EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
PTEK ACQUISITION CORPORATION,
TELET COMMUNICATIONS LLC
AND
THE MEMBERS OF TELET COMMUNICATIONS LLC
DATED AS OF SEPTEMBER 18, 1996
TABLE OF CONTENTS
Page
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PARTIES............................................................ 1
PREAMBLE........................................................... 1
ARTICLE 1 - PURCHASE AND SALE...................................... 1
1.1 Sale and Purchase of TeleT Assets.......................... 1
1.2 Consideration; Method of Payment; Distribution............. 1
1.3 Liabilities Assumed........................................ 2
1.4 Time and Place of Closing.................................. 2
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF TELET AND THE
MEMBERS................................................ 2
2.1 Organization, Standing, and Power.......................... 2
2.2 Authority; No Breach By Agreement.......................... 3
2.3 Interests.................................................. 3
2.4 TeleT Subsidiaries......................................... 3
2.5 TeleT Financial Statements................................. 4
2.6 Absence of Undisclosed Liabilities......................... 4
2.7 Absence of Certain Changes or Events....................... 4
2.8 Tax Matters................................................ 4
2.9 Assets..................................................... 5
2.10 Intellectual Property...................................... 6
2.11 Software................................................... 7
2.12 Environmental Matters...................................... 7
2.13 Compliance with Laws....................................... 8
2.14 Labor Relations............................................ 8
2.15 Employee Benefit Plans..................................... 8
2.16 Material Contracts......................................... 10
2.17 Legal Proceedings.......................................... 10
2.18 Reports.................................................... 11
2.19 Tax and Regulatory Matters................................. 11
2.21 Investment Representation.................................. 11
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF PREMIERE............. 11
3.1 Organization, Standing, and Power.......................... 11
3.2 Authority; No Breach By Agreement.......................... 12
3.3 Capital Stock.............................................. 12
3.4 SEC Filings; Financial Statements.......................... 13
3.5 Absence of Undisclosed Liabilities......................... 13
3.6 Absence of Certain Changes or Events....................... 13
ARTICLE 4 - CONDUCT OF BUSINESS PENDING CONSUMMATION............... 14
4.1 Affirmative Covenants of TeleT............................. 14
4.2 Negative Covenants of TeleT................................ 14
4.3 Covenants of Premiere...................................... 15
ARTICLE 5 - ADDITIONAL AGREEMENTS.................................. 16
5.1 Exchange Listing........................................... 16
5.2 Investigation and Confidentiality.......................... 16
5.3 Press Releases............................................. 16
5.4 Certain Actions............................................ 17
5.5 Change of Name............................................. 17
5.6 Transferred Employees...................................... 17
5.7 Noncompetition............................................. 17
5.8 Trade Secrets.............................................. 18
5.9 Allocation of Purchase Price and Reporting................. 18
5.10 Sales Tax.................................................. 18
ARTICLE 6 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...... 18
6.1 Conditions to Obligations of Each Party.................... 18
6.2 Conditions to Obligations of Premiere...................... 19
6.3 Conditions to Obligations of TeleT and the Members......... 21
ARTICLE 7 - INDEMNIFICATION........................................ 22
7.1 Agreement of Indemnitors to Indemnify...................... 22
7.2 Limitations on Indemnification............................. 23
7.3 Procedures for Indemnification............................. 24
7.4 Third Party Claims......................................... 25
7.5 Other Rights and Remedies Not Affected..................... 26
7.6 Tax Effect and Insurance................................... 27
7.7 Escrow; Right of Setoff Sole Remedy........................ 27
7.8 Subrogation................................................ 27
7.9 Appointment of Indemnitor Representative................... 28
7.10 Arbitration................................................ 28
7.11 Intellectual Property Escrow............................... 28
ARTICLE 8 - TERMINATION............................................ 29
8.1 Termination................................................ 29
8.2 Effect of Termination...................................... 29
ARTICLE 9 - MISCELLANEOUS.......................................... 30
9.1 Definitions................................................ 30
9.2 Expenses................................................... 39
9.3 Brokers and Finders........................................ 39
9.4 Entire Agreement........................................... 39
9.5 Amendments................................................. 40
9.6 Waivers.................................................... 40
9.7 Assignment................................................. 40
9.8 Notices.................................................... 40
9.9 Governing Law.............................................. 41
9.10 Counterparts; Facsimile.................................... 41
9.11 Captions; Articles and Sections............................ 42
9.12 Interpretations............................................ 42
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9.13 Enforcement of Agreement................................... 42
9.14 Severability............................................... 42
SIGNATURES......................................................... 43
EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
SCHEDULES
Schedule 1.2.1
Schedule 5.6
Schedule 6.3(h)
Schedule 9.1(a)
Schedule 9.1(b)
Schedule 9.1(c)
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of September 18, 1996, by and among PREMIERE TECHNOLOGIES, INC.
("Premiere"), a Georgia corporation; PTEK ACQUISITION CORPORATION ("Sub"), a
Georgia corporation; TELET COMMUNICATIONS LLC ("TeleT"), a Delaware limited
liability company; and the Members of TeleT identified in Schedule I hereto
(each a "Member" and collectively the "Members").
PREAMBLE
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The Members and the respective Boards of Directors of TeleT and
Premiere are of the opinion that the transactions described herein are in the
best interests of the parties to this Agreement and their respective
stockholders and members. This Agreement provides for the acquisition of
substantially all the assets and business operations of TeleT (the "Business")
and the assumption of certain liabilities of TeleT by Premiere. The
transactions described in this Agreement are subject to the satisfaction of
certain other conditions described in this Agreement.
Certain terms used in this Agreement are defined in Section 9.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
PURCHASE AND SALE
-----------------
1.1. Sale and Purchase of TeleT Assets. Subject to the terms and
---------------------------------
conditions of this Agreement and in reliance upon the representations,
warranties and covenants contained herein, on the Closing Date TeleT shall sell,
grant, convey, assign, transfer and deliver to Sub, and Sub shall purchase from
TeleT, the TeleT Assets, free and clear of all Liens.
1.2 Consideration; Method of Payment; Distribution. In consideration
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for the TeleT Assets, on the Closing Date Sub shall:
(a) Deliver to TeleT Two Million Eight Hundred Seventy Thousand
Dollars ($2,870,000) in cash by wire transfer to such account(s) as TeleT shall
designate;
(b) Deliver to TeleT a certificate for 423,187 shares of Premiere
Common Stock; and
(c) Deliver to the Escrow Agent a certificate for 37,500 shares of
Premiere Common Stock with respect to the CMG Escrow Account and a certificate
for 37,500 shares of
Premiere Common Stock with respect to the Other Indemnitors' Escrow Account
(collectively, the "Escrowed Shares") to be held by the Escrow Agent under the
Escrow Agreement.
On the Closing Date, the cash consideration delivered pursuant to clause (a)
above and the shares of Premiere Common Stock delivered pursuant to clause (b)
above shall be distributed by TeleT as set forth on Schedule 1.2.1 hereto.
1.3 Liabilities Assumed. In connection with the purchase of the TeleT
-------------------
Assets, on the Closing Date, Sub will assume, from and after the Closing Date,
the Assumed Liabilities. Except for the Assumed Liabilities which Sub expressly
assumes on the Closing Date:
(a) neither Sub nor Premiere will assume, or be deemed to have
assumed, or otherwise be responsible in any respect for, any Liabilities of
TeleT of any kind; and
(b) TeleT shall pay and satisfy all of its Liabilities, whether now
existing or hereafter arising.
1.4 Time and Place of Closing. The The closing of the transactions
-------------------------
contemplated hereby (the "Closing") will take place at 10:00 A.M. Eastern Time
on September 18, 1996 or at such other time as the Parties may mutually agree.
The Closing shall be held at the offices of Xxxxxx & Bird, 0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx or such other location as may be mutually agreed upon
by the Parties.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF TELET AND THE MEMBERS
-------------------------------------------------------
TeleT and the Members, jointly and severally, hereby represent and
warrant to Premiere as of the date of the execution of this Agreement and as of
the Closing Date as follows:
2.1 Organization, Standing, and Power. TeleT is a limited liability
---------------------------------
company duly organized, validly existing, and in good standing under the Laws of
the State of Delaware, and has the power and authority to carry on the Business
as now conducted and to own, lease and operate the TeleT Assets. Connect is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Maryland, and has the power and authority to carry on its
business as then conducted and to own, lease and operate its Assets. Each of
TeleT and Connect is duly qualified or licensed to transact business in good
standing in the States of the United States and foreign jurisdictions where the
character of its respective Assets or the nature or conduct of its respective
Business requires it to be so qualified or licensed. The minute book, Articles
of Incorporation and Bylaws of Connect, the TeleT Certificate of Formation, the
TeleT LLC Agreement and other organizational and governing documents for TeleT
and Connect have been made available to Premiere for its review and are true and
complete in all material respects as in effect as of the date of this Agreement
and accurately reflect in all material respects all amendments thereto and all
proceedings of the Board of Directors and Members thereof.
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2.2 Authority; No Breach By Agreement.
---------------------------------
(a) Each of TeleT, CMG and Connect has the power and authority, and
each of the other Members has the capacity and authority, necessary to execute,
deliver, and perform its obligations under this Agreement and the Related
Agreements to which it is a party and to consummate the transactions
contemplated hereby. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated herein have been duly and
validly authorized by all necessary action in respect thereof on the part of
TeleT, CMG and the other Members.
(b) Neither the execution and delivery of this Agreement and the
Related Agreements by TeleT and the Members, nor the consummation by TeleT of
the transactions contemplated hereby, nor compliance by TeleT with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of TeleT's Certificate of Formation and TeleT LLC Agreement, or (ii) constitute
or result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any of the TeleT Assets under, any Contract or
Permit of TeleT, or, (iii) subject to receipt of the requisite Consents referred
to in Section 6.1(b), violate any Law or Order applicable to TeleT or any of
the TeleT Assets.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by TeleT of the other transactions
contemplated in this Agreement.
2.3 Interests.
---------
(a) The authorized capital interests of TeleT consists of (i) 800,000
Common Membership Units, of which 121,622 are issued and outstanding as of the
date of this Agreement, (ii) 204,723 Series A Preferred Membership Units,
204,723 of which are issued and outstanding as of the date hereof; and (iii)
150,000 Series B Preferred Membership Units, none of which are issued and
outstanding as of the date hereof. All of the issued and outstanding Interests
of TeleT are duly and validly issued and outstanding and are fully paid and
nonassessable under the DLLCA None of the outstanding Interests of TeleT have
been issued in violation of any preemptive rights of the current or past Members
of TeleT or any Securities Laws.
(b) Except as set forth in Section 2.3(a), or as disclosed in Section
2.3 of the TeleT Disclosure Memorandum, there are no Membership Interests or
other equity securities of TeleT outstanding and no outstanding Rights relating
to Membership Interest of TeleT.
(c) Section 2.3 of the TeleT Disclosure Memorandum sets forth a true
and correct list of each Person who holds TeleT Interests, the number of units
and class of TeleT Interests so held, and the address of such holder.
2.4 TeleT Subsidiaries. TeleT has no Subsidiaries or any investment
------------------
in or advance to any other Person.
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2.5 TeleT Financial Statements. Except as set forth in Section 2.5 of
--------------------------
the TeleT Disclosure Memorandum, each of the TeleT Financial Statements
(including, in each case, any related notes) was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements), and fairly
presented in all material respects the financial position of TeleT as at the
respective dates and the results of operations for the periods indicated, except
that the unaudited interim financial statements were or are subject to normal
and recurring year-end adjustments which were not or are not expected to be
material in amount or effect.
2.6 Absence of Undisclosed Liabilities. TeleT has no Liabilities,
----------------------------------
except Liabilities which are accrued or reserved against in the balance sheets
of TeleT as of August 31, 1996, included in the TeleT Financial Statements
delivered prior to the date of this Agreement or reflected in the notes thereto.
TeleT has not incurred or paid any Liability since August 31, 1996, except for
such Liabilities incurred or paid (i) in the ordinary course of business
consistent with past business practice, or (ii) in connection with the
transactions contemplated by this Agreement. Except as disclosed in Section 2.6
of the TeleT Disclosure Memorandum, TeleT is not directly or indirectly liable,
by guarantee, indemnity, or otherwise, upon or with respect to, or obligated, by
discount or repurchase agreement or in any other way, to provide funds in
respect to, or obligated to guarantee or assume any Liability.
2.7 Absence of Certain Changes or Events. Since August 31, 1996,
------------------------------------
except as disclosed in the TeleT Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 2.7 of the TeleT Disclosure
Memorandum, (i) there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on the TeleT Assets or the Business, and (ii) TeleT has
not taken any action, or failed to take any action, which action or failure, if
taken after the date of this Agreement, would represent or result in a material
breach or violation of any of the covenants and agreements of TeleT provided in
Article 4.
2.8 Tax Matters.
-----------
(a) All Tax Returns required to be filed by or on behalf of any of the
TeleT Companies have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or before
December 31, 1995, and on or before the date of the most recent fiscal year end
immediately preceding the Closing, and all Tax Returns filed are complete and
accurate. All Taxes shown on filed Tax Returns have been paid. As of the date
of this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes. All Taxes and other Liabilities due with
respect to completed and settled examinations or concluded Litigation have been
paid. There are no Liens with respect to Taxes upon any of the Assets of the
TeleT Companies.
(b) None of the TeleT Companies has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due
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(excluding such statutes that relate to years currently under examination by the
Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any Taxes due or to become due for any of the
TeleT Companies for the period or periods through and including the date of the
respective TeleT Financial Statements that has been made and is reflected on
such TeleT Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of the TeleT Companies, if any, have been
provided for in accordance with GAAP.
(e) None of the TeleT Companies is a party to any Tax allocation or
sharing agreement and none of the TeleT Companies has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was TeleT) has any Liability for Taxes of any
Person (other than TeleT and its Subsidiaries) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign Law) as a
transferee or successor or by Connect or otherwise.
(f) Each of the TeleT Companies is in compliance with, and its records
contain all information and documents (including properly completed IRS Forms W-
9) necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup withholding
under Section 3406 of the Internal Revenue Code.
(g) None of the TeleT Companies have made any payments, is obligated
to make any payments, or is a party to any Contract that could obligate it to
make any payments that would be disallowed as a deduction under Section 280G or
162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as defined in Internal
Revenue Code Section 382(g), of the TeleT Companies that occurred during or
after any Taxable Period in which the TeleT Companies incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1995.
(i) No TeleT Company has or has had in any foreign country a permanent
establishment, as defined in any applicable tax treaty or convention between the
United States and such foreign country.
2.9 Assets
------
(a) Except as disclosed in Section 2.9 of the TeleT Disclosure
Memorandum or as disclosed or reserved against in the TeleT Financial
Statements, TeleT has good and marketable title, free and clear of all Liens, to
all of the TeleT Assets. All tangible properties included in the TeleT Assets
are in good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with TeleT's past practices.
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(b) The accounts receivable of TeleT as set forth on the most recent
balance sheet included in the TeleT Financial Statements delivered prior to the
date of this Agreement or arising since the date thereof are valid and genuine;
have arisen solely out of bona fide sales and deliveries of goods, performance
of services and other business transactions in the ordinary course of business
consistent with past practice; are not subject to valid defenses, set-offs or
counterclaims; and, to TeleT's knowledge, are collectible within 90 days after
billing at the full recorded amount thereof less, in the case of accounts
receivable appearing on the most recent balance sheet included in the TeleT
Financial Statements delivered prior to the date of this Agreement, the recorded
allowance for collection losses on such balance sheet.
(c) All TeleT Assets which are material to the Business on a
consolidated basis, held under leases or subleases by TeleT, are held under
valid Contracts enforceable in accordance with their respective terms, and each
such Contract is in full force and effect.
(d) TeleT currently maintains insurance similar in amounts, scope, and
coverage to that maintained by other peer organizations. TeleT has received
notice from any insurance carrier that (i) any policy of insurance will be
canceled or that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. There are presently no claims pending under such policies of
insurance and no notices of claims in excess of such amounts have been given by
TeleT under such policies.
(e) The TeleT Assets include all Assets required to operate the
Business as presently conducted.
2.10 Intellectual Property. TeleT owns or has a license to use all
---------------------
of the Intellectual Property used by TeleT in the course of its business. TeleT
is the owner of or has a license to any Intellectual Property sold or licensed
to a third party by TeleT in connection with the Business, and TeleT has the
right to convey by sale or license any Intellectual Property so conveyed to Sub
free and clear of any Lien. TeleT is not in Default under any of its
Intellectual Property licenses. Each Intellectual Property license (other than
"shrink wrap" licenses of commercially available software) is described in
Section 2.10 of the TeleT Disclosure Memorandum. No proceedings have been
instituted, or are pending or to the Knowledge of TeleT threatened, which
challenge the rights of any TeleT Company with respect to Intellectual Property
used, sold or licensed by TeleT in the course of its business, nor has any
person claimed or alleged any rights to such Intellectual Property. The conduct
of the business of TeleT does not infringe any Intellectual Property of any
other Person. Except as disclosed in Section 2.10 of the TeleT Disclosure
Memorandum, TeleT is not obligated to pay any recurring royalties to any Person
with respect to any such Intellectual Property. Except as disclosed in Section
2.10 of the TeleT Disclosure Memorandum, every officer, director, or employee of
TeleT is a party to a Contract which requires such officer, director or employee
to assign any interest in any Intellectual Property with respect to the Business
to TeleT and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of a TeleT Company, and no such
officer, director or employee is party to any Contract with any Person other
than TeleT which requires such officer, director or employee to assign any
interest in any Intellectual Property with respect to the Business to any Person
other than TeleT or to keep confidential any trade secrets, proprietary data,
customer information, or other business information of any Person other than
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TeleT. No officer, director or employee of TeleT is party to any Contract which
restricts or prohibits such officer, director or employee from engaging in
activities competitive with any Person. The Intellectual Property does not
include any inventions of the employees made prior to the time such employees
became employees of TeleT nor any intellectual property of any previous employer
of such employee.
2.11 Software. The computer software of TeleT included in the
--------
Intellectual Property (the "Software") performs in accordance with the
documentation and other written material used in connection with the Software
and, is free of defects in programming and operation to the extent the Software
is used in commerce, is in machine-readable form, contains all current revisions
of such Software, and includes all computer programs, materials, tapes, know-
how, object and source codes, other written materials, know-how and processes
related to the Software. TeleT has delivered to Premiere complete and correct
copies of all user and technical documentation related to the Software. Neither
TeleT nor, to the Knowledge of TeleT, any employee or agent thereof has
developed or assisted in the enhancement of the Software, except for
enhancements included in the Software to be delivered to Sub pursuant hereto, or
the development of any program or product based on the Software or any part
thereof except for any program or product to be delivered to Sub pursuant
hereto. TeleT has kept secret and has not disclosed the source code for the
Software to any person or entity other than certain employees of TeleT who are
subject to the terms of a binding confidentiality agreement with respect
thereto.
2.12 Environmental Matters.
---------------------
(a) TeleT and its Operating Properties are, and have been, in
compliance with all Environmental Laws.
(b) There is no Litigation pending or, to the Knowledge of TeleT,
threatened before any court, governmental agency, or authority or other forum in
which any TeleT Company or any of its Operating Properties or Participation
Facilities (or TeleT in respect of such Operating Property or Participation
Facility) has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by any TeleT Company or any of its Operating
Properties or Participation Facilities.
(c) During the period of (i) any TeleT Company's ownership or
operation of any of their respective current properties, (ii) any TeleT
Company's participation in the management of any Participation Facility, or
(iii) any TeleT Company's holding of a security interest in a Operating
Property, there have been no releases, discharges, spillages, or disposals of
Hazardous Material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties. Prior to the period of (i) any TeleT Company's
ownership or operation of any of their respective current properties, (ii) any
TeleT Company's participation in the management of any Participation Facility,
or (iii) any TeleT Company's holding of a security interest in a Operating
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Property, to the Knowledge of TeleT, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property, Participation Facility or Operating Property.
2.13 Compliance with Laws. TeleT has in effect all Permits necessary
--------------------
for it to own, lease, or operate the TeleT Assets and to carry on the Business
as now conducted, and there has occurred no Default under any such Permit.
TeleT:
(a) is not in Default under any of the provisions of its Certificate
of Formation or TeleT LLC Agreement (or other governing instruments);
(b) is not in Default under any Laws, Orders, or Permits applicable to
its business or employees conducting the Business; and
(c) has not received any notification or communication from any agency
or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that TeleT is not in compliance
with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, (ii) threatening to revoke any Permits, or
(iii) requiring TeleT enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking.
Copies of all material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to
Premiere.
2.14 Labor Relations. TeleT is not the subject of any Litigation
---------------
asserting that it or any other TeleT Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state law) or seeking to compel it or any other TeleT Company to bargain with
any labor organization as to wages or conditions of employment, nor is TeleT a
party to any collective bargaining agreement, nor is there any strike or other
labor dispute involving TeleT Company, pending or, to the Knowledge of TeleT,
threatened, nor is there any activity involving any of TeleT's employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
2.15 Employee Benefit Plans.
----------------------
(a) TeleT has disclosed in Section 2.15 of the TeleT Disclosure
Memorandum, and has delivered or made available to Premiere prior to the
execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including "employee benefit plans" as that term
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is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in whole or in part by, or contributed to by TeleT or any ERISA Affiliate
thereof for the benefit of employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "TeleT Benefit
Plans"). Any of the TeleT Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "TeleT ERISA Plan." Each TeleT ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as a "TeleT Pension Plan." No TeleT Pension Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All TeleT Benefit Plans are in compliance with the applicable terms
of ERISA, the Internal Revenue Code, and any other applicable Laws. Each TeleT
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and TeleT is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. TeleT has not
engaged in a transaction with respect to any TeleT Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject TeleT to a Tax imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA.
(c) No TeleT Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value of
the assets of any such plan exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA. Since the date of the most
recent actuarial valuation, there has been (i) no material change in the
financial position of any TeleT Pension Plan, (ii) no change in the actuarial
assumptions with respect to any TeleT Pension Plan, and (iii) no increase in
benefits under any TeleT Pension Plan as a result of plan amendments or changes
in applicable Law. Neither any TeleT Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by TeleT, or the single-employer plan of any entity which is
considered one employer with TeleT under Section 4001 of ERISA or Section 414 of
the Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an
"ERISA Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA. TeleT has not
provided, nor is required to provide, security to a TeleT Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Internal Revenue Code.
(d) Except as disclosed in Section 2.15 of the TeleT Disclosure
Memorandum, TeleT has no Liability for retiree health and life benefits under
any of the TeleT Benefit Plans and there are no restrictions on the rights of
TeleT to amend or terminate any such retiree health or benefit Plan without
incurring any Liability thereunder.
(e) Except as disclosed in Section 2.15 of the TeleT Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of TeleT under any TeleT
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under
-9-
any TeleT Benefit Plan, or (iii) result in any acceleration of the time of
payment or vesting of any such benefit.
(f) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of TeleT and their respective beneficiaries, other than entitlements
accrued pursuant to funded retirement plans subject to the provisions of Section
412 of the Internal Revenue Code or Section 302 of ERISA, have been fully
reflected on the TeleT Financial Statements to the extent required by and in
accordance with GAAP.
2.16 Material Contracts. Except as disclosed in Section 2.16 of the
------------------
TeleT Disclosure Memorandum or otherwise reflected in the TeleT Financial
Statements, neither TeleT nor any of the TeleT Assets, the Business, or
operations, is a party to, or is bound by, or receives benefits under, (i) any
employment, severance, termination, consulting, or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of $5,000,
(ii) any Contract relating to the borrowing of money by TeleT or the guarantee
by TeleT of any such obligation (other than Contracts evidencing trade payables
and Contracts relating to borrowings or guarantees made in the ordinary course
of business), (iii) any Contract which prohibits or restricts TeleT from
engaging in any business activities in any geographic area, line of business or
otherwise in competition with any other Person, (iv) any Contract between or
among TeleT Companies, (v) any Contract involving Intellectual Property (other
than Contracts entered into in the ordinary course with customers and "shrink-
wrap" software licenses), (vi) any Contract relating to the provision of data
processing, network communication, or other technical services to or by TeleT,
and (vii) any Contract relating to the purchase or sale of any goods or services
(other than Contracts entered into in the ordinary course of business and
involving payments under any individual Contract not in excess of $5,000),
(together with all Contracts referred to in Sections 2.10 and 2.15(a), the
"TeleT Contracts"). With respect to each TeleT Contract and except as disclosed
in Section 2.16 of the TeleT Disclosure Memorandum: (i) the Contract is in full
force and effect; (ii) TeleT is not in Default thereunder; (iii) TeleT has not
repudiated or waived any material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of TeleT, in Default in
any respect or has repudiated or waived any material provision thereunder. All
of the indebtedness of TeleT for money borrowed is prepayable at any time by
TeleT without penalty or premium.
2.17 Legal Proceedings. There is no Litigation instituted or pending,
-----------------
or, to the Knowledge of TeleT, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome) against TeleT, or against any director, employee or
employee benefit plan of TeleT, or against any Asset, interest, or right of any
of them, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against TeleT. Section 2.17
of the TeleT Disclosure Memorandum contains a summary of all Litigation as of
the date of this Agreement to which TeleT is a party and which names TeleT as a
defendant or cross-defendant or for which TeleT has any potential Liability.
-10-
2.18 Reports. Since the date of organization of TeleT, TeleT has timely
-------
filed all reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with Regulatory
Authorities. As of their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules thereto, complied in
all material respects with all applicable Laws. As of its respective date, each
such report and document did not, in all material respects, 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 light of the
circumstances under which they were made, not misleading.
2.19 Tax and Regulatory Matters. Neither TeleT nor any Member or any
---------------------------
Affiliate thereof has taken or agreed to take any action or has any Knowledge of
any fact or circumstance that is reasonably likely to materially impede or delay
receipt of any Consents of Regulatory Authorities referred to in Section 6.1(b)
or result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section.
2.20 Investment Representation. TeleT understands that the shares of
-------------------------
Premiere Common Stock to be issued to TeleT under this Agreement have not been
registered by Premiere under the Securities Laws and, therefore, the shares
cannot be sold or otherwise transferred unless either they are registered under
the Securities Laws or an exemption from such registration is available TeleT
is acquiring such shares of Premiere Common Stock for investment and not with
the intent to distribute such shares, except in compliance with the Securities
Laws. TeleT understands that certificates evidencing such shares will contain a
customary restrictive legend relating to the foregoing understanding and stop
transfer instructions will be filed with Premiere's transfer agent to ensure
compliance with the Securities Laws.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere and Sub hereby represent and warrant to TeleT and the Members as
follows:
3.1 Organization, Standing, and Power. Each of Premiere and Sub is a
---------------------------------
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Georgia, and has the corporate power and authority to carry
on its business as now conducted and to own, lease and operate its material
Assets. Each of Premiere and Sub is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Premiere.
-11-
3.2 Authority; No Breach By Agreement.
---------------------------------
(a) Each of Premiere and Sub has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and the Related Agreements and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement and the
Related Agreements and the consummation of the transactions contemplated herein
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of Premiere and Sub. This Agreement and the Related
Agreements represent legal, valid, and binding obligations of Premiere and Sub
enforceable against Premiere and Sub in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this Agreement and the Related
Agreements by Premiere and Sub, nor the consummation by Premiere and Sub of the
transactions contemplated hereby, nor compliance by Premiere and Sub with any of
the provisions hereof, will (i) conflict with or result in a breach of any
provision of Premiere's or Sub's Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Premiere Company under,
any Contract or Permit of any Premiere Company, where such Default or Lien, or
any failure to obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Premiere, or, (iii) subject to
receipt of the requisite Consents referred to in Section 6.1(b), violate any Law
or Order applicable to any Premiere Company or any of their respective material
Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings, or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Premiere, no notice to, filing with, or Consent of,
any public body or authority is necessary for the consummation by Premiere or
Sub of transactions contemplated in this Agreement.
3.3 Capital Stock.
-------------
(a) The authorized capital stock of Premiere consists of (i) 150,000,000
shares of Premiere Common Stock, of which 20,940,823 shares are issued and
outstanding as of the date of this Agreement, and (ii) 5,000,000 shares of
Premiere Preferred Stock, of which no shares are issued and outstanding. All of
the issued and outstanding shares of Premiere Capital Stock are, and all of the
-12-
shares of Premiere Common Stock to be issued in accordance with the terms of
this Agreement, will be, duly and validly issued and outstanding and fully paid
and nonassessable. None of the outstanding shares of Premiere Capital Stock has
been, and none of the shares of Premiere Common Stock to be issued in accordance
with the terms of this Agreement will be, issued in violation of any preemptive
rights of the current or past Stockholders of Premiere.
(b) Except as set forth in Section 3.3(a), or as disclosed in Section 3.3
of the Premiere Disclosure Memorandum, there are no shares of capital stock or
other equity securities of Premiere outstanding and no outstanding Rights
relating to the capital stock of Premiere.
3.4 SEC Filings; Financial Statements.
---------------------------------
(a) Premiere has timely filed and made available to TeleT all SEC
Documents required to be filed by Premiere since December 31, 1995 (the
"Premiere SEC Reports"). The Premiere SEC Reports (i) at the time filed,
complied or will comply in all material respects with the applicable
requirements of the Securities Laws and other applicable Laws and (ii) did not,
at the time they were filed (or, if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such Premiere SEC Reports or necessary in order to make the statements
in such Premiere SEC Reports, in light of the circumstances under which they
were made.
(b) Each of the Premiere Financial Statements (including, in each case,
any related notes) contained in the Premiere SEC Reports complied as to form in
all material respects with the applicable published rules and regulations of the
SEC with respect thereto, was prepared in accordance with GAAP (except to the
extent required by changes in generally accepted accounting principles, as may
be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated financial position of
Premiere and its Subsidiary as at the respective dates and the consolidated
results of operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount or effect.
3.5 Absence of Undisclosed Liabilities. No Premiere Company has any
----------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Premiere, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Premiere as of
December 31, 1995 and June 30, 1996, included in the Premiere Financial
Statements or SEC Reports delivered prior to the date of this Agreement or
reflected in the notes thereto. No Premiere Company has incurred or paid any
Liability since June 30, 1996, except for such Liabilities incurred or paid (i)
in the ordinary course of business consistent with past business practice or
(ii) in connection with the transactions contemplated by this Agreement.
3.6 Absence of Certain Changes or Events. Since June 30, 1996, except as
------------------------------------
disclosed in the Premiere Financial Statements delivered prior to the date of
this Agreement or as disclosed in Section 3.6 of the Premiere Disclosure
-13-
Memorandum, (i) there have been no events, changes or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Premiere, and (ii) the Premiere Companies have not
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of the
covenants and agreements of Premiere provided in Article 7.
ARTICLE 4
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
4.1 Affirmative Covenants of TeleT. From the date of this Agreement until
------------------------------
the earlier of the Closing or the termination of this Agreement, unless the
prior written consent of Premiere shall have been obtained, and except as
otherwise expressly contemplated herein, TeleT shall (a) operate its business
only in the usual, regular, and ordinary course, (b) preserve intact its
business organization and Assets and maintain its rights and franchises, and (c)
take no action which would (i) adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentences of Section 6.1(b) or 6.1(c), or (ii) adversely affect the ability of
any Party to perform its covenants and agreements under this Agreement.
4.2 Negative Covenants of TeleT. From the date of this Agreement until the
---------------------------
earlier of the Closing or the termination of this Agreement, unless the prior
written consent of Premiere shall have been obtained, and except as otherwise
expressly contemplated herein, TeleT covenants and agrees that it will not do or
agree or commit to do any of the following:
(a) amend the Certificate of Formation or TeleT LLC Agreement, or
(b) incur any additional debt obligation or other obligation for borrowed
money in excess of an aggregate of $5,000, or impose, or suffer the
imposition, on any Asset of TeleT of any Lien or permit any such Lien to
exist (other than in connection with Liens in effect as of the date hereof
that are disclosed in the TeleT Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any Interests, or any securities convertible into any , of the
Interests of TeleT, or declare or pay any dividend or make any other
distribution in respect of TeleT's Interests; or
(d) issue, sell, pledge, encumber, authorize the issuance of, enter into
any Contract to issue, sell, pledge, encumber, or authorize the issuance of,
or otherwise permit to become outstanding, any additional Interest of TeleT
or any Interest appreciation rights, or any option, warrant, or other Right;
or
(e) adjust, split, combine or reclassify any Interest of TeleT or issue
or authorize the issuance of any other securities in respect of or in
-14-
substitution for Interests of TeleT, or sell, lease, mortgage or otherwise
dispose of or otherwise encumber any Asset other than in the ordinary course
of business for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of three years or
less, purchase any securities or make any material investment, either by
purchase of stock of securities, contributions to capital, Asset transfers,
or purchase of any Assets, in any Person, or otherwise acquire direct or
indirect control over any Person; or
(g) grant any increase in compensation or benefits to the employees or
officers of TeleT; pay any severance or termination pay or any bonus other
than pursuant to written policies or written Contracts in effect on the date
of this Agreement and disclosed in Section 4.2(g) of the TeleT Disclosure
Memorandum; and enter into or amend any severance agreements with officers of
TeleT; grant any increase in fees or other increases in compensation or other
benefits to directors of TeleT; or
(h) enter into or amend any employment, consulting or management Contract
between TeleT and any Person (unless such amendment is required by Law) that
TeleT does not have the unconditional right to terminate without Liability
(other than Liability for services already rendered), at any time on or after
the Closing Date; or
(i) adopt any new employee benefit plan of TeleT or terminate or withdraw
from, or make any change in or to, any existing employee benefit plans of
TeleT; or
(j) make any change in any Tax or accounting methods or systems of
internal accounting control, except as may be appropriate to conform to
changes in Tax Laws or regulatory accounting requirements or GAAP; or
(k) commence any Litigation, settle any Litigation involving any
Liability of TeleT for material money damages or restrictions upon the
operations of TeleT; or
(l) enter into, modify, amend or terminate any material Contract
(including any loan Contract with an unpaid balance exceeding $5,000) or
waive, release, compromise or assign any material rights or claims.
4.3 Covenants of Premiere. From the date of this Agreement until the
---------------------
earlier of the Closing or the termination of this Agreement, unless the prior
written consent of TeleT shall have been obtained, and except as otherwise
expressly contemplated herein, Premiere covenants and agrees that it shall (a)
continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment, to enhance the long-term value of
the Premiere Common Stock and the business prospects of the Premiere Companies
and to the extent consistent therewith use all reasonable efforts to preserve
intact the Premiere Companies' core businesses and goodwill with their
respective employees and the communities they serve, and (b) take no action
which would (i) materially adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
-15-
sentences of Section 6.1(a) or 6.1(b), or (ii) materially adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided, that the foregoing shall not prevent any Premiere Company
from acquiring any Assets or other businesses or from discontinuing or disposing
of any of its Assets or business if such action is, in the judgment of Premiere,
desirable in the conduct of the business of Premiere and its Subsidiaries.
Premiere further covenants and agrees that it will not, without the prior
written consent of TeleT, which consent shall not be unreasonably withheld,
amend the Articles of Incorporation or Bylaws of Premiere, in each case, in any
manner adverse to the holders of TeleT Interests as compared to rights of
holders of Premiere Common Stock generally as of the date of this Agreement.
ARTICLE 5
ADDITIONAL AGREEMENTS
---------------------
5.1 Exchange Listing. Premiere shall use its reasonable efforts to list,
----------------
prior to the Closing, on the Nasdaq National Market the shares of Premiere
Common Stock to be issued to TeleT pursuant to this Agreement, and Premiere
shall give all notices and make all filings with the NASD required in connection
with the transactions contemplated herein.
5.2 Investigation and Confidentiality.
---------------------------------
(a) Prior to the Closing, each Party shall keep the other Party
advised of all material developments relevant to its business and to the
consummation of the transactions contemplated hereby and shall permit the other
Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted, and
incorporated by reference herein each Party shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Closing, each Party shall promptly return or certify the destruction of all
documents and copies thereof, and all work papers containing confidential
information received from the other Party.
5.3 Press Releases. Prior to the Closing, the Members, TeleT and
--------------
Premiere shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
5.3 shall be deemed to prohibit any Party from making any disclosure which its
-16-
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
5.4 Certain Actions. Except with respect to this Agreement and the
---------------
transactions contemplated hereby, neither TeleT nor any Member nor any Affiliate
thereof nor any Representatives thereof retained by TeleT shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
the Board of Directors of TeleT, after having consulted with and considered the
advice of outside counsel, reasonably determines in good faith that the failure
to take such actions would constitute a breach of fiduciary duties of the
members of such Board of Directors to TeleT's Members under applicable law,
neither TeleT, any Member or any Affiliate or Representative thereof shall
furnish any non-public information that it is not legally obligated to furnish,
negotiate with respect to, or enter into any Contract with respect to, any
Acquisition Proposal, but TeleT may communicate information about such an
Acquisition Proposal to it Members if and to the extent that it is required to
do so in order to comply with its legal obligations as advised by outside
counsel. TeleT and each Member shall promptly advise Premiere following the
receipt of any Acquisition Proposal and the details thereof, and advise Premiere
of any developments with respect to such Acquisition Proposal promptly upon the
occurrence thereof. TeleT and each Member shall (i) immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
Persons conducted heretofore with respect to any of the foregoing, and (ii)
direct and use its reasonable efforts to cause all of its Affiliates and
Representatives not to engage in any of the foregoing.
5.5 Change of Name. On the Closing Date, TeleT shall change its name to
--------------
a name that does not include the words TeleT, Connect or any derivation thereof
or other name confusingly similar thereto (a "TeleT Name") and thereafter shall
not use or otherwise refer to itself in any way utilizing a TeleT Name and shall
take all steps necessary to avoid any confusion or association between itself
and any Premiere Company.
5.6 Transferred Employees. One or more of the Premiere Companies may,
---------------------
but shall not be obligated to, offer employment to certain Persons listed on
Schedule 5.6 hereof who are or were prior to the Closing Date employees of
TeleT, on such terms and conditions as the relevant Premiere Company shall deem
appropriate. Any such employees who desire to accept employment with a Premiere
Company (a "Transferred Employee") shall be allowed by TeleT to accept such
employment. Neither TeleT nor any Member of TeleT shall, for a period of five
years following the Closing Date, solicit for employment or employ or assist any
other Person in soliciting for employment or employ any Transferred Employee or
directly or indirectly request or cause a Transferred Employee to terminate his
or her employment with a Premiere Company.
5.7 Noncompetition. For a period of five years following the Closing
--------------
Date, TeleT shall not, directly or indirectly, (i) as an individual proprietor,
partner, stockholder, officer, employee, director, member, manager, joint
venturer, investor, lender or in any other capacity whatsoever (except as a
passive holder of not more than two percent of the total outstanding stock of a
publicly-held company), engage anywhere in the world in the business of
developing, producing, marketing , licensing or selling products or services or
any kind or type which were developed or were being developed, produced,
marketed, licensed or sold by TeleT on or prior to the Closing Date
-17-
(collectively, the "TeleT Products") or (ii) solicit, divert, or take away, or
attempt to divert or take away, any business of any of the clients, customers or
accounts of TeleT or any Premiere Company with respect to any TeleT Products.
5.8 Trade Secrets. At all times from and after the date of this
-------------
Agreement, TeleT and all Members of TeleT agree to hold any Trade Secrets of
TeleT in trust and strictest confidence and not to use, reproduce, distribute,
disclose or otherwise disseminate the TeleT Trade Secrets or any physical
embodiments thereof.
5.9 Allocation of Purchase Price and Reporting. The consideration paid
------------------------------------------
by Sub for the purchase of the TeleT Assets pursuant to this Agreement shall be
allocated among the TeleT Assets in the manner determined by Premiere in its
reasonable judgment, which allocation shall be presented to TeleT by February
15, 1997. TeleT and Premiere each covenant and agree that it will not take a
position on any income tax return, before any governmental agency charged with
the collection of any income tax, or in any judicial proceeding that is in any
way inconsistent with the terms of this Section 5.9.
5.10 Sales Tax. Premiere shall be responsible for the payment of sales
---------
tax, if any, due under Maryland Law relating to the TeleT Assets transferred
hereunder based upon a reasonable valuation of such Assets as determined by
Premiere.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
6.1 Conditions to Obligations of Each Party. The respective obligations
---------------------------------------
of each Party to perform this Agreement and consummate the transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by both Parties pursuant to Section 9.6:
(a) Regulatory Approvals. All Consents of, filings and registrations
--------------------
with, and notifications to, all Regulatory Authorities required for
consummation of the transactions contemplated hereby shall have been obtained
or made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any Regulatory
Authority which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner (including requirements
relating to the raising of additional capital or the disposition of Assets)
which in the reasonable judgment of the Board of Directors of Premiere would
so materially adversely impact the economic or business assumptions of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, Premiere would not, in its reasonable judgment, have
entered into this Agreement.
(b) Consents and Approvals. Each Party shall have obtained any and all
----------------------
Consents required for consummation of the transactions contemplated hereby
(other than those referred to in Section 6.1(a)) or for the preventing of any
Default under any Contract or Permit of such Party.
-18-
No Consent so obtained which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner which in
the reasonable judgment of the Board of Directors of Premiere would so
materially adversely impact the economic or business assumptions of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable judgment,
have entered into this Agreement.
(c) Legal Proceedings. No court or governmental or regulatory authority
-----------------
of competent jurisdiction shall have enacted, issued, promulgated, enforced
or entered any Law or Order (whether temporary, preliminary or permanent) or
taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
6.2 Conditions to Obligations of Premiere. The obligations of Premiere to
-------------------------------------
perform this Agreement and the transactions contemplated hereby are subject to
the satisfaction of the following conditions, unless waived by Premiere pursuant
to Section 9.6(a):
(a) Representations and Warranties. The representations and warranties
------------------------------
of TeleT and the Members set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing with the same
effect as though all such representations and warranties had been made on and
as of the Closing (provided that representations and warranties which are
confined to a specified date shall speak only as of such date); provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material" or "Material
Adverse Effect" or to the "Knowledge" of any Person shall be deemed not to
include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of TeleT and the Members to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Closing shall have been duly performed and
complied with.
(c) Certificates. TeleT shall have delivered to Premiere (i) a
------------
certificate, dated as of the Closing and signed on its behalf by its chief
executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 6.1 as relates to TeleT and in Section 6.2(a)
and 6.2(b) have been satisfied, and (ii) certified copies of resolutions duly
adopted by TeleT's Board of Directors and Members evidencing the taking of
all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Premiere and its
counsel shall request.
(d) Conveyance Documents. Sub shall have received such assignments,
--------------------
bills of sale and other instruments of transfer and conveyance (including,
without limitation, conveyance documents from Connect) as, in the opinion of
Sub, shall be effective to vest in Sub valid legal title to the TeleT Assets
in accordance with the terms of this Agreement as well as such termination
-19-
statements, releases, satisfactions and other instruments as, in the opinion
of Sub, shall be required to evidence payment, satisfaction and cancellation
of record of all Liens which affect ownership and title to the TeleT Assets.
(e) Opinion of Counsel to TeleT. Premiere shall have received an opinion
of Xxxxxxx and Xxxxxxx, counsel to TeleT and certain of the Members, dated as
of the Closing, in form reasonably satisfactory to Premiere, as to the
matters set forth in Exhibit A.
(f) Opinion of Counsel to CMG. Premiere shall have received the opinion
--------------------------
of Xxxxxx & Dodge, counsel to CMG, dated as of the Closing, in form
reasonably satisfactory to Premiere as to the matters set forth on Exhibit B.
(g) Escrow Agreement. Each Member shall have executed and delivered the
----------------
Escrow Agreement.
(h) Employment Agreements. Each of Xxxxx Xxxxxxxxx and Xxxxx Xxxxxxx
----------------------
shall have entered in to Employment and Non-Competition Agreements with
Premiere or a Premiere Subsidiary on terms and conditions which are
reasonably satisfactory to Premiere.
(i) Invention and Confidentiality Agreements. All employees of TeleT
----------------------------------------
listed on Schedule 5.6 shall have executed and delivered to Premiere
invention, noncompetition and confidentiality agreements in form and
substance satisfactory to Premiere.
(j) Investment Representation and Lockup Agreements. Each Member of
------------------------------------------------
TeleT who is to receive a distribution of shares of Premiere Common Stock
issued in connection with this Agreement shall have executed and delivered to
Premiere the Investment Representation and Lockup Agreement in form and
substance satisfactory to Premiere.
(j) CMG Agreements. TeleT and CMG shall have complied with the CMG
---------------
Agreements, and CMG shall have no further rights thereunder with respect to
the TeleT Assets, pursuant to such agreement or instrument in form and
substance satisfactory to Premiere.
(k) Klawans Note. Klawans shall release any and all rights under the
------------
Klawans Note with respect to the TeleT Assets, pursuant to such agreement or
instrument in form and substance satisfactory to Premiere.
(l) Connect Contribution. Connect shall have contributed to the capital
--------------------
of TeleT, $80,000 received from the exercise of options to purchase 12,500
shares of Connect common stock.
(m) Calling Card Agreement. Premiere Communications, Inc. ("Premiere
----------------------
Communications") and Planet Direct Corporation ("Planet Direct") shall have
entered into a Calling Card Agreement in form and substance reasonably
satisfactory to Premiere Communications and Planet Direct.
-20-
(n) Software Development Agreement. TeleT and Planet Direct shall have
------------------------------
entered into a Software Development and Operations Agreement in form and
substance reasonably satisfactory to TeleT, Planet Direct and Premiere.
6.3 Conditions to Obligations of TeleT and the Members. The obligations
--------------------------------------------------
of TeleT and the Members to perform this Agreement and consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by TeleT pursuant to Section 9.6(b):
(a) Representations and Warranties. The representations and warranties
------------------------------
of Premiere and Sub set forth in this Agreement shall be true and correct as
of the date of this Agreement and as of the Closing with the same effect as
though all such representations and warranties had been made on and as of the
Closing (provided that representations and warranties which are confined to a
specified date shall speak only as of such date).
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of Premiere to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior
to the Closing shall have been duly performed and complied with in all
material respects.
(c) Certificates. Premiere shall have delivered to TeleT (i) a
------------
certificate, dated as of the Closing and signed on its behalf by its chief
executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 6.1 as relates to Premiere and in Section
6.3(a) and 6.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by Board of Directors of Premiere and Sub and the
sole shareholder of Sub evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, all
in such reasonable detail as TeleT and its counsel shall request.
(d) Assumption Documents. TeleT shall have received such agreement or
--------------------
instruments of assumption as, in the opinion of TeleT, shall be necessary to
effect Sub's assumption of the Assumed Liabilities in accordance with the
terms of this Agreement.
(e) Opinion of Counsel. TeleT shall have received an opinion of Xxxxxx &
------------------
Bird, counsel to Premiere, dated as of the Closing, in form reasonably
acceptable to TeleT, as to the matters set forth in Exhibit C.
(f) Registration Rights. Premiere and CMG shall have executed and
-------------------
delivered the Stock Restriction and Registration Rights Agreement, in the
form attached hereto as Exhibit D.
(g) Employee Agreements. Premiere or a Premiere subsidiary shall have
-------------------
entered into Employment and Noncompetition Agreements with each of Xxxxx
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Freishtat and Xxxxx Xxxxxxx on terms and conditions reasonably satisfactory
to Messrs. Freishtat and Leitess.
(h) Stock Options. Premiere shall have granted to certain of the
-------------
Transferred Employees options to purchase Premiere Common Stock at the Fair
Market Value of all stock on the date of Closing and on such other terms and
conditions as are reasonably satisfactory to such Transferred Employees and
Premiere as set forth on Schedule 6.3(h).
(i) Software Development Agreement. TeleT and Planet Direct shall have
------------------------------
entered into a Software Development and Operations Agreement in form and
substance reasonably satisfactory to TeleT, Planet Direct and Premiere.
(j) Calling Card Agreement. Premiere Communications and Planet Direct
----------------------
shall have entered into a Calling Card Agreement in form and substance
reasonably satisfactory to Premiere Communications and Planet Direct.
ARTICLE 7
INDEMNIFICATION
---------------
7.1 Agreement of Indemnitors to Indemnify. Subject to the terms and
-------------------------------------
conditions of this Article 7, Indemnitors jointly and severally agree to
indemnify, defend, and hold harmless Indemnitees, and each of them, from,
against, for and in respect of any and all Losses asserted against, or paid,
suffered or incurred by, an Indemnitee and resulting from, based upon, or
arising out of:
(a) the inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Member or TeleT contained in or made
pursuant to this Agreement, any Related Agreement or in any certificate,
Schedule, or Exhibit furnished by Indemnitors in connection herewith and for
purposes of this Section 7.1(a) any qualification of such representations and
warranties by reference to the materiality of matters stated therein or as to
matters having or not having a "Material Adverse Effect,", and any limitation
of such representations and warranties as being "to the Knowledge of," or
"known to" or words of similar effect, shall be disregarded, in determining
any inaccuracy, untruth, incompleteness or breach thereof;
(b) a breach of or failure to perform any covenant or agreement of the
Member or TeleT made in this Agreement;
(c) any Liability of TeleT or any TeleT Company, other than the Assumed
Liabilities;
(d) without limiting the application of Sections 7.1(a), 7.1(b) and
7.1(c), any Third Party Claim arising out of or relating to any act or
omission by TeleT, Connect, any TeleT Company, and any shareholder, Member,
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director, officer, employee or agent of any of the foregoing occurring prior
to the Closing; or
(e) without limiting the application of Sections 7.1(a), 7.1(b), 7.1(c)
or 7.1(d), any Third Party Claim (including, without limitation, any Third
Party Claim arising out of the matters, described in Sections 2.10 and 2.17
of the TeleT Disclosure Memorandum) of patent infringement, copyright
infringement contributory infringement or inducing infringement resulting
from the manufacture, use, sale, importation or licensing of (i) TeleT's
products as they exist at the Closing, including those products currently
known as AMAIL, DIALWEB, CROSS MEDIA MESSAGING and PERSONAL COMMUNICATIONS
CONTROL CENTER (both PC2 and PC3), (ii) any products substantially equivalent
to TeleT's products as they exist at the Closing, including those products
currently known as AMAIL, DIALWEB, CROSS MEDIA MESSAGING or PERSONAL
COMMUNICATIONS CONTROL CENTER (both PC2 and PC3), or (iii) any Software or
other Intellectual Property as they exist at the Closing transferred to Sub
pursuant to this Agreement including the Software and computer based tools
CTTP, CTTPD, a CTML and other distributed telephone Software; excepting,
however, in all cases, those products, substantially equivalent products,
Software, or other Intellectual Property that infringe only to the extent of
changes made thereto after the Closing Date.
7.2 Limitations on Indemnification.
------------------------------
(a) The indemnification obligations set forth in Sections 7.1(a), (b),
(c) and (d) shall survive the Closing Date and continue thereafter for a
period of eighteen (18) months with respect to the CMG Escrow Assets and for
the period of twenty-four (24) months with respect to the Other Indemnitors'
Escrow Assets, provided that any Indemnification Claim under Section 10.1(a),
(b), (c) and (d) made prior to the end of (i) the eighteen (18) months period
following the Closing Date with respect to the CMG Escrow Assets and (ii) the
twenty-four (24) months period following the Closing Date with respect to the
Other Indemnitors' Escrow Assets shall survive until paid or otherwise
resolved in accordance with the terms of this Agreement.
(b) The indemnification obligations set forth in Section 7.1(e) shall
survive the Closing Date and continue thereafter for a period of five (5)
years with respect to the CMG Escrow Assets and for a period of six (6) years
with respect to the Other Indemnitors' Escrow Assets; provided, however, that
any Indemnification Claim under section 7.1(e) made prior to the end of the
(i) the five (5) years period following the Closing Date with respect to the
CMG Escrow Assets and (ii) the six (6) years period following the Closing
Date with respect to the Other Indemnitors' Escrow Assets shall survive until
paid or otherwise resolved in accordance with the terms of this Agreement.
provided, however, that if no Indemnification Claim under Section 7.1(e)
-------- -------
exists on the fourth anniversary of the Closing Date, then one-half (1/2) of
the CMG Escrow Assets held pursuant to the Escrow Agreement shall be
immediately released and distributed to CMG and one-half (1/2) of the Other
-23-
Indemnitors' Escrow Assets held pursuant to the Escrow Agreement shall be
immediately released and distributed on a pro rata basis to the Other
Indemnitors. If no Indemnification Claim under Section 7.1(e) exists on the
fifth anniversary of the Closing Date, then all of the CMG Escrow Assets held
pursuant to the Escrow Agreement shall be immediately released and
distributed to CMG, and one-half (1/2) of the Other Indemnitors' Escrow
Assets then held pursuant to the Escrow Agreement shall be immediately
released and distributed on a pro rata basis to the Other Indemnitors. If no
Indemnification Claim under Section 7.1(e) exists on the sixth anniversary of
the Closing Date, then all of the Other Indemnitors' Escrow Assets then held
pursuant to the Escrow Agreement shall be immediately released and
distributed on a pro rata basis to the Other Indemnitors. Notwithstanding
any of the foregoing, if, on any of the fourth, fifth or sixth anniversaries
of the Closing Date there exists an Indemnification Claim or Claims that have
not been resolved, then the amount of Escrow Assets otherwise distributable
on that date shall be withheld from distribution pending resolution of such
Claims pursuant to the terms of this Agreement.
(c) The Indemnitors shall have no obligation for indemnification under
this Article 7 unless and until the aggregate amount of Losses (on a
cumulative basis) claimed against all Indemnitors exceed Fifty Thousand
Dollars ($50,000); provided that once the aggregate Indemnification Claims
reach that amount, there shall be no limitation on the ability to assert
Claims hereunder and the Indemnitees shall be liable for all such
Indemnification Claims, including amounts required to reach the Fifty
Thousand Dollars ($50,000) threshold.
(d) In no event shall the indemnification obligations of CMG hereunder
exceed the lesser of (i) Nine Hundred Thousand Dollars ($900,000) or (ii) the
CMG Escrow Assets. In no event shall the indemnification obligations of the
Other Indemnitors, individually or in the aggregate, hereunder exceed the
lesser of (i) Nine Hundred Thousand Dollars ($900,000) or (ii) the Other
Indemnitors' Escrow Assets.
(e) Any indemnification obligations hereunder (other than those arising
with respect to an Indemnification Claim under Section 7.1(e)) shall first be
satisfied by the setoff of such Losses on a pro rata basis against all of the
Other Indemnitors' Escrow Assets, and no CMG Escrow Assets shall be used to
satisfy any such Claim until the Other Indemnitors' Escrow Assets have been
exhausted. Notwithstanding the foregoing, any indemnification obligations
arising hereunder with respect to Indemnification Claims under Section 7.1(e)
shall first be satisfied by a set-off of one-third (1/3) of such Losses
against the CMG Escrow Assets and two-thirds (2/3) of such Losses on a pro
rata basis against all of the Other Indemnitors' Escrow Assets; provided,
however, that once the Other Indemnitors' Escrow Assets have been exhausted,
any Losses remaining under such Claim may be satisfied from the CMG Escrow
Assets to the extent of such Escrow Assets.
7.3 Procedures for Indemnification.
------------------------------
(a) An Indemnification Claim shall be made by an Indemnitee by delivery
of a written notice to the Indemnitor Representative requesting
indemnification and specifying the basis on which indemnification is sought
-24-
and the amount of asserted Losses and, in the case of a Third Party Claim,
containing (by attachment or otherwise) such other information as such
Indemnitee shall have concerning such Third Party Claim.
(b) If the Indemnification Claim involves a Third Party Claim the
procedures set forth in Section 7.4 shall be observed by the Indemnitee and
the Indemnitor Representative.
(c) If the Indemnification Claim involves a matter other than a Third
Party Claim, the Indemnitor Representative shall have 45 days to object to
such Indemnification Claim by delivery of a written notice of such objection
to such Indemnitee specifying in reasonable detail the basis for such
objection. Failure to timely so object shall constitute a final and binding
acceptance of the Indemnification Claim by the Indemnitor Representative on
behalf of all Indemnitors, and the Indemnification Claim shall be paid in
accordance with subsection (d) hereof. If an objection is timely interposed
by the Indemnitor Representative and the dispute is not resolved by such
Indemnitee and the Indemnitor Representative within 15 days from the date the
Indemnitee receives such objection, such dispute shall be resolved by
arbitration as provided in Section 7.10.
(d) Upon determination of the amount of an Indemnification Claim, whether
by agreement between the Indemnitor Representative and the Indemnitee or by
an arbitration award or by any other final adjudication, the obligation of
the Indemnitors shall be immediately satisfied through the withdrawal from
Escrow of a sufficient amount of Escrowed Assets as provided in Section 7.2
of this Agreement and the Escrow Agreement.
7.4 Third Party Claims. The obligations and liabilities of the parties
------------------
hereunder with respect to a Third Party Claim shall be subject to the following
terms and conditions:
(a) The Indemnitee shall give the Indemnitor Representative written
notice of a Third Party Claim promptly after receipt by the Indemnitee of
notice thereof, and the Indemnitor Representative, on behalf of the
Indemnitors, may undertake the defense, compromise and settlement thereof by
representatives of its own choosing reasonably acceptable to the Indemnitee.
The failure of the Indemnitee to notify the Indemnitor Representative of such
claim shall not relieve the Indemnitors of any liability that they may have
with respect to such claim except to the extent the Indemnitor Representative
demonstrates that the defense of such claim is prejudiced by such failure.
The assumption of the defense, compromise and settlement of any such Third
Party Claim by the Indemnitor Representative shall be an acknowledgment of
the obligation of the Indemnitors to indemnify the Indemnitee with respect to
such claim hereunder. If the Indemnitee desires to participate in, but not
control, any such defense, compromise and settlement, it may do so at its
sole cost and expense. If, however, the Indemnitor Representative fails or
refuses to undertake the defense of such Third Party Claim within thirty (30)
days after written notice of such claim has been given to the Indemnitor
Representative by the Indemnitee (or such shorter period if necessary to
avoid prejudice to the defense of such Third Party Claim), the Indemnitee
shall have the right to undertake the defense, compromise and settlement of
-25-
such claim with counsel of its own choosing. In the circumstances described
in the preceding sentence, the Indemnitee shall, promptly upon its assumption
of the defense of such claim, make an Indemnification Claim as specified in
Section 7.3 which shall be deemed an Indemnification Claim that is not a
Third Party Claim for the purposes of the procedures set forth herein.
(b) No settlement of a Third Party Claim involving the asserted liability
of the Indemnitors under this Article shall be made without the prior written
consent by or on behalf of the Indemnitor Representative, which consent shall
not be unreasonably withheld or delayed. If the Indemnitor Representative
assumes the defense of such a Third Party Claim, (a) no compromise or
settlement thereof may be effected by the Indemnitor Representative without
the Indemnitee's consent unless (i) there is no finding or admission of any
violation of law or any violation of the rights of any person and no effect
on any other claim that may be made against the Indemnitee, (ii) the sole
relief provided is monetary damages that are paid in full by the Indemnitors,
and (iii) the compromise or settlement includes, as an unconditional term
thereof, the giving by the claimant or the plaintiff to the Indemnitee of a
release, in form and substance satisfactory to the Indemnitee, from all
liability in respect of such Third Party Claim, and (b) the Indemnitee shall
have no liability with respect to any compromise or settlement thereof
effected without its consent.
(c) In connection with the defense, compromise or settlement of any Third
Party Claim, the parties to this Agreement shall execute such powers of
attorney as may reasonably be necessary or appropriate to permit
participation of counsel selected by any party hereto and, as may reasonably
be related to any such claim or action, shall provide access, without any
cost or any unnecessary burden on any Indemnitee, to the counsel, accountants
and other representatives of each party during normal business hours to all
properties, personnel, books, tax records, contracts, commitments and all
other business records of such other party and will furnish to such other
party copies of all such documents as may reasonably be requested (certified,
if requested).
7.5 Other Rights and Remedies Not Affected. The representations and
--------------------------------------
warranties made by TeleT or any Member pursuant to this Agreement and the
Related Agreements or in any certificate, schedule or exhibit furnished by such
party in connection herewith shall survive the Closing Date for a period
following such Closing Date of eighteen (18) months with respect to CMG and the
CMG Escrow Assets and for a period of twenty-four (24) months with respect to
the Other Indemnitors and the Other Indemnitors' Escrow Assets; provided,
however, that the representations and warranties with respect to the
Indemnification Obligations set forth in Section 7.1(e) shall survive for the
periods and in accordance with the terms and conditions set forth in Article 7
with respect to any Indemnification Claims related thereto. All covenants and
agreements of the parties contained herein shall survive in accordance with
their respective terms. No third party other than the Indemnitees shall be a
third party or other beneficiary of such representations and warranties, and no
such third party shall have any rights of contribution against the Indemnitors
with respect to such representations or warranties. The rights and remedies of
the Indemnitees' (in their capacities as Indemnitees or in any other capacities)
at law or in equity with respect to the inaccuracy, untruth, incompleteness or
breach of any representation or warranty of any Indemnitor made in any capacity
contained herein or in any Related Agreement or in any certificate, schedule or
exhibit furnished by such party in connection herewith and the survival thereof
-26-
shall be strictly limited as provided in this Article 7. The rights of the
Indemnitees under this Article 7 in their capacity as Indemnitees or in any
other capacity) with respect to breaches of covenants and agreements contained
in this Agreement are independent of and in addition to such rights and remedies
as the Indemnitees may have at law or in equity or otherwise, including without
limitation the right to seek specific performance, recession or restitution,
none of which rights or remedies shall be affected or diminished hereby.
7.6 Tax Effect and Insurance. The liability of the Indemnitors with
------------------------
respect to any Indemnification Claim shall be reduced by the tax benefit
actually realized and any insurance proceeds received by the Indemnitees as a
result of any Losses upon which such Indemnification Claim is based, and shall
include any tax detriment actually suffered by the Indemnitees as a result of
such Losses. The amount of any such tax benefit or detriment shall be
determined by taking into account the effect, if any and to the extent
determinable, of timing differences resulting from the acceleration or deferral
of items of gain or loss resulting from such Losses and shall otherwise be
determined so that payment by the Indemnitors of the Indemnification Claim, as
adjusted to give effect to any such tax benefit or detriment, will make the
Indemnitee as economically whole as is reasonably practical with respect to the
Losses upon which the Indemnification Claim is based. Any dispute as to the
amount of such tax benefit or detriment shall be resolved by arbitration as
provided in Section 7.10 of this Agreement.
7.7 Escrow; Right of Setoff Sole Remedy. Upon notice to the Indemnitor
-----------------------------------
Representative specifying in reasonable detail the basis therefor, the
Indemnitee shall give notice of a Claim in such amount under the Escrow
Agreement. Neither the exercise of nor the failure to give a notice of a Claim
under the Escrow Agreement shall constitute an election of remedies nor limit
Indemnitee in any manner in the enforcement of any other remedies that may be
available to it; provided, however, that the terms of Section 7.2(d) shall in
-------- --------
any case apply. An Indemnitor may at any time substitute funds in the amount of
Twenty-Four Dollars ($24) per Escrow Share for any or all of its Escrow Shares,
pursuant to the terms of the Escrow Agreement. Such substituted funds shall be
invested in United States Treasury obligations. Any Escrow Shares for which
funds have been so substituted shall thereupon be immediately released to said
Indemnitor. Any distributions, dividends, or accrued interest with respect to
Escrow Shares (or any funds substituted therefor), except stock dividends, shall
be for the account of the Indemnitor holding title to such Escrow Shares and
shall be distributed to the Indemnitors at least every calendar quarter.
Premiere's sole and exclusive remedy for satisfaction of an Indemnification
Claim pursuant to this Article 7 shall be to make a claim against the Escrowed
Assets and regardless of the amount of the Escrowed Assets, no Indemnitor shall
have any liability or obligation to Premiere for any indemnification obligation
hereunder other than as Premiere may satisfy from the Escrowed Assets.
7.8 Subrogation. Upon payment in full of any Indemnification Claim,
-----------
whether such payment is effected by set-off or otherwise, or the payment of any
judgment or settlement with respect to a Third Party Claim, the Indemnitors
shall be subrogated to the extent of such payment to the rights of the
Indemnitee against any person or entity with respect to the subject matter of
such Indemnification Claim or Third Party Claim.
-27-
7.9 Appointment of Indemnitor Representative. Each Indemnitor
----------------------------------------
constitutes and appoints the Indemnitor Representative as his or her true and
lawful attorney-in-fact to act for and on behalf of such Indemnitor in all
matters relating to or arising out of this Article 7 and the liability or
asserted liability of such Indemnitor hereunder, including specifically, but
without limitation, accepting and agreeing to the liability of such Indemnitor
with respect to any Indemnification Claim, objecting to any Indemnification
Claim, disputing the liability of such Indemnitor, or the amount of such
liability, with respect to any Indemnification Claim and prosecuting and
resolving such dispute as herein provided, accepting the defense, compromise and
settlement of any Third Party Claim on behalf of such Indemnitor or refusing to
accept the same, settling and compromising the liability of such Indemnitor
hereunder, instituting and prosecuting such actions (including arbitration
proceedings) as the Indemnitor Representative shall deem appropriate in
connection with any of the foregoing, retaining counsel, accountants, appraisers
and other advisers in connection with any of the foregoing, all for the account
of the Indemnitor, such Indemnitor agreeing to be fully bound by the acts,
decisions and agreements of the Indemnitor representative taken and done
pursuant to the authority herein granted. Each Indemnitor hereby agrees to
indemnify and to save and hold harmless the Indemnitor Representative from any
liability incurred by the Indemnitor Representative based upon or arising out of
any act, whether of omission or commission, of the Indemnitor Representative
pursuant to the authority herein granted, other than acts, whether of omission
or commission, of the Indemnitor Representative that constitute gross negligence
or willful misconduct in the exercise by the Indemnitor Representative of the
authority herein granted.
7.10 Arbitration. All disputes arising under this Article 7 (other than
-----------
claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Indemnitor Representative and Premiere in accordance with
the Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in such place in Atlanta, Georgia as may be specified
by the arbitrator (or any place agreed to by the Indemnitor Representative,
Premiere and the arbitrator). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Article 7; provided, however, if
necessary, such decision and satisfaction procedure may be enforced by either
the Indemnitor Representative or Premiere in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
7.11 Intellectual Property Escrow. Premiere agrees that for purposes of
----------------------------
establishing the Software and other Intellectual Property as it exists at the
Closing, as referred to in Section 7.1(e), Premiere will place in escrow with an
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escrow agent acceptable to CMG and Premiere copies of the Software in source
code and object code form with documentation and other written materials used in
connection therewith as they exist on the Closing Date.
ARTICLE 8
TERMINATION
-----------
8.1 Termination. Notwithstanding any other provision of this Agreement,
-----------
and notwithstanding the approval of this Agreement by the Members of TeleT, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing:
(a) By mutual consent of Premiere and TeleT; or
(b) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a breach by the other Party of
any representation or warranty contained in this Agreement which cannot be or
has not been cured within 30 days after the giving of written notice to the
breaching Party of such breach and which breach is reasonably likely, in the
opinion of the non-breaching Party, to have, individually or in the
aggregate, a Material Adverse Effect on the breaching Party; or
(c) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot
be or has not been cured within 30 days after the giving of written notice to
the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party is not then in
material breach of any representation, warranty, covenant, or other agreement
contained in this Agreement) in the event any Consent of any Regulatory
Authority required for consummation of the Acquisition and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal; or
(e) By either Party in the event that the transactions contemplated
hereby shall not have been consummated by September 30, 1996; or
(f) By either Party in the event that any of the conditions precedent to
the obligations of such Party to consummate the transactions contemplated
hereby cannot be satisfied or fulfilled by the date specified in Section
8.1(e).
8.2 Effect of Termination. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 8.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
8.2 and Article 9 and Section 5.2(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 8.1(b), 8.1(c) or
-29-
8.1(f) shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 Definitions.
-----------
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock, Interests or assets of, or other business combination involving
such Party or any of its Subsidiaries or the acquisition of a substantial
equity interest in, or a substantial portion of the assets of, such Party or
any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, Member, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Asset Purchase Agreement, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the
books and records of such Person, and whether or not owned in the name of
such Person or any Affiliate of such Person and wherever located.
"ASSUMED LIABILITY" shall mean the Liabilities of TeleT listed on
Schedule 9.1(a) hereto, and no others.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CMG" shall mean CMG@Ventures, L.P., a Delaware limited partnership and
Member of TeleT.
"CMG AGREEMENTS" shall mean the Series A and Series B Convertible
Preferred Interest Purchase Agreement; Investor's Rights Purchase Agreement;
TeleT Communications, LLC Co-Sale Agreement; Right of First Refusal
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Agreement; Voting Rights Agreement; and Pre-Emptive Rights Agreement each
dated as of March 29, 1996 and entered into between TeleT, CMG and certain
other parties as stated therein.
"CMG ESCROW ACCOUNT" shall mean 37,500 Escrow Shares, together with such
funds as are substituted for any such Escrow Shares in the amount of Twenty-
Four Dollars ($24) per Escrow Share, but less any Escrow Shares (or
substituted funds) released and distributed in accordance with the terms of
this Agreement and the Escrow Agreement.
"CMG ESCROW ASSETS" shall mean any Escrow Shares or funds substituted
therefor in the CMG Escrow Account at a given time, not including any
dividends (except stock dividends), distributions, or accrued interest with
respect to such Escrow Shares or funds.
"CONFIDENTIALITY AGREEMENT" shall mean that certain Confidentiality
Agreement, dated __________, 1996, between TeleT and Premiere.
"CONNECT" shall mean Connect, Inc., a Maryland corporation and
predecessor of TeleT with respect to the Business.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of any
kind or character, or other document to which any Person is a party or that
is binding on any Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default under any
Contract, Law, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a breach
or violation of or default under any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Law, Order, or Permit.
"DLLCA" shall mean the Delaware Limited Liability Company Act.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface, or subsurface strata) and which are
administered, interpreted, or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the
environment, including the Comprehensive Environmental Response Compensation
and Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq.
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("RCRA"), and other Laws relating to emissions, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ESCROW AGENT" shall mean the party appointed as such under the Escrow
Agreement.
"ESCROW AGREEMENT" shall mean the form of escrow agreement attached
hereto as Exhibit E.
"ESCROW ASSETS" shall mean the CMG Escrow Assets and the Other
Indemnitors' Escrow Assets.
"ESCROW SHARES" shall mean the shares of Premiere Common Stock delivered
to the Escrow Agent pursuant to Article 1.
"EXCLUDED ASSETS" shall mean (i) the corporate seals, certificates of
formation, minute books, registration books, tax returns, books of account
or other records having to do with corporate organization of TeleT; (ii)
the rights which accrue or will accrue to TeleT under this Agreement; (iii)
the rights to any of TeleT's claims for any federal, state, local, or
foreign tax refunds; or (iv) the assets, properties or rights set forth on
Schedule 9.1(b).
"EXHIBITS" A through E, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be referred
to in this Agreement and any other related instrument or document without
being attached hereto.
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as those
terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"INDEMNIFICATION CLAIM" shall mean a claim for indemnification under
Article 7.
"INDEMNITEES" shall mean Premiere, Sub and their respective officers,
directors, shareholders, controlling persons, Affiliates and Representatives.
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"INDEMNITOR REPRESENTATIVE" shall mean Xxxxx Xxxxxxxxx or his designee
until the Other Indemnitors' Escrow Assets held in the Other Indemnitors'
Escrow Account are zero, and thereafter shall mean Xxxxxx Xxxxxxxx or CMG's
designee.
"INDEMNITORS" shall mean TeleT and the Members.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor, technology
rights and licenses, computer software (including any source or object codes
therefor or documentation relating thereto), trade secrets, franchises, know-
how, inventions, and other intellectual property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts that
are known or should reasonably have been known after due inquiry by the
chairman, president, chief financial officer, chief accounting officer, chief
credit officer, general counsel, any assistant or deputy general counsel, or
any senior, executive or other vice president of such Person.
"KLAWANS" shall mean Xxxxxxx X. Xxxxxxx, a Member of TeleT.
"KLAWANS NOTE" shall mean the Subordinated Secured Term Promissory Note
dated March 29, 1996 in the original principal amount of $145,225 made by
TeleT to Klawans.
"LAW" shall mean any code, law (including common law), ordinance,
regulation, reporting or licensing requirement, rule, or statute applicable
to a Person or its Assets, Liabilities, or business, including those
promulgated, interpreted or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including
costs of investigation, collection and defense), claim, deficiency, guaranty
or endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course
of business) of any type, whether accrued, absolute or contingent, liquidated
or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, and (iii) Liens which do not materially impair
the use of or title to the Assets subject to such Lien.
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"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, governmental or other examination or
investigation, hearing, administrative or other proceeding relating to or
affecting a Party, its business, its Assets (including Contracts related to it),
or the transactions contemplated by this Agreement.
"LOSSES" shall mean any and all demands, claims, actions or causes of
action, assessments, losses, diminution in value, damages (including special and
consequential damages), liabilities, costs, and expenses, including interest,
penalties, cost of investigation and defense, and reasonable attorneys' and
other professional fees and expenses.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Acquisition or the other transactions
contemplated by this Agreement, provided that "Material Adverse Effect" shall
not be deemed to include the impact of (a) changes in Laws of general
applicability or interpretations thereof by courts or governmental authorities,
(b) changes in generally accepted accounting principles or regulatory accounting
principles, and (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed written Consent of the other Party
in contemplation of the transactions contemplated hereby.
"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality
in that instance.
"MEMBER" shall mean the members of TeleT and shareholders of Connect.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotations System.
"OPERATING PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in which such
Party or Subsidiary holds a security interest or other interest (including an
interest in a fiduciary capacity), and, where required by the context, includes
the owner or operator of such property, but only with respect to such property.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.
"OTHER INDEMNITORS" shall mean the Indemnitors other than CMG.
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"OTHER INDEMNITORS' ESCROW ACCOUNT" shall mean 37,500 Escrow Shares,
together with such funds as are substituted for any such Escrow Shares in the
amount of Twenty-Four dollars ($24) per Escrow Share, but less any Escrow Shares
(or substituted funds) released and distributed in accordance with the terms of
this Agreement and the Escrow Agreement.
"OTHER INDEMNITORS' ESCROW ASSETS" shall mean any Escrow Shares or
funds substituted therefor in the Other Indemnitors' Escrow Account at a given
time, not including any dividends (except stock dividends), distributions, or
accrued interest with respect to such Escrow Shares or funds.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the management
and, where required by the context, said term means the owner or operator of
such facility or property, but only with respect to such facility or property.
"PARTY" shall mean either TeleT or Premiere, and "PARTIES" shall mean
both TeleT and Premiere.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in
a representative capacity.
"PREMIERE CAPITAL STOCK" shall mean, collectively, the Premiere Common
Stock, the Premiere Preferred Stock and any other class or series of capital
stock of Premiere.
"PREMIERE COMMON STOCK" shall mean the $.01 par value common stock of
Premiere.
"PREMIERE COMPANIES" shall mean, collectively, Premiere and all
Premiere Subsidiaries.
"PREMIERE DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Premiere Technologies, Inc. Disclosure Memorandum" delivered on the
date of this Agreement to TeleT describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
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"PREMIERE SUBSIDIARIES" shall mean the Subsidiaries of Premiere.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the NASD,
and all other federal, state, county, local or other governmental or regulatory
agencies, authorities (including self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction over the
Parties and their respective Subsidiaries.
"RELATED AGREEMENTS" shall mean the Escrow Agreement, the Registration
Rights Agreement, and the Investment Representation and Lockup Agreements.
"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of
its capital stock or other Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to be
filed, by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the Securities Act of 1933, the
Securities Exchange Act of 1934, the Investment Company Act of 1940, as amended,
the Investment Advisors Act of 1940, as amended, the Trust Indenture Act of
1939, as amended, and the rules and regulations of any Regulatory Authority
promulgated thereunder.
"SUBSIDIARIES" shall mean all those corporations, associations, or
other business entities of which the entity in question either (i) owns or
controls 50% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its parent
(provided, there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the case of
partnerships, serves as a general partner, (iii) in the case of a limited
liability company, serves as a managing member, or (iv) otherwise has the
ability to elect a majority of the directors, trustees or managing members
thereof.
"TAX RETURN" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in connection
with Taxes, including any return of an affiliated or combined or unitary group
that includes a Party or its Subsidiaries.
"TAX" or "TAXES" shall mean any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single
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business and unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum, estimated,
or other tax or governmental fee of any kind whatsoever, imposes or required to
be withheld by the United States or any state, county, local or foreign
government or subdivision or agency thereof, including any interest, penalties,
and additions imposed thereon or with respect thereto.
"TELET ASSETS" shall mean all right, title and interest of TeleT in
and to (a) the Business as a going concern, (b) the name "TeleT" and all
goodwill associated therewith, and (c) all of the assets, properties and rights
of TeleT constituting the Business or used therein, of every kind and
description, real, personal and mixed, tangible and intangible, wherever
situated including without limitation the following assets, properties and
rights of TeleT used directly or indirectly in the conduct of, or generated by
or constituting, the Business:
(i) all cash or cash equivalents in transit, in hand or in bank
accounts;
(ii) all machinery, equipment, tools, vehicles, furniture,
furnishings, goods, and other tangible personal property;
(iii) all prepaid items, unbilled costs and fees, and accounts, notes
and other receivables;
(iv) all supplies and inventories and office and other supplies;
(v) to the extent permitted by applicable law, all rights under any
written or oral contract, agreement, plan, instrument, registration,
license, certificate of occupancy, other permit or approval of any
nature, or other document, commitment, arrangement, undertaking,
practice or authorization;
(vi) all rights under any patent, trademark, service xxxx, trade name
or copyright, whether registered or unregistered, and any applications
therefor, including, without limitation, the trademark and service xxxx
applications and the applications for copyright registration listed on
Schedule 9.1(c) hereto;
(vii) all technologies, methods, formulations, databases, trade
secrets, know-how, inventions and other intellectual property used in
the Business or under development;
(viii) all computer software (including documentation and related
object and source codes);
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(ix) all rights or choses in action arising out of occurrences before
or after the Closing, including without limitation all rights under
express or implied warranties relating to the TeleT Assets; and
(x) all information, files, records, data, plans, contracts and
recorded knowledge, including customer and supplier lists, related to
the foregoing;
provided, however, that the TeleT Assets shall not include the Excluded Assets.
"TELET COMPANIES" shall mean, collectively, TeleT and all predecessors
of TeleT, including, without limitation, Connect (f/k/a CPL Acquisition
Corporation), Connect, Inc., a Maryland corporation, Leitess Information
Solutions, L.L.C., a Maryland limited liability company, and Planet
Communications LLC, a Maryland limited liability company.
"TELET DISCLOSURE MEMORANDUM" shall mean the written information
entitled "TeleT Communications LLC Disclosure Memorandum" delivered on the date
of this Agreement to Premiere describing in reasonable detail the matters
contained therein and, with respect to each disclosure made therein,
specifically referencing each Section of this Agreement under which such
disclosure is being made. Information disclosed with respect to one Section
shall not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
"TELET FINANCIAL STATEMENTS" shall mean (i) the balance sheet
(including related notes and schedules, if any) of TeleT as of August 31, 1996,
and the related profit and loss statements (including related notes and
schedules, if any) for the one month or five months ended August 31, 1996.
"TELET LLC AGREEMENT" shall mean the TeleT Communications LLC Limited
Liability Company Agreement dated as of March 29, 1996 and as amended in
connection with the Connect Merger.
"THIRD PARTY CLAIM" shall mean any Litigation that is instituted
against an Indemnitee by a person or entity other than an Indemnitor and which,
if prosecuted successfully, would result in a Loss for which the Indemnitee is
entitled to indemnification under Article 7.
"TRADE SECRETS" shall mean information belonging to TeleT (a) which
derives economic value, actual or potential, from not being generally known
to or readily ascertainable by other Persons who can obtain economic value
from its disclosure or use, and (b) which is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy' provided,
--------
however, for purposes of Section 5.8 of this Agreement, Trade Secrets shall
-------
not include any information (i) independently developed by any Member and not
covered by a duty of confidentiality to TeleT or (ii) within the public
domain or obtained from a Person that did not violate any duty of
confidentiality to TeleT or any other Person.
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(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections:
Closing Section 1.2
ERISA Affiliate Section 2.5(b)
Escrowed Shares Section 1.2(c)
Premiere SEC Reports Section 3.4
Software Section 2.11
TeleT Benefit Plans Section 2.14
TeleT Contracts Section 2.15
TeleT ERISA Plan Section 2.14
TeleT Pension Plan Section 2.14
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
9.2 Expenses.
--------
(a) Except as otherwise provided in this Section 9.2 and subject to
Section 7.1, each of the Parties shall bear and pay all direct costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder.
(b) Nothing contained in this Section 9.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.
9.3 Brokers and Finders. Each of the Parties represents and warrants
-------------------
that neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained by
TeleT or Premiere, each of TeleT and Premiere, as the case may be, agrees to
indemnify and hold the other Party harmless of and from any Liability in respect
of any such claim.
9.4 Entire Agreement. Except as otherwise expressly provided herein,
----------------
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
5.1(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
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9.5 Amendments. To the extent permitted by Law, this Agreement may be
----------
amended by a subsequent writing signed by each of the Parties upon the approval
of each of the Parties.
9.6 Waivers.
-------
(a) Prior to or at the Closing, Premiere, acting through its Board of
Directors, or other authorized officer, shall have the right to waive any
Default in the performance of any term of this Agreement by TeleT or the
Members, to waive or extend the time for the compliance or fulfillment by TeleT
or the Members of any and all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations of Premiere
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in
writing signed by a duly authorized officer of Premiere.
(b) Prior to or at the Closing, TeleT, acting through its Board of
Directors, chief executive officer or other authorized officer, shall have the
right to waive any Default in the performance of any term of this Agreement by
Premiere, to waive or extend the time for the compliance or fulfillment by
Premiere of any and all of its obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of TeleT and the
Members under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of TeleT.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
9.7 Assignment. Except as expressly contemplated hereby, neither this
----------
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
9.8 Notices. All notices or other communications which are required or
-------
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
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TeleT or
any Member: TeleT Communications LLC
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: President
Copy to Counsel: Xxxxxxx and Xxxxxxx
00 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
and
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx II, Esq.
Premiere: Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
3399 Peachtree Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: President
Copy to Counsel: Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
9.9 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
9.10 Counterparts; Facsimile. This Agreement may be executed in two or
-----------------------
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument. Delivery of a
signature page by facsimile transmission shall be deemed to be legally
sufficient execution and delivery of the page and the agreement or instrument
for which it relates.
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9.11 Captions; Articles and Sections. The captions contained in this
-------------------------------
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
9.12 Interpretations. Neither this Agreement nor any uncertainty or
---------------
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
9.13 Enforcement of Agreement. The Parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.14 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be executed on its behalf and attested by officers thereunto as of the day and
year first above written.
ATTEST: PREMIERE TECHNOLOGIES, INC.
_______________________ By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
Title: Chief Executive Officer
-------------------------
ATTEST: PTEK ACQUISITION CORPORATION
_______________________ By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
Title: Chief Executive Officer
-------------------------
ATTEST: TELET COMMUNICATIONS LLC
_______________________ By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
-------------------------
Title: President
-------------------------
THE MEMBERS:
CMG@VENTURES, L.P.:
By: CMG@VENTURES, Inc.
Managing General Partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxxx
--------------------
Title: President
--------------------
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CONNECT, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
------------------------
Title: President
-------------------------
/s/ Xxxxxxx Xxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxx
--------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxx
--------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxx Roswell
--------------------------------------
Xxxxxx Roswell
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxx
--------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxxx XxXxxxxx
--------------------------------------
Xxxxxxx XxXxxxxx
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--------------------------------------
Xxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxxxxx Xxxxx
--------------------------------------
Xxxxxxxxx Xxxxx
/s/ Xxxxxxxxxxx Brouillat
--------------------------------------
Xxxxxxxxxxx Brouillat
The undersigned Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxxx
are executing the foregoing agreement for the sole purpose of consenting to have
their shares become subject to the indemnification provisions of Article 7,
inclusive of appointment of Indemnitor Representative, as set forth in Section
7.9.
/s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx
-45-
EXHIBIT A
FORM OF OPINION OF XXXXXXX AND XXXXXXX
1. TeleT is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware with full
corporate power and authority to carry on the Business in which it is engaged
and to own and use the TeleT Assets. TeleT is qualified as a foreign limited
liability company to do business and is in good standing in each jurisdiction in
the United States in which the ownership of its property or the conduct of the
Business requires such qualification and where any statutory fines or penalties
or any corporate disability imposed for the failure to qualify would materially
and adversely affect TeleT's financial condition or its ability to execute,
deliver and perform its obligations under the Agreements.
2. Neither the execution and delivery of the Agreements by TeleT, nor the
consummation by TeleT of any of the transactions contemplated thereby, nor
compliance by TeleT with any of the provisions thereof, will (i) conflict with
or result in a breach of any provision of TeleT's Certificate of Formation or
the TeleT LLC Agreement, or (ii) constitute or result in a Default under, or
require any Consent (other than any Consent that has been duly obtained)
pursuant to, or result in the creation of any Lien on any TeleT Assets under,
any Contract or Permit of TeleT known to us after due inquiry, or (iii) violate
any Law or Order known to us after due inquiry to be applicable to TeleT or any
of the TeleT Assets.
3. The execution and delivery by TeleT of the Agreements and the
performance by TeleT of its obligations under the Agreements have been duly
authorized by all necessary action on the part of the board of directors and
Members of TeleT.
4. Each of the Members of TeleT (other than CMG as to which we express no
opinion) has reached his majority and has the legal capacity to enter into those
of the Agreements to which he is party and to be legally bound in accordance
with the terms thereof.
5. The Agreements have been duly and validly executed and delivered by
TeleT and the Members of TeleT (other than CMG to which we express no opinion)
and assuming valid authorization, execution and delivery by the other parties
thereto, constitute valid and binding agreements of TeleT and such Members of
TeleT (other than CMG as to which we express no opinion) enforceable in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, or similar laws affecting creditors'
rights generally, provided, however, that we express no opinion as to the
availability of the equitable remedy of specific performance.
-46-
6. TeleT's authorized membership interests consist of (a) eight hundred
thousand (800,000) units of Common Interests, of which 121,622 units are issued
and outstanding, and (b) three hundred thousand (300,000) units of Preferred
Interests, of which one hundred fifty thousand (150,000) units have been
designated Series A Convertible Preferred Interests and one hundred fifty
thousand (150,000) units have been designated Series B Convertible Preferred
Interests, of which 204,723 units of Series A Convertible Preferred Interests
are issued and outstanding, and no Series B Convertible Preferred Interests are
issued and outstanding. The outstanding TeleT Membership Interests have been
duly authorized and validly issued and are fully paid and non-assessable; all
outstanding TeleT Membership Interests were issued and sold in compliance with
all applicable Securities Laws; none of the outstanding Membership Interests
have been issued in violation of any pre-emptive or similar right. The rights,
preferences and privileges of the Series A Convertible Preferred Interests and
the Series B Convertible Preferred Interests are as stated in TeleT's
Designation of Interests. There are no options, warrants, conversion rights or
privileges, pre-emptive rights, or other Rights outstanding to purchase any of
the authorized but unissued TeleT Membership Interests.
7. Except as disclosed in the TeleT Disclosure Memorandum, there is no
litigation pending or, to our knowledge, threatened against TeleT before any
court, administrative agency or Regulatory Authority.
8. All Consents required for the consummation by TeleT and the Members of
TeleT (other than CMG as to which we express no opinion) of the transactions
contemplated by the Agreements have been obtained.
-47-
EXHIBIT B
FORM OF OPINION OF XXXXXX & DODGE
1. CMG is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware with full partnership
power and authority to carry on the business in which it is engaged and to own
and use its Assets. CMG is qualified as a foreign limited partnership to do
business and is in good standing in each jurisdiction in the United States in
which the ownership of its property or the conduct of its business requires such
qualification and where any statutory fines or penalties or any corporate
disability imposed for the failure to qualify would materially and adversely
affect CMG's financial condition or ability to execute, deliver and perform its
obligations under the Agreements.
2. Neither the execution and delivery of the Agreements by CMG, nor the
consummation by CMG of any of the transactions contemplated thereby, nor
compliance by CMG with any of the provisions thereof, will (i) conflict with or
result in a breach of any provision of CMG's Certificate of Limited Partnership
or the CMG Limited Partnership Agreement, or (ii) constitute or result in a
Default under, or require any Consent (other than any Consent that has been duly
obtained) pursuant to, or result in the creation of any Lien or any Transferred
Asset of CMG under, any Contract or Permit of CMG known to us after due inquiry
or, (iii) violate any Law or Order known to us after due inquiry to be
applicable to CMG or any of its Transferred Assets.
3. The execution and delivery by CMG of the Agreements, and the
performance by CMG of its respective obligations under the Agreements have been
duly authorized by all necessary partnership action on the part of CMG and all
necessary corporate action on the part of CMG's general partner.
4. The Agreements have been duly and validly executed and delivered by
CMG and assuming valid authorization, execution and delivery by the other
parties thereto, constitute valid and binding agreements of CMG enforceable in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, or similar laws affecting creditors'
rights generally, provided, however, that we express no opinion as to the
availability of the equitable remedy of specific performance.
-48-
EXHIBIT C
FORM OF OPINION OF XXXXXX & BIRD
1. Premiere is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia with full corporate power and
authority to carry on the business in which it is engaged and to own and use its
Assets.
2. Sub is a corporation duly organized and validly existing and in good
standing under the laws of the State of Georgia with full corporate power and
authority to carry on the business in which it is engaged and to own and use its
Assets.
3. Neither the execution and delivery of the Agreements by Premiere, nor
the consummation by Premiere of any of the transactions contemplated thereby,
nor compliance by Premiere with any of the provisions thereof, will (i) conflict
with or result in a breach of any provision of Premiere's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
material Asset of Premiere under, any material Contract or Permit of Premiere
known to us after due inquiry, (iii) require any approval, order or
authorization of, or registration, qualification, designation, declaration, or
filing with, any United States or state government authority (other than any
filings to be made before or after the Closing under applicable federal and
state securities laws), or (iv) violate any Law or Order known to us after due
inquiry to be applicable to Premiere or any of its material Assets.
4. Neither the execution and delivery of the Agreements by Sub, nor the
consummation by Sub of any of the transactions contemplated thereby, nor
compliance by Sub with any of the provisions thereof, will (i) conflict with or
result in a breach of any provision of Sub's Articles of Incorporation or
Bylaws, or (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any material Asset of Sub
under, any material Contract or Permit of Sub known to us after due inquiry,
(iii) require any approval, order or authorization of, or registration,
qualification, designation, declaration, of filing with, any United States or
state governmental authority, or (iv) violate any Law or Order known to us after
due inquiry to be applicable to Sub or any of its material Assets.
5. The execution and delivery by Premiere and Sub of the Agreements, and
the performance by Premiere and Sub of their respective obligations under the
Agreements have been duly authorized by all necessary corporate action on the
part of the board of directors of Premiere and the board of directors and sole
stockholder of Sub.
6. The Agreements have been duly and validly executed and delivered by
Premiere and, where applicable, Sub, and assuming valid authorization, execution
and delivery by the other parties thereto, constitute valid and binding
agreements of Premiere and, where applicable, Sub, enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or similar laws affecting creditors'
rights generally, provided, however, that we express no opinion as to the
availability of the equitable remedy of specific performance.
-49-
7. The issuance, sale and delivery of the shares of Premiere Common Stock
to be issued to TeleT as contemplated by the Purchase Agreement, have been duly
authorized by all necessary corporate action on the part of Premiere and, when
properly issued and delivered in accordance with the terms of the Purchase
Agreement , will be fully paid and non-assessable under the Georgia Business
Corporation Act.
8. Based solely on the representations of each of the Members in their
respective Investment Representations and Lockup Agreements and by the Members
and TeleT in the Purchase Agreement, the offer, issuance and sale to TeleT of
the shares of Premiere Common Stock pursuant to the Purchase Agreement are
exempt from registration under the Securities Act of 1933, as amended (subject
to the timely filing of any required notices with the Securities and Exchange
Commission), and from the qualification requirements of all applicable state
securities laws (subject to the timely filing of any required notices with
appropriate state authorities).
9. The certificates representing the shares of Premiere Common Stock to
be issued pursuant to the Purchase Agreement are in due and proper form and have
been validly executed.
-50-
EXHIBIT D
STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
---------------------------------------------------
THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made and entered into this 18th day of September, 1996 (the
"Effective Date"), by and among PREMIERE TECHNOLOGIES, INC., a Georgia
corporation ("Premiere" or the "Company") and CMG@VENTURES, L.P., a Delaware
limited partnership ("CMG").
R E C I T A L S
---------------
WHEREAS, pursuant to of an Asset Purchase Agreement, dated as of September
18, 1996 , by and among Premiere, PTEK Acquisition Corporation, a Georgia
corporation ("Sub"), TeleT Communications LLC, a Delaware limited liability
company ("TeleT") and the Members of TeleT (the "Purchase Agreement"), Sub will
purchase certain assets and liabilities TeleT (the "Acquisition") in exchange
for cash and Premiere common stock ("Premiere Common Stock") a portion of which
is to be distributed by TeleT to CMG; and
WHEREAS, Premiere has agreed, as a condition precedent to TeleT's
obligations under the Purchase Agreement, to grant CMG certain registration
rights; and
WHEREAS, Premiere and CMG desire to define such registration rights on the
terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective
meanings set forth below:
Closing Date: shall mean the date of the closing the Acquisition and
------------
other transactions contemplated by the Purchase Agreement;
Commission: shall mean the Securities and Exchange Commission or any
----------
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
------------
Holder: shall mean any holder of Registrable Securities;
------
-51-
Initiating Holder: shall mean any Holder or Holders who in the aggregate
-----------------
are Holders of more than 50% of the then outstanding Registrable Securities;
Other Stockholders: shall have the meaning set forth in Section 3(a).
------------------
Person: shall mean an individual, partnership, joint stock company,
------
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean a registration effected
-------- ---------- ------------
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean the shares of Premiere Common Stock
----------------------
acquired by TeleT under the Purchase Agreement distributed to CMG and any
securities of Premiere issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of Registrable Securities, provided
that Registrable Securities shall cease to be Registrable Securities if and when
(i) a registration statement with respect to the disposition of such Restricted
Shares shall have become effective under the Securities Act and such Registrable
Securities shall have been disposed of pursuant to such effective registration
statement, (ii) such Registrable Securities shall have been sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or all of the
Registrable Securities then owned by such Holder could be sold in any one-day
period pursuant to Rule 144 (with or without giving effect to the provisions of
Rule 144(k)), (iii) such Registrable Securities shall have been otherwise
transferred, if new certificates or other evidences of ownership for such
Registrable Securities not bearing a legend restricting further transfer and not
subject to any stop transfer order or other restrictions on transfer shall have
been delivered by Premiere and subsequent disposition of such Registrable
Securities shall not require registration or qualification of such Registrable
Securities under the Securities Act, or (iv) such Registrable Securities shall
have ceased to be outstanding.
Registration Expenses: shall mean all expenses incurred by Premiere in
---------------------
compliance with Sections 3(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for Premiere, fees and expenses of one counsel for all
the Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of Premiere, which shall be paid in any event by Premiere);
Security, Securities: shall have the meaning set forth in Section 2(1) of
--------------------
the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended; and
--------------
Selling Expenses: shall mean all underwriting discounts and selling
----------------
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
-52-
Underwritten registration or underwritten offering: shall refer to any
------------------------- ---------------------
registration in which securities of Premiere are sold or to be sold pursuant to
a firm commitment underwriting.
2. RESTRICTIONS ON TRANSFER
------------------------
(a) Prior to any proposed transfer of any Registrable Securities
(other than under the circumstances described in Article 3 hereof), the Holder
thereof shall give written notice to Premiere of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by Premiere, shall be accompanied by an opinion of counsel
reasonably satisfactory to Premiere (it being agreed that Xxxxxx & Dodge shall
be acceptable to render such opinion) to the effect that the proposed transfer
may be effected without registration under the Securities Act, whereupon such
Holder shall be entitled to transfer the Registrable Securities in accordance
with the terms of its notice. Each certificate or instrument transferred as
above provided shall bear the legend set forth in Section 2(b), except that such
certificate or instrument shall not bear such legend if (i) such transfer is in
accordance with the provisions of Rule 144 under the Securities Act (or any
other rule permitting public sale without registration under the Securities Act)
or (ii) the opinion of counsel referred to above is to the further effect that
the transferee and any subsequent transferee would be entitled to transfer such
Registrable Securities in a public sale without registration under the
Securities Act.
(b) Each certificate evidencing Registrable Securities issued to any
Holder in connection with the Acquisition ("Restricted Shares") shall bear a
legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE."
(c) If any Restricted Shares shall cease to be subject to the
restrictions on transfer set forth in this Agreement, Premiere shall, upon the
written request of the Holder thereof, issue to such Holder a new certificate
evidencing such Restricted Shares without the legend required by Section 2(b)
hereof endorsed thereon.
3. REGISTRATION RIGHTS
-------------------
(a) Requested Registration.
----------------------
(i) Request for Registration. If Premiere shall receive from an
------------------------
Initiating Holder, at any time on or after the date which is thirty days prior
to the end of the six (6) months period following the Closing Date, a written
request that Premiere effect any registration with respect to all or a part of
the Registrable Securities, Premiere will:
-53-
(A) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders and all Other Stockholders;
and
(B) as soon as practicable, use its reasonable best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request received by Premiere within ten business
days after written notice from Premiere is given under Section 3(a)(i)(A)
above; provided that Premiere shall not be obligated to effect, or take any
--------
action to effect, any such registration pursuant to this Section 3(a):
(u) Prior to the end of the six months period following the
Closing Date, and then only with respect to such number of Registrable
Securities so that the average holding period per share with respect to
all Registrable Securities beginning on the date of execution of this
Agreement and ending on the date of sale of any such Registrable
Securities equals or exceeds one (1) year and provided that any shares of
Registrable Securities held by the Holders and not sold as provided above
are subject to a continuing lock-up agreement in form satisfactory to
Premiere for such period of time such that the one-year average holding
period for all Registrable Securities will be satisfied;
(v) Which will allow any Holder to request a registration of
Common Stock which could result in the registration statement for such a
registration being declared effected prior to the 90th day subsequent to
the effective date of any registration effective pursuant to Section 5.2
or 5.3 of the Stock Purchase Agreement between Premiere and NationsBanc
Capital Corporation dated January 18, 1994;
(w) Solely with respect to underwritten registrations requested
pursuant to this Agreement, if Premiere shall have previously effected an
underwritten registration with respect to Registrable Securities pursuant
to Section 3(b) hereof, Premiere shall not be required to effect any
underwritten registration pursuant to this Section 3(a) until a period of
180 days shall have elapsed from the effective date of the most recent
such previous registration; provided that if, in the most recent such
previous registration, participation of the Holders pursuant to Section
3(b) hereof shall not have been to the extent requested pursuant to
Section 3(b) hereof, then Premiere shall not be required to effect any
underwritten registration pursuant to this Section 3(a) until a period of
90 days shall have elapsed from the effective date of the most recent
such previous registration;
-54-
(x) If, upon receipt of a registration request pursuant to this
Section 3(a), Premiere is advised in writing (with a copy to each
Initiating Holder) by a recognized national independent investment
banking firm selected by Premiere that, in such firm's opinion, a
registration at the time and on the terms requested would adversely
affect any public offering of securities of Premiere by Premiere (other
than in connection with benefit and similar plans) or by or on behalf of
any shareholder of Premiere exercising a demand registration right
(collectively, a "Premiere Offering") with respect to which Premiere has
commenced preparations for a registration prior to the receipt of a
registration request pursuant to this Section 3(a), Premiere shall not be
required to effect a registration pursuant to this Section 3(a) until the
earlier of (i) 30 days after the completion of such Premiere Offering,
(ii) promptly after any abandonment of such Premiere Offering or (iii) 60
days after the date of receipt of a registration request pursuant to this
Section 3(a); provided, however, that the periods during which Premiere
-----------------
shall not be required to effect a registration pursuant to this Section
3(a) together with any periods of suspension under Section 3(i) hereof
may not exceed 90 days in the aggregate during any period of 12
consecutive months;
(y) In any particular jurisdiction in which Premiere would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless Premiere is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder;
(z) After Premiere has effected two (2) such registrations
pursuant to this Section 3(a) (in the aggregate for all Holders) and such
registrations have been declared or ordered effective and the sales of
such Registrable Securities shall have closed; provided, that Holders
shall not have the right to request an underwritten registration pursuant
to this Section 3(a) more than one (1) time in any six-month period.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 3(a)(ii) below, include other
Securities of Premiere which are held by Persons who, by virtue of agreements
with Premiere, are entitled to include their Securities in any such registration
("Other Stockholders").
(ii) Underwriting. If the Initiating Holders intend to distribute the
------------
Registrable Securities covered by their request by means of an underwriting,
they shall so advise Premiere as a part of their request made pursuant to
Section 3(a). If Other Stockholders request inclusion in any such registration,
the Holders shall offer to include the securities of such Other Stockholders in
the underwriting and may condition such offer on their acceptance of the further
applicable provisions of this Section 3. The Holders whose shares are to be
included in such registration and Premiere shall (together with all Other
Stockholders proposing to distribute their securities through such underwriting)
enter into underwriting and related agreements in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by Premiere after consultation with the Initiating Holders. Such underwriting
-55-
agreement will contain such representations and warranties by Premiere and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnities and contribution to the effect and to the extent
provided in Section 3(e) hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 3(d)
hereof, and the representations and warranties by, and the other agreements on
the part of, Premiere to and for the benefit of such underwriters shall also be
made to and for the benefit of the Holders. The Company shall cooperate fully
with the Holders and the underwriters in connection with any underwritten
offering. Notwithstanding any other provision of this Section 3(a), if the
representative advises the Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, the securities of
Premiere held by Other Stockholders (other than shares held by Sirrom Capital
Corporation ("Sirrom") which Sirrom has requested be included in the offering
pursuant to existing registration rights granted to Sirrom) shall be excluded
from such registration to the extent so required by such limitation. If, after
the exclusion of such shares, further reductions are still required, the number
of shares included in the registration by each Holder shall be reduced on a pro
rata basis (based on the number of shares held by such Holder), by such minimum
number of shares as is necessary to comply with such request. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to Premiere, the underwriter and
the Initiating Holders. The securities so withdrawn shall also be withdrawn
from registration. If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, Premiere and officers and
directors of Premiere may include its or their securities for its or their own
account in such registration if the representative so agrees and if the number
of Registrable Securities and other securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
(b) Premiere Registration.
---------------------
(i) So long as 20% of the Registrable Securities remain outstanding,
if Premiere shall determine to register any of its equity securities either for
its own account or for the account of Other Stockholders, other than a
registration relating solely to benefit plans, or a registration relating solely
to a Commission Rule 145 transaction, or a registration on any registration form
which does not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, Premiere will:
(A) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which Premiere intends to
attempt to qualify such securities under the applicable blue sky or other
state securities laws); and
(B) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by the Holders within ten (10) business days after the giving
-56-
of the written notice from Premiere described in clause (i) above, except as
set forth in Section 3(b)(ii) below. Such written request shall specify the
amount of Registrable Securities intended to be disposed of by a Holder and
may specify all or a part of the Holders' Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written notice
of its intention to effect such registration and prior to the effective date of
the registration statement filed in connection with such registration, Premiere
shall determine for any reason not to register such equity securities Premiere
may, at its election, give written notice of such determination to the Holders
and thereupon Premiere shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such equity
securities (but not from its obligation to pay Registration Expenses to the
extent incurred in connection therewith as provided herein), without prejudice,
however, to the rights (if any) of Holders immediately to request that such
registration be effected as a registration under Section 3(a) hereof.
(ii) Underwriting. If the registration of which Premiere gives notice
------------
is for a registered public offering involving an underwriting, Premiere shall so
advise each of the Holders as a part of the written notice given pursuant to
Section 3(b)(i)(A). In such event, the right of each of the Holders to
registration pursuant to this Section 3(b) shall be conditioned upon such
Holders' participation in such underwriting and the inclusion of such Holders'
Registrable Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall (together
with Premiere and the Other Stockholders distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected for the
underwriting by Premiere or such Other Stockholders, as the case may be. Such
underwriting agreement will contain such representations and warranties by
Premiere and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution to the effect and to the extent
provided in Section 3(e) hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 3(d),
and the representations and warranties by, and the other agreements on the part
of, Premiere to and for the benefit of such underwriters shall also be made to
and for the benefit of the Holders whose shares are to be included in such
registration. Notwithstanding any other provision of this Section 3(b), if the
representative determines that marketing factors require a limitation on the
number of shares to be underwritten, Premiere shall so advise all holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting shall be
allocated in the following manner: the securities of Premiere held by officers,
directors and Other Stockholders of Premiere (other than shares held by Sirrom
that Sirrom has requested be included in the offering and other than shares of
any Other Stockholder that has requested the offering pursuant to a demand
registration right held by that Other Stockholder) shall be excluded from such
registration and underwriting to the extent required by such limitation, and, if
a limitation on the number of shares is still required, the number of shares
that may be included in the registration and underwriting by each of the Holders
shall be reduced, on a pro rata basis (based on the number of shares held by
such Holder), by such minimum number of shares as is necessary to comply with
such limitation. If any of the Holders or any officer, director or Other
-57-
Stockholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to Premiere and the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance pursuant to this
Section 3(b) shall be borne by Premiere; and all Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Section 3(a) (including any supplements or amendments thereto, whether or not it
becomes effective, and whether all, none or some of the Registrable Securities
are sold pursuant to the registration), and all Selling Expenses incurred in
connection with a registration, qualification or compliance pursuant to Sections
3(a) and 3(b), shall be borne by the Holders of the securities including Other
Stockholders so registered pro rata on the basis of the number of their shares
so registered; provided, however, that if, as a result of the withdrawal of a
request for registration by any of the Holders, as applicable, the registration
statement does not become effective, the Holders and Other Stockholders
requesting registration may elect to bear the Registration Expenses (pro rata on
the basis of the number of their shares so included in the registration request,
or on such other basis as such Holders and Other Stockholders may agree), in
which case such registration shall not be counted as a registration pursuant to
Section 3(a)(i)(B)(z).
(d) Registration Procedures. In the case of each registration effected
-----------------------
by Premiere pursuant to this Section 3, Premiere will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. Premiere will:
(i) keep such registration effective for a period of one hundred eighty
(180) days or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto,
whichever first occurs;
(ii) furnish to each Holder, and to any underwriter before filing with
the Commission, copies of any registration statement (including all exhibits)
and any prospectus forming a part thereof and any amendments and supplements
thereto (including all documents incorporated or deemed incorporated by
reference therein prior to the effectiveness of such registration statement
and including each preliminary prospectus, any summary prospectus or any term
sheet (as such term is used in Rule 434 under the Securities Act)) and any
other prospectus filed under Rule 434 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject the review of the Holders and any such underwriter
for a period of at least five business days, and Premiere shall not file any
such registration statement or such prospectus or any amendment or supplement
to such registration statement or prospectus to which any Holder or any such
underwriter shall reasonably object within five business days after the
receipt thereof; a Holder or such underwriters, if any, shall be deemed to
have reasonably objected to such filing only if the registration statement,
amendment, prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission;
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(iii) furnish to each Holder and to any underwriter, such number of
conformed copies of the applicable registration statement and of each
amendment and supplement thereto (in each case including all exhibits) and
such number of copies of the prospectus forming a part of such registration
statement (including each preliminary prospectus, any summary prospectus or
any term sheet (as such term is used in Rule 434 under the Securities Act))
and any other prospectus filed under Rule 434 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including without limitation documents incorporated or deemed to
be incorporated by reference prior to the effectiveness of such registration,
as each of the Holders or any such underwriter, from time to time may
reasonably request;
(iv) to the extent practicable, promptly prior to the filing of any
document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than the date such document
is filed with the Commission, provide copies of such document to the Holders,
if requested, and to any underwriter, make representatives of Premiere
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as any Holder or any such underwriter reasonably may request;
(v) make available at reasonable times for inspection by the Holders, any
underwriter participating in any disposition pursuant to such registration
and any attorney or accountant retained by the Holders or any such
underwriter, all financial and other records, pertinent corporate documents
and properties of Premiere and cause the officers, directors and employees of
Premiere to supply all information reasonably requested by the Holders and
any such underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration
statement and prior to the effectiveness of the applicable registration
statement;
(vi) use its reasonable best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
under such other securities or blue sky laws of such States of the United
States of America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration shall reasonably request,
(y) to keep such registration or qualification in effect for so long as the
applicable registration statement remains in effect, and (z) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities
to be sold by such sellers, except that Premiere shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to execute a general consent
to service of process in effecting such registration, qualification or
compliance, unless Premiere is already subject to service in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
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(vii) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities
as may be necessary in the opinion of counsel to Premiere and counsel to the
Holders of Registrable Securities to enable the Holders thereof to consummate
the disposition of such Registrable Securities;
(viii) subject to Section 3(g) hereof, promptly notify each Holder of
Registrable Securities covered by a registration statement (A) upon discovery
that, or upon the happening of any event as a result of which, the prospectus
forming a part of such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of proceedings
for that purpose, (C) of any request by the Commission for (1) amendments to
such registration statement or any document incorporated or deemed to be
incorporated by reference in any such registration statement, (3) supplements
to the prospectus forming a part of such registration statement or (4)
additional information, or (D) of the receipt by Premiere of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, and at the
request of any such Holder promptly prepare and furnish to it a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ix) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any such registration, or the lifting
of any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction;
(x) if requested by any Initiating Holder, or any underwriter, promptly
incorporate in such registration statement or prospectus, pursuant to a
supplement or post effective amendment if necessary, such information as the
Initiating Holder and any underwriter may reasonably request to have included
therein, including, without limitation, information relating to the "plan of
distribution" of the Registrable Securities, information with respect to the
principal amount or number of shares of Registrable Securities being sold to
such underwriter, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering and
make all required filings of any such prospectus supplement or post-effective
amendment as soon as practicable after Premiere is notified of the matters to
be incorporated in such prospectus supplement or post effective amendment;
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(xi) furnish to the Holders, addressed to them, an opinion of counsel for
Premiere, dated the date of the closing under the underwriting agreement, if
any, or the date of effectiveness of the registration statement if such
registration is not an underwritten offering, and use its reasonable best
efforts to furnish to the Holders, addressed to them, a "cold comfort" letter
signed by the independent certified public accountants who have certified
Premiere's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and the
prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities and such other matters as the Holders may reasonably
request;
(xii) provide promptly to the Holders upon request any document filed by
Premiere with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on each
securities exchange on which securities of the same class are then listed,
or, if not then listed on any securities exchange, to be eligible for trading
in any over-the-counter market or trading system in which securities of the
same class are then traded.
(e) Indemnification.
---------------
(i) Premiere will indemnify each of the Holders, as applicable, each
of its officers, directors, members and partners, and each person controlling
each of the Holders, with respect to each registration which has been effected
pursuant to this Section 3, and each underwriter, if any, and each person who
controls any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by Premiere of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to Premiere and relating to action or inaction required of Premiere
in connection with any such registration, qualification or compliance, and will
reimburse each of the Holders, each of its officers, directors, members and
partners, and each person controlling each of the Holders, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, provided that Premiere will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to Premiere by the Holders or
underwriter and stated to be specifically for use therein.
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(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify Premiere, each of its directors and
officers and each underwriter, if any, of Premiere's securities covered by such
a registration statement, each person who controls Premiere or such underwriter,
each Other Stockholder and each of their officers, directors, members and
partners, and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse
Premiere and such Other Stockholders, directors, officers, partners, members,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to Premiere by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder and under clause (vi) below shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 3(e)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of one such counsel for all Indemnified Parties shall be at
the expense of the Indemnifying Party), and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 3 unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 3(e) is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
-62-
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with any underwritten public offering contemplated by
this Agreement are in conflict with the foregoing provisions, the provisions in
such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of Premiere and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 434(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(f) Information by the Holders. Each of the Holders holding securities
--------------------------
included in any registration shall furnish to Premiere such information
regarding such Holder and the distribution proposed by such Holder as Premiere
may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the provisions of
--------------------------------
Sections 3(a) and (b), if the Board of Directors of Premiere determines in good
faith that it is in the best interests of Premiere not to disclose the existence
of facts surrounding any proposed or pending acquisition, disposition, strategic
alliance or financing transaction or other material nonpublic transaction
involving Premiere, Premiere will certify such determination to CMG and then
may, by notice to the Holders in accordance with Section 5(a), (1) suspend the
rights of the Holders to make sales pursuant to any effective registration for
such a period of time as the Board of Directors may determine and (2) postpone
any registration which is requested pursuant to Section 3(a), in each case for
such a period of time as the Board of Directors may determine; provided that no
such suspension or postponement shall exceed ninety (90) days and provided,
-63-
further, that any such suspension or postponement shall serve to increase the
180-day period referred to in Section 3(d)(i) by the same number of days as the
period of suspension or postponement.
(h) Assignment. The registration rights set forth in Section 3 hereof
----------
may be assigned, in whole or in part, to any transferee of Registrable
Securities who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Investor shall be a Holder only with
respect to such Registrable Securities so acquired and any stock of Premiere
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Registrable Securities) and shall be bound by all
obligations and limitations of this Agreement).
(i) Limitation as to Amount. Premiere will not be required to effect any
-----------------------
registration pursuant to this Section 3 unless the Holders or Holder requesting
registration propose to dispose of Registrable Securities having an aggregate
expected gross offering price of at least Five Hundred Thousand Dollars
($500,000).
4. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Directly or Indirectly. Where any provision in this Agreement refers
----------------------
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
5. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing and
shall be delivered by facsimile or by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to Premiere, to Premiere Technologies, Inc., 0000 Xxxxxxxxx
Xxxx, X.X., Xxx Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention:
Chief Executive Officer, with a copy to Xxxxxxx X. Xxxxxx, Xxxxxx & Bird, 0000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 or at such other address as
it may have furnished in writing to CMG;
(B) if to CMG, to CMG Information Services, Inc., 000 Xxxxxxxxxxx
Xxxxxx, Xxxxx X000, X.X. Xxx 0000, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000,
Attention: Chief Financial Officer with a copy to Xxxxxxx Xxxxxxxx, II, Xxxxxx
& Dodge LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other
-64-
addresses as may have been furnished Premiere in writing.
(ii) Any notice so addressed shall be deemed to be given: if delivered
by hand, on the date of such delivery; if mailed by courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.
(b) Reproduction of Documents. This Agreement and all documents relating
-------------------------
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by CMG by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and CMG may destroy any original document so reproduced. The parties
hereto agree and stipulate that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by CMG in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
(c) Third Party Beneficiaries; Successors and Assigns. Each of the
-------------------------------------------------
Shareholders as of the Effective Date of the Acquisition is an intended
beneficiary of this Agreement and shall be entitled to the benefits of this
Agreement, subject to compliance with the obligations of this Agreement as
applied to Shareholders hereunder. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties.
(d) Entire Agreement; Amendment and Waiver; Investment Representation and
---------------------------------------------------------------------
Lockup Agreement. This Agreement constitutes the entire understanding of the
----------------
parties hereto and supersedes all prior understanding among such parties. This
Agreement may be amended, and the observance of any term of this Agreement may
be waived, with (and only with) the written consent of Premiere and the Holders
of a majority of the then outstanding Registrable Securities. Nothing in this
Agreement shall supercede or modify any provision of the Investment
Representation and Lockup Agreement of even date herewith between Premiere and
CMG.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PREMIERE TECHNOLOGIES, INC.
By:
-------------------------------------
Name:
------------------------------
Title:
------------------------------
CMG@VENTURES, L.P.:
By: CMG@VENTURES, Inc.
------------------------------------
Managing General Partner
By:
--------------------------------
Name:
--------------------------
Title:
--------------------------
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EXHIBIT E
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
September 18, 1996, by and among PREMIERE TECHNOLOGIES, INC., a Georgia
corporation ("Premiere" or "Escrow Agent"), and the Members of TeleT
Communications, LLC, a Delaware limited liability corporation ("TeleT"),
identified on Schedule I hereto (each a "Member" and collectively the
"Members").
W I T N E S S E T H
- - - - - - - - - -
PTEK Acquisition Corporation ("Sub") is a wholly owned subsidiary of
Premiere and each of Premiere and Sub is a party to an Asset Purchase Agreement
(the "Purchase Agreement") with TeleT, dated as of September 18, 1996, pursuant
to which TeleT has assigned substantially all of its assets to Sub and Sub has
assumed certain of TeleT's liabilities. Pursuant to the terms of the Purchase
Agreement, Escrow Shares have been issued and will be held by the Escrow Agent
pursuant to the terms of this Agreement until termination of this Agreement as
provided herein.
The Members have agreed to indemnify Premiere pursuant to Article 7 of
the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
On this date, Sub has delivered to the Escrow Agent a stock certificate in
negotiable form representing the Escrow Shares and naming the Indemnitor
Representative, as representative of the pro rata interests of the Members, as
the registered holder, along with a schedule showing for each Member (i) the
respective percentage interest (the "Percentage Interest") of each such Member
in the Escrow Shares, and (ii) the corresponding aggregate maximum number of
shares of Premiere Common Stock issuable to each Member, subject to the
adjustments provided herein. The Escrow Agent shall hold the Escrow Shares as
Escrow Agent on behalf of, and as a convenience to the Members with the same
force and effect as if the Escrow Shares had been delivered by Sub to each
Member and subsequently delivered by such Member to the Escrow Agent. The Escrow
Agent shall hold the Escrow Shares for the benefit of Premier and the Members,
as the case may be, pursuant to the terms of this Agreement.
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ARTICLE 2
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
(a) "AGGREGATE VALUE" at any time shall mean the product of the Value Per
Share and the number of Escrow Shares then held in escrow pursuant to this
Agreement.
(b) "DISTRIBUTION DATE" shall mean the fifth anniversary of the Closing
Date with respect to the Escrow Assets in the CMG Escrow Account and the
sixth anniversary of the Closing Date with respect to the Escrow Assets held
in the Other Indemnitors' Escrow Account; provided, however, that if no
Intellectual Property Claim exists on the fourth anniversary of the Closing
Date, the Distribution Date with respect to one-half (1/2) of the CMG Escrow
Assets in the CMG Escrow Account and also with respect to one-half (1/2) of
the Other Indemnitors' Escrow Assets in the Other Indemnitors' Escrow Account
shall be the fourth anniversary of the Closing Date, and if no Intellectual
Property Claim exists on the fifth anniversary of the Closing Date, the
Distribution Date with respect to one-half (1/2) of the remaining Other
Indemnitors' Escrow Assets then in the Other Indemnitors' Escrow Account
shall be the fifth anniversary of the Closing Date (the other half being
retained to the sixth anniversary of the Closing Date), all as provided in
Section 7.2(b) of the Purchase Agreement and Section 3.3 hereof.
(c) "INTELLECTUAL PROPERTY CLAIM" shall mean an Indemnification Claim
under Section 7.1(c) of the Purchase Agreement.
(d) "VALUE PER SHARE" on any date shall mean (i) the closing sales price
per share of the Premiere Common stock, regular way, on such date on the
national securities exchange having the greatest volume of trading in the
stock during the thirty (30) day period preceding such date or, if such
exchange was not open for trading on such date, the next preceding date on
which it was open; (ii) if the Premiere Common Stock is not traded on any
national securities exchange, the average of the closing high bid and low
asked prices of the stock on the over-the-counter market on the date such
value is to be determined, or in the absence of closing bids on such date,
the closing bids on the next preceding date on which there were bids; or
(iii) if the stock also is not traded on the over-the-counter market, the
fair market value as determined in good faith by Premiere based on such
relevant facts as may be available, which may include opinions of independent
experts, the price at which recent sales of stock have been made, the book
value of the stock, and Premiere's past, current and future earnings.
Any other capitalized terms used herein but not defined herein shall have the
same meaning as provided in the Purchase Agreement.
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ARTICLE 3
TERM; DISTRIBUTION OF ESCROW SHARES; LIMITS
3.1 TERM. The term of this Agreement shall commence at the date hereof and
----
shall terminate at such time as all Escrow Shares and other Escrow Assets have
been distributed to the Members, canceled or distributed to Premiere pursuant to
the terms of this Agreement and the Purchase Agreement.
3.2 ADJUSTMENT OF ESCROW SHARES. (a) The number of Escrow Shares subject to
---------------------------
this Agreement shall be adjusted from time to time, as follows: If, between the
date of this Agreement and the Distribution Date, Premiere shall be entitled to
be indemnified pursuant to an Indemnification Claim under Article 7 of the
Purchase Agreement, then Premiere shall deliver to the Indemnitor Representative
and the Escrow Agent a notice thereof (a "Notice of Indemnification
Obligation"), and Premiere and the Indemnitor Representative shall agree in
writing on the dollar amount owed by the Members pursuant to such
Indemnification Claim (the "Indemnification Amount"). The Indemnification Amount
shall consist of the "CMG Indemnification Amount," representing CMG's
obligation, if any, with respect to the Indemnification Amount pursuant to
Section 7 of the Purchase Agreement, and the "Other Indemnitors' Indemnification
Amount," representing the Other Indemnitors' obligation, if any, with respect to
the Indemnification Amount. Section 7 of the Purchase Agreement shall in each
case govern as to the priority of any Indemnitor's obligation to pay an
Indemnification Amount or the share to be paid by such Indemnitor, if any. In no
event shall the respective indemnification obligations of CMG and of the Other
Indemnitors exceed the amounts set forth in Section 7.2(d) of the Purchase
Agreement. Upon execution by the parties of the agreement setting forth the
Indemnification Amount, (including the CMG Indemnification Amount, if any, and
the Other Indemnitors' Indemnification Amount, if any) Premiere shall (A) issue
and deliver to the Escrow Agent new stock certificates (the "Replacement
Certificates") in the respective names of the Members in accordance with Section
3.2(b) hereof, (B) cancel the Premiere Common Stock certificates representing
the Escrow Shares held in escrow immediately prior to delivery of the Notice of
Indemnification Obligation (such certificates, the "Old Certificates"), and (C)
direct the Escrow Agent to hold the Replacement Certificates in escrow pursuant
to this Agreement. Upon the issuance of any Replacement Certificates, the shares
represented by such Replacement Certificates shall be deemed to be "Escrow
Shares" for all purposes of this Agreement.
(b) The Replacement Certificate issued to the CMG Escrow Account upon
satisfaction by CMG of any Indemnification Obligation pursuant to Section 7 of
the Purchase Agreement shall represent the number of shares of Premiere Common
Stock equal to the difference between (x) the number of Escrow Shares in the CMG
Escrow Account immediately prior to such Notice of Indemnification Obligation
minus (y) the quotient (rounded to the next highest whole number) obtained by
dividing the CMG Indemnification Amount by the Value Per Share.
(c) The Replacement Certificates issued to the Other Indemnitors' Escrow
Account upon satisfaction by the Other Indemnitors of any Indemnification
Obligation pursuant to Section 7 of the Purchase Agreement shall represent the
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number of shares of Premiere Common Stock equal to the product of (i) the
difference between (x) the number of Escrow Shares in the Other Indemnitors'
Escrow Account immediately prior to such Notice of Indemnification Obligation
minus (y) the quotient (rounded to the next highest whole number) obtained by
dividing the Other Indemnitors' Indemnification Amount by the Value Per Share
and (ii) each Other Indemnitor's Percentage Interest.
3.3 DISTRIBUTION OF ESCROW SHARES. On the Distribution Date, Premiere shall
-----------------------------
cancel certificates representing the Escrow Shares then held in escrow as of the
Distribution Date ("Available Escrow Shares") and with respect to which an
Indemnification Claim is not pending and distribute new certificates to the
Members in accordance with each Member's Percentage Interest. With respect to
Indemnification Claims pending as of the Distribution Date, Premiere and the
Indemnitor Representative shall use their reasonable efforts to agree in writing
on the Indemnification Amount with respect to any such pending Indemnification
Claims; provided, that if Premiere and the Indemnitor Representative are not
able to agree on the Indemnification Amount with respect to such Indemnification
Claims by the Distribution Date, the amount of the Indemnification Amount for
purposes of the calculations in the following sentence of this Section 3.3 shall
be the amount claimed by Premiere in its Notice of Indemnification Claim. Upon
determination of the Indemnification Amount in accordance with the preceding
sentence, Premiere shall promptly (i) calculate the number of Escrow Shares of
each Member necessary to satisfy the Indemnification Amount in the same manner
as set forth in Section 3.2(a) hereof (the "Disputed Escrow Shares"), and (ii)
issue to each Member a Replacement Certificate for the number of shares of
Premiere Common Stock (the "Undisputed Escrow Shares") equaling: (x) in the case
of CMG, obtained by subtracting the Disputed Escrow Shares from the number of
Escrow Shares in the CMG Escrow Account on the Distribution Date and (y) in the
case of the Other Indemnitors, obtained by subtracting the Disputed Escrow
Shares from the number of Escrow Shares in the Other Indemnitors' Escrow Account
on the Distribution Date, multiplied by each Indemnitor's Percentage Interest.
Any such delivery of Premiere Common Stock to Members shall be of full shares
and any fractional portions shall be rounded to a whole number by the Escrow
Agent so that the number of shares remaining in escrow to be delivered will be
fully allocated among such Members. Upon the final resolution as agreed by
Premiere and the Indemnitor Representative in writing of any Indemnification
Claim for which Disputed Escrow Shares were retained in escrow after the
Distribution Date, the Escrow Agent shall promptly cancel the appropriate number
of Disputed Escrow Shares corresponding to the Indemnification Amount
corresponding to such Indemnification Claim (if any) and shall deliver any
remaining Disputed Escrow Shares to the Members in accordance with their
respective interests in such remaining Disputed Escrow Shares.
3.4 EFFECT OF FINAL DELIVERY. This Agreement shall continue in full force
------------------------
and effect until the Escrow Agent has delivered or canceled all of the Escrow
Shares pursuant to the terms hereof. After all of such shares have been so
delivered or canceled, all rights, duties and obligations of the respective
parties hereunder shall terminate.
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ARTICLE 4
ESCROW STOCK CERTIFICATES; RIGHT TO SUBSTITUTE CASH THEREFOR
4.1 SUBSTITUTION OF NEW CERTIFICATES. The Escrow Agent may, with the prior
--------------------------------
written consent of the Indemnitor Representative, at any time request Premiere
to issue new certificates representing the Escrow Shares in such denominations
as may be necessary or appropriate in carrying out the Escrow Agent's
obligations under this Agreement.
4.2 SUBSTITUTION OF CASH FOR ESCROW SHARES. At any time, a Member may
--------------------------------------
substitute cash for part or all of its Escrow Shares, by notice to Premiere and
to the Escrow Agent of the same and by tender of funds to Premiere in the amount
of $24.00 times the number of Escrow Shares to be redeemed. Upon receipt of
such notice and tender of funds, Premiere shall promptly issue and deliver to
such Member a Replacement Certificate for the number of shares of Premiere
Common Stock so redeemed. Any cash transferred to Escrow shall be held and
invested in U.S. government or other securities consistent with the investment
policies of the Escrow Agreement. For purposes of the provisions of Article 3
of this Agreement, such cash assets shall be distributed to Premiere to satisfy
Indemnification Claims in lieu of the adjustment procedures of Section 3.2
hereof but otherwise on the date such adjustment would otherwise be made, or
distributed to the Members on the Distribution Date in a manner consistent with
the provisions of Section 3.3 hereof.
ARTICLE 5
DIVIDENDS; VOTING RIGHTS
5.1 CASH DIVIDENDS; VOTING RIGHTS. The Members shall be entitled to receive
-----------------------------
currently any and all cash dividends or other cash income with respect to the
Escrow Shares. Each Member shall have the right to direct the Escrow Agent in
writing as to the exercise of voting rights with respect to such Escrow Shares
held by the Escrow Agent on behalf of such Member, and the Escrow Agent shall
comply with any such directions if received in a timely manner. In the absence
of such directions, the Escrow Agent shall not vote any such Escrow Shares.
5.2 STOCK SPLITS; STOCK DIVIDENDS. In the event of any stock split or stock
-----------------------------
dividend with respect to Premiere Common Stock that becomes effective during the
term of this Agreement, the additional shares so issued with respect to the
Escrow Shares shall be added to the Escrow Shares and subject to the escrow
covered by this Agreement and any other references herein to a specific number
of shares of Premiere Common Stock or references herein to prices for or the
fair market value of Premiere Common Stock shall be adjusted accordingly.
ARTICLE 6
THE ESCROW AGENT
6.1 LIABILITY. Premiere, in its capacity as Escrow Agent, or any successor
---------
Escrow Agent, shall be liable only to hold the Escrow Shares and other Escrow
Assets and to deliver the same to the persons named herein in accordance with
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the provisions of this Agreement. By acceptance of this Escrow Agreement,
Premiere, in its capacity as Escrow Agent, or any successor Escrow Agent, is
acting in the capacity of a depository only, and shall not be liable or
responsible for any damages, losses or expenses unless such damages, losses or
expenses shall be caused by the negligence or malfeasance of Premiere, in its
capacity as Escrow Agent, or the gross negligence or malfeasance of any
successor Escrow Agent. Neither Premiere, in its capacity as Escrow Agent, nor
any successor Escrow Agent, shall incur any liability with respect to (i) any
action taken or omitted in good faith upon the advice of its counsel with
respect to any questions relating to the duties and responsibilities of the
Escrow Agent under this Agreement; or (ii) any action taken or omitted in
reliance upon any instrument, including the written instructions provided for
herein, not only as to the due execution of such instrument, or the identity, or
authority of any person executing such instrument, or the validity and
effectiveness of such instrument, but also as to the truth and accuracy of any
information contained therein, provided that the Escrow Agent shall in good
faith believe such instrument to be genuine, to have been signed by a proper
person or persons, and to conform to the provisions of this Agreement. In the
event of any disagreement or the presentation of adverse claims or demands in
connection with or for any item affected hereby, the Escrow Agent shall, at its
option, be entitled to refuse to comply with any such claims or demands during
the continuance of such disagreement and may refrain from delivering any item
affected hereby, and in so doing the Escrow Agent shall not become liable to the
parties, or to any other person, due to its failure to comply with any such
adverse claim or demand. The Escrow Agent shall be entitled to continue, without
liability, to refrain and refuse to act until all of the rights of the adverse
claimants have been either fully resolved among themselves, arbitrated to a
final award, or finally adjudicated by a court having jurisdiction over the
dispute. The Escrow Agent shall be held harmless and indemnified by the parties
hereto in connection with any claims against it in connection with its service
as escrow agent hereunder. Any action requested to be taken by the Escrow Agent
hereunder and not otherwise specifically set forth herein shall require the
agreement in writing of the Member Representative, Indemnitor and any successor
Escrow Agent.
6.2 SUCCESSOR. The Escrow Agent, with the prior written consent of the
---------
Member Representative, may by written instrument designate a bank or trust
company to act as successor Escrow Agent. Any such successor Escrow Agent must
agree to be and shall be bound by, and shall have all the rights, duties and
responsibilities of the Escrow Agent under, this Agreement.
6.3 EXPENSES. Premiere shall bear all of its expenses incurred in carrying
--------
out its obligations as Escrow Agent under this Agreement. Compensation for the
normal services of any successor Escrow Agent, if any, shall be borne by the
Members and Premiere equally. Any successor Escrow Agent shall be reimbursed for
any reasonable expenses, including the actual out-of-pocket cost of outside
legal services should such Escrow Agent deem it necessary in its reasonable
discretion to retain an outside attorney, and Premiere and the Members shall
share equally the reimbursement of such expenses of such Escrow Agent, except
that (a) if Premiere is unsuccessful in any litigation relating to such Escrow
Agent, then the fees and expenses of such Escrow Agent in connection therewith
shall be paid by Premiere, or (b) should the Members be the unsuccessful party
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in any such litigation, then the Members will bear the fees and expenses of such
Escrow Agent in connection therewith. Any successor Escrow Agent shall not be
liable for any action taken in good faith in accordance with the advice of an
attorney.
ARTICLE 7
INDEMNITOR REPRESENTATIVE
7.1 POWER AND AUTHORITY. The Indemnitor Representative shall have full power
-------------------
and authority to represent the Members and their successors with respect to all
matters arising under this Agreement, and all action taken by the Indemnitor
Representative hereunder shall be binding upon such Members and their successors
as if expressly ratified and confirmed in writing by each of them. Without
limiting the generality of the foregoing, the Indemnitor Representative shall
have full power and authority, on behalf of all the Members and their
successors, to interpret all the terms and provisions of this Agreement, to
dispute or fail to dispute any claim of Indemnifiable Loss against the Escrow
Shares made by an Indemnitee, to negotiate and compromise any dispute which may
arise under this Agreement, to sign any releases or other documents with respect
to any such dispute, and to authorize payments to be made with respect thereto.
7.2 RESIGNATION; SUCCESSORS. The Indemnitor Representative, or any successor
-----------------------
hereafter appointed, may resign and shall be discharged of his duties hereunder
upon the appointment of a successor Indemnitor Representative as hereinafter
provided. In case of such resignation, or in the event of the death or
inability to act of the Indemnitor Representative, a successor shall be named
from among the Members by a majority in interest of the Members. Each such
successor Indemnitor Representative shall have all the power, authority, rights
and privileges hereby conferred upon the original Indemnitor Representative, and
the term "Indemnitor Representative" as used herein shall be deemed to include
such successor Indemnitor Representative.
ARTICLE 8
MISCELLANEOUS
8.1 TRANSFERABILITY. A Member may not transfer any interest in the Escrow
---------------
Shares or any other right under this Escrow Agreement to any other party, except
that upon written notice from the legal representative of the estate of a
deceased Member to the Escrow Agent, the rights of such Member under this Escrow
Agreement shall be transferred to the estate of such Member, and subsequently to
any beneficiary thereof, in the event of the Member's death; provided, however,
that any such beneficiary or the legal representative of any such estate shall
be bound by the provisions of this Escrow Agreement without taking any further
action. The Escrow Agent shall be entitled to treat the legal representative of
the estate of such Member, and subsequently any beneficiary thereof, as the
absolute owner of the rights of such Member under this Escrow Agreement in all
respects and shall incur no liability for distributions made in good faith to
the legal representatives of such Member or such beneficiary in accordance with
the terms of this Escrow Agreement. The contingent right to receive Escrow
Shares shall not be transferable by the Members otherwise than by will or by the
laws of descent and distribution.
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8.2 NOTICES. Each party shall keep each of the other parties hereto advised
-------
in writing of all transactions pursuant to this Agreement. Any notices or other
communications required or permitted under this Agreement shall be in writing
and shall be sufficiently given if sent by registered or certified mail, postage
prepaid, addressed as follows, or if sent by facsimile to the facsimile numbers
identified below:
If to Premiere:
Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
3399 Peachtree Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
with a copy to:
Xxxxxx & Bird
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
If to the Members or the Indemnitor Representative:
Xxxxx Xxxxxxxxx
c/o Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
3399 Peachtree Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx and Xxxxxxx
00 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
and
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XXX@Xxxxxxxx, X.X.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Managing General Partner
Telecopy Number: _____________
or such other person or address as shall be furnished in writing by any of the
parties and any such notice or communication shall be deemed to have been given
as of the date so mailed.
8.3 CONSTRUCTION. This Agreement shall be governed by and construed in
------------
accordance with the laws of the State of Georgia, without regard to any
applicable conflicts of laws.
8.4 BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding upon the respective heirs, executors, administrators, successors and
assigns of the parties hereto.
8.5 SEPARABILITY. If any provision or section of this Agreement is
------------
determined to be void or otherwise unenforceable, it shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain unenforceable in accordance with their terms.
8.6 HEADINGS. The headings and subheadings contained in this Agreement are
--------
for reference only and for the benefit of the parties and shall not be
considered in the interpretation or construction of this Agreement.
8.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
-------------------------
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
8.8 AMENDMENTS. This Agreement may be amended from time to time but only by
----------
written agreement signed by all of the parties hereto.
8.9 THIRD PARTY BENEFICIARIES. Each Subsidiary of Premiere and each of the
-------------------------
directors, officers and employees of Premiere and each of its Subsidiaries are
expressly intended to be third party beneficiaries of the indemnities and
obligations of the Members as if they were parties to this Agreement.
8.10 SUCCESSOR ESCROW AGENT. The parties to this Agreement shall negotiate
----------------------
in good faith to find a mutually acceptable successor Escrow Agent to replace
Premiere within sixty (60) days of the date of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the
day and year first above written.
PREMIERE TECHNOLOGIES, INC.
By:
---------------------------------------
MEMBERS:
CMG@VENTURES, L.P.:
By: CMG@VENTURES, INC.
Managing General Partner
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
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Xxxxxxx Xxxxxxx
------------------------------------------
Xxxxx Xxxxxxxxx
------------------------------------------
Xxxxx Xxxxxxx
------------------------------------------
Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxx Roswell
------------------------------------------
Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxx
------------------------------------------
Xxxxxx Xxxxxx
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------------------------------------------
Xxxxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxxx XxXxxxxx
------------------------------------------
Xxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxxxx
------------------------------------------
Xxxxxxxxx Xxxxx
------------------------------------------
Xxxxxxxxxxx Brouillat
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