AGREEMENT FOR THE SALE OF PAY TELEPHONE ROUTE
This AGREEMENT is made and entered into by and between Alpha Telcom, Inc., an
Oregon Corporation, or its designee, hereinafter referred to as "Buyer," and
ChoiceTel Communications, Inc. a Minnesota Corporation, and Xxxx Xxxxxx, its
President, hereinafter collectively referred to as "Seller," and is made with
reference to the following facts:
1. Seller owns approximately 930 pay telephone locations in the
State of Pennsylvania, under the trade name Xxx Telephone Vending,
more particularly described on Exhibit "A," which is attached
hereto and incorporated herein by this reference, and desires to
sell the same to Buyer pursuant to the terms set forth herein; and,
2. Buyer is in the business of owning, maintaining, and servicing pay
telephones in Oregon and elsewhere; and,
3. Buyer desires to purchase from Seller, upon the terms and
conditions contained herein, the pay telephones and associated
locations and contracts memorialized by Exhibit A.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Upon completion of the sale referred to herein, Seller will sell
and transfer all of its right, title, and interest in and to the
approximately 930 pay telephones and locations together with all
associated site or location contracts, for the agreed price of
$2400.00 per approved location, a total of $2,232,000.00, adjusted
to final count.
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2. The terms of this sale are as follows:
a. $50,000.00 xxxxxxx money paid upon execution of this
Agreement, paid into an approved escrow account acceptable to
Seller; and,
b. Balance all cash to Seller upon closing.
3. Due Diligence Inspection. Buyer will complete its due diligence
inspection on or before February 15, 2000. Seller will cooperate
with Buyer in providing all information to Buyer to complete its
Due Diligence Inspection, including, but not limited to, revenue
and expense records for the pay telephone locations, all site
location contracts, and any other reasonable information requested
by Buyer to complete its Due Diligence Inquiry. In addition,
Seller shall provide Buyer with site location addresses so that
Buyer may make a physical inspection of the pay telephones and
locations. Seller represents that the information provided to
Buyer in connection with Buyer's Due Diligence Inspection will be
complete and accurate when provided and accurately represents the
state and condition of Seller's pay telephones being sold hereby.
4. Due Diligence shall be deemed to be successfully completed when
Buyer advises Seller that all of the pay telephones listed on
Exhibit A are acceptable to Buyer.
5. Upon successful completion of Buyer's Due Diligence as
contemplated herein, $25,000.00 of the deposit placed into escrow
shall become non-refundable. Should Buyer fail to close escrow
after successful completion of Due Diligence, the parties agree
that damages to Seller are difficult or
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impossible to ascertain, and $25,000.00 of the deposit shall be
forfeited. The balance of the deposit shall forthwith be refunded
to Buyer. If Buyer's Due Diligence Inspection is not successfully
completed, as defined herein, Buyer shall be entitled to a refund
of its entire deposit forthwith.
6. Unless the parties agree otherwise, this transaction shall close
on or before February 29, 2000.
7. Upon close of this Transaction, Seller shall deliver to Buyer free
and clear title to all pay telephones and related equipment. In
this regard, Seller agrees to execute a Xxxx of Sale for all of
the telephone sites, equipment, and related contracts currently
owned by Seller, in a form agreeable to the parties, and
represents that all pay telephones, location agreements, and
related equipment will be free and clear of all liens upon closing.
8. Upon close of this transaction, Seller shall sell, deliver, and
transfer to Buyer the right to use the trade name "Xxx Telephone
Vending" in the pay telephone business. It is contemplated hereby
that Buyer will file the necessary papers to do business under
Seller's name, wherever desired. Seller will not interfere with
Buyer's exclusive right to use the Seller's name in the pay phone
industry. In this regard, this paragraph shall restrict Seller
from preventing or attempting to prevent Buyer from using the
Seller's name in Buyer's pay phone business wherever located.
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9. The following shall occur as of close of this transaction:
a. All accounts payable due from Seller relating to the pay
telephones being transferred, including but not limited to
telephone bills shall be paid by Seller (all such telephone
bills shall be superceded to Buyer at close).
b. All accounts receivable due to Seller, relating to the pay
telephones being transferred, which are collected by buyer,
shall be prorated based upon date of closing and will be paid
to seller when received.
c. Site commissions for the month prior to closing, due location
owners, shall be paid in full by Seller, and Seller shall
provide evidence thereof to Buyer.
d. Site commissions for the month of closing, due location
owners, shall be prorated as of the date of closing. In this
regard, an amount equal to the Seller's share of these
payments shall be estimated at closing by determining an
average commission over the six (6) months prior to closing
and withholding the same from Seller's proceeds at closing.
Buyer shall pay commissions when due and shall provide Seller
with a true up for Seller's pro rata share for the month of
closing. To the extent that the amount withheld from Seller's
proceeds exceeds the amount paid by Buyer on Seller's behalf,
Buyer shall forthwith pay Seller the amount over withheld. To
the extent that the amount withheld from Seller's proceeds
fails to pay Seller's pro rata share of the closing month's
commissions, Buyer shall xxxx Seller, and the amount due shall
be paid
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Buyer forthwith. Buyer shall be responsible for all
commissions to location owners accruing on or after closing.
c. Coin in the box shall be collected by Seller on the day prior
to closing. In lieu of collecting, Buyer and Seller may elect
to rely on polling information concerning said coin in the box
as of the day prior to closing; in which case, Buyer shall pay
Seller at closing cash to cover coin in the box. All coin in
the box after the day prior to closing shall be the property
of Buyer.
e. Dial around revenues due for the First Quarter, 2000, shall be
prorated based upon date of closing. Dial around for said
period shall be billed and collected by Buyer in the normal
course, and Buyer shall pay Seller its pro rata share thereof
upon collection of the same.
10. Upon the close of this transaction, Buyer and Seller shall
cooperate in the changeout of any and all locks associated with
the pay telephones and associated locations and site agreements.
In this regard, Seller shall turn over all keys to the upper and
lower housing locks at closing. Buyer shall be responsible for
the cost of any change out of any locks.
11. Upon close of this transaction, Seller shall cooperate fully with
Buyer in the transfer of data from Seller to Buyer regarding the
approximately 930 pay phones. The data shall be transferred to
Buyer via e-mail, if possible, backed up by information placed on
disc, or any other manner satisfactory to Buyer and Seller.
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12. Seller warrants that there are no claims, actions, or proceedings
pending or threatened against it, which threaten the assets, which
are the subject of this sale. Seller agrees to hold Buyer harmless
from any and all litigation which has arisen or might arise from
the transaction of any business or as a result of any conduct
related to the operation or control of any of the assets subject
to this sale prior to close of escrow.
13. Seller warrants that it has the corporate power to complete this
transaction and that this transaction will duly be authorized by
the Board of Directors prior to close of escrow.
14. Seller warrants that it is not a party to any pending insolvency
proceeding of any nature, including without limitation
bankruptcy, receivership, reorganization, composition, or any
arrangement with creditors, whether voluntary or involuntary, and
Seller further warrants that it is aware of no condition, which
might warrant such action.
15. Seller warrants that the financial information provided to Buyer
during Buyer's Due Diligence inspection is true and correct and
accurately reflects the financial condition represented.
16. Seller warrants that it keeps and maintains adequate policies of
fire, casualty, liability, worker's compensation, and other forms
of insurance in connection with the conduct of its business. All
such policies are in full force and effect in accordance with
their terms and will remain in full force and effect at close of
escrow.
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17. Seller warrants that it will continue to conduct business as
usual through close of escrow.
18. Seller warrants that it will provide to Buyer copies of all
permits, licenses, orders, certificates, or approvals held by it,
which relate to the assets subject to this sale. Seller also
warrants that no other permits, licenses, orders, certificates,
or approvals are required for the operation of the assets.
19. Seller warrants that, except as otherwise shown in the financial
statements, it has no liability whatsoever or any material nature
relating to the assets subject to this sale. Seller further
warrants that, as of close of escrow, all of the pay telephones,
related sites and locations, enclosures, inventory, and equipment
included in this sale are and will be as of close of escrow free
and clear of any encumbrances.
20. Upon close of this Transaction, Seller agrees not to compete
with Buyer in the pay telephone business for a period of five (5)
years in any of the following areas: The State of Pennsylvania.
21. The parties hereto agree to cooperate with one another to
complete this transaction and to execute any and all documents as
may be required to complete this transaction.
22. The terms and conditions of this AGREEMENT shall inure to the
benefit of and shall be binding upon the heirs, assigns,
successors, and transferees of each of the parties.
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23. If any particular provision of this AGREEMENT shall be
determined to be unenforceable for any reason, then the remainder
of this AGREEMENT shall, nonetheless, be enforceable.
24. If any litigation shall be initiated to enforce any provision of
this AGREEMENT or for the breach of any provision of this
AGREEMENT, then the prevailing party in that litigation shall be
entitled, in addition to any other remedy available, to the
reasonable costs and attorney's fees incurred in connection with
that litigation.
DATED: 1-11-2000
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Alpha Telcom, Inc.
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxxxx,
Vice President
DATED: 1-11-2000
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ChoiceTel Communications, Inc.
/s/ Xxxx Xxxxxx
-----------------------------------
By: Xxxx Xxxxxx, President
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