Memorandum of Closing
Memorandum of Closing between and among Xxxxxxx Xxxxxx Limited ("BBL")
and Teltran International Group, Ltd. ("Teltran") dated August 16, 1999.
BBL and Teltran have entered into an Exchange Agreement as of July 15,
1999 for the acquisition of the shares of Channelnet Ltd. ("Channelnet") which
Agreement is hereby affirmed. The Parties hereby have completed the Exchange.
In connection with this Closing, the parties have modified the Exchange
Agreement and have come to the understandings as set forth below and the
Exchange Agreement shall be deemed amended.
1. Notwithstanding the provision ov Article X of the Exchange Agreement the
obligations of BBL shall be limited as set forth below:
(a) As used herein "Excluded Liabilities" shall be any liability
arising from a claim of a third party that such third party has any interest or
rights to the shares with Channelnet exchanged hereby, the assets of Channelnet
or the agreements or contracts or business of Channelnet.
(b) Except for Excluded Liabilities, BBL shall have no liability for an
amount exceeding the sum of (i) the aggregate purchase price for the Channelnet
Shares, (ii) amounts to
be paid or to be paid pursuant to the Deferred Purchase Agreement, and (iii) the
aggregate amount of the Bonus in stock to be paid to Xxxx Xxxxxxx pursuant to
the Service Agreement referred to in the aforementioned Exchange Agreement.
(c) Other than the amounts of Excluded Liabilities and any damages
arising directly or indirectly from BBL's failure to perform paragraph 5 hereof.
BBL shall have no liability pursuant to Article X unless the amount exceeds
(pound)70,000 pounds.
(d) Nothing herein shall operate to exclude any amount as a deduction
for purposes of calculating Channelnet's Net Income as defined in the Exchange
Agreement and Service Agreement for purposes of determining additional shares in
connection with the purchase price or the bonus pursuant to the Service
Agreement.
2. The parties agree to the following provisions relating to the operation of
Channelnet during the period in which a determination is to be made for the
calculation of Net Income as defined in the Service Agreement.
(a) The representative of Teltran and BBL shall in good faith establish
a budget consistent with projections previously presented (no representation is
made with respect to such projections). Teltran shall cause Channelnet to adhere
to the budget. (Nothing herein shall require Teltran to advance any sums.)
(b) Teltran shall at all times operate Channelnet as a separate entity
(together with its sister entity Atlantic Communications Corporation Ltd.
("Atlantic") if acquired by Teltran which may be combined with Channelnet.
Notwithstanding the foregoing Teltran may reorganize or merge Channelnet with
other entities it controls as long as Teltran continues to operate Channelnet as
a separate entity and maintains separate books and records.
(c) Any transaction between Channelnet and Teltran or its affiliates
shall have terms and conditions as if they were negotiated with an independent
third party.
(d) Teltran shall cause Channelnet to operate consistent with its past
operations subject to the aforesaid Budget, the law and efficiencies Teltran may
effect for Channelnet.
3. BBL makes no other representations excepts as set forth in such agreement or
any other agreement or document executed hereby.
4. The last sentence of paragraph 4.10 of the Exchange Agreement shall be
deleted.
(a) The financial statements to be delivered separately this date to
Teltran by the Acquired Company shall contribute the financial statements
referred to in paragraph 4.13 of the Exchange Agreement.
5. BBL hereby covenants and undertakes to procure the consent of the Landlord
(as defined in the Lease) to the assignment of the Lease to Teltran or such
other person as it directs for the
premises at Xxxxxxxxxx Xxxxx, 00 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx between
Xxxxxx Xxxxxx and BBL dated 12 August, 1999.
6. The parties have this date executed an Exchange Agreement with respect to
Atlantic. The provisions set forth above paragraphs 1 through 5 shall apply to
Atlantic in the same manner, except references to Channelnet shall refer to
Atlantic and vice versa.
7. Notwithstanding any of the foregoing, the documents shall be deemed revised
and amended to reflect the comments of Xxxx X. Xxxxxxxx as set forth in
paragraphs 1 through 6 and paragraphs 8, 9, 10 and 13 of Xx. Xxxxxxxx'x fax
memorandum of August 15, 1999 to Xxxxxxx X. XxXxxxxxxx (which is attached
hereto) except that paragraph 5 of the same shall be deemed modified by
paragraph 2 thereof.
XXXXXXX XXXXXX LIMITED
By: /s/
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Xxxxxxx Xxxxxxxx
TELTRAN INTERNATIONAL GROUP, LTD.
By: /s/
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