ASSET PURCHASE AGREEMENT
by and among
CLIFTON TELECARD, INC.
a Delaware Corporation
and
THE XXXXX GROUP, INC.
A Delaware Corporation
and
XXXXXXX TELECARD ALLIANCE, INC.
a New Jersey Corporation
effective as of September 27, 2000
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, made and entered into this 27th day of
September, 2000, by and among Clifton Telecard, Inc. a Delaware Corporation with
its principal place of business located at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxxx, XX
00000 ("Telecard"); The Xxxxx Group, Inc., a Delaware corporation with its
principal place of business located at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxxx, XX 00000
("Xxxxx") and Xxxxxxx Telecard Alliance, Inc. a New Jersey Corporation with its
principal place of business at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx, XX 00000
("Clifton"). Premises
A. This Agreement provides for the acquisition of all of the assets as
listed on Schedule A and the liabilities listed on Schedule B attached hereto of
Xxxxxxx by Telecard and in connection therewith the payment of $500,000, the
issuance of a $200,000 promissory note plus the issuance of 2,000,000 ($ 0.0001
par value per share) shares of restricted common stock of Xxxxx and other
consideration.
B. The majority shareholders and boards of directors of Telecard, Xxxxx and
Xxxxxxx have determined, subject to the terms and conditions set forth in this
Agreement, that the transaction contemplated hereby is desirable and in the best
interests of their stockholders, respectively. This Agreement is being entered
into for the purpose of setting forth the terms and conditions of the proposed
acquisition.
X. Xxxxx is the sole shareholder of Telecard and this Agreement provides
for the transfer of all the assets listed in Schedule A and all the liabilities
listed on Schedule B of Xxxxxxx to Telecard.
D. Both parties agree that the primary purpose for this Agreement is for
the running of the time to go through the switches located in California and
both parties will undertake all steps to ensure that this part of the
transaction is undertaken immediately after the Closing Date of this Agreement.
Within one week of the Closing Date, all current and future telecommunications
traffic will be run through the switch equipment to be owned by Xxxxx'x
subsidiary, Xxxxx Telecom.
X. Xxxxxxx Telecard, Inc. agrees to obtain its own lease from sellers
landlord as soon as possible. This representation shall survive the closing.
Agreement
NOW, THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
TELECARD AND XXXXX
As an inducement to and to obtain the reliance of Xxxxxxx, Telecard and
Xxxxx represent and warrant as follows:
Section 1.1 ORGANIZATION. Telecard and Xxxxx are corporations duly
organized, validly existing, and in good standing under the laws of Delaware and
have the corporate power and are duly authorized, qualified, franchised and
licensed under all applicable laws, regulations, ordinances and orders of public
authorities to own all of their properties and assets and to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the jurisdiction in
which the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification. Included in the Telecard and
Xxxxx Schedules (as hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of both Telecard and
Xxxxx as in effect on the date hereof. The execution and delivery of this
Agreement does not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not violate any provision of
Xxxxx or Telecard's articles of incorporation or bylaws. Xxxxx and Telecard have
full power, authority and legal right and have taken all action required by law,
its articles of incorporation, its bylaws or otherwise to authorize the
execution and delivery of this Agreement.
Section 1.2 OPTIONS AND WARRANTS. There are no existing options, warrants,
calls or commitments of any character to which Telecard is a party and by which
it is bound. Telecard have no securities, warrants or options authorized or
issued. Xxxxx presently has 4,500,000 options outstanding.
Section 1.3 LITIGATION AND PROCEEDING. To the best of Xxxxx'x knowledge and
belief, there are no actions, suits, proceedings or investigations pending or
threatened by or against Xxxxx or affecting Xxxxx or its properties, at law or
in equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial condition or
income of Xxxxx. Xxxxx does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality or
of any circumstances which, after reasonable investigation, would result in the
discovery of such a default.
To the best of Telecard's knowledge and belief, there are no actions,
suits, proceedings or investigations pending or threatened by or against
Telecard or affecting Telecard or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind that would have a material adverse affect
on the business, operations, financial condition or income of Telecard. Telecard
does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.4 MATERIAL CONTRACT DEFAULTS. To the best of Xxxxx'x knowledge
and belief, Xxxxx is not in default in any material respect under the terms of
any outstanding contract, agreement, lease or other commitment which is material
to the business, operations, properties, assets or condition of Xxxxx, and there
is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which Xxxxx has not taken
adequate steps to prevent such a default from occurring.
To the best of Telecard's knowledge and belief, Telecard is not in default
in any material respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business, operations,
properties, assets or condition of Telecard, and there is no event of default in
any material respect under any such contract, agreement, lease or other
commitment in respect of which Xxxxx has not taken adequate steps to prevent
such a default from occurring.
Section 1.5 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Xxxxx or
Telecard is a party or to which any of their properties or operations are
subject.
Section 1.6 GOVERNMENTAL AUTHORIZATIONS. To the best of Xxxxx'x knowledge,
Xxxxx and Telecard have all licenses, franchises, permits or other governmental
authorizations legally required to enable Xxxxx and Telecard to conduct its
business in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by Xxxxx and Telecard
of this Agreement and the consummation of Xxxxx and Telecard of the transactions
contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF XXXXXXX
As an inducement to, and to obtain the reliance of Xxxxx and Telecard,
Xxxxxxx represents and warrants as follows:
Section 2.1 ORGANIZATION. Clifton is a corporation duly organized, validly
existing and in good standing under the laws of the state of New Jersey and has
the corporate power and is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign entity in the country or states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Xxxxxxx Schedules (as
hereinafter defined) are complete and correct copies of the certificate of
incorporation, memorandum and articles of association and amendments thereto of
Xxxxxxx as in effect on the date hereof. The execution and delivery of this
Agreement does not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision of
Clifton's certificate of incorporation or bylaws. Xxxxxxx has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, bylaws or otherwise to authorize the execution and delivery of
this Agreement.
Section 2.2 MINIMUM REVENUE PER MONTH. Xxxxxxx hereby represents that the
assets being transferred will generate and maintain a minimum of $2,000,0000 in
revenue per month for the first year of this Agreement. However, this is not a
guarantee and will depend upon the quality, service and competitive pricing of
the buyers.
Section 2.3 AUTHORIZATION. Xxxxxxx Xxxxxxx, President of Xxxxxxx and the
other officers of Xxxxxxx will sign all necessary documents pursuant to the
terms of this Agreement.
Section 2.4 TAX MATTERS; BOOKS & RECORDS
(a) The books and records, financial and others, of Xxxxxxx are in all material
respects complete and correct and have been maintained in accordance with good
business accounting practices; and
(b) Xxxxxxx has no liabilities with respect to the payment of any country,
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties) except as set forth in Schedule B.
Section 2.5 INFORMATION. The information concerning Xxxxxxx as set forth in
this Agreement and in the Xxxxxxx Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as described herein or in the Xxxxxxx Schedules,
since June 30, 2000:
(a) Xxxxxxx has not: (i) waived any rights of value which in the aggregate
are extraordinary or material considering the business of Xxxxxxx; (ii) made any
material change in its method of management, operation or accounting; or (iii)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee;
(b) Xxxxxxx has not: (i) borrowed or agreed to borrow any funds or incurred
or become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business; and
(c) to the best knowledge of Xxxxxxx, it has not become subject to any law
or regulation which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets or condition of.
Section 2.7 TITLE AND RELATED MATTERS. Xxxxxxx has good and marketable
title to and is the sole and exclusive owner of all of its properties,
inventory, interests in properties and assets, real and personal (collectively,
the "Assets") free and clear of all liens, pledges, charges or encumbrances.
Except as set forth in the Xxxxxxx Schedules, Xxxxxxx owns free and clear of any
liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures, techniques, marketing
plans, business plans, methods of management or other information utilized in
connection with Clifton's business. Except as set forth in the Xxxxxxx
Schedules, no third party has any right to, and Xxxxxxx had not received any
notice of infringement of or conflict with asserted rights of others with
respect to any product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse affect on the business, operations,
financial conditions or income of Xxxxxxx or any material portion of its
properties, assets or rights.
Section 2.8 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or, to the best of Clifton's knowledge and belief,
threatened by or against or affecting Xxxxxxx, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind that would have a material adverse effect on
the business, operations, financial condition, income or business prospects of
Xxxxxxx. Xxxxxxx does not have any knowledge of any default on its part with
respect to any judgement, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality.
Section 2.9 CONTRACTS. On the Closing Date:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which Xxxxxxx is a party or by which it or
any of its properties are bound;
(b) Xxxxxxx is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree or award which materially and
adversely affects, or in the future may (as far as Xxxxxxx can now foresee)
materially and adversely affect, the business, operations, properties, assets or
conditions of Xxxxxxx; and
(c) Xxxxxxx is not a party to any material oral or written: (i) contract
for the employment of any officer or employee; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension, benefit or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of any obligation
for the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.
Section 2.10 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Xxxxxxx is a
party or to which any of its properties or operations are subject.
Section 2.11 MATERIAL CONTRACT DEFAULTS. To the best of Clifton's knowledge
and belief, Xxxxxxx is not in default in any material respect under the terms of
any outstanding contract, agreement, lease or other commitment which is material
to the business, operations, properties, assets or condition of Xxxxxxx, and
there is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which Xxxxxxx has not taken
adequate steps to prevent such a default from occurring.
Section 2.12 GOVERNMENTAL AUTHORIZATIONS. To the best of Clifton's
knowledge, Xxxxxxx has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business
operations in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Xxxxxxx of the transactions contemplated hereby.
Section 2.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of Clifton's
knowledge and belief, Xxxxxxx has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Xxxxxxx or would not result in Clifton's incurring any material liability.
Section 2.14 INSURANCE. All of the insurable properties of Xxxxxxx are
insured for Clifton's benefit under valid and enforceable policy or policies
containing substantially equivalent coverage and will be outstanding and in full
force at the Closing Date.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 XXXX OF SALE FOR ASSETS AND EXHIBIT FOR ASSUMED LIABILITIES. On
the Closing Date, Xxxxxxx shall deliver to Xxxxx a xxxx of sale for all of the
assets of Xxxxxxx and any and all other documents to transfer all of the assets
to Xxxxxxx. In addition, at closing Xxxxxxx will provide Telecard with a
Schedule of the liabilities of Xxxxxxx that Xxxxxxx has agreed to assume under
the terms of this Agreement.
Section 3.2 ISSUANCE OF 2,000,000 COMMON SHARES; PAYMENT OF $500,000 AND
ISSUANCE OF $200,000 PROMISSORY NOTE. In exchange for the transfer of all of the
assets of Xxxxxxx to Telecard pursuant to Section 3.1, Xxxxx shall pay Xxxxxxx
$500,000; Telecard shall assume the liabilities of Xxxxxxx as indicated on
Schedule B; Xxxxx shall issue a $200,000 promissory note to Xxxxxxx on the
following terms and conditions: terms of repayment: 180 days; interest rate: 8%
per annum; and Xxxxx shall issue 2,000,000 common shares of Xxxxx to Xxxxxxx at
the time of the Closing. The issued shares shall be restricted under Rule 144 of
the 1933 Securities Act.
Section 3.3 OTHER CONSIDERATION.
(a) Xxxxxxx Xxxxxxx shall be provided with an employment agreement with
Telecard, attached hereto and made a part hereof, for a three-year term at the
same salary base that he presently has with Xxxxxxx.
(b) Both parties will ensure as soon as possible after closing, all current
and future telecommunications traffic will be run through the switch equipment
in California to be owned by Xxxxx'x subsidiary, Xxxxx Telecom.
Section 3.4 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practical, management of Xxxxx, Telecard and Xxxxxxx shall
execute, acknowledge and deliver (or shall cause to be executed, acknowledged
and delivered) any and all certificates, opinions, financial statements,
schedules, agreements, resolutions rulings or other instruments required by this
Agreement to be so delivered, together with such other items as may be
reasonably requested by the parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated hereby, subject
only to the conditions to Closing referenced herein below.
Section 3.6 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about September 19, 2000 ("Closing
Date").
Section 3.7 TERMINATION.
(a) This Agreement may be terminated by the board of directors or majority
interest of Shareholders of either Xxxxx, Telecard or Xxxxxxx, respectively, at
any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court or any
governmental body which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement and which, in the judgement of such
board of directors, made in good faith and based on the advice of its legal
counsel, makes it inadvisable to proceed with the exchange contemplated by this
Agreement; or
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions.
In the event of termination pursuant to this paragraph (a) of this Section 3.5,
no obligation, right, or liability shall arise hereunder and each party shall
bear all of the expenses incurred by it in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.
(b) This Agreement may be terminated at any time prior to the Closing Date
by action of the board of directors of Xxxxx or Telecard if Xxxxxxx shall fail
to comply in any material respect with any of its covenants or agreements
contained in this Agreement or if any of the representations or warranties of
Xxxxxxx contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written notice thereof is
given to Xxxxxxx. If this Agreement is terminated pursuant to this paragraph (b)
of this Section 3.5, this Agreement shall be of no further force or effect and
no obligation, right or liability shall arise hereunder.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 ACCESS TO PROPERTIES AND RECORDS. Prior to closing, Xxxxx,
Telecard and Xxxxxxx will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
each other, in order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of each other, as the other
shall from time to time reasonably request.
Section 4.2 AVAILABILITY OF RULE 144. Xxxxx shareholders holding
"restricted securities, " as that term is defined in Rule 144 promulgated
pursuant to the Securities Act will remain as "restricted securities." Xxxxx is
under no obligation to register such shares under the Securities Act, or
otherwise. The stockholders of Xxxxx holding restricted securities of Xxxxx and
their respective heirs, administrators, personal representatives, successors and
assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
Section 4.3 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE XXXXX
COMMON SHARES TO BE ISSUED IN THE AGREEMENT. The consummation of this Agreement,
including the issuance of the Xxxxx Common Shares to Xxxxxxx as contemplated
hereby, constitutes the offer and sale of securities under the Securities Act,
and applicable state statutes. Such transaction shall be consummated in reliance
on exemptions from the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under which Xxxxxxx
acquires such securities.
Section 4.4 THIRD PARTY CONSENTS. Xxxxx, Telecard and Xxxxxxx agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
Section 4.5 ACTIONS PRIOR AND SUBSEQUENT TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date,
except as permitted or contemplated by this Agreement, Xxxxxxx, Telecard and
Xxxxx will each use its best efforts to:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in amount and
in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under material
contracts, leases and instruments relating to or affecting its assets,
properties and business;
(v) maintain and preserve its business organization intact, to retain its
key employees and to maintain its relationship with its material
suppliers and customers; and
(vi) fully comply with and perform in all material respects all obligations
and duties imposed on it by all federal and state laws and all rules,
regulations and orders imposed by federal or state governmental
authorities.
Section 4.6 INDEMNIFICATION.
(a) Xxxxxxx hereby agrees to indemnify Xxxxx and Telecard and each of the
officers, agents and directors of Xxxxx and Telecard as of the date of execution
of this Agreement against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it or they may become
subject to or rising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement, including, but not limited to,
misrepresentations. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXX AND TELECARD
The obligations of Xxxxx of Telecard under this Agreement are subject to
the satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 ACCURACY OF REPRESENTATIONS. The representations and warranties
made by Xxxxxxx in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes therein permitted
by this Agreement), and Xxxxxxx shall have performed or compiled with all
covenants and conditions required by this Agreement to be performed or complied
with by Xxxxxxx prior to or at the Closing.
Section 5.2 OFFICER'S CERTIFICATE. Xxxxx shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
Xxxxxxx to the effect that: (a) the representations and warranties of Xxxxxxx
set forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date; and (b) Xxxxxxx had performed all covenants,
satisfied all conditions, and complied with all other terms and provisions of
the Agreement to be performed, satisfied or complied with by it as of the
Effective Date.
Section 5.3 APPROVAL. Xxxxxxx Xxxxxxx shall have the proper authority to
bind Xxxxxxx to the terms of the Agreement and the transactions contemplated
herein.
Section 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of Xxxxxxx.
Section 5.5 OTHER ITEMS. Xxxxx shall have received such further documents,
certificates or instruments relating to the transactions contemplated hereby as
Xxxxx may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXXX
The obligations of Xxxxxxx under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
Section 6.1 ACCURACY OF REPRESENTATIONS. The representations and warranties
made by Xxxxx and Telecard in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Xxxxx and Telecard shall
have performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Xxxxx and Telecard prior to or at
the Closing. Xxxxxxx shall have been furnished with a certificate, signed by a
duly authorized executive officer of Xxxxx and Telecard and dated the Closing
Date, to the foregoing effect.
Section 6.2 OFFICER'S CERTIFICATE. Xxxxxxx shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
Xxxxx and Telecard to the effect that: (a) the representations and warranties of
Xxxxx and Telecard set forth in the Agreement and in all Exhibits, Schedules and
other documents furnished in connection herewith are in all material respects
true and correct as if made on the Effective Date; and (b) Xxxxx and Telecard
had performed all covenants, satisfied all conditions, and complied with all
other terms and provisions of the Agreement to be performed, satisfied or
complied with by it as of the Effective Date.
Section 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of Xxxxx and Telecard.
Section 6.4 OTHER ITEMS. Xxxxxxx shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Xxxxxxx may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.1 BROKERS AND FINDERS. Each party hereto hereby represents and
warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person not listed in
Schedule 7.1 for any commission, brokerage or finder's fee or other payment with
respect to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
Section 7.2 LAW, FORUM AND JURISDICTION. This Agreement shall be construed
and interpreted in accordance with the laws of the State of New Jersey, United
States of America.
Section 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Xxxxx and Clifton: 00 Xxxxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
and : Xxxxxxx X. Xxxxxx & Associates
0000 Xxxxx 0 Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
If to Clifton: 0000 Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 CONFIDENTIALITY. Each party hereto agrees with the other party
that, unless and until the transactions contemplated by this Agreement have been
consummated, they and their representatives will hold in strict confidence all
data and information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director or employee, or from any
books or records or from personal inspection, of such other party, and shall not
use such data or information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by law to be
published; and (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.
Section 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.7 THIRD PARTY BENEFICIARIES. This contract is solely between
Xxxxx and Xxxxxxx and except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
Section 7.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
Section 7.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.11 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
Section 7.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 7.13 EXPENSES. Each party herein shall bear all of their respective
cost s and expenses incurred in connection with the negotiation of this
Agreement and in the consummation of the transactions provided for herein and
the preparation thereof.
Section 7.14 HEADINGS; CONTEXT. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and do not
form a part hereof and in no way modify, interpret or construe the meaning of
this Agreement.
Section 7.15 BENEFIT. This Agreement shall be binding upon and shall inure
only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 7.16 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto. Notwithstanding same, both parties agree that Xxxxx will be issuing a
press release regarding this transaction.
Section 7.17 SEVERABILITY. In the event that any particular provision or
provisions of this Agreement or the other agreements contained herein shall for
any reason hereafter be determined to be unenforceable, or in violation of any
law, governmental order or regulation, such unenforceability or violation shall
not affect the remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties hereto.
Section 7.18 FAILURE OF CONDITIONS; TERMINATION. In the event of any of the
conditions specified in this Agreement shall not be fulfilled on or before the
Closing Date, either of the parties have the right either to proceed or, upon
prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
Section 7.19 NO STRICT CONSTRUCTION. The language of this Agreement shall
be construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 EXECUTION KNOWING AND VOLUNTARY. In executing this Agreement,
the parties severally acknowledge and represent that each: (a) has fully and
carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprized by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) is executing
this agreement voluntarily, free from any influence, coercion or duress of any
kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, and
entered into as of the date first above written.
THE XXXXX GROUP, INC.
ATTEST:
/s/ Xxxxxx Xxxxxxxxxxx By: /s/ Xxxxxx Xxxxxxxxxxx
------------------------------ -----------------------------------------
, Secretary Xxxxxx Xxxxxxxxxxx, Xx., President
ATTEST: XXXXXXX TELECARD, INC.
/s/ Xxxxxx Xxxxxxxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------------ -----------------------------------------
, Secretary Xxxxxx Xxxxxx, President
ATTEST: XXXXXXX TELECARD ALLIANCE, INC.
/s/ Xxxx Xxxxx By:/s/ Xxxxxxx Xxxxxxx
------------------------------ -----------------------------------------
, Secretary Xxxxxxx Xxxxxxx, President
SCHEDULE A
To
Xxxx of Sale
Of the Assets of
Xxxxxxx Telecard Alliance, Inc.
Dated September 27, 2000
In Conjunction With The Asset Purchase Agreement
By and Among
CLIFTON TELECARD, INC., a Delaware Corporation
and
THE XXXXX GROUP, INC., a Delaware Corporation
and
CLIFTON TELECARD ALLICANCE, INC., a New Jersey Corporation
Effective September 27, 2000
Bank Book Balance $401,388
A/R Schedule $513,046
Inventory Schedule $543,866
Equipment Schedule $18,995
Deposits $9,403
Prepaid Printing $8,000
TM/Patents Schedule N/A
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxxxx, Xx.
------------------------- ------------------- ---------------------------
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxxxx Xxxxxxxxxxx, Xx.
Xxxxxxx Telecard Alliance, Inc. Xxxxxxx Telecard, Inc. The Xxxxx Group, Inc.
SCHEDULE B
To
Xxxx of Sale
Of the Liabilities of
Xxxxxxx Telecard Alliance, Inc.
Dated September 27, 2000
In Conjunction With The Asset Purchase Agreement
By and Among
CLIFTON TELECARD, INC., a Delaware Corporation
and
THE XXXXX GROUP, INC., a Delaware Corporation
and
CLIFTON TELECARD ALLICANCE, INC., a New Jersey Corporation
Effective September 27, 2000
A/P Schedule $1,377,637
Obligations Schedule $0
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxxxx, Xx.
------------------------- ------------------- ---------------------------
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxxxx Xxxxxxxxxxx, Xx.
Xxxxxxx Telecard Alliance, Inc. Xxxxxxx Telecard, Inc. The Xxxxx Group, Inc.
