FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to that certain Asset Purchase Agreement is made as of
December 11, 2002, by and among ESSEX ACQUISITION CORP., a Delaware corporation
("Buyer"), ESSEX COMMUNICATIONS, INC., a New York corporation ("Essex"), and
eLEC COMMUNICATIONS CORP., a New York corporation ("ELEC") (Essex and ELEC are
sometimes hereinafter referred to as "Sellers").
R E C I T A L S
WHEREAS, Buyer and Sellers wish to amend certain terms of the Asset
Purchase Agreement, dated as of September 3, 2002 (the "Asset Purchase
Agreement"), among Buyer, Essex and ELEC; and
WHEREAS, Buyers and Sellers desire to reduce the terms of the amendments to
writing in accordance with Section 10.4 of the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties and agreements contained herein, the parties
agree as follows:
1. Section 2.2(a) of the Disclosure Memorandum is hereby modified and
amended such that Buyer shall not acquire and Sellers shall not sell, transfer
or assign to Buyer either the shares of, or the entity known as, Essex
Telecommunications of Virginia, Inc., and that such asset shall be deemed an
Excluded Asset and included on Section 2.3 of the Disclosure Memorandum.
2. Section 2.2(h) of the Disclosure Memorandum is hereby modified and
amended such that Buyer shall only acquire the state certifications,
governmental permits and authorizations to transact business therein, with
respect to the states of Colorado, New York, Rhode Island and West Virginia and
the United States. State certifications, governmental permits and authorizations
to transact business therein, with respect to the states of Alabama, Arkansas,
Arizona, California, Connecticut, Delaware, Florida, Georgia, Iowa, Idaho,
Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota,
Mississippi, Montana, North Carolina, North Dakota, Nebraska, New Hampshire, New
Jersey, Nevada, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South
Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and Wyoming
shall be deemed Excluded Assets and included on Section 2.3 of the Disclosure
Memorandum.
3. Section 2.2(b) of the Disclosure Memorandum is hereby modified and
amended such that Buyer shall acquire the Interconnect Agreements with respect
to the states of Colorado Connecticut, New Jersey, New York, Massachusetts,
Pennsylvania, Rhode Island, Virginia and West Virginia. Interconnect Agreements
with respect to the states of Alabama, Arkansas, Arizona, California, Delaware,
Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana,
Maryland, Michigan, Minnesota, Mississippi, Montana, North Carolina, North
Dakota, Nebraska, New Hampshire, Nevada, Ohio, Oklahoma, Oregon, South Carolina,
South Dakota, Tennessee, Texas, Utah, Washington, Washington D.C., Wisconsin and
Wyoming shall be deemed Excluded Assets and included on Section 2.3 of the
Disclosure Memorandum.
4. Section 5.10(i)(y) of the Asset Purchase Agreement is hereby modified
and amended to provide that Seller or Essex may hire or retain any current agent
with whom it or they utilized or were affiliated with prior to the Closing Date,
on a non-exclusive basis, without seeking the prior written approval of Buyer
prior to such engagement, provided, however, notwithstanding such permitted
engagement, for the time periods proscribed in Section 5.10(a), Seller and Essex
may not, directly, indirectly or through such agent, solicit, approach or
otherwise contact any customer of the Business acquired by Buyer.
5. The following individuals shall be offered continued employment with
Essex through the earlier of December 20, 2002 or the Closing Date: :
Xxxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxx
Xxxx Xxxxx
6. Section 7.1 of the Asset Purchase Agreement is hereby modified and
amended to delete the Closing Conditions contained in Section 7.1(c), Third
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Party Consents, Section 7.1(d), Shareholder Approval, Section 7.1(e), Agreement
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with Verizon, Section 7.1(l), Customer Lines and Section 7.1(m), No Material
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Adverse Change; provided, however, the Closing Date as contemplated by the Asset
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Purchase Agreement must take place on or before December 31, 2002, unless
extended by the mutual agreement of the parties.
7. Section 7.1(h) of the Asset Purchase Agreement is hereby modified and
amended to provide that the Software Billing Agreement shall be in full force
and effect, and be extended on the same terms and conditions as provided
therein, for a term through and including May 31, 2003. The minimum monthly fee
of $10,000 per month shall apply during the extended term. Buyer may extend the
Software Billing Agreement on a month to month basis on the same terms and
conditions for up to six more months upon 30 days notice prior to the close of
the term thereof. Notwithstanding the foregoing, in order to minimize customer
disruption, the billing system will remain on its current servers until the
termination of the Software Billing Agreement. In connection herewith, Buyer
shall pay $2,500 per month for maintenance of the hardware. Telco shall assist
Buyer with mass data uploads so as to reasonably minimize the amount of manual
data entry required in the transition to the Cost Guard billing system. To the
extent that the mass data uploads require more than five hours of assistance,
Buyer agrees to compensate Sellers on an hourly basis.
8. Section 7.2(d) of the Asset Purchase Agreement is hereby modified and
amended to provide that the Software Billing Agreement shall be in full force
and effect, and be extended on the same terms and conditions as provided
therein, for a term through and including May 31, 2003. The minimum monthly fee
of $10,000 per month shall apply during the extended term. Buyer may extend the
Software Billing Agreement on a month to month basis on the same terms and
conditions for up to six more months upon 30 days notice prior to the close of
the term thereof. Notwithstanding the foregoing, in order to minimize customer
disruption, the billing system will remain on its current servers until the
termination of the Software Billing Agreement. In connection herewith, Buyer
shall pay $2,500 per month for maintenance of the hardware. Telco shall assist
Buyer with mass data uploads so as to reasonably minimize the amount of manual
data entry required in the transition to the Cost Guard billing system. To the
extent that the mass data uploads require more than five hours of assistance,
Buyer agrees to compensate Sellers on an hourly basis.
9. Section 7.1(n) shall be added, entitled Opinion of Counsel, which
provides as follows: Buyer shall have been provided the favorable opinion of
Sellers' counsel, dated the Closing Date, addressed to Buyer, in form and
substance reasonably satisfactory to Buyer and its counsel, which opinion shall
be limited solely to the favorable opinion with respect to the authority of
Sellers to consummate the transaction contemplated hereby.
10. Section 7.1(o) shall be added, entitled Transfer of Post Office Box
and Associated Bank Accounts, which provides as follows: At or promptly
following the Closing Date, Sellers will transfer and assign to Buyer all right,
title and interest in and to that certain post office box known as X.X. Xxx
0000, Xxxxxx, XX 00000-0000 as well as those certain First Union Bank Accounts,
Account Nos. 2000008090997, 2030000170115, 2000008161761 and 2030000980033,
associated therewith. To the extent that any deposit are received at such post
office box or such accounts with respect to the Excluded Assets, Buyer shall
transfer such funds to Seller.
11. Unless indicated otherwise, all capitalized terms shall have the
meaning ascribed to them in the Asset Purchase Agreement.
12. All other terms and conditions of the Asset Purchase Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
the Asset Purchase Agreement to be executed by their respective officers
thereunto duly authorized as of the date first above written.
ESSEX ACQUISITION CORP. ELEC COMMUNICATIONS CORP.
By: ______________________ By: _________________________
Name: ______________________ Name: _________________________
Title: ______________________ Title: _________________________
ESSEX COMMUNICATIONS INC.
By: _________________________
Name: _________________________
Title: _________________________
