WARRANTY XXXX OF SALE AND ASSIGNMENT AND RELATED AGREEMENTS
FROM
Prime Communications of New York, Inc., a New York corporation TO/AND BETWEEN
DigiTEC 2000, Inc., a Nevada corporation
Effective Date: January 16, 1998
1. Transfer
KNOW ALL MEN BY THESE PRESENTS, that Prime Communications of New York,
Inc., a New York Corporation ("Seller"), for the consideration herein, the
receipt and sufficiency of which is hereby acknowledged, has this day sold,
conveyed, transferred and assigned, and by these presents does hereby sell,
convey, transfer and assign to DigiTEC 2000, Inc., a Nevada corporation
("Buyer"), its successors and assigns forever, all of Seller's right, title and
interest in, to and under the assets listed on Exhibit A attached hereto (the
"Assets").
TO HAVE AND TO HOLD, all said Assets hereby sold, conveyed, transferred and
assigned to the Buyer for its own use, benefit and behalf forever.
2. Consideration
The consideration for Seller's execution of this Warranty Xxxx of Sale and
Assignment and Related Agreements and the transfer of Assets hereunder shall
consist of the following:
a. Buyer hereby forever cancels and releases Seller from the obligations
to pay the debt and other amounts due to Buyer from Seller in the aggregate
amount of $203,521 as detailed on Exhibit B.
b. The execution by Buyer, and the delivery to Seller, of the promissory
note attached as Exhibit C in the principal amount of $147,000.
c. The sum of $36,500 paid to Seller as follows: $35,000.00 by check,
subject to collection, payable to Phonetime, Inc. and $1,500 payable to Xxxxxxx,
Kopilow & Weil, as attorneys for Seller.
d. The issuance of certain Stock Options of Buyer as set forth on the
Annexed Stock Option Certificate.
3. Good Title
Seller hereby warrants to the Buyer and to its successors and assigns that there
is hereby transferred to Buyer good title to the Assets, free and clear of all
liens or other encumbrances as of November 26, 1996, and that it will warrant
and defend such title forever against all claims and demands whatsoever but only
to the extent that any claim or defect as to such title existed prior to
November 26, 1996. Seller acknowledges and agrees that Buyer has not assumed any
liabilities of Seller except as otherwise provided herein.
4. Restrictions on Use; Rights of Seller to Continued Use
(a) In consideration of the transfer of the Assets by Seller to Buyer, Seller
covenants that Seller shall not engage in the marketing, promotion and
distribution of telecommunications products known as pre-paid telephone cards to
those customers listed in and comprising the Assets. Except as restricted
herein, Seller shall not otherwise be restricted from using the Assets.
5. Buyer's Representations
Buyer warrants and represents to Seller as follows: (a) it is authorized to do
business in the State of New York; (b) the terms of this Agreement and the
consideration paid hereunder have been duly authorized and approved by the Board
of Directors of the Buyer, and do not conflict with the provisions of the
Buyer's Certificate of Incorporation, its By-Laws or with the laws of the State
of Nevada; (c) the Stock Options aggregating 145,000 Common Shares of the Buyer
represent fewer than five (5%) percent of the issued and outstanding stock of
the Buyer.
6. Mutual Release
In and as consideration of the transfer of the Assets hereunder, Buyer and
Seller, each on behalf of itself and its agents, employees, officers, directors,
shareholders, affiliates, representatives, attorneys, predecessors in interest
and successors and assigns ("Representatives") do fully and forever release and
discharge the other and its Representatives from all actions, claims, demands,
losses, expenses, obligations and liabilities related to any conduct or activity
occurring on or before the effective date of this Warranty Xxxx of Sale and
Assignment and Related Agreements including without limitation any and all (a)
contract or tort claims; (b) any and all claims for punitive, exemplary or
statutory damages; and (c) any and all claims for attorneys' fees. Buyer and
Seller each represent to the other that it has not assigned any such claims or
authorized any other person, group or entity to assert such claims on its
behalf. The above mutual release shall not affect any of the parties'
obligations under this Warranty Xxxx of Sale and Assignment and Related
Agreements.
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7. Indemnity
(a) Seller agrees to indemnify Buyer and its Representatives against and hold
them harmless from any and all claims, losses or damages, including reasonable
attorneys' fees, arising out of Seller's failure to comply with any applicable
Bulk Transfer Laws.
(b) The Buyer agrees to and shall indemnify and hold the Seller, its successors,
assigns, shareholders, officers and directors, harmless against any and all
debts, liabilities, choses in action, or claims of any nature, absolute or
contingent, including but not limited to reasonable attorneys' fees, arising out
of or relating to a breach of the payment obligations set forth in Section 2(c)
and of the representations set forth in Sections 7(b) and 7(c) of this
Agreement. Buyer acknowledges that it has been in possession of the Assets of
the Seller since November 26, 1996 (hereinafter the "commencement date") and
operated and managed the business of the Seller from November 26, 1996 until
March 31, 1997. Buyer represents and warrants that (a) from the commencement
date through January 26, 1998, it has not caused Seller to enter into any
arrangement or agreement, either oral or written, other than an account in
Seller's name at Chase Manhattan Bank NA and an agreement with ADP for Seller's
payroll; (b) it has not knowingly caused Seller to violate any laws, rules and
regulations of any local, city, state or federal governing authority in
connection with the operation of its business; (c) it has filed all payroll tax
returns required to be filed and has paid and turned over all taxes shown by
such returns to be due and payable; and (d) Seller has not received any notice
from any third party or governmental entity, which notice alleges a debt,
default, claim or liability of the Seller, except an income execution notice
issued by the New York State Department of Taxation and Finance upon monies owed
by Seller to Seller's President.
(c) The Buyer hereby agrees to deliver to Xxxxx Xxxxxxx, accountant to Seller,
as soon as practicable, all documents, records and information, including but
not limited to bank statements, ledgers, and sales records reasonably required
by Seller or its accountant, for the preparation and filing of such local, state
and federal tax forms and returns as may be required to be filed by or on behalf
of Seller for the three months ended March 31, 1997 and hereby further agrees to
pay all costs incurred by Seller in preparation and filing of said forms
together with the taxes, penalties and interest due thereon.
8. Further Assurances
For the consideration aforesaid, the Seller, for itself, its successors and
assigns, has covenanted and by this Warranty Xxxx of Sale and Assignment and
Related Agreements does covenant with the Buyer, its successors and assigns,
that the Seller, its successors and assigns, will do, execute and deliver, or
will cause to be done, executed and delivered, all such further acts, documents
or instruments of transfer, conveyance or assignment as shall be necessary and
appropriate to vest in or confirm to the Buyer, its successors and assigns, all
and singular, the Assets hereby assigned and transferred which the Buyer, its
successors and assigns, reasonably require.
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9. Shareholder Guarantee
Seller represents that the shareholders noted below represent the complete list
of shareholders of the Seller as of the date hereof. Each such shareholder, by
signing below, jointly and severally guarantees the performance of Seller's
obligations hereunder and agrees to the Mutual Release set forth herein.
10. Governing Law
This Warranty Xxxx of Sale and Assignment and Related Agreements shall be
governed and construed in accordance with the internal, substantive laws of the
State of New York without giving effect to the conflict of law rules thereof and
any action relating thereto shall be brought exclusively in the state or federal
courts of the State of New York.
11. Injunctive Relief
The parties understand and acknowledge that violation of their respective
covenants and agreements herein may cause the other irreparable harm and damage,
which may not be recovered at law, and each agrees that the other's remedies for
a breach hereof may be in equity by way of injunctive relief, as well as for
damages and any other relief available to the non-breaching party, whether in
law or in equity.
12. Authority
Each party represents and warrants that it has the requisite corporate power and
authority to enter into this Warranty Xxxx of Sale and Assignment and Related
Agreements and to undertake its obligations hereunder, and that this Warranty
Xxxx of Sale and Assignment and Related Agreements has been executed and
delivered by a duly authorized officer, and is the binding obligation of such
party enforceable in accordance with its terms.
13. Entire Agreement
This Warranty Xxxx of Sale and Assignment and Related Agreements, which includes
and incorporates by reference all appendices and supplements hereto, constitutes
the entire understanding and contract between the parties and supersedes any and
all prior and contemporaneous, oral or written representations, communications,
understandings and agreements between the parties with respect to the subject
matter hereof, all of which representations, communications, understandings and
agreements are hereby canceled to the extent they are not specifically merged
herein. The parties acknowledge and agree that neither of the parties is
entering into this Warranty Xxxx of Sale and Assignment and Related Agreements
on the basis of any representations or promises not expressly contained herein.
This Warranty Xxxx of Sale and Assignment and Related Agreements may not be
amended, altered or modified except by an instrument in writing duly executed by
both parties.
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14. Severability
If any part, term or provision of this Warranty Xxxx of Sale and Assignment and
Related Agreements be held illegal, invalid or unenforceable, such part, term or
provision shall be deemed severable and shall not affect the other provisions
hereof, which other provisions shall remain in full force and effect. To the
extent that any part, term or provision of this Warranty Xxxx of Sale and
Assignment and Related Agreements is held to be illegal, invalid or
unenforceable because it is deemed to be overbroad, that part, term or provision
shall not be void but rather shall be limited only to the extent required by
applicable law and enforced as so limited.
15. Survival of Representations
All representations and warranties and agreements made herein shall survive the
delivery of this Xxxx of Sale.
16. Notice
All communications and notices hereunder shall be in writing; and shall be
deemed to have been duly given if delivered personally, or when mailed, if sent
by certified mail, return receipt requested, and by facsimile transmission, if
to Buyer at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or if to Seller at:
c/o Rockaway Xxxxxxx Cash Checking, 0000-00 Xxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxx
Xxxx 00000, or at such other place as the party may have designated to the other
party upon written notice.
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IN WITNESS WHEREOF, this Warranty Xxxx of Sale and Assignment and Related
Agreements has been duly executed on behalf of the Seller by its President and
attested by its Secretary effective date the 16th day of January 1998.
PRIME COMMUNICATIONS OF
NEW YORK, INC.
Attest: By: /s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx, President
/s/ Xxxxx Land
--------------------------
Xxxxx Land, Secretary
IN WITNESS WHEREOF, this Warranty Xxxx of Sale and Assignment and Related
Agreements has been duly executed on behalf of the Buyer by its President and
attested by its Secretary effective the 16th day of January, 1998.
DigiTEC 2000, Inc.
Attest: By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Xxxxx Xxxxxxxx, CEO
/s/ Xxxxx Xxxx
--------------------------
Xxxxx Xxxx, Secretary
Each of the signatories below, together constituting all of the shareholders of
Prime Communications of New York, Inc., a New York corporation, agrees to
jointly and severally guarantee the obligations of Prime Communications of New
York, Inc. under this Warranty Xxxx of Sale and Assignment and Related
Agreements Effective Date January 16, 1998.
/s/ Xxxxx Xxxxxxx
--------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Land
--------------------------
Xxxxx Land
--------------------------
Xxxxxx Xxxxxxxx
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--------------------------
Xxxxxxx Xxxxx
-------------------------- -----------------------------
Xxx Xxxxx Xxxx Xxxxxxx
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