NOTE SATISFACTION AND RELATED AGREEMENTS
BETWEEN TECLINK, INC. ("Borrower") and DIGITEC 2000, INC., a Nevada corporation,
formerly known as Promo Tel, Inc. ("Company") entered into as June 1, 1997.
RECITALS
A. On July 23, 1996, Borrower and the Company entered into that certain
Agreement for Purchase and Sale of Assets ("Purchase Agreement") to be effective
as of January 20, 1996 ("Effective Date"). All capitalized terms not defined
herein shall have the meaning set forth in the Purchase Agreement.
B. In connection with the Purchase Agreement, on July 23, 1996, Borrower and the
Company entered into that certain Xxxx of Sale, Assignment and Assumption
Agreement effective on the Effective Date.
C. In connection with the Purchase Agreement, on July 23, 1996, Borrower
executed and delivered to Company a promissory note in the principal amount of
$2,405,000 effective on the Effective Date ("Note").
D. As security for its obligations under the Note, on July 23, 1996, Borrower
and the Company entered into that certain Security Agreement effective on the
Effective Date ("Security Agreement").
E. Borrower is in Default under the Note and the Security Agreement.
F. Borrower and Company desire to provide for satisfaction of the Note, on the
terms and conditions specified herein.
AGREEMENT
1. Acceleration of Note.
Exhibit A sets forth the schedule of all payments made by Borrower to the
Company under the Note and sets forth the current amount outstanding including
accrued and unpaid interest as of the date hereof ("Remaining Balance"). Company
hereby accelerates the due date of the Note and makes all of the Remaining
Balance immediately payable.
2. Satisfaction by Borrower.
(a) Company agrees to accept from Borrower, and Borrower agrees to transfer to
the Company, in full or partial satisfaction of the Note, as determined below,
all of the assets of the Borrower, described on Exhibit B ("Assets") by the
execution and delivery of the Warranty Xxxx of Sale and Assignment Agreement
attached as Exhibit C.
(b) In connection with the transfer of the Assets to the Company, Company agrees
to assume the liabilities of Borrower described on Exhibit D ("Assumed
Liabilities").
(c) The Note shall be satisfied, and Borrower shall be forever discharged and
released therefrom, in an amount equal to Assets minus the Assumed Liabilities,
as specified on Exhibit E, and as adjusted by the parties within 90 days hereof
to reflect any decrease in Asset value deemed by the parties to have occurred
due to the transfer made hereby.
(d) Any Remaining Balance not satisfied in accordance with the above shall
continue to be immediately due and payable under the Note and interest shall
accrue thereon and Company shall continue to maintain all of its rights under
the Note with respect thereto and any unsatisfied amount shall continue to be
secured under the terms of the Security Agreement.
3. Representations by Borrower
(a) Borrower represents and warrants that it has good and marketable title to
the Assets and that it has conveyed the Subject Property to Company free and
clear of all liens and encumbrances as of the date hereof, excluding Company's
rights under the Security Agreement.
(b) Borrower has sufficient rights in and to the Assets necessary to the
operation of its business and the right to transfer such rights to Company
without the consent of any third party.
(c) As of the date hereof, the Assets are in good and workable condition.
(d) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate and shareholder action by Borrower. This
Agreement and exhibits have been duly executed and delivered by Borrower and
constitute the valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms.
(e) The execution and delivery of this Agreement by Borrower and the performance
by Borrower of its obligations hereunder will not violate or conflict with, or
constitute a breach or default under, or result in the creation or imposition of
any lien under (I) the Certificate of Incorporation or by-laws of Borrower, (ii)
any statute, law, regulation or rule applicable to Borrower, or (iii) any
contract, agreement, lease, mortgage, judgment, order, decree or other
instrument to which Borrower is a party or by which Borrower is bound.
4. Indemnification by Borrower
Borrower shall defend, indemnify and hold Company and any of its affiliates,
directors, officers, employees or representatives harmless from, against and in
all respect of any and all claims, demands, lawsuits, proceeding, losses,
assessments, fines, penalties, administrative orders, obligations, costs,
expenses, liabilities and damages, including interest, penalties and reasonable
attorneys' fees (collectively, "Claims") which arise, result from or are related
to Borrower's breach of, or failure to perform, any of its representations,
warranties, covenants, commitments, agreements or obligations under this
Agreement or in any writing, certificate, exhibit, schedule, statement, list,
report, instrument or other document furnished or delivered to Company in
connection with this Agreement and from all Claims associated with the Assets
incurred or relating
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to periods prior to the date hereof.
5. Heritage
The parties hereby confirm to each other that Section 9(d) of the Purchase
Agreement shall continue to apply to the Heritage Case.
6. Xxxxxx
The parties acknowledge that existence of the claims by Borrower against Xxxxxx
Network Systems as further described on Exhibit F ("Xxxxxx Case"). Borrower
agrees that Company shall bear no liability in connection with the Xxxxxx Case
and agrees to indemnify and defend Company therefrom pursuant to Borrower's
indemnification obligation set forth above. Company agrees that Borrower shall
be entitled to any and all proceeds in connection with its claim against Xxxxxx.
7. Notices
Unless otherwise provided in this Agreement, all notices, demands, requests,
approvals or other communications which may be or are required to be given,
served or sent pursuant to this Agreement shall be in writing in the English
language and shall be hand-delivered, mailed by registered or certified mail,
return receipt requested, postage prepaid, or delivered by a recognized
commercial courier, directed to the parties at such addresses as are set forth
on the signature page hereof. Each party may designate by notice in writing a
new address to which any communication may thereafter be so given, served or
sent. Each communication which shall be mailed or delivered in the manner
described above, shall be deemed sufficiently given, served, sent or received
for all purposes at such time as it is delivered to the addressee (with the
return receipt or the delivery receipt being deemed conclusive evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
8. Assignment
Neither the Agreement nor any rights therein may be assigned by either party
without the express prior written consent of the other party; which consent
shall not be unreasonably withheld. Any such attempted assignment without such
consent shall be void. Subject to the above, this Agreement shall be binding
upon the parties and their respective successors, assigns and legal
representatives.
9. Entire Agreement
This Agreement, which includes and incorporates by reference all appendices and
supplements hereto, constitutes the entire understanding and contract between
the parties and supersedes any and all prior and contemporaneous, oral or
written representations, communications, understandings and agreements between
the parties with respect to the subject matter hereof, all of which
representations, communications, understandings and agreements are hereby
canceled to the extent they are not specifically merged herein. The parties
acknowledge and agree that neither of the parties is entering into this
Agreement on the basis of any representations or promises not expressly
contained herein. Notwithstanding the foregoing, the Note and Security
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10. Severability
If any part, term or provision of this Agreement be held illegal, invalid or
unenforceable, such part, term or provision shall be deemed severable and shall
not affect the other provisions hereof, which other provisions shall remain in
full force and effect. To the extent that any part, term or provision of this
Agreement is held to be illegal, invalid or unenforceable because it is deemed
to be overbroad, that part, term or provision shall not be void but rather shall
be limited only to the extent required by applicable law and enforced as so
limited.
11. Amendments; Waiver
This Agreement may not be amended, altered or modified except by an instrument
in writing duly executed by both parties and such amendment, alteration or
modification shall become effective only when accepted by Supplier. The failure
or delay of either party at any time to enforce any provision of this Agreement
shall in no way affect its right thereafter to require complete performance by
the other party. Any waiver to be effective must be in writing. The execution of
this Agreement by Company shall not be deemed a waiver of any of its rights
under the Note or Security Agreement.
12. Governing Law; Arbitration
This Agreement and the provisions herein contained shall be governed exclusively
by, and construed and interpreted exclusively in accordance with the laws of the
State of Mississippi. The parties agree to arbitrate any disputes hereunder in
accordance with paragraph 10 of the Purchase Agreement.
13. Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one and the same
instrument.
14, Further Assurances
Each of the parties shall execute and deliver, at its own expense, such further
instruments of transfer and conveyance, documents and certificates as may be
reasonably required for it to consummate all of the matters contemplated by this
Agreement.
IN WITNESS THEREOF, the parties have duly executed this Agreement as of the date
first written above.
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DIGITEC 2000 INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------
Title: President
-----------------------------
TECLINK, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-----------------------------
Title: President
-----------------------------
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EXHIBIT A
PAYMENTS MADE UNDER THE NOTE AND REMAINING BALANCE DUE UNDER THE NOTE
EXHIBIT A
Promissory Note $2,405,000
----------
Payments:
November, 1996 100,000
November, 1996 100,000
November, 1996 100,000
----------
300,000
----------
Outstanding Principal ----------
Balance, May 31, 1997 $2,105,000
Accrued Interest:
August 1, 1996 to November 1, 1996 36,075
November 2, 1996 to May 31, 1997 73,675
Outstanding Principal ----------
and Interest - May 31, 1997 $2,214,750
==========
EXHIBIT B
ASSETS TRANSFERRED
EXHIBIT B
ASSETS TRANSFERRED
Cash:
Xxxxx Cash 607
Cash - Citibank 0
Cash - TNB Operating 0
Cash - Palm Beach 0
Cash - TNB - A/P Disb 0
Cash - TNB - Payroll 0
Cash - Bank Draft Clearing 0
Cash - Savings 0
-----------
607
-----------
Accounts Receivable 177,964
Less: Reserve (59,404)
-----------
118,560
-----------
-----------
Inventory 197,550
-----------
-----------
Prepaid expenses 2,714
-----------
Property and Equipment:
Servers 32,634
Routers 18,848
Total Controls 105,000
Other Communications equipment 17,134
Furnitures and Fixtures 23,246
Office Computers 167,179
Other Office equipment 410
Software 10,754
Accumulated Depreciation 0
Reserve (20,000)
-----------
Total - Property and Equipment 355,204
-----------
Intangibles: -----------
Customer List 598,261
-----------
Deposits 5,000
-----------
Total Assets $ 1,277,895
===========
WARRANTY XXXX OF SALE AND ASSIGNMENT AGREEMENT
FROM
TECLINK, INC. TO/AND BETWEEN DigiTEC 2000, Inc., Nevada corporation
Effective Date: June 1, 1997
1. Transfer
KNOW ALL MEN BY THESE PRESENTS, that Teclink, Inc. ("Seller"), for the
consideration set forth in that certain Note Satisfaction and Related Agreements
of even date herewith, the receipt and sufficiency of which is hereby
acknowledged, has this day sold, conveyed, transferred and assigned, and by
these presents does hereby sell, convey, transfer and assign to DigiTEC 2000,
Inc., a Nevada corporation ("Buyer"), its successors and assigns forever, all of
Seller's right, title and interest in, to and under all the assets of its
business, whether real, personal, tangible or intangible, including without
limitation the assets listed on Exhibit A attached hereto (the "Assets").
TO HAVE AND TO HOLD, all said Assets hereby sold, conveyed, transferred and
assigned to the Buyer for its own use, benefit and behalf forever.
2. Good Title
Seller hereby warrants to the Buyer and to its successors and assigns that there
in hereby transferred to Buyer good title to the Assets, free and clear of all
liens or other encumbrances and that it will warrant and defend such title
forever against all claims and demands whatsoever. Seller acknowledges and
agrees that Buyer has not assumed any liabilities of Seller.
3. Appointment as Attorneys
For the consideration aforesaid, the Seller hereby constitutes and appoints the
Buyer, its successors and assigns, the true and lawful attorneys for the Seller,
with full power of substitution, in the name of the Seller, but on behalf of and
for the benefit of the Buyer, (a) to institute and prosecute, in the name of the
Seller or otherwise, all proceedings which the Buyer may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or to the
Assets, (b) to defend and compromise any and all actions, suits or proceeding in
respect of any of the Assets, except with respect to any claim, action, suit or
proceeding in respect of the Assets the liability for which has been retained by
the Seller, and (c) to do all such acts and things in relation thereto as the
Buyer shall deem advisable. The Seller hereby declares that the foregoing powers
are coupled with an interest and shall be revocable by the Seller or by its
dissolution or in any manner or for any reason.
4. Further Assurances
For the consideration aforesaid, the Seller, for itself, its successors and
assigns has covenanted and by this Warranty Xxxx of Sale and Assignment and
Related Agreements does covenant with the Buyer, its successors and assigns,
that the Seller, its successors and assigns, will do, execute and deliver, or
will cause to be done, executed and delivered, all such further acts, documents
or instruments of transfer, conveyance or assignment as shall be necessary and
appropriate to vest in or confirm to the Buyer, its successors and assigns, all
and singular, the Assets hereby assigned and transferred which the Buyer, its
successors and assigns, reasonably require.
5. Authority
Each party represents and warrants that it has the requisite corporate power and
authority to enter into this Warranty Xxxx of Sale and Assignment Agreement and
to undertake its obligations hereunder, and that this Warranty Xxxx of Sale and
Assignment Agreement has been executed and delivered by a duly authorized
officer, and is the binding obligation of such party enforceable in accordance
with its terms.
6. Governing Law
This Warranty Xxxx of Sale and Assignment Agreement shall be governed
exclusively by, and construed and interpreted exclusively in accordance with the
laws of the State of Mississippi. The parties agree to arbitrate any disputes
hereunder in accordance with paragraph 10 of the Purchase Agreement (as defined
in the Note Satisfaction and Related Agreements.
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IN WITNESS WHEREOF, this Warranty Xxxx of Sale and Assignment Agreement
has been duly executed on behalf of the Seller by its President and attested by
its Secretary this 1st day of June, 1997.
TECLINK, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Attest:
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Secretary
IN WITNESS WHEREOF, this Warranty Xxxx of Sale and Assignment and Related
Agreements has been duly executed on behalf of the Buyer by its President and
attested by its Secretary this 1 day of June, 1997.
DIGITEC 2000, INC.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
Attest:
/s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Secretary
EXHIBIT A TO WARRANTY XXXX OF SALE AND ASSIGNMENT AGREEMENT
DESCRIPTION OF ASSETS SOLD
EXHIBIT D
ASSUMED LIABILITIES
EXHIBIT D
LIABILITIES ASSUMED
Accounts Payable 267,971
Other Liabilities 245,154
--------
Total Liabilities $513,125
========
EXHIBIT E
AMOUNT OF NOTE SATISFIED UNDER THIS AGREEMENT
WORLD ACCESS
ACQUIRED OTHER LIABILITIES
MAY 31, 1997
Micro Age Note Payable $ 69,213
0
0
Due to DigiTEC 2000, Inc. 0
Other 5,268
Netscape Accounts Payable 25,409
Accrued TOWP 15,495
Accrued Payroll Tax Liability 129,769
--------
$245,154
========
EXHIBIT E
Promissory Note $2,405,000
----------
Payments:
November, 1996 100,000
November, 1996 100,000
November, 1996 100,000
----------
300,000
----------
Outstanding Principal ----------
Balance, May 31, 1997 $2,105,000
Accrued Interest:
August 1, 1996 to November 1, 1996 36,075
November 2, 1996 to May 31, 1997 73,675
Outstanding Principal ----------
and Interest - May 31, 1997 $2,214,750
Net Assets Acquired (1) 764,770
----------
Amount considered outstanding $1,449,980
==========
(1) If DigiTEC 2000, Inc. sells such assets within six months from June
1, 1997, any difference in value from such sale will be used to adjust
this amount.
The borrower hereby grants an assignment of proceeds received from any
settlement from the Xxxxxx Case equal to the outstanding balance of the Note.
Any proceeds received greater than the outstanding balance of the note will
become the Borrower's property without any encumbrances from DigiTEC 2000, Inc.
