MANAGEMENT AND SERVICES AGREEMENT
MANAGEMENT AND SERVICES AGREEMENT dated as of March 12, 1998, by and
among EQUALNET CORPORATION, a Delaware corporation ("Buyer"), EQUALNET HOLDING
CORP., a Texas corporation ("EqualNet" and, collectively with Buyer, the
"EqualNet Parties"), and SA TELECOMMUNICATIONS, INC., a Delaware corporation
("SA Telecom"), and its subsidiaries named on the signature page hereof
(collectively, the "Sellers").
W I T N E S S E T H:
WHEREAS, on November 19, 1997, Sellers filed petitions for
reorganization under Chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code") with the Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court");
WHEREAS, the EqualNet Parties and the Sellers are parties to a
Purchase Agreement dated as of January 15, 1998 (as amended from time to time,
the "Purchase Agreement") (capitalized terms used but not defined herein have
the meanings specified in the Purchase Agreement), pursuant to which the Sellers
agreed to sell to Buyer, and Buyer agreed to purchase from Sellers, all of the
Sellers' rights, titles and interests in and to substantially all of the assets
of the Sellers (the "Assets");
WHEREAS, the Bankruptcy Court has approved the sale of the Assets
to the Buyer pursuant to the Purchase Agreement;
WHEREAS, the Buyer will purchase, as part of the Assets, all of the
accounts (the "Accounts") of the subscribers (the "Subscribers") to the Sellers'
long distance telecommunications services (the "Services");
WHEREAS, the Services are provided to the Subscribers through the
Sellers' network of switching and transmission facilities (the "Sellers' Network
Facilities"), consisting of equipment, switches, software and line capacity;
WHEREAS, the Sellers' Network Facilities are a combination of (i)
owned assets and (ii) leased contractual arrangements (capital and operating)
with third parties (the "Network Contracts");
WHEREAS, the Buyer's purchase of the Assets may be delayed because
of the need to obtain the approval of EqualNet's shareholders and certain
regulatory approvals for such purchases;
WHEREAS, for various technical and operating reasons, the Buyer may
be unable to transition the Subscribers from the Sellers' Network Facilities to
its own network of switching and transmission facilities (the "Transition") by
the Closing Date; and
WHEREAS, in order to facilitate the Transition and to limit the cost
and expense borne by the Sellers in operating the business pending the closing
under the Purchase Agreement, the Sellers and the EqualNet Parties have agreed
to enter into this Agreement whereby from the Effective Date to the conclusion
of the Transition Period (as such terms are defined below), (i) the Buyer will
manage the telecommunications business of the Sellers (the "Business") and (ii)
the Sellers will provide to the Buyer telecommunications services pursuant to
the network contracts to be specified by the Buyer to the Sellers in writing no
later than the Closing Date (the "Specified Network Contracts"), upon the terms
and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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1. APPOINTMENT OF BUYER. Effective as of 12:01 a.m. on the first day
following the date that the Bankruptcy Court approves this Agreement (the
"Effective Date"), the Sellers hereby appoint and retain the Buyer, and the
Buyer hereby agrees, to manage the Business of the Sellers during the term of
this Agreement; PROVIDED that the Sellers shall continue to perform all of their
obligations under all contracts in effect during the Transition Period.
2. AUTHORITY TO BE RETAINED BY SELLERS. Except as provided herein,
Sellers retain full authority to manage the affairs of the Sellers and their
estates. Without limiting the generality of the foregoing, the Sellers have
exclusive authority to (i) administer the Sellers' Chapter 11 cases, (ii) assume
or reject any executory contract or unexpired lease to which any Seller is a
party to the extent not inconsistent herewith or with the Purchase Agreement,
(iii) sell any of their assets to the extent not prohibited under the Purchase
Agreement, (iv) borrow under each of those certain debtor-in-possession
financings provided by (a) Greyrock Business Credit and (b) EqualNet, (v) pay
all accounts payable and other expenses of any of the Sellers, (vi) enforce,
defend and compromise any claim by or against any Seller or its estate, and
(vii) commence, continue and defend any actions or proceedings involving any
Seller or its estate.
3. SERVICES TO BE PROVIDED BY SELLERS. The Sellers shall provide to
Buyer from and after the Closing Date until the conclusion of the Transition
Period telecommunications services under the Specified Network Contracts at a
cost equal to the cost to the Sellers of providing such services, including,
without limitation, all charges payable by the Sellers under the Specified
Network Contracts in connection with the provision of such services.
4. SERVICES TO BE PROVIDED BY BUYER. (a) In the performance of its
duties hereunder, the Buyer shall supervise and assist in the supervision and
management of all aspects of the Business, including the Specified Network
Contracts, during the Transition Period. The Buyer shall devote such reasonable
time, personnel, attention and effort as it may deem necessary to the
performance of its duties hereunder. The Buyer shall have the complete authority
to do
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whatever it may deem necessary, appropriate or convenient to conduct, manage and
operate the Business, subject, however, to satisfaction and performance of and
full compliance with (i) reasonable business judgment in accordance with all
industry norms and standards, (ii) the terms of the Specified Network Contracts
and all other legal and contractual obligations of the Sellers, and (iii) all
applicable federal and state laws, including, without limitation, (a) all laws
relating to the employment/labor industry, without limitation, the provision
thereof relating to wages, hours, conditions of employment, collective
bargaining and the payment of social security taxes or other payroll taxes, (b)
federal, state or local laws, statutes or regulations or the common law relating
to the environmental or occupational health and safety, and (c) all federal laws
and regulations relating to the performance of government contracts. Nothing
contained herein shall authorize Buyer to take any action in respect of Sellers'
Chapter 11 cases or in respect of any claim by or against Sellers.
(b) The Sellers shall cause the Sellers and all of their employees,
agents, and representatives to cooperate in all material respects with the
Buyer's activities as contemplated herein and shall make Sellers' books and
records specifically relating to the Business or the Specified Network Contracts
available to the Buyer at all times.
(c) During the Transition Period, Buyer agrees, absent the Sellers'
prior written consent, not to authorize, direct or otherwise take any of the
following actions:
(1) Any action which would be deemed to constitute a breach by
the Sellers of any contractual obligations of the Sellers;
(2) Sell or otherwise dispose of any equipment, inventory or
assets of the Sellers;
(3) Destroy any of Sellers' books and records, including,
without limitation, any computer data information;
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(4) Incur any liability on behalf of the Sellers, except to
the extent (i) necessary or appropriate to manage the Business
or perform under the Specified Network Contracts during the
Transition Period; or (ii) expressly authorized by Sellers in
writing;
(5) Assume or reject any executory contract or unexpired lease
to which any Seller is a party; and
(6) Commence any litigation in the name of any Seller, release
or compromise any claim or cause of action of any Seller, file
any plan of reorganization in Sellers' Chapter 11 cases, or
waive any defense or objection of any Seller in respect of any
claim against any Seller or its estate. With respect to the
commencement of any litigation, Sellers will not unreasonably
withhold their consent to the commencement of such action.
5. TERM OF AGREEMENT. (a) Subject to subsections (c) and (d) below,
the term of this Agreement shall be the period commencing on the Effective Date
and ending 12:01 a.m. on the 60th day following the Closing Date (the
"Transition Period"), subject to extensions of the Transition Period as provided
in this Section; PROVIDED, HOWEVER, that nothing contained herein shall be
deemed to extend the term of any other contract, agreement or lease to which any
of the Sellers is a party.
(b) In the event the Transition is not completed within the
Transition Period, the Buyer shall have the right to extend the Transition
Period, for a period which, in the Buyer's best estimation, shall be sufficient
to permit the completion of the Transition (a "Transition Period Extension").
The Buyer must provide the Sellers' with ten (10) days' prior written notice of
its desire to extend the Transition Period, which notice shall specify the
requested Transition Period Extension. The terms of this Agreement and, in
particular, the terms contained in
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subsection (c) below shall govern any such Transition Period Extension. The term
Transition Period shall include any such Transition Period Extension.
(c) In the event all or any portion of the Transition is completed
prior to the end of the Transition Period, Buyer shall have the right, upon five
days' prior written notice to Sellers, to terminate its receipt of services
under any Specified Network Contracts.
(d) Any party may terminate this Agreement prior to the Closing Date
(i) if the Closing Date does not occur on or before May 31, 1998, (ii) if the
Purchase Agreement is terminated by any party thereto or (iii) upon fifteen (15)
days' prior written notice to the other parties hereto by (x) any Seller if any
EqualNet Party breaches any of its obligations under this Agreement or (y)
either EqualNet Party if any Seller breaches any of its obligations under this
Agreement and, in either case, such breach is not cured within such fifteen (15)
day period.
(e) If this Agreement is terminated prior to the Closing Date, the
EqualNet Parties shall cooperate with the Sellers to restore to the Sellers'
Network Facilities all telecommunications traffic relating to the Subscribers
that had been transferred to the EqualNet Parties' network facilities during the
term of this Agreement and, if so requested by the Sellers, will permit the
Sellers to use for sixty (60) days after the termination of this Agreement the
EqualNet Parties' network facilities to carry such traffic at a cost equal to
the EqualNet Parties' cost of carrying such traffic.
6. ASSUMPTION OF LIABILITIES AND FUNDING REQUIREMENTS. (a) The Buyer
agrees to assume and pay to the Sellers, or as directed by Sellers, (i) all
Increased Costs (as defined below) incurred by the Sellers from the Effective
Date to March 31, 1998 by reason of any action taken by either EqualNet Party
pursuant hereto, (ii) all Operating Losses (as defined below) incurred by
Sellers during the period commencing on April 1, 1998 and ending on the Closing
Date, and (iii) all liabilities incurred or accrued by Sellers to other parties
under or in respect of the Specified Network Contracts during the period
commencing on the Closing Date
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and ending on the last day of the Transition Period (the "Specified Network
Contracts Liabilities").
(b) Sellers agree to pay to Buyer all Operating Income (as defined
below) of Sellers for the period commencing on April 1, 1998 through the Closing
Date.
(c) The Increased Costs shall be payable as and when they become
due, but, in any event, no later than the last day of the Transition Period, the
Operating Losses or Operating Income shall be payable on the Closing Date, or as
soon thereafter as is practical, but, in no event, later than sixty (60) days
after the Closing Date, and the Specified Network Contracts Liabilities shall be
payable as and when the same are required to be paid under the relevant
Specified Network Contract, but in any event no later than the last day of the
Transition Period.
(d) From the Effective Date to March 31, 1998, prior to implementing
any change in the Sellers' operations that is inconsistent with the Sellers'
plans for such period, the EqualNet Parties and the Sellers shall agree on the
net amount of any increased costs to Sellers that will result from such change
(the "Increased Costs").
(e) For purposes of this Agreement: "Operating Losses" shall, for
any relevant period, be defined as the amount by which (i) all costs and
expenses of the Sellers accrued during such period (including all amounts
accrued by the Sellers during such period under all capital leases, but
excluding (x) all non-cash items, (y) all professional fees and expenses
incurred by the Sellers in connection with the administration of the Sellers'
Chapter 11 cases and (z) all amounts that accrue under the Sellers' self-funded
health insurance plan in excess of the product of (A) $20,000 and (B) the number
of weeks from April 1, 1998 to the Closing Date) exceed (ii) all revenues of the
Sellers accrued during such period (excluding all non-cash items); and
"Operating Income" shall, for any relevant period, be defined as the amount by
which the amount calculated pursuant to clause (ii) of the definition of
Operating Losses exceeds the amount calculated pursuant to clause (i) of the
definition of Operating Losses.
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7. CHANGE IN OPERATIONS. If the EqualNet Parties wish to take any
action in connection with their management of the Sellers' business pursuant
hereto, which action the EqualNet Parties believe will result in a cost savings
to the Sellers, and for which the Sellers' consent is required, the EqualNet
Parties shall deliver to the Sellers a written request for such consent, which
request shall describe in reasonable detail the action proposed to be taken and
the basis for the EqualNet Parties' belief that such action will result in a
cost savings to the Sellers. In such case, the Sellers shall not unreasonably
withhold their consent to such actions, provided that the granting of such
consent is consistent with the Sellers' fiduciary duties as
debtors-in-possession.
8. TRUE-UP. The Buyer and the Sellers shall use reasonable good
faith efforts to resolve any disputes regarding amounts owing by either party
hereunder. If Sellers and Buyer cannot resolve any such dispute within thirty
(30) days after such dispute arises, such dispute shall be resolved by the
Bankruptcy Court as provided in Section 13 of this Agreement.
9. OUTSIDE ACTIVITIES. Nothing in this Agreement shall prevent,
limit or restrict the Buyer, its officers, directors, employees or agents in any
way from (i) acting for any other entity as administrative manager, management
consultant, or in any other advisory, consultative or professional capacity, or
(ii) engaging in any other business or devoting its, his or her time and
attention to the management or any other aspects of any other business, whether
of a similar or dissimilar nature to the Business.
10. BOOKS AND RECORDS. From the Effective Date to the Closing Date,
to the extent any books and records of the Sellers are held or controlled by the
EqualNet Parties, the EqualNet Parties will fully cooperate with and provide
full access to Sellers with respect to such books and records for the purpose of
permitting Sellers to prepare all necessary financial reports and tax returns,
verify, assess, assert or defend claims and for all other purposes relating to
the Sellers' administration of their Chapter 11 cases. Upon termination of this
Agreement, the
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EqualNet Parties will as promptly as practical return all such books and records
to the Sellers, provided that if such termination occurs after the Closing Date
the EqualNet Parties may retain such books and records that constitute Assets.
11. NOTICE OF APPROVAL OR DISAPPROVAL. The Sellers and Buyer each
agree to provide notice by facsimile transmission to the other within one (1)
business day of their receipt of a written objection to this Agreement from any
party to a Specified Network Contracts or its representative (a "Specified
Network Contracts Party").
12. NO REPRESENTATIONS OR WARRANTIES. The EqualNet Parties hereby
acknowledge and agree that the Sellers are not making any representation or
warranty whatsoever, express or implied, that any consent or authorization of
any party for the arrangement provided for in this Agreement will be obtained or
that any of the Specified Network Contracts will remain in effect during the
Transition Period, and Sellers' obligations hereunder are subject to the receipt
of any required consent or authorization. However, the Sellers shall use
reasonable good faith efforts to obtain, as promptly as possible, all consents,
authorizations, orders or approvals, if any, from each and every Specified
Network Contracts Party, whether private or governmental, required in connection
with the arrangement contemplated by this Agreement. Sellers agree that they
will not reject, without Buyer's consent, any Specified Network Contract during
the Transition Period unless the failure to do so would constitute an assumption
of such Specified Network Contract. In no event will Sellers be required by this
Agreement to assume any contract or lease, including any Specified Network
Contract. To the extent Sellers' ability to comply with this Agreement is
conditioned by the Bankruptcy Court upon assumption of one or more contracts or
leases, including any Specified Network Contracts, then Sellers shall be excused
from complying with this Agreement in respect of any such contract or lease.
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13. DISPUTE RESOLUTION AND REMEDY. (a) If any dispute or
disagreement shall arise in connection with either this Agreement or the
interpretation or performance thereof, then the matter in controversy shall be
submitted to the Bankruptcy Court for prompt resolution.
(b) THE PARTIES HERETO AGREE THAT ANY LEGAL ACTION OR PROCEEDING
RELATING TO OR ARISING UNDER THIS AGREEMENT SHALL BE LITIGATED IN THE BANKRUPTCY
COURT AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH SELLER HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, AND EACH EQUALNET PARTY
HEREBY ACCEPTS FOR ITSELF, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE BANKRUPTCY COURT WITH REGARD TO ALL SUCH ACTIONS OR PROCEEDINGS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN THE BANKRUPTCY COURT.
14. NOTICES AND INSTRUCTIONS. Any notice or instruction provided for
herein shall be provided to the parties hereto by facsimile transmission.
15. CONDITIONS. This Agreement and all obligations of the Sellers
and the EqualNet Parties hereunder are subject to and expressly conditioned upon
entry of an order by the Bankruptcy Court approving this Agreement.
16. MISCELLANEOUS. (a) This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; PROVIDED that none of the parties hereto may assign their rights
and obligations hereunder, other than for breach of this Agreement, without the
consent of the other parties hereto. No person, other than the parties
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hereto or their respective successors and assigns, shall have any legal or
equitable right, remedy or claim under or in respect of this Agreement.
(b) This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter hereof and may not be modified except
by a writing signed by all the parties hereto.
(c) The descriptive headings contained in this Agreement are
inserted for convenience and do not constitute part of this Agreement.
(d) This Agreement may be terminated upon written mutual consent of
the Sellers and the EqualNet Parties.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CHOICE OF LAW
PRINCIPLES THEREOF WHICH WOULD MAKE THE LAWS OF ANY OTHER JURISDICTION
APPLICABLE TO THIS AGREEMENT.
(f) All capitalized terms used herein which are not defined herein
shall have the meaning given to them in the Purchase Agreement.
(g) The Sellers and the Buyer agree to reasonably cooperate
regarding any written, oral or electronic mail communications made to employees
of the Sellers during the Transition Period.
(h) In the event there is a conflict between the terms of the
Purchase Agreement and the terms of this Agreement, the terms of the Purchase
Agreement shall govern.
(i) Nothing contained herein shall limit, impair, or otherwise
affect any rights or obligations of the EqualNet Parties or Sellers under the
Purchase Agreement.
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(j) To the extent that any provision of this Agreement, or any part
thereof, shall be declared invalid or unenforceable, it shall be considered
deleted herefrom and the remainder of such provision and of this Agreement shall
be unaffected and shall continue in full force and effect.
(k) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all or which together shall constitute
one and the same instrument.
(l) Nothing contained herein shall be deemed to amend, modify,
terminate or extend any lease, contract or agreement to which any Seller is a
party or any rights or obligations of any party thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
EQUALNET CORPORATION
By:
Name:
Title:
EQUALNET HOLDING CORP.
By:
Name:
Title:
SA TELECOMMUNICATIONS, INC.
ADDTEL COMMUNICATIONS, INC.
LONG DISTANCE NETWORK, INC.
NORTH AMERICAN TELECOMMUNICATIONS
CORPORATION
U.S. COMMUNICATIONS, INC.
SOUTHWEST LONG DISTANCE NETWORK, INC.
UNIQUEST COMMUNICATIONS, INC.
By:
Name:
Title:
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AMENDMENT
dated as of March 5, 1998
to
PURCHASE AGREEMENT
dated as of January 15, 1998
WHEREAS, EqualNet Corporation, a Delaware corporation ("BUYER"),
EqualNet Holding Corp., a Texas Corporation ("EQUALNET"), and SA
Telecommunications, Inc., a Delaware corporation ("SA TELECOM"), and its
subsidiaries named as Sellers on the signature pages hereto (SA Telecom and such
subsidiaries collectively, "SELLERS") are parties to a Purchase Agreement dated
as of January 15, 1998 (the "PURCHASE AGREEMENT," capitalized terms used but not
defined herein having the meaning specified for such terms in the Purchase
Agreement) pursuant to which Buyer agreed to purchase from Sellers, and Sellers
agreed to sell to Buyer, on the terms and conditions set forth therein, the
assets of Seller specified therein (the "ASSETS");
WHEREAS, on March 4, 1998, Sellers conducted an auction of their
assets (the "AUCTION") pursuant to a Second Amended Order (i) Authorizing and
Scheduling Auction at Which the Sellers May Sell Substantially All Their Assets
Free And Clean Of All Liens, Claims, and Encumbrances; (ii) Approving Proposed
Auction Procedures; (iii) Scheduling Hearing and Objections Deadline on Motion
of Debtors to Sell Assets; and (iv) Approving Notice and Service of the Sale
approval Motion (the "AMENDED SCHEDULING ORDER"), which Amended Scheduling Order
was entered by the Bankruptcy Court on February 23, 1998;
WHEREAS, at the Auction Buyer modified and clarified the terms of
its offer contained in the Purchase Agreement to purchase the Assets;
WHEREAS, the Buyer's offer, as so modified and clarified, was
determined by Sellers and the Creditors' Committee to be the highest and best
offer for the Assets;
WHEREAS, Buyer has agreed to provide Sellers with a
debtor-in-possession financing in the amount of $1,000,000, available commencing
on March 9, 1998 on the terms and conditions set forth in the Stipulation dated
March __, 1998, among Sellers, Buyer and Greyrock, subject to the approval by
the Bankruptcy Court of the sale of the Assets to Buyer pursuant to the Purchase
Agreement as modified hereby;
WHERAS, Sellers, Buyer and EqualNet wish to Amend the Purchase
Agreement to reflect said modification and clarification of Buyer's offer and
clarify other matters;
NOW THEREFORE, Buyer, EqualNet and Sellers hereby agree as follows:
1. The definitions of the terms "Adjusted Pre-Closing Monthly
Minute", "Pre-Closing Monthly Minutes", "Post-Closing Monthly Minutes", "Closing
Date Market Value", "Billable Minute" "Escrow Agreement", "Escrowed Shares", and
"Xxxxxx Group" contained in Section 1 of the Purchase Agreement and all
references to said terms in the Purchase Agreement are hereby deleted.
2. The definition of the term "Conversion Rate" set forth in Section
1 of the Purchase Agreement is amended to read in its entirety as follows:
"CONVERSION RATE shall mean the number of shares of Common Stock
that the holder of Preferred Shares shall receive upon conversion of one
Preferred Share. Subject to adjustment as set forth in the Preferred Stock
Provisions for the effect of dilutive and concentrative events affecting
the Common Stock, one Preferred Share shall be convertible into ten shares
of Common Stock."
3. There is inserted the following new definitions in Section 1 of
the Purchase Agreement, in appropriate alphabetical sequence:
"EQUALNET DIP FINANCING shall mean the debtor-in-possession
financing provided or to be provided by Buyer to Sellers."
All references in the Purchase Agreement to the "Xxxxxx Group DIP Financing"
shall be to the EqualNet DIP Financing and all references in the Purchase
Agreement to the "Xxxxxx Group" shall be to Buyer.
4. The definition of the term "Revenue Amount" set forth in Section
1 of the Credit Agreement is amended to read it its entirety as follows:
"REVENUE AMOUNT" shall mean the gross revenue of Sellers, determined
in accordance with GAAP, during the months of December 1997 and January
1998; provided, however, that if the gross revenue of Sellers during the
month of February 1998 is less than 92% of the average monthly gross
revenue of Sellers during the months of December 1997 and January 1998,
then "Revenue Amount" shall mean the gross revenue of Sellers, determine
in accordance with GAAP, during the months of January and February 1998.
5. All references in the Purchase Agreement to "Scheduling Order"
shall be to the Amended Scheduling Order.
6. Clause (i) of Section 4(b) of the Purchase Agreement is amended
to read in its entirety as follows:
"(i) Buyer shall pay the cash portion of the Consideration by a wire
transfer in immediately available funds to such account or accounts as SA
Telecom, as agent for
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Sellers, shall specify by a notice in writing to Buyer at least two
business days prior to the Closing Date;"
7. Sections 4(d) and 5(b) and the last sentence of Section 5(a)(v)
of the Purchase Agreement are hereby deleted.
8. Section 5(a) of the Purchase Agreement is amended by deleting the
words "fifteen days after the Closing Date" set forth therein and substituting
therefor the words "April 1, 1998."
9. The third sentence of Section 8(b) of the Purchase Agreement is
amended to read as follows:
"No other corporate proceedings on the part of any EqualNet Party, other
than the approval of the shareholders of EqualNet, are necessary to
authorize this Agreement, the other Transaction Documents, the issuance of
the Preferred Shares to Sellers pursuant hereto or the transactions
contemplated herein or therein."
10. Sections 10(e), 11(g), 11(i) and 12(e) of the Purchase Agreement
are hereby deleted.
11. Section 11 of the Purchase Agreement is hereby amended by adding
the following new paragraph (n) at the end thereof:
"(n) SHAREHOLDER APPROVAL The shareholders of EqualNet
shall have approved the transactions contemplated by this
Agreement."
12. Section 12 of the Purchase Agreement is amended by adding at the
end thereof the following new paragraph (k):
"(k) EQUALNET DIP FINANCING. Buyer shall have provided
to Sellers the EqualNet DIP Financing."
13. Clause (v) of Section 13(a) is amended to read as follows:
"(v) by any party (unless such party is in default under this
Agreement) if the Sale Order is not entered on or before March 13, 1998 or
if the Closing does not occur on or before May 31, 1998."
14. Section 14(b) of the Purchase Agreement is amended by (a)
changing the dates "February 13, 1998" and "March 31, 1998" set forth therein
to, respectively, "March 13, 1998" and "May 31, 1998"; and (b) adding the
following new clause (iv) to the proviso at the end of said paragraph 14(b):
"or (iv) if Buyer fails to purchase the Assets because the conditions
specified in Sections 10(d), 11(m) or 11(n) are not satisfied or Sellers
refuse to sell the
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Assets to Buyer because the condition specified in Section 12(k) is not
satisfied."
[15. Exhibit A to the Purchase Agreement (Summary of Terms of
Preferred Stock) is amended to provide that the Preferred Stock shall rank as
follows:
"Senior to the Common Stock and the Series A Preferred Stock to be issued
in connection with the transaction among EqualNet, the Xxxxxx Group and
MCM Partners."]
16. Exhibit B to the Purchase Agreement is hereby deleted.
17. Provided that Sellers turn over to the EqualNet Partners
operational control of Sellers business on or before March 17, 1998 pursuant to
a Management and Service Agreement to be entered into by Sellers and the
EqualNet Parties, all operating losses of Sellers accruing on or after April 1,
1998 and until the Closing Date shall be for the account of Buyer, and Buyer
shall pay, or shall reimburse Sellers for, such operating losses on the Closing
Date. Such payment or reimbursement by Buyer shall be in addition to the
Consideration to be paid by Buyer for the Assets pursuant to Section 3(d) of the
Purchase Agreement.
18. Except as amended hereby, the Purchase agreement and the
respective rights and obligations of the parties thereunder, shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
BUYER:
EQUALNET CORPORATION
By:
Name:
Title:
EQUALNET:
EQUALNET HOLDING CORP.
By:
Name:
Title:
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SELLERS:
SA TELECOMMUNICATIONS, INC.
ADDTEL COMMUNICATIONS, INC.
LONG DISTANCE NETWORK, INC.
NORTH AMERICAN TELECOMMUNICATIONS
CORPORATION
U.S. COMMUNICATIONS, INC.
SOUTHWEST LONG DISTANCE NETWORK, INC.
UNIQUEST COMMUNICATION, INC.
Debtors and Debtors-in-possession
By:
Name:
Title:
[The Xxxxxx Group, LLC] and _____ (the "SHAREHOLDERS"), being the
holders, respectively of not less than ___% and ___% of the outstanding shares
of the common stock of EqualNet Holding Corp., hereby confirm to the Sellers
referred to in the foregoing Amendment that the Shareholders will vote their
respective shares of EqualNet Holding Corp. stock in favor of the transactions
contemplated by the Purchase Agreement referred to in, and as amended by, the
foregoing Amendment.
[THE XXXXXX GROUP, LLC]
By:
Name:
Title:
