EXHIBIT 2.4
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
[FRANCHISEE]
AND
OWNERS OF [FRANCHISEE]
DATED AS OF ____________ __, 1997
TRANSFER AGREEMENT
------------------
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of _________
__, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), [Franchisee], a __________ (the "Company"), and those parties
listed on the signature pages hereto as the owners of the Company (the
"Owners").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company
have approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own at least [one hundred percent (100 %)] of the
equity interests in the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive [shares of Premiere Stock]
[cash] in connection with the Merger;
[WHEREAS, it is also the intention of the parties hereto that the form of
the transactions with respect to the Company, Premiere and Merger Corp shall
qualify as a "reorganization" within the meaning of Section 368(a) of the Code
for federal income tax purposes; and]
[WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.]
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
I. UNIFORM TERMS AND CONDITIONS
--------------------------------
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
--------------------------
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
II. TERMS OF MERGER
--------------------
2.1 The Merger.
----------
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of [Company State] (the "[Company State] Act") and the laws of the
State of Georgia (the "Georgia Act"). Merger Corp shall be the surviving
corporation resulting from the Merger, shall thereafter conduct the business and
operations of the Company as a wholly owned subsidiary of Premiere and shall
continue to be governed by the laws of the State of Georgia. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective boards of directors of Premiere, Merger Corp and the
Company.
(b) Subject to the provisions of this Agreement, the parties
shall file [Articles] [a Certificate] of Merger executed in accordance with the
relevant provisions of the [Company State] Act and a Certificate of Merger
executed in accordance with the relevant provisions of the Georgia Act and shall
make all other filings or recordings required under each such Act as soon as
practicable on or after the Closing Date. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the [Articles] [Certificate] of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of [Company State] and the
Certificate of Merger reflecting the Merger becomes effective with the Secretary
of State of the State of Georgia (the "Effective Time").
(c) The charter and Bylaws of Merger Corp in effect immediately
prior to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
--------------------
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp
common stock issued and outstanding at the Effective Time shall remain issued
and outstanding after the Effective Time.
(b) All of the shares of the capital stock, par value $___ per
share, of the Company ("Company Stock") (excluding treasury shares and excluding
shares held by shareholders who perfect their statutory dissenters' rights as
provided in Section 2.4 of this Agreement) issued and outstanding at the
Effective Time shall cease to be outstanding and shall be converted into and
exchanged for the right to receive:
(i) [the number of shares of Premiere Stock determined by
dividing (A) the product of [.X] ] multiplied by the
Company Purchase Price, by
-2-
(B) the Average Closing Price] [an amount of cash
determined by multiplying the Company Purchase Price
by [.X]];
(ii) [the number of shares of Premiere Stock determined by
dividing (A) the product of .1 multiplied by the
Company Purchase Price, by (B) the Average Closing
Price] [an amount of determined by multiplying the
Company Purchase Price by .1]] (the "General Escrow
Amount"); and
(iii) [the number of shares of Premiere Stock determined by
dividing (A) the product of [.Y] multiplied by the
Company Purchase Price, by (B) the Average Closing
Price]] [an amount of cash determined by multiplying
the Company Purchase Price by [.Y]] (the "Specific
Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
[issuable] [payable] to the Owners pro rata in accordance with their ownership
of Company Common Stock pursuant to Section 2.6, which ownership the Owners
represent has not been adjusted in contemplation of the transactions described
herein.
(c) Any and all shares of Company Common Stock held as treasury
shares by the Company shall be canceled and retired at the Effective Time, and
no consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount [and the Specific Escrow Amount] in negotiable form to the
Escrow Agent to be held in escrow pursuant to the terms and conditions of the
Escrow Agreement(s) in the form (s) attached hereto as Exhibit B [and Exhibit B-
1], which shall be executed and delivered by Premiere and the Owners at the
Closing.
2.3 Calculation of Consideration. For purposes of determining the
----------------------------
Consideration [issuable] [payable] to the Owners pursuant to Section 2.2(b)
above, the following shall apply:
(a) "Average Closing Price" shall be the average of the daily
last sale prices of Premiere Stock for the period consisting of twenty (20)
consecutive trading days on which such shares are actually traded on the Nasdaq
National Market (as reported by the Wall Street Journal or, if not reported
thereby, any other authoritative source selected by Premiere) ending at the
close of trading on the first trading day immediately preceding the Closing;
provided, however, that the Market Value Per Share shall not be less than $22.50
-------- -------
nor more than $30.50 (collectively, $22.50 and $30.50 are referred to as the
"Average Closing Price Limitations").
(b) "Cash Multiple" shall be _______ .
(c) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the
appropriate Stock Multiple or Cash Multiple, plus (ii) the amount of cash
----
reflected on the Closing Date Balance Sheet, minus (iii) the aggregate amount of
-----
debt reflected on the Closing Date Balance Sheet, and minus (iv) the amount by
-----
which the Transaction Costs exceed the Deductible Amount.
-3-
(d) "Deductible Amount" shall be an amount equal to $_________.
(e) "Normalized EBITDA" of the Company shall be an amount equal
to $_______, which has been determined, based on information provided by the
Company to Premiere, by (i) calculating the Company's earnings for the fiscal
year ended [December 31, 1996] as determined in accordance with generally
accepted accounting principles before expense for interest, income taxes and
depreciation and amortization, and (ii) adjusting that amount to account for
extraordinary or nonrecurring income and expense items taking into consideration
ongoing normal operational requirements as determined based on information
provided to Premiere.
(f) "Registration Right" shall mean the right to include
Premiere Stock issued in the Merger in a registration statement which Premiere
intends to file as soon as reasonably practicable after the end of the first
full fiscal quarter of Premiere containing the period of post-Merger combined
operations required by ASRs 130 and 135, pursuant to the terms and conditions of
the Stock Restriction and Registration Rights Agreement in the form attached
hereto as of Exhibit C (the "Registration Rights Agreement").
(g) "Stock Multiple" shall be six (6) if the Owners choose to
have the Registration Right and seven (7) if the Owners choose not to have the
Registration Right. Sections 3.5 and 5.2 of this Agreement shall indicate
whether the Owners have selected the Registration Right.
(h) "Transaction Costs" shall mean all amounts paid or incurred
by the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements and (iii)
the consummation of the Transactions.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
-----------------------
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the [Company State] Act shall
be entitled to receive the value of such shares in cash from the Company after
the Effective Time as determined pursuant to such provision of law; provided,
that no such payment shall be made to any dissenting shareholder unless and
until such dissenting shareholder has complied with the applicable provisions of
the [Company State] Act and surrendered to the Company the certificate or
certificates representing the shares for which payment is being made. In the
event that a dissenting shareholder of the Company fails to perfect, or
effectively withdraws or loses, its right to appraisal and of payment for its
shares, Premiere shall issue and deliver the consideration to which such holder
of shares of Company capital stock is entitled under this Article II (without
interest) upon surrender of certificates representing such shares held by such
holder.
2.5 Closing. The Closing shall take place at the offices of Xxxxxx & Bird
-------
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
------------------
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
[shares of Premiere Stock] [cash] as provided in this Agreement. Until
-4-
surrendered for exchange in accordance herewith, each certificate theretofore
representing shares of Company Common Stock shall from and after the Effective
Time represent only the right to receive the Consideration provided in this
Agreement in exchange therefor. [No certificates representing fractional shares
will be issued as a result of the Merger. Each holder of shares of Company
Common Stock exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Premiere Common Stock shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of Premiere Common Stock multiplied by the Actual
Closing Value.]
[2.7 Purchase for Investment, Etc. Each Owner, jointly and severally,
-----------------------------
represents and warrants the following to Premiere:
(a) such Owner has accurately completed the Investor
Questionnaire required by Premiere prior to or contemporaneous with the
execution of the Transfer Agreement and the statements therein are true and
correct and acknowledges that Premiere has relied upon such statements in
entering into this Agreement;
(b) such Owner is acquiring Premiere Stock for such Owner's own
account and not with a view to or for sale in connection with any public
distribution thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in
financial and business matters to enable him, her or it to evaluate the merits
and risks of an investment in Premiere Stock, (ii) has the ability to bear the
economic risk of acquiring Premiere Stock for an indefinite period and to afford
a complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and
the securities regulatory authorities of applicable states or
unless an exemption from such registration is available."]
[2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
--------------------------------------
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the
-5-
Uniform Terms or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
III. ADDITIONAL AGREEMENTS
---------------------------
3.1 Filings with State Offices. Upon the terms and subject to the
--------------------------
conditions of this Agreement, the Company and Merger Corp shall execute and file
the [Articles] [Certificate] of Merger with the Secretary of State of the State
of [Company State] and a Certificate of Merger with the Secretary of State of
the State of Georgia in connection with the Closing.
3.2 Conditions to Closing. The Companies, the Owners and Premiere agree to
---------------------
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
--------------------------------
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates, from and against
any and all Losses suffered or incurred by any such party by reason of or
arising out of any of the following:
(a) [insert matters which arise during and are unresolved
following due diligence]
[3.4 Tax Matters. The Owners understand that (i) while it is the mutual
-----------
intention of the parties hereto that the Merger qualify as a tax-free plan of
reorganization under Section 368(a) of the Code, Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.]
[3.5 Registration Rights. At the Closing. Premiere and the Owners shall
-------------------
[shall not]execute and deliver the Registration Rights Agreement.]
[3.6 Accounting Treatment.
--------------------
(a) The Company and each of the Owners has accurately completed
the Pooling Questionnaire required by Premiere prior to or contemporaneous with
the execution of this Agreement, and the statements therein are true and
correct.
(b) The Company and each of the Owners agrees not to take any
action from and after the date hereof that would prevent Premiere from
accounting for the business combination to be effected by the Merger as a
pooling of interests. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of
-6-
financial results of at least thirty (30) days of post-Merger combined
operations of Premiere and the Company. Premiere agrees that it shall publish
such results within forty-five (45) days after the end of the first fiscal
quarter of Premiere containing the required period of post-Merger combined
operations and that it shall notify the Company and each of the Owners promptly
following such publication. Premiere shall be entitled to place the following
restrictive legend on the shares of Premiere Stock issued pursuant to the Merger
to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of
interests" and may not be sold, nor may the owner thereof reduce his
risks relative thereto in any way, until such time as Premiere
Technologies, Inc. ("Premiere") has published the financial results
covering at least 30 days of combined operations after the effective
date of the merger through which the business combination was
effected.
[3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
-------------------- ------------
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere at least 30 days prior
to the Effective Time a written agreement, substantially in the form attached
hereto as Exhibit D "3]
[3.8 Tax Representations. In connection with the opinion to be rendered to
-------------------
Premiere by Xxxxxx & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.]
[3.9 Restricted Stock. All contractual restrictions or limitations on
----------------
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.]
[3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
----------------
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.]
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
-------------------------------------------------------
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
------------------
accordance with the requirements of the [Company State] Act and the Company
shall have provided Premiere
-7-
certified copies of such resolutions, and Owners holding no more than [____
percent (__%)] of the Company Common Stock issued and outstanding immediately
prior to the Effective Time shall have exercised any of the rights described in
Section 2.4.
4.2 Approval of Premiere and Merger Corp. The Board of Directors of
------------------------------------
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirements of applicable state
law.
4.3 Grand Solution Documents VTE, VTN, NAP and each of the Franchise
-------------------------
Companies shall have executed and delivered the Grand Solution Documents in the
forms attached hereto as Exhibit E.
[4.4 Employment and Noncompetition Agreements. The employees of the
-----------------------------------------
Company listed on Schedule 4.4 hereto shall have executed and delivered to
Premiere an employment and/or noncompetition and nondisclosure agreement in form
and substance reasonably satisfactory to Premiere.]
[4.5 Audited Financial Statements. Premiere shall have received financial
----------------------------
statements of the Company for the fiscal year(s) ended ________ (the "Audited
Financial Statements") prepared in accordance with GAAP and Regulation S-X
promulgated by the Commission, accompanied by an unqualified audit opinion of
Xxxxxx Xxxxxxxx LLP relating thereto. The Audited Financial Statements (i)
shall present fairly in all material respects the financial position of the
Company as of the dates indicated and present fairly in all material respects
the results of the Company's operations, cash flows and changes in owners equity
for the periods then ended, (ii) shall be in accordance with the books and
records of the Company, and (iii) shall not reflect any material change in the
Company's financial condition or results of operations from the condition and
results reported in the Financial Statements delivered by the Company prior to
the execution of this Agreement.]
[4.6 Pooling Letter. Premiere shall have received a letter, dated as of the
--------------
Effective Time, in form and substance reasonably acceptable to Premiere, from
Xxxxxx Xxxxxxxx LLP to the effect that the Merger will qualify for pooling of
interests accounting treatment, and no action shall have been taken by any
regulatory authority or any statute, rule, regulation or order enacted,
promulgated or issued by any regulatory authority, or any proposal made for any
such action by any regulatory authority which is reasonably likely to be put
into effect, that would prevent Premiere from accounting for the business
combination to be effected by the Merger as a pooling of interests.]
[4.7 Reorganization Opinion. Premiere shall have received an opinion of
----------------------
Xxxxxx & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.]
-8-
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
---------------------------------------------------------
AND THE OWNERS
--------------
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
------------------------------------
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
[5.2 Registration Rights. Premiere and each Owner shall have executed and
-------------------
delivered a Registration Rights Agreement.]
VI. MISCELLANEOUS
------------------
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
-------
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
Attn: ______________ Attn: ______________
Phone: (___) ___-___ Phone: (___) ___-___
Fax: (___) ___-___ Fax: (___) ___-___
If to the Owners: With a copy to:
_____________________ ______________________
_____________________ ______________________
_____________________ ______________________
Attn: ______________. Attn: _______________
Phone: (___) ___-___ Phone: (___) ___-____
Fax: (___) ___-___ Fax: (___) ___-____
6.2 Owner's Representative. The Owners' Representative for purposes of
----------------------
Section 10.2 of the Uniform Terms shall be _________________, who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
-------------------
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean _________ __, 1997.
------------------------
-9-
(b) "Knowledge" of the Company shall mean the personal knowledge
---------
after due inquiry of those facts that are known or should
reasonably have been known after due inquiry by _______ and
_______ and the knowledge of any such Persons obtained or which
would have been obtained from a reasonable investigation.
(c) "Outside Closing Date" shall mean _________ __, 1997.
--------------------
-10-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
a Georgia corporation
By:___________________________
Title:________________________
Attest:
By:_______________________________
Title:______________________________
COMPANY:
[FRANCHISEE]
a ____________
By:___________________________
Title:________________________
Attest:
By:_______________________________
Title:______________________________
OWNERS:
______________________________
[Owner's Address] [NAME]
an individual resident of the
State of _________
Witness:
By:_______________________________
Name:______________________________
-11-
EXHIBIT A
UNIFORM TERMS AND CONDITIONS
TABLE OF CONTENTS
I. REPRESENTATIONS AND WARRANTIES OF THE OWNERS....................... 1
1.1 Ownership Interest Held and Conveyed.......................... 1
1.2 Organization, Authority and Capacity.......................... 1
1.3 Authorization and Validity.................................... 1
1.4 Absence of Conflicting Agreements or Required Consents........ 2
1.5 Interested Transactions....................................... 2
1.6 Statements True and Correct................................... 2
II. REPRESENTATIONS AND WARRANTIES OF THE OWNERS AND THE COMPANY....... 2
2.1 Organization, Authority and Capacity......................... 2
2.2 Authorization and Validity................................... 3
2.3 Absence of Conflicting Agreements or Required Consents....... 3
2.4 Franchise Matters............................................ 3
2.5 Outstanding and Authorized Capitalization.................... 3
2.6 Subsidiaries, Investments and Predecessors................... 4
2.7 Financial Statements......................................... 4
2.8 Absence of Changes........................................... 4
2.9 No Undisclosed Liabilities................................... 5
2.10 Litigation, etc.............................................. 5
2.11 No Violation of Law.......................................... 5
2.12 Real and Personal Property................................... 5
2.13 Contracts and Commitments.................................... 6
2.14 Employment and Labor Matters................................. 7
2.15 Employee Benefit Matters..................................... 8
2.16 Insurance Policies........................................... 9
2.17 Environmental Matters........................................ 9
2.18 Accounts Receivable and Payable.............................. 10
2.19 Taxes........................................................ 10
2.20 Statements True and Correct.................................. 11
2.21 Intellectual Property Rights................................. 11
2.22 Company Products and Services................................ 12
III. REPRESENTATIONS AND WARRANTIES OF PREMIERE......................... 13
3.1 Organization, Authority and Capacity.......................... 13
3.2 Authorization and Validity.................................... 13
3.3 Absence of Conflicting Agreements or Required Consents........ 13
3.4 Outstanding and Authorized Capitalization..................... 13
3.5 SEC Filings; Financial Statements............................. 13
3.6 Statements True and Correct................................... 14
IV. ADDITIONAL COVENANTS AND AGREEMENTS................................ 14
4.1 Access to Company Information................................ 14
4.2 No-Shop...................................................... 14
4.3 Affirmative Covenants of the Company......................... 14
4.4 Negative Covenants of the Company............................ 16
4.5 Confidentiality.............................................. 17
4.6 Public Announcements......................................... 17
4.7 Noncompetition, Nonsolicitation and Nondisclosure............ 18
4.8 Approval of Transactions..................................... 19
4.9 Delivery of Schedules........................................ 20
4.10 Tax Returns.................................................. 20
4.11 Risk of Loss................................................. 20
4.12 State Takeover Laws.......................................... 20
4.13 Documents of the Company..................................... 20
4.14 Owner Covenant............................................... 20
4.15 Consents..................................................... 21
V. CONDITIONS TO OBLIGATIONS OF PREMIERE.............................. 21
5.1 Representations and Warranties............................... 21
5.2 Performance.................................................. 21
5.3 Document Delivery - General.................................. 21
5.4 Document Delivery - Asset Transfer........................... 22
5.5 Document Delivery - Stock Transfer........................... 22
5.6 Necessary Consents and Approvals............................. 23
5.7 No Material Adverse Change................................... 23
5.8 No Injunction, Etc........................................... 23
5.9 Satisfactory Due Diligence................................... 23
5.10 Legal Opinion................................................ 23
5.11 Escrow Agreement............................................. 23
5.12 Claims Letters............................................... 23
5.13 Owners' Equity............................................... 23
VI. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE OWNERS........... 24
6.1 Representations and Warranties................................ 24
6.2 Performance; Covenants........................................ 24
6.3 Document Delivery - General................................... 24
6.4 Document Delivery - Asset Transfer............................ 24
6.5 Document Delivery - Stock Transfer............................ 24
6.6 No Injunction, Etc............................................ 24
VII. CLOSING AND TERMINATION............................................ 25
7.1 Closing....................................................... 25
7.2 Right of Termination.......................................... 25
7.3 Effect of Termination......................................... 25
VIII. INDEMNIFICATION.................................................... 25
8.1 Indemnification of Premiere................................... 25
8.2 Notice and Opportunity to Defend.............................. 27
8.3 Survival, and Insurance....................................... 27
8.4 Establishment of Escrow....................................... 27
8.5 Arbitration................................................... 27
8.6 Other Rights and Remedies Not Affected........................ 27
IX. CERTAIN DEFINITIONS................................................ 28
X. MISCELLANEOUS...................................................... 32
10.1 Notices..................................................... 32
10.2 Owner's Representatives..................................... 33
10.3 Expenses.................................................... 33
10.4 Further Assurances.......................................... 33
10.5 Waiver...................................................... 33
10.6 Assignment.................................................. 34
10.7 Binding Effect.............................................. 34
10.8 Entire Agreement............................................ 34
10.9 Governing Law; Severability................................. 34
10.10 Counterparts................................................ 34
10.11 No Brokers.................................................. 34
10.12 Schedules and Exhibits...................................... 34
10.13 Headings.................................................... 34
10.14 Amendment................................................... 34
10.15 Enforcement................................................. 34
10.16 No Benefit to Third Parties................................. 35
EXHIBIT A
UNIFORM TERMS AND CONDITIONS
BACKGROUND
----------
The Owners, the Company and Premiere are those parties identified in that
certain Transfer Agreement among such parties to which these Uniform Terms and
Conditions are appended. The parties agree that the terms and conditions set
forth herein are made a part of and incorporated by reference into said Transfer
Agreement as if fully restated therein, provided that these Uniform Terms and
Conditions are subject in all respects to any contrary provision contained in
the Transfer Agreement and the Transfer Agreement shall control in the event of
any conflict with any provision herein. Capitalized terms not defined in the
text hereof have the meanings provided in the Transfer Agreement and herein,
including Article X hereof.
Premiere intends to acquire all franchisees of VTE other than the Company
(the "Other Companies" and together with the Company, the "Franchisee
Companies") and has entered or intends to enter into separate agreements for the
purchase of such Other Companies.
I. REPRESENTATIONS AND WARRANTIES OF THE OWNERS
--------------------------------------------
Each Owner, jointly and severally, represents and warrants the following to
Premiere:
1.1 Ownership Interest Held and Conveyed. Owner is the owner of all right,
------------------------------------
title and interest (legal, record and beneficial) in and to the Company Equity
Securities as set forth on Schedule 1.1, free and clear of any and all liens,
------------
encumbrances or restrictions of any nature whatsoever (except for any
restrictions on transfer imposed by securities laws), and Owner holds no other
interest in the Company. Except as provided in Schedule 1.1 or as specifically
------------
contemplated by this Agreement, no person or entity has any right or privilege
(whether preemptive or contractual) for the purchase of any Company Equity
Securities from Owner. Schedule 1.1 contains a complete list of all agreements
------------
or arrangements, whether written or oral, to which Owner is a party that relate
in any way to the Company Equity Securities. If the Transactions involve a Stock
Transfer, the delivery of such Company Equity Securities pursuant thereto will
transfer to Premiere good and marketable title to all such Company Equity
Securities held by such Owner, free and clear of all liens, encumbrances or
restrictions of any nature whatsoever other than any restrictions on transfer
imposed by federal or state securities laws.
1.2 Organization, Authority and Capacity. If Owner is a natural person,
------------------------------------
Owner has the full authority and capacity necessary to execute, deliver and
perform his or her obligations under the Transaction Documents to be executed
and delivered by Owner. If Owner is not a natural person, (i) Owner is an entity
of the type described in the Transfer Agreement, is duly organized, validly
existing and in good standing under the laws of its state of organization, and
has the full corporate, partnership or other power and authority necessary to
execute, deliver and perform its obligations under the Transaction Documents to
be executed and delivered by Owner, and (ii) Owner is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified or in good standing could have a material adverse effect on Owner's
ability to perform its obligations under the Transaction Documents to be
executed and delivered by Owner.
1.3 Authorization and Validity.
--------------------------
(a) If Owner is not a natural person, (i) the execution, delivery and
performance of the Transaction Documents to be executed and delivered by Owner
have been duly authorized by all necessary action on the part of Owner, and (ii)
the Transaction Documents to be executed and delivered by Owner
have been or will be, as the case may be, duly executed and delivered by Owner
and constitute or will constitute the legal, valid and binding obligations of
Owner, enforceable in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, fraudulent conveyance or other laws affecting
creditors' rights generally, or as may be modified by a court of equity.
(b) If Owner is a natural person, Owner has the legal capacity
required for executing, delivering and performing the Transaction Documents to
be executed and delivered by Owner. If Owner is married and Owner's interest in
the Company constitutes community property, the Transaction Documents to be
executed and delivered by Owner's spouse have been or will be, as the case may
be, duly executed and delivered by Owner's spouse and constitute or will
constitute the legal, valid and binding obligations of Owner's spouse,
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency or other laws affecting creditors' rights generally,
or as may be modified by a court of equity.
1.4 Absence of Conflicting Agreements or Required Consents. Except as set
------------------------------------------------------
forth on Schedule 1.4, the execution, delivery and performance by Owner of each
------------
of the Transaction Documents to be executed and delivered by Owner (i) do not
require the consent of or notice to any governmental or regulatory authority or
any other third party; (ii) if Owner is not a natural person, will not conflict
with any organizational document of Owner; (iii) will not conflict with or
result in a violation of any law, ordinance, regulation, ruling, judgment, order
or injunction of any court or governmental instrumentality to which Owner is
subject or by which Owner is bound; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, instrument, license or
permit material to the Transactions; and (v) will not create any encumbrance or
restriction upon the Company Equity Securities if the Transactions involve a
Stock Transfer.
1.5 Interested Transactions. Except as set forth on Schedule 1.5, Owner is
----------------------- ------------
not a party to any contract, loan or other transaction with the Company and does
not have any direct or indirect interest in or affiliation with any party to any
such a contract, loan or other transaction. Except as set forth on Schedule 1.5,
------------
Owner is not an employee, consultant, partner, principal, director or owner of,
and does not have any other direct or indirect interest in or affiliation with,
or membership in, any person or business entity that is engaged in a business
that competes with or is similar to the business of the Company.
1.6 Statements True and Correct. No representation or warranty made herein
---------------------------
by Owner, nor in any statement, certificate or instrument furnished or to be
furnished to Premiere by Owner pursuant to any Transaction Document, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein and
therein not misleading.
II. REPRESENTATIONS AND WARRANTIES OF THE OWNERS AND THE COMPANY
------------------------------------------------------------
The Company and the Owners jointly and severally represent and warrant the
following to Premiere:
2.1 Organization, Authority and Capacity. The Company is an entity of the
------------------------------------
type described in the Transfer Agreement, is duly organized, validly existing,
and in good standing under the laws of its state of organization, and has the
full corporate, partnership or other power and authority necessary to (i)
execute, deliver and perform its obligations under the Transaction Documents to
be executed and delivered by the Company and (ii) carry on its business as it
has been and is now being conducted and to own and lease the Assets which it now
owns or leases. The Company is duly qualified to do business and is in good
standing in the jurisdictions set forth in Schedule 2.1, which includes every
------------
jurisdiction in which the failure to be so qualified or in good standing would
have a material adverse effect on (i) the
-2-
Company's ability to perform its obligations under the Transaction Documents to
be executed and delivered by the Company or (ii) the Assets, results of
operations or prospects of the Company.
2.2 Authorization and Validity. The execution, delivery and performance of
--------------------------
the Transaction Documents to be executed and delivered by the Company have been
duly authorized by all necessary corporate, partnership or other action on the
part of the Company. The Transaction Documents to be executed and delivered by
the Company have been or will be, as the case may be, duly executed and
delivered by the Company and constitute or will constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, or other
laws affecting creditors' rights generally, or as may be modified by a court of
equity.
2.3 Absence of Conflicting Agreements or Required Consents. Except as set
------------------------------------------------------
forth on Schedule 2.3, the execution, delivery and performance by the Company of
------------
the Transaction Documents to be executed and delivered by the Company: (i) do
not require the consent of or notice to any governmental or regulatory authority
or any other third party; (ii) will not conflict with any provision of the
Company's organizational documents; (iii) will not conflict with or result in a
violation of any law, ordinance, regulation, ruling, judgment, order or
injunction of any court or governmental instrumentality to which the Company is
subject or by which the Company or any of its Assets are bound; (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, require any notice under, or accelerate or permit
the acceleration of any performance required by the terms of any agreement,
instrument, license or permit to which the Company is a party or by which the
Company or any of its properties are bound; and (v) will not create any lien,
encumbrance or restriction upon any of the Assets owned or leased by the
Company.
2.4 Franchise Matters.
-----------------
(a) Attached to Schedule 2.4(a) is a true and complete copy of
---------------------------
(i) the Franchise Agreement, (ii) the SRA, (iii) the NAP Agreement, (iv) each
other written agreement to which the Company or any Owner, on one hand, and VTE,
VTN or any Affiliate thereof, on the other hand, are party, and (v) a
description of all material terms of any oral agreement to which the Company or
any Owner, on one hand, and VTE, VTN or any Affiliate thereof, on the other
hand, are party. Except as set forth on Schedule 2.4(a), the Company (i) has not
---------------
received a notice of financial or other Default under any of the agreements
attached to or described in Schedule 2.4(a), and (ii) has not notified any other
---------------
party to any such agreement that it considers such party in Default under such
agreement.
(b) Schedule 2.4(b) contains a true, complete and correct copy
---------------
of the operating manual or other document containing all operating policies,
codes and requirements imposed on Franchise by VTE pursuant to the Franchise
Agreement.
2.5 Outstanding and Authorized Capitalization. All authorized and
-----------------------------------------
outstanding Company Equity Securities are accurately described on Schedule 2.5.
------------
If the Company is a corporation, no shares of capital stock are held in the
treasury of the Company except as set forth on Schedule 2.5. All outstanding
------------
Company Equity Securities are listed and held of record as indicated on Schedule
--------
1.1 and have been duly and validly issued, are fully paid and nonassessable.
---
None of such Company Equity Securities were issued in violation of preemptive
rights of any past or present holder of any Company Equity Security. Except as
set forth on Schedule 1.1, there are no outstanding warrants, options, rights,
------------
calls or other commitments of any nature relating to Company Equity Securities
and there are no outstanding securities of the Company convertible into or
exchangeable for any Company Equity Securities, in either case which have been
granted or created by the Company. Except as set forth on Schedule 2.5, the
------------
Company is not obligated to issue or repurchase any Company Equity Securities
for any reason and no person or entity has any right or privilege (whether
preemptive or contractual) for the purchase, subscription or issuance of any
unissued Equity Securities of the Company. There are no outstanding rights to
demand registration of
-3-
securities of the Company or to sell securities of the Company in connection
with a registration by the Company under the Securities Act.
2.6 Subsidiaries, Investments and Predecessors. Except as set forth on
------------------------------------------
Schedule 2.6, the Company has not owned and does not currently own, directly or
------------
indirectly, of record, beneficially or equitably, any capital stock or other
equity, ownership or proprietary interest in any corporation, partnership,
limited liability company, association, trust, joint venture or other entity.
Set forth on Schedule 2.6 is a listing of all predecessor companies of the
------------
Company, including the names of any entities from whom the Company previously
acquired material Assets, and any other entity of which the Company has been a
subsidiary or division. Except as listed on Schedule 2.6, the Company has not
------------
sold or disposed of, by way of Asset sale, stock sale, spin-off or otherwise,
any material Assets or business of the Company.
2.7 Financial Statements. Attached hereto as Schedule 2.7 are the
-------------------- ------------
financial statements of the Company for the fiscal years set forth therein, and
interim financial statements for the Company's most recently ended interim
period, which reflect the results of operations and financial condition of the
Company for such periods and as of the dates indicated (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
other than as indicated on Schedule 2.7 and except for (i) the omission of notes
------------
to interim Financial Statements, and (ii) the fact that interim Financial
Statements are subject to normal and customary year-end adjustments which will
not, in the aggregate, be material. The Financial Statements present fairly in
all material respects the financial position of the Company as of the dates
indicated and present fairly in all material respects the results of the
Company's operations for the periods then ended, and are in accordance with the
books and records of the Company, which have been properly maintained and are
complete and correct in all material respects.
2.8 Absence of Changes. Except as set forth on Schedule 2.8, and except
------------------ ------------
as contemplated by this Agreement, since the date of the Latest Balance Sheet,
the Company has conducted its business only in the ordinary course and has not:
(i) suffered any material adverse change in its working capital,
condition (financial or otherwise), Assets, liabilities, reserves, business
or operations;
(ii) paid, discharged or satisfied any liability other than in
the ordinary course of business and consistent with past practices;
(iii) written off as uncollectible any account receivable other
than in the ordinary course of business and in amounts not exceeding the
reserve or allowance for doubtful accounts included in the Latest Balance
Sheet;
(iv) compromised any debts, claims or rights or disposed of any
of its properties or Assets other than in the ordinary course of business
and consistent with past practices;
(v) entered into any commitments or transactions not in the
ordinary course of business or made capital expenditures or commitments;
(vi) made any change in any method of accounting or accounting
practice;
(vii) subjected any of its Assets, tangible or intangible, to
any lien, encumbrance or restriction of any nature whatsoever, except for
liens for current property taxes not yet due and payable;
-4-
(viii) increased any salaries, wages or employee benefits for
any employee of the Company;
(ix) hired, committed to hire or terminated any independent
contractor, or employee;
(x) declared, set aside or made any payment, dividend or other
distribution to any holder of a Company Equity Security or purchased,
redeemed or otherwise acquired, directly or indirectly, any Company Equity
Security;
(xi) terminated or amended any material contract, license or
other instrument to which the Company is a party or suffered any loss or
termination or threatened loss or termination of any existing business
arrangement or supplier or customer, the termination or loss of which, in
the aggregate, could materially and adversely affect the Company;
(xii) issued any Company Equity Security or otherwise effected
any change in its capital structure;
(xiii) commenced or settled any litigation; or
(xiv) agreed, whether in writing or otherwise, to take any
action described in this Section 2.8.
2.9 No Undisclosed Liabilities. Except as listed on Schedule 2.9 hereto,
-------------------------- ------------
the Company has no liabilities or obligations, whether accrued, absolute,
contingent or otherwise, except for liabilities and obligations (i) reflected in
the Financial Statements or (ii) incurred in the ordinary course of its business
since the date of the Latest Balance Sheet and immaterial in amount or effect on
the business, prospects, financial condition or results of operations of the
Company.
2.10 Litigation, etc. Except as listed on Schedule 2.10 hereto, (i) there
--------------- -------------
are no claims, lawsuits, actions, arbitrations, administrative or other
proceedings instituted or pending against the Company or against any director,
employee, employee benefit plan or Asset of the Company, and, to the Knowledge
of the Company and the Owners, no such matter is threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) and there is no basis for any
such action; (ii) to the Knowledge of the Company and the Owners, there are no
governmental or administrative investigations or inquiries pending that involve
the Company or any of its Assets; (iii) there are no judgments against or
consent decrees binding on the Company or any of its Assets; and (iv) there are
no claims not covered by insurance.
2.11 No Violation of Law. Except as set forth on Schedule 2.11, the
------------------- -------------
Company has not been and is not in violation of any applicable local, state or
federal law, ordinance, regulation, order, injunction or decree, or any other
requirement of any governmental body, agency or authority or court binding on
it, or relating to its property or business or its advertising, sales or pricing
practices, except for any such violations as would not individually or in the
aggregate have a material adverse effect on the Company, financial or otherwise.
Except as set forth on Schedule 2.11, the Company has and has always had in
-------------
effect all Permits necessary for it to own, lease and operate its Assets and to
conduct its business as it has been and is currently conducted, and there has
occurred no Default under any such Permit.
2.12 Real and Personal Property.
--------------------------
(a) Schedule 2.12(a) sets forth a list of all material Assets of the
----------------
Company, including, without limitation, all furniture, fixtures and equipment.
Except as set forth on Schedule 2.12(a), the
----------------
-5-
Company (i) has good and valid title to all of its Assets, including all the
Assets reflected in the Financial Statements; and (ii) owns such Assets free and
clear of all liens, encumbrances or restrictions of any nature whatsoever.
(b) Schedule 2.12(b) contains a true and correct description of all
----------------
real property owned or leased by the Company, including all improvements located
thereon. Except as set forth on Schedule 2.12(b), the Company has good and
----------------
marketable title to all real property owned by it, free and clear of any liens,
encumbrances or restrictions of any nature whatsoever. Attached to Schedule
--------
2.12(b) are true, correct and complete copies of all leases, deeds, easements
-------
and other documents and instruments concerning the matters listed on Schedule
--------
2.12(b). No condemnation or similar actions are currently in effect or pending
-------
against any part of any real property owned or leased by the Company and, to the
best knowledge of the Company and the Owners, no such action is threatened
against any such real property. To the Knowledge of the Company, there are no
encroachments, leases, easements, covenants, restrictions, reservations or other
burdens of any nature which impair in any material respect the use of any owned
or leased real property in a manner consistent with past practices nor does any
part of any building structure or any other improvement thereon encroach on any
other property.
(c) If the Transactions involve an Asset Transfer, the delivery of
the Transferred Assets in accordance with the Transaction Documents will
transfer and convey good and valid title to such Transferred Assets free and
clear of all liens, encumbrances or restrictions of any nature whatsoever, other
than liens for liabilities reflected in the Financial Statements or as may be
specifically contemplated by the Transaction Documents.
(d) The present zoning, subdivision, building and other ordinances
and regulations applicable to any owned or leased real property permit the
continued operation, use, occupancy and enjoyment of such real property
consistent with past practices, and the Company is in compliance with, in all
material respects, and has received no notices of violations of, any applicable
zoning, subdivision or building regulation, ordinance or other law, regulation,
or requirement including, but not limited to, certificate of need. The Company
has all rights and easements necessary for public ingress thereto and egress
therefrom and for the provision of all utility services thereto, including any
required curb cut or street opening permits or licenses for vehicular access
over presently existing roads and driveways.
(e) The Company's Assets (including all buildings and improvements in
connection therewith) are in good operating condition and repair, ordinary wear
and tear excepted, and such Assets include all rights, properties, interests in
properties, and Assets necessary to permit Premiere to carry on the Company's
business as presently conducted.
(f) Except as set forth on Schedule 2.12(b), each piece of real
----------------
property owned by the Company is separately assessed for real property tax
assessment purposes and is not combined with any other real property for such
tax assessment purposes. Schedule 2.12(f) contains true, complete and correct
----------------
copies of the most recent tax bills for each piece of real property set forth on
Schedule 2.12(b).
----------------
2.13 Contracts and Commitments.
-------------------------
(a) Schedule 2.13 contains a complete and accurate list of all
-------------
contracts, agreements, commitments, instruments and obligations (whether written
or oral, contingent or otherwise) of the Company of or concerning the following
matters (the "Company Agreements"):
(i) the lease (as lessee or lessor) or license (as licensee or
licensor) of any real or personal property (tangible or intangible);
-6-
(ii) the employment, termination, severance or engagement of or
with respect to any officer, director, employee, consultant or agent;
(iii) any arrangement between or among the Company, its
Affiliates, the Owners, any director, officer or employee thereof and/or
Related Persons;
(iv) any arrangement limiting the freedom of the Company to
compete in any manner in any line of business or requiring the Company to
share profits;
(v) any arrangement that could reasonably be anticipated to have
a material adverse effect on the Company, financial or otherwise;
(vi) any arrangement not in the ordinary course of business;
(vii) any power of attorney, whether limited or general, granted
by or to the Company;
(viii) any other arrangement that requires performance for a
period of more than 90 days or that requires payments in excess of $10,000;
(ix) any contract or arrangement relating to the borrowing of
money by the Company or the guarantee by the Company of any third party
obligation;
(x) any agreement or arrangement involving Intellectual Property
Rights (other than contracts entered into in the ordinary course of
business with customers and "shrink-wrap" software licenses);
(xi) any contract or arrangement relating to the provision of
data processing, network communication or other technical services to or by
the Company or any Affiliate thereof; and
(xii) any contract or arrangement relating to the provision,
purchase or sale of goods or services, other than contracts entered into in
the ordinary course of business and involving payments not in excess of
$5,000.
(b) The Company has delivered to Premiere true and complete copies of
all of the Company Agreements. Except as indicated on Schedule 2.13, the
-------------
Company Agreements are valid and effective in accordance with their terms, and
there is not under any of such Company Agreements (i) any existing or claimed
Default by the Company or (ii) to the Knowledge of the Company and the Owners,
any existing or claimed Default by any other party. Except as indicated on
Schedule 2.13, the continuation, validity and effectiveness of the Company
-------------
Agreements will not be affected by the Transactions and the Transactions will
not result in a breach of or Default under, or require the consent of any other
party to, any of the Company Agreements. There is no actual or, to the
Knowledge of the Company and the Owners, threatened termination, cancellation or
limitation of any Company Agreements that would have a material adverse effect
on the Company, financial or otherwise. To the Knowledge of the Company and the
Owners, there is no pending or threatened bankruptcy, insolvency or similar
proceeding with respect to any other party to the Company Agreements.
2.14 Employment and Labor Matters.
----------------------------
(a) Schedule 2.14(a) sets forth (i) the number of all full-time and
----------------
part-time employees of the Company; and (ii) the name and compensation paid to
each independent contractor, employee of or
-7-
consultant to the Company who received salary and bonuses for either of the
Company's two most recently ended fiscal years in excess of $20,000.
(b) To the Knowledge of the Company, the Company is in compliance in
all material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages and hours,
occupational safety and health, including laws concerning unfair labor practices
within the meaning of Section 8 of the National Labor Relations Act, and the
employment of non-residents under the Immigration Reform and Control Act of
1986.
(c) Except as disclosed on Schedule 2.14(b),
----------------
(i) there are no charges, governmental audits,
investigations, administrative proceedings or complaints concerning the
Company's employment practices pending or, to the Knowledge of the Company
and the Owners, threatened before any federal, state or local agency or
court, and, to the Knowledge of the Company and the Owners, no basis for
any such matter exists;
(ii) the Company is not a party to any union or collective
bargaining agreement, and, to the Knowledge of the Company and the Owners,
no union attempts to organize the employees of the Company have been made,
nor are any such attempts now threatened; and
(iii) the Company has not experienced any organized
slowdown, work interruption, strike, or work stoppage by its employees.
2.15 Employee Benefit Matters. The employee benefit plans and agreements
------------------------
described in Schedule 2.15 hereto are the only employee benefit plans and
-------------
agreements maintained by the Company for the benefit of its shareholders,
officers, directors, employees, former employees, or independent contractors,
including, without limitation, (i) profit sharing, pension, ESOP, 401(k) or
other retirement plans or programs, (ii) current and deferred compensation,
severance, vacation, stock purchase, stock option, bonus and incentive
compensation benefits and (iii) medical, hospital, life, health, accident,
disability, death and other fringe and welfare benefits, including any split-
dollar life insurance policies, all of which plans, programs, practices,
policies and other individual and group arrangements and agreements, including
any unwritten compensation, fringe benefit, payroll or employment practices,
procedures or policies of any kind or description are hereinafter referred to as
the "Benefit Plans." Except as disclosed on Schedule 2.15, there are no
-------------
contributions or payments due with respect to any of the Benefit Plan, nor will
any such contributions or payments be due or required to be paid on or prior to
the Closing Date. Each Benefit Plan of the Company has been operated and
administered in substantial compliance with the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and the provisions of the Code
applicable to it. No Benefit Plan of the Company or its ERISA Affiliates which
is subject to the minimum funding standards of ERISA or the Code, if any, has
incurred any accumulated funding deficiency within the meaning of ERISA or the
Code. All contributions with respect to a Benefit Plan of the Company or its
ERISA Affiliates that is subject to Code Section 412 or ERISA Section 302 have
been timely made and there is no lien or expected to be a lien under Code
Section 412(n) or ERISA Section 302(f) or tax under Code Section 4971. No
Benefit Plan of the Company or its ERISA Affiliates has a "liquidity shortfall"
as defined in Code Section 412(m)(5). Neither the Company nor its ERISA
Affiliates are subject to or can reasonably be expected to become subject to a
lien under Code Section 401(a)(29). No event has occurred in connection with a
Benefit Plan of the Company or its ERISA Affiliates that could result in
liability to the Company under Title IV of ERISA. The Company has not incurred
any liability to the Pension Benefit Guaranty Corporation in connection with any
Benefit Plan of the Company or its ERISA Affiliates which is subject to Title IV
of ERISA, if any. The Assets of each Benefit Plan of the Company or its ERISA
Affiliates that is subject to Title IV of ERISA, if any, are
-8-
sufficient to provide all "benefit liabilities" (as defined in ERISA Section
4001(a)(16) under such Benefit Plan if such Benefit Plan terminated, and are
also sufficient to provide all other benefits due under the Benefit Plan
(including, but not limited to, ancillary, disability, shutdown, early
retirement and welfare benefits). Neither the Company nor its ERISA Affiliates
have had an "obligation to contribute" (as defined in ERISA Section 4212) to a
"multiemployer pension plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A) at any time. No event which constitutes a reportable event as defined
in Section 4043 of ERISA has occurred or is continuing with respect to any
Benefit Plan covered by ERISA. No facts exist which will result in a material
increase in the premium costs of any Benefit Plan for which benefits are insured
or a material increase in benefit costs of any Benefit Plan which provides self-
insured benefits. No "prohibited transaction" (as defined in ERISA Section 406
or Code Section 4975) has occurred with respect to any Benefit Plan. None of the
Benefit Plans has any current or projected liability in respect of post-
employment or post-retirement health or medical or life insurance benefits for
former or retired employees of the Company, except as required to avoid excise
taxes under Code Section 4980B. All Benefit Plans subject to Code Section 4980B
or Part 6 of Title I of ERISA have been maintained in compliance with the
requirements of Code Section 4980B and Part 6 of Title I of ERISA. There is no
contract, agreement, plan or arrangement covering any employee or former
employee of the Company that could result in the payment of any amount that
would not be deductible under Code Sections 162(m) or 280G. As of the Closing
Date, the Company has no material liabilities under any Benefit Plan that is not
reflected in the Financial Statements, except for accruals for contributions and
expenses for the current year.
2.16 Insurance Policies. Except as described on Schedule 2.16, all of the
------------------ -------------
Assets and business of the Company are insured in such amounts and against such
losses, casualties or risks as are reasonably customary for similar properties
and businesses, and the Company has maintained such insurance continuously from
the earlier of (i) the date of its inception and (ii) the date of inception of
any of its predecessors. Schedule 2.16 sets forth a complete and accurate list
-------------
and description of all insurance policies in force naming the Company, or any
employee, consultant or independent contractor thereof, or Owner, as an insured
or beneficiary or as a loss payee or for which the Company has paid or is
obligated to pay all or part of the premiums, including, without limitation, all
liability, professional liability, fire, health and life insurance policies. All
such policies are in full force and effect and the premiums due thereon have
been timely paid. The Company has not received notice of any pending or
threatened termination or premium increase (retroactive or otherwise) with
respect thereto, and, to the Knowledge of the Company and the Owners, the
Company and the Owners are in compliance with all conditions contained therein.
Except as set forth on Schedule 2.16, there are no pending claims against such
-------------
insurance by the Company as to which insurers are defending under reservation of
rights or have denied liability, and except as set forth on Schedule 2.16, there
-------------
exists no claim under such insurance that has not been properly filed by the
Company. To the Knowledge of the Company and the Owners, there are no
outstanding or unfulfilled requirements or recommendations of any insurance
company insuring the Company regarding any repairs to or work to be performed
with respect to the Assets of the Company. The Company has complied with any
such requirements and recommendations as to which the Company has received
notice. Schedule 2.16 contains a listing of all claims made and loss histories
-------------
in respect of any insurance maintained by the Company or any predecessor or any
Owner during the past three (3) years.
2.17 Environmental Matters. Except as set forth in Schedule 2.17, there
--------------------- -------------
are no present or past Environmental Conditions in any way relating to the
business, properties or Assets of the Company. For the purposes of this
Agreement, "Environmental Condition" means (a) the introduction into the
environment of any pollution, including without limitation any contaminant,
irritant or pollutant or other toxic or hazardous substance, in violation of any
federal, state or local law, ordinance or governmental rule or regulations, as a
result of any spill, discharge, leak, emission, escape, injection, dumping or
release of any kind whatsoever of any substance or exposure of any type in any
work places or to any medium, including without limitation air, land, surface
waters or ground waters, or from any generation,
-9-
transportation, treatment, discharge, storage or disposal of waste materials,
raw materials, hazardous materials, biomedical waste including blood, toxic
materials or products of any kind or from the storage, use or handling of any
hazardous or toxic materials or other substances, as a result of which the
Company has or may become liable to any person or by any reason of which any of
the Assets of the Company may suffer or be subjected to any lien, encumbrance or
restriction of any nature, or (b) any noncompliance with any federal, state or
local environmental law, rule, regulation or order as a result of or in
connection with any of the foregoing.
2.18 Accounts Receivable and Payable. Except as set forth on Schedule
------------------------------- --------
2.18.1, the accounts receivable outstanding as of the date of the Latest Balance
------
Sheet are, and the accounts receivable outstanding as of the Closing Date will
be, (i) valid and genuine accounts receivable arising solely out of bona fide
sales and delivery of goods, performance of services and other business
transactions in the ordinary course of business consistent with past practice,
(ii) subject to no defenses, counterclaims, or rights of setoff, and (iii)
collectible within ninety (90) days after billing at the full recorded amount
thereof less the recorded allowance for doubtful accounts reflected on the
Latest Balance Sheet or the Closing Date Balance Sheet, as applicable. Except as
set forth on Schedule 2.18.2, no accounts payable of the Company are, at this
---------------
date, over 30 days old and no accounts payable of the Company will be over 30
days old at the Closing Date.
2.19 Taxes.
-----
(a) Except as listed in Schedule 2.19 or as reflected in the
-------------
Financial Statements, there does not exist and will not after the Effective Time
exist any liability for taxes which may be asserted by any taxing authority
against, and no lien or other encumbrance for taxes will attach to, the Company
or any of its Assets other than (i) taxes due in respect of periods for which
tax returns are not yet due and for which adequate accruals have been made in
the Financial Statements and (ii) taxes accrued in the ordinary course of
business between the date of the Financial Statements and the Closing Date. All
federal, state and local tax returns and tax reports required to be filed prior
to the date hereof with respect to the Company have been filed (other than
returns for which extensions to file have been granted) with the appropriate
governmental agencies in all jurisdictions in which such returns and reports are
required to be filed, all of which are true, correct and complete, and all
amounts shown as owing thereon have been paid.
(b) Except as listed on Schedule 2.19, the Company has not received
-------------
notice of any tax claims being asserted or any proposed assessment by any taxing
authority and no tax returns of the Company have been examined by the Internal
Revenue Service (the "IRS") or the appropriate state agencies for any fiscal
year or period ended prior to the date hereof, and the Company is not presently
under, nor has it received notice of any, contemplated investigation or audit by
the IRS or any state agency concerning any fiscal year or period ended prior to
the date hereof. Except as listed on Schedule 2.19, the Company has not
-------------
executed any extension or waivers of any statute of limitations on the
assessment or collection of any tax due that is currently in effect.
(c) The Company and any predecessors in interest have withheld or
collected from each payment made to each of their employees the amount of all
taxes required to be withheld or collected therefrom and the Company and any
predecessors in interest have paid the same to the proper tax depositories or
collecting authorities.
(d) For purposes hereof, "taxes" shall mean any federal, state,
county, local, foreign or other tax, charge, imposition or other levy (including
interest or penalties thereon) including without limitation, income taxes
estimated taxes, excise taxes, sales taxes, use taxes, gross receipts taxes,
franchise taxes, taxes on earnings and profits, employment and payroll related
taxes, property taxes, real property transfer taxes, Federal Insurance
Contributions Act taxes, taxes on value added and import duties,
-10-
whether or not measured in whole or in part by net income, imposed by the United
States or any political subdivision thereof or by any jurisdiction other than
the United States or any political subdivision thereof.
(e) If the Company is a Subchapter S corporation within the meaning
of the Code, it has been a Subchapter S corporation at all times since the date
specified on Schedule 2.19 under federal law and corresponding provisions of any
-------------
applicable state law and does not have any net unrealized built-in gain within
the meaning of Section 1374 of the Code.
2.20 Statements True and Correct. No representation or warranty made
---------------------------
herein by the Company or any of the Owners, nor in any statement, certificate or
instrument to be furnished to Premiere by the Company or any of the Owners
pursuant to any Transaction Document, contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make these statements contained herein and therein not misleading.
2.21 Intellectual Property Rights. Schedule 2.21(a)(i) sets forth (i) a
---------------------------- -------------------
brief description of each Company Intellectual Property Right, and (ii) with
respect to each Company Intellectual Property Right registered or capable of
registration with any regulatory authority or for which an application for
registration has been filed with any regulatory authority, the names of the
jurisdictions covered by the applicable registration or application, if any.
Schedule 2.21(a)(ii) identifies and provides a brief description of each
--------------------
Intellectual Property Right licensed to the Company by any Person (except for
any Intellectual Property Right that is licensed to the Company under any third
party software license generally available to the public at a cost of less than
Ten Thousand Dollars ($10,000)), and identifies the license agreement under
which such Intellectual Property Right is being licensed to the Company. The
Company is not in Default under any such license agreements. Except as set forth
in Schedule 2.21(a)(iii), the Company has valid and marketable title to all
---------------------
Company Intellectual Property Rights used in or reasonably necessary for the
conduct of its business free and clear of all liens and other encumbrances,
except for third party Intellectual Property Rights licensed to the Company, as
to which it has a valid right to use with respect to such Company Intellectual
Property Rights. No present or former employee or owner of the Company and no
other Person owns or has any proprietary, financial or other interest, direct or
indirect, in whole or in part, in any Intellectual Property Right which the
Company owns, possesses or uses in its operations as now or heretofore
conducted. All personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception and
development of any Company Intellectual Property Right (i) have been party to a
"work-for-hire" relationship with the Company that has accorded the Company
full, effective, and exclusive original ownership of all tangible and intangible
property thereby arising with respect to such Company Intellectual Property
Right, and/or (ii) have executed appropriate instruments of assignment in favor
of the Company as assignee that have conveyed to the Company full, effective,
and exclusive ownership of all tangible and intangible property thereby arising
with respect to such Company Intellectual Property Right. Except as set forth in
Schedule 2.21(a)(iv), the Company is not obligated to make any material payment
--------------------
to any Person for the use of any Company Intellectual Property Right. Except as
set forth in Schedule 2.21(a)(v), the Company has not developed jointly with any
-------------------
other Person any Company Intellectual Property Right with respect to which such
other Person has any rights. The Company is the owner of or has a license to any
Intellectual Property Right sold or licensed to a third party by the Company in
connection with its business operations, and the Company has the right to convey
by sale or license any Intellectual Property Rights so conveyed.
(b) Except as set forth in Schedule 2.21(b), the Company has taken all
----------------
reasonable and customary measures and precautions necessary to protect and
maintain the confidentiality and secrecy of all Company Intellectual Property
Rights (except Company Intellectual Property Rights whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Company Intellectual Property Rights. Except as set forth in Schedule
--------
2.21(b), the Company has not
-------
-11-
disclosed or delivered, or permitted the disclosure or delivery to any Person of
the source code, or any portion or aspect of the source code, of any Company
Intellectual Property Rights.
(c) The Company is not infringing, misappropriating or making any
unlawful use of, and no the Company has not at any time infringed,
misappropriated or made any unlawful use of, and, except as set forth in
Schedule 2.21(c), the Company has not received any notice or other communication
----------------
(in writing or otherwise) of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Intellectual Property
Right owned or used by any other Person. To the Knowledge of the Company, no
other Person is infringing, misappropriating or making any unlawful use of, and
no Intellectual Property Right owned or used by any other Person infringes or
conflicts with, any Company Intellectual Property Right.
(d) The Company Intellectual Property Rights constitute all the
Intellectual Property Rights necessary to enable the Company to conduct its
business in the manner in which such business has been and is being conducted.
The Company has not licensed any of the Company Intellectual Property Rights to
any Person on an exclusive basis and, except as set forth in Schedule 2.21(d),
----------------
the Company has not entered into any covenant not to compete or contract
limiting its ability to exploit fully any of the Company Intellectual Property
Rights or to transact business in any market or geographical area or with any
Person.
(e) Except as disclosed in Schedule 2.21(e), every officer, director,
----------------
or employee of the Company is a party to a contract which requires such officer,
director or employee to assign any interest in any Intellectual Property Right
to the Company and to keep confidential any trade secrets, proprietary data,
customer information, or other business information of the Company, and no such
officer, director or employee is party to any contract with any Person other
than the Company which requires such officer, director or employee to assign any
interest in any Intellectual Property Right to any Person other than the Company
or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than the Company.
Except as disclosed in Schedule 2.21(e), no officer, director or employee of the
----------------
Company is party to any contract which restricts or prohibits such officer,
director or employee from engaging in activities competitive with any Person,
including the Company.
2.22 Company Products and Services. The Company Products and Services
-----------------------------
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided with respect
thereto by or on behalf of the Company, and there has not been during the last
three (3) years any claim made against the Company by any customer of the
Company or by any other Person alleging that any Company Product and Service
(including each version thereof that has been licensed or otherwise made
available by the Company to any Person) does not conform in all material
respects with any specification, documentation, performance standard,
representation or statement made or provided by or on behalf of the Company,
and, to the Knowledge of the Company, there is not a reasonable basis for any
such claim. No product liability or warranty claims which individually or in the
aggregate could exceed the reserves therefor on the Financial Statements have
been communicated in writing to or threatened in writing against the Company.
The Company Products and Services, as of the date hereof, during and after the
calendar year 2000 A.D., include design, function and performance capabilities
such that the Company Products and Services shall not abnormally end and/or have
invalid and/or incorrect results from and/or performance or functional
degradation because of the then-current date. The design and function of the
Company Products and Services shall ensure year 2000 A.D. and shall include, but
not be limited to, date data century recognition, calculations that accommodate
same century and multicentury formulas and date values, and date data interface
values that reflect the century.
-12-
III. REPRESENTATIONS AND WARRANTIES OF PREMIERE
------------------------------------------
Premiere hereby represents and warrants the following to the Company and
the Owners:
3.1 Organization, Authority and Capacity. Premiere is a corporation duly
------------------------------------
organized, validly existing, and in good standing under the laws of the State of
Georgia and has the full power and authority necessary to (i) execute, deliver
and perform its obligations under the Transaction Documents to be executed and
delivered by it, and (ii) carry on its business as it has been and is now being
conducted and to own and lease the properties and Assets which it now owns or
leases. Premiere is duly qualified to do business and is in good standing in
each jurisdiction in which a failure to be so qualified or in good standing
would have a material adverse effect on (i) Premiere's ability to perform its
obligations under the Transaction Documents to be executed and delivered by it
or, (ii) the Assets, results of operations or prospects of Premiere.
3.2 Authorization and Validity. The execution, delivery and performance of
--------------------------
the Transaction Documents to be executed and delivered by Premiere have been
duly authorized by all necessary action by Premiere. The Transaction Documents
to be executed and delivered by Premiere have been or will be, as the case may
be, duly executed and delivered by Premiere and constitute or will constitute
the legal, valid and binding obligations of Premiere, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency,
or other laws affecting creditors' rights generally, or as may be modified by a
court of equity.
3.3 Absence of Conflicting Agreements or Required Consents. The execution,
------------------------------------------------------
delivery and performance by Premiere of the Transaction Documents to be executed
and delivered by it: (i) do not require the consent of or notice to any
governmental or regulatory authority or any other third party; (ii) will not
conflict with any provision of Premiere's articles of incorporation or bylaws;
or (iii) will not conflict with or result in a violation of any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which Premiere is a party or by which Premiere or any of its
properties are bound.
3.4 Outstanding and Authorized Capitalization. The authorized capital
-----------------------------------------
stock of Premiere consists of (a) one hundred and fifty million (150,000,000)
shares of common stock, par value $.01 per share, of which _________ shares were
issued and outstanding as of ___________ __, 1997, and (b) five million
(5,000,000) shares of preferred stock, par value $.01 per share, none of which
are issued and outstanding as of the date of this Agreement.
3.5 SEC Filings; Financial Statements.
---------------------------------
(a) Premiere has timely filed and made available to the Owners and the
Company all SEC Documents required to be filed by Premiere since March 5, 1996
(the "Premiere SEC Reports"). The Premiere SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Laws and other applicable laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Premiere SEC Reports or necessary in order to make the statements in such
Premiere SEC Reports, in light of the circumstances under which they were made,
not misleading. No Premiere Subsidiary is required to file any SEC Documents.
(b) Each of the Premiere Financial Statements (including, in each
case, any related notes) contained in the Premiere SEC Reports, including any
Premiere SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP
-13-
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
interim statements, as permitted by Form 10-Q of the SEC), and fairly presented
in all material respects the consolidated financial position of Premiere and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring year-
end adjustments which were not or are not expected to be material in amount or
effect.
3.6 Statements True and Correct. No representation or warranty made herein
---------------------------
by Premiere, nor in any statement, certificate or instrument to be furnished to
the Company or any of the Owners by Premiere pursuant to any Transaction
Document, contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make these statements
contained therein not misleading.
IV. ADDITIONAL COVENANTS AND AGREEMENTS
-----------------------------------
4.1 Access to Company Information. At all times prior to the Closing, the
-----------------------------
Company and the Owners will afford the officers and authorized representatives
of Premiere access to all of the Company's properties, books and records that
may relate to or concern the Transactions and will furnish Premiere with such
additional financial, operating and other information as to the business and
properties of the Company as Premiere may from time to time reasonably request.
Premiere shall also be allowed access, upon reasonable notice, to consult with
the officers, employees, accountants, counsel and agents of the Company in
connection with such investigation of the properties and business of the
Company. No such investigation shall diminish or otherwise affect any of the
representations, warranties, covenants or agreements of any party under this
Agreement.
4.2 No-Shop. Unless and until this Agreement is terminated pursuant to
-------
Article VII hereof, neither the Company nor any Owner shall directly or
indirectly, through any officer, director, employee, agent, intermediary or
otherwise: (i) solicit, initiate or encourage submission of proposals or offers
from any person or other entity relating to any purchase of an equity interest
in the Company, or any merger, sale of substantial Assets or any similar
transaction whether or not resulting in a change of control of the Company; (ii)
participate in any discussions or negotiations regarding, or furnish to any
other person or other entity, any information with respect to, or otherwise
cooperate or encourage, any effort or attempt by any other person or other
entity to purchase any equity interest in the Company, or engage in a merger,
purchase of substantial Assets or any similar transaction whether or not such
transaction contemplates a change of control the Company; or (iii) approve or
undertake any such transaction. The Company and the Owners shall promptly (but
in any event within twenty-four (24) hours) communicate to Premiere the terms of
any such oral or written proposal or offer upon knowledge or receipt of such
proposal or offer.
4.3 Affirmative Covenants of the Company. From the date hereof until the
------------------------------------
earlier of the Effective Time or the termination of this Agreement, the Company
covenants and agrees that, unless the prior written consent of Premiere shall
have been obtained, and except as otherwise expressly contemplated herein or in
the Transfer Agreement, the Company shall:
(i) operate its business only in the usual, regular, and ordinary
course of business, consistent with past practices;
(ii) preserve intact its business organization, licenses, permits,
vendor and supplier relationships and subscriber relationships;
-14-
(iii) retain the services of its employees, agents and consultants on
terms and conditions not less favorable than those existing prior to the
date hereof and ensure that there are no material or adverse changes to
employee relations;
(iv) keep and maintain its Assets in their present condition, repair
and working order, except for normal depreciation and wear and tear, and
maintain its insurance, rights and licenses;
(v) pay all accounts payable of the Company in accordance with past
practice and collect all accounts receivable in accordance with past
practice, but not less than in accordance with prudent business practices;
(vi) consult with Premiere prior to undertaking any new business
opportunity outside the ordinary course of business and not undertake such
new business opportunity without the prior written consent of Premiere;
(vii) confer on a regular and frequent basis with one or more
designated representatives of Premiere to report material operational
matters and to report the general status of ongoing business operations;
(viii) upon request by Premiere, make available to Premiere true and
correct copies of all internal management and control reports (including
aging of accounts receivable, listings of accounts payable, and inventory
control reports) and financial statements related to the Company and
furnished to management of the Company;
(ix) cause all tax returns that have not been filed prior to the date
hereof to be prepared and filed on or before the date such tax return is
required to be filed (taking into account any extensions of the filing
deadlines granted); provided, however, that any such tax return (other than
routine employment and sales tax returns) shall not be filed without a
reasonable opportunity for prior review and comment by Premiere;
(x) as soon as reasonably practicable after they become available,
but in no event more than ten (10) days following the end of each calendar
month, deliver to Premiere true and complete copies of its monthly
financial statements for each calendar month ending subsequent to the date
hereof on the format historically utilized by the Company;
(xi) perform in all material respects all obligations under
agreements relating to or affecting its Assets, properties or rights;
(xii) keep in full force and effect present insurance policies or
other comparable insurance coverage; and
(xiii) notify Premiere of (i) any event or circumstance which is
reasonably likely to have a material adverse effect on the Company or would
cause or constitute a breach of any of the Company's representations,
warranties or covenants contained herein; or (ii) any unexpected change in
the normal course of business or in the operation of the Company's Assets,
and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), adjudicatory
proceedings, budget meetings or submissions involving any material
property. The Company agrees to keep Premiere fully informed of such
events and to permit Premiere's representatives prompt access to all
materials prepared in connection therewith.
-15-
4.4 Negative Covenants of the Company. From the date hereof until the
---------------------------------
earlier of the Effective Time or the termination of this Agreement, the Company
covenants and agrees that it will not do any of the following without the prior
written consent of Premiere, except as may be contemplated herein or by the
Transfer Agreement:
(i) take any action which would (i) adversely affect the
ability of any party to the Transaction Documents to obtain any consents
required for the transactions contemplated thereby, or (ii) adversely
affect the ability of any party hereto to perform its covenants and
agreements under the Transaction Documents;
(ii) amend any of its organizational or governing documents;
(iii) incur any additional debt obligation or other obligation
for borrowed money except in the ordinary course of the business of the
Company consistent with past practices, or impose, or suffer the
imposition, on any Asset of the Company of any lien or permit any such lien
to exist;
(iv) repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any Company Equity Securities, or any securities
convertible into any Company Equity Securities, or declare or pay any
dividend or make any other distribution in respect of Company Equity
Securities;
(v) other than pursuant to the Transaction Documents, issue,
sell, pledge, encumber, authorize the issuance of, enter into any contract
to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional Company Equity
Securities or any rights with respect to any Company Equity Securities;
(vi) purchase or acquire any Assets or properties, whether real
or personal, tangible or intangible, or sell or dispose of any Assets or
properties, whether real or personal, tangible or intangible, except in the
ordinary course of business and consistent with past practices;
(vii) adjust, split, combine or reclassify any Company Equity
Securities or issue or authorize the issuance of any other securities in
respect of or in substitution for Company Equity Securities, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber any Asset;
(viii) purchase any securities or make any material investment,
either by purchase of stock or other securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any entity, or otherwise
acquire direct or indirect control over any other entity;
(ix) grant any increase in compensation or benefits to the
employees or officers of the Company; pay any severance or termination pay
or any bonus other than pursuant to written policies or written contracts
in effect as of the date hereof and disclosed on the Schedules hereto;
---------
enter into or amend any severance agreements with officers of the Company;
or grant any increase in fees or other increases in compensation or other
benefits to directors of the Company;
(x) enter into or amend any employment contract between the
Company and any person or entity (unless such amendment is required by law)
that the Company does not have the unconditional right to terminate without
liability (other than liability for services already rendered), at any time
on or after the Effective Time;
-16-
(xi) adopt any new employee benefit plan or make any material
change in or to any existing employee benefit plans other than any such
change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such
plan;
(xii) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws or regulatory accounting
requirements or GAAP;
(xiii) commence any litigation other than in accordance with past
practice, settle any litigation involving any liability of the Company for
material money damages or restrictions upon the operations of the Company;
(xiv) modify, amend or terminate any material contract or waive,
release, compromise or assign any material rights or claims;
(xv) make or commit to make any capital expenditure, or enter
into any lease of capital equipment as lessee or lessor;
(xvi) take any action, or omit to take any action, which would
cause any of the representations and warranties contained in Article II or
the Transfer Agreement to be untrue or incorrect; or
(xvii) make any loan to any person or increase the aggregate
amount of any loan currently outstanding to any person.
4.5 Confidentiality. Each of Premiere, the Company and the Owners agree
---------------
that from the date hereof until the earlier of termination of the Transfer
Agreement or the Effective Time, it will not, and will use reasonable commercial
efforts to ensure that none of its representatives, agents or employees will,
without the prior written consent of Premiere or the Company, as applicable, use
or disclose to or file with any other person any confidential or non-public
information relating to the other party, except for: (i) use or disclosures
required, in the reasonable judgment of Premiere, in connection with the
Transactions, and (ii) use or disclosures that are required by any law,
regulation, rule, ordinance or judicial process. Notwithstanding the foregoing,
Premiere shall not, in the course of any investigation it shall deem necessary
and desirable in connection with the transactions contemplated by this
Agreement, be prohibited from discussing the business and Assets of the Company
with VTE, the other Franchisee Companies, or their respective owners, or with
others having business dealings with the Company. The Company and the Owners
agree to restrict their use or disclosure of confidential information concerning
the other Franchisee Companies and their respective owners in a manner
consistent with the restrictions on Premiere contained in this Section 4.5 and
Premiere agrees that it will cause each of the other Franchisee Companies and
their respective owners to enter into a provision similar to this Section 4.5
with respect to information obtained by them concerning the Company and the
Owners. The Owners and the Company hereby acknowledge that the Premiere Common
Stock is publicly traded and that the Securities Laws prohibit each Owner and
any other Person who has received material non-public information about Premiere
from purchasing or selling securities of Premiere or from communicating such
information to any other Person under circumstances in which it is reasonably
foreseeable that such Person is likely to purchase or sell such securities in
reliance on such information.
4.6 Public Announcements. Neither the Company nor the Owners, nor any of
--------------------
their representatives, shall make any public announcement with respect to the
Transfer Agreement or the Transactions without the prior written consent of
Premiere, and Premiere shall not make the initial public announcement with
respect thereto without the prior written consent of the Company, unless, in
either
-17-
case, required by law or judicial process, in which case notification shall be
given to Premiere or to the Company, as the case may be, prior to such
disclosure.
4.7 Noncompetition, Nonsolicitation and Nondisclosure.
-------------------------------------------------
(a) The parties acknowledge:
(i) that each Owner has substantial special expertise and
experience in the Business Activities (as defined below) and that such Owner
possesses substantial contacts with suppliers and customers of the Company, and
that such expertise, experience and contacts have been built up over a number of
years, including such Owner's period of ownership of Company Equity Securities;
(ii) that each Owner will be well-compensated under this
Agreement for the expertise, knowledge and contacts he or she has obtained, as
well as the goodwill that he or she has built up in the Company, and that this
Section 4.7 is being executed as an integral part of such Owner's sale of all of
his or her Company Equity Securities to Purchaser pursuant to the Transactions,
an express element of which includes the sale of the goodwill such Owner's
ownership and service has generated, and for which sale such Owner will receive
substantial remuneration hereunder;
(iii) that each Owner has occupied a position of trust and
responsibility with the Company in which he or she has had access to a
substantial amount of Confidential Information (as defined below) and Trade
Secrets (as defined below), and that Premiere is entering into this Agreement in
reliance upon such Owner's agreement not to use or disclose such Trade Secrets
and Confidential Information, not to compete against Premiere or any Affiliate,
and not to solicit Premiere's or any such Affiliate's customers during the time
periods set forth in this Agreement;
(iv) that due to each Owner's special experience and his or
her close identification with goodwill of the Company, the harm caused by such
Owner's violation of the provisions of this Section 4.7 cannot reasonably or
adequately be compensated solely by damages in an action at law;
(v) that Owner is capable of competing with and
substantially harming Premiere and its Affiliates and has more than adequate
capital, experience, customer contact, supplier contact, name recognition and
industry reputation to start a competing business, which would deprive Premiere
of all or substantially all of its bargained for goodwill and other
consideration in the Transactions; and
(vi) that the terms of this Section 4.7 are necessary to
protect Premiere's legitimate business interests, Trade Secrets and Confidential
Information and that Owner's competition with Premiere or any of its Affiliates
or other violation of the covenants set forth below would cause substantial and
irreparable harm to Premiere.
(b) For purposes of this Section 4.7, the following terms shall
have the meanings set forth below:
(i) "Business Activities" shall mean the provision of
interactive voice messaging services.
(ii) "Confidential Information" means information, other
than Trade Secrets, which relates to the Company, the Company's business, or the
Company's suppliers or customers that is not generally known by persons not
employed by the Company or VTE and which Owner has learned as a consequence of
his or her relationship to the Company or VTE. Such information includes,
without limitation, to the extent it is not considered a Trade Secret, financial
information, strategic plans and forecasts, marketing plans and
-18-
forecasts, customer lists, customer pricing and order data, supplier lists, or
technical information relating to the Company's products or services.
"Confidential Information" shall not include information which has become
generally available to the public by the act of one who has the right to
disclose such information without violating a legal right of Premiere or the
Company.
(iii) "Trade Secrets" shall mean all secret, proprietary or
confidential information regarding the Company or its business, including any
and all information not generally known to, or ascertainable by, persons not
employed by the Company or VTE, the disclosure or knowledge of which would
permit those persons to derive actual or potential economic value therefrom or
to cause economic or financial harm to the Company or VTE. "Trade Secrets"
shall not include information that has become generally available to the public
by the act of one who has the right to disclose such information without
violating a legal right of Premiere or the Company.
(c) For three (3) years immediately following the execution of
this Agreement, no Owner shall, directly or indirectly, by himself or herself or
in conjunction with any person, firm or corporation other than Premiere, engage
in Business Activities, or help anyone else engage in the Business Activities,
within the Protected Territory. Notwithstanding anything contained herein to the
contrary, Owner may own up to two percent (2%) of the shares of a publicly-held
corporation which competes with Premiere or any of its Affiliates, provided none
of his or her other relationships with such corporation violate the terms of
this Section 4.7.
(d) No Owner shall, for himself or herself or on behalf of
others, use or disclose any Confidential Information or Trade Secrets except in
the furtherance of the business of Premiere or any of its Affiliates. Trade
Secrets shall not lose the protection of this provision at the end of such
three-year period. No Owner shall use or disclose any Trade Secret at any time
while the information remains a Trade Secret. Nothing in this provision shall
limit the protections available to Premiere under any federal, state or local
statute or legal principle governing confidential information or trade secrets.
(e) Notwithstanding anything else in this Agreement to the
contrary, the terms of this Section 4.7 shall survive the expiration or
termination of this Agreement. If an Owner violates any portion of this Section
4.7, he or she shall forfeit and return all compensation due to him or her, or
already paid to him or her pursuant to this Agreement.
(f) Each Owner acknowledges that his or her agreement not to
compete with Premiere or any of its Affiliates is necessarily of a special,
unique and extraordinary nature, and that the loss arising from a breach thereof
cannot reasonably be compensated by money damages and will cause Premiere and
any such Affiliate irreparable harm. Accordingly, upon the failure of any Owner
to comply with the terms of this Section 4.7 at any time, Premiere and any such
Affiliate shall be entitled to injunctive or other extraordinary relief in case
of such breach, such injunctive or other extraordinary relief to be cumulative
to, but not in limitation of, any other remedies to which Premiere or any such
Affiliate may be entitled.
(g) Premiere and the Owners intend that Premiere have the
broadest possible protection from unfair competition by the Owners with Premiere
or any of its Affiliates, consistent with public policy. Accordingly, should any
court of competent jurisdiction determine that, consistent with the established
precedent of the forum state, the public policy of such state requires a more
limited restriction in duration, geographic area, nature of restricted activity,
or any combination thereof, it would be in furtherance of the intentions of the
parties hereto for the court to so interpret and construe the terms of this
Agreement, or to modify the Agreement, to apply to only such more limited
restrictions to an appropriate degree.
4.8 Approval of Transactions. Each Owner, through the execution and
-------------------------
delivery of the Transfer Agreement, irrevocably votes for and approves the
Transactions in its capacity as a holder of Company
-19-
Equity Securities and each such Owner does hereby waive any required notice for
any meeting concerning such matters. At any further meeting of the Owners of the
Company called to vote on the Transactions or in any other circumstances upon
which a vote, consent or other approval with respect to the Transactions is
sought, such Owner shall vote (or cause to be voted), such Owner's Company
Equity Securities in favor of the Transactions and the execution, delivery and
performance by the Company of the Transfer Agreement. Each Owner acknowledges
and agrees that he, she or it has had adequate opportunity to review the terms
and conditions of the Transactions and to seek independent legal, tax and
financial advice.
4.9 Delivery of Schedules. All Schedules required to be delivered by the
--------------------- ---------
Company and the Owners shall be delivered to Premiere in completed form upon
execution hereof. The last such Schedule delivered shall be accompanied by a
--------
certificate, executed by the Company and the Owners, stating that all Schedules
---------
required to be delivered by such parties hereunder have been delivered.
4.10 Tax Returns. The Owners shall cause to be prepared and filed, at
-----------
their expense, a short-period tax return of the Company ending on the Closing
Date, which shall be provided to Premiere for its prior review and approval,
such approval not to be unreasonably withheld or delayed. If the Company is a
Subchapter S corporation within the meaning of the Code, the Company shall
maintain its status as a Subchapter S corporation under the Code and any
corresponding provisions of any applicable state law through the Closing Date
and shall file such short-period return with that status. Premiere agrees to
make available any information in its or the Company's possession which may
reasonably be required by the Owners to complete any such short-period return.
4.11 Risk of Loss. The Company shall retain all risk of condemnation,
------------
destruction, loss or damage due to fire or other casualty from the date of this
Agreement until the Closing. If the condemnation, destruction, loss, or damage
occurring prior to the Closing is such that the operation of the Company is
materially interrupted or curtailed or any of the Assets of the Company are
materially affected, then Premiere shall have the right to terminate this
Agreement. If Premiere nonetheless elects to close, the Company shall retain as
the surviving corporation in the merger all net condemnation proceeds or third
party insurance proceeds to Premiere and the Consideration shall be adjusted at
the Closing to reflect such condemnation, destruction, loss or damage to the
extent that insurance or condemnation proceeds are not sufficient to cover such
destruction, loss or damage provided, however, in such event, the Company shall
have the right to terminate this Agreement prior to the Closing if the
Consideration is to be reduced by more than twenty percent (20%).
4.12 State Takeover Laws. The Company and each of the Owners shall take
-------------------
all necessary steps to exempt the Transactions from, or if necessary to
challenge the validity or applicability of, any applicable "moratorium," "fair
price," "business combination," "control share," or other anti-takeover laws.
4.13 Documents of the Company. True and correct copies of (i) the
------------------------
organizational documents and all amendments thereto of the Company (certified by
the Secretary of State of the state in which the Company was organized, as
applicable), (ii) the Company's minutes, which accurately reflect all
proceedings of the board of directors of the Company (and all committees
thereof) and (iii) the record books of the Company, which contain true, complete
and accurate records of the ownership of the Company, shall be provided to
Premiere at Closing in accordance with Section 5.4(c).
4.14 Owner Covenant. Each Owner acknowledges and agrees that such Owner
--------------
does not have and will not claim any individual interest in the Assets, property
or rights of the Company and, after the Closing, will claim no further equity or
other interest in the Company or its Assets, properties or rights.
-20-
4.15 Consents. The Company and the Owners shall use commercially
--------
reasonable efforts to obtain all necessary consents prior to the Closing, and to
the extent any such necessary consent has not been obtained, the Company and the
Owners shall continue their efforts to obtain such consent after the Closing. In
order, however, that the full value of the Company's contracts and agreements
may be realized, at Premiere's request, direction and expense, the Owners and
the Company shall take such action as shall be reasonably necessary in order to
preserve for the benefit of Premiere and the Company the rights and obligations
of the Company under such contracts and agreements.
V. CONDITIONS TO OBLIGATIONS OF PREMIERE
-------------------------------------
In addition to any conditions set forth in the Transfer Agreement, the
obligation of Premiere to consummate the Transactions is subject to the
satisfaction or waiver, at or prior to Closing, of each of the following
conditions:
5.1 Representations and Warranties. The representations and warranties of
------------------------------
the Company and the Owners set forth in this Agreement, or any document or
instrument delivered to Premiere hereunder, shall be true and correct as of the
Effective Time with the same force and effect as if such representations and
warranties had been made at and as of the Effective Time, except with respect to
any of such representations and warranties referring to a state of facts
existing on a specified date prior to the Closing Date, it shall be sufficient
if at the Effective Time such representation and warranty continues to describe
accurately the state of facts existing on the date so specified.
5.2 Performance. All of the terms, covenants and conditions of the
-----------
Transaction Documents to be complied with or performed by the Company or the
Owners at or prior to Closing shall have been complied with and performed in all
material respects.
5.3 Document Delivery - General. The Company and the Owners shall have
---------------------------
delivered the following:
(a) A good standing certificate regarding the Company and any
Owner that is not a natural person, certified by the Secretary of State of such
party's state of organization dated within fifteen (15) business days of the
Closing;
(b) A certificate dated as of the Closing Date signed by the
duly authorized officers of the Company and by the Owners certifying that the
representations and warranties of the Company and the Owners set forth herein
are true and correct in all material respects as of the Effective Time and that
the Company and each of the Owners have fulfilled all of the conditions of this
Article V;
(c) A certificate certifying that the documents provided
pursuant to Section 4.13 are true, accurate and complete;
(d) Resolutions of the Company and any Owner that is not a
natural person in form and substance satisfactory to Premiere approving the
execution, delivery and performance of this Agreement and the consummation of
the Transactions, certified by an appropriate officer of the Company and any
such Owner;
(e) An incumbency certificate certifying the identity of the
officers of the Company and any Owner that is not a natural person;
(f) Such further assurances, certificates or opinions as may be
specified in the Transfer Agreement with respect to the tax consequences of the
Transactions; and
-21-
(g) A certificate of the chief financial officer of the Company
certifying that the Closing Date Balance Sheet presents fairly in all material
respects the financial condition of the Company as of the Closing Date and is in
accordance with the books and records of the Company.
5.4 Document Delivery - Asset Transfer. If the Transactions involve an
----------------------------------
Asset Transfer, the Company and the Owners shall have delivered the following:
(a) A Xxxx of Sale, Assignment and Assumption Agreement
satisfactory to Premiere conveying the Transferred Assets as provided in the
Transfer Agreement;
(b) An acknowledgment of each Owner disclaiming any individual
interest in the Transferred Assets; and
(c) Such warranty deeds, surveys, title insurance policies,
zoning certificates, environmental reports and other matters concerning any
owned or leased real property as Premiere shall reasonably require, at its
expense, concerning the condition thereof and the conveyance of good and
marketable thereto in the case of such owned property.
5.5 Document Delivery - Stock Transfer. If the Transactions involve a
----------------------------------
Stock Transfer, the Company and the Owners, as applicable, shall have delivered
the following:
(a) Certificates representing the Company Equity Securities
being purchased or converted into the consideration specified in the Transfer
Agreement, as they case may be, together with accompanying stock transfer powers
or instruments of assignment, duly endorsed in blank;
(b) Resignations of each of the officers and directors of the
Company effective as of the Effective Time;
(c) Releases, in form and substance satisfactory to Premiere, of
each Owner and each officer and director of the Company concerning any claim
against the Company other than accrued wages and benefits;
(d) All books and records of the Company, including all
corporate and other records, minute books, stock record books, stock registers,
books of accounts, contracts, agreements and such other documents or
certificates as shall be reasonably requested by Premiere;
(e) Such documents as shall be reasonably acceptable to Premiere
by which the Company shall convey and assign to any Owner, and by which any
Owner shall accept and assume, any Asset or liability of the Company as
specified by the Transfer Agreement to be conveyed to and assumed by any such
Owner;
(f) If the Stock Transfer also involves a merger, evidence that
said merger is effective under the laws of the jurisdiction of each constituent
entity to the merger;
(g) If the Stock Transfer also involves a merger, documentary
evidence that the transfer of certain rights and Assets to the surviving
corporation in the Merger, as contemplated by the Transfer Agreement, has
occurred; and
(h) All agreements or arrangements, whether written or oral,
between the Company and any other Person, including without limitation any
Owner, that relate in any manner to the Company Equity Securities shall have
been terminated.
-22-
5.6 Necessary Consents and Approvals. Premiere, the Company and the Owners
--------------------------------
shall have obtained all licenses, consents and permits, and provided all
notices, necessary in order for Premiere, the Company and the Owners to
consummate the Transactions and for the continued operation of the business of
the Company after the Effective Time consistent with its operation prior to the
Effective Time, including all consents and approvals listed on the Schedules
---------
hereto. No consent so obtained which is necessary to consummate the Transactions
shall be conditioned or restricted in a manner which in the reasonable judgment
of the Board of Directors of Premiere would so materially adversely impact the
economic or business benefits of the Transactions that, had such condition or
requirement been known, Premiere would not have entered into this Agreement
5.7 No Material Adverse Change. There shall not have occurred any
--------------------------
material adverse change in the business, Assets, liabilities or condition,
financial or otherwise, of the Company between the date hereof and the Effective
Time, and a certificate shall have been delivered to Premiere to such effect
signed by each of the Owners and such executive officers of the Company as
Premiere may request.
5.8 No Injunction, Etc. No action, proceeding, investigation or
------------------
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
Agreement or the consummation of the Transactions, or which is related to or
arises out of the business or operations of the Company, if such action,
proceeding, investigation or legislation, in the reasonable judgment of Premiere
or its counsel, would make it inadvisable to consummate such transactions.
5.9 Satisfactory Due Diligence.
--------------------------
(a) Premiere shall in all respects be reasonably satisfied with
the results of its due diligence investigation of the Company, including its
continuing review of matters contained or not contained in the Schedules.
(b) Premiere shall have received Uniform Commercial Code and
court and docket searches (conducted through a date reasonably approximate in
time to the Closing) in all jurisdictions where the Company has any material
personal property or fixtures, which shall be in form, scope and substance
satisfactory to Premiere and its counsel, and which shall not disclose any
liens, security interests or encumbrances in the property or Assets of the
Company that are not listed on the Schedules hereto.
---------
5.10 Legal Opinion. Premiere shall have received an opinion of counsel to
-------------
the Company and the Owners in form and substance reasonably satisfactory to
Premiere.
5.11 Escrow Agreement. The Escrow Agent, each of the Owners and the
----------------
Company shall have executed and delivered the Escrow Agreement.
5.12 Claims Letters. Each of the Company, directors and officers of the
--------------
Company and the other Persons listed in Schedule 5.12 shall have executed and
-------------
delivered to Premiere releases concerning any claim against VTE, VTN or the NAP
in form and substance satisfactory to Premiere.
5.13 Owners' Equity. The Owners' equity as of the Closing shall not be
--------------
less than the Owners' equity as of December 31, 1996, excluding for purposes of
the calculation of such Owners' equity the effects of (i) all costs, fees, and
charges, including fees and charges of the Company's accountants, counsel and
financial advisors, whether or not accrued or paid, that are related to the
Transactions and (ii) any reductions in Owners' equity resulting from any
actions or changes in policies of the Company taken at the request of Premiere.
-23-
VI. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE OWNERS
-------------------------------------------------------
In addition to any conditions set forth in the Transfer Agreement, the
obligations of the Company and the Owners to close the Transactions are subject
to the satisfaction or waiver, at or prior to Closing, of each of the following
conditions:
6.1 Representations and Warranties. The representations and warranties of
------------------------------
Premiere set forth in this Agreement, or any document or instrument delivered to
any party hereunder, shall be true and correct as of the Effective Time with the
same force and effect as if such representations and warranties had been made at
and as of the Effective Time, except with respect to any of such representations
and warranties referring to a state of facts existing at a specified date prior
to the Closing Date, it shall be sufficient if at the Effective Time such
representation and warranty continues to describe accurately the state of facts
existing on the date so specified.
6.2 Performance; Covenants. All of the terms, covenants and conditions of
----------------------
this Agreement to be complied with or performed by Premiere at or prior to the
Closing shall have been complied with and performed in all material respects.
6.3 Document Delivery - General Premiere shall have delivered the
---------------------------
following:
(a) The consideration required under the Transfer Agreement;
(b) A certificate dated as of the Closing Date signed by a duly
authorized officer of Premiere certifying that the representations and
warranties of Premiere set forth herein are true and correct in all material
respects as of the Effective Time and that Premiere has fulfilled all of the
conditions of this Article VI; and
(c) Resolutions adopted by the Board of Directors of Premiere in
form and substance satisfactory to the Company and the Owners approving the
execution, delivery and performance of this Agreement and the consummation of
the Transactions, certified by the Secretary of Premiere.
6.4 Document Delivery - Asset Transfer. If the Transactions involve an
----------------------------------
Asset Transfer, Premiere shall have delivered the following:
(a) A Xxxx of Sale, Assignment and Assumption Agreement
satisfactory to the Company and the Owners by which Premiere shall have assumed
and agreed to perform and satisfy the Assumed Liabilities after the Effective
Time.
6.5 Document Delivery - Stock Transfer. If the Transactions involve a
----------------------------------
Stock Transfer, Premiere shall have delivered the following:
(a) If the Stock Transfer also involves a merger, evidence that
said merger is effective under the laws of the jurisdiction of each constituent
entity to the merger; and
(b) Certificates representing the issuance of shares of Premiere
Stock as required by the Transfer Agreement.
6.6 No Injunction, Etc. No action, proceeding, investigation or
------------------
legislation shall have been instituted, threatened or proposed before any court,
governmental agency, or legislative body to enjoin, restrain, prohibit or obtain
substantial damages in respect of, or which is related to, arises out of, this
-24-
Agreement or the consummation of the Transactions, or which is related to or
arises out of the business or operations of Premiere, if such action,
proceeding, investigation or legislation, in the reasonable judgment of the
Company or its counsel, would make it inadvisable to consummate such
transactions.
VII. CLOSING AND TERMINATION
-----------------------
7.1 Closing. The consummation of the Transactions shall take place at the
-------
offices of Xxxxxx & Bird, One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000-0000 on the Anticipated Closing Date, or at such other
time and date as Premiere, the Company and the Owners may mutually agree.
7.2 Right of Termination. The Transfer Agreement and the Transactions may
--------------------
be terminated as between Premiere, the Company and the Owners at any time prior
to the Closing Date:
(a) By the mutual written consent of Premiere and the Company;
(b) By Premiere in the event that the conditions set forth in
Article V of this Agreement shall not have been satisfied or waived by the
Outside Closing Date, unless such satisfaction shall have been frustrated or
made impossible by any act or failure to act of Premiere; and
(c) By the Company in the event that the conditions set forth in
Article VI of this Agreement shall not have been satisfied or waived by the
Outside Closing Date, unless such satisfaction shall have been frustrated or
made impossible by any act or failure to act of the Company or one or more of
the Owners.
7.3 Effect of Termination. In the event that this Agreement is terminated
---------------------
in accordance with Section 7.2, the Transfer Agreement shall become void and of
no further force or effect, without any liability on the part of any of the
parties hereto or their respective owners, directors, officers or employees,
except the obligations of each party under this Section 7.3 and the obligations
of each party to preserve the confidentiality of documents, certificates and
information furnished to such party pursuant thereto and for any obligation or
liability of any party based on or arising from any breach or default by such
party with respect to its representations, warranties, covenants or agreements
contained in the Transaction Documents.
VIII. INDEMNIFICATION
---------------
8.1 Indemnification of Premiere.
---------------------------
(a) Subject to the provisions of this Article VIII, each Owner
shall, severally and not jointly, indemnify and hold harmless Premiere, and its
officers, directors, agents or Affiliates, from and against any and all demands,
claims, actions or causes of action, assessments, losses, diminution in value,
damages (including special and consequential damages), liabilities, costs and
expenses, including but not limited to reasonable attorneys' fees ("Losses"),
suffered or incurred by any such party by reason of or arising out of any of the
following:
(i) the breach by such Owner of any representation or
warranty contained in Article I hereof or in any document or instrument
delivered by such Owner in connection with the Transaction Documents; and
-25-
(ii) the non-fulfillment of any covenant or agreement of
such Owner contained in Article IV hereof or in the Transfer Agreement.
(b) Subject to the provisions of this Article VIII, the Owners
and, if the Transactions involve an Asset Transfer, the Company, shall jointly
and severally indemnify and hold harmless Premiere, and its officers, directors,
agents or Affiliates, from and against any and all Losses suffered or incurred
by any such party by reason of or arising out of any of the following:
(i) the breach by the Company of any representation or
warranty contained in Article II hereof or in any Transaction Document or
any document or instrument delivered by the Company in connection
therewith;
(ii) the non-fulfillment of any covenant or agreement of
the Company or the Owners contained any Article IV hereof or in the
Transfer Agreement;
(iii) if the Transactions involve an Asset Transfer,
(A) any liability or obligation of the Company
not included in the Assumed Liabilities, and
(B) the operation and conduct of the business of
the Company prior to the Effective Time;
(iv) if the Transactions involve a Stock Transfer,
(A) any liability or obligation of the Company
expressly assumed and retained by any Owner, and
(B) any claim or demand by any person asserting
any interest in any Company Equity Security or seeking
dissenter's or appraisal rights or any other claim in
respect of the Transactions, provided that indemnification
as to dissenter's or appraisal rights shall not apply in
respect of any claimant thereof as to which the Company
notified Premiere in writing prior to the Closing; and
(v) the items listed in Section 3.3 of the Transfer
Agreement.
(c) If the Transaction is to accounted for as a pooling of
interests, no claim for indemnification with respect to any alleged
misrepresentation or breach of warranty under Section 8.1(a)(i) or Section
8.1(b)(i) may be made after the later of (i) the ninetieth (90th) day after
receipt by Premiere of its audited financial statements covering a period of at
least thirty (30) days after the Effective Time or (ii) for matters that would
not be reasonably expected to be encountered in the audit process, one year
following the Effective Time; provided, however, that the right to
-------- -------
indemnification shall extend beyond such period with respect to any claim for
which written notice was given to the Owners during such period but shall expire
on the expiration of the applicable statutes of limitations unless an action has
been brought with respect thereto, and provided further, that the
----------------
representations and warranties set forth in Sections 1.1 through 1.4, Section
1.6, Sections 2.1 through 2.3, Section 2.5, Section 2.17 and Section 2.19 shall
survive until the expiration of the statutes of limitations applicable to any
claims or causes of actions with respect to matters covered thereby. Other than
as set forth above, (i) claims for indemnification with respect to any matter in
a Transaction to be accounted for as a pooling of interests, and (ii) without
regard to the limitations set forth above, all claims for indemnification with
respect to a
-26-
Transaction to be accounted for as a purchase or other than as a pooling of
interests, may be made at any time prior to the expiration of the applicable
statutes of limitations with respect to the matter.
8.2 Notice and Opportunity to Defend. The party indemnified under this
--------------------------------
Article VIII (the "Indemnified Party") shall notify in writing the indemnifying
party (the "Indemnifying Party") of any matter giving rise to an obligation to
indemnify and the Indemnifying Party shall defend such claim at its expense with
counsel reasonably acceptable to the Indemnified Party, provided that the
Indemnifying Party may not settle any such claim without the consent of the
Indemnified Party, which consent will not be unreasonably withheld or delayed.
The Indemnified Party agrees to cooperate with the Indemnifying Party and to
make reasonably available to the Indemnifying Party any necessary records or
documents in the possession of the Indemnified Party which are necessary to
defend such claim. If the Indemnifying Party does not defend or settle such
claim, the Indemnified Party may do so without the Indemnifying Party's
participation, in which case the Indemnifying Party shall pay the expenses of
such defense, and the Indemnified Party may settle or compromise such claim
without the Indemnifying Party's consent. The failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent that the Indemnifying Party is
actually prejudiced by such failure to give notice.
8.3 Survival and Insurance. The representations and warranties of the
----------------------
parties contained in the Transaction Documents or in any document or instrument
delivered in connection therewith shall survive the Closing and shall not be
extinguished thereby notwithstanding any investigation or other examination by
any party. Any indemnified Loss that is not covered by insurance maintained by
the Indemnifying Party shall be reduced by the amount of any insurance proceeds
actually received from insurance maintained by the Indemnified Party.
8.4 Establishment of Escrow. At the Effective Time, the Owners shall
-----------------------
deliver to the Escrow Agent certificates, or cash, as the case may be,
representing the General Escrow Amount and, if applicable, the Specific Escrow
Amount in accordance with the Transfer Agreement. The General Escrow Amount and
the Specific Escrow Amount shall be held by the Escrow Agent pursuant to the
terms of the Escrow Agreements.
8.5 Arbitration. All disputes arising under this Article VIII (other than
-----------
claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Owners' Representative and Premiere in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration shall be held in such place in Atlanta, Georgia as may be specified
by the arbitrator (or any place agreed to by the Owners' Representative,
Premiere and the arbitrator). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Article VIII; provided, however,
if necessary, such decision and satisfaction procedure may be enforced by either
the Owners' Representative or Premiere in any court of record having
jurisdiction over the subject matter or over any of the parties to this
Agreement. All costs and expenses incurred in connection with any such
arbitration proceeding (including reasonable attorneys fees) shall be borne by
the party against which the decision is rendered, or, if no decision is
rendered, such costs and expenses shall be borne equally by the Indemnitors as
one party and the Indemnitees as the other party. If the arbitrator's decision
is a compromise, the determination of which party or parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
made by the arbitrator on the basis of the arbitrator's assessment of the
relative merits of the parties' positions.
8.6 Other Rights and Remedies Not Affected. The rights of the
--------------------------------------
Indemnitees under this Article VIII are independent of and in addition to such
rights and remedies as the Indemnitees may have at law or inequity or otherwise
based upon any inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Indemnitor contained herein or in any
certificate, schedule or exhibit furnished by such
-27-
party in connection herewith, or based upon the failure of an Indemnitor to
perform any covenant, agreement or undertaking required by the terms hereof to
be performed by such Indemnitor, including without limitation the right to seek
specific performance, recession or restitution, none of which rights or remedies
shall be affected or diminished hereby.
IX. CERTAIN DEFINITIONS
------------------------
In addition to the terms defined elsewhere herein, following terms used herein
shall have the meanings set forth below:
"1933 Act" - the Securities Act of 1933, as amended.
--------
"1934 Act" - the Securities Exchange Act of 1934, as amended.
--------
"Agreement" - The Transfer Agreement to which these Uniform Terms and
---------
Conditions are appended and these Uniform Terms and Conditions, including the
Appendices, Exhibits and Schedules delivered pursuant thereto and hereto.
"Affiliate" - of a Person shall mean: (i) any other Person directly, or
---------
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
"Anticipated Closing Date" - shall be the date set forth in the Transfer
------------------------
Agreement.
"ASRs 130 and 135" shall mean SEC Accounting Series Release Nos. 130 and 135.
----------------
"Asset Transfer" - The purchase pursuant to the Transactions by Premiere, or
--------------
either of its Affiliates, of substantially all of the Assets of the Company as
specified in the Transfer Agreement.
"Assets" - of a Person shall mean all of the assets, properties, businesses
------
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"Assumed Liabilities" - If the Transactions involve an Asset Transfer, those
-------------------
liabilities, obligations and agreements of the Company identified as the
"Assumed Liabilities" in the Transfer Agreement.
"Closing" - The closing of the Transactions.
-------
"Closing Date" - The date upon which the closing of the Transactions shall
------------
occur.
"Closing Date Balance Sheet" - The unaudited balance sheet of the Company as
--------------------------
of the close of business on the Closing Date prepared by the Company.
"Code" - The Internal Revenue Code of 1986, as amended.
----
"Company" - The entity identified as such in the Transfer Agreement.
-------
-28-
"Company Equity Securities" - Equity securities of the Company of any type,
-------------------------
including but not limited to common stock, preferred stock, limited partnership
interests, general partnership interests, limited liability company interests,
options to purchase any of the foregoing and securities convertible into any of
the foregoing.
"Company Intellectual Property Rights" - any Intellectual Property Right used
------------------------------------
by or reasonably useful to the Company in the course of its business.
"Company Products and Services" - the interactive voice messaging services and
-----------------------------
related equipment provided by the Company to customers in the course of its
business operations.
"Contract" - any written or oral agreement, arrangement, authorization,
--------
commitment, contract, indenture, instrument, lease, obligation, plan, practice,
restriction, understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or its
capital stock, Assets or business.
"Default" - (i) any breach or violation of, default under, contravention of,
-------
or conflict with, any Contract, Law, Order, or Permit, (ii) any occurrence of
any event that with the passage of time or the giving of notice or both would
constitute a breach or violation of, default under, contravention of, or
conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence of
any event that with or without the passage of time or the giving of notice would
give rise to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the current
terms of, or renegotiate, or to accelerate the maturity or performance of, or to
increase or impose any Liability under, any Contract, Law, Order, or Permit.
"Effective Time" - The time on the Closing Date when all deliveries to be made
--------------
on the Closing Date have been made and all actions to be taken have been taken,
and the parties are agreed that the Closing has occurred.
"ERISA Affiliate" - of any entity means any other entity which, together with
---------------
such entity, would be treated as a single employer (i) under Section 414(b) or
(c) of the Code or (ii) for purposes of any Benefit Plan subject to Title IV of
ERISA, under Section 414(b), (c), (m) or (o) of the Code.
"Escrow Agent" - The entity identified as such in the Escrow Agreement.
------------
"Escrow Agreement" - The Escrow Agreement or Agreements substantially in the
----------------
form or forms attached as exhibits to the Transfer Agreement.
"Exchange Act" - The Securities Exchange Act of 1934, as amended.
------------
"Franchise" - the rights granted by VTE relating to the ownership and/or
---------
operation of one or more VTE Centers in one or more Sales Territories within a
Protected Territory pursuant to a Franchise Agreement.
"Franchise Agreement" - a franchise or license agreement and all amendments,
-------------------
supplements and modifications thereto entered into by VTE with the Company
relating to a Franchise.
"GAAP" - Generally accepted accounting principles, consistently applied.
----
"Intellectual Property Rights" - (a) any patent, patent application, trademark
----------------------------
(whether registered or unregistered), trademark application, trade name,
fictitious business name, service xxxx (whether registered or unregistered),
service xxxx application, copyright (whether registered or unregistered),
-29-
copyright application, maskwork, maskwork application, trade secret, know-how,
customer list, system, computer software or computer program (including any
source or object codes therefor or documentation relating thereto), invention,
design, blueprint, engineering drawing, proprietary product, technology,
proprietary right or other intellectual property right or intangible Asset; and
(b) any right to use or exploit any of the foregoing.
"IRS" - The Internal Revenue Service.
---
"Knowledge" - as used with respect to the Company shall have the meaning set
---------
forth in the Transfer Agreement.
"Latest Balance Sheet" - the latest balance sheet included in the Financial
--------------------
Statements.
"Law" - any code, law (including common law), ordinance, regulation, reporting
---
or licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities, or business, including those promulgated, interpreted or enforced
by any Regulatory Authority.
"Liability" - any direct or indirect, primary or secondary, liability,
---------
indebtedness, obligation, penalty, cost or expense (including costs of
investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"NAP" - the National Accounts Program of VTE.
---
"NAP Agreement" - an agreement executed by the Company and VTE in which the
-------------
Company agreed to be bound by the bylaws of the NAP Board of Directors.
"Order" - any administrative decision or award, decree, injunction, judgment,
----
order, quasi-judicial decision or award, ruling, or writ of any federal, state,
local or foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.
"Outside Closing Date" - shall be the date set forth in the Transfer
--------------------
Agreement.
"Owner" - The individuals or entities identified as such under the Transfer
-----
Agreement.
"Permit" - any federal, state, local, and foreign governmental approval,
-----
authorization, certificate, easement, filing, franchise, license, notice,
permit, or right to which any Person is a party or that is or may be binding
upon or inure to the benefit of any Person or its securities, Assets, or
business.
"Person" - a natural person or any legal, commercial or governmental entity,
------
such as, but not limited to, a corporation, general partnership, joint venture,
limited partnership, limited liability company, trust, business association,
group acting in concert, or any person acting in a representative capacity.
"Premiere" - Premiere Technologies, Inc., a Georgia corporation.
--------
"Premiere Financial Statements" - (i) the consolidated balance sheets
-----------------------------
(including related notes and schedules, if any) of Premiere as of December 31,
1996 and 1995, and the related statements of operations, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three fiscal years ended December 31, 1996, 1995 and 1994,
as filed by Premiere in SEC Documents, and (ii) the consolidated balance sheets
of Premiere (including related notes and schedules, if any) and related
statements of operations, changes in stockholders' equity, and cash flows
(including
-30-
related notes and schedules, if any) included in SEC Documents filed with
respect to periods ended subsequent to December 31, 1996.
"Premiere Stock" - Common stock, $.01 par value per share, of Premiere.
--------------
"Protected Territory" - the territory in which the Company solicits and
-------------------
provides services and products to customers for digital voice messaging services
as such territory is defined in the Franchise Agreement.
"Regulatory Authority" - collectively, the SEC, the NASD, the Federal Trade
--------------------
Commission, the United States Department of Justice, and all other federal,
state, county, local or other governmental or regulatory agencies, authorities
(including self-regulatory authorities), instrumentalities, commissions, boards
or bodies having jurisdiction over the parties hereto and their respective
Subsidiaries.
"Related Person" - with regard to any Owner or any director, officer or
--------------
employee of the Company, his or her spouse, parent, sibling, child, aunt, uncle,
niece, nephew, in-law, grandparent and grandchild (including by adoption or
remarriage) and any trustees or other fiduciaries for the benefit of such
relatives.
"Sales Territory" - the geographic areas into which a Protected Territory is
---------------
divided under the Franchise Agreement.
"Schedules" - The disclosure schedules referred to in this Agreement.
---------
"SEC Documents" - all forms, proxy statements, registration statements,
-------------
reports, schedules, and other documents filed, or required to be filed, by
Premiere pursuant to the Securities Laws.
"Securities Laws" - the 1933 Act, the 1934 Act, the Investment Company Act of
---------------
1940, as amended, the Investment Advisors Act of 1940, as amended, the Trust
Indenture Act of 1939, as amended, and the rules and regulations of any
regulatory authority promulgated thereunder.
"SRA" - a service representative agreement executed by VTE and a service
---
representative relating to the provision of services on behalf of VTE with
respect to the Franchise.
"Stock Transfer" - The purchase by Premiere, or any of its Affiliates,
--------------
pursuant to the Transactions, of Company Equity Securities, including by means
of any merger, consolidation, share exchange or other transaction by which the
Company becomes wholly-owned by Premiere or any of its Affiliates.
"Subsidiaries" - all those corporations, associations, or other business
------------
entities of which the entity in question either (i) owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided, there shall
not be included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (ii) in the case of partnerships, serves as
a general partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority of the
directors, trustees or managing members thereof.
"Transactions" - The transactions contemplated by the Transfer Agreement and
------------
the other Transaction Documents.
"Transaction Documents" - The Transfer Agreement, including these Uniform
---------------------
Terms and Conditions, and all other agreements, instruments and documents to be
executed and delivered in connection with the Transfer Agreement and the
transactions contemplated thereby.
-31-
"Transfer Agreement" - That certain Transfer Agreement among Premiere, the
------------------
Company and the Owners and to which these terms and conditions are applicable.
"Transferred Assets" - If the Transactions involve an Asset Transfer, those
------------------
Assets of the Company identified as the "Transferred Assets" in the Transfer
Agreement.
"VTE" - Voice-Tel Enterprises, Inc., a Delaware corporation.
---
"VTE Center" - a site owned or operated by the Company which houses one or
----------
more Centigram voice mail servers used to store messages for retrieval by users
within the local service area of VTE Center, and, where applicable, one or more
network interface boxes and routers used to transmit voice message packet data
to a hub via the T1 local loop.
"VTN" - VTN, Inc., an Ohio corporation and the sole general partner of VTNLP.
---
"VTNLP" - Voice-Tel Network Limited Partnership, a Delaware limited
-----
partnership.
X. MISCELLANEOUS PROVISIONS
------------------------
10.1 Notices.
-------
(a) Any notice sent in accordance with the provisions of this
Section 10.1 shall be deemed to have been received (even if delivery is refused
or unclaimed) on the date which is : (i) the date of proper posting, if sent by
certified U.S. mail or by Express U.S. mail or private overnight courier; or
(ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail, addressed
as follows:
If to the Company or the Owners: To the addresses set forth in the Transfer
Agreement.
:If to Premiere:
Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Telephone: (000)000-0000
Facsimile: (000)000-0000
with a copy to: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section
10.1.
-32-
10.2 Owner's Representatives.
-----------------------
(a) The Owners have and do hereby irrevocably make, constitute
and appoint the individual designated as the "Owner's Representative" in the
Transfer Agreement as their agent (the "Owner's Representative") and authorize
and empower him or her to fulfill the role of Owner's Representative hereunder.
In the event of the resignation of the Owner's Representative, the resigning
Owner's Representative shall appoint a successor from among the Owners and who
shall agree in writing to accept such appointment. If the Owner's Representative
should die or become incapacitated, his or her successor shall be appointed
within 15 days of his death or incapacity by a majority of the Owners, and such
successor shall be an Owner. The choice of a successor Owner's Representative
appointed in any manner permitted above shall be final and binding upon all of
the Owners. The decisions and actions of any successor Owner's Representative
shall be, for all purposes, those of a Owner's Representative as if originally
named in the Transfer Agreement.
(b) Each Owner has made, constituted and appointed and by the
execution of this Agreement hereby irrevocably makes, constitutes and appoints
the Owner's Representative as such person's true and lawful attorney in fact and
agent, for such person and in such person's name, place and stead for all
purposes necessary or desirable in order for the Owner's Representative to take
the actions contemplated by the Transaction Documents on behalf of the Owners,
with the ability to execute and deliver all instruments, certificates and other
documents of every kind incident to the foregoing to all intents and purposes
and with the same effect as such Owner could do personally, and each such Owner
hereby ratifies and confirms as his, her, or its own act, all that the Owner's
Representative shall do or cause to be done pursuant to the provisions hereof.
All Claim Notices and all other notices and communications directed to Owners
under this Agreement shall be given to the Owner's Representative.
(c) The death or incapacity of any Owner shall not terminate the
authority and agency of the Owner's Representative.
(d) The Owners hereby agree to indemnify the Owner's
Representative and to hold him or her harmless against any and all loss,
liability or expense incurred without bad faith on the part of the Owner's
Representative and arising out of or in connection with his or her duties as
Owner's Representative, including the reasonable costs and expenses incurred by
the Owner's Representative in defending against any claim or liability in
connection herewith.
10.3 Expenses (a) Except as otherwise provided in this Section 10.3 or
in the Transfer Agreement, each of the parties hereto shall bear and pay all
direct costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel.
(b) Nothing contained in this Section 10.3 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
party hereto of the terms of this Agreement or otherwise limit the rights of a
nonbreaching party.
10.4 Further Assurances. Each party covenants that at any time, and from
------------------
time to time, after the Closing, it will execute such additional instruments and
take such actions as may be reasonably requested by the other parties to confirm
or perfect or otherwise to carry out the intent and purposes of this Agreement.
10.5 Waiver. Any failure on the part of any party to comply with any of
------
its obligations, agreements or conditions hereunder may be waived by any other
party to whom such compliance is owed.
-33-
No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver.
10.6 Assignment. Premiere may assign its rights under this Agreement to
----------
any Affiliated entity, but otherwise this Agreement shall not be assignable by
any of the parties hereto without the written consent of all other parties. Any
such assignment shall not relieve Premiere of its obligations hereunder.
10.7 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns. This
Agreement shall survive the Closing and not be merged therein.
10.8 Entire Agreement. This Agreement and the Appendices, Exhibits,
----------------
Schedules, certificates and other documents delivered pursuant hereto or
incorporated herein by reference, contain and constitute the entire agreement
among the parties and supersede and cancel any prior agreements,
representations, warranties, or communications, whether oral or written, among
the parties relating to the transactions contemplated by this Agreement. Neither
this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom or which the enforcement of such change, waiver, discharge or
termination is sought.
10.9. Governing Law; Severability. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Georgia without regard to
conflicts of laws principles. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.10 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.11 Brokers. The Owners, the Company and Premiere
-------
each represent to the others that no broker or finder has been employed in
connection with the transactions hereunder.
10.12 Schedules and Exhibits. All Schedules and Exhibits attached to this
----------------------
Agreement are by reference made a part hereof.
10.13 Headings. The headings contained in this Agreement are for reference
--------
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
10.14 Amendment. To the extent permitted by law, this Agreement may be
---------
amended by a subsequent writing signed by each of the parties hereto upon the
approval of each of such parties, whether before or after stockholder approval
of this Agreement has been obtained; provided, that after any such approval by
the holders of Company Common Stock, there shall be made no amendment that
reduces or modified in any material respect the consideration to be received by
holders of Company Common Stock.
10.15 Enforcement. The parties hereto agree that irreparable damage would
-----------
occur in the event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
-34-
10.16 No Benefit to Third Parties. This Agreement is not intended to
---------------------------
benefit, and shall not be construed to benefit, any person other than the
parties hereto or create any third-party beneficiary right for any other person.
-35-
EXHIBIT B
[GENERAL]
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
_________ __, 1997, by and among Premiere Technologies, Inc., a Georgia
corporation ("Premiere"); ______________________________ (the "Owners'
Representative"), on behalf of certain owners (the "Owners") of the equity
interests in [Franchisee], a _____________ (the "Company"); and [SunTrust Bank
of Atlanta], a Georgia bank, as escrow agent hereunder (the "Escrow Agent").
W I T N E S S E T H
- - - - - - - - - -
Premiere, the Company and the Owners are parties to a Transfer Agreement
dated as of __________, 1997 (the "Merger Agreement"), pursuant to which
Premiere has acquired the Company pursuant to a merger of the Company with and
into a wholly owned subsidiary of Premiere ("Merger Corp"), with Merger Corp as
the surviving corporation in such merger (the "Merger"). Pursuant to Section
2.2 of the Merger Agreement, the Owners each received, in exchange for each
share of the Company's capital stock, the contingent right to receive [_______
shares of the $0.01 par value common stock of Premiere (the "Premiere Common
Stock")] [$______ in cash].
Pursuant to the terms of the Merger Agreement, a portion of the aggregate
consideration which each Owner is entitled to receive pursuant to the Merger,
which amount shall be held by the Escrow Agent pursuant to the terms of this
Agreement to satisfy certain indemnification claims by Premiere against the
Owners in accordance with the terms of the Merger Agreement until termination of
this Agreement as provided herein.
Pursuant to the Merger Agreement, the Owners have appointed the Owners'
Representative as their respective agent and attorney-in-fact to execute and
deliver this Escrow Agreement on their behalf and to act for them hereunder.
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 is hereby acknowledged, the parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
1.1 ESCROW. On this date, Premiere has delivered to the Escrow Agent [a
------
stock certificate in negotiable form representing the shares of Premiere Common
Stock constituting the General Escrow Amount (the "Escrow Shares")] [an amount
in cash equal to the General Escrow Amount (the "Escrow Fund")]. The Escrow
Agent acknowledges receipt of the [Escrow Shares] [Escrow Fund] and agrees to
hold and disburse the [Escrow Shares] [Escrow Fund] for the benefit of Premiere
and the Owners, as the case may be, in accordance with the provisions of this
Agreement.
1.2 OWNER PERCENTAGE INTERESTS. Attached as Schedule I hereto is a
--------------------------
schedule showing for each Owner (i) the respective percentage interest (the
"Percentage Interest") of each such Owner in the [Escrow Shares] [Escrow Fund],
and (ii) the corresponding aggregate maximum [number of Escrow Shares issuable]
[amount payable from the Escrow Fund] to each Owner, subject to the adjustments
provided herein.
ARTICLE 2
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
2.1 ["AGGREGATE VALUE" at any time shall mean [the product of the Value
Per Share and the number of Escrow Shares then held in escrow pursuant to this
Agreement] [the aggregate value of the Escrow Fund].
2.2 "DISTRIBUTION DATE" shall mean the date that is the earlier of (i) one
year from the date of the Effective Time and (ii) the date of issuance of the
first independent accountants report on the consolidated financial statements of
Premiere which reflect at least 30 days of post-Merger combined results of
Premiere and the Company subsequent to the Effective Time.
2.3 "OWNERS' REPRESENTATIVE" shall mean ________.
2.4 ["VALUE PER SHARE" shall mean $__.__.]
2.5 Any other capitalized term used herein but not defined herein shall
have the same meaning as provided in the Merger Agreement.
ARTICLE 3
TERM; DISTRIBUTION OF ESCROW [SHARES] [FUND]; LIMITS
3.1 TERM. The term of this Agreement shall commence at the Effective
----
Time and shall terminate at such time as all of the [Escrow Shares have] [Escrow
Fund has] been distributed to the Owners or [canceled] [to Premiere] pursuant to
the terms of this Agreement.
3.2 ADJUSTMENT OF [ESCROW SHARES] [ESCROW FUND]. The [Escrow Shares]
-------------------------------------------
[Escrow Fund] subject to this Agreement shall be adjusted from time to time, as
follows:
Stock version
If, between the date of this Agreement and the Distribution Date, Premiere
shall be entitled to be indemnified pursuant to an indemnification claim under
Sections 8.1(a), 8.1(b)(i), 8.1(b)(ii), 8.1(b)(iii) or 8.1(b)(iv) of the Uniform
Terms (an "Indemnification Claim"), then Premiere shall, at its option, deliver
to the Owners' Representative a notice thereof (a "Notice of Indemnification
Obligation"), and Premiere and the Owners' Representative shall agree in writing
on the dollar amount owed by the Owners pursuant to such Indemnification Claim
(the "Indemnification Amount"). Upon execution by the parties of the agreement
setting forth the Indemnification Amount, Premiere shall (A) issue (or cause to
be issued) a new stock certificate (the "Replacement Certificate") in the names
of the Owner's Representative as representative of the pro rata interests of the
Owners, representing, for the respective pro rata interest of the Owners, the
number of shares of Premiere Common Stock equal to the product of (i) the
difference between (x) the number of Escrow Shares in escrow immediately prior
to such Notice of General Indemnification Obligation minus (y) the quotient
(rounded to the next highest whole number) obtained by dividing the
Indemnification Amount by the Value Per Share, and (ii) each such Owner's
Percentage Interest, (B) cancel the Premiere Common Stock certificate
representing the Escrow Shares in escrow immediately prior to delivery of the
Notice of Indemnification Obligation (such certificates, the "Old Certificate"),
and (C) the Escrow Agent shall hold the Replacement Certificate in escrow
pursuant to this
-2-
Agreement. Upon the issuance of any Replacement Certificate, the shares
represented by such Replacement Certificates shall be deemed to be the "Escrow
Shares" for all purposes of this Agreement.]
Cash version
If, between the date of this Agreement and the Distribution Date, Premiere
shall be entitled to be indemnified pursuant to an indemnification claim under
Sections 8.1(a), 8.1(b)(i), 8.1(b)(ii), 8.1(b)(iii) or 8.1(b)(iv) of the Uniform
Terms (an "Indemnification Claim"), then Premiere shall, at its option, deliver
to the Owners' Representative a notice thereof (a "Notice of Indemnification
Obligation"), and Premiere and the Owners' Representative shall agree in writing
on the dollar amount owed by the Owners pursuant to such Indemnification Claim
(the "Indemnification Amount"). Upon execution by the parties of the agreement
setting forth the Indemnification Amount, the Escrow Agent shall pay to Premiere
from the Escrow Fund an amount equal to the Indemnification Amount and hold the
remainder of the Escrow Fund, if any, in escrow pursuant to this Agreement.
Immediately following any payment to Premiere in accordance with the previous
sentence, the amount remaining in escrow, if any, shall be deemed to be the
"Escrow Fund" for all purposes of this Agreement.]
3.3 DISTRIBUTION OF [ESCROW SHARES] [ESCROW FUND].
---------------------------------------------
Stock version
On the Distribution Date, the Escrow Agent shall cancel certificates
representing the Escrow Shares then held in escrow as of the Distribution Date
("Available Escrow Shares") and with respect to which an Indemnification Claim
is not pending. With respect to Indemnification Claims pending as of the
Distribution Date, Premiere and the Owners' Representative shall use their
reasonable efforts to agree in writing on the Indemnification Amount with
respect to any such pending Indemnification Claims; provided, that if Premiere
and the Owners' Representative are not able to agree on the Indemnification
Amount with respect to such Indemnification Claims by the Distribution Date, the
amount of the Indemnification Amount for purposes of the calculations in the
following sentence of this Section 3.3 shall be the amount claimed by Premiere
in its Notice of Indemnification Claim. Upon determination of the
Indemnification Amount in accordance with the preceding sentence, Premiere shall
promptly (i) issue and deliver to the Escrow Agent and the Escrow Agent shall
deliver to the Owners new certificates representing the number of shares of
Premiere Common Stock (the "Distribution Shares") equal to the quotient obtained
by dividing (A) the difference between the Aggregate Value immediately prior to
such Distribution Date and the aggregate Indemnification Amount with respect to
such pending Indemnification Claims by (B) the Value Per Share (the "Undisputed
--
Escrow Shares"), and such certificates shall be denominated in the names of the
respective Owners in amounts equal to the product of the Undisputed Escrow
Shares and each Owner's Percentage Interest, and (ii) issue to the Escrow Agent,
who shall retain in escrow pending final determination of the Indemnification
Amount, new certificates representing the number of shares of Premiere Common
Stock equal to the quotient obtained by dividing (C) the aggregate
Indemnification Amount with respect to such pending Indemnification Claims by
--
(D) the Value Per Share ("Disputed Escrow Shares"). Any such delivery of
Premiere Common Stock to Owners shall be of full shares and any fractional
portions shall be rounded to a whole number by the Escrow Agent so that the
number of shares remaining in escrow to be delivered will be fully allocated
among such Owners. Upon the final resolution as agreed by Premiere and the
Owners' Representative in writing of any Indemnification Claim for which
Disputed Escrow Shares were retained in escrow after the Distribution Date, the
Escrow Agent shall promptly cancel the appropriate number of Disputed Escrow
Shares corresponding to the Indemnification Amount corresponding to such
Indemnification Claim (if any) and shall deliver any remaining Disputed Escrow
Shares to the Owners in accordance with their respective Percentage Interests in
such remaining Disputed Escrow Shares.]
-3-
Cash version
With respect to Indemnification Claims pending as of the Distribution Date,
Premiere and the Owners' Representative shall use their reasonable efforts to
agree in writing on the Indemnification Amount with respect to any such pending
Indemnification Claims; provided, that if Premiere and the Owners'
Representative are not able to agree on the Indemnification Amount with respect
to such Indemnification Claims by the Distribution Date, the amount of the
Indemnification Amount for purposes of the calculations in the following
sentence of this Section 3.3 shall be the amount claimed by Premiere in its
Notice of Indemnification Claim. Upon determination of the aggregate
Indemnification Amount with respect to such pending Indemnification Claims in
accordance with the preceding sentence, the Escrow Agent shall (i) promptly
distribute to the Owners in accordance with their respective Percentage
Interests the difference between (A) the amount of the Escrow Fund then held in
escrow and (B) the aggregate Indemnification Amount determined in accordance
with the preceding sentence, and (ii) retain in escrow any remainder of the
Escrow Fund (the "Disputed Portion") pending final resolution of such pending
Indemnification Claims. Upon the final resolution as agreed by Premiere and the
Owners' Representative in writing of any Indemnification Claim for which the
Disputed Portion was retained in escrow after the Distribution Date, the Escrow
Agent shall promptly distribute to the Owners in accordance with their
respective Percentage Interests or to Premiere an amount equal to the
Indemnification Amount corresponding to such Indemnification Claim (if any.]
3.4 EFFECT OF FINAL [DELIVERY] [DISTRIBUTION]. This Agreement shall
-----------------------------------------
continue in full force and effect until the Escrow Agent has [delivered or
canceled all of the Escrow Shares] [distributed all of the Escrow Fund] pursuant
to the terms hereof. After all of such [shares have been so delivered or
canceled] [fund has been so distributed], all rights, duties and obligations of
the respective parties hereunder shall terminate.
ARTICLE 4
[ESCROW STOCK CERTIFICATES; DIVIDENDS; VOTING RIGHTS
4.1 ESCROW STOCK CERTIFICATES. The Escrow Agent may, with the prior
-------------------------
written consent of the Owners' Representative, at any time issue new
certificates (or request Premiere to issue new certificates) representing the
Escrow Shares in such denominations as may be necessary or appropriate in
carrying out the Escrow Agent's obligations under this Agreement.
4.2 CASH DIVIDENDS; VOTING RIGHTS. The Owners shall be entitled to
-----------------------------
receive currently any and all cash dividends or other cash income with respect
to the Escrow Shares. Each Owner shall have the right to direct the Escrow
Agent in writing as to the exercise of voting rights with respect to such Escrow
Shares held by the Escrow Agent on behalf of such Owner, and the Escrow Agent
shall comply with any such directions if received in a timely manner. In the
absence of such directions, the Escrow Agent shall not vote any such Escrow
Shares.
4.3 STOCK SPLITS; STOCK DIVIDENDS. In the event of any stock split or
-----------------------------
stock dividend with respect to Premiere Common Stock that becomes effective
during the term of this Agreement, the additional shares so issued with respect
to the Escrow Shares shall be added to the Escrow Shares and subject to the
escrow covered by this Agreement and any other references herein to a specific
number of shares of Premiere Common Stock or references herein to prices for or
the fair market value of Premiere Common Stock shall be adjusted accordingly.]
-4-
[INVESTMENT OF ESCROW FUND
The Escrow Fund shall be invested [in accordance with the written
instructions of the Owners' Representative] [in a money market fund invested in
direct obligations of the United States of America or obligations the principal
of and interest on which are unconditionally guaranteed by the United States of
America]. Any investment income earned on the Escrow Fund shall be added to and
shall become part of the Escrow Fund.]
ARTICLE 5
THE ESCROW AGENT
5.1 APPOINTMENT. Premiere and the Owners hereby designate and appoint
-----------
the Escrow Agent as "Escrow Agent" under this Agreement and the Escrow Agent
hereby accepts such designation and appointment, subject to all of the
provisions of this Agreement.
5.2 LIABILITY. The Escrow Agent, in its capacity as such, or any
---------
successor Escrow Agent, shall be liable only to hold the Escrow Shares and to
deliver the same to the persons named herein in accordance with the provisions
of this Agreement. By acceptance of this Escrow Agreement, the Escrow Agent, in
its capacity as such, or any successor Escrow Agent, is acting in the capacity
of a depository only, and shall not be liable or responsible for any damages,
losses or expenses unless such damages, losses or expenses shall be caused by
the gross negligence or malfeasance of the Escrow Agent or any successor Escrow
Agent. Neither the Escrow Agent, in its capacity as such, nor any successor
Escrow Agent, shall incur any liability with respect to (i) any action taken or
omitted in good faith upon the advice of its counsel with respect to any
questions relating to the duties and responsibilities of the Escrow Agent under
this Agreement; or (ii) any action taken or omitted in reliance upon any
instrument, including the written instructions provided for herein, not only as
to the due execution of such instrument, or the identity, or authority of any
person executing such instrument, or the validity and effectiveness of such
instrument, but also as to the truth and accuracy of any information contained
therein, provided that the Escrow Agent shall in good faith believe such
instrument to be genuine, to have been signed by a proper person or persons, and
to conform to the provisions of this Agreement. In the event of any
disagreement or the presentation of adverse claims or demands in connection with
or for any item affected hereby, the Escrow Agent shall, at its option, be
entitled to refuse to comply with any such claims or demands during the
continuance of such disagreement and may refrain from delivering any item
affected hereby, and in so doing the Escrow Agent shall not become liable to the
parties, or to any other person, due to its failure to comply with any such
adverse claim or demand. The Escrow Agent shall be entitled to continue,
without liability, to refrain and refuse to act until all of the rights of the
adverse claimants have been either fully resolved among themselves, arbitrated
to a final award, or finally adjudicated by a court having jurisdiction over the
dispute. The Escrow Agent shall be held harmless and indemnified by the parties
hereto in connection with any claims against it in connection with its service
as escrow agent hereunder. Any action requested to be taken by the Escrow Agent
hereunder and not otherwise specifically set forth herein shall require the
agreement in writing of the Owners' Representative, Premiere and any successor
Escrow Agent.
5.3 SUCCESSOR. The Escrow Agent, with the prior written consent of the
---------
Owners' Representative, may by written instrument designate a bank or trust
company to act as successor Escrow Agent. Any such successor Escrow Agent must
agree to be and shall be bound by, and shall have all the rights, duties and
responsibilities of the Escrow Agent under, this Agreement.
5.4 EXPENSES. Compensation for the normal services of the Escrow Agent
--------
or any successor Escrow Agent, if any, shall be borne by the Owners and Premiere
equally. Any successor Escrow Agent shall be reimbursed for any reasonable
expenses, including the actual out-of-pocket cost of outside legal
-5-
services should such Escrow Agent deem it necessary in its reasonable discretion
to retain an outside attorney, and Premiere and the Owners shall share equally
the reimbursement of such expenses of such Escrow Agent, except that (a) if
Premiere is unsuccessful in any litigation relating to such Escrow Agent, then
the fees and expenses of such Escrow Agent in connection therewith shall be paid
by Premiere, or (b) should the Owners be the unsuccessful party in any such
litigation, then the Owners will bear the fees and expenses of such Escrow Agent
in connection therewith. The Escrow Agent and any successor Escrow Agent shall
not be liable for any action taken in good faith in accordance with the advice
of an attorney.
ARTICLE 6
OWNERS' REPRESENTATIVE
6.1 POWER AND AUTHORITY. The Owners' Representative shall have full power
-------------------
and authority to represent the Owners and their successors with respect to all
matters arising under this Agreement, and all action taken by the Owners'
Representative hereunder shall be binding upon such Owners and their successors
as if expressly ratified and confirmed in writing by each of them. Without
limiting the generality of the foregoing, the Owners' Representative shall have
full power and authority, on behalf of all the Owners and their successors, to
interpret all the terms and provisions of this Agreement, to dispute or fail to
dispute any claim of Indemnifiable Loss against the Escrow Shares made by an
Indemnitee, to negotiate and compromise any dispute which may arise under this
Agreement, to sign any releases or other documents with respect to any such
dispute, and to authorize payments to be made with respect thereto.
6.2 RESIGNATION; SUCCESSORS. The Owners' Representative, or any successor
-----------------------
hereafter appointed, may resign and shall be discharged of his duties hereunder
upon the appointment of a successor Owners' Representative as hereinafter
provided. In case of such resignation, or in the event of the death or
inability to act of the Owners' Representative, a successor shall be named from
among the Owners by a majority of the members of the Board of Directors of the
Company who served on such board prior to the Merger. Each such successor
Owners' Representative shall have all the power, authority, rights and
privileges hereby conferred upon the original Owners' Representative, and the
term "Owners' Representative" as used herein shall be deemed to include such
successor Owners' Representative.
ARTICLE 7
MISCELLANEOUS
7.1 TRANSFERABILITY. A Owner may not transfer any interest in the
---------------
[Escrow Shares] [Escrow Fund] or any other right under this Escrow Agreement to
any other party, except that upon written notice from the legal representative
of the estate of a deceased Owner to the Escrow Agent, the rights of such Owner
under this Escrow Agreement shall be transferred to the estate of such Owner,
and subsequently to any beneficiary thereof, in the event of the Owners' death;
provided, however, that any such beneficiary or the legal representative of any
such estate shall be bound by the provisions of this Escrow Agreement without
taking any further action. The Escrow Agent shall be entitled to treat the legal
representative of the estate of such Owner, and subsequently any beneficiary
thereof, as the absolute owner of the rights of such Owner under this Escrow
Agreement in all respects and shall incur no liability for distributions made in
good faith to the legal representatives of such Owner or such beneficiary in
accordance with the terms of this Escrow Agreement. The contingent right to
receive the [Escrow Shares] [Escrow Fund] shall not be transferable by the
Owners otherwise than by will or by the laws of descent and distribution.
-6-
7.2 NOTICES. Each party shall keep each of the other parties hereto
-------
advised in writing of all transactions pursuant to this Agreement. Any notices
or other communications required or permitted under this Agreement shall be in
writing and shall be sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows, or if sent by facsimile to the facsimile
numbers identified below:
If to Premiere:
Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
3399 Peachtree Road, N.E.
Xxxxxxx, Xxxxxxx 00000
Attn: Bolant X. Xxxxx, President
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Owners or the Owners' Representative:
________________
________________
________________
Telecopy: (___) ___-____
with a copy to:
________________
________________
________________
________________
Attn: _________
Telecopy: (___) ___-____
If to the Escrow Agent:
[SunTrust Bank of Atlanta]
______________
________, ______ ____
Attn: ___________
Telecopy: (___) ___-____
or such other person or address as shall be furnished in writing by any of the
parties and any such notice or communication shall be deemed to have been given
as of the date so mailed.
-7-
7.3 CONSTRUCTION. This Agreement shall be governed by and construed in
------------
accordance with the laws of the State of Georgia, without regard to any
applicable conflicts of laws.
7.4 BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding upon the respective heirs, executors, administrators, successors and
assigns of the parties hereto.
7.5 SEPARABILITY. If any provision or section of this Agreement is
------------
determined to be void or otherwise unenforceable, it shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain unenforceable in accordance with their terms.
7.6 HEADINGS. The headings and subheadings contained in this Agreement
--------
are for reference only and for the benefit of the parties and shall not be
considered in the interpretation or construction of this Agreement.
7.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
-------------------------
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
7.8 AMENDMENTS. This Agreement may be amended from time to time but
-----------
only by written agreement signed by all of the parties hereto.
7.9 THIRD PARTY BENEFICIARIES. Each Subsidiary of Premiere and each of
-------------------------
the directors, officers and employees of Premiere and each of its Subsidiaries
are expressly intended to be third party beneficiaries of the indemnities and
obligations of the Owners as if they were parties to this Agreement.
-8-
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of
the day and year first above written.
PREMIERE TECHNOLOGIES, INC.
INC.
By:___________________________
__________________
OWNERS' REPRESENTATIVE:
______________________________
__________________(SEAL)
[SUNTRUST BANK OF ATLANTA]
By:____________________________
________________
-9-
SCHEDULE I
TO ESCROW AGREEMENT
OWNERS
MAXIMUM [INTEREST IN ESCROW
FUND] OF ESCROW[NUMBER
NAME SHARES] PERCENTAGE OWNERSHIP
EXHIBIT C
STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT
---------------------------------------------------
THIS STOCK RESTRICTION AND REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made and entered into as of ____________, 1997, by and among Premiere
Technologies, Inc., a Georgia corporation (the "Company"), those stockholders of
Voice-Tel Enterprises, Inc., a Delaware corporation ("VTE"), appearing as
signatories hereto, those shareholders of VTN, Inc., an Ohio corporation
("VTN"), appearing as signatories hereto (each of the stockholders of VTE and
shareholders of VTN, a "VTE/VTN Stockholder" and collectively, the "VTE/VTN
Stockholders"), and those stockholders or other equity owners of franchisees of
VTE ("Franchisees") that execute Adoption Agreements in the form attached hereto
as Exhibit A (each such stockholder or owner, a "Franchisee Stockholder" and
collectively, the "Franchisee Stockholders" and collectively with the VTE/VTN
Stockholders, the "Stockholders").
R E C I T A L S
---------------
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of March __, 1997 (as the same may be amended, the "VTE Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation, a Delaware corporation
("Sub"), VTE, and the stockholders of VTE, Sub shall be merged with and into VTE
(the "VTE Acquisition"), with the result that each of the outstanding shares of
no par value common stock of VTE ("VTE Common Stock") will be converted into the
right to receive shares of the $0.01 par value common stock of the Company (the
"Company Common Stock");
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of March __, 1997 (as the same may be amended, the "VTN Acquisition Agreement"),
by and among the Company, PTEK Merger Corporation II, an Ohio corporation ("Sub
II"), VTN and the shareholders of VTN, Sub II will be merged with and into VTN
(the "VTN Acquisition"), with the result that each of the outstanding shares of
the no par value common stock of VTN ("VTN Common Stock") will be converted into
the right to receive shares of Company Common Stock (the VTE Acquisition and the
VTN Acquisition are collectively called the "Acquisition" and the VTE
Acquisition Agreement and the VTN Acquisition Agreement are collectively called
the "Acquisition Agreement");
WHEREAS, the Company has agreed, as a condition precedent to VTE's and
VTN's obligations under the Acquisition Agreement, to grant the VTE/VTN
Stockholders certain registration rights; and
WHEREAS, the Company has agreed to acquire certain Franchisees pursuant to
the terms a Transfer Agreement between each such Franchisee, the stockholders or
other equity owners of such Franchisee and the Company (collectively, the
"Franchisee Acquisition Agreements"); and
WHEREAS, the Company has agreed, as a condition precedent to the
consummation of the transactions contemplated in the Franchisee Acquisition
Agreements, to grant the Franchisee Stockholders certain registration rights;
and
WHEREAS, the Company and the Stockholders desire to define the
aforementioned registration rights on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the respective meanings
set forth below:
Affiliate: shall mean, for any Person, (i) any other Person controlling,
---------
controlled by or under common control with such Person and (ii) any partner of
any such Person which is a partnership.
Amway Entity: shall mean Amway Corporation and any Affiliate thereof.
------------
Commission: shall mean the Securities and Exchange Commission or any other
----------
federal agency at the time administering the Securities Act;
Effective Date: shall mean the date on which the Acquisition is
--------------
consummated;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
------------
Holder: shall mean any holder of Registrable Securities;
------
Initiating Holder: shall mean any Amway Entity or any other Holder or
-----------------
Holders who in the aggregate are Holders of more than 10% of the then
outstanding Registrable Securities;
Other Stockholders: shall mean Persons who, by virtue of an agreement with
------------------
the Company, are entitled to include their Securities in any registration
effected under Section 3.
Person: shall mean an individual, partnership, joint stock company,
------
limited liability company, corporation, trust or unincorporated organization,
and a government or agency or political subdivision thereof;
register, registered and registration: shall mean a registration effected
-------- ---------- ------------
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) the shares of Company Common Stock
----------------------
issued to the Stockholders under the Acquisition Agreement and the Franchisee
Acquisition Agreements, and (B) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clause (A);
provided, that Registrable Securities shall not include (i) securities with
respect to which a registration statement with respect to the sale of such
securities has become effective under the Securities Act and all such securities
have been disposed of in accordance with such registration statement, (ii) such
securities as are actually sold pursuant to Rule 144, or (iii) such securities
as are acquired by the Company or any of its subsidiaries;
Registration Expenses: shall mean all expenses incurred by the Company in
---------------------
compliance with Sections 3(a), (b), (c) and (d) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Rule 144: shall mean Rule 144 (or any successor provision thereto) under
--------
the Securities Act.
Rule 145: shall mean Rule 145 (or any successor provision thereto) under
--------
the Securities Act.
Security, Securities: shall have the meaning set forth in Section 2(1) of
--------------------
the Securities Act;
-2-
Securities Act: shall mean the Securities Act of 1933, as amended; and
--------------
Selling Expenses: shall mean all underwriting discounts and selling
----------------
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
2. [Reserved]
----------
3. REGISTRATION RIGHTS
-------------------
(a) Requested Registration.
----------------------
(i) Request for Registration. If the Company shall receive
------------------------
from an Initiating Holder, at any time (x) after July 15, 1997 and (y) before
the end of the nine month period following the Effective Time (the "Demand
Period"), a written request (a "Registration Request") that the Company effect
any registration with respect to Registrable Securities held by such Initiating
Holder, the Company shall:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) use its commercially reasonable efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested as soon as practicable, but in any event no later than
ninety (90) days from the date of the request and as would permit or
facilitate the sale and distribution of all such Registrable Securities as
are specified in such request, together with (i) all of the Registrable
Securities of any Stockholder joining in such request as specified in a
written request received by the Company within twenty (20) business days
after written notice from the Company is given under Section 3(a)(i)(A)
above; provided, however, that no registration requested under this Section
-------- -------
3(a) shall become effective unless and until financial results covering at
least thirty (30) days of combined operations of the Company, VTE and the
Franchisees have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies; provided
--------
further, that the Company shall not be obligated to effect, or take any
-------
action to effect, any such registration pursuant to this Section 3(a):
(u) Other than by means of an underwriting in
accordance with Section 3(a)(ii);
(v) Other than pursuant to a registration
statement on Form S-3;
(w) Unless the Company has received audited
financial statements with respect to any business acquired or to be
acquired to the extent required by Rule 3-05 of Regulation S-X for
so long as it takes to obtain such statements, provided that the
Company shall use all commercially reasonable efforts to obtain such
statements;
(x) If the Company, within ten (10) business days
of the receipt of the request of the Initiating Holders, gives
notice of its bona fide intention to effect the filing of a
registration statement with the Commission and to cause such
registration statement to become effective within ninety (90) days
of receipt of such request, provided that the Company actively
employs, in good faith, all commercially reasonable efforts to cause
such registration statement to become effective within such ninety
(90) day period;
-3-
provided, however, that the periods during which the Company shall not
-----------------
be required to effect a registration in accordance with this Section
3(a) together with any periods of suspension under Section 3(g) hereof
may not exceed ninety (90) days in the aggregate;
(y) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act or applicable rules
or regulations thereunder;
(z) After the Company has effected one (1) such
registration in accordance with this Section 3(a) (in the aggregate for
all Holders) and such registration has been declared or ordered
effective and the sales of such Registrable Securities thereunder shall
have closed.
Notwithstanding any other provision of this Agreement,
provided any Registration Request is made at any time during the Demand Period,
any postponement or deferral of such requested registration in accordance with
Sections 3(a)(i) or 3(g) shall only postpone or defer the requested registration
(regardless of the expiration of the Demand Period) until such time as it may
otherwise be effected in accordance with the terms hereof.
(ii) Underwriting. The Holders whose shares are to be
------------
included in a registration in accordance with this Section 3(a) and the Company
shall enter into underwriting and related agreements in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by the Initiating Holders and reasonably acceptable to the Company. Such
underwriting agreement shall contain representations and warranties by the
Company and other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions. The Company
shall cooperate fully with the Holders and the underwriters in connection with
any underwritten offering.
If any Holder or holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(iii) Cut-Back. Notwithstanding any other provision of
--------
this Section 3(b), if the managing underwriter advises the Company and the
Holders in writing that marketing factors require a limitation on the number of
shares to be underwritten, the securities of the Company held by Other
Stockholders shall be excluded from such registration to the extent so required
by such limitation, unless and to the extent prohibited by the terms of any
registration rights or other agreement in effect with such Other Stockholder.
If, after the exclusion of such shares, still further reductions are still
required, the number of shares included in the registration by each Holder shall
be reduced on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply with such
request; provided, that there shall be no reduction in the number of shares
included in the registration by any Holder until all shares of Other
Stockholders have been excluded from such registration, unless and to the extent
prohibited by the terms of any registration rights or other agreement in effect
with such Other Stockholder. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration. If any Other Stockholder who
has requested inclusion in such registration as provided above disapproves of
the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the underwriter and the Initiating Holder. The
securities so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company and officers and directors of the
Company may include its or their securities for its or their own account in such
registration if the representative so agrees and if the number of Registrable
Securities and other securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
-4-
(iv) Demand Registration Rights of Other Persons. In
-------------------------------------------
the event the Company, directly or indirectly, grants any right to, or alters
any existing right of, any Person or Persons, by agreement, arrangement or
understanding, which enables such Person or Persons to exercise during the
Demand Period rights requiring the Company to prepare, or cause to be prepared,
on behalf of such Person or Persons or in cooperation with such Person or
Persons, a registration statement the form of which is, under the rules and
regulations of the Commission, suitable for the sale of any of the Company's
securities in a registered public offering, the Company shall notify the Holders
of the terms and conditions of such rights granted to such Person. Following
receipt of such notification from the Company, if requested by Holders of a
majority of the Registrable Securities, in their sole discretion, the Company
shall enter into a written agreement with the Holders, which agreement shall
amend this Agreement to permit the Holders to exercise during the Demand Period
demand registration rights on any more favorable terms and conditions which have
been granted to any such Person by the Company.
(b) Company Registration.
---------------------
(i) Notice of Registration. If at any time prior to the
----------------------
first anniversary of the date of this Agreement (the "Piggyback Period") the
Company shall determine to register any of its equity securities, either for its
own account or for the account of a security holder or holders, other than (A) a
registration relating solely to employee benefit plans, or (B) a registration
relating solely to a Rule 145 transaction, the Company shall:
(A) promptly give to each Holder written notice
thereof; and
(B) include in such registration (and any related
qualification laws or other compliance), and related underwriting, if any, all
the Registrable Securities specified in a written request or requests, made
within twenty (20) days after mailing of such written notice from the Company to
any Holder.
(ii) Underwriting. If the registration of which the Company
------------
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3(b)(i). In such event the right of any Holder to
registration in accordance with Section 3(b) shall be conditioned upon such
Holder's participation in such underwriting, and the inclusion of Registrable
Securities in the underwriting shall be limited to the extent provided herein.
All Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the other holders distributing their
securities though such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting by
the Company.
(iii) Cut-Back. Notwithstanding any other provision of this
--------
Section 3(b), if the managing underwriter advises the Company and the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the number of shares included in the registration by each
Holder and any other holder of securities of the Company whose shares are
requested to be included in a registration proposed to be filed by the Company
shall be reduced on a pro rata basis (based on the number of shares held by such
Holder and other security holder)by such minimum number of shares as is
necessary to comply with such request; subject to the terms of any registration
rights or other agreement in effect with any Other Stockholder. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The securities so withdrawn shall also be withdrawn from
registration.
-5-
(iv) Piggyback Registration Rights of Other Persons. In the
-----------------------------------------------
event the Company grants any rights, or alters any existing right, to any Person
or Persons by agreement, arrangement or understanding which enables such Person
to exercise during the Piggyback Period piggyback registration rights, the
Company shall, in writing, notify, within ten (10) calendar days of such action
by the Company, the Holders of the terms and conditions of such rights granted
to such Person. Notwithstanding anything contained in this Agreement to the
contrary, the Company shall not grant during the Piggyback Period any piggyback
rights to any Person or Persons, directly or indirectly, by agreement,
arrangement or understanding that provide, in the context of any cut back in the
number of shares to be included in accordance with piggyback registration
rights, that such cut back be made on a pro rata basis other than as provided in
Section 3(b)(iii).
(v) Right to Terminate Registration. The Company shall have
--------------------------------
the right to terminate or withdraw any registration initiated by it under this
Section 3(b) prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
(c) Expenses of Registration. Registration Expenses incurred in
------------------------
connection with any registration, qualification or compliance in accordance with
this Section 3 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities registered pro rata on the basis of the
number of their shares so registered.
(d) Registration Procedures. In the case of each registration
-----------------------
effected by the Company pursuant to this Section 3, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
shall:
(i) keep such registration effective for a period of forty five
(45) days or until the Holders, as applicable, have completed the distribution
described in the registration statement relating thereto, whichever first
occurs;
(ii) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriters of such offering;
(iii) furnish to each Holder, and to any underwriter before filing
with the Commission, copies of any registration statement (including all
exhibits) and any prospectus forming a part thereof and any amendments and
supplements thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness of such
registration statement and including each preliminary prospectus, any summary
prospectus or any term sheet (as such term is used in Rule 434 under the
Securities Act)) and any other prospectus filed under Rule 424 under the
Securities Act, which documents, other than documents incorporated or deemed
incorporated by reference, will be subject to the review of the Holders and any
such underwriter for a period of at least five business days, and the Company
shall not file any such registration statement or such prospectus or any
amendment or supplement to such registration statement or prospectus to which
any Holder or any such underwriter shall reasonably object within five business
days after the receipt thereof; a Holder or such underwriters, if any, shall be
deemed to have reasonably objected to such filing only if the registration
statement, amendment, prospectus or supplement, as applicable, as proposed to
be filed, contains a material misstatement or omission;
(iv) furnish to each Holder and to any underwriter, such number
of conformed copies of the applicable registration statement and of each
amendment and supplement thereto (in each case including all exhibits) and such
number of copies of the prospectus forming a part of such registration
statement (including each preliminary prospectus, any summary prospectus or any
term sheet (as such term is used in Rule 434 under the Securities Act)) and any
other prospectus filed
-6-
under Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be incorporated by reference prior to the
effectiveness of such registration, as each of the Holders or any such
underwriter, from time to time may reasonably request;
(v) to the extent practicable, promptly prior to the filing of
any document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the effectiveness
thereof, and in any event no later than the date such document is filed with
the Commission, provide copies of such document to the Holders, if requested,
and to any underwriter, and make representatives of the Company available for
discussion of such document and other customary due diligence matters, and
include in such document prior to the filing thereof such information as any
Holder or any such underwriter reasonably may request;
(vi) make available at reasonable times for inspection by the
Holders, any underwriter participating in any disposition pursuant to such
registration and any attorney or accountant retained by the Holders or any such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company and cause the officers, directors and employees of
the Company to supply all information reasonably requested by the Holders and
any such underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration statement
and prior to the effectiveness of the applicable registration statement;
(vii) use its commercially reasonable efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such States of the
United States of America where an exemption is not available and as the sellers
of Registrable Securities covered by such registration shall reasonably
request, (y) to keep such registration or qualification in effect for so long
as the applicable registration statement remains in effect, and (z) to take any
other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities
to be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to execute a general consent to
service of process in effecting such registration, qualification or compliance,
unless the Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act or applicable rules or
regulations thereunder;
(viii) use its commercially reasonable efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company and
counsel to the Holders of Registrable Securities to enable the Holders thereof
to consummate the disposition of such Registrable Securities;
(ix) subject to Section 3(g) hereof, promptly notify each Holder
of Registrable Securities covered by a registration statement (A) upon
discovery that, or upon the happening of any event as a result of which, the
prospectus forming a part of such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of proceedings
for that purpose, (C) of any request by the Commission for (1) amendments to
such registration statement or any document incorporated or deemed to be
incorporated by reference in any such registration statement, (2) supplements
to the prospectus forming a part of such registration statement or (3)
additional information, or (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the
-7-
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and at the request of any such Holder promptly
prepare and furnish to it a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(x) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any such registration,
or the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction;
(xi) if requested by any Initiating Holder, or any underwriter,
promptly incorporate in such registration statement or prospectus, pursuant to
a supplement or post effective amendment if necessary, such information as the
Initiating Holder and any underwriter may reasonably request to have included
therein, including, without limitation, information relating to the "plan of
distribution" of the Registrable Securities, information with respect to the
principal amount or number of shares of Registrable Securities being sold to
such underwriter, the purchase price being paid therefor and any other terms of
the offering of the Registrable Securities to be sold in such offering and make
all required filings of any such prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the matters
to be incorporated in such prospectus supplement or post effective amendment;
(xii) furnish to the Holders, addressed to them, an opinion of
counsel for the Company, dated the date of the closing under the underwriting
agreement, if any, or the date of effectiveness of the registration statement
if such registration is not an underwritten offering, and use its commercially
reasonable efforts to furnish to the Holders, addressed to them, a "cold
comfort" letter signed by the independent certified public accountants who have
certified the Company's financial statements included in such registration,
covering substantially the same matters with respect to such registration (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as the Holders may reasonably request;
(xiii) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months, but not more than 18
months, beginning with the first full calendar month after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(xiv) provide promptly to the Holders upon request any document
filed by the Company with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act; and
(xv) use its commercially reasonable efforts to cause all
Registrable Securities included in any registration pursuant hereto to be
listed on each securities exchange on which securities of the same class are
then listed, or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
-8-
(e) Indemnification.
---------------
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, members and partners, and each
person controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 3, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of its officers, directors, members
and partners, and each person controlling each of the Holders, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
the Holders or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors, members and partners, and each person controlling such
Other Stockholder against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse the Company and such Other Stockholders, directors, officers,
partners, members, persons, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder and under clause (vi) below shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this
Section 3(d) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 3 unless
the
-9-
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section
3(d) is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense
referred to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(f) Information by the Holders. Each of the Holders holding
--------------------------
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 3.
(g) Holdback Agreement; Postponement. Notwithstanding the provisions
--------------------------------
of Section 3(a), if the Company shall furnish to the Initiating Holder(s) a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company and its stockholders for a registration statement to
be filed, the Company's obligation to use commercially reasonable efforts to
register, qualify or comply under Section 3(a) shall be deferred for a period
not to exceed ninety (90) days from the date the Company received the
Registration Request.
(h) Assignment. The registration rights set forth in Section 3
----------
hereof may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Stockholder shall be a
-10-
Holder only with respect to such Registrable Securities so acquired and any
stock of the Company issued as a dividend or other distribution with respect to,
or in exchange for or in replacement of, such Registrable Securities) and shall
be bound by all obligations and limitations of this Agreement).
4. RULE 144 REPORTING
------------------
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
(ii) use its commercially reasonable efforts to file with the Commission
in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(iii) so long as there are outstanding any Registrable Securities, furnish
to each Holder, upon request, a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports
and documents so filed as such Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
such Holder to sell any such securities without registration.
5. INTERPRETATION OF THIS AGREEMENT
--------------------------------
(a) Directly or Indirectly. Where any provision in this Agreement
----------------------
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
----------------
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
6. MISCELLANEOUS
-------------
(a) Notices.
-------
(i) All communications under this Agreement shall be in writing
and shall be delivered by facsimile or by hand or mailed by overnight courier or
by registered or certified mail, postage prepaid: .
(A) if to the Company, to Premiere Technologies, Inc., The
Lenox Building, Suite 400, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000,
Telecopy (000) 000-0000, Attention: Xxxxxx X. Xxxxx, President, or at such other
address as it may have furnished in writing to the Stockholders;
(B) if to the VTE/VTN Stockholders, at the addresses listed
on Schedule I hereto, or at such other addresses as may have been furnished to
the Company in writing; and
-11-
(C) if to the Franchisee Stockholders, at the addresses
listed in the appropriate Adoption Agreement, or at such other addresses as may
have been furnished to the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
-------------------------
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the
Stockholder by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Stockholders may destroy any
original document so reproduced. The parties hereto agree and stipulate that
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Stockholders in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
--------------------------------------
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not hereafter
--------------------------
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement.
(g) Remedies. Each Holder of Registrable Securities, in
--------
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended and understood that all of the rights and
privileges of each of the Holders shall be enforceable to the fullest extent
permitted by law.
-12-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PREMIERE TECHNOLOGIES, INC.
By: ______________________________
Name:________________________________
Title:_______________________________
VTE/VTN STOCKHOLDERS:
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
_____________________________________
Name:________________________________
-13-
EXHIBIT A
ADOPTION AGREEMENT
Reference is made to that certain Stock Restriction and Registration Rights
Agreement entered into as of ____________, 1997, by and among Premiere
Technologies, Inc. ("Premiere"), those stockholders of Voice-Tel Enterprises,
Inc. ("VTE") appearing as signatories thereto, those stockholders of VTN, Inc.
appearing as signatories thereto and those stockholders or other equity owners
of franchisees of VTE that execute Adoption Agreements in the form hereof (the
"Registration Rights Agreement").
WHEREAS, the undersigned is the holder of ______ shares of the common
stock, $.01 par value per share, of Premiere (the "Shares"); and
WHEREAS, Premiere has agreed to grant to the undersigned registration
rights with respect to the Shares on the terms and subject to the conditions set
forth in the Registration Rights Agreement.
NOW, THEREFORE, the undersigned hereby agrees to become a party to and be
bound by the terms and conditions of the Registration Rights Agreement,
effective as of the date hereof.
Date:________________________ ______________________________________
Name:
Address: ______________________
______________________
______________________
Acknowledged and Agreed:
PREMIERE TECHNOLOGIES, INC.
___________________________
By:________________________
Its:_______________________
EXHIBIT D
AFFILIATE AGREEMENT
-------------------
Premiere Technologies, Inc.
The Xxxxx Xxxxxxxx, Xxxxx 000
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
President
Gentlemen:
The undersigned is a stockholder of [Franchisee] (the "Company"), a
corporation organized and existing under the laws of the State of ________, and
will become a shareholder of Premiere Technologies, Inc. ("Premiere"), a
corporation organized and existing under the laws of the State of Georgia,
pursuant to the transactions described in the Transfer Agreement dated as of
____________, 1997 (the "Agreement"), by and among Premiere, the Company, and
certain stockholders of the Company. Under the terms of the Agreement, the
Company will be merged into and with a wholly owned subsidiary of Premiere (the
"Merger"), and the shares of the $____ par value common stock of the Company
("Company Common Stock") will be converted into and exchanged for shares of the
$0.01 par value common stock of Premiere ("Premiere Common Stock"). This
Affiliate Agreement represents an agreement between the undersigned and Premiere
regarding certain rights and obligations of the undersigned in connection with
the shares of Premiere to be received by the undersigned as a result of the
Merger.
In consideration of the Merger and the mutual covenants contained herein,
the undersigned and Premiere hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
----------------
the Company he or she is an "affiliate" under Rule 145(c) as defined in Rule 405
of the Rules and Regulations of the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"), and the undersigned
anticipates that he or she will be such an "affiliate" at the time of the
Merger.
2. Initial Restriction on Disposition. The undersigned agrees that he or
----------------------------------
she will not sell, transfer, or otherwise dispose of his or her interests in, or
reduce his or her risk relative to, any of the shares of Premiere Common Stock
into which his or her shares of Company Common Stock are converted upon
consummation of the Merger until such time as Premiere notifies the undersigned
that the requirements of SEC Accounting Series Release Nos. 130 and 135 ("ASR
130 and 135") have been met. The undersigned understands that ASR 130 and 135
relate to publication of financial results of post-Merger combined operations of
Premiere and the Company. Premiere agrees that it will publish such results
within 45 days after the end of the first fiscal quarter of Premiere containing
the required period of post-Merger combined operations and that it will notify
the undersigned promptly following such publication.
3. Covenants and Warranties of Undersigned. The undersigned represents,
---------------------------------------
warrants and agrees that:
(a) The Premiere Common Stock received by the undersigned as a result of
the Merger will be taken for his or her own account and not for others,
directly or indirectly, in whole or in part.
(b) Premiere has informed the undersigned that any distribution by the
undersigned of Premiere Common Stock has not been registered under the 1933
Act and that shares of Premiere Common Stock received pursuant to the Merger
can only be sold by the undersigned (1) following registration under the 1933
Act, or (2) in conformity with the volume and other requirements of Rule
145(d) promulgated by the SEC as the same now exist or may hereafter be
amended, or (3) to the extent some other exemption from registration under
the 1933 Act might be available. The undersigned understands that except as
set forth in that certain Stock Restriction and Registration Rights Agreement
of even date herewith between Premiere and the undersigned, Premiere is under
no obligation to file a registration statement with the SEC covering the
disposition of the undersigned's shares of Premiere Common Stock or to take
any other action necessary to make compliance with an exemption from such
registration available.
(c) The undersigned will, and will cause each of the other parties whose
shares are deemed to be beneficially owned by the undersigned pursuant to
Section 8 hereof to, have all shares of Company Common Stock beneficially
owned by the undersigned registered in the name of the undersigned or such
parties, as applicable, prior to the effective date of the Merger and not in
the name of any bank, broker-dealer, nominee or clearinghouse.
(d) During the 30 days immediately preceding the Effective Time of the
Merger, the undersigned has not sold, transferred, or otherwise disposed of
his or her interests in, or reduced his or her risk relative to, any of the
shares of Company Common Stock beneficially owned by the undersigned as of
the record date for determination of stockholders entitled to vote at the
Stockholders' Meeting of the Company held to approve the Merger.
(e) The undersigned is aware that Premiere intends to treat the Merger as
a tax-free reorganization under Section 368 of the Internal Revenue Code
("Code") for federal income tax purposes. The undersigned agrees to treat the
transaction in the same manner as Premiere for federal income tax purposes.
The undersigned acknowledges that Section 1.368-1(b) of the Income Tax
Regulations requires "continuity of interest" in order for the Merger to be
treated as tax-free under Section 368 of the Code. This requirement is
satisfied if, taking into account those stockholders of the Company who
receive cash in exchange for their stock, who receive cash in lieu of
fractional shares, or who dissent from the Merger, there is no plan or
intention on the part of the the stockholders of the Company to sell or
otherwise dispose of the Premiere Common Stock to be received in the Merger
that will reduce such stockholders' ownership to a number of shares having,
in the aggregate, a value at the time of the Merger of less than 50% of the
total fair market value of the Company Common Stock outstanding immediately
prior to the Merger. The undersigned has no prearrangement, plan or intention
to sell or otherwise dispose of an amount of his or her Premiere Common Stock
to be received in the Merger which would cause the foregoing requirement not
to be satisfied.
4. Restrictions on Transfer. The undersigned understands and agrees that
------------------------
stop transfer instructions with respect to the shares of Premiere Common Stock
received by the undersigned pursuant to the Merger will be given to Premiere's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests" and
may not be sold, nor may the owner thereof reduce his risks relative thereto
in any way, until such time as Premiere Technologies, Inc. ("Premiere") has
published the financial results covering at least 30 days of combined
operations after the effective date of the merger through which the business
combination was effected. In addition, the shares represented by this
certificate may not be sold, transferred or otherwise disposed of except or
unless (1) covered by an effective registration statement under the
Securities Act of 1933, as amended, (2) in accordance with (i) Rule 145(d)
(in the case of shares issued to an individual who is not an affiliate of
---
Premiere) or (ii) Rule 144 (in the case of shares issued to an individual who
is an
-2-
affiliate of Premiere) of the Rules and Regulations of such Act, or (3) in
accordance with a legal opinion satisfactory to counsel for Premiere that
such sale or transfer is otherwise exempt from the registration requirements
of such Act."
Such legend will also be placed on any certificate representing Premiere
securities issued subsequent to the original issuance of the Premiere Common
Stock pursuant to the Merger as a result of any transfer of such shares or any
stock dividend, stock split, or other recapitalization as long as the Premiere
Common Stock issued to the undersigned pursuant to the Merger has not been
transferred in such manner to justify the removal of the legend therefrom. Upon
the request of the undersigned, Premiere shall cause the certificates
representing the shares of Premiere Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to
restrictions on transfer by virtue of ASR 130 and 135 as soon as practicable
after the requirements of ASR 130 and 135 have been met. In addition, if the
provisions of Rules 144 and 145 are amended to eliminate restrictions applicable
to the Premiere Common Stock received by the undersigned pursuant to the Merger,
or at the expiration of the restrictive period set forth in Rule 145(d),
Premiere, upon the request of the undersigned, will cause the certificates
representing the shares of Premiere Common Stock issued to the undersigned in
connection with the Merger to be reissued free of any legend relating to the
restrictions set forth in Rules 144 and 145(d) upon receipt by Premiere of an
opinion of its counsel to the effect that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
---------------------------------------------
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of Premiere Common Stock received by the undersigned, to the
extent he or she believes necessary, with his or her counsel or counsel for the
Company.
6. Filing of Reports by Premiere. Premiere agrees, for a period of two
-----------------------------
years after the effective date of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of Premiere Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
--------------------------
otherwise transfer the shares of Premiere Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for Premiere Common Stock together with such additional
information as the transfer agent may reasonably request. If Premiere's counsel
concludes that such proposed sale or transfer complies with the requirements of
Rule 145(d), Premiere shall cause such counsel to provide such opinions as may
be necessary to Premiere's Transfer Agent so that the undersigned may complete
the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
---------------
foregoing provisions also apply to all shares of the capital stock of the
Company and Premiere that are deemed to be beneficially owned by the undersigned
pursuant to applicable federal securities laws, which the undersigned agrees may
include, without limitation, shares owned or held in the name of (i) the
undersigned's spouse, (ii) any relative of the undersigned or of the
undersigned's spouse who has the same home as the undersigned, (iii) any trust
or estate in which the undersigned, the undersigned's spouse, and any such
relative collectively own at least a 10% beneficial interest or of which any of
the foregoing serves as trustee, executor, or in any similar capacity, and (iv)
any corporation or other organization in which the undersigned, the
undersigned's spouse and any such relative collectively own at least 10% of any
class of equity securities or of the equity interest. The undersigned further
recognizes that, in the event that the undersigned is a director or officer of
Premiere or becomes a director or officer of Premiere upon consummation of the
Merger, among other things, any sale of Premiere Common Stock by the undersigned
within a period of less than six months following the effective time of the
Merger may subject the undersigned to liability pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended.
-3-
9. Miscellaneous. This Affiliate Agreement is the complete agreement
-------------
between Premiere and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of Georgia.
This Affiliate Agreement is executed as of the ____ day of _________, 1997.
Very truly yours,
___________________________
Signature
___________________________
Print Name
___________________________
___________________________
___________________________
Address
[add below the signatures of all registered
owners of shares deemed beneficially owned
by the affiliate]
___________________________
Name:
___________________________
Name:
___________________________
Name:
AGREED TO AND ACCEPTED as of
_______________, 1997
PREMIERE TECHNOLOGIES, INC.
By:_________________________
-4-
