducted by Seller prior
to the Closing Date, and (b) to assist Buyer in connection with Buyer's
efforts to hire key employees relating to the International Re-Origination
Business (to the extent not retained by Seller).
4.3 Revenue Maximization. After the Closing Date, but prior to the
Initial Payment Date, Buyer will conduct its International Re-Origination
Business with respect to the Customer Base without making any material pricing
changes thereto which would reasonably be expected to adversely impact the
Purchase Price. In addition, for purposes of determining the Initial
Consideration and the Contingent Consideration, the amount paid to Seller
shall not be reduced to the extent Buyer changes the terms and conditions of
dealing with sales through resellers which are part of the Customer Base that,
for accounting purposes, has the effect of reclassifying charges that
previously would have been treated as sales or administrative expenses or cost
of goods sold, to reductions in revenue but have no negative impact on net
income. Notwithstanding the foregoing, Buyer shall have flexibility to alter
pricing so as to remain economically competitive in the telecommunications
industry, even if such pricing changes ultimately result in a decrease in the
Contingent Consideration.
4.4 Calculation of Purchase Price; Inspection and Audit Rights. All
calculations of the June Revenue shall be done jointly by Buyer and Seller.
At all times from the Closing Date to the Contingent Payment Date, Buyer shall
keep (or cause to be kept or made available within a reasonable time after
request therefor) at its principal executive office all records of Buyer
pertaining to the Customer Base and the collection and calculation of gross
revenues for purposes of the Purchase Price, which records will be of such
character so as to enable the Seller to conduct the Audit, as defined below.
As soon as practicable after the end of each of September, October and
November 2000, Buyer shall provide to Seller a statement of gross revenue
billed to the Customer Base for such month along with such call detail records
as are reasonably necessary for Seller to determine the accuracy of such
statement. Seller shall have until the Contingent Payment Date to notify
Buyer whether it intends to conduct an audit of any or all of such statements
(the "Audit"), which Audit shall be commenced as soon as practicable after
such notice and shall be conducted by an independent accounting firm
reasonably acceptable to both Buyer and Seller. The Audit shall be conducted
during Buyer's regular business hours and upon reasonable notice. Regardless
of whether Seller shall notify Buyer that it intends to conduct the Audit,
Buyer shall deliver the Contingent Consideration to Seller no later than that
Contingent Payment Date. Seller shall be solely responsible for the cost of
the Audit, unless such Audit results in a finding that the revenue calculation
provided by Buyer and upon which the Contingent Consideration is based has
been understated by more than five percent (5%), in which event Buyer shall
immediately (i) reimburse Seller for the cost of the Audit and (ii) pay any
additional Contingent Consideration due to Seller.
4.5 Use of Seller's Trademarks. In order to assist in the
transfer of the Customer Base to Buyer, Seller hereby grants to Buyer the
right to use, solely for a period of eighteen (18) months commencing on the
Closing Date (the "Transition Period"), the name "Justice International" or
such other trade names or trademarks (or derivations thereof) of Seller as
Seller may approve in writing for use by Buyer during such period
(collectively, "Seller's Trademarks") only for the purpose of conducting the
International Re-Origination Business. Nothing herein shall grant Buyer any
right, title or interest in Seller's Trademarks. At no time during or after
the Transition Period shall Buyer challenge or assist others to challenge
Seller's Trademarks or the registration thereof or attempt or assist to
attempt to register any trademarks, marks or trade names confusingly similar
to those of Seller. Representations of Seller's Trademarks that Buyer intends
to use shall first be submitted to Seller for approval (which shall not be
unreasonably withheld) of design, color, and other details. If any of
Seller's Trademarks are to be used in conjunction with another trademark in
relation to the International Re-Origination Business, Seller's Trademarks
shall be presented separated from the other so that each appears to be a xxxx
in its own right, distinct from the other xxxx.
4.6 Confidential Treatment. Except for such use as may be reasonably
required in connection with the purchase of the Assets and the transactions
contemplated by this Agreement or as otherwise required by law, each party
agrees to keep confidential, and to not disclose or use, directly or
indirectly, in any way, any information obtained by it from the other party in
connection with its investigations, communications or otherwise in connection
with this Agreement and the transactions contemplated hereby.
4.7 Filings; Public Announcements. Each party shall cooperate fully
with the other party in furnishing any necessary information required in
connection with the preparation, distribution and filing of any filings,
applications and notices which may be required by any federal, state and local
regulatory agencies. No public announcement by any party hereto with regard
to the transactions contemplated hereby or the material terms hereof shall be
issued by any party without the mutual prior consent of the other party,
except that in the event the parties are unable to agree on a press release
and legal counsel for one party is of the opinion that such press release is
required by law and such party furnishes the other party a written opinion of
outside legal counsel, or other counsel reasonably acceptable to the party
being furnished such opinion, to that effect, then such party may issue the
legally required press release.
4.8 Forwarding of Certain Payments. In the event either party
receives a payment from the Customer Base or otherwise rightfully belonging to
the other party pursuant to the terms hereof, the receiving party shall
immediately forward such incorrectly received payment to the other party.
Cooperation in Customer Transfer. In connection with the transfer of the
Assets, to the extent requested by Buyer, Seller shall jointly execute notices
to the Customer Base informing the Customer Base of the transfer of such
Customer Base to Buyer provided that no such notice shall be sent to the
Customer Base prior to July 1, 2000, without Seller's express written consent.
ARTICLE V
INDEMNIFICATION
5.1 Survival of Representations and Warranties. The representations
and warranties of the parties hereto contained in this Agreement or in any
writing delivered pursuant hereto shall survive only until the close of
business on the first anniversary of the Contingent Payment Date (the
"Survival Period"). As used in this Article V, the term "Damages" shall mean
any and all losses, liabilities, obligations, judgments, costs, expenses,
damages, obligations, lawsuits, claims and deficiencies of any kind or nature
whatsoever, including without limitation, interest, attorneys', accountants'
and experts' fees and costs and all amounts paid in investigation, defense or
settlement of any of the foregoing and such fees and costs incurred pursuing
indemnification or other rights or claims under this Article.
5.2 Indemnification.
(a) Seller covenants and agrees to defend, indemnify and hold
harmless the Buyer from and against any Damages arising out of or resulting
from: (i) any inaccuracy in or breach of any representation or warranty made
by Seller in this Agreement or in any writing delivered pursuant to this
Agreement; (ii) the failure by Seller to perform or observe any covenant,
agreement or provision to be performed or observed by it pursuant to this
Agreement; or (iii) any third party claim with respect to Excluded
Liabilities.
(b) Buyer covenants and agrees to defend, indemnify and hold
harmless the Seller from and against any Damages arising out of or resulting
from: (i) any inaccuracy in or breach of any representation or warranty made
by Buyer in this Agreement or in any writing delivered pursuant to this
Agreement; (ii) the failure by Buyer to perform or observe any covenant,
agreement or provision to be performed or observed by it pursuant to this
Agreement; or (iii) any Damages arising out of third party claims with respect
to Assumed Liabilities.
5.3 Third Party Claims.
(a) If any party entitled to be indemnified pursuant to
Section 5.2 (an "Indemnified Party") receives notice of the assertion by any
third party of any claim or of the commencement by any such third party of any
Action (any such claim or Action being referred to herein as an "Indemnifiable
Claim") with respect to which another party hereto (an "Indemnifying Party")
is or may be obligated to provide indemnification, the Indemnified Party shall
promptly notify the Indemnifying Party in writing (the "Claim Notice") of the
Indemnifiable Claim; provided, that the failure to provide such notice shall
not relieve or otherwise affect the obligation of the Indemnifying Party to
provide indemnification hereunder, except to the extent that any Damages
directly resulted from or were caused by such failure. In order to avoid
unnecessary litigation, the Indemnifying Party and the Indemnified Party agree
that as between the Indemnifying Party and the Indemnified Party the statute
of limitations or other period applicable to the Indemnifiable Claim and any
related claim for indemnification by the Indemnified Party for alleged breach
of or to enforce this Agreement shall be tolled as of the date the Claim
Notice is given to the Indemnifying Party and shall remain tolled until the
date, if any, upon which the Indemnified Party commences an action to enforce
such rights; provided, that such Claim Notice is given within the applicable
Survival Period described in Section 5.1. The fact that any Indemnifiable
Claim may be subject to a defense based upon the expiration of the applicable
statute of limitations or on any other legal or equitable ground shall not
relieve the Indemnifying Party of its obligation to indemnify, save and hold
harmless the Indemnified Party under this Agreement.
(b) The Indemnifying Party shall have thirty (30) days after receipt
of the Claim Notice to undertake, conduct and control, through counsel
reasonably acceptable to the Indemnified Party, and at Indemnifying Party's
expense, the settlement or defense thereof, and the Indemnified Party shall
cooperate with the Indemnifying Party in connection therewith; provided, that
(i) the Indemnifying Party shall permit the Indemnified Party to participate
in such settlement or defense through counsel chosen by the Indemnified Party;
provided that the fees and expenses of such counsel shall not be borne by the
Indemnifying Party unless the Indemnified Party shall have reasonably
concluded that there are defenses or counter or cross claims available to it
that may not be available to the Indemnifying Party, in which event the
Indemnifying Party shall bear the reasonable fees and expenses (and shall pay
the same on a current basis as incurred) of counsel and experts selected by
the Indemnified Party, and (ii) the Indemnifying Party shall not settle any
Indemnifiable Claim without the Indemnified Party's consent. So long as the
Indemnifying Party is vigorously contesting any such Indemnifiable Claim in
good faith, the Indemnified Party shall not pay or settle such claim without
the Indemnifying Party's consent, which consent shall not be unreasonably
withheld or delayed.
(c) If the Indemnifying Party does not (i) notify the Indemnified
Party within thirty (30) days after receipt of the Claim Notice that it elects
to undertake the defense of the Indemnifiable Claim described therein and (ii)
agree in writing that it is unconditionally and irrevocably obligated to
indemnify the Indemnified Party in respect of all Damages arising out of the
Indemnified Claim in accordance with this Agreement, the Indemnified Party
shall have the right to contest, settle or compromise the Indemnifiable Claim
in the exercise of its reasonable discretion; provided, that the Indemnified
Party shall notify the Indemnifying Party of any compromise or settlement of
any such Indemnifiable Claim. The Indemnifying Party shall be liable for any
such settlement or compromise of the Indemnifiable Claim and for any final
judgment, and the Indemnifying Party agrees to indemnify the Indemnified Party
against all Damages by reason of such settlement, compromise or judgment.
5.4 Limitations on Indemnification.
(a) Notwithstanding any other provision of this Agreement, an
Indemnified Party shall have no right to indemnification under this Article V
for Damages:
(i) after the Indemnified Party has received payment
of Damages equal to the amount of the Purchase Price; provided, that this
limitation shall not apply to Damages resulting from a willful breach of
warranty or misrepresentation or from gross negligence or willful misconduct;
(ii) for a claim based upon an inaccuracy or breach
of a representation or warranty unless that claim is asserted by the
Indemnified Party to whom such representation or warranty was made during the
applicable Survival Period during which such representation or warranty
survives under Section 5.1;
(iii) to the extent arising from such Indemnified
Party's gross negligence or willful misconduct; or
(iv) which consist of or arise with respect to
special, indirect, consequential or punitive damages or expenses of any
nature.
A claim shall be deemed to have been asserted for purposes of clause (ii)
above only if the asserting party provides written notice to the Indemnifying
Party within the prescribed period setting forth in reasonable detail (to the
extent of its information) the basis of its claim and the amount of the
indemnity sought (to the extent then determinable).
(b) No claim may be made by any party for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each party hereby waives, releases and
agrees not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
(c) Except with respect to a failure to pay the Purchase Price
pursuant to the terms hereof, the indemnify provisions in this Article V shall
be the exclusive remedy for Damages of the parties hereto arising out of or
relating to this Agreement and the transactions contemplated herein.
ARTICLE VI
GENERAL PROVISIONS
6.1 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS HERETO WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
CALIFORNIA.
6.2 Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and permitted assigns of such parties whether so
expressed or not. No party hereto shall assign any right or delegate any
obligation hereunder without the express prior written consent of the other
party hereto.
6.3 Entire Agreement; Amendment. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party
in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
party against whom enforcement of any such amendment, waiver, discharge or
termination is sought.
6.4 Notices, etc. All notices, requests, demands, waivers, consents
and other communications hereunder shall be in writing, shall be delivered
either in person, by telegraphic, facsimile or other electronic means, by
overnight air courier or by mail, and shall be deemed to have been duly given
and to have become effective (a) upon receipt if delivered in person or by
telegraphic, facsimile or other electronic means calculated to arrive on any
business day prior to 6:00 p.m. local time at the address of the addressee, or
on the next succeeding business day if delivered on a non-business day or
after 6:00 p.m. local time, (b) one business day after having been delivered
to an air courier for overnight delivery or (c) three business days after
having been deposited in the mails as certified or registered mail, return
receipt requested, all fees prepaid, directed to the parties or their
assignees at the following addresses (or at such other address as shall be
given in writing by a party hereto):
If to Seller: Justice Telecom Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
If to Buyer: Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile (000) 000-0000
With a copy to: Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx, XX Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Facsimile (000) 000-0000
6.5 Expenses. Each of the parties shall bear and pay their own costs
and expenses relating to the transactions contemplated by, or the performance
of or compliance with any condition or covenant set forth in, this Agreement.
6.6 Delays or Omissions. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any party
hereto, upon any breach or default of any other party hereto under this
Agreement, shall impair any such right, power or remedy of such party nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part
of any party of any breach or default under this Agreement, or any waiver on
the part of any party of any provisions or conditions of this Agreement, must
be in writing and shall be effective only to the extent specifically set forth
in such writing. Except as otherwise provided herein, all remedies, either
under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
6.7 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
invalid, unenforceable or void, this Agreement shall continue in full force
and effect without said provision. In such event, the parties shall
negotiate, in good faith, a legal, valid and enforceable substitute provision
which most nearly effects the intent of the parties in entering into this
Agreement.
6.8 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing
or interpreting this Agreement.
6.9 Facsimile Signatures. Any signature page delivered by a telecopy
machine shall be binding to the same extent as an original signature page,
with regard to any agreement subject to the terms hereof or any amendment
thereto. Any party who delivers such a signature page agrees to later deliver
an original counterpart to any party which requests it.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
6.11 Arbitration. Except as otherwise provided herein, any
controversy or claim arising out of or relating to this Agreement, or any
agreements or instruments relating hereto or in connection herewith, or the
transactions contemplated hereby or thereby, shall at the request of any party
be determined by binding arbitration before the American Arbitration
Association (AAA) under their then-prevailing commercial arbitration rules.
The arbitration shall be held in Los Angeles, California, unless the parties
mutually select another venue, and judgment upon the arbitrator's award may be
entered in any court having jurisdiction. Notwithstanding the foregoing,
either party may seek equitable relief by court action, before or after
instituting arbitration, including without limitation seeking and obtaining
temporary restraining orders, injunctions, or other provisional or ancillary
remedies, and the institution and maintenance of any such action shall not
constitute a waiver of the right to arbitrate the controversy or claim. The
arbitrator shall award the costs and expenses of arbitration, including
attorneys' fees, to the prevailing party as part of his or her award, in
addition to all other relief granted.
6.12 Rule of Construction. In the event that an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, each party has executed this Agreement or caused this
Agreement to be executed by its duly authorized representative as of the date
first above written.
SELLER BUYER
Justice Telecom Corporation, Ursus Telecom Corporations,
a California corporation a Florida corporation
By: By:
---------------------------- ----------------------------
Name:______________ Name:______________
-------------------------- ---------------------------
Its: Its:
--------------------------- ---------------------------
EXHIBIT A
RETAIL ASSETS
ARGENTINA - BUENOS AIRES
---------------------------
Call-Thru Node
---------------
Industrial PC
Telephony Boards Dialogic D/SC-160 LS-16 Ports-Analog
VOS/Parity Software
ITFS Node
----------
Industrial PC
Telephony Boards Dialogic D/41-ESC-4 Ports-Analog
VOS/Parity Software
X.25 Internet Trigger Node
-----------------------------
Industrial PC
Telephony Boards Dialogic D/41-ESC-4 Ports-Analog
VOS/Parity Software
Frad/Pad
UPS
GIBRALTAR
---------
Call-Thru Node
---------------
Industrial PC
Telephony Boards Dialogic D/SC-160 LS-16 Ports-Analog
VOS/Parity Software
NIGERIA
-------
Call-Thru Node
---------------
Industrial PC
Telephony Boards Dialogic D/41-ESC-4 Ports-Analog
VOS/Parity Software
VENEZUELA
---------
Trigger Node
-------------
VOS/Parity Software
Telephony Boards Dialogic D/41-ESC-4 Ports-Analog
INTERNET TRIGGER, X.25, & TELEDESQ ACCESS
----------------------------------------------
X.25 Connection:
-----------------
Industrial PC (Tethys)
CSU/DSU [(1)Paradyne Comsphere 3611 X.25]
FRAD/PAD [1]
JIT
---
AS5300 Universal Access Server JIT-RETAIL PLATFORM - S/N SCA032200B5
AS53-4CT1 Quad T1/Primary Rate Interface (PRI)
AS53-CC-VOX DSPM Card-4 542 DSP's
AS53-CC-VOX DSPM Card-4 549 DSP's
AS53-AC-RPS AC Dual Power Supply
SF53CP-12.0.7 12.0(7)T IOS IP PLUS FEATURE SET
MEM-64M-AS53 80 MB DRAM
MEM-16F-AS53 16 MB Flash
CSU/DSU [Adtran FT1]
DIALERS
-------
All GMA Communications LTD, Model PRD-107 Automatic Dialers in Sellers
Inventory as of June 1, 2000.
EXHIBIT A-1
EXHIBIT A CONTRACTS
VOS/PARITY SOFTWARE
Country Application Software License No. VOS License Type
---------------------------------------------------------------------------
Argentina Trigger Node 8939-CB 9638W3907 8 port runtime DOS
Argentina Call-thru Node XXX00000000X00000 00 xxxx xxxxxxx XX
Xxxxxxxxx ITFS Node SRB040679806L59241 8 port runtime NT
Nigeria Trigger Node SRB040679806L59241 8 port runtime NT
Venezuela Trigger Node SRB040670013FA8777 8 port runtime NT
Gibraltar Call-thru Node SRB040679806L59241 16 port runtime NT
EXHIBIT B
EXHIBIT B ASSETS
ENHANCED SERVICE PLATFORM
---------------------------
Summa IV (Switch)
Sun Server [CDR Database Machine] S/N FW92230055
Sun Server [Host Machine] S/N FW92351012
Sun Server [Traffic Machine]] S/N FW92351022
Sun Server [StorEdge Raid] S/N 925H3EBC
Sun Workstations - (2) Ultra 5:
Undertaker S/N FW925120959
Euclid S/N FW92510958
KVM + Cables for 4 Sun Machines
Firewall Software Certificate Key 3df7 ed2b 70a6
Product: CPFW-FIG-25 (Firewall Internet
Gateway/25)
ICVerify License S/N UN8001753
SCO Unix License for ICVerify
Informix Software S/N AAC#J679166
Informix Software S/N AAC#J679165
Research and Development
TELEDESQ & TELESCRIPT
-----------------------
Trilogy
EXHIBIT B-1
Exhibit B Contracts
Enhanced Service Platform:
1. SCO Open Server Unix 5.5 Operating System License
Teledesq & Telescript:
2. Trilogy Telemanagement Service Agreement by and between Trilogy
Management, L.L.C., a Delaware limited liability company, and Justice
Technology Corporation, now known as Justice Telecom Corporation, a California
corporation, dated June 21, 1999
EXHIBIT C
XXXX OF SALE
JUSTICE TELECOM CORPORATION, a California corporation ("the Seller"),
pursuant to the Asset Purchase Agreement, dated as of June 1, 2000 (the
"Agreement"; unless otherwise defined herein, all capitalized terms used
herein shall have the meaning ascribed to such terms in the Agreement) between
URSUS TELECOM CORPORATION, a Florida corporation (the "Buyer"), in
consideration of the mutual covenants, agreements, representations and
warranties contained in the Agreement and for other good and valuable
consideration, do hereby sell to Buyer all of the Seller's right, title and
interest in and to the following (collectively, the "Assets"):
(a) All information regarding the customers, sales representatives
and resellers of Seller's International Re-Origination Business contained on
TeleDesq and TeleScript, as such terms are defined below (the "Customer Base")
and such other information regarding the Customer Base as may be reasonably
required in order for Buyer to continue the International Re-Origination
Business of Seller (as used herein, the terms "TeleDesq" and "TeleScript"
shall refer to the software licensed to Seller under that certain Trilogy
Telemanagement Service Agreement dated June 21, 1999, between Seller and
Trilogy Telemanagement L.L.C.
(b) All rights and obligations of Seller under all contracts or
agreements with the Customer Base (the "International Re-Origination
Contracts") for all periods on and after the Closing Date, subject to the
terms and conditions of the Agreement, on a going forward basis all the
International Re-Origination Contracts and all rights and obligations relating
thereto, in each case to the fullest extent the foregoing are assignable
pursuant to their terms;
(c) Subject to the terms and conditions of the Agreement, all advance
payments, prepayments, prepaid expense, deposits and the like paid to Seller
by the Customer base in connection with the International Re-Origination
Business ("Prepaids") which are held by Seller as of the Closing Date;
(d) Certain specified assets related to the International Re-
Origination Business of the Seller set forth on Exhibit A (the "Exhibit A
Assets") including, subject to the terms and conditions of the Agreement all
rights and obligations of Seller under the Exhibit A Contracts;
(e) All telecommunications and computer software developed solely by
Seller and specific to Seller's International Re-Origination Business and not
used in any other activities of Seller; and
(f) A non-exclusive, perpetual, assignable license to use all
telecommunications and computer software developed solely by Seller and used
both in Seller's International Re-Origination Business and in the other
activities of Seller, but only to the extent such software is required to
conduct the International Re-Origination Business.
Notwithstanding the foregoing, the sale, conveyance, transfer, assignment
and delivery set forth herein does not include the Excluded Assets as provided
in Section 1.2 of the Agreement.
Such sale, transfer, conveyance and delivery is made in full accordance
with and subject to the representations, warranties, covenants, indemnities,
exclusions, limitations and provisions contained in the Agreement.
The Seller does not make any representations or warranties, either
express or implied, regarding the Assets except as expressly set forth in the
Agreement. THE SELLER MAKES NO WARRANTY OF MERCHANTABILITY NOR OF FITNESS FOR
ANY PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS. THE PURCHASER ACCEPTS THE
ASSETS IN "AS-IS" CONDITION.
IN WITNESS WHEREOF, the Seller has signed this Xxxx of Sale on the 1st
day of June, 2000.
JUSTICE TELECOM CORPORATION
By:
-------------------------------
Name:
----------------------------
Title:
---------------------------
[EXHIBIT D]
XXXX OF SALE
JUSTICE TELECOM CORPORATION, a California corporation ("the Seller"),
pursuant to the Asset Purchase Agreement, dated June 1, 2000 (the "Agreement";
unless otherwise defined herein, all capitalized terms used herein shall have
the meaning ascribed to such terms in the Agreement) between URSUS TELECOM
CORPORATION, a Florida corporation (the "Buyer"), in consideration of the
mutual covenants, agreements, representations and warranties contained in the
Agreement and for other good and valuable consideration, do hereby sell to
Buyer all of the Seller's right, title and interest in and to:
Certain specified assets relating to the International Re-
Origination Business of Seller set forth on Exhibit B
(the "Exhibit B Assets"), including, subject to the terms
and conditions of the Agreement, all rights and obligations
of Seller under the Exhibit B Contracts.
Notwithstanding the foregoing, the sale, conveyance, transfer, assignment
and delivery set forth herein does not include the Excluded Assets as provided
in Section 1.2 of the Agreement.
Such sale, transfer, conveyance and delivery is made in full accordance
with and subject to the representations, warranties, covenants, indemnities,
exclusions, limitations and provisions contained in the Agreement.
The Seller does not make any representations or warranties, either express or
implied, regarding the Assets except as expressly set forth in the Agreement.
THE SELLER MAKES NO WARRANTY OF MERCHANTABILITY NOR OF FITNESS FOR ANY
PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS. THE PURCHASER ACCEPTS THE
ASSETS IN "AS-IS" CONDITION.
IN WITNESS WHEREOF, the Seller has signed this Xxxx of Sale on this 1st
day of June, 2000.
JUSTICE TELECOM CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
[EXHIBIT E]
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of June 1, 2000 (the
"Assignment and Assumption Agreement"), by and between URSUS TELECOM
CORPORATION, a Florida corporation (the "Assignee"), and JUSTICE TELECOM
CORPORATION, a California corporation (the "Assignor").
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement dated as of June 1, 2000 (the "Agreement"; unless otherwise defined
herein, all capitalized terms used herein shall have the meaning ascribed to
such terms in the Agreement) pursuant to which Assignor has agreed to assign,
transfer and convey to Assignee, and Assignee has agreed to assume from
Assignor, all right, title and interest of Seller in and to the International
Re-Origination Contracts and the Exhibit A Contracts, all on a going forward
basis, in each case to the fullest extent that each is assignable pursuant to
their terms (as interpreted under applicable law); and
WHEREAS, Assignee wishes to fulfill its agreement to assume the Re-
Origination Contracts and the Exhibit A Contracts on a going forward basis,
commencing on or after the Closing Date, in accordance with the terms of the
Agreement;
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 General. Any capitalized item used but not defined herein will
have the meaning set forth in the Agreement.
ARTICLE II
ASSIGNMENT AND ASSUMPTION BY ASSIGNEE
2.01 Assignment and Assumption. Assignor hereby assigns to Assignee,
and Assignee hereby assumes from Assignor, on a going forward basis all
Seller's right, title and interest in and to each of the International Re-
Origination Contracts and the Exhibit A Contracts, and all rights and
obligations relating thereto, in each case to the fullest extent the foregoing
are assignable pursuant to their terms (as interpreted under applicable law).
Assignee hereby assumes and agrees to pay, perform, defend and discharge in
due course all liabilities and obligations which pertain to or are to be
performed during any period commencing on or after the Closing Date in
connection with the International Re-Origination Contracts and the Exhibit A
Contracts , in accordance with the Agreement. Such sale, transfer, conveyance
and delivery is made in full accordance with and subject to the
representations, warranties, covenants, indemnities, exclusions, limitation
and provisions contained in the Agreement.
2.02 Exclusions. Notwithstanding the foregoing, the Assignor shall
not assign, and the Assignee shall not assume or otherwise be responsible for,
in accordance with the Agreement, any of the Excluded Liabilities or the
Excluded Assets.
ARTICLE III
MISCELLANEOUS
3.01 Binding Effect. This Assignment and Assumption Agreement shall
be binding upon and inure to the benefit of the Assignor and the Assignee and
their respective successors and assignees in accordance with the Agreement.
3.02 Governing Law. This Assignment and Assumption Agreement shall
be governed by and construed in accordance with the laws of California,
without reference to the choice of law provisions thereof.
3.03 Counterparts. This Assignment and Assumption Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have signed this Assignment and
Assumption Agreement on the date first set forth above.
JUSTICE TELECOM CORPORATION
By:
---------------------------------
Name:
------------------------------
Title:
-----------------------------
URSUS TELECOM CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[EXHIBIT F]
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT dated June 1, 2000 (the
"Assignment and Assumption Agreement"), by and between URSUS TELECOM
CORPORATION, a Florida corporation (the "Assignee"), and JUSTICE TELECOM
CORPORATION, a California corporation (the "Assignor").
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement dated June 1, 2000 (the "Agreement"; unless otherwise defined
herein, all capitalized terms used herein shall have the meaning ascribed to
such terms in the Agreement) pursuant to which Assignor has agreed to assign,
transfer and convey to Assignee, and Assignee has agreed to assume from
Assignor, all right, title and interest of Seller in and to the Exhibit B
Contracts, all on a going forward basis, in each case to the fullest extent
that each is assignable pursuant to their terms (as interpreted under
applicable law); and
WHEREAS, Assignee wishes to fulfill its agreement to assume the Exhibit B
Contracts on a going forward basis, commencing on or after the Closing Date,
in accordance with the terms of the Agreement;
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 General. Any capitalized item used but not defined herein will
have the meaning set forth in the Agreement.
ARTICLE II
ASSIGNMENT AND ASSUMPTION BY ASSIGNEE
2.01 Assignment and Assumption. Assignor hereby assigns to Assignee,
and Assignee hereby assumes from Assignor, on a going forward basis all
Seller's right, title and interest in and to each of the Exhibit B Contracts,
and all rights and obligations relating thereto, in each case to the fullest
extent the foregoing are assignable pursuant to their terms (as interpreted
under applicable law). Assignee hereby assumes and agrees to pay, perform,
defend and discharge in due course all liabilities and obligations which
pertain to or are to be performed during any period commencing on or after the
Closing Date in connection with the Exhibit B Contracts in accordance with the
Agreement. Such sale, transfer, conveyance and delivery is made in full
accordance with and subject to the representations, warranties, covenants,
indemnities, exclusions, limitation and provisions contained in the Agreement.
2.02 Exclusions. Notwithstanding the foregoing, the Assignor shall
not assign, and the Assignee shall not assume or otherwise be responsible for,
in accordance with the Agreement, any of the Excluded Liabilities or the
Excluded Assets.
ARTICLE III
MISCELLANEOUS
3.01 Binding Effect. This Assignment and Assumption Agreement shall
be binding upon and inure to the benefit of the Assignor and the Assignee and
their respective successors and assignees in accordance with the Agreement.
3.02 Governing Law. This Assignment and Assumption Agreement shall
be governed by and construed in accordance with the laws of California,
without reference to the choice of law provisions thereof.
3.03 Counterparts. This Assignment and Assumption Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE OF ASSIGNMENT AND ASSUMPTION AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have signed this Assignment and
Assumption Agreement on the date first set forth above.
JUSTICE TELECOM CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
URSUS TELECOM CORPORATION
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
EXHIBIT G
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (the "Agreement") dated as of June 1, 2000
---------
(the "Effective Date") by and between URSUS TELECOM CORPORATION, a Florida
---------------
corporation ("Buyer"), and JUSTICE TELECOM CORPORATION, a California
-----
corporation ("Seller").
------
R E C I T A L S
WHEREAS, Buyer and Seller have entered into that certain Asset Purchase
Agreement dated as of June 1, 2000 (the "Purchase Agreement"), pursuant to
------------------
which (x) Buyer will purchase from Seller certain specified assets and
properties of Seller relating to Seller's International Re-Origination
Business (as defined in the Purchase Agreement), (y) Buyer has obligated
itself to pay the Purchase Price (as defined in the Purchase Agreement) for
such specified assets and properties and (z) Buyer has agreed to assume on a
going forward basis the International Re-Origination Contracts (as defined in
the Purchase Agreement);
WHEREAS, Seller will derive substantial economic benefit from the sale of
the Assets (as defined in the Purchase Agreement) pursuant to the terms and
conditions of the Purchase Agreement;
WHEREAS, Seller recognizes that in order to protect the Assets that Buyer
is acquiring from Seller it is essential that Seller not take any action that
could detract from the Assets and goodwill and the value thereof, and Seller
acknowledges that the obligations it is undertaking in this Agreement are
reasonable in light of Buyer's need for such protection and the benefits
Seller will receive as a result of the sale of the Assets pursuant to the
Purchase Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the obligation of Buyer to consummate the transactions
contemplated by the Purchase Agreement.
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein or the context otherwise
-----------
requires, all capitalized terms shall have the meaning ascribed to such terms
in the Purchase Agreement. The following terms shall have the respective
meanings shown for all purposes of this Agreement:
"Confidential or Proprietary Information" shall (i) mean the Customer Base
----------------------------------------
list, and all information, whether written or oral, generally unavailable to
the public that has been created, discovered or developed by Seller or in
which property rights have been assigned or otherwise conveyed to Seller,
which information has material economic value or potential economic value to
the conduct of the International Re-Origination Business with respect to the
Customer Base; provided, however, "Confidential or Proprietary Information"
---------------------------------------
does not include any information that (a) is or becomes generally available to
the public other than as a result of a disclosure by Seller or (b) is required
to be disclosed by law pursuant to an order or decree of a court of competent
jurisdiction.
"Customer Base" shall mean all customers, sales representatives and
--------------
resellers wherever located, of Seller's International Re-Origination Business.
"International Re-Origination Business" shall mean the business of
---------------------------------------
re-origination of international retail telephone traffic.
------------
"Term" shall mean the period commencing on the Closing Date and
continuing until June 1, 2002; provided, however, that, in the event Buyer
defaults under any of its obligations under the Purchase Agreement, and such
default continues for a period of fifteen (15) days after notice thereof from
Seller, Seller may, at its option, declare the Term to be suspended (for such
period as Seller may select) or terminated, in which event the Term shall be
so suspended or terminated.
2. Non-Compete; Non-Solicitation.
------------------------------
(a) Seller agrees that during the Term, except as set forth in the
Purchase Agreement with respect to assistance to and cooperation with Buyer,
it shall not (i) directly or indirectly for its own account or for the account
of another party, through an affiliate, subsidiary, shareholder or principal,
market, sell, resell or otherwise engage in the International Re-Origination
Business anywhere in the world, or (ii) directly or indirectly disclose to any
person or entity any Confidential or Proprietary Information.
(b) Seller agrees that during the Term, except as set forth in the
Purchase Agreement with respect to assistance to and cooperation with Buyer,
it shall not call upon any person who is, at that time, an employee of Buyer
(or any subsidiary thereof) in a sales representative or managerial capacity
for the purpose or with the intent of enticing such employee away from or out
of the employ of Buyer (or any subsidiary thereof) anywhere in the world.
(c) Nothing herein shall prohibit the Seller from being a passive
owner of not more than 5% of the outstanding stock of any publicly traded
class of securities of an entity engaged in the International Re-Origination
Business, so long as Seller does not otherwise have any participation in the
business of such entity.
(d) Seller agrees that during the Term, except (i) as set forth in
the Purchase Agreement with respect to assistance to and cooperation with
Buyer and (ii) for Operator Services, as such term is defined below, it shall
not directly, for its own account or for the account of another party, through
an affiliate, subsidiary, shareholder or principal, knowingly market, sell,
resell or otherwise provide telecommunications services of any kind (whether
voice, data, video, long distance or local) to any person which is a customer
in the Customer Base except with the consent of Buyer, which consent shall be
withheld only if the granting of such consent would materially interfere with
Buyer's conduct of the International Re-Origination Business . As used herein,
the term "Operator Services" shall mean telecommunication services conducted
by Mission Communications L. L. C. (or any successor-in-interest in which
Seller has an ownership interest) which make use of the assistance of a live
or an automated operator, including, but not limited to, collect, credit card,
third party calling and LEC calling card calls, but shall not include
international re-origination calls which require operator assistance for
completion.
(e) If, at any time during the Term, a court of any jurisdiction
shall hold that the duration, scope, area or other restrictions stated herein
are unreasonable with regard to that jurisdiction under circumstances then
existing, the parties agree that the maximum duration, scope, area or other
restrictions reasonable with regard to that jurisdiction under such
circumstances shall be substituted for the stated duration, scope, area or
other restrictions.
3. Representation and Warranties. Seller hereby represents and warrants
------------------------------
to Buyer that:
(a) Authority. This Agreement has been duly executed and delivered by
---------
Seller to Buyer.
(b) Binding Obligations. This Agreement constitutes the legal, valid
--------------------
and binding obligation of Seller, enforceable against it in accordance with
its terms, except as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
4. Remedies. The parties hereto agree that Buyer would suffer
--------
irreparable harm from a breach by Seller of any of the covenants or agreements
contained herein. Therefore, in the event of the actual or threatened breach
by Seller of any of the provisions of this Agreement, Buyer may, in addition
and supplementary to other rights and remedies existing in its favor, apply to
any court of law or equity of competent jurisdiction for, and obtain, specific
performance and/or injunctive or other equitable relief in order to enforce or
prevent any violation of the provisions hereof.
5. Successors and Assigns. The provisions of this Agreement shall be
------------------------
binding upon and inure to the benefit of the heirs, legal representatives,
executors, successors and assigns of each party hereto; provided, however,
that Seller shall not, directly or indirectly, transfer, assign or delegate
any of its rights or obligations hereunder in whole or in part without the
prior written consent of Buyer, and Buyer shall not, directly or indirectly,
transfer, assign or delegate any of its rights or obligations hereunder, in
whole or in part, without the consent of the Seller, and any such transfer,
delegation or assignment without said consent shall be void, ab initio.
-- ------
6. Modification or Waiver. No amendment, modification, waiver,
-----------------------
termination or cancellation of this Agreement shall be binding or effective
for any purpose unless it is made in a writing signed by the party against
whom enforcement of such amendment, modification, waiver, termination or
cancellation is sought. No course of dealing between or among the parties to
this Agreement shall be deemed to affect or to modify, amend or discharge any
provision or term of this Agreement. A waiver of right or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right or
remedy on any other occasion.
7. Severability. Subject to Section 2(c), if any term or provision of
------------
this Agreement or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
such term or provision in any other jurisdiction, the remaining terms and
provisions of this Agreement or the application of such terms and provisions
to circumstances other than those as to which it is held invalid or
enforceable.
8. Counterparts. This Agreement may be executed simultaneously in two
------------
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.
9. Entire Agreement. This Agreement (together with all documents and
-----------------
instruments referred to herein) constitute the entire agreement and supersede
all other prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof.
10. Notices. All notices and other communications under or in
-------
connection with this Agreement shall be in writing and shall be deemed given
(i) if delivered personally (including by overnight express or messenger),
upon delivery, (ii) if delivered by registered or certified mail (return
receipt requested), upon the earlier of actual delivery or three days after
being mailed, or (iii) if given by facsimile, upon confirmation of
transmission by facsimile, in each case to the parties at the following
addresses or to such other address or facsimile number as shall be specified
in writing by the intended recipient of such notice:
(a) If to the Buyer, addressed to:
Ursus Telecom Corporation
000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
(b) If to Seller:
Justice Telecom Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
11. Construction. The parties understand and acknowledge that they have
------------
each been represented by (or have had the opportunity to be represented by)
counsel in connection with the preparation, execution and delivery of this
Agreement. This Agreement shall not be construed against any party for having
drafted it. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
12. Applicable Law. This Agreement shall be governed by and construed
---------------
and enforced in accordance with the internal laws (and not the law of
conflicts) of the State of California.
13. Consent to Jurisdiction. Each party hereto irrevocably submits to
-------------------------
the exclusive jurisdiction of the courts of the State of California and the
United States District Court for the Central District of California, for the
purpose of any suit, action, proceeding or judgment relating to or arising out
of this Agreement and the transactions contemplated hereby and to the laying
of venue in any such court. Each party hereto irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the day and year first above written.
BUYER:
URSUS TELECOM CORPORATION
By:
---------------------------
Name:
Title:
SELLER:
JUSTICE TELECOM CORPORATION
By:
----------------------------
Name:
Title:
