Exhibit 2.3
ASSETS PURCHASE AND SALE AGREEMENT
BETWEEN
USTEL, INC.,
AS PURCHASER
AND
PACIFIC COMMUNICATIONS, INC.,
AS SELLER
PAGE
ASSETS PURCHASE AND SALE AGREEMENT
AGREEMENT dated as of July 23, 1997, between USTEL, INC., a Minnesota
corporation (the "Purchaser"), PACIFIC COMMUNICATIONS, INC., a Nevada
corporation (the "Seller"), and, with respect to Article VIII, XXXXXX X.
XXXXXXX ("Xxxxxxx").
The Seller owns all the rights, titles and interests in and to all
the assets utilized in the operations of the cellular telephone business
division of Seller conducted under the name "Pacific Cellular" located at 0000
Xxxxx Xxxxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxx, 00000 (such assets, excluding
however all licenses and similar rights granted by governmental authorities,
agencies, or instrumentalities thereof ("Government Licenses") (collectively,
the "Business")). Molasky is a principal shareholder of Seller and the chief
executive officer of the Business.
The Purchaser wishes to purchase the assets comprising the Business,
and the Seller wishes to transfer and sell such assets comprising the Business
to the Purchaser, subject to the terms and conditions of, and in reliance upon
the representations and warranties contained in, this Agreement.
Accordingly, the parties hereto hereby agree as follows:
I. PURCHASE AND SALE OF ASSETS
SECTION 1.01. Assets. For good and valuable consideration, the
Seller shall sell, convey, transfer, assign and deliver to the Purchaser, and
the Purchaser shall purchase from the Seller, all the Business assets of the
Seller of every kind and character, whether tangible, intangible (excluding,
however, any Government Licenses), real, personal or mixed, and wherever
located, reflected on the pro forma balance sheet of the Seller as of July 16,
1997 (unaudited), a copy of which is attached as Schedule 1.01 hereto,
including without limitation, cash, cash equivalents, accounts receivable,
inventories, supplies, prepaid expenses, deposits, equipment, furniture and
furnishings, leasehold improvements, fixtures, leases, contracts and contract
rights of every description, the name "Pacific Cellular" and all variations
thereof, and all goodwill associated with the Business (collectively, the
"Assets").
SECTION 1.02. Liabilities. The Purchaser hereby expressly
assumes and shall discharge in accordance with their respective terms all the
obligations of the Seller under the contracts and agreements pursuant to which
the Seller has purchased or enjoys the right to use under lease any of the
Assets (i.e., including without limitation, the leases with the following
lessors (collectively, the "Waiver Leases"): Business Credit Leasing (copier
lease dated February 2, 1995), General Electric Capital Corporation (copier
lease dated July 20, 1994), and Pitney Xxxxx Credit Corporation (mailing
equipment lease dated June 28, 1994). The Purchaser does not and shall not
assume, and hereby expressly disclaims any responsibility for, any other
liabilities or obligations whatsoever of the Seller except for those
identified on Schedule 1.02 hereof.
SECTION 1.03. Prorations and Expenses. (a) Taxes on equipment
shall be prorated as of the Closing Date between the Seller and the
Purchaser. Any sales tax on non-exempted Assets shall be the sole
responsibility of the Seller.
(b) The parties hereto shall pay their respective legal,
accounting and other expenses incurred in negotiating and consummating this
Agreement.
II. CLOSING
The closing (the "Closing") of the transactions contemplated by this
Agreement shall take place at the Business, commencing at 10:00 a.m. local
time, on the day on which the last of the conditions set forth in Articles IX
and X hereof is fulfilled or waived, but not later than July , 1997 (the
"Closing Date"), or at such other place, date or time as the parties hereto
may otherwise mutually agree; provided, however, that the Seller may extend
the Closing Date, in its sole discretion, until August 11, 1997. The Closing
shall be effective as of the close of business on the day of the Closing
Date. Time is of the essence with respect to the Closing and the Closing
Date.
III. CONSIDERATION; ACTION AT CLOSING
SECTION 3.01. Consideration. The purchase price for the Assets
is ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($1,250,000), (i) adjusted
upwards or downwards to reflect, dollar-for-dollar, any increase or decrease
in the amount of the net working capital of the Seller as of July 16, 1997, as
reflected on the pro forma balance sheet (unaudited) of the Seller as of that
date, and (ii) adjusted downwards by all assumed long-term liabilities, if any
(the "Purchase Price"). At Closing of the transactions provided for herein,
the Purchaser shall issue to the Seller stock certificate(s) representing the
number of shares of Common Stock, $.01 par value per share, of Purchaser,
multiplied by the Exchange Basis Price, which equals the Purchase Price (the
"Shares"). Said stock certificate(s) shall be legended with a reference to
this Agreement. For the purposes of this Agreement, the Exchange Basis Price
shall be the average price per share of UStel Common Stock, during the thirty
consecutive trading days ending five business days prior to the Closing Date,
based on the closing price or, in case no sale takes place on any such day,
the average of the closing bid and asked prices on such day as reported on The
NASDAQ SmallCap Stock Market or any comparable system or, if the UStel Common
Stock is not reported on The NASDAQ SmallCap Stock Market or a comparable
system, the average of the closing bid and asked prices as furnished by two
members of the National Association of Securities Dealers, Inc. mutually
designated by the Seller and the Purchaser for that purpose. No fractional
shares of UStel will be issued; the Seller shall receive from the Purchaser an
amount of cash in lieu of such fractional share of UStel Common Stock based on
the Exchange Basis Price of UStel Common Stock as described in the preceding
sentence. All shares of UStel Common Stock to be issued to the Seller will be
restricted securities as such term is defined in Rule 144 of the Securities
Act of 1933, as amended.
To the extent XxXxx Communications of Nevada, Inc. dba Cellular
One-Las Vegas and/or its assignee (collectively, "XxXxx") exercises its right
to purchase all or a portion of the End User accounts as defined in that
certain Reseller Agreement between XxXxx as Company and Seller as Reseller,
then the Purchase Price shall be reduced by the product obtained by
multiplying (x) the number of End User accounts so purchased, by (y) $500 per
End User account.
SECTION 3.02. Allocation of Purchase Price. The Purchase Price
shall for all purposes be allocated as follows by both the Seller and the
Purchaser: (i) an amount equal to the book value on Seller's books of account
as at July 16, 1997 shall be allocated to the tangible Assets properly being
conveyed hereunder; and (ii) the balance of the Purchase Price shall be
allocated to Seller's goodwill, licenses, and other intangible property being
conveyed hereunder.
SECTION 3.03. Actions at Closing. The Seller shall deliver to
the Purchaser such bills of sale, endorsements, assignments, third-party
agreements and other good and sufficient instruments of conveyance, assignment
and transfer, satisfactory in form and substance to the Purchaser, as shall be
effective to vest in the Purchaser all the Seller's rights, titles and
interests in and to the Assets. Simultaneously with and after such delivery,
the Seller shall take all additional steps which are within its power as shall
tend to place the Purchaser in possession and operating control of the
Assets. To the extent that any transfer or assignment to the Purchaser by the
Seller of any agreement or rights thereunder shall require the consent of the
other party or parties to such agreement, this Agreement shall not constitute
an agreement to assign the same if an attempted assignment would constitute a
breach thereof.
IV. REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to the Purchaser in all material
respects as of the date hereof and as of the Closing Date as follows;
provided, however, that such representations and warranties are made only with
respect to the Assets and liabilities of the Business:
SECTION 4.01. Due Organization, Etc. The Seller is, and at the
Closing Date will be, a corporation validly existing and in good standing
under the laws of the State of Nevada. The Seller has, and at the Closing
Date will have, full power and authority to own or lease all the Assets owned
or leased by it with respect to the Business and to conduct the Business as it
is presently conducted.
SECTION 4.02. Power and Authority. The Seller has full power
and authority to enter into this Agreement. The Agreement has been duly
authorized, executed and delivered by the Seller and constitutes a valid and
binding agreement of the Seller, and is enforceable against the Seller, as
appropriate, in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
similarly affecting the enforcement of creditors' rights generally.
SECTION 4.03. No Conflicts. The execution, delivery and
performance of this Agreement by the Seller will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the Assets pursuant
to the terms or provisions of, or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or, except to the
extent that any such instrument or agreement requires the consent of the other
party thereto with respect to the transaction, give any other party a right to
terminate any of its obligations under its governing documents or any other
material contract, agreement or instrument to which the Seller is a party or
by which it or any of the Assets is bound or affected, or violate or conflict
with any judgment, ruling decree, order, application, filing, declaration,
license, registration, statute, rule or regulation of any court or other
governmental agency or body applicable to the business or Assets of the
Seller.
SECTION 4.04. Financial Statements. There have heretofore been
delivered to the Purchaser copies of (a) the balance sheet of the Seller
relating to the Business for the fiscal year ended December 31, 1996 and the
pro forma balance sheet as of July 16, 1997 (unaudited), and the related
statements of income and expense for the fiscal year ended December 31, 1996
and for the five-month period ended May 31, 1997, and (b) monthly comparative
analyses from January 1, 1997 through May 31, 1997. The Seller also shall
provide the Purchaser with copies of all other interim financial statements
becoming available prior to the Closing as soon as practicable after the same
become available. To the best knowledge of the Seller, such financial
statements are correct and complete, are in accordance with the books and
records of the Seller and present fairly the financial position and results of
operations and changes in financial position of the Seller relating to the
Business as at the dates and for the periods set forth therein.
The Purchaser acknowledges that such financial statements were
prepared by the Seller internally and represent its reasonable efforts in good
faith to fairly present the Seller's financial results and position for the
periods indicated. The Purchaser further acknowledges its understanding that
such statements are unaudited and, therefore, do not provide the same level of
assurance as to accuracy as might be contained in audited financial
statements.
SECTION 4.05. Schedule of Properties and Other Data. (a)
Schedule 4.05(a) hereof is a correct and complete description of all
machinery, equipment, motor vehicles and other tangible personal property
(other than inventory and supplies), owned, leased or used by the Seller
relating to the Business and all the conditional sale, lease or other title
retention agreements pursuant to which the Seller or any other person
purchased or obtained the use of any item of such tangible personal property
relating to the Business.
(b) Schedule 4.05(b) hereof is a correct and complete
description of all contracts, agreements and commitments, written or oral (but
excluding any oral at-will employment agreements or arrangements), which will
require the payment or receipt of an amount in excess of $25,000 with respect
to each such contract, agreement and commitment.
(c) Schedule 4.05(c) hereof is a correct and complete
description of all franchise agreements, licenses and other instruments under
which the Seller has a right to use any business system, name or xxxx, patent,
idea or other intangible property of any person relating to the Business.
(d) No representation or warranty of any kind or nature is made
hereby with respect to any approvals, authorizations, permits, consents,
licenses, orders and restrictions of any governmental agency, whether federal,
state or local required by the Business conducted by the Seller.
(e) Schedule 4.05(e) hereof is a correct and complete
description of all copyrights, patents, trademarks or trade names owned by or
registered in the name of the Seller as it relates to the Seller's Assets.
(f) Schedule 4.05(f) hereof is a correct and complete list of
all the employees of the Seller relating to the Business whose annual rate of
pay exceeds $25,000.
(g) Schedule 4.05(g) hereof is a correct and complete
description of all policies of life, casualty, liability or other forms of
insurance owned by the Seller relating to the Business, including, in each
case, the amount and type of coverage; provided, however, that no such
policies or other forms of insurance are being conveyed hereby.
(h) The Seller has supplied to the Purchaser true and complete
copies of all the instruments referred to in the foregoing Schedules 4.05(a)
through 4.05(g). Except to the extent described in said Schedules, the Seller
has performed all the obligations required to be performed by it to date, and
is not in default in any respect under any of the documents described in any
Schedule, nor is any other party to any of such instruments in default
thereunder.
SECTION 4.06. Good Title. The Seller has (or, by the Closing
Date, will have), and hereby covenants to protect and defend, its good and
marketable and merchantable title to all its Assets, including all the Assets
reflected on the Seller's pro forma balance sheet as of July 16, 1997, which
have not been disposed of in the ordinary course of business since said date,
free and clear of all mortgages, pledges, liens, security interests,
conditional sales agreements, charges, encumbrances and restrictions of every
kind and nature, except for restrictions or encumbrances referred to in
Section 1.02 hereof (and the related schedule).
SECTION 4.07. Absence of Changes. Except as set forth in
Schedule 4.07 hereof, since May 31, 1997: (i) the Seller has conducted the
Business in the ordinary course and in substantially the same manner as
heretofore; (ii) there has not been a material adverse change in the
condition (financial or otherwise) of the assets, liabilities or earnings of
the Business, nor has the Seller suffered any damage, destruction or loss
(whether or not covered by insurance) which has materially and adversely
affected the assets, condition or prospects of the Business; (iii) the Seller
has not purchased or otherwise acquired, sold, leased or otherwise disposed of
(or committed so to do) any property (other than items of inventory and supply
in the ordinary course of business) in an amount of $10,000 individually and
$25,000 in the aggregate; (iv) the Seller has not increased the salary or wage
rate or other remuneration of any employee relating to the Business; and (v)
the Business has not paid any distributions to the shareholders or other
divisions of the Seller.
SECTION 4.08. Compliance with Laws. The Seller has, and at the
Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on the Business;
provided, however, that the Purchaser acknowledges that it is not acquiring
any Government Licenses for the conduct of the Business or otherwise hereby,
(ii) complied in all material respects with all applicable laws, rules,
regulations and ordinances the violation of which would have a material and
adverse effect on the Business, and (iii) performed all material obligations
required to be performed by it and is not, and at the Closing Date will not
be, in default, under any material contract or other instrument to which it is
a party or by which the Assets are bound or materially affected, excluding
only any defaults under the Waiver Leases resulting from the failure of the
lessors thereunder to have consented to the assignment of the leasehold
interests thereof. To the actual knowledge of the Seller, without undertaking
any independent investigation, no other party under any contract or other
instrument to which it is a party is in material default in any respect
thereunder.
SECTION 4.09. Tax Matters. All taxes (including sales, use and
income taxes (whether federal, state or local)) required to be paid by the
Seller relating to the Business have been paid; all taxes the Seller is
obligated to withhold from amounts owing to any employee, creditor or third
party have been withheld; and all tax returns and reports required by law to
have been filed by the Seller have been duly filed and reflect the amounts due
and paid. The Seller's federal tax returns have not been audited by the
Internal Revenue Service. No deficiency assessment or proposed adjustment of
the Seller's sales, use or federal income tax or state or local taxes is
pending and the Seller has no knowledge of any proposed liability for any tax
to be imposed upon its properties or the Assets for which there is not an
adequate reserve reflected in the financial statements.
SECTION 4.10. Condition of Equipment. The equipment and other
assets owned or leased by the Seller or used or employed by it in the Business
are being sold by the Seller to the Purchaser "as-is, where is," with all
faults, and without representation or warranty of any kind.
SECTION 4.11. Inventory. All the inventory and supplies of the
Business are being sold by the Seller to the Purchaser "as-is, where is," with
all faults, and without representation or warranty of any kind.
SECTION 4.12. Trade Receivables. All receivables of the Seller
reflected on the balance sheet dated May 31, 1997 or thereafter acquired by it
are being sold by the Seller "as-is, where-is," with all faults, and without
representation or warranty of any kind; provided, however, that accounts
receivable in excess of 150 days (other than the accounts receivable of
Pacific Homes and Properties, an affiliate of the Seller and Molasky) shall
not be reflected on such balance sheet and are not being sold by the Seller to
the Purchaser hereunder although the Purchaser shall be obligated to use its
reasonable efforts to collect such retained accounts receivable pursuant to
Section 7.04 hereof.
SECTION 4.13. Labor Relations; Working Relationships. There
are no pending or, to the knowledge of the Seller, threatened charges of
unfair labor practices, and the Business is in compliance in all material
respects with all federal and state laws governing employment and employment
practices, terms and conditions of employment and wages and hours.
SECTION 4.14. Litigation and Compliance with Governmental
Regulations. To the best knowledge of the Seller, there are no claims of any
kind or any actions, suits, proceedings, arbitrations or investigations
pending or threatened in any court or before any governmental agency or
instrumentality or arbitration panel or otherwise against, by or affecting the
Seller or the Assets: (i) which would prevent the carrying out of this
Agreement or any of the transactions contemplated hereby or declare the same
unlawful or cause the rescission thereof, or (ii) which, if determined
adversely, would have a materially adverse effect on the business, prospects,
properties or condition (financial or otherwise) of the Business, and to the
knowledge of the Seller no basis for any of the foregoing exists. The
Business has not been charged with and, to the knowledge of the Seller, is not
threatened with or under any investigation with respect to any charge
concerning any violation of any provision of any federal, state or local law,
regulation, ordinance, order or administrative ruling, and the Business is not
in default with respect to any order, writ, injunction or decree of any court,
agency or instrumentality. The Business is in compliance with all federal,
state and local laws, regulations, ordinances and orders which are applicable
to it or to the conduct of its business.
SECTION 4.15. No Material Misstatement or Omission. The
representations, warranties and statements contained in this Agreement
(including the Schedules hereto) with respect to the Seller contain no untrue
statement of material fact and do not omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading.
SECTION 4.16. Investment. The Seller (i) understands that the
Shares have not been registered under the Securities Act of 1933, as amended,
or under any state securities laws, are being offered and sold in reliance
upon federal and state exemptions for transactions not involving any public
offering, (ii) is acquiring the Shares solely for its own account for
investment purposes, and not with a view to the distribution thereof, other
than distribution to its shareholders as at June 30, 1996 and to any finders
paid by the Seller in connection with this transaction, (iii) is a
sophisticated investor with knowledge and experience in business and financial
matters, (iv) has received copies of and has had an opportunity to review the
contents of all the filings of the Purchaser under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and has had
the opportunity to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding the Shares, and (v) is
able to bear the economic risk and lack of liquidity in holding the Shares.
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Seller as of the date
hereof and as of the Closing Date as follows:
SECTION 5.01. Due Organization, Etc. The Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota.
SECTION 5.02. Power and Authority. The Purchaser has full power
and authority to enter into this Agreement. The Agreement has been duly
authorized, executed and delivered by the Purchaser and constitutes a valid
and binding agreement of the Purchaser, and is enforceable against the
Purchaser, as appropriate, in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws similarly affecting the enforcement of creditors' rights generally.
SECTION 5.03. No Conflicts. The execution, delivery and
performance of this Agreement by the Purchaser are not prohibited by any
judicial decree, order or judgment to which the Purchaser is a party nor
conflict with, or result in a breach of or constitute a default under, its
governing documents or any material agreement or instrument to which the
Purchaser is a party or by which it or any of its properties or assets is
bound or affected.
SECTION 5.04. No Material Misstatement or Omission. The
representations, warranties and statements contained in this Agreement
(including the Schedules hereto) with respect to the Purchaser contain no
untrue statement of material fact and do not omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
SECTION 5.05. Incorporation of Disclosure. All disclosures made
to date in the filings of the Purchaser with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, are deemed to be incorporated
herein by this reference, and the Seller shall be deemed to be relying
thereupon in entering into this Agreement.
SECTION 5.06. Limitation of Representations and Warranties.
Except for the representations and warranties of the Seller set forth in
Article IV hereof, the Purchaser has not relied upon any representations and
warranties in making its determination to enter into this Agreement and
consummate the matters provided for herein.
VI. COVENANTS OF SELLER
The Seller covenants and agrees with the Purchaser as follows:
SECTION 6.01. Access to Books and Records. The Purchaser and
its counsel, accountants and other representatives shall have full access
during normal business hours throughout the period prior to the Closing Date
to all of the properties, books, contracts and records of the Seller relating
to the Business, and the Seller will cause the Business to furnish the
Purchaser during such period with all such documents, copies of documents
(certified if required) and information concerning the affairs of the Business
as the Purchaser may reasonably request. Nothing contained in this subsection
shall affect the survival of the representations and warranties of the Seller
as provided hereby.
SECTION 6.02. Consents. The Seller will use reasonable efforts
to deliver to the Purchaser on the Closing Date any and all consents or
waivers of other parties required in order to permit the continuation of the
Business's Waiver Leases and other contracts upon the same terms and
conditions as are contained in such leases and other contracts upon
consummation of the transactions contemplated by this Agreement except insofar
as the Purchaser may have waived such consents or waiver, in writing, prior to
the date hereof; provided, however, that the Purchaser hereby waives consent
to the Waiver Leases.
SECTION 6.03. Preservation of Business. Without making any
commitment on the Purchaser's behalf, the Seller will cause the Business to
use its reasonable efforts to preserve intact its present business
organization, to keep available the services of its present employees and
agency personnel and to maintain and preserve the business relations of the
Business with suppliers, customers and others.
SECTION 6.04. Conduct Prior to Closing Date. Between the date
of this Agreement and the Closing Date, except as permitted by the prior
written consent of the Purchaser, the Seller shall cause the Business to (i)
carry on its business diligently and in the same manner as heretofore,
maintain all its properties and the Assets in good condition and repair and
perform its obligations under all agreements binding upon it; (ii) continue in
effect the policies of insurance referred to in Section 4.05(g) hereof; (iii)
not become a party to an agreement which, if it existed on the date hereof,
would be required to be listed in the Schedules attached hereto unless it has
received the prior written consent of the Purchaser; and (iv) not sell any of
the Assets other than sales to unaffiliated parties where such sales will not
have a material adverse effect upon the Business. The Seller further
covenants that no cash or cash equivalents have been distributed by the
Business to the shareholders or other divisions of the Seller on or after May
31, 1997.
SECTION 6.05. Government Consents. Prior to the Closing Date,
the Seller shall use its reasonable efforts to obtain all consents and
approvals from all applicable governmental and regulatory bodies which are
necessary for the Seller to consummate the transactions contemplated by this
Agreement, it being understood that no Government Licenses are being conveyed
hereby and, accordingly, that no consents or approvals in respect of
conveyances of Government Licenses are required hereby.
SECTION 6.06. Financial Reporting. Until the Closing Date, as
soon as practicable and in any event within 30 days after the end of each
calendar month, the Seller shall cause the Business to deliver to the
Purchaser an unaudited balance sheet of the Business as of the end of such
month and the related statements of operations and changes in financial
position for the period then ended. Such financial statements shall present
fairly the financial position of the Business as of the date thereof and the
results of its operations and changes in financial position for the periods
then ended on a basis consistent with the preparation of the financial
statements referred to in Section 4.04 hereof.
SECTION 6.07. Joint Statement. Seller covenants and agrees
that, promptly following the Closing, if requested by Purchaser, Seller shall
cooperate in issuing a joint statement to suppliers, customers and such other
parties as may be agreed upon by the parties hereto, advising them of the fact
of the transfer of Assets from Seller to Purchaser hereunder, including, but
not limited to, the transfer of the accounts receivable of Seller.
SECTION 6.08. Right of First Refusal. If, at any time during
the first year following the Closing, the Seller desires to sell or transfer a
block of 10,000 or more of the shares of UStel Common Stock received pursuant
to the transaction described in this Agreement (collectively "Offered
Interest") to a third party (the "Transferee"), then the Seller shall give
notice (the "Offer Notice") to the Purchaser offering to transfer the Offered
Interest to the Purchaser. The Offer Notice may not specify the identity of
the Transferee but shall specify sufficient information to allow the Purchaser
to evaluate the terms of the proposed transaction. The Offer Notice shall
also specify the price (stated in cash or cash equivalents) and the terms and
conditions on which the Offered Interest is to be offered to the Transferee
and shall offer the Offered Interest to the Purchaser at the identical price,
terms and conditions. The offer contained in the Offer Notice shall be
irrevocable and may be accepted by the Purchaser by forwarding written notice
(the "Acceptance Notice") to the Transferor at any time within twenty-four
(24) hours (the "Offer Period" ) of deemed delivery of the Offer Notice.
If the Purchaser shall accept all or any portion of the Offered
Interest, then the Seller shall be bound to sell, and the Purchaser shall be
bound to purchase, such interest, and the Seller shall be permitted to sell
and transfer any remaining portion of such interest to the Transferee.
Notwithstanding anything to the contrary, the Seller may distribute
the Shares to its shareholders as at June 30, 1996 (and to any finders paid by
the Seller in connection with this transaction) without in any way being
subject to the provisions of this Section if in connection with such
distribution the distributee of such Shares agrees to be bound by the
provisions of this Section.
VII. COVENANTS OF PURCHASER
SECTION 7.01. Access to Books and Records. The Purchaser
covenants and agrees with the Seller that for a period of six years after the
Closing Date the Seller and its representatives shall be provided access at
reasonable times during normal business hours to the books and records of the
Business pertaining to periods ending on or prior to the Closing Date, and the
Seller shall be permitted to inspect and make copies (at the Seller's expense
unless copied at the Purchaser's offices, in which event no charge therefor
will be assessed) of such materials, in connection with the Seller's
preparation of tax returns and financial reports and the conduct of tax
audits, if any, with respect to periods ending on or prior to the Closing
Date.
SECTION 7.02. Registration Rights. For a period of one year
following the Closing hereunder, if the Purchaser shall determine to register
any of its securities on a form (other than Form S-8 or Form S-4 or their
successor forms), or the Purchaser shall be requested to register any of its
securities by any holder of any securities entitled to registration upon such
request (other than the Seller or its nominees or assignees), the Purchaser
will: (i) promptly give to the Seller written notice thereof (which shall
include a list of the jurisdictions, if any, in which the Purchaser intends to
qualify such securities under the applicable blue sky or other state
securities laws); and (ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein which must be a firm commitment underwriting,
all the securities specified in a written request or requests made by the
Seller within 20 days after receipt of the written notice from the Purchaser
described in clause (i) above.
As a condition to the Purchaser's obligation hereunder to cause the
Seller's securities to be included in a registration statement, the Seller
shall provide such information and execute such documents as may reasonably be
required in connection with such registration.
All expenses incurred in connection with the registration,
qualification or compliance pursuant to this Section including, without
limitation, all registration, filing and qualification fees, accounting fees
and printing expenses, fees and disbursements of counsel for the Purchaser
shall be borne by the Purchaser (other than underwriting discounts and
commissions and brokerage commissions and fees, if any, payable with respect
to securities sold by the Seller, which shall be borne solely by the Seller
with respect to such shares of the Seller to be sold by such entities).
The registration rights of the Seller also shall be held in
identical form by any persons who were shareholders of the Seller as at June
30, 1996 (and any finders paid by the Seller in connection with the
transaction), and receive distributions of all or any of the Shares from the
Seller.
SECTION 7.03. "Put" Option. During the period commencing six
months following the Closing and ending nine months following the Closing of
this Agreement, the Purchaser hereby irrevocably grants and issues to the
Seller, from time to time and on one or more occasions, the rights and options
to sell to the Purchaser (the "Put") up to fifty percent (50%) of the UStel
Common Stock received by the Seller pursuant to the transaction described in
this Agreement at a purchase price per share equal to the Exchange Basis Price
as defined in Section 3.01 hereof. The Seller's right to exercise the Put
shall commence upon notice to the Purchaser received during the three-month
period described in the preceding sentence. The Purchaser shall be required
to repurchase such UStel Common Stock as to which the Put is exercised within
sixty (60) days after notice from the Seller of its exercise of the Put.
Concurrent with receipt of payment in cash, the Seller shall deliver to the
Purchaser a stock certificate or certificates representing the total number of
shares being put and purchased, duly endorsed in blank by the Seller or having
attached thereto a stock power duly executed by Seller in proper form for
transfer.
Notwithstanding the foregoing, if the UStel Common Stock received by
the Seller pursuant to the transaction described in this Agreement has not
been registered within nine months following the Closing, then the Put shall
extend to all the shares of UStel Common Stock received by the Seller pursuant
to this Agreement. The Purchaser shall be required to repurchase such UStel
Common Stock as to which the Put is exercised within sixty (60) days after
notice from the Seller of its exercise of the Put. In addition, during the
one-year period following the Closing hereunder, if the Purchaser registers
any of its securities but fails to include the Seller's securities therein
pursuant to the terms and conditions of Section 7.02 hereof, then the Put
shall extend to all the shares of UStel Common Stock received by the Seller
pursuant to this Agreement. The Purchaser shall be required to repurchase
such UStel Common Stock as to which the Put is exercised within sixty (60)
days after notice from the Seller of its exercise of the Put.
In the event of any stock dividend, stock split, combination of
shares, subdivision or other recapitalization of the Purchaser's securities,
then the number of shares and the Exchange Basis Price shall be
proportionately adjusted to take into account each of any such events, so that
upon the exercise of the Put provided for in this Agreement, the Seller shall
be entitled to put such number of shares and to receive such purchase price
per share, upon exercise of the Put, as it would have been entitled to do or
receive after the occurrence of any such event had the Put been exercised
immediately prior to the occurrence of any such event.
All "put" rights of the Seller also shall be held, in identical
form, by any persons who were shareholders of the Seller as at June 30, 1996
(and any finders paid by the Seller in connection with this transaction) and
receive distributions of all or any of the Shares from the Seller; provided,
however, that such "put" rights may only be exercised upon one-half of the
Shares distributed to any such person unless the Seller would be entitled to
exercise its "put" rights upon all of the Shares pursuant to any provision
hereof (e.g., the failure to register any Shares within one (1) year of the
date hereof, the failure to include any Shares in any registration statement,
etc.) in which event such person shall be entitled to exercise the "put"
rights upon all of the Shares distributed to such person.
SECTION 7.04. Collection of Delinquent Accounts Receivable. The
Purchaser shall use its reasonable efforts to collect all delinquent (150 days
and over) accounts receivable for the account of the Seller, less reimbursement
of the Purchaser's actual out-of-pocket expenses incurred in performing such
duties and paid (i) to unaffiliated parties, or (ii) to employees of the
Purchaser or its affiliates in an amount not greater than the percentage paid
to such employees for collection by their employer in the normal course of
business. All sums paid to the Purchaser by delinquent customers of the
Seller whose accounts receivable have been retained by the Seller shall,
regardless of whether such payments are in respect of new services or any
other matter, first be applied to the Seller's outstanding accounts receivable
from such delinquent customers and thereafter paid to the Purchaser.
VIII. COVENANT NOT TO COMPETE BY MOLASKY
Molasky agrees that neither he nor any of his affiliates shall, for
a period ending two years following the Closing of the transactions
contemplated hereby, within the Las Vegas market, engage, directly or
indirectly through any person or entity, in the resale of goods and services
in the wireless telephonic or paging services industries, or own, directly or
indirectly through a person or entity, any part of or become the employee of,
or otherwise render services to, any enterprise which directly or indirectly
competes with the resale of goods and services in the wireless telephonic or
paging services industries. Molasky further agrees that he will not (i)
induce or attempt to induce any person(s) or entities which were customers of
the Business or were being actively solicited at the time of the Closing to
cease doing business or not to commence doing business in whole or in part
with the Purchaser or solicit the business of any such customer for any
wireless telephonic or paging products or services which compete with any of
the products or services offered or sold, or proposed by the Purchaser to be
offered or sold, by the Purchaser; or (ii) solicit, interfere with, or
endeavor to cause any employee of the Business to leave his employment or
induce or attempt to induce any such employee to breach his employment
agreement with the Business. Participation in a business shall include, but
not be limited to, serving as a director, officer, employee, agent or other
representative of or having an interest in the business as an owner,
stockholder, partner, limited partner, joint venturer, material creditor or
any other financial interest; provided, however, that the following shall not
be in violation of this covenant: (i) the participation by Molasky in the
Nevada Basic Trading Area of Pocket Communications; (ii) the ownership by
Molasky or any of his affiliates of not more than three percent of the
outstanding shares of stock of any such business listed on any national stock
exchange or registered under the federal securities laws and actively traded
in the over-the-counter market; (iii) the participation through the Seller or
any other person or entity, or directly, in any telephone or other activities
which are not in the wireless telephonic or paging goods or services resale
business; and (iv) the participation by Molasky or any of his affiliates in
any capacity in any business, which participation has received a specific
written approval of a majority of the Board of Directors of the Purchaser.
Molasky agrees that the limitations set forth herein in regard to
competing with the Business and the Purchaser following the Closing of this
Agreement are reasonable and necessary for the protection of the goodwill of
the Business. Molasky further recognizes and agrees that a violation of any
of the provisions contained in this Article will cause irreparable damage to
the Business and the Purchaser, the exact amount of which may be impossible to
ascertain and that, for such reason, among others, the Purchaser shall be
entitled to an injunction without the necessity of posting bond therefor in
order to restrain any further violation of such provisions. Such right to an
injunction shall be in addition to, and not in limitation of, any other rights
and remedies the Purchaser may have against Seller, including, but not limited
to, the recovery of damages. Further, it is agreed by Seller that in the
event that any of the provisions of this Article are found by a court of
competent jurisdiction to exceed the time and geographic limitations
enforceable under applicable law, such provisions shall be automatically
reformed to establish the maximum time or geographic limitations permitted by
law, or, if not capable of such reformation, deemed null and void. The terms
and conditions of this Article shall survive the Closing and the termination
of this Agreement.
IX. PURCHASER'S CONDITIONS PRECEDENT TO CLOSING
The obligations of the Purchaser under this Agreement are, at the
option of the Purchaser, subject to the satisfaction, at or prior to the
Closing Date, of the following conditions:
(a) All legal proceedings in connection with the transactions
contemplated hereby shall be satisfactory in form and substance to the
Purchaser and its counsel, and the Seller shall have delivered to the
Purchaser such certificates and other evidences of compliance with its
obligations hereunder, dated as of the Closing Date, as the Purchaser and its
counsel may reasonably require approving the terms and execution and delivery
to the Seller of this Agreement and authorizing the carrying out of the terms
hereof, including without limitation, the issuance of the Shares to the Seller
for the consideration and upon the terms and conditions provided for in this
Agreement.
(b) All consents and approvals from all applicable governmental
and regulatory bodies which are necessary for the consummation of the
transactions contemplated by this Agreement shall have been obtained in form
and substance satisfactory to the Purchaser and its counsel and shall be in
full force and effect on the Closing Date; provided, however, that the
Purchaser acknowledges and agrees that no Government Licenses are being
conveyed hereby and, accordingly, that no such consents or approvals with
respect to conveyances of Government Licenses are required hereby.
(c) All consents and approvals to the assignment of all the
Reseller Agreements and Tariff Agreements pursuant to which the Business is
conducted from all interested parties, including without limitation, the
consent by AT&T Wireless, PageMart, Inc., and 360 Communications, Inc., and/or
their assignees.
(d) The representations and warranties of the Seller made in
this Agreement or in any Schedule, document or certificate delivered to the
Purchaser pursuant hereto shall be true and correct in all material respects
as of the Closing Date with the same force and effect as though such
representations and warranties were made at and as of the Closing Date, except
for changes therein expressly permitted hereby and the Purchaser shall receive
the certificate, dated the Closing Date, of the Seller to such effect.
(e) All the terms, covenants and conditions of this Agreement to
be complied with and performed by the Seller on or before the Closing Date
shall have been complied with and performed.
(f) On the Closing Date, no order of any court or administrative
agency shall be in effect which restrains, preliminarily or otherwise, or
prohibits the transactions contemplated by this Agreement, and no suit,
action, investigation, inquiry or other proceeding by any governmental body or
other person or legal or administrative proceeding shall have been instituted
or threatened which questions the validity or legality of the transactions
contemplated by this Agreement. In the event of receipt prior to the Closing
Date of any communication from any department or agency of government, with
regard to the transactions contemplated by this Agreement, the Purchaser shall
be the sole judge for purpose of this subsection of whether such communication
is to be interpreted as a threat of such an action or proceeding.
(g) The Purchaser shall have received such other certificates,
documents and instruments as the Purchaser or its counsel shall reasonably
request.
(h) Since May 31, 1997, the Business has not paid any
distributions to the shareholders or other divisions of the Seller.
X. SELLER'S CONDITIONS PRECEDENT TO CLOSING
The obligations of the Seller under this Agreement are, at the
option of the Seller, subject to the satisfaction, at or prior to the Closing
Date, of the following conditions:
(a) All legal proceedings in connection with the transactions
contemplated hereby shall be satisfactory in form and substance to the Seller
and its counsel and the Purchaser shall have delivered to the Seller
certificates or other evidences of compliance with its obligations hereunder,
dated the Closing Date, as the Seller or its counsel may reasonably require
approving the terms and execution and delivery to the Purchaser of this
Agreement and authorizing the carrying out of the terms hereof, including
without limitation, the issuance of the Shares to the Seller for the
consideration and upon the terms and conditions provided for in this
Agreement.
(b) All consents and approvals from all applicable governmental
and regulatory bodies which are necessary for the consummation of the
transactions contemplated by this Agreement shall have been obtained in form
and substance satisfactory to the Seller and its counsel and shall be in full
force and effect on the Closing Date.
(c) All consents and approvals to the assignment of all the
Reseller Agreements and Tariff Agreements pursuant to which the Business is
conducted from all interested parties, including without limitation, the
consent by AT&T Wireless, PageMart, Inc., and 360 Communications, Inc., and/or
their assignees.
(d) The representations and warranties of the Purchaser
contained in this Agreement or in any document or certificate delivered to the
Seller pursuant hereto shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made as of the Closing Date, except
for changes therein expressly permitted hereby and the Seller shall receive
the certificate, dated the Closing Date, of the Purchaser to such effect.
(e) All the terms, covenants and conditions of this Agreement to
be complied with and performed by the Purchaser on or before the Closing Date
shall have been duly complied with and performed.
(f) On the Closing Date, no order of any court or administrative
agency shall be in effect which restrains, preliminarily or otherwise, or
prohibits the transactions contemplated by this Agreement, and no suit,
action, investigation, inquiry or other proceeding by any governmental body or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated by this Agreement. In
the event of receipt prior to the Closing Date of any communication from any
department or agency of government with regard to the transactions
contemplated by this Agreement, the Seller shall be the sole judge for purpose
of this subsection of whether such communication is to be interpreted as a
threat of such an action or proceeding.
(g) The Seller shall have received such other certificates,
documents and instruments as the Seller or its counsel shall reasonably
request.
XI. INDEMNIFICATION
SECTION 11.01. Indemnification by Seller. The Seller shall
indemnify and hold the Purchaser harmless from and against, and shall
reimburse the Purchaser with respect to, any and all loss, damage, liability,
cost and expense, including reasonable attorneys' fees, incurred by the
Purchaser by reason of or arising out of or in connection with: (i) the breach
or inaccuracy of any representation or warranty contained in Article IV hereof
or elsewhere in this Agreement or in any schedule, instrument or certificate
delivered pursuant hereto notwithstanding any purchase investigation which the
Purchaser may have made; (ii) the failure of the Seller to perform any
agreement or covenant required by this Agreement to be performed by the
Seller; (iii) the account payable to AT&T or any of its affiliates with
respect to billing disputes concerning fraudulent telephone calls in the
approximate aggregate amount of $210,000 or (iv) the failure or alleged
failure of the Purchaser to comply with the requirements of applicable law
with respect to bulk transfers in connection with the transactions
contemplated hereby; provided, however, that the Seller shall not have any
obligation to indemnify the Purchaser pursuant to this Section (A) until the
Purchaser has suffered aggregate losses by reason of all such breaches in
excess of a $50,000 deductible (after which point the Seller will be obligated
only to indemnify the Purchaser from and against such further losses), or
thereafter (B) to the extent the aggregate losses the Purchaser has suffered
by reason of all such breaches exceeds the Purchase Price (after which point
the Seller will have no obligation to indemnify the Purchaser from and against
further losses); and provided, however, further, that the Seller shall
indemnify the Purchaser for any loss with respect to the account payable to
AT&T or any of its affiliates referred to in item (iii) above on a
dollar-for-dollar basis without taking into account any deductible threshold.
SECTION 11.02. Indemnification by Purchaser. The Purchaser
agrees to indemnify and hold the Seller harmless from and against, and shall
reimburse the Seller with respect to, any and all loss, damage, liability,
cost and expense, including reasonable attorneys' fees, incurred by the Seller
by reason of or arising out of or in connection with: (i) the breach or
inaccuracy of any representation or warranty contained in Article V hereof or
elsewhere in this Agreement or in any instrument or certificate delivered
pursuant hereto notwithstanding any purchase investigation which the Seller
may have made; and (ii) the failure of the Purchaser to perform any agreement
or covenant required by this Agreement to be performed by the Purchaser;
provided, however, that the Purchaser shall not have any obligation to
indemnify the Seller pursuant to this Section until the Seller has suffered
aggregate losses by reason of all such breaches in excess of a $50,000
deductible (after which point the Purchaser will be obligated only to
indemnify the Seller from and against such further losses).
SECTION 11.03. Notice and Control of Litigation. If any claim
or liability is asserted in writing against a party entitled to
indemnification under this Article (the "Indemnified Party") which would give
rise to a claim under this Section, the Indemnified Party shall notify the
person giving the indemnity (the "Indemnifying Partner") in writing of the
same within 30 days of receipt of such written assertion or a claim or
liability. The Indemnifying Party shall have the right to defend the claim
and control the defense, settlement and prosecution of any litigation. All
parties agree to cooperate in the defense of such matters including, but not
limited to, providing witnesses and documentary evidence as may be reasonably
requested. Should the Indemnified Party fail to notify the Indemnifying Party
in the time required above, this indemnity shall terminate and be of no
further force and effect with respect to the subject matter of the required
notice.
SECTION 11.04. Survival of Representation and Warranties. All
representations, warranties, covenants and agreements made by the parties
hereto, shall be deemed to have been relied upon by the party to whom made or
for whose benefit undertaken and shall, for a period of one year, survive the
Closing regardless of any investigation made by or on behalf of such party.
XII. CONFIDENTIALITY
In the event that the transactions contemplated hereby shall not be
consummated, the Purchaser shall not use or disclose any information with
respect to the Seller or the Assets which has been disclosed to the Purchaser
by the Seller in connection with the evaluation by the Purchaser of whether to
acquire the Assets, and the Purchaser shall return to the Seller all data,
documents, schedules, exhibits then in its possession and furnished to the
Purchaser or its counsel by the Seller in connection with said evaluation;
provided, however, that nothing contained in this Article or elsewhere in this
Agreement shall be deemed to include, or impose any obligations on the
Purchaser with respect to, any information disclosed to, known by, or, data,
documents and schedules within the possession of the Purchaser by virtue of
any other reason.
XIII. TERMINATION
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(i) by mutual written consent of the Seller and the Purchaser; (ii) by either
the Seller or the Purchaser if there has been a material misrepresentation or
breach of the representations and warranties, or breach, nonfulfillment or
default in the performance of the covenants and agreements of the other party
contained in this Agreement; (iii) by the Seller if all the conditions set
forth in Article X hereof have not been satisfied or waived by the Closing
Date; or (iv) by the Purchaser if all the conditions set forth in Article IX
hereof have not been satisfied or waived by the Closing Date.
(b) In the event of any termination of this Agreement, pursuant
to this Article, neither the Seller nor the Purchaser shall have any
obligation or liability to the other except that the parties shall continue to
be bound by the provisions of Article XII hereof.
XIV. GENERAL PROVISIONS
SECTION 14.01. Notices. All notices, requests, demands and
other communications shall be in writing and deemed to have been duly given
when delivered personally, by facsimile transmission upon receipt of a "clear"
or "ok" transmission notice, or three days following deposit in the United
States mail, first class, postage prepaid, duly addressed:
If to Purchaser: UStel, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention of Chairman.
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxx, A Professional Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to Seller: Pacific Communications, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention of President.
With a copy to: Xxxx X. Xxxxx, Esq.
Xxxxx Xxxxxx & Xxxxxxxxx, Ltd.
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Any party may, pursuant to written notice in compliance with this Section,
alter or change the address or the identity of the person to whom any notice
is to be sent.
SECTION 14.02. Assignment. Either party shall have the right to
assign its rights hereunder to any affiliate or successor in interest whether
by merger, consolidation, purchase of assets or otherwise.
SECTION 14.03. Further Assurances. Each party hereby agrees to
execute and deliver such instruments and documents as the other party may deem
necessary or advisable to effectuate the contemplated transaction.
SECTION 14.04. No Waiver. No term or condition of this
Agreement shall be deemed to have been waived, nor shall any party hereto be
estopped from enforcing any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. Any written
waiver shall not be deemed a continuing waiver unless specifically stated,
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
SECTION 14.05. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada without
giving effect to that state's choice of law provisions or principles.
SECTION 14.06. Entire Agreement; Amendments. This Agreement
contains the entire agreement of the parties hereto in regard to the subject
matter hereof, and may not be changed orally but only by a written document
signed by the party against whom enforcement of waiver, change, modification,
extension or discharge is sought.
SECTION 14.07. Headings. Headings contained in this Agreement
are for convenient reference only; they are not a part of this Agreement and
are not to affect in any way the substance or interpretation of this
Agreement.
SECTION 14.08. Survival of Provisions. In case any one or more
of the provisions or any portion of any provision contained in this Agreement
should be found to be invalid, illegal or unenforceable in any respect, such
provision or portion thereof shall be modified or deleted in such manner so as
to afford the parties the fullest protection commensurate with making this
Agreement, as modified, legal and enforceable under applicable laws, and the
validity, legality and enforceability of any such provision shall not in any
way be affected or impaired thereby, such remaining provisions or portion of
any such provision construed as severable and independent thereof.
SECTION 14.09. Arbitration; Attorneys' Fees. Any dispute or
conflict which arises between the parties hereto shall be submitted to binding
arbitration of the American Arbitration Association, before a panel of three
arbitrators, in accordance with its then current Commercial Rules in Las
Vegas, Nevada, for arbitration and the parties shall be bound by the results
of such arbitration in accordance with Nevada law. Such method of dispute
resolution shall be the exclusive method and forum for resolution of any
dispute hereunder. If either party brings an action for judicial review or
enforcement of the arbitration proceedings, award or decision, the prevailing
party in any such action, trial or appeal shall be entitled to its reasonable
attorneys' fees to be paid by the nonprevailing party as fixed by the court.
SECTION 14.10. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument. Each party
hereto, and its respective successors and assigns, shall be authorized to rely
upon the signatures of all of the parties hereto which are delivered by
facsimile as constituting a duly authorized, irrevocable, actual, current
delivery of this Agreement with original ink signatures of each person and
entity; provided, however, that each party hereto that delivers such facsimile
signatures to another party hereto, covenants and agrees that it shall deliver
an executed original of the same to the party so receiving the previous
facsimile signatures within five (5) days after delivery of such facsimile
signatures.
SECTION 14.11. Construction. In all matters of interpretation,
whenever necessary to give effect to any provision of this Agreement, each
gender shall include the others, the singular shall include the plural, and
the plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, all as of the date and year first above written.
SELLER: PACIFIC COMMUNICATIONS, INC.,
By:
Its:
MOLASKY:
XXXXXX X. XXXXXXX
PURCHASER:USTEL, INC.,
By:
XXXXXX X.X. XXXXXX, Chairman
PAGE
SCHEDULE 1.01
Pro Forma Balance Sheet as of July 16, 1997
[See attachment.]
PAGE
SCHEDULE 1.02
Liabilities
Other than the liabilities set forth in the May 31, 1997 balance
sheet of the Seller, and the accounts payable incurred subsequent to May 31,
1997 in the ordinary course of operating the Business, including, without
limitation, those more particularly set forth in the Schedule attached hereto,
the Purchaser does not and shall not assume, and hereby disclaims responsibility
for, any liabilities or obligations of the Seller.
[See attachment.]
PAGE
SCHEDULE 4.05(a)
Fixed Assets and Other Personal Property
[See attachment.]
PAGE
SCHEDULE 4.05(b)
Material Contracts
Reseller Agreement dated December 1, 1993, between XxXxx
Communications of Nevada, Inc., dba Cellular One-Las Vegas, and Xxxxxx
Xxxxxxx, Pacific Cellular (Reseller).
Xxxxxx Xx. 0 - A Applicable to Regulations, Rates and Charges of
Centel Cellular Company of Nevada Limited Partnership dba Sprint Cellular
Company within the Las Vegas, Nevada Cellular Geographic Service Area, filing
accepted effective September 9, 1993 by the Public Service Commission of
Nevada.
Agreement (first page is missing) between Centel Cellular Company of
Nevada and Pacific Entertainment, Inc., dba Pacific Cellular.
Paging Reseller Agreement undated between PageMart, Inc. and Pacific
Communications, Inc.
PAGE
SCHEDULE 4.05(c)
License Agreements
None.
PAGE
SCHEDULE 4.05(e)
Copyrights, Patents, Trademarks and Trade Names
Common Law rights in the name "Pacific Cellular".
PAGE
SCHEDULE 4.05(f)
List of Employees Whose Compensation Exceeds $25,000 Annually
Xxxxxxx Xxxxx
Xxx Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxx
PAGE
SCHEDULE 4.05(g)
Insurance
Surety Bond No. 000-00-00 in an amount not to exceed $55,000 issued
by Insurance Company of the West dated February 18, 1993 [not executed by any
party] on behalf of Pacific Entertainment, Inc. in favor of Centel Cellular
Company of Nevada for sums payable by Pacific Entertainment to Centel Cellular
Company of Nevada on September 30, 1993, pursuant to paragraph 2 (page 4) of
that certain Agreement dated as of September 30, 1992, by and among Centel
Cellular Company of Nevada, Xxxxxxx Communications, Inc. and Pacific Entertainme
nt, Inc. [expired September 30, 1993].
Change in Name and/or Address of Principal Rider to be attached to
and form a part of Bond No. 128 77 51 in the amount of $60,000 issued by the
Insurance Company of the West on behalf of Pacific Entertainment, Inc. in
favor of XxXxx Communications of Nevada, Inc., dba Cellular One, changing the
name of the principal to Pacific Communications, Inc. from and after October
18, 1994, and a related Power of Attorney.
PAGE
SCHEDULE 4.07
Adverse Changes
None.
