ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into this 23rd day of April, 1997, by and between WorldPort
Communications, Inc., a Delaware corporation ("Buyer") and Telenational
Communications, Limited Partnership, a
Nebraska limited partnership ("Seller").
WHEREAS, Seller is a limited partnership with ownership
divided between a general partner (the "General Partner") and several limited
partners (each a "Limited Partner," and collectively with the General Partner,
the "Partners"), each with an ownership stake as set forth on Exhibit A hereto;
WHEREAS, Seller provides domestic and international
telecommunications services, and is a switch-based reseller of services of
interexchange carriers, and operates telecommunications switches and operator
services platforms in Omaha, Nebraska (the "Business");
WHEREAS, on April 4, 1997, Buyer and Seller signed that
certain letter of intent in contemplation of the transactions to be entered into
under this Agreement (the "Letter of Intent");
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, the Purchased Assets and Assumed Liabilities and Assumed Obligations
in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and promises
herein contained, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1. Purchase and Sale of Seller's Assets. At the Closing (as
hereafter defined), Seller shall sell, transfer, assign and deliver to Buyer,
and Buyer shall purchase, accept, assume and receive, all right, title and
interest in, to or arising from the Business, as a going concern, including the
Purchased Assets, but excluding the Excluded Assets.
1.2. Purchased Assets. The "Purchased Assets" are all of the
assets, properties, rights and claims used in, relating to or arising from the
conduct of the Business, including the following:
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(a) All accounts and notes receivable;
(b) All network and switching equipment;
(c) All Seller's rights to the FCC 214 License - File No.
I-T-C88-056, held in the name of the General Partner, dated March 8,
1988 (the "FCC 214 License");
(d) All Seller's rights to the South American calling card
business opportunity currently under development by Seller and its
officers;
(e) All cash, cash equivalents and marketable securities;
(f) All carrier contracts;
(g) All inventories;
(h) All rights to amounts received and receivable arising
from the judgment in favor of Seller in the case Telenational
Communications Limited Partnership v. Gateway Communications (HK) Ltd.
and Xxxxxxx Xxx, Doc. 934, No. 260, in the District Court of Xxxxxxx
County, Nebraska;
(i) All tools, machinery and equipment, whether owned or
leased;
(j) All vehicles and rights under vehicle leases;
(k) All office furnishings, shelves, equipment, telephone and
telecopy numbers, fixtures and supplies;
(l) All real property, whether owned or leased, including all
land, buildings, structures, easements, appurtenances and privileges
relating thereto, and all leaseholds, leasehold improvements, fixtures
and other appurtenances and options, including options to purchase and
renew, or other rights thereunder (the "Real Estate");
(m) All technical, operational, manufacturing or marketing
information, including new developments, inventions, know-how,
processes, ideas and trade secrets and documentation thereof and all
claims and rights related thereto;
(n) The contents of all bank accounts, lock boxes, safe
deposit boxes which are maintained for use in the conduct of the
Business;
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(o) All patents, trademarks, trade names, trade styles, logos
and service marks and all applications and registrations therefor and
licenses thereof;
(p) Copyrights and author's rights, whether published or
unpublished, including rights to prepare, reproduce and distribute
copies, compilations and derivative works;
(q) All customer files, all lists of customers, suppliers and
vendors, all rights and claims under sales contracts, customer orders,
service agreements, purchase orders, agent, dealer and distributorship
agreements and other similar commitments;
(r) All rights in, to and under the Material Contracts listed
on Schedule 2.15;
(s) All documents and records relating to the Purchased
Assets, or the operations or products of the Business (including
historical costing and pricing data), and employment and personnel
records for all employees of the Business that Buyer chooses to hire;
(t) All accounting books, records, ledgers and electronic
data processing materials;
(u) Rights under agreements with employees concerning
confidentiality and the assignment of inventions;
(v) All information systems, programs, software and
documentation thereof (including all electronic data processing
systems, program specifications, source codes, logs, input data and
report layouts and formats, record file layouts, diagrams, functional
specifications and narrative descriptions, flow charts and other
related material) which are used or intended to be used in the conduct
of the Business;
(w) Prepaid expenses, deferred charges and cash advanced by
customers of the Business and rights to volume rebates due from
suppliers;
(x) Subject to the agreements set forth on Schedule 1.2(x),
all goodwill associated with the Business, including all rights to use
the name "Telenational Communications";
(y) All warranties related to assets owned and services
received by Seller;
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(z) All permits, licenses, franchises, product registrations,
filings, authorizations, approvals and indicia of authority (and
pending applications for any thereof) to conduct the operations of the
Business and to own, construct, operate and maintain any product,
fixture, facility, equipment, vehicle, machinery or installation of the
Business; and
(aa) All other assets, properties, rights and claims related
to the operations of the Business or which arise in or from the conduct
thereof;
other than the Excluded Assets.
For purposes hereof, "Excluded Assets" means only the
following assets of Seller:
(i) 850,000 shares of the Series A Non-Cumulative Preferred
Stock of Enhanced Telecommunications Services, Inc. owned by Seller.
1.3. Assumed Liabilities. At Closing, Buyer shall assume and
at or after Closing, as necessary, Buyer shall discharge the following
liabilities of the Seller, but only to the extent to which they are recorded and
accrued on Schedule 1.3 or arise from the date of Schedule 1.3 through and
including the Closing Date (as hereafter defined) in the ordinary course of
business consistent with Seller's past practices (the "Assumed Liabilities"):
(a) Amounts owed by Seller to creditors under third party loan
agreements including amounts owed by Seller to Buyer under that certain
secured Promissory Note dated April 4, 1997 (the "Buyer Note");
(b) Liabilities to trade creditors for accounts payable which
arose in the ordinary course of the Business;
(c) Liabilities to creditors for accrued expenses and
liabilities for accrued payroll taxes which arose in the ordinary
course of the Business;
(d) Liabilities owed by Seller to creditors who are Partners
as shown on Schedule 1.3 up to a maximum of $600,000 (the "Affiliate
Liabilities");
(e) Liabilities owed by Seller to the General Partner for
accrued unpaid management fees or notes into which such accrued unpaid
management fees have been converted up to a maximum of $400,000 (the
"G.P. Liabilities");
(f) Liabilities and obligations to Buyer Employees (as
defined hereafter);
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(g) Liabilities to provide services to prepaid calling card
purchasers to the extent reflected as deferred revenue on the 1996 Financial
Statements consistent with Seller's past practices; and
(h) Liabilities under the leases for capital equipment.
At any time up until two (2) business days prior to Closing, the Partners to
whom amounts are owed under the Affiliate Liabilities may opt to receive the
common stock of Buyer, at $1.50 per share, as payment in lieu of cash. At any
time up until two (2) business days prior to Closing, the General Partner may
opt (with the consent of Buyer, which consent may be withheld in Buyer's sole
discretion) to receive the common stock of Buyer, at $1.50 per share, as payment
for the G.P. Liabilities in lieu of the G.P. Note, as defined hereafter. All
shares of Buyer's common stock delivered in satisfaction of the Affiliate
Liabilities are "Conversion Shares".
Buyer's assumption of the foregoing Assumed Liabilities is
qualified by the understanding that under no circumstances shall Buyer's
aggregate liability under the Assumed Liabilities exceed $4.5 million (the
"Liabilities Cap"). If the Assumed Liabilities exceed the Liabilities Cap, the
G.P. Liabilities to be assumed shall be reduced dollar for dollar until the
aggregate value of the Assumed Liabilities does not exceed the Liabilities Cap.
If, notwithstanding adjustments made in accordance with the foregoing sentence,
the value of the Assumed Liabilities is greater than the Liabilities Cap, Buyer,
in its sole discretion may elect to assume all or a portion of such additional
liabilities (the "Additional Liabilities"). To the extent that Buyer assumes any
Additional Liabilities, that number of the Escrowed Shares (as defined hereafter
and valued for this purpose at $1.50 per share) equal to the value of the
Additional Liabilities shall be distributed to Buyer.
1.4. Obligations. As of the Closing, Buyer will assume only
the obligations of Seller to perform after the Closing Date with respect to the
following obligations of Seller arising solely from the operation of the
Business (referred to herein as the "Assumed Obligations"):
(a) Obligations under supplier contracts and purchase orders
arising in the normal course of the Business consistent with Seller's
past practices;
(b) Obligations under sales contracts and customer orders
accepted in the normal course of the Business; and
(c) Obligations under the equipment operating leases to be
assumed by Buyer at Closing that arose in the ordinary course of the
Business.
Except as set forth in Section 1.3 or this Section 1.4, Buyer does not assume
and shall not be liable for any debt, obligation, responsibility or liability of
Seller or any affiliate thereof arising at any time or of the Business arising
on or prior to the Closing Date, whether known or unknown, contingent or
absolute, or otherwise, all of which are retained by Seller and Seller shall
indemnify, defend and hold harmless Buyer from and against all loss and expense
resulting from or related to any thereof.
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Buyer shall defend, indemnify and hold harmless the Seller
from and against any and all liabilities, obligations, losses, claims, damages
(not including any incidental or consequential damages), costs and expenses
(including court costs and reasonable attorneys' fees) related to or arising
from Buyer's failure to fully perform and discharge the responsibilities of the
Seller with respect to the Assumed Liabilities and Assumed Obligations. The
Buyer further agrees to pay and discharge all such Assumed Liabilities and
Assumed Obligations as they come due.
1.5. Consideration. The aggregate consideration for the
Business and the Purchased Assets shall be as follows:
(a) 3,750,000 shares of Buyer's common stock subject to
adjustment if (i) the Liability Cap is exceeded and Buyer assumes any
Additional Liabilities, (ii) Buyer is due indemnification by Seller
under Article IX hereof, (iii) there are any Expense Overruns (as
defined in Section 12.3, or (iv) there are any Rejected Contracts (as
defined in Section 1.9(c)) (as adjusted in accordance herewith, the
"Buyer's Stock"); and
(b) Assumption of the Assumed Liabilities and Assumed
Obligations.
1.6. Closing. The transfer of assets contemplated by this
Agreement (the "Closing") shall occur at the offices of XxXxxxxxx, Will & Xxxxx,
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, at 10:00 A.M. on the tenth (10th)
business day following the later to occur of (i) the receipt and acceptance of
the 1996 Financial Statements and (ii) the grant by the Federal Communications
Commission (the "FCC") of a Joint Application (as defined hereafter) by Final
Order (as defined hereafter), or at such other time or place as may be mutually
agreed upon by the parties (the "Closing Date"). Upon consummation, the Closing
shall be deemed to take place as of the close of business on the Closing Date.
1.7. Deliveries by Buyer. At Closing, Buyer shall deliver the
following:
(a) Certificates evidencing the Buyer's Stock registered in
the name of Seller;
(b) Payment of the Affiliate Liabilities or delivery of the
Conversion Shares, as applicable;
(c) An Instrument of Assumption of Assumed Liabilities and
Assumed Obligations in substantially the form attached hereto as
Exhibit B executed on behalf of Buyer;
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(d) The Escrow Agreement in substantially the form attached
hereto as Exhibit C (the "Escrow Agreement") executed on behalf of
Buyer;
(e) The Registration Rights Agreement in substantially the
form attached hereto as Exhibit D (the "Registration Rights Agreement")
executed on behalf of Buyer;
(f) An opinion of counsel to Buyer, including, but not limited
to, opinions as to the organization, good standing and capitalization
of Buyer and the authority of Buyer to enter into and perform under
this Agreement and the enforceability of this Agreement against the
Buyer;
(g) A certificate of Buyer certifying as to the continued
accuracy of the representations and warranties made herein and
compliance with conditions precedent to the Closing;
(h) Certificate of the Secretary of Buyer certifying copies
of the Certificate of Incorporation and Bylaws of Buyer as of the
Closing Date;
(i) Payment or cancellation of the Buyer Note and a release
of Xx. Xxxxxx Xxxxxxxxx from his guaranty thereunder which guarantee
shall be returned to Xx. Xxxxxxxxx at Closing; and
(j) Such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated hereby.
One Million (1,000,000) shares of the Buyer's Stock (the "Escrowed Shares")
shall, pursuant to the Escrow Agreement, be delivered to the Escrow Agent (as
defined in the Escrow Agreement). The remainder of the Buyer's Stock shall be
delivered to Seller. The consideration described in Section 1.7(b) shall be
delivered to Seller on behalf of the relevant Partners.
1.8. Deliveries by Seller. At the Closing, Seller shall
deliver the following to Buyer:
(a) A Xxxx of Sale in substantially the form attached hereto
as Exhibit E (the "Xxxx of Sale");
(b) An opinion of counsel to Seller, including, but not
limited to, opinions as to the organization, good standing and
capitalization of Seller and the authority of Seller to enter into and
perform under this Agreement and the enforceability of this Agreement
against the Seller;
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(c) A certificate of Seller certifying as to the continued
accuracy of the representations and warranties made herein and
compliance with conditions precedent to the Closing;
(d) Certificate of an officer of Seller certifying copies of
the organizational documents and ownership record book of Seller as of
the Closing Date;
(e) Any third party consents required for Seller to
consummate the transactions contemplated hereby;
(f) Trademark assignments, if any;
(g) Patent assignments, if any;
(h) Warranty deed to each parcel of Real Estate as required
by applicable law, if any;
(i) Consent and estoppel letters from each lessor of real or
personal property used in the Business;
(j) Except for the creditors set forth on Schedule 1.8 (j),
which creditors shall provide Seller with consents to the consummation
of the transactions contemplated hereunder and which consents Seller
shall also deliver to Buyer at Closing, payoff and release letters from
creditors of the Seller together with UCC-3 termination statements with
respect to financing statements filed against the Business or any of
the Purchased Assets;
(k) The Escrow Agreement executed on behalf of Seller;
(l) The Registration Rights Agreement executed on behalf of
Seller; and
(m) Such other endorsements, instruments or documents as may
be necessary or appropriate to carry out the transactions contemplated
hereby.
At the Closing, Seller shall take all steps necessary to place the Buyer in
actual possession and operating control of the Business and the Purchased
Assets.
1.9. Nonassignable Contracts.
(a) To the extent that the assignment by Seller of any sales
order, purchase order, lease or other contract included in the Purchased Assets
is not permitted without (i) the consent of the other party to the contract,
(ii) the approval of Buyer as a source of the products or services
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called for by such contract or (iii) the approval of Buyer as a lessee, this
Agreement shall not be deemed to constitute an assignment or an attempted
assignment of the same, if such assignment or attempted assignment would
constitute a breach thereof. However, unless otherwise agreed as to any
particular contract or order (or class thereof), Seller shall use commercially
reasonable efforts to obtain any and all such consents, approvals and novations.
(b) If any consent, approval or novation is requested but not
obtained, Seller shall cooperate with Buyer in any reasonable arrangement
designed to provide the Buyer with all of the benefits under such contract,
lease or order as if such consent, approval or novation had been obtained,
including subleases from Seller and, undertakings by Buyer of the work necessary
to complete contracts and to deliver goods and services called for thereunder as
the agent of Seller with the understanding that Seller shall then invoice the
purchaser for the goods and services provided and promptly remit the amount of
the receivable to Buyer. In any such arrangement, the Buyer shall have the sole
responsibility with respect to the completion of the work following Closing;
shall bear all costs and expenses with respect thereto arising or occurring
after the Closing Date; shall be solely entitled to the benefits; and shall be
solely responsible for any breach of contract with respect to the goods and
services of the Business to the extent they are manufactured or performed after
the Closing Date.
(c) If a consent, approval or novation requested by Buyer
pursuant to this Section is not obtained prior to the Closing Date and as a
result Buyer will not receive the benefit of the goods or services to be
received or the amounts to be paid pursuant to the underlying contract, lease or
order despite the best efforts of the parties to develop a suitable arrangement
pursuant to subsection (b) above (the "Rejected Contracts"), Buyer shall give
written notice at or prior to Closing that the following adjustments shall be
made:
(i) All rights of Seller with respect to each Rejected
Contract identified in Buyer's notice shall be deemed Excluded Assets
and shall not be deemed Purchased Assets for purposes of this
Agreement, including for the determination of the consideration to be
paid to Seller;
(ii) All liabilities and obligations of Seller with respect to
each Rejected Contract identified in Buyer's notice shall not be deemed
Assumed Liabilities for purposes of this Agreement, including
determination of the consideration to be paid to Seller, and
(iii) The consideration to be paid pursuant to Section 1.5(a)
above shall be reduced to account for the value of the Rejected
Contract. For the purposes of this reduction, the Buyer's Stock shall
be valued at $1.50 per Share.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the date
hereof, and as of the Closing Date, as follows:
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2.1. Authority. Seller has all requisite power and authority,
without the consent of any other person except for the creditors listed on
Schedule 1.8(j), and the Limited Partners, which consent shall have been
received prior to Closing, to execute and deliver this Agreement and the
agreements to be delivered at Closing and to carry out the transactions
contemplated hereby and thereby. All acts or proceedings required to be taken by
Seller to authorize the execution and delivery of this Agreement have been duly
and properly taken. All acts or proceedings required to be taken by Seller to
authorize the performance of this Agreement and all transactions contemplated
hereby will have been duly and properly taken on or before the Closing Date.
2.2. Validity. This Agreement has been, and the documents to
be delivered at Closing by Seller will be, duly executed and delivered and
constitute lawful, valid and binding obligations of Seller, enforceable in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally and by general equitable principles.
Except as set forth on Schedule 2.2, the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
result in the creation of any lien, charge or encumbrance of any kind or the
acceleration of any indebtedness or other obligation of Seller, will not
otherwise restrict the ability of Buyer to carry on the Business after Closing
and are not prohibited by, do not violate or conflict with any provision of, and
do not constitute a default under or a breach of (a) the certificate of limited
partnership of Seller, (b) any note, bond, indenture, contract, agreement,
permit, license or other instrument to which Seller is a party or by which
Seller or any of its Purchased Assets is bound, (c) any order, writ, injunction,
decree or judgment of any court or governmental agency, or (d) any law, rule or
regulation applicable to Seller. Except as set forth in Schedule 2.2, no
approval, authorization, registration, consent, order or other action of or
filing with any person, including any court, administrative agency or other
governmental authority, is required for the execution and delivery by Seller of
this Agreement or the consummation by Seller of the transactions contemplated
hereby.
2.3. Due Organization.
Seller has been duly organized, and is validly existing and in
good standing under the laws of its state of formation, and has full power and
authority and all requisite rights, licenses, permits and franchises to own,
lease and operate its assets and to carry on the business in which it is
engaged.
2.4. Transactions with Affiliates. Except as set forth on
Schedule 2.4, since December 31, 1996, there has not been any distribution of
cash declared or paid or any other distribution of assets by the Seller made to
its Partners or affiliates. Except as set forth on Schedule 2.4, no Partner nor
any affiliate of Seller, directly or indirectly:
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(a) owns any debt, equity or other interest or investment
greater than 5% in any corporation, association or other entity which is a
competitor, lessor, lessee, customer, supplier or advertiser of the Seller or
the Business;
(b) has any cause of action or other claim whatsoever against
or owes any amount to, or is owed any amount by, the Seller;
(c) has any interest in or owns any property or right used in
the conduct of the Business;
(d) is a party to any contract, lease, agreement, arrangement
or commitment entered into with Seller or otherwise in connection with the
Business; or
(e) has outstanding any loan or advance from Seller.
2.5. Financial Statements. Buyer has received Seller's audited
financial statements for the years ended December 31, 1994 and 1995 (the "1994
and 1995 Financials") and Seller represents that the 1994 and 1995 Financials,
attached hereto as Schedule 2.5 are (i) accurate, correct and complete; (ii) in
accordance with the books of account and records of Seller; (iii) fair
presentations of the financial condition and results of operations of Seller as
of the dates and for the periods indicated therein; and (iv) prepared in
accordance with U.S. generally accepted accounting principles, as consistently
applied by Seller. Seller has also provided Buyer with an unaudited profit and
loss statement and balance sheet for the year ended December 31, 1996 (the
"Unaudited Financial Statements"), dated as of April 14, 1997. Except as set
forth on the Unaudited Financial Statements, Seller does not have any
liabilities or obligations of any nature (accrued, absolute, contingent or
otherwise) other than liabilities incurred in the ordinary course of business
since the date of the Unaudited Financial Statements on terms and conditions and
in amounts consistent with past practice and not exceeding $15,000, except as
set forth in Schedule 2.5. Prior to Closing, Seller shall present Buyer with the
audited financial statements of Seller for the year ended December 31, 1996 (the
"1996 Financial Statements"). The 1996 Financial Statements shall be (i)
accurate, correct and complete; (ii) in accordance with the books of account and
records of Seller; (iii) fair presentations of the financial condition and
results of operations of Seller as of the dates and for the periods indicated
therein; and (iv) prepared in accordance with U.S. generally accepted accounting
principles, as consistently applied by Seller.
2.6. Books and Records. The books of account, records of
ownership and other records (financial and otherwise) of Seller are in all
respects complete and correct and are maintained in accordance with good
business practices.
2.7. Interim Change. Except as set forth on Schedule 2.7,
since December 31, 1996 there have not been any of the following with respect to
Seller: (a) any material adverse change in the financial condition, assets,
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liabilities, personnel, business, prospects or relationships with suppliers,
customers, distributors, sales representatives, lenders, lessors or others (a
"Material Adverse Effect") or (b) any damage, destruction or loss of any
material assets, whether or not covered by insurance. Since December 31, 1996,
Seller has operated the Business in the ordinary course, consistent with past
practices.
2.8. Accounts Receivable. To the best of Seller's knowledge,
Schedule 2.8 hereto sets forth an accurate, correct and complete aging of all
outstanding accounts and notes receivable of Seller as of March 31, 1997. To the
best of Seller's knowledge, all outstanding accounts and notes receivable of
Seller are due and valid claims against account debtors for goods or services
delivered or rendered, are not subject to any defenses, offsets or counterclaims
and are collectible within 90 days of the date of the applicable invoice (net of
the stated allowance for doubtful accounts reflected on Schedule 2.8). All
receivables arose in the ordinary course of business. Except as set forth on
Schedule 2.8, no receivables are subject to prior assignment, claim, lien or
security interest. Where receivables arose out of secured transactions, all
financing statements and other instruments required to be filed or recorded to
perfect the title or security interest of Seller have been properly filed and
recorded.
2.9. Insurance. Schedule 2.9 is a complete and correct list
and summary description (including the name of the carrier, coverage, premium
and expiration date) of all policies of insurance or fidelity bond maintained by
Seller. Such policies are in full force and effect.
2.10. Title to Assets. Seller is the sole and exclusive legal
and equitable owner of all right, title and interest in and has good and
marketable title to all of the Purchased Assets. Except as set forth on Schedule
2.10, none of the Purchased Assets which the Seller purports to own are subject
to (a) any title defect or objection; (b) any contract of lease, license or
sale; (c) any security interest, mortgage, pledge, lien, charge or encumbrance
of any kind or character, direct or indirect, whether accrued, absolute,
contingent or otherwise, except minor liens and encumbrances which do not
materially detract from the value or interfere with the present use thereof; (d)
any royalty or commission arrangement; or (e) any claim, covenant or
restriction. Schedule 2.10 sets forth an accurate, correct and complete list of
all depreciable Purchased Assets. The Purchased Assets are in good operating
condition and repair (reasonable wear and tear excepted), are suitable for the
purposes for which they are presently being used, and are adequate to meet all
requirements of the Business as presently conducted. The Purchased Assets will
furnish the Buyer with all of the capacity and rights to produce, develop, use,
sell, distribute, install and service the products of the Business and to
perform the same services in the same manner as presently being performed by
Seller.
2.11. Proprietary Information. Except as set forth on Schedule
2.11, information in the nature of trade secrets, know-how or proprietary
information used by Seller, including but not limited to, customer lists,
customer files, mailing lists, copyrighted and copyrightable material,
electronic data processing systems, program specifications and technical
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information relating to the products and the operation of the Business (the
"Proprietary Information"): (a) is owned solely and exclusively by Seller free
and clear of any adverse claims; and (b) has been continuously maintained as
confidential information by Seller by taking all reasonable precautions to
protect the confidentiality of such Proprietary Information. Seller has no
knowledge of any violation of any trade secret rights or copyrights with respect
to the Proprietary Information by any other person, nor of any violation by
Seller of any trade secret rights, patents, trademarks or copyrights of any
other person.
2.12. Customers and Suppliers. All contracts or agreements
with customers and suppliers currently in effect were entered into by or on
behalf of Seller in the ordinary course of business at prices, in quantities and
on terms consistent with past practice. Seller has no reason to believe that any
customer or supplier will cease to do business with Seller after, or as a result
of, the consummation of any transactions contemplated hereby or that any
customer or supplier is threatened with bankruptcy or insolvency. Except as set
forth on Schedule 2.12 Seller knows of no fact, condition or event which would
adversely affect the relationship of Seller with any customer or supplier after
Closing.
2.13. Employees. Schedule 2.13 hereto sets forth an accurate,
correct and complete list and summary description of all agreements,
arrangements or understandings, written or oral, with officers, directors and
employees of Seller, including those regarding services to be rendered, terms
and conditions of employment, non-competition, confidentiality and compensation
(the "Employment Contracts"). Seller has provided Buyer with information that is
correct in all material respects with respect to (a) the length of service of
each employee of Seller (each a "Business Employee"); and (b) the compensation
(including terms of payment, bonuses, commissions and deferred compensation, as
well as any benefits) of each Business Employee. Schedule 2.13 contains a list
and summary description of all cash profit-sharing plans, benefit plans and
other compensation arrangements or understandings of Seller or to which Seller
is a party or otherwise bound. Seller has no pension or profit sharing plans
that require it to comply with the provisions of the Employee Retirement Income
Security Act of 1974, as amended. Seller is not a party to any collective
bargaining agreement. Seller has not suffered or sustained any labor disputes
resulting in any work stoppage. Seller does not have any unfunded liabilities in
connection with its 401(k) plan or in connection with any other retirement or
employee benefit plan.
2.14. Licenses and Permits. Schedule 2.14 hereto contains an
accurate, correct and complete list and summary description of each license
(including the FCC 214 License), permit, certificate, approval, exemption,
franchise, registration, variance, accreditation or authorization issued to
Seller or used in the Business, (collectively, the "Licenses and Permits"). The
Licenses and Permits are valid and in full force and effect and there are not
pending, nor, to the knowledge of Seller, threatened, any proceedings which
could result in the termination, revocation, limitation or impairment of any of
the Licenses and Permits. Except as set forth on Section 2.14, the execution of
this Agreement and the consummation of the transactions contemplated hereby will
not alter or result in the termination or modification of any License or Permit.
The Licenses and Permits listed on Schedule 2.14 include all licenses, permits,
certificates, approvals, exemptions, franchises, registrations, variances,
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accreditations and other authorizations as are necessary or appropriate in order
for Seller to own and conduct its business, sell and distribute its products,
operate its motor vehicles and occupy and lease its offices. No violations have
been recorded in respect of any Licenses and Permits, and Seller has no
knowledge of any meritorious basis therefor.
2.15. Material Contracts. Schedule 2.15 hereto sets forth an
accurate, correct and complete list of all contracts, instruments, commitments,
agreements, arrangements and understandings including all amendments and
supplements thereto, to which Seller is a party or is bound, or by which any of
the assets of Seller are subject or bound (i) which involve benefits or
obligations with a value individually or in the aggregate, of $20,000 or more,
or (ii) which otherwise involve any of the following types of contracts (the
items in (i) and (ii) being collectively referred to herein as the "Material
Contracts"):
(a) any customer and representative contracts;
(b) any vendor and carrier contracts;
(c) any sales, license, service or distribution agreements
and contracts;
(d) any leases of real or personal property;
(e) all Employment Contracts;
(f) all agreements and contracts containing requirements or
"take or pay" provisions;
(g) all agreements between Seller and any Partner or
affiliate of Seller;
(h) all agreements and contracts for insurance;
(i) all agreements and contracts with state, federal, local,
regulatory or other governmental entities;
(j) all agreements and contracts not to compete or otherwise
restricting activities;
(k) all agreements and contracts containing a provision to
indemnify any party or assume any tax, environmental or other liability; and
Except as set forth on Schedule 2.15, all Material Contracts
are valid, binding and enforceable in accordance with their terms and are in
full force and effect and none of the parties to any Material Contract are in
breach of, violation of, or in default under the terms of any such Material
Contract. Except as set forth on Schedule 2.15, no event has occurred which with
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notice or passage of time or both would result in a breach of, violation of, or
in default under, the terms of any Material Contract. Except as set forth on
Schedule 2.15, the consummation of the transactions contemplated hereby, without
notice to or consent or approval of any party, will not constitute a breach of,
violation of, or default under any provision of any Material Contract. There is
no adverse claim on the rights of Seller under any Material Contract. None of
the rights of Seller under any Material Contract will be impaired by the
consummation of the transactions contemplated by this Agreement, and all of such
rights will be enforceable by Buyer after the Closing Date without the consent
or agreement of any other party, including all rights to renew the applicable
Material Contract. Seller has delivered accurate, correct and complete copies of
each Material Contract to Buyer.
2.16. Taxes. All federal, state, county and other tax returns,
reports and declarations of every nature (including income, employment, excise,
property, sales and use taxes) required to be filed by or on behalf of Seller
have been filed or will be filed by their respective due dates, as extended, and
have been paid. There are no outstanding agreements or waivers extending the
statute of limitations with respect to the assessment of any federal income tax
or other tax. Except to the extent reflected on the Unaudited Financial
Statements or accrued in the Assumed Liabilities, since December 31, 1996,
Seller does not have any tax liability.
2.17. Legal Proceedings. Except as set forth in Schedule 2.17
hereto, Seller is not engaged in or a party to or, to the best of the knowledge
of Seller, threatened with any action, suit, proceeding, complaint, charge,
hearing, investigation or arbitration or other method of settling disputes or
disagreements; and, Seller does not know of, anticipate or have notice of any
reasonable basis for any such action. Seller has not received notice of any
investigation threatened or contemplated by any foreign, federal, state or local
governmental or regulatory authority, including those involving the working
conditions of employees, the Business' employment practices or policies, or
compliance with environmental regulations. Neither Seller nor any of the assets
of Seller is subject to any judgment, order, writ, injunction, stipulation or
decree of any court or any governmental agency or any arbitrator.
2.18. Compliance with Law.
(a) With respect to the United States:
Seller and the Business conform to all applicable statutes, codes,
ordinances, licensing requirements, laws, rules and regulations. Seller
has complied with all statutes, codes, ordinances, licensing
requirements, laws, rules, regulations, decrees, awards or orders
applicable to its business or operations; and there is not and will not
be any liability arising from or related to any violations thereof;
Seller has no knowledge of any violations of such laws. Seller has
submitted or filed all reports and statements required by all
applicable statutes, codes, ordinances, licensing requirements, laws,
rules and regulations in a timely manner and all such reports and
statements were true and correct in all material respects when
submitted or filed.
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(b) With respect to the laws of all other countries in which
Seller conducts the Business:
To the best of Seller's knowledge, Seller and the Business conform to
all applicable statutes, codes, ordinances, licensing requirements,
laws, rules and regulations. To the best of Seller's knowledge, Seller
has complied with all statutes, codes, ordinances, licensing
requirements, laws, rules, regulations, decrees, awards or orders
applicable to its business or operations; and there is not and will not
be any liability arising from or related to any violations thereof;
Seller has no knowledge of any violations of such laws. To the best of
Seller's knowledge, Seller has submitted or filed all reports and
statements required by all applicable statutes, codes, ordinances,
licensing requirements, laws, rules and regulations in a timely manner
and all such reports and statements were true and correct in all
material respects when submitted or filed.
2.19. Brokers. Seller has retained Xx. Xxxxx Xxxxxxxxx as a
broker. Schedule 2.19 accurately describes all obligations and liabilities of
Seller (the "Broker Fees") to Xx. Xxxxxxxxx.
2.20. Seller's Investment Intent; Provisions of Information.
The Buyer's Stock acquired by Seller pursuant to this Agreement is being
acquired for Seller's own account, for investment and not with a view to the
distribution thereof within the meaning of Section 2 of the Securities Act of
1933, as amended (the "1933 Act"); provided, however, Seller shall be able to
distribute the Buyer's Stock to the Partners, so long as such distribution shall
not amount to a distribution within the meaning of Section 2 of the 1933 Act.
Seller is a sophisticated investor and has had access to all information
regarding Buyer necessary to make a decision to invest in the Buyer's Stock.
Seller has received from Buyer and has reviewed Buyer's 1995 and 1996 reports on
Form 10-KSB, Buyer's reports on Form 10-QSB for the first, second and third
quarters of 1996, the Buyer's report on Form S-8 dated February 7, 1997 and
Buyer's Private Placement Memorandum dated November 1, 1996.
2.21. Disclosure. The representations and warranties of
Seller contained in this Agreement and the schedules, certificates or other
written statements delivered pursuant to this Agreement or in connection with
the transactions contemplated herein, are each accurate, correct and complete in
all respects, and do not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements and
information contained herein or therein not misleading. Each list and
description contained on any schedule delivered pursuant to this Agreement is
accurate and complete.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to Seller as of the date
hereof, and as of the Closing Date, as follows:
3.1. Authority. Buyer has all requisite power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the agreements to be delivered at Closing and to carry out the transactions
contemplated hereby and thereby. All corporate and other acts or proceedings
required to be taken by Buyer to authorize the execution, delivery and
performance of this Agreement and all transactions contemplated hereby have been
duly and properly taken.
3.2. Validity. This Agreement has been, and the documents to
be delivered at Closing by Buyer will be, duly executed and delivered and
constitute lawful, valid and legally binding obligations of Buyer, enforceable
in accordance with their respective terms, except as enforcement may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally and by general equitable principles. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation of any lien,
charge or encumbrance of any kind or the acceleration of any indebtedness or
other obligation of Buyer and are not prohibited by, do not violate or conflict
with any provision of, and do not constitute a default under or a breach of (a)
Buyer's certificate of incorporation or bylaws, (b) any note, bond, indenture,
contract, agreement, permit, license or other instrument to which Buyer is a
party or by which Buyer or any of its assets is bound, (c) any order, writ,
injunction, decree or judgment of any court or governmental agency, or (d) any
law, rule or regulation applicable to Buyer.
3.3. Due Organization. Buyer is a corporation organized and
validly existing under the laws of the State of Delaware, and has full power and
authority to carry on the business in which it is engaged.
3.4. SEC Documents. Buyer has filed all reports, forms,
schedules and other documentation ("Reports") with the Securities Exchange
Commission as required by the Securities Exchange Act of 1934, as amended and as
required by the Securities Act of 1933, as amended. None of the Reports, as of
the respective dates, contained any untrue statement of material fact or omitted
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
3.5. Access. Buyer and its agents have been given the access
to the assets, books, records and contracts as requested by Buyer, have been
given the opportunity to meet with officers and other representatives of Seller
for the purpose of investigating and obtaining information regarding the
Business and the Purchased Assets.
3.6. Capital Stock of Buyer. The authorized capital stock of
Buyer consists of 65,000,000 shares of common stock, par value $.0001 per share
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and 10,000,000 shares of preferred stock, par value $.0001 per share. As of the
date of this Agreement, 10,883,333 shares of common stock are issued and
outstanding, and no shares of common stock are held in the treasury of Buyer,
and no shares of preferred stock are issued and outstanding. All outstanding
shares of common stock are duly authorized, validly issued, fully paid and
nonassessable. Except as described on Schedule 3.7 attached hereto, there are no
outstanding subscriptions, options, calls, conversion rights, warrants or other
agreements or commitments of any nature whatsoever, either firm or conditioned,
obligating Buyer to issue, deliver, sell or otherwise encumber, or cause to be
issued, delivered, sold or otherwise encumbered, any additional shares of common
stock, or any securities convertible into or exchangeable for shares of common
stock of Buyer or obligating Buyer to grant, extend or enter into any such
agreement or commitment. Buyer represents and warrants that none of Buyer's
issued and outstanding common stock was issued in violation of any third party's
preemptive rights. Buyer represents and warrants that upon each issuance of
common stock hereunder, the shares of common stock issued shall be free and
clear of all liens, security interests and encumbrances of any kind whatsoever
and shall be duly authorized and validly issued, fully-paid and nonassessable.
3.7. No Violations. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with, or result in any violation of, or default or loss of a benefit
under, or permit the acceleration of any obligation under, any provision of the
Certificate of Incorporation or Bylaws of Buyer, or any mortgage, indenture,
lease, covenant, agreement or other instrument, permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Buyer or its respective properties.
3.8. Financial Statements.
(a) Prior to the execution of this Agreement, Buyer has delivered to
Seller true and correct copies of (i) audited consolidated financial statements
of Buyer as of and for the fiscal years ended December 31, 1996 and 1995,
including the statements of condition, statements of operations, statements of
changes in shareholders' equity, statements of cash flow and related footnote
disclosures, and (ii) unaudited statement of condition and statement of
operations and statement of cash flow as of and for the period ended March 15,
1997 (collectively, "Buyer's Financials"). As of their respective date, such
Buyer's Financials present fairly the financial position of Buyer as of the
dates thereof and the results of its operations for the periods then ended.
Except as set forth on the Buyer's Financials and in Buyer's 1996 Form 10-KSB,
dated April 15, 1997, Buyer does not have any liabilities or obligations of any
nature (accrued, absolute, contingent or otherwise) other than liabilities
incurred in the ordinary course of business since the date of the Buyer's
Financials on terms and conditions and in amounts consistent with past practice
and not exceeding $15,000.
(b) Buyer has conducted its business since December 31, 1996, only in
the ordinary and usual course, and Buyer has not undergone or suffered any
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change in its condition (financial or otherwise), properties, assets,
liabilities, business operations or prospects which have been, in any case or in
the aggregate, materially adverse to Buyer.
3.9. No Litigation. Except as set forth on Schedule 3.10,
there is not pending or, to the knowledge of Buyer, threatened or existing, any
claim, unsatisfied judgment, litigation, governmental investigation or
proceeding before any court, arbitrator or federal or state or other
governmental commission, board or other agency, by or against or adversely
affecting the operations or financial condition of Buyer or its business,
property or assets or any business, property or assets with respect to which
Buyer has an agreement, understanding or arrangement to acquire.
3.10. Subsidiaries. Except as described on Schedule 3.11
attached hereto, Buyer does not control, directly or indirectly, any other
corporation, association, partnership or other business entity or own any shares
of capital stock or other securities of any other entity or any general or
limited partnership; nor has Buyer entered into any contract, agreement,
commitment or arrangement to acquire any such interest.
3.11. Registration Rights. Except as set forth in Schedule
3.12 and as provided in this Agreement, Buyer is not a party to, or otherwise
bound by, any agreement or commitment which obligates Buyer to register under
federal securities laws any of the Buyer's presently outstanding securities or
any of Buyer's securities which may hereafter be issued.
3.12. Tax Returns. Buyer has filed all federal and state
income tax returns and all other returns with respect to taxes, either federal
or state, which are required to be filed, and has paid all taxes shown as due on
such returns.
ARTICLE IV
ACTIONS PENDING CLOSING
4.1. Interim Conduct of Business. From the date hereof until
the Closing, Seller shall preserve, protect and maintain the Business, and
operate the Business consistent with prior practice and in the ordinary course
of business. Without limiting the generality of the foregoing, from the date
hereof until the Closing, except as otherwise agreed by Buyer in writing, Seller
shall not:
(a) merge, liquidate, consolidate, amend its limited
partnership agreement or effect any other organizational change;
(b) expressly enter into, amend or terminate, or agree to
enter into, amend or terminate any Material Contract, except as noted on
Schedule 4.1 hereto, and shall comply with all obligations under all the
Material Contracts in all material respects;
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(c) sell, lease or otherwise dispose of or agree to sell,
lease or otherwise dispose of, any assets, properties, rights or claims, except
in the ordinary course of business and at prices and on terms consistent with
past practice;
(d) incur or become subject to, nor agree to incur or become
subject to, any debt, obligation or liability, contingent or otherwise, except
current liabilities in the ordinary course of business and consistent with past
practice;
(e) fail to maintain, keep, and preserve all of its properties
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted;
(f) fail to comply in all respects with applicable laws,
rules, regulations, and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property;
(g) forgive or cancel any debts or claims, or waive any
rights thereto;
(h) enter into any other transaction outside the ordinary
course of business; and
(i) take or omit to take any action which could have a
Material Adverse Effect or cause any representation or warranty herein to become
false in any material respect.
From the date hereof through the Closing, Seller shall confer on a regular and
frequent basis with one or more designated representatives of Buyer to report
material operational matters and the general status of on-going operations of
the Business. Seller shall promptly notify Buyer of any threatened or actual
loss of an agent or any affinity groups, and any material change in the
financial condition, results of operations, personnel, properties, business or
prospects of Seller and shall keep Buyer fully informed of such events and
permit Buyer's representatives to participate in all discussions relating
thereto.
4.2. Assistance of Seller. Seller shall assist Buyer in
Buyer's attempts to renegotiate certain of the Assumed Liabilities with the
creditors associated with such liabilities.
4.3. Access. Seller shall give Buyer and its employees,
lenders, financial advisors, attorneys, accountants and other authorized
representatives full and free access to all properties, facilities, personnel,
accountants, customers, vendors, books, contracts, leases, commitments and
records of Seller, and shall furnish Buyer with all financial and operating data
and other information as to the Business and the assets, properties, rights and
claims of Seller, as Buyer may from time to time request.
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ARTICLE V
COVENANTS
Seller hereby agrees to keep, perform and fully discharge the
following covenants and agreements:
5.1. Continued Assistance. From time to time after Closing, at
Buyer's request and without further consideration, Seller shall execute,
acknowledge and deliver such documents, instruments or assurances and take such
other action as Buyer may reasonably request to carry out the provisions hereof
and the transactions contemplated hereby.
5.2. No Solicitation. Until the termination of this Agreement,
Seller shall not permit its officers, directors or representatives to, solicit,
encourage (including by way of furnishing any non-public information concerning
the operations, properties or assets of Seller), entertain or enter into any
discussions or negotiations with respect to any proposal to acquire Seller or
any substantial portion of its assets.
5.3. Taxes. Seller shall promptly pay and fully discharge any
income, excise, employment, sales or use taxes imposed as a result of the sale,
transfer, conveyance or assignment of the Buyer's Stock pursuant to the
transactions contemplated hereby.
5.4. Best Efforts. Seller shall use its best efforts to
consummate the transactions contemplated by this Agreement and shall not take
any other action inconsistent with its obligations hereunder or which could
hinder or delay the consummation of the transactions contemplated hereby. From
the date hereof through the Closing Date, Seller shall use its best efforts to
negotiate in good faith the Closing Agreements (as defined in Section 6.9),
fulfill each party's conditions to Closing, perform the covenants required to be
performed by them, obtain all necessary consents and to cause each of their
representations and warranties to remain true and correct in all respects as of
the Closing Date. Seller shall use its best effort to cause the General Partner
to cooperate with Buyer in the preparation, filing and prosecution of the Joint
Application.
5.5. No Inconsistent Actions. Neither Seller nor any of its
affiliates shall take any action inconsistent with the General Partner's
obligations as an applicant to the Joint Application, and neither Seller nor any
of its affiliates shall cause, influence or encourage any person or entity to
petition the FCC to revoke or deny the Application (as defined hereafter) or the
Joint Application.
Buyer hereby agrees to keep, perform and fully discharge the
following covenants and agreements:
5.6. Best Efforts. Buyer shall use its best efforts to
consummate the transactions contemplated by this Agreement and shall not take
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any other action inconsistent with its obligations hereunder or which could
hinder or delay the consummation of the transactions contemplated hereby. From
the date hereof through the Closing Date, Buyer shall use its best efforts to
negotiate in good faith the Closing Agreements (as defined in Section 6.9), to
prepare, file and prosecute the Joint Application, fulfill each party's
conditions to Closing, perform the covenants required to be performed by them,
obtain all necessary consents and to cause each of their representations and
warranties to remain true and correct in all respects as of the Closing Date.
From the date hereof, Buyer shall use its best efforts to prepare, file and
prosecute the Application.
5.7. No Inconsistent Actions. Buyer shall not take any action
inconsistent with its obligations as an applicant to the Application and the
Joint Application, and it shall not cause, influence or encourage any person or
entity to petition the FCC to revoke or deny the Application or Joint
Application.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
OF BUYER
The obligations of Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to the satisfaction of
each of the following conditions:
6.1. Approval. Buyer's Board of Directors shall have approved
the form and substance of this Asset Purchase Agreement and the other agreements
and instruments contemplated hereby.
6.2. Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Seller contained herein shall be accurate in
all respects as if made on and as of the Closing Date. Seller shall have
performed all of the obligations and complied with each and all of the
covenants, agreements and conditions required to be performed or complied with
on or prior to the Closing.
6.3. Assignment of Rights and Interests. Buyer shall have
received from Seller, Mr. Xxxxx Xxxxxx and Xx. Xxxxxx Xxxxxxxxx an assignment of
all their rights to and interests in all business opportunities currently under
development by Seller and its officers.
6.4. 1996 Financial Statements. Buyer shall have received the
1996 Financial Statements and these statements shall (a) include an opinion from
Seller's independent auditors, O'Donnell, Ficenec, Xxxxx & Xxxxxx qualified only
as to going concern, and (b) not deviate, in any material manner, from the
Unaudited Financial Statements. For the purposes of this Section 6.4, "material"
shall be defined as follows: for the 12-months ending December 31, 1996:
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(i) the amounts set forth on the 1996 Financial Statements for
each of Net Sales, Total Current Assets, Total Assets,
Accounts Payable, Notes Payable, Total Long-Term Liabilities
and Total Labilities shall not deviate from the amounts set
forth for such items on the Unaudited Financial
Statements by more than five percent (5%);
(ii) the amount set forth on the 1996 Financial Statements for Loss
from Operations shall not deviate from the amount set forth
for such item on the Unaudited Financial Statements by more
than ten percent (10%); and
(iii) the amount set forth on the 1996 Financial Statements for Net
Loss shall not deviate from the amount set forth for such item
on the Unaudited Financial Statements by more than twenty-five
percent (25%).
6.5. No Pending Action. No action, suit, proceeding or
investigation before or in any court, administrative agency or other
governmental authority shall be pending or threatened wherein an unfavorable
judgment, decree or order would prevent the carrying out of this Agreement or
any of the transactions contemplated hereby, declare unlawful the transactions
contemplated hereby, cause such transactions to be rescinded, or affect the
right of Buyer to own, operate or control the Business.
6.6. Consents. All consents by third parties that are required
for the consummation of the transactions contemplated hereby, or that are
required in order to prevent a breach of or a default under or a termination of
any agreement to which Seller is a party or to which any portion of the property
of Seller is subject, shall have been obtained or provided for.
6.7. Regulatory Approvals. All administrative agencies or
other government authorities shall have taken such action as may be required to
permit the consummation of the transactions contemplated hereby and such actions
remain in full force and effect including, but not limited to, (i) the FCC grant
by Final Order of the Application for Temporary Section 214 Authority, to be
filed by Buyer and the General Partner, in respect of the FCC 214 License (the
"Joint Application") and (ii) the filing by Buyer of the Application for Section
214 Authority in respect of the FCC 214 License (the "Application"). For the
purposes of this Agreement, a "Final Order" is an FCC action granting the Joint
Application and the Application, as to which the time for filing for
administrative or judicial review or reconsideration or for the FCC to set aside
such grant on its own motion has expired without any such filing having been
made or FCC action taken, or, in the event of such filing or FCC action, the FCC
grant has been reaffirmed or upheld and the time for filing for administrative
or judicial review or reconsideration of such reaffirmed or upheld grant and for
the FCC to set aside such reaffirmed or upheld grant on its own motion, has
expired without any such filing having been made or FCC action having been
taken.
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6.8. Condition of Business. There shall have been no Material
Adverse Effect with respect to Seller or the Business, and there shall have been
no change or event which could reasonably be expected to have a Material Adverse
Effect on Seller or the Business. Neither Seller nor the Business shall have
been adversely affected in any way by any act of God, fire, flood, accident,
war, labor disturbance, legislation (proposed or enacted), or other event or
occurrence, whether or not covered by insurance.
6.9. Closing Agreements. The parties shall have executed,
acknowledged and delivered the following (collectively, the "Closing
Agreements"):
(a) Two-year employment agreement effective as of the Closing
Date, between Buyer and Mr. Xxxxx Xxxxxx in form and substance
reasonably satisfactory to Xx. Xxxxxx and Buyer;
(b) Eighteen-month consulting and non-competition agreement
between Buyer and Xx. Xxxxxx Xxxxxxxxx in form and substance reasonably
satisfactory to Xx. Xxxxxxxxx and Buyer; and
(c) Such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated by this
Agreement and to comply with the terms hereof.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATION TO CLOSE
OF SELLER
The obligations of Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to the satisfaction of
each of the following conditions:
7.1. Approval. The General Partner and a majority in interest
of the Limited Partners shall have approved the form and substance of this Asset
Purchase Agreement and the other agreements and instruments contemplated hereby.
7.2. Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Buyer contained herein shall be accurate in
all respects as if made on and as of the Closing Date. Buyer shall have
performed all of the obligations and complied with each and all of the
covenants, agreements and conditions required to be performed or complied with
on or prior to the Closing.
7.3. Closing Agreements. The parties shall have executed,
acknowledged and delivered the Closing Agreements.
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7.4. No Pending Action. No action, suit, proceeding or
investigation before or in any court, administrative agency or other
governmental authority shall be pending or threatened wherein an unfavorable
judgment, decree or order would prevent the carrying out of this Agreement or
any of the transactions contemplated hereby, declare unlawful the transactions
contemplated hereby or cause such transactions to be rescinded.
7.5. Regulatory Approvals. All administrative agencies or
other government authorities shall have taken such action as may be required to
permit the consummation of the transactions contemplated hereby and such actions
remain in full force and effect including, but not limited to, (i) the FCC grant
by Final Order of the Joint Application and (ii) the filing by Buyer of the
Application.
7.6 [intentionally omitted]
7.7 Release of Guaranties. Schedule 7.7 lists (i) the Assumed
Liabilities for which Xx. Xxxxxx Xxxxxxxxx has provided personal guaranties of
performance (the "Guaranties") and (ii) the maximum exposure (calculated in
United States dollars) that Xx. Xxxxxxxxx faces under each of the Guaranties.
Buyer shall have used its best efforts to effect the release of Xx. Xxxxxxxxx
from the Guaranties. Seller and Xx. Xxxxxxxxx shall have used their best efforts
to assist Buyer in this undertaking. Buyer shall hold Xx. Xxxxxxxxx harmless
from any continued exposure under Guaranties from which Buyer has not been able
to secure Xx. Xxxxxxxxx'x release prior to Closing (the "Remaining Guaranties")
in accordance with Section 8.4.
ARTICLE VIII
POST-CLOSING OBLIGATIONS
If the Closing occurs, the appropriate parties agree to keep,
perform and fully discharge the following covenants and agreements:
8.1. Escrow. Pursuant to the Escrow Agreement, the Escrowed
Shares shall remain in the Escrow (as defined in the Escrow Agreement) until the
Termination Date (as defined in the Escrow Agreement) (a) as security for any
Additional Liabilities that may be assumed by Buyer in accordance with Section
1.3, (b) as security for Seller's indemnity obligations in accordance with
Article IX or Article X hereof, and (c) as security for any Expense Overruns (as
defined hereafter) that may be payable by Buyer in accordance with Section 12.3.
8.2. Amendment to Bylaws. Buyer shall amend Buyer's Bylaws to
provide that the number of directors of Buyer be increased from three (3) to
four (4), and that in connection with the increase of the number of Buyer's
directors, Xx. Xxxxxx Xxxxxxxxx shall be appointed to fill the new vacancy and
shall thereafter be nominated to serve for the one-year term commencing on the
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date of Buyer's next shareholder meeting at which the board of directors is
elected.
8.3. Settlement Statement. Within ninety (90) days following
the Closing, Buyer and Seller shall work together in good faith to draft a
settlement statement (the "Settlement Statement") setting forth, as of the
Closing Date, the value of the Additional Liabilities and the G.P. Liabilities.
If, as set forth on the Settlement Statement, any amounts are due and owing to
the General Partner in connection with the G.P. Liabilities, then the General
Partner shall, within two (2) business days of the release of the Settlement
Statement, instruct Buyer to either (a) make a 24-month term note, payable to
the General Partner in a principal amount equal to the value of the G.P.
Liabilities as set forth on the Settlement Statement (which principal amount
shall be paid in full at the end of the term), earning interest at the prime
rate, as published in the Wall Street Journal for the date of the Settlement
Statement, plus one percent (1%) (the "G.P. Note"), or (b) instruct Buyer to
issue to the General Partner the number of shares of Buyer's common stock
(valued for this purpose at the higher of (i) $1.50 per share and (ii) the price
per share in the last equity placement of Buyer's common stock prior to the date
of the Settlement Statement) equal to the value of the G.P. Liabilities as set
forth on the Settlement Statement.
8.4. Remaining Guaranties. Following Closing, Buyer shall
use its best efforts to effect the release of Xx. Xxxxxx Xxxxxxxxx from the
Remaining Guaranties. Seller and Xx. Xxxxxxxxx shall use their best efforts to
assist Buyer in this undertaking. Buyer shall reimburse Xx. Xxxxxxxxx for any
liability that he incurs under the Remaining Guaranties.
8.5. FCC Licensing. The Buyer, Seller and the affiliates
of Seller shall use their best efforts following Closing to expedite the grant
by the FCC of the Application by Final Order.
ARTICLE IX
EMPLOYEES
9.1. Continued Association With the Business. Seller shall use
its best efforts to encourage the employees of the Business to continue their
employment until Closing and thereupon encourage such employees to accept
employment with Buyer. Seller shall indemnify and hold Buyer harmless against
any claims by any employee for Seller relating to events or occurrences through
Closing, including any severance or termination pay obligations based upon prior
policies of Seller or arising from the transactions contemplated hereby except
for the vacation benefits extended to Buyer Employees pursuant to Section
9.3(b). Effective at Closing, Seller shall terminate its employment relationship
with all employees of the Business.
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9.2. Employee Benefit Plans. Buyer shall not assume or be
responsible for any retirement, 401(k), profit-sharing or similar benefit plan,
or any liabilities related thereto. Seller shall grant 100% vesting credit to
all of its employees as of the Closing Date in any retirement, 401(k),
profit-sharing or similar benefit plan. Seller shall cause such participants to
have full rights to all distribution alternatives available to terminated
employees and shall effect such distribution within thirty (30) days of a notice
of election of any participant.
9.3. Employment and Employee Benefits.
(a) On or before the Closing Date, Buyer shall provide Seller
with a list of the employees of the Business (not covered by a collective
bargaining agreement) employed by Seller on the Closing Date, who will be
offered employment by Buyer commencing immediately after the Closing Date (those
employees accepting such offers of employment being the "Buyer Employees").
(b) To the extent reflected on the Unaudited Financial
Statements or accrued in the Assumed Liabilities, Buyer shall provide the Buyer
Employees all vacation accrued as employees of the Business but not yet received
as of the Closing Date shall require all Buyer Employees accepting a position to
waive in writing a claim against Seller for accrued but unused vacation
benefits, to the extent reflected on the Unaudited Financial Statements or
accrued in the Assumed Liabilities, and shall continue for such Buyer Employees
Seller's vacation policies through the calendar year of the Closing Date and
until thereafter changed by written notice to the Buyer Employees.
(c) As of the Closing Date, all employees of the Business will
cease participation in Seller's retirement and welfare plans (within the meaning
of ERISA). Welfare claims incurred but not reported as of the Closing Date or
other welfare claims made upon Seller's welfare plans by employees of the
Business after the Closing Date will be treated by Seller's plans as if the
covered employees had been terminated from employment at 11:59 PM on the Closing
Date.
(d) This Section is not intended to, and does not, create any
rights or obligations to or for the benefit of anyone, other than Buyer and
Seller.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1. Survival. All covenants and agreements contained in this
Agreement or in any agreement or other document delivered pursuant hereto shall
be deemed to be material and to have been relied upon by the parties hereto and
shall survive the Closing and be enforceable until the covenant or agreement has
been fully performed. Unless otherwise specified, the representations and/or
warranties contained in this Agreement or in any agreement or other document
-27-
delivered pursuant hereto shall be deemed to be material and to have been relied
upon by the parties hereto and shall survive the Closing and be enforceable
for a period ending three years from closing.
10.2. Indemnification.
(a) Buyer shall indemnify and hold harmless Seller, from and
against any and all loss, diminution in value, damage, cost, expense (including
court costs and attorneys' fees and expenses and costs of investigation), fine,
penalty, suit, action, claim, deficiency, liability or obligation caused by or
arising from (i) any misrepresentation, breach of warranty or failure to fulfill
any covenant or agreement of Buyer contained herein or in any agreement or other
document delivered pursuant hereto and (ii) any and all claims of third parties
made based upon facts alleged that, if true, would have constituted such a
misrepresentation, breach or failure.
(b) Seller shall indemnify and hold harmless Buyer, from and
against any and all loss, diminution in value, damage, cost, expense (including
court costs and attorneys' fees and expenses and costs of investigation), fine,
penalty, suit, action, claim, deficiency, liability or obligation caused by or
arising from (i) any misrepresentation, breach of warranty or failure to fulfill
any covenant or agreement of Seller contained herein or in any agreement or
other document delivered pursuant hereto, and (ii) any and all claims of third
parties made based upon facts alleged that, if true, would constitute such a
misrepresentation, breach or failure.
(c) The representations, warranties, covenants and agreements
contained in this Agreement shall not be affected by any party hereto or by
anyone on behalf of any such party: (i) investigating, verifying or examining
any matters with respect to Seller, the Business, this Agreement or the
transactions contemplated hereby; (ii) having the opportunity to investigate,
verify or examine any matters related to Seller, the Business, this Agreement or
the transactions contemplated hereby; or (iii) failing to determine or discover
any facts which were determinable or discoverable by any such party. All rights
contained in this Article are cumulative and are in addition to all other rights
and remedies which are otherwise available, pursuant to the terms of this
Agreement or applicable law. All indemnification rights shall be deemed to apply
in favor of the indemnified party's officers, directors, representatives,
subsidiaries, affiliates, successors and assigns. Neither the Seller nor the
Buyer shall have any right to indemnification for any breach of representation
or warranty hereunder until it has claims of at least $20,000 in the
aggregate (the "Threshold Amount") and then the indemnifying party shall be
responsible for the entire amount of all such claims, including the Threshold
Amount.
10.3. Defense of Third Party Claims. With respect to each
third party claim subject to this Article (a "Third Party Claim"), the party
seeking indemnification (the "Indemnified Party") shall give prompt notice to
the indemnifying party (the "Indemnifying Party") of the Third Party Claim,
provided that failure to give such notice promptly shall not relieve or limit
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the obligations of the Indemnifying Party except to the extent the Indemnifying
Party is materially prejudiced thereby. If the remedy sought in the Third Party
Claim is solely money damages or if the Indemnified Party otherwise permits,
then the Indemnifying Party, at its sole cost and expense, may, upon notice to
the Indemnified Party within fifteen (15) days after the Indemnifying Party
receives notice of the Third Party Claim, assume the defense of the Third Party
Claim. If it assumes the defense of a Third Party Claim, then the Indemnifying
Party shall select counsel reasonably satisfactory to the Indemnified Party to
conduct the defense. The Indemnifying Party shall not consent to a settlement
of, or the entry of any judgment arising from, any Third Party Claim, unless (i)
the settlement or judgment is solely for money damages and the Indemnifying
Party admits in writing its liability to hold the Indemnified Party harmless
from and against any losses, damages, expenses and liabilities arising out of
such settlement or (ii) the Indemnified Party consents thereto, which consent
shall not be unreasonably withheld. The Indemnifying Party shall provide the
Indemnified Party with fifteen (15) days prior notice before it consents to a
settlement of, or the entry of a judgment arising from, any Third Party Claim.
The Indemnified Party shall be entitled to participate in the defense of any
Third Party Claim, the defense of which is assumed by the Indemnifying Party,
with its own counsel and at its own expense. With respect to Third Party Claims
in which the remedy sought is not solely money damages, (i) the Indemnifying
Party shall, upon notice to the Indemnified Party within fifteen (15) days after
the Indemnifying Party receives notice of the Third Party Claim, be entitled to
participate in the defense with its own counsel at its own expense and (ii) the
Indemnified Party shall not consent to any settlement of, or entry of any
judgment arising from, such Third Party Claim unless the Indemnifying Party
consents thereto, which consent shall not be unreasonably withheld. If the
Indemnifying Party does not elect to assume or participate in the defense of any
Third Party Claim in accordance with the terms of this Section 10.3, then the
Indemnifying Party shall be bound by the results obtained by the Indemnified
Party with respect to the Third Party Claim. The parties shall cooperate in the
defense of any Third Party Claim and the relevant records of each party shall be
made available on a timely basis.
ARTICLE XI
TERMINATION AND WAIVER
11.1. Termination or Abandonment. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement may be terminated
and abandoned at any time prior to the Closing:
(a) by the mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if any court of competent jurisdiction
or governmental body, authority or agency having jurisdiction shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
-29-
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and nonappealable;
(c) by Buyer, if one or more of the conditions to the
obligation of Buyer to close has not been fulfilled by June 30, 1997; provided,
however, that delays in regulatory transfers, which delays arise through no
fault of Seller, shall not constitute a failure to fulfill a condition to the
obligation of Buyer to close unless such regulatory transfers have not occurred
by September 30, 1997; or
(d) by Seller, if one or more of the conditions to the
obligation of Seller to close has not been fulfilled by June 30, 1997.
In the event of termination of this Agreement pursuant to this Section 11.1,
this Agreement shall terminate and there shall be no other liability on the part
of Seller to Buyer or on the part of Buyer to Seller except as otherwise
provided herein and except liability arising out of a breach of this Agreement
or the failure by a party to perform its covenants hereunder, in which event,
the non-breaching party reserves the right to seek all available remedies. The
termination of this Agreement pursuant to this Section 11.1 shall become
effective on the date (x) in the case of a termination pursuant to Section
11.1(a), the consent is executed and (y) in the case of a termination pursuant
to Section 11.1(b), (c) or (d), written notice is given by the terminating party
to the other party hereto.
11.2. Extension of Time, Waiver, Etc. At any time prior to
the Closing, Buyer and Seller may by written instrument:
(a) extend the time for the performance of any of the
obligations or acts of the other party; and
(b) waive compliance with any of the agreements of the other
party contained herein; provided, however, that no failure or delay by any
party, in exercising any right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other rights hereunder.
ARTICLE XII
GENERAL PROVISIONS
12.1. Amendments and Waiver. No amendment, waiver or consent
with respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by Buyer and Seller, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
-30-
12.2. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered in person or
sent by registered or certified mail, postage prepaid, commercial overnight
courier (such as Express Mail, Federal Express, etc.) with written verification
of receipt or by telecopy. A notice shall be deemed given: (a) when delivered by
personal delivery (as evidenced by the receipt); (b) five (5) days after deposit
in the mail if sent by registered or certified mail; (c) one (1) business day
after having been sent by commercial overnight courier as evidenced by the
written verification of receipt; or (d) on the date of confirmation if
telecopied.
(a) If to Buyer:
WorldPort Communications, Inc.
000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
With a copy to:
XxXxxxxxx, Will & Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, P.C.
(b) If to Seller:
Telenational Communications, Limited Partnership
0000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx
Any party may change its address for receiving notice by written notice given to
the others named above.
12.3. Expenses.
(a) Other than (i) liabilities of up to $25,000 to cover
Seller's accountants' fees related to the transactions contemplated under this
Agreement, (ii) liabilities of up to $20,000 to cover Seller's attorneys' fees
related to the transactions contemplated under this Agreement and (iii)
liabilities (excluding costs associated with effecting the release of the
Guaranties) of up to $10,000 to cover legal fees incurred as a result of actions
against Seller taken by Seller's creditors that arise from the transactions
contemplated hereunder (each a "Transaction Cost"), which shall be paid by
Buyer, each party shall bear its own legal, accounting and administrative
-31-
expenses in connection with the investigation, negotiation and consummation of
the transaction contemplated hereby.
(b) To the extent the any Transaction Cost exceed the limits
set forth in Section 12.3(a) and to the extent Seller requests Buyer to pay the
Broker Fees (collectively, the "Expense Overruns"), then the Expense Overruns
shall be reimbursed to Buyer by the delivery to Buyer from the Escrow Agent of
that number of shares of the Buyer's Stock (valued for this purpose at $1.50 per
share) equal to the amount of the Expense Overruns.
12.4. Confidentiality.
(a) As used in this Agreement, "Confidential Information"
means confidential business information regarding any party to this Agreement or
its affiliates, including, without limitation, customer lists and files, prices
and costs, business and financial records, information relating to personnel
contracts, stock ownership, liabilities, litigation and the terms of this
Agreement. "Confidential Information" shall not include: (i) any information
already in the possession of the party to this agreement that is subject to the
confidentiality obligation (the "Obligated Party"), prior to the date hereof, or
information available to the Obligated Party from public records or from other
sources in accordance with law; (ii) any information that is in the public
domain or subsequently enters the public domain otherwise than through
disclosure by the Obligated Party or any of the Obligated Party's
representatives; (iii) any information that is capable of being independently
developed by or on behalf of the Obligated Party without reference to the
Confidential Information; or (iv) any information that is acquired from a person
(other than the party disclosing Confidential Information (the "Disclosing
Party")) not known by the Obligated Party to be providing such information in
breach of a confidentiality obligation to the Disclosing Party.
(b) Seller on the one hand and Buyer on the other, will treat
the Confidential Information disclosed by the other as confidential, will use
the Confidential Information only in connection with their evaluation of the
transaction contemplated hereby, and will not disclose it to others.
(c) If the Obligated Party becomes legally compelled by
deposition, subpoena, or other court or governmental action to disclose any of
the Confidential Information, then the Obligated Party will give the Disclosing
Party prompt notice to that effect, and will cooperate with the Disclosing Party
if the Disclosing Party seeks to obtain a protective order concerning the
Confidential Information. The Obligated Party will disclose only such
Confidential Information as its counsel shall advise is legally required.
(d) The provisions of this Section 12.4 shall survive the
Closing and termination without consummation of this Agreement. The parties
acknowledge that remedies at law may be inadequate to protect against breach of
this Section, and the Obligated Party hereby in advance agrees to the granting
of injunctive relief in the Disclosing Party's favor without proof of actual
damages as a remedy for breach of this Section 12.4.
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12.5. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
12.6. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties named herein and their respective successors
and assigns. After Closing, Buyer shall be entitled to assign its rights and
duties under this Agreement without the consent of any other party hereto. No
other party may assign its rights or duties under this Agreement without the
prior written consent of Buyer.
12.7. Entire Transaction. This Agreement and the documents
referred to herein contain the entire understanding among the parties with
respect to the transactions contemplated hereby and supersedes all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
12.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Illinois. Each party hereby irrevocably and unconditionally consents and submits
to the in personam jurisdiction of Illinois state courts and federal courts
located in Chicago, Illinois over all matters relating to this Agreement. Each
party agrees that service of process in any action or proceeding hereunder may
be made upon such party by certified mail, return receipt requested to the
address for notice set forth herein. Each party irrevocably waives any objection
it may have to the venue of any action, suit or proceeding brought in such
courts or to the convenience of the forum and each party irrevocably waives the
right to proceed in any other jurisdiction. Final judgment in any such action,
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, a certified or true copy of which shall
be conclusive evidence of the fact and the amount of any indebtedness or
liability of any party therein described.
12.9. Other Rules of Construction. References in this
Agreement to sections, schedules and exhibits are to sections of, and schedules
and exhibits to, this Agreement unless otherwise indicated. Words in the
singular include the plural and in the plural include the singular. The word
"or" is not exclusive. The word "including" shall mean including, without
limitation. The section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. For purposes of this Agreement, "affiliate"
shall mean any officer, director, stakeholder or employee of Seller, as
appropriate, any member of the immediate family of any such person, or any
corporation, partnership, trust or other entity in which Seller, as appropriate,
or any of the foregoing individuals is a director, officer, partner or trustee
or has an equity interest in excess of 5%. The term affiliate shall also include
any entity which controls, or is controlled by, or is under common control with,
any of the individuals or entities described in the preceding sentence.
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12.10. Announcements. The parties shall cooperate in the
preparation of any announcements regarding the transactions contemplated by this
Agreement. No announcement of this Agreement or any transaction contemplated
hereby shall be made by any party prior to the Closing without the written
approval of Buyer (which approval shall not be unreasonably withheld).
12.11. Partial Invalidity. In the event that any provision
of this Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
12.12. Schedules. All schedules attached hereto or required
to be delivered pursuant to this Agreement shall be prepared as of the date
hereof or as otherwise set forth herein or therein.
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IN WITNESS WHEREOF, each of the parties has executed this
Agreement or caused this Agreement to be executed on its behalf by a duly
authorized officer, all as of the date first written above.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Its: President & C.E.O.
---------------------------
TELENATIONAL COMMUNICATIONS,LIMITED PARTNERSHIP
By: IMTS, Inc., General Partner
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------
Its: President & C.E.0
---------------------------
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EXHIBIT A
GENERAL PARTNER AND LIMITED PARTNERS
(see attached)
A-1
EXHIBIT B
INSTRUMENT OF ASSUMPTION
This INSTRUMENT OF ASSUMPTION, dated as of __________, 1997,
is delivered to Telenational Communications, Limited Partnership, a Nebraska
limited partnership (the "Seller"), pursuant to the Asset Purchase Agreement by
and between Seller and WorldPort Communications, Inc., a Delaware corporation
(the "Buyer"), dated _________, 1997 (the "Agreement"). All capitalized terms
used in this Instrument of Assumption and not otherwise defined shall have the
meanings given to them in the Agreement.
WHEREAS, the Agreement provides that Buyer assume the Assumed
Liabilities and the Assumed Obligations.
NOW, THEREFORE, pursuant to the Agreement and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
(a) Effective as of the date hereof, Buyer hereby assumes and
agrees to satisfy, discharge and pay the Assumed Liabilities and Assumed
Obligations as set forth in the Agreement.
(b) Neither the making nor the acceptance of this Instrument
of Assumption shall enlarge, restrict or otherwise modify the terms of the
Agreement.
(c) This Instrument of Assumption shall not confer any rights
or remedies upon any person or entity other than the Seller and its successors
and permitted assigns.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
to be executed on its behalf by a duly authorized officer this day of _________,
1997.
WORLDPORT COMMUNICATIONS, INC.
By:
Its:
B-1
EXHIBIT C
ESCROW AGREEMENT
This Escrow Agreement ("Escrow Agreement") is made and entered into as
of _________ __, 1997, by and among WORLDPORT COMMUNICATIONS, INC., a Delaware
corporation ("Buyer"), TELENATIONAL COMMUNICATIONS, LIMITED PARTNERSHIP, a
Nebraska limited partnership ("Seller"), and OTC Stock Transfer, Inc. ("Escrow
Agent").
R E C I T A L S:
A. Buyer and Seller entered into that certain Asset Purchase Agreement
dated __________, 1997 (with the other agreements referred to therein or
delivered pursuant thereto, the "Asset Purchase Agreement"). All capitalized
terms not defined in this Agreement shall have the meaning given them in the
Asset Purchase Agreement.
B. The Asset Purchase Agreement provides that, concurrently with the
execution of the Asset Purchase Agreement, Buyer and Seller will enter into an
Escrow Agreement in the form hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, it is agreed:
1. Escrow. As of the Closing Date, Buyer will deposit one million
(1,000,000) shares of Buyer's common stock (as adjusted from time to time in
accordance herewith, the "Shares") in an escrow account with the Escrow Agent
(the "Escrow"). Escrow Agent shall hold the Shares as the agent of Buyer and
subject to the terms of this Agreement. Escrow Agent shall hold the Shares until
it receives a written notice, requesting that a distribution of some or all of
the Shares be made, whereupon Escrow Agent shall make distributions from the
Escrow under the following circumstances:
(i) Fifteen days after receipt of a notice from Buyer that Buyer
has assumed Additional Liabilities, Escrow Agent shall
immediately distribute to Buyer that number of Shares (valued
for this purpose at $1.50 per share) equal to such Additional
Liabilities, unless during such fifteen day period, the Escrow
Agent receives written notice from Seller that such notice
from Buyer is incorrect (a "Dispute Notice");
(ii) Fifteen days after receipt of a notice from Buyer that Seller
has incurred Expense Overruns, Escrow Agent shall immediately
distribute to Buyer that number of the Shares (valued for this
purpose at $1.50 per share) equal to the amount of the Expense
Overruns, unless during such fifteen day period, the Escrow
Agent receives a Dispute Notice from Seller;
C-1
(iii) Fifteen days after receipt of a notice from Buyer requesting
Escrow Agent to make a distribution to Buyer as an indemnified
party under Article IX or X of the Asset Purchase Agreement,
Agent shall immediately distribute to Buyer that number of the
Shares (valued for this purpose at $1.50 per share) equal to
the value of such indemnification amount, unless during such
fifteen day period, the Escrow Agent receives a Dispute Notice
from Seller;
(iv) Promptly after receipt of a joint direction from Buyer and
Seller, Escrow Agent shall transfer the Shares as prescribed
in said joint direction.
(v) If a Dispute Notice is timely received by Escrow Agent, Buyer
and Seller shall undertake to obtain as promptly as possible a
final resolution of such dispute (a "Dispute"). Upon a final
resolution of such Dispute, Buyer and Seller shall execute a
joint direction that Escrow Agent transfer the Shares in
accordance with such final resolution. Absent such joint
direction, Escrow Agent shall continue to hold the Shares
until it receives from either Buyer or Seller a certified copy
of an order or judgment of a court of competent jurisdiction
determining the disposition to be made of the Shares, together
with a certificate from such party that such party also has
provided the other party with a certified copy of such order
or judgment. Upon receipt thereof, the Escrow Agent shall
distribute the Shares in accordance with such order or
judgment.
Any notice provided by Buyer to Escrow Agent under Sections 1(i), (ii) or (iii)
shall be provided simultaneously to Seller, and any Dispute Notice provided by
Seller to Escrow Agent under Sections 1(i), (ii) or (iii) shall be provided
simultaneously to Buyer.
2. Term of Escrow; Termination Date. The term of this Escrow Agreement
("Term") shall be from the Closing Date of the Asset Purchase Agreement until
the Termination Date. This Escrow Agreement shall terminate on the earlier of
(i) the date on which the balance of the Shares in the Escrow drops to zero and
(ii) eighteen (18) months following Closing, provided, however, if one or more
Disputes are outstanding after eighteen months following Closing, then at such
time as a final resolution of the last of such Disputes is entered and all
distributions are made in accordance therewith (the "Termination Date"). To the
extent any of the Shares and their associated dividends are still held in the
Escrow as of the Termination Date, Escrow Agent shall turn over such remainder
to Seller.
3. Dividends, Voting and Rights of Ownership. All dividends paid during
the Term on the Shares (including stock dividends, cash dividends or dividends
payable in securities) shall be paid over directly to Escrow Agent, who shall
hold such dividends pending distribution of the underlying Shares pursuant to
paragraphs 1 and 2 hereof. The distributions made by Escrow Agent pursuant to
paragraphs 1 and 2 hereof shall not include any dividends paid on the Shares
prior to such distribution. Prior to distribution, the Seller shall have the
right to vote or not vote the Shares, or any portion thereof, in its sole
discretion.
C-2
4. No Encumbrance. None of the Shares held in the Escrow nor any
beneficial interest therein may be pledged, sold, assigned or transferred,
including by operation of law, by Seller or be taken or reached by any legal or
equitable process in satisfaction of any debt or other liability of Seller.
5. Power to Transfer the Shares. The Escrow Agent is hereby granted the
power to effect any transfer of the Shares held in the Escrow contemplated by
this Escrow Agreement. Buyer will cooperate with Escrow Agent in promptly
issuing stock certificates to effect such transfers.
6. Responsibilities of Escrow Agent. Escrow Agent shall perform all
of the duties expressly required of it under the terms of this Escrow Agreement
and shall not have any other duties or responsibilities that are not expressly
set forth herein.
7. Fees and Expenses. The reasonable fees and expenses of Escrow Agent
shall be paid as requested by Escrow Agent by Buyer. Such fees and expenses of
Escrow Agent shall not include the parties' respective attorneys' fees and
costs.
8. Exculpation and Indemnity. Buyer and Seller shall, jointly and
severally, indemnify, defend and hold Escrow Agent harmless from any and all
expenses, costs, damages and liabilities arising or incurred by reason of it
serving as Escrow Agent hereunder unless such expenses, costs, damages and
liabilities result from Escrow Agent's gross negligence or willful misconduct.
Escrow Agent shall be entitled to rely, and shall be protected in doing so, upon
any notice, instrument or signature believed by it to be genuine and to have
been signed or presented by the proper party or parties duly authorized to do
so.
9. Resignation and Discharge. Escrow Agent may resign and be discharged
from its duties hereunder at any time by giving notice of such resignation to
Buyer and Seller. Upon such notice, a successor Escrow Agent shall be appointed
by Buyer and Seller and become Escrow Agent hereunder effective upon the
resignation date specified in such notice. Escrow Agent shall continue to serve
until its successor accepts the assignment of the Escrow Agent's rights and
obligations hereby, but need not continue to serve longer than sixty (60) days
after the date of its notice of resignation.
10. Notices. All notices provided for herein or required hereby shall
be given or made in accordance with Section 12.2 of the Asset Purchase
Agreement. Such notice, if to Escrow Agent, shall be addressed to:
OTC Stock Transfer, Inc.
000 Xxxx 00xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
fax: (000) 000-0000
11. Governing law. This Escrow Agreement is to be governed by, and
interpreted under, the laws of the State of Illinois.
C-3
12. Counterparts. This Escrow Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Escrow Agreement has been executed and
delivered by the parties as of the date first above written.
WORLDPORT COMMUNICATIONS, INC., a
Delaware corporation
By:
Its:
TELENATIONAL COMMUNICATIONS, LIMITED
PARTNERSHIP, a Nebraska limited partnership
By:
Its:
OTC STOCK TRANSFER, INC.,
a Utah corporation
By:
Its:
C-4
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into this ____ day of ____________, 1997, by and between WorldPort
Communications, Inc., a Delaware corporation ("Buyer") and Telenational
Communications, Limited Partnership, a Nebraska limited partnership ("Seller").
WHEREAS, Buyer and Seller have entered into that certain Asset
Purchase Agreement, dated __________, 1997 (the "Asset Purchase Agreement"); and
WHEREAS, pursuant to Sections 1.7 and 1.8 of the Asset
Purchase Agreement, Buyer and Seller have agreed to execute and deliver this
Agreement.
NOW, THEREFORE, in consideration of the premises and promises
herein contained, the parties agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Asset Purchase Agreement.
2. Demand Registration Rights. Seller understands that at any time
eighteen months following the Closing Date, subject to the provisions of Section
9, upon the delivery to Buyer of a written request of the holders ("Holders") of
the Minimum Registration Amount (as hereafter defined) of the Registrable
Securities (as hereafter defined) outstanding, requesting that Buyer effect the
registration under the Securities Act of 1933, as amended (the "Act") (a "Demand
Registration"), and requesting a firm commitment underwriting as a means for the
disposition thereof, Buyer will promptly give written notice of such requested
registration to all other Holders of Registrable Securities, and Buyer thereupon
will use its best efforts to effect, as expeditiously as possible, the
registration under the Act (in accordance with the intended method of
disposition specified in the notice from the initial requesting Holder) of the
Registrable Securities which Buyer has been so requested to register, all to the
extent necessary to permit the disposition of the Registrable Securities so to
be registered; provided, however that Buyer shall not be required to register
such Registrable Securities if, in the reasonable opinion of the Board of
Directors of Buyer, it would not be in the best interests of Buyer to register
such Registrable Securities. "Minimum Registration Amount" means 2,000,000
shares of common stock of Buyer ("Common Stock") before any stock splits,
reverse stock splits or other recapitalizations which may occur after the date
hereof. "Registrable Securities" means (i) any shares of Buyer's Stock issuable
under the Asset Purchase Agreement, and (ii) any other Common Stock issuable
with respect to the Common Stock referred to in clause (i) by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
D-1
3. Right to Piggyback. Subject to the provisions of Section 9, whenever
Buyer proposes to register any of its Common Stock under the Act for sale in an
underwritten public offering, and the registration form to be used may be used
for the registration (a "Piggyback Registration," and together with a Demand
Registration, a "Registration") of Registrable Securities, Buyer will give
written notice to all holders of Registrable Securities of its intention to
effect such a registration and will, except as otherwise provided herein,
include in such registration all Registrable Securities with respect to which
Buyer has received written requests for inclusion therein within 15 days after
the receipt of Buyer's notice.
4. Registration Expenses. Buyer will pay all expenses incident to
Buyer's performance of or compliance with the provisions set forth in this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel for Buyer
and all independent certified public accountants, underwriters (excluding
discounts and commissions) and other persons retained by Buyer.
5. Priority on Primary Registrations. If a Registration is an
underwritten primary registration on behalf of Buyer, and the managing
underwriters advise Buyer in writing that in their opinion the number of
securities required to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to Buyer, Buyer will include in such registration (i) first, the
securities Buyer proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration and other securities as to which
the holders have similar registration rights and have requested similar
registration, pro rata among the holders of such Registrable Securities and
other securities on the basis of the number of shares owned by each such holder,
and (iii) third, other securities requested to be included in such registration.
6. Priority on Secondary Registrations. If a Registration is an
underwritten secondary registration on behalf of holders of Buyer's securities,
and the managing underwriters advise Buyer in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the holders initially requesting such registration, Buyer
will include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration and other
securities as to which the holders have similar registration rights and have
requested similar registration, pro rata among the holders of such Registrable
Securities and other securities on the basis of the number of shares owned by
each such holder, and (iii) third, other securities requested to be included in
such registration.
7. Holdback Agreement. Each holder of Registrable Securities agrees
not to effect any public sale or distribution (including sales pursuant to Rule
144) of equity securities of Buyer, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and the 90-day period beginning on the effective date of any underwritten
D-2
Registration (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree. Seller
agrees that it will not transfer its Shares in a non-public sale or distribution
to any transferee without such transferee first agreeing in writing to be bound
by the terms of this Agreement.
8. Indemnification.
(i) Buyer agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to Buyer by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after Buyer has
furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, Buyer will indemnify such
underwriters, their officers and directors and each person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(ii) In connection with any registration statement in which a
holder of Registrable Securities is participating, each such holder will furnish
to Buyer in writing such information and affidavits as Buyer reasonably requests
for use in connection with any such registration statement or prospectus and, to
the extent permitted by law, will indemnify Buyer, its directors and officers
and each person who controls Buyer (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
holder; provided that the obligation to indemnify will be individual to each
holder and will be limited to the net amount of proceeds received by such holder
from the sale of Registrable Securities pursuant to such registration statement.
(iii) Any person entitled to indemnification hereunder will
(a) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (b) permit such indemnifying party
to assume the defense of such claim. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim.
D-3
(iv) The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person of such indemnified party and will survive the transfer of securities.
Buyer also agrees to make such provisions, as are reasonably requested by an
indemnified party, for contribution to such party in the event Buyer's
indemnification is unavailable for any reason.
9. Termination. The rights to Demand Registration for those Holders who
choose not to participate in the registration undertaken pursuant to a Demand
Registration shall terminate upon such registration. In all other cases, the
rights to Demand Registration with respect to particular Registrable Securities
shall terminate on the earlier of (i) the date two years and six months
following the Closing Date, (ii) the date on which the particular Registrable
Securities may be sold pursuant to paragraph (k) of Rule 144, or (iii) the date
on which the Registerable Securities may be sold pursuant to other provisions of
the Act or the rules and regulations promulgated thereunder as will allow the
sale of all Registrable Securities then held by the holder thereof without
limitation on the manner of the sale and without any governmental filings. The
rights to Piggyback Registrations with respect to particular Registrable
Securities shall terminate on the earlier of (i) the fifth anniversary of the
Closing Date, (ii) the date on which the particular Registrable Securities may
be sold pursuant to paragraph (k) of Rule 144, or (iii) the date on which the
Registerable Securities may be sold pursuant to other provisions of the Act or
the rules and regulations promulgated thereunder as will allow the sale of all
Registrable Securities then held by the holder thereof without limitation on the
manner of the sale and without any governmental filings.
10. General Provisions.
a. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
b. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties named herein and their respective successors and
assigns. After Closing, Buyer shall be entitled to assign its rights and duties
under this Agreement without the consent of any other party hereto, and Seller
shall be entitled to assign its rights hereunder to Partners when it distributes
shares of Common Stock from Seller to such Partners in accordance with Section
2.20 of the Asset Purchase Agreement.
c. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Illinois. Each party hereby irrevocably and unconditionally consents and submits
to the in personam jurisdiction of Illinois state courts and federal courts
located in Chicago, Illinois over all matters relating to this Agreement. Each
D-4
party agrees that service of process in any action or proceeding hereunder may
be made upon such party by certified mail, return receipt requested to the
address for notice set forth herein. Each party irrevocably waives any objection
it may have to the venue of any action, suit or proceeding brought in such
courts or to the convenience of the forum and each party irrevocably waives the
right to proceed in any other jurisdiction. Final judgment in any such action,
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment, a certified or true copy of which shall
be conclusive evidence of the fact and the amount of any indebtedness or
liability of any party therein described.
d. Other Rules of Construction. References in this Agreement
to sections are to sections of this Agreement unless otherwise indicated. Words
in the singular include the plural and in the plural include the singular. The
word "or" is not exclusive. The word "including" shall mean including, without
limitation. The section and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
e. Partial Invalidity. In the event that any provision of
this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
D-5
IN WITNESS WHEREOF, each of the parties has executed this
Agreement or caused this Agreement to be executed on its behalf by a duly
authorized officer, all as of the date first written above.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------
Its:President & C.E.O.
--------------------------
TELENATIONAL COMMUNICATIONS, LIMITED PARTNERSHIP
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Its:President & C.E.O
--------------------------
D-6
EXHIBIT E
XXXX OF SALE
This XXXX OF SALE is delivered to WorldPort Communications,
Inc., a Delaware corporation (the "Buyer"), pursuant to the Asset Purchase
Agreement by and between Buyer and Telenational Communications, Limited
Partnership, a Nebraska limited partnership (the "Seller"), dated _________,
1997 (the "Agreement").
WHEREAS, the Agreement provides that the Seller shall sell,
transfer, assign and deliver to the Buyer, all right, title and interest in and
to the Purchased Assets as defined in the Agreement.
NOW, THEREFORE, pursuant to the Agreement and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
Effective as of the date hereof, Seller hereby irrevocably
contributes, sells, transfers, assigns, conveys and delivers to Buyer and its
successors and assigns forever, the Purchased Assets, TO HAVE AND TO HOLD the
same for its and their own use and benefit forever.
Seller hereby constitutes and appoints Buyer as its true and
lawful attorney-in-fact, with full power of substitution and resubstitution, in
the name of Seller but on behalf of and for the benefit of Buyer (i) to demand,
collect and receive for the account of Buyer all of the Purchased Assets; (ii)
to institute or prosecute, in the name of Seller or otherwise, all proceedings
which Buyer may deem necessary or convenient in order to realize upon, affirm or
obtain title to or possession of or to collect, assert or enforce any property,
claim, right or title of any kind in or to the Purchased Assets; (iii) to defend
and compromise any and all actions, suits or proceedings in respect of any of
the Purchased Assets subject to any obligations in the Agreement; and (iv) to do
all such acts and things in relation thereto as Buyer shall deem desirable.
Seller agrees that the foregoing powers are coupled with an interest and are and
shall be irrevocable by Seller for any reason.
All of the terms and provisions of this Xxxx of Sale shall be
binding upon Seller and its successors and assigns, and shall inure to the
benefit of Buyer and its successors and assigns. Seller hereby covenants and
agrees with Buyer that it will duly execute and deliver all such instruments of
sale, transfer, assignment and conveyance and all such notices, releases and
other documents as may be necessary more fully to sell, transfer, assign and
convey to, and vest in Buyer, all and singular, the Purchased Assets.
This Xxxx of Sale shall not confer any rights or remedies upon
any person or entity other than the Buyer and its successors and permitted
assigns. Neither the making nor the acceptance of this instrument shall enlarge,
restrict or otherwise modify the terms of the Agreement.
E-1
All capitalized terms used in this Xxxx of Sale and not
otherwise defined shall have the meanings given to them in the Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Xxxx of
Sale to be executed on their behalf by a duly authorized officer this day of
_________, 1997.
TELENATIONAL COMMUNICATIONS, LIMITED
PARTNERSHIP
By: /s/ Xxxxxx Xxxxxxxxx
------------------------
Its: President & C.E.O.
------------------------
E-2
WORLDPORT SCHEDULES
AND
DISCLOSURE MATERIALS
SCHEDULES
---------
Schedule 3.6 Capital Stock of Buyer
Schedule 3.8 Financial Statements (Interim Changes)
Audited Financial Statements for 1995 and
1996 included in Form 10KSB Filings
(attached)
Schedule 3.9 Litigation
Schedule 3.10 Subsidiaries
Schedule 3.11 Registration Rights
Schedule 3.12 Tax Returns
WORLDPORT DISCLOSURE MATERIALS
------------------------------
Form 10KSB for period ending December 31, 1996
Form 10QSB for period ending September 30, 1996
Form 10QSB for period ending June 30, 1996
Form 10QSB for period ending March 31, 1996
Form 10KSB for period ending December 31, 1995
Form S-8 filed February 11, 1997
WorldPort Private Offering Memorandum dated November 1, 1996
OTHER
-----
Other WorldPort Disclosure Materials Provided to Telenational
Schedules to Asset Purchase Agreement dated April 23, 1997
Schedule 1.2(x) Use of Name
Schedule 1.3 Assumed Liabilities
Schedule 1.8(j) Authority/Creditors
Schedule 2.2 Validity/Authority
Schedule 2.4 Transactions with Affiliates/Partners
Schedule 2.5 Financial Statements
Schedule 2.7 Interim Changes/Potential Material
Adverse Effect
Schedule 2.8 Outstanding Accounts/Notes Receivable
Schedule 2.9 List/Summary Description of Insurance
Policies or Fidelity Bond
Schedule 2.10 Asset List
Schedule 2.11 Proprietary Information
Schedule 2.12 Customers and Suppliers
Schedule 2.13 Employees/Benefits
Schedule 2.14 Licenses & Permits
Schedule 2.15 Material Contracts
Schedule 2.17 Legal Proceedings
Schedule 2.19 Brokers (Friedrich)
Schedule 4.1 Interim Conduct of Business
Schedule 7.7 Assumed Liabilities/Guaranties
