EXHIBIT 2.1
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
by and among
PTEK HOLDINGS, INC.
PREMIERE COMMUNICATIONS, INC.
VOICE-TEL ENTERPRISES, LLC
VOICE-TEL OF CANADA LTD.
INTELLIVOICE COMMUNICATIONS, LLC
and
VOICECOM TELECOMMUNICATIONS, LLC
and
VOICECOM TELECOMMUNICATIONS, INC.
dated
March 25, 2002
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.............................................................................................2
1.1 Definitions.....................................................................................2
1.2 Other Defined Terms............................................................................11
ARTICLE II CONTRIBUTION OF THE BUSINESS TO THE COMPANY; SALE
AND PURCHASE OF MEMBERSHIP INTERESTS AND PCI REGULATED
ASSETS.......................................................................................................12
2.1 Formation of the Company; Conversion of Certain Sellers........................................12
2.2 Contribution of Certain Assets to the Company..................................................13
2.3 Purchase of Membership Interests...............................................................14
2.4 Purchase of PCI Regulated Assets and Assumption of PCI Liabilities.............................14
2.5 Consideration for Purchase of Membership Interests and PCI Regulated Assets....................14
2.6 Net Asset and Capital Lease Obligations Adjustment.............................................14
ARTICLE III CLOSINGS.............................................................................................17
3.1 The Closings...................................................................................17
3.2 Deliveries by Sellers..........................................................................17
3.3 Deliveries by Buyer............................................................................18
3.4 Allocation of Purchase Price...................................................................18
3.5 Purchase of PCI Regulated Assets...............................................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS.............................................................19
4.1 Organization and Related Matters...............................................................19
4.2 Intentionally Omitted..........................................................................20
4.3 Authorization..................................................................................20
4.4 No Conflicts...................................................................................20
4.5 Liabilities....................................................................................20
4.6 No Other Agreements to Sell Assets or Business.................................................21
4.7 Legal Proceedings..............................................................................21
4.8 Approvals and Third Party Consents.............................................................21
4.9 Financial Information..........................................................................21
4.10 Properties; Title..............................................................................22
4.11 Taxes..........................................................................................22
4.12 Permits........................................................................................23
4.13 Intercompany Transactions......................................................................23
4.14 Compliance with Law............................................................................23
4.15 No Brokers or Finders..........................................................................23
4.16 Certain Rights.................................................................................24
4.17 Patents, Trademarks and Proprietary Information................................................24
4.18 Material Contracts.............................................................................25
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4.19 Absence of Certain Changes or Events...........................................................26
4.20 Accounts Receivable............................................................................27
4.21 Real Property..................................................................................27
4.22 Customers, Resellers and Suppliers.............................................................27
4.23 Employment Matters.............................................................................28
4.24 Employee Benefit Plans.........................................................................28
4.25 Environmental Matters..........................................................................29
4.26 Insurance......................................................................................30
4.27 Disclaimer of Other Representations and Warranties.............................................30
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER................................................................30
5.1 Organization and Related Matters...............................................................30
5.2 Authorization; No Conflicts....................................................................30
5.3 Legal Proceedings..............................................................................31
5.4 Approvals and Third Party Consents.............................................................31
5.5 No Brokers or Finders..........................................................................31
5.6 Purchase of the Membership Interests; Investment Experience; Restricted Securities.............31
5.7 Tax Liability..................................................................................32
5.8 Investigation; No Additional Representations and Warranties....................................32
ARTICLE VI COVENANTS AND AGREEMENTS..............................................................................32
6.1 Maintenance of Insurance.......................................................................32
6.2 Intentionally omitted..........................................................................32
6.3 Access to Information; Notification of Certain Matters.........................................32
6.4 Approvals and Permits..........................................................................33
6.5 Government Approvals and Filings...............................................................33
6.6 Post-Closing Covenants Regarding Employees.....................................................33
6.7 Intentionally Omitted..........................................................................35
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6.8 Covenants Not to Compete and Not to Solicit....................................................35
6.9 Actions to Effect Transaction and Obtain Consents..............................................36
6.10 Litigation Support.............................................................................37
6.11 Capital Leases and Included Real Property Leases...............................................38
6.12 PCI Post-Closing Operations....................................................................38
6.13 Centigram Licensed Premises....................................................................39
ARTICLE VII TAX MATTERS..........................................................................................42
7.1 Tax Indemnification; Tax Returns...............................................................42
7.2 Tax Cooperation................................................................................43
7.3 Maintain Records...............................................................................43
7.4 Transfer Taxes.................................................................................44
7.5 Tax Sharing Agreements.........................................................................44
7.6 Survival of Obligations........................................................................44
ARTICLE VIII CONDITIONS OF PURCHASE..............................................................................44
8.1 General Conditions.............................................................................44
8.2 Conditions to Obligations of Buyer.............................................................45
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8.3 Conditions to Obligations of PTEK and each Seller..............................................46
ARTICLE IX TERMINATION OF OBLIGATIONS; NONSURVIVAL OF R
EPRESENTATIONS AND WARRANTIES...............................................................................46
9.1 Termination of Agreement.......................................................................46
9.2 Effect of Termination..........................................................................47
9.3 Non-Survival of Representations and Warranties.................................................47
ARTICLE X INDEMNIFICATION........................................................................................47
10.1 Obligations of Sellers and PTEK................................................................47
10.2 Obligations of Buyer and the Company...........................................................47
10.3 Procedure......................................................................................48
10.4 Exclusive Remedy...............................................................................49
10.5 Limitation on Indemnification..................................................................49
ARTICLE XI GENERAL...............................................................................................49
11.1 Amendments; Waivers............................................................................49
11.2 Schedules; Exhibits; Integration...............................................................49
11.3 Further Assurances.............................................................................49
11.4 Governing Law..................................................................................50
11.5 No Assignment..................................................................................50
11.6 Headings.......................................................................................50
11.7 Counterparts...................................................................................50
11.8 Publicity and Reports..........................................................................50
11.9 Confidentiality................................................................................50
11.10 Parties in Interest............................................................................51
11.11 Notices........................................................................................51
11.12 Expenses.......................................................................................52
11.13 Waiver.........................................................................................52
11.14 Attorney Fees..................................................................................52
11.15 Representation By Counsel; Interpretation......................................................52
11.16 Severability...................................................................................53
11.17 Specific Performance...........................................................................53
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MEMBERSHIP INTERESTS PURCHASE AGREEMENT
This MEMBERSHIP INTERESTS PURCHASE AGREEMENT (the "Agreement") is entered
into as of March 25, 2002 by and among Voicecom Telecommunications, LLC, a
Delaware limited liability company (the "Company"), PTEK Holdings, Inc., a
Georgia corporation ("PTEK"), Premiere Communications, Inc, a Florida
corporation and a wholly owned subsidiary of PTEK ("PCI"), Voice-Tel of Canada
Ltd., a Canadian corporation and a wholly-owned subsidiary of PTEK ("VCL"),
Intellivoice Communications, LLC, a Delaware limited liability company and a
wholly-owned subsidiary of PCI ("ICI"), Voice-Tel Enterprises, LLC, a Delaware
limited liability company and a wholly-owned subsidiary of PCI ("VEI", and with
PTEK, PCI, VCL and ICI, each a "Seller" and collectively, the "Sellers"), and
Voicecom Telecommunications, Inc., a Delaware corporation("Buyer").
RECITALS
WHEREAS, pursuant to that certain Contribution Agreement, dated as of the
date hereof, by and among each of PTEK, PCI, ICI, VEI and the Company (the
"Contribution Agreement"), PTEK, PCI, ICI and VEI transferred to the Company,
immediately prior to the execution and delivery of this Agreement, certain
assets (the "Contribution Agreement Assets") and related scheduled liabilities
(the "Contribution Agreement Liabilities") necessary to own and operate PTEK's
Voicecom business, which is engaged in the development, marketing, distribution,
sale and support of hosted voice mail, broadcast/network voice messaging,
long-distance calling card, unified communications and inbound interactive voice
response customer management services principally in the United States and
Canada, as provided through the products and services listed on Schedule 1.1(a)
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(the "Business");
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of the
date hereof, by and among VCL and the Company (the "VCL Agreement"), VCL sold to
the Company, immediately prior to the execution and delivery of this Agreement,
certain assets (the "VCL Assets"), and the Company assumed certain scheduled
liabilities (the "VCL Liabilities"), held by VCL and material to the operation
of the Business, in exchange for a promissory note issued by the Company to VCL
in the principal amount of $50,000 ("the VCL Note");
WHEREAS, PCI operates as a regulated carrier of telecommunications services
and is a party to certain contracts that require the provider to be licensed
with federal and various state governmental authorities, and owns or holds
certain other assets used in providing such services, all of which assets
constitute part of the Business (the "PCI Regulated Assets," and together with
the Contribution Agreement Assets and the VCL Assets, the "Contributed Assets"),
and the transfer of those assets and assumption of certain scheduled liabilities
(the "PCI Liabilities," and together with the Contribution Agreement Liabilities
and the VCL Liabilities, the "Assumed Liabilities") that are subject to
regulation will not be effective until applicable regulatory approvals have been
received as provided herein or as otherwise agreed by the parties;
WHEREAS, as a result of the transactions contemplated by this Agreement,
the Company will hold or have a right to use all of those assets necessary to
own and operate the Business as it is being conducted on the date hereof;
WHEREAS, PCI, ICI and VEI are the record and beneficial owners of all of
the issued and outstanding membership interests of the Company (the "Membership
Interests") and desire to sell the Membership Interests to Buyer; and
WHEREAS, in reliance on and subject to the terms, conditions,
representations, warranties, covenants and agreements herein contained, Buyer
desires to purchase the Membership Interests from PCI, ICI and VEI;
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, agreements and covenants hereinafter set forth, and
intending to be legally bound hereby, Buyer, PTEK, Sellers and the Company
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
As used in this Agreement and the Exhibits and Schedules delivered pursuant
to this Agreement, the following definitions will apply:
"Accounts Payable" shall mean payables from operations incurred in the
ordinary course of business and other current accruals, determined in accordance
with GAAP, consistently applied.
"Accounts Receivable" shall mean all accounts receivable from the sale
of products and services of the Business in favor of Sellers or the Company,
determined in accordance with GAAP, consistently applied, but excluding any
long-term Receivables.
"Action" means any action, claim, complaint, petition, investigation,
suit or other proceeding, whether administrative, civil or criminal, in law or
in equity, or threatened or before any arbitrator or Governmental Entity.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person. The term "control" (including, with correlative
meanings, the terms "controlled by" and "under common control with") means the
possession of the power to direct the management and policies of the referenced
Person, whether through ownership interests, by contract or otherwise.
"Agreement" means this Purchase Agreement by and among Sellers and
Buyer as amended or supplemented from time to time, together with all Exhibits
and Schedules delivered pursuant to this Agreement.
"Ancillary Agreements" means the Transition Services Agreement between
PTEK and Company, the Management Services Agreement between Company and PCI, the
Wholesale Services Agreement between American Teleconferencing Services, Ltd.,
d/b/a Premiere Conferencing and Buyer, the Telecommunications Services Agreement
between the Company and PCI, the ▇▇▇▇ of Sale with respect to the PCI Regulated
Assets, the Sublease with respect to the Lenox Building, the Assignment and
Assumption Agreement with respect to the
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PCI Liabilities, the Contribution Agreements between PTEK, PCI, ICI, VEI and the
Company, the VCL Agreement and the VCL Note, the Patent License Agreement
between the Company and PTEK, the Trademark and Technology License Agreement
between the Company and PTEK, and Right to Use agreements with respect to
certain equipment.
"Approval" means any approval, authorization, consent, qualification,
registration, Permit, declaration, filing, application, transfer or any waiver
of any of the foregoing, required to be obtained from, or any notice, statement
or other communication required to be filed with or delivered to, any
Governmental Entity.
"Assumed Liabilities" are defined in the Contribution Agreement.
"Audited Financial Statements" means the audited balance sheet of PTEK
at December 31, 2000 and the audited statements of income and retained earnings
and cash flows of PTEK for the twelve-month period ended December 31, 2000,
together with notes thereto, all accompanied by the report of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP thereon.
"Books and Records" means Sellers' books, ledgers, files, records,
manuals, and other materials (in any form or medium, including electronic and
computer files) related to the Business, including, but not limited to, all
correspondence, personnel records, payroll records, purchasing materials and
records, vendor lists, operation and quality control records and procedures,
research and development files, Intellectual Property disclosures and
documentation, sales order files, purchase order files, advertising materials,
catalogs, product brochures, mailing lists, customer files, customer lists,
distribution lists, sales and promotional materials, and all other records of
Sellers utilized in connection with the Business (or, in the case of PTEK,
primarily utilized in the Business) and all computer software and data files
necessary to access or review or continue to compile or utilize any of the
foregoing (to the extent permitted under applicable software license agreements
with respect to software that is an Excluded Asset as described on Schedule
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1.1(aa)); provided that Seller may retain such original books and records and
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provide, as promptly as practicable after Closing (during which time Company
shall have full access to such records), true and correct copies of such books
and records in cases where the original books and records are primarily used in
operations of PTEK other than the Business, or constitute the Excluded
Liabilities or the Excluded Assets or are necessary for the preparation and/or
defense of matters pertaining to Sellers' liability for Taxes or are required to
be retained by Sellers by Law; provided, however, that with respect to books and
records that (i) are contained in storage or archives or (ii) are too voluminous
to copy expeditiously, Sellers may fulfill their obligations with respect
thereto by providing the Company with copies of such Books and Records at
Seller's expense upon the Company's reasonable request.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banks in Atlanta, Georgia are authorized or obligated by Law or
executive order to close.
"Buyer Material Adverse Effect" means any change, effect or
circumstance that would materially impair the validity or enforceability of this
Agreement or materially adversely affect or delay Buyer's ability to consummate
the Closing or perform its obligations under this Agreement or any of the
Ancillary Agreements to which it is a party.
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"Capital Lease Obligations" means the total amount payable under
Capital Leases included in the Assumed Liabilities, determined in accordance
with GAAP.
"Capital Leases" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which would,
in accordance with GAAP, be required to be accounted for as a capital lease on
the balance sheet of that Person.
"Closing" means the consummation of the purchase and sale of the
Membership Interests under this Agreement.
"Closing Date" means the date of the Closing.
"Closing Date Net Assets" means Current Assets minus Total
Liabilities, determined as of the Closing Date.
"Confidential Information" means all information respecting the
Business and activities of Sellers and/or any Affiliate, including, without
limitation, the clients, customers, suppliers, employees, consultants, computer
or other files, projects, products, computer disks or other media, computer
hardware or computer software programs, marketing plans financial information,
methodologies, know-how, processes, practices, approaches, projections,
forecasts, formats, systems, data gathering methods and/or strategies of Sellers
and/or any Affiliate. Notwithstanding the immediately preceding sentence,
Confidential Information shall not include any information that is, or becomes,
generally available to the public (unless such availability occurs as a result
of breach by any Seller of any portion of this Agreement, the Ancillary
Agreements or any other obligation each Seller owes to Buyer and/or any
Affiliate).
"Contracts" mean any contract, binding arrangement, license or other
agreement, written or oral, to which any Seller or any Seller's subsidiaries are
subject or a party to and which are related to the Business, including without
limitation, any sales agreement, customer contract, sponsorship agreement,
Capital Lease, vendor or customer supply agreement, service agreement,
maintenance agreement, manufacturing agreement, support agreement, sales agency
agreement, distributorship agreement, marketing agreement, purchase commitment
with suppliers, and any agreement or binding arrangement relating to
Intellectual Property.
"Current Assets" means the current assets of the Business as of the
Closing Date reflected on the Final Closing Statement, determined in accordance
with GAAP consistent with each Seller's past practice (but to the extent such
past practice is not consistent with GAAP, GAAP shall apply), in each case if
included in the Contributed Assets, consisting of (i) Accounts Receivable, net
of a reserve for doubtful accounts, and (ii) all Seller Advance Payments.
Current Assets shall not include cash and cash equivalents, any other Excluded
Asset or assets that are not transferred to the Company.
"Deferred Revenue" means revenue amounts billed or collected but not
yet fully earned and therefore deferred in accordance with GAAP.
"Disclosure Schedule" means Sellers' Disclosure Schedule and Buyer's
Disclosure Schedule attached to this Agreement. The sections of each Disclosure
Schedule are numbered to correspond to the applicable sections of this
Agreement.
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"Employee Benefit Plan(s)" is defined as (i) any "employee welfare
benefit plan," as defined in Section 3(1) of ERISA or any "employee pension
benefit plan," as defined in Section 3(2) of ERISA, which any Seller sponsors or
to which any Seller contributes or is required to contribute, or under which any
Seller may incur any liability (whether governed by U.S. Law or the Law of any
foreign country in which any Seller has any employees), and which applies to or
in respect of an employee or former employee employed by any Seller in
connection with the Business, including each such multiemployer welfare benefit
plan; (ii) any "multiemployer plan," as defined in Section 4001(a)(3) of ERISA,
to which any Seller has contributed or been obligated to contribute at any time
within the six years prior to the date hereof, or under which any Seller may
incur any liability, and which applies to or in respect of an employee or former
employee employed by any Seller in connection with the Business, and (iii) any
incentive compensation, commission, vacation pay, holiday pay, sabbatical leave,
scholarship or tuition reimbursement, dependent care assistance, immigration
assistance, salary continuation, employee loan or loan guarantee, split dollar
arrangement, deferred compensation plan, severance pay, bonus plan, profit
sharing plan, stock option plan, employee stock purchase plan, restricted stock,
stock appreciation right, phantom stock, and any other employee benefit plan,
agreement, arrangement or commitment which any Seller sponsors or to which any
Seller contributes or is required to contribute and which applies to or in
respect of any employee or former employee employed by any Seller within or
outside the United States in connection with the Business (whether governed by
U.S. Law or the Law of any foreign country in which any Seller has any
employees) and any such plan which applies to or in respect of any consultant or
former consultant to any Seller in connection with the Business.
"Encumbrance" means, with respect to any Person, any mortgage, lien
(whether or not created voluntarily by such Person), pledge, easement,
encumbrance, restrictive covenant, charge, or security interest, or any interest
or title of any vendor, lessor, lender or other secured party to or of such
Person under any conditional sale or other title retention agreement or Capital
lease, upon or with respect to any property or asset of such Person.
"Environmental Conditions" mean the Release or presence of any
Hazardous Substance (whether or not such Release or presence constituted at the
time thereof a violation of any Environmental Law) as a result of which any
Seller has or may become liable to any Person or by reason of which the Business
or any of the Contributed Assets may suffer or be subjected to any Encumbrance
or liability.
"Environmental Laws" mean all Laws which regulate or relate to (i) the
protection or clean-up of the environment, (ii) the use, treatment, storage,
transportation, generation, manufacture, processing, distribution, handling, or
Release of Hazardous Substances, (iii) the preservation or protection of
waterways, groundwater, drinking water, air, wildlife, plants or other natural
resources, or (iv) the health and safety of persons or property, including,
without limitation, protection of the health and safety of employees.
Environmental Laws include, without limitation, the Federal Water Pollution
Control Act, Resource Conservation & Recovery Act, Clean Water Act, Safe
Drinking Water Act, Atomic Energy Act, Occupational Safety and Health Act, Toxic
Substances Control Act, Clean Air Act, Comprehensive Environmental Response,
Compensation and Liability Act, Hazardous Materials Transportation Act and all
analogous or related foreign, federal, state or local law.
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"Excluded Contracts" shall mean all Contracts of any Seller set forth
on Schedule 1.1(b), and, unless Buyer otherwise agrees, any Material Contract of
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any Seller that should have been disclosed on Schedule 4.18, but was not.
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"FF&E" means Sellers' machinery, equipment, computers, peripherals,
software booked as FF&E, office equipment, furniture, leasehold improvements,
vehicles, tools and other similar property used in connection with the Business
(or, in the case of PTEK, used primarily in the Business).
"Financial Statements" means the Audited Financial Statements and
Unaudited Financial Statements.
"Final Closing" means the consummation of the purchase and sale of the
PCI Regulated Assets and the assumption of the PCI Liabilities under this
Agreement.
"Final Closing Date" means the date of the Final Closing.
"GAAP" means generally accepted accounting principles in the United
States, in effect from time to time.
"Governmental Entity" means any government or any agency, regulatory
authority, bureau, board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government, whether
Federal, state or local, domestic or foreign.
"Hazardous Substance" means any pollutants, contaminants, chemicals,
waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or
flammable chemical or chemical compound or hazardous substance, material or
waste, whether solid, liquid or gas, including any quantity of asbestos in any
form, urea formaldehyde, PCB's, radon gas, crude oil or any fraction thereof,
all forms of natural gas, petroleum products or by-products or derivatives,
radioactive substance, waste waters, sludges, slag and any other substance,
material or waste that is subject to regulation, control or remediation under
any Environmental Law.
"Included Owned Real Property" means the properties listed on Schedule
4.21.
"Included Real Property Leases" means those real property leases set
forth on Schedule 4.21.
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"Indebtedness" means indebtedness for borrowed money or for the
deferred purchase price of property or services, including without limitation
indebtedness evidenced by a note, bond, debenture or similar instrument.
"Intellectual Property" means all of the intellectual property rights
owned or licensed to any Seller or in which any Seller has any right or
interest, and, in either case, used in connection with the Business (or, in the
case of PTEK, used primarily in the Business), including, without limitation,
each Seller's (i) common law, state, provincial, federal, international and
statutory rights in any trademarks, trademark registrations and applications,
service marks, trade names, corporate names and fictitious names, copyrights,
copyright registrations, patents, patent applications, industrial design
registrations and applications,
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integrated circuit topography applications and registrations, design rights,
inventions, trade secrets, technical and confidential information (including,
without limitation, designs, plans, specifications, formulas, processes,
methods, shop rights, know-how, show-how, and other business or technical
confidential information in each case whether or not such rights are patentable,
copyrightable, or registerable) related to the Business; (ii) computer software
and hardware programs and systems, source code, object code, know-how, show-how,
processes, formula, specifications and designs, data bases, and documentation
relating to the foregoing or used in the Business (or, in the case of PTEK, used
primarily in the Business); and (iii) other Proprietary Information owned,
controlled, created, under development or used by or on behalf of any Seller in
whole or in part in connection with the conduct of the Business in which any
Seller has any interest whatsoever (or, in the case of PTEK, used primarily in
the Business), whether or not registered, including rights or obligations under
any license agreement or other agreement with any other person.
"Knowledge" means the knowledge of the individuals listed on Schedule
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1.1(c), with respect to Sellers, the individuals listed on Schedule 1.1(d), with
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respect to Buyer, as the case may be, in each case after reasonable inquiry into
the matter.
"Law" means all laws of any nation or political subdivision thereof,
including, without limitation, all federal, state, provincial, local, or foreign
statutes, regulations, ordinances, orders, decrees, or any other laws, common
law theories, or reported decisions of any state, provincial, federal or other
court or tribunal.
"Leases" means all leases, subleases, or other occupancy agreements,
licenses, and lease agreements for equipment, machinery, furnishings, vehicles
or tools related primarily to the Business or required for the continued
operation of the Business in substantially the same manner as the Business is
conducted as of the date of this Agreement, together with all amendments,
supplements and nondisturbance agreements pertaining thereto, under which any
Seller subleases, licenses, occupies or uses any real or personal property.
"Loss" means, with respect to any Person, any cost, damage,
disbursement, expense, liability, loss, obligation, penalty or settlement,
including interest or other carrying costs, reasonable legal, accounting and
other professional fees and expenses incurred in the investigation, collection,
prosecution and defense of claims and amounts paid in settlement, that may be
imposed on or otherwise incurred or suffered by the referenced Person; provided,
however, that "Loss" shall not include any of the foregoing with respect to any
indirect, special, incidental or consequential damages of any Person.
"Material Adverse Effect" means any item, change, effect or
circumstance that could reasonably be expected to be materially adverse to the
Contributed Assets, the Assumed Liabilities, or the condition (financial or
otherwise) or results of operations of the Business, taken as a whole.
"Net Assets" means Current Assets minus Total Liabilities.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ naming PTEK or any Seller or the Company as a party.
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"Permit" means any license, permit, franchise, certificate of
authority, Order or any waiver of the foregoing, required to be issued by any
Governmental Entity.
"Permitted Encumbrances" means: (i) Encumbrances reflected in Schedule
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1.1(e); (ii) Encumbrances for Taxes not yet due and payable, or that are being
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contested in good faith by appropriate proceedings and which if related to
Business Taxes are described in the Schedules; (iii) carriers, warehousemen's,
mechanic's, materialmen's, repairmen's, landlord's and other similar
Encumbrances that are imposed by Law and incurred in the ordinary course of
business for obligations not overdue by more than thirty (30) days or are being
contested in good faith by appropriate proceedings; (iv) Encumbrances incurred
by statute connection with workmen's compensation, unemployment insurance and
other social security legislation and as to which payments due are not
delinquent; (v) Encumbrances incurred by statute in connection with deposit
accounts or to secure the performance of bids, tenders, trade contracts,
statutory obligations, surety and appeal bonds, performance and return-of-money
bonds and other obligations of like nature; (vi) any interest or title of a
vendor or lessor in property subject to the Capital Lease Obligations included
in the Assumed Liabilities provided, all material Encumbrances are disclosed on
Schedule 1.1(e); (vii) other Encumbrances incidental to the conduct of business
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or the ownership or lease of real property, including easements, rights of way,
zoning and similar restrictions, and sub-leases granted to others (and included
in the Contracts), which do not in the aggregate materially detract from the
value or use of any of Seller's and Company's real property; and (ix)
Encumbrances that are not individually or in the aggregate Material.
"Person" means an association, corporation, individual, partnership,
limited liability company, trust or any other entity or organization, including
a Governmental Entity.
"Potential Business" means any current or reasonably foreseeable
commercial activity or any current or reasonably foreseeable commercial
opportunities associated in any way with the Products consistent with the scope
of activities of the Business included within the definition of "Business" in
this Agreement.
"Potential Client" or "Potential Customer" means a person or entity
that Buyer and/or any Seller, or Affiliates of any Seller (i) as of the date
hereof, is, or in the reasonably foreseeable future can reasonably be expected
to be, soliciting (or has targeted for solicitation, or can reasonably be
expected to be so targeting in the reasonably foreseeable future), and/or (ii)
at any time or from time to time, with the 24-month period prior to the date
hereof, any Seller has been soliciting for or in respect of any current,
actively pending or contemplated Products.
"Products" means product lines, businesses or services offered and
performed by any Seller (and not merely resold) in the last 24 months including,
without limitation, as described on Schedule 1.1(f).
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"Proprietary Information" means all patent applications, inventions,
ideas, trademarks, trade names, copyrights, data, moral rights, trade secrets,
know-how, concepts, computer programs, documentation and other technical data
and information.
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"Receivables" means all notes, deposits and accounts receivable in
favor of any Seller and all notes, bonds and other evidence of Indebtedness of
and rights to receive payments from any person in favor of any Seller, in each
case related primarily to the Business and determined in accordance with GAAP,
excluding those Receivables included in Excluded Assets.
"Release" means any release, threatened release, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the environment or the workplace of any
Hazardous Substance, and otherwise as defined in any Environmental Law.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor law, and the related regulations and published interpretations.
"Seller" and "Sellers" are defined in this Agreement's opening
paragraph and includes their immediate predecessors-in-interest.
"Seller Advance Payments" means, to the extent included in the
Contributed Assets, payments with respect to the Business made by any Seller for
goods or services on or prior to the Closing Date, to the extent such goods or
services are not fully used or received by the Business as of the Closing Date,
including without limitation all credits, prepaid expenses (except for property
and liability insurance), deferred charges, advance payments, security deposits,
prepaid rent, prepaid Taxes, prepaid advertising and prepaid items (except split
dollar life insurance cash surrender values), to the extent transferred,
properly recorded and categorized as current in accordance with GAAP.
"Seller Customer Deposits" means deposits received by any Seller from
customers and subscribers of the Business on or prior to the Closing Date,
including deposits by customers whose creditworthiness requires payments in
advance.
"Seller Customer Prepayments" means payments received by any Seller
for goods or services from customers and subscribers of the Business where such
goods or services are not fully delivered or performed by any Seller as of the
Closing Date.
"Site" means any real property now or previously owned or operated by
any Seller.
"Tax" means all taxes, charges, fees, levies, duties, imposts or other
assessments or charges imposed by and required to be paid to any federal, state,
local or foreign taxing authority, utility commission or other governmental or
quasi-governmental agency or authority (a "Taxing Authority"), including without
limitation income, gross receipts, ad valorem, value-added, excise, real
property, personal property, sales, use, utility, communications, universal
service, E-911, high costs, infrastructure maintenance, relay service, transfer,
gains, stamp, payroll, employment, social security, workers' compensation,
unemployment compensation, withholding, net worth and franchise taxes and any
applicable estimated payments or applicable estimated taxes, imposed by the
United States government or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States government
or of any foreign government, and any interest, penalties, assessments or
additions
-9-
to tax resulting from, attributable to or incurred in connection with any Tax or
any contest or dispute thereof.
"Tax Return" means a report, return or other information required to
be supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes any Seller.
"Telecare Assets" means the "Collateral", as defined in that certain
Security Agreement by and among Telecare, Inc., an Indiana corporation, and PCI
dated August 25, 2000.
"Third Party Consent" means any approval, consent or waiver required
to be obtained from or any notice required to be delivered to any Person other
than any Governmental Entity.
"Total Liabilities" means all Assumed Liabilities (including, for
purposes of the calculation, VCL Liabilities and the PCI Liabilities) except
Capital Lease Obligations, determined as of the Closing Date in accordance with
GAAP consistent with Sellers' past practice (but to the extent such past
practice is not consistent with GAAP, GAAP shall apply) including: (i) all
Accounts Payable and overdrafts on bank accounts included in the Contributed
Assets; (ii) all Seller Customer Deposits and Seller Customer Prepayments,
including prepayments on customer maintenance agreements; (iii) all accrued
expenses, including but not limited to accrued payroll salaries and vacation and
other employment expenses as detailed in Section 6.6(e), in each case to the
extent related to the Transferred Employees, accrued warranty costs and accrued
professional services costs, and (iv) all Deferred Revenue. Specifically
excluded from the definition of Total Liabilities are Liabilities for Capital
Lease Obligations.
"Trade Secrets" means the whole or any portion or phase of any
scientific or technical information, design, process, procedure, computer
program, formula or improvement of any Seller or any Affiliates of a Seller that
is valuable and not generally known to the competitors of any Seller or any
Affiliates of a Seller, whether or not in written or tangible form.
"Transaction" means the contribution of the Contribution Agreement
Assets, the Purchase of the VCL Assets, the sale of the Membership Interests and
the sale of the PCI Regulated Assets, as contemplated by this Agreement.
"Unaudited Financial Statements" means the unaudited balance sheet of
the Business as of each of December 31, 1999, December 31, 2000, December 31,
2001 and January 31, 2002 and the unaudited statements of income and retained
earnings and cash flows of the Business for the one-year, one-year, one-year and
one-month periods then ended (except that there is no statement of cash flows
for the one month period ended January 31, 2002).
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1.2 Other Defined Terms.
The following capitalized terms shall have the meanings given to them in
the Sections set forth below:
Term Section
---- -------
"Accountants" 2.6(d)
"Additional Adjustment Amount" 2.6(e)(ii)
"Assumed Liabilities" Recitals
"Business" Recitals
"Buyer" Introduction
"Buyer Indemnified Persons" 10.1
"Centigram Site Leases" 6.13(a)
"Claim" 6.10(a)
"Closing Cash Adjustment" 2.6(b)
"Closing Date Statement" 2.6(b)
"COBRA" 6.6(c)
"Code" 3.4
"Confidentiality Agreement" 11.9
"Contributed Assets" Recitals
"Contribution Agreement Assets" Recitals
"Contribution Agreement Liabilities" Recitals
"Converted Company" 2.1(b)
"Deloitte" 2.6(d)
"Excluded Assets" Contribution Agreement
"Excluded Liabilities" Contribution Agreement
"Final Cash Adjustment" 2.6(e)(i)
"Final Closing Statement" 2.6(d)
"Holdback Amount" 2.5(b)
"ICI" Introduction
"Indemnifiable Claim" 10.3(c)
"Indemnified Party" 10.3(a)
"Indemnified Tax Liabilities" 7.1(a)
"Indemnifying Party" 10.3(a)
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Term Section
---- -------
"Inquiry" 6.5(b)
"Inter-Party Claim" 10.3(c)
"Material Contracts" 4.18(a)
"Non-Assigned Contracts" 6.9(b)
"PCI" Introduction
"PTEK" Introduction
"Protected Business" 6.8(a)
"Purchase Price" 2.5
"Representatives" 6.3
"Seller" and "Sellers" Introduction
"Seller Indemnified Persons" 10.2
"Tax Proceeding" 7.2
"Telecommunication Services" 6.12
"Third Party Claim" 10.3(b)
"Transferred Employees" 6.6(a)
"VCL" Introduction
"VEI" Introduction
ARTICLE II
CONTRIBUTION OF THE BUSINESS TO THE COMPANY;
SALE AND PURCHASE OF MEMBERSHIP INTERESTS
AND PCI REGULATED ASSETS
2.1 Formation of the Company; Conversion of Certain Sellers.
(a) On or prior to the Closing Date, the Sellers (i) formed the
Company as a limited liability company under the laws of the State of Delaware
named "Voicecom Telecommunications, LLC", and (ii) entered into a limited
liability company agreement, which is attached hereto as Exhibit A, which shall
not be amended prior to the Closing and the certificate of formation shall
likewise not be amended. PTEK and the Sellers shall take, and shall cause the
Company to take, any and all action that can be taken prior to the Closing to
ensure that the Company will be treated for all periods from inception as a
disregarded entity for federal and state income Tax purposes.
(b) Promptly following the transactions described in Section 2.1(a),
--------------
each of ICI and VEI (each such limited liability company being a "Converted
Company") statutorily converted into a limited liability company under the laws
of the State of Delaware and PCI entered into a limited liability company
agreement with each such Converted Company in the
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form attached hereto as Exhibit B, which shall not be amended prior to the
Closing. PTEK and PCI shall take, and shall cause each Converted Company to
take, any and all action that can be taken prior to the Closing to ensure that
the Converted Company will be treated for all periods from inception as a
disregarded entity for federal and state income Tax purposes.
2.2 Contribution of Certain Assets to the Company.
(a) On or prior to the Closing Date, PTEK, PCI, VEI and ICI each
entered into a Contribution Agreement with the Company in the form of Exhibit D
attached hereto and, pursuant thereto, (i) PTEK, PCI, VEI and ICI contributed to
the Company, and the Company accepted the Contribution Agreement Assets owned by
them, as more particularly described in the Schedules to the Contribution
Agreement, and (ii) PTEK, PCI, VEI and ICI assigned to the Company, and the
Company assumed, the Contribution Agreement Liabilities. The Contribution
Agreement shall not be amended prior to the Closing. The Contribution Agreement
Assets were contributed to the Company free and clear of all Encumbrances, other
than Permitted Encumbrances.
(b) On or prior to the Closing Date, VCL sold the VCL Assets to the
Company pursuant to the VCL Agreement in the form attached hereto as Exhibit C,
and the Company assumed the VCL Liabilities, which agreement shall not be
amended prior to the Closing. The VCL Assets were purchased by the Company free
and clear of all Encumbrances, other than Permitted Encumbrances.
(c) The Company is a newly formed entity that shall have no assets,
liabilities or operations prior to the consummation of the transactions
contemplated under the Contribution Agreements. As of the Closing Date, the
Company shall have no assets or liabilities other than those set forth in the
Contribution Agreement or VCL Agreement.
(d) As of the Closing Date, the Membership Interests will be the only
outstanding Membership Interests of the Company, and will be owned, of record
and beneficially, by PCI, ICI and VEI, free and clear of all Encumbrances. There
will be no outstanding subscription, option, warrant, call, right, claim,
preemptive right or other agreement, restriction or commitment obligating the
Company to issue, sell, deliver or transfer (including any right of conversion
or exchange under any outstanding security or other instrument) any economic,
voting or any other type of membership or other interest in the Company, or that
would have the effect of making Buyer's acquisition of the Membership Interests
void or voidable.
(e) Within ten (10) days after Closing, VCL and Company will enter
into a Purchase and Sale Agreement (the "Included Owned Real Property Purchase
Agreement") for the sale of the Included Owned Real Property by VCL to Company
or its assignee, containing the terms set forth on Schedule 2.2(e) attached
hereto and incorporated herein by this reference, together with such other terms
to which each of VCL and Company may hereafter agree. From and after the Closing
Date hereunder, Company may use and occupy the Included Owned Real Property, on
the terms set forth on Schedule 2.2(e) attached hereto and incorporated herein
by this reference.
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2.3 Purchase of Membership Interests.
(a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing, PTEK, PCI, ICI and VEI shall sell, assign and deliver
the Membership Interests to Buyer, and Buyer shall purchase and acquire the
Membership Interests from PTEK, PCI, ICI and VEI, free and clear of all
Encumbrances.
(b) The parties agree (i) to treat the sale of the Membership
Interests in accordance with this Agreement as a purchase and sale of the
Contributed Assets and the assumption of the Assumed Liabilities for federal
income Tax purposes, and (ii) to treat such sale as a closed transaction for
federal income Tax purposes. The parties shall file all returns for Taxes, make
or refrain from making all elections necessary for and (except as otherwise
required pursuant to a "determination" within the meaning of Section 1313(a) of
the Internal Revenue Code) take no position inconsistent with the tax treatment
set forth above in this Section 2.3.
-----------
2.4 Purchase of PCI Regulated Assets and Assumption of PCI Liabilities.
On the terms and subject to the conditions set forth in this Agreement, at
the Final Closing, PCI shall sell, assign, transfer and convey to the Company,
and the Company shall acquire the PCI Regulated Assets from PCI, free and clear
of all Encumbrances, other than Permitted Encumbrances, and the Company shall
assume the PCI Liabilities.
2.5 Consideration for Purchase of Membership Interests and PCI Regulated
Assets.
Buyer shall deliver to PTEK, in its capacity as agent for PCI, ICI and VEI,
as consideration for the sale, transfer, assignment and delivery of the
Membership Interests to Buyer, and the sale, transfer, assignment and delivery
of the PCI Regulated Assets to the Company the following amounts (the "Purchase
Price"):
(a) At Closing, cash by wire transfer to PTEK's designated account in
an amount equal to Twelve Million One Hundred and Sixty Thousand Dollars and
00/100 Cents ($12,160,000), less (i) the Closing Cash Adjustment, (ii) $50,000
which amount will be delivered at Closing in cash by wire transfer to VCL's
designated account to satisfy in full the Company's obligations under the VCL
Note, and (iii) $100,000 pursuant to Schedule 2.2(e).
---------------
(b) Upon the determination of the amounts owed, if any, pursuant to
Section 2.6, Buyer shall deliver to Sellers cash by wire transfer to PTEK's
-----------
designated account in an amount equal to Two Million Dollars ($2,000,000) (the
"Holdback Amount"), or such other amount as may be required pursuant to Section
--------
2.6.
---
(c) At Closing, cash by wire transfer to PTEK's designated account in
an amount equal to $350,000, as Buyer's share of employee severance costs.
2.6 Net Asset and Capital Lease Obligations Adjustment.
(a) The amount of the Purchase Price set forth in Section 2.5 above
-----------
was determined, in part, based upon the assumption that the Closing Date Net
Assets will equal or
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exceed zero dollars, and that the amount of the Capital Lease Obligations
determined in accordance with GAAP and reflected on the Final Closing Statement
will not exceed Three Million Dollars ($3,000,000). The amount of the Purchase
Price shall be adjusted dollar for dollar by the amount, if any, the Closing
Date Net Assets are less than zero, and also by the amount, if any, by which the
amount of such Capital Lease Obligations exceed Three Million Dollars
($3,000,000), in each case as reflected on the Final Closing Statement.
(b) Prior to the Closing, PTEK shall deliver to Buyer a good faith
estimate substantially in the form of Exhibit E, reasonably acceptable to Buyer,
of a statement of the Contributed Assets and Assumed Liabilities as of the
Closing Date, prepared in accordance with GAAP applied consistently with the
balance sheet furnished with the Unaudited Financial Statements (provided that,
to the extent that the Unaudited Financial Statements were not prepared in
accordance with GAAP, GAAP shall apply), and including a computation in
accordance with such data of the estimated Closing Date Net Assets and the
estimated amount of the Capital Lease Obligations determined in accordance with
GAAP as of the Closing Date (the "Closing Date Statement"), together with the
detailed work papers which support the Closing Date Statement. The Cash Payment
at Closing shall be reduced by the sum of (x) the amount by which the estimated
Closing Date Net Assets are less than zero, plus (y) the amount by which the
estimated amount of the Capital Lease Obligations determined in accordance with
GAAP and reflected on the Closing Date Statement exceeds Three Million Dollars
($3,000,000) (such reduction referred to as the "Closing Cash Adjustment").
(c) Sellers shall provide Buyer with full access to the books and
records of Sellers and the Business on a consolidated basis for a period of
sixty (60) days after the Closing Date (or such reasonable extension thereof as
approved by PTEK, such approval not to be unreasonably withheld) to verify and
confirm the accuracy of the Closing Date Statement. If, after such review, Buyer
objects to the Closing Date Statement, Buyer shall promptly (and in any event
within sixty (60) days after the Closing Date or approved extension thereof)
provide PTEK with a statement indicating the basis for its objections, and Buyer
and PTEK shall meet and confer in an effort to resolve any disagreement with
respect to the Closing Date Statement, in good faith. The parties intend that
the negotiations to resolve the disputes raised in any objection be conducted by
experienced business representatives empowered to decide the issues. If Buyer
does not object within sixty (60) days following the Closing Date (or approved
extension thereof) the Closing Date Statement shall be final and binding on the
parties.
(d) In the event Buyer and PTEK are unable to resolve a disagreement
with respect to the Closing Date Statement within thirty (30) days following the
date of Buyer's objection (or such longer period as Buyer and PTEK may agree),
the Closing Date Net Assets and the amount of the Capital Lease Obligations
shall be determined by Deloitte & Touche LLP ("Deloitte") or such other
independent national firm of certified public accountants mutually agreeable to
Buyer and PTEK (the "Accountants"). Each party represents and warrants that it
has not engaged Deloitte to perform any material services (other than dispute
resolution services) for it or its Affiliates in the last three years (or since
such Affiliate became an Affiliate of Buyer, if shorter); at such time as a
party has engaged Deloitte to perform any material service (other than dispute
resolution services) for it or any Affiliate, it shall give notice to the other
party and Deloitte shall no longer be deemed independent of such party and,
unless the other party agrees to allow Deloitte to continue so to serve, another
independent, nationally recognized accounting
-15-
firm shall be selected as the Accountants by mutual agreement of the parties
(provided, that if the parties cannot agree on a firm within 30 days of Deloitte
ceasing to qualify as Accountants, the American Arbitration Association in New
York, New York shall be engaged to select new Accountants (and the AAA fee shall
be paid by the party engaging Deloitte for other services)). If issues in
dispute are submitted to the Accountants for resolution, (i) each party shall
furnish to the Accountants such work papers and other documents and information
relating to the disputed issues as the Accountants may request and are available
to that party, and shall be afforded the opportunity to present to the
Accountants any material relating to the determination and to discuss the
determination with the Accountants; (ii) the determination by the Accountants of
the Closing Date Net Assets and the amount of the Capital Lease Obligations
determined in accordance with GAAP as set forth in a notice delivered to both
parties by the Accountants, will be binding and conclusive on the parties; and
(iii) the fees and expenses of the Accountants for such determination shall be
paid by the parties based upon the degree to which the Accountants accept the
respective positions of the parties. For example, if it is Buyer's position that
the adjustment owed is $300, PTEK's position that the adjustment owed is $100
and the Accountants' finding that the adjustment owed is $150, then Buyer shall
pay 75% (300-150 / 300-100) of the Accountants' fees and expenses and PTEK shall
pay 25% (150-100 / 300-100) of the Accountants' fees and expenses. Other than
the expense of retaining the Accountants, the expense of preparing the Closing
Date Statement shall be borne by PTEK and the expense of Buyer's review shall be
borne by Buyer. The Closing Date Statement as agreed to by the parties or
determined by the Accountants, as the case may be, shall be the "Final Closing
Statement."
(e) Within three (3) business days of determination of the Final
Closing Statement:
(i) If the Closing Cash Adjustment is greater than the sum, as
shown on the Final Closing Statement, of (A) the amount, if any, by which the
Closing Date Net Assets on the Final Closing Statement are less than zero plus
(B) the amount, if any, by which the Capital Lease Obligations on the Final
Closing Statement exceed Three Million Dollars ($3,000,000) (such sum, the
"Final Cash Adjustment"), then Buyer shall pay to Sellers in cash the Holdback
Amount plus the difference between the Closing Cash Adjustment and the Final
Cash Adjustment, plus interest at a rate of 7.5% per annum from the date which
is ninety (90) days after the Closing Date to the date of payment on such
amount;
(ii) If the Final Cash Adjustment is greater than the Closing
Cash Adjustment, but the difference between the Final Cash Adjustment and the
Closing Cash Adjustment (the "Additional Adjustment Amount") is less than the
Holdback Amount, then Buyer shall pay Sellers in cash the Holdback Amount, less
the Additional Adjustment Amount, plus interest at a rate of 7.5% per annum from
the date which is ninety (90) days after the Closing Date to the date of payment
on such amount; or
(iii) If the Additional Adjustment Amount is Two Million Dollars
($2,000,000) or more, Buyer shall retain the Holdback Amount and Sellers shall
pay to Buyer in cash the Additional Adjustment Amount less the Holdback Amount,
plus interest at a rate of 7.5% per annum from the date which is ninety (90)
days after the Closing Date to the date of payment on such amount.
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(f) Until the Final Closing Statement is determined, each party shall
provide the other parties with reasonable access to the books and records of
Sellers and the Business that are within their possession and control, including
all books and records constituting Contributed Assets.
ARTICLE III
CLOSINGS
3.1 The Closings.
The consummation of the purchase and sale of the Membership Interests under
this Agreement (the "Closing") will take place at the offices of ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ in Los Angeles, California at the close of business on March , 2002,
---
or by facsimile signatures delivered to such location, or at such other time and
place as the parties may mutually agree (the "Closing Date"). A final closing
(the "Final Closing") shall take place with respect to the PCI Regulated Assets
and PCI Liabilities on the Final Closing Date, as determined pursuant to Section
-------
3.5(b).
-----
3.2 Deliveries by Sellers.
At the Closing, PTEK and each Seller will deliver or cause to be delivered
to Buyer (unless delivered previously) the following:
(a) Certificates representing the Membership Interests, duly endorsed
for transfer in blank;
(b) A certificate of the Secretary of PTEK and each Seller in form and
substance reasonably satisfactory to Buyer evidencing that this Agreement, the
Ancillary Agreements, and the transactions contemplated hereby and thereby,
respectively, have been duly authorized by all necessary corporate action on the
part of PTEK and each respective Seller and that the parties signing this
Agreement and the Ancillary Agreements on behalf of PTEK and each respective
Seller are authorized to do so;
(c) A duly executed certificate as required by Section 8.2(c);
--------------
(d) A duly executed counterpart of each of the Ancillary Agreements;
(e) The original VCL Note marked "satisfied in full";
(f) To escrow, the documents required under Section 3.5;
-----------
(g) Evidence of releases of Encumbrances by ABN/Amro and Silicon
Valley Bank;
(h) The opinion of Sellers' counsel and regulatory counsel;
(i) Originally executed copies of the documents transferring title of
the Contributed Assets to the Company; and
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(j) Such other documents indicated as being delivered by PTEK and the
Sellers on the closing statement delivered at Closing.
3.3 Deliveries by Buyer.
At the Closing, Buyer will deliver or cause to be delivered to PTEK and the
Sellers (unless delivered previously) the following:
(a) The Purchase Price;
(b) A certificate of the Secretary of Buyer, in form and substance
reasonably satisfactory to PTEK and Sellers, evidencing that this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby,
respectively, have been duly authorized by all necessary corporate action on the
part of Buyer and that the party signing this Agreement and the Ancillary
Agreements is authorized to do so;
(c) A duly executed certificate as required by Section 8.3(c);
--------------
(d) A duly executed counterpart of each of the Ancillary Agreements;
(e) To escrow, the documents required under Section 3.5;
-----------
(f) The opinion of Buyer's counsel; and
(g) Such other documents indicated as being delivered by Buyer on the
closing statement delivered at Closing.
3.4 Allocation of Purchase Price.
Promptly following the Closing, PTEK will prepare a schedule allocating the
Purchase Price among the Contributed Assets, in accordance with the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code").
Subject to Buyer's reasonable approval of the schedule, PTEK, Sellers and Buyer
each agree, (a) to report the sale of the Contributed Assets for Tax purposes in
accordance with the allocations set forth on PTEK's allocation schedule and to
follow the allocations set forth thereon in determining and reporting their
liabilities for any Taxes, (b) without limitation, not to take any position
inconsistent with such allocations on any of its Tax Returns, and (c) to timely
file federal tax Form 8594 with the applicable Tax Return for the year of this
transaction reflecting such Purchase Price allocations. If Buyer disputes
whether the allocations proposed by PTEK comply with the Code, and PTEK does not
agree to revise such allocations, then, if after further discussion between the
parties the matter cannot be resolved in 60 days, the dispute shall be referred
to the Accountants. The Accountants shall appoint an expert in Taxes and such
expert shall be engaged to resolve the dispute under all of the terms of Section
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1.6(d). Notwithstanding anything to the contrary herein, the parties agree that
-----
$50,000 of the Purchase Price will be allocated to the repayment of the VCL
Note.
-18-
3.5 Purchase of PCI Regulated Assets.
(a) Simultaneously with the execution of this Agreement, each of the
Company and PCI shall execute a ▇▇▇▇ of Sale and an Assignment and Assumption
Agreement with respect to the PCI Regulated Assets (including without limitation
those set forth on Schedule 3.5(a)(i) and any Telecare Assets obtained by PCI)
------------------
and the PCI Liabilities, which consist in their entirety of the liabilities set
forth on Schedule 3.5(a)(ii), and shall deliver an original counterpart of such
---------------
documents to counsel for each of Buyer and PTEK to hold in escrow pending the
Final Closing. Such documents shall not be deemed to be delivered at the
Closing. Such documents are irrevocable and shall so provide. Upon satisfaction
of the conditions precedent to the Final Closing as set forth in subsection (b)
below, or the giving of notice of Buyer thereunder, such ▇▇▇▇ of Sale and
Assignment and Assumption Agreement shall be deemed delivered to the other party
without further action on the part of the Company, Buyer, PTEK or the Sellers,
at 5:00 p.m., Eastern Standard Time, on the Final Closing Date.
(b) The ▇▇▇▇ of Sale and Assignment and Assumption Agreement shall
provide: (i) that the PCI Regulated Assets are being delivered by PCI free and
clear of any Encumbrances, other than Permitted Encumbrances, (ii) that the PCI
Regulated Assets, or any portion thereof, have not been sold, delivered,
transferred, conveyed, hypothecated or pledged to any other party, (iii) that
the consideration for the PCI Regulated Assets has been received, and (iv) that
the PCI Liabilities do not include any Excluded Liabilities. PTEK and each
Seller shall notify Buyer promptly if any of the foregoing is not a true and
correct statement, shall use their reasonable best efforts to cure the breach
and shall jointly and severally indemnify the Company and hold it harmless from
such breach.
(c) The PCI Liabilities shall be liabilities arising under the
Contracts and Telco Permits that are the PCI Regulated Assets, provided, that no
liability shall be a PCI Liability unless, had it been transferable on the
Closing Date, it would have been an Assumed Liability. Any liability of PCI
incurred between the Closing and the Final Closing shall be an Excluded
Liability, unless the incurrence of such liability was approved by the Company
pursuant to the Management Services Agreement between the Company and PCI, or
arose directly out of the performance of management services thereunder.
(d) The "Final Closing Date" shall be the first to occur of (i) the
date Buyer notifies PTEK in writing that it wishes to complete the Final
Closing; (ii) the date that all Approvals required for the purchase of the PCI
Regulated Assets have been obtained; and (iii) the first anniversary of the
Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise indicated on a Schedule to a representation or warranty
of Sellers, Sellers jointly and severally represent, warrant and agree as
follows:
4.1 Organization and Related Matters.
Each Seller is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization. The
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Company, when organized, will be a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each Seller has all necessary organizational power and authority to own its
respective properties and to carry on its respective businesses as presently
conducted and is duly qualified or licensed to do business as a foreign
corporation in good standing in all jurisdictions in which the nature of its
businesses requires licensing or qualification, except where the failure to be
so qualified or licensed would not, individually or in the aggregate, result in
a Material Adverse Effect. The jurisdictions in which each Seller is
incorporated or organized, and if applicable, licensed or qualified, are shown
on Schedule 4.1.
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4.2 Intentionally Omitted.
4.3 Authorization.
Each Seller has all necessary corporate power and authority to execute,
deliver and perform this Agreement and the Ancillary Agreements, and each Seller
has the necessary corporate power and authority to sell, convey and assign the
Contributed Assets it owns in accordance with the terms hereof or thereof. The
execution, delivery and performance of this Agreement and each Ancillary
Agreement by each Seller has been duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered by each Seller and
constitutes each Seller's legally valid and binding obligation, enforceable
against each Seller in accordance with its terms except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or limiting creditors rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
4.4 No Conflicts.
Except as set forth in Schedule 4.4, each Seller's execution and delivery
------------
of this Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the contribution of the Contribution Agreement
Assets to the Company as contemplated hereby) and the sale of the VCL Assets and
the PCI Regulated Assets nor compliance by each Seller with any provisions
hereof will (a) violate or conflict with any Seller's charter documents; (b)
violate, conflict with, result in a breach of, constitute a default (or an event
which, with the giving of notice or lapse of time or both, would constitute a
default) under, or create a right of acceleration of performance under, or
termination or cancellation of, any Material Contract; (c) violate in any
Material respects any applicable Law; (d) create an Encumbrance other than a
Permitted Encumbrance on any Contributed Assets; or (e) violate any Order or
Action to which any Seller or the Company is a party or by which any Seller or
the Company is affected, except in the case of clauses (b) through (e), for such
violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not be Material.
4.5 Liabilities.
Except as set forth on Schedule 4.5, and Excluded Liabilities, since
------------
December 31, 2001, the Business has not incurred liabilities or obligations
(absolute, accrued, contingent, unmatured
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or otherwise) other than (a) liabilities of the type included in the Assumed
Liabilities and reflected on the Final Closing Statement, (b) liabilities or
obligations incurred in the ordinary course of business not required to be
included in the Financial Statements under GAAP, or (c) liabilities that are not
material in the aggregate, or (d) liabilities arising out of the Transaction
that are Excluded Liabilities.
4.6 No Other Agreements to Sell Assets or Business.
Neither the Company nor any Seller has any other obligation, absolute or
contingent, to any Person (other than as contemplated hereby) (a) to sell any of
the Contributed Assets, (b) to issue, sell or otherwise transfer any Membership
Interests or capital stock or any security convertible into or exchangeable for
capital stock or Membership Interests of any Seller or the Company that would
impede the consummation of the transactions contemplated hereby, or (c) to
effect any merger, consolidation or other reorganization of any Seller or the
Company or enter into any agreement with respect to any of the foregoing.
4.7 Legal Proceedings.
Except as set forth in Schedule 4.7, there is no Material Order, or Action
------------
pending or, to the knowledge of PTEK, threatened against or affecting PTEK or
any Seller, related to the Business.
4.8 Approvals and Third Party Consents.
Except as set forth in Schedule 4.8, no Approvals by any Governmental
------------
Entity, or any other person or persons or entity, or Third Party Consents
relating to any Material Contract, are required to be made or obtained by the
Company or any Seller (a) by virtue of the execution, delivery or performance of
this Agreement; (b) to avoid the loss of any Permit (including Telco Permits)
that is a Contributed Asset or the breach of any Material Contract or the
creation of an Encumbrance other than Permitted Encumbrances on the Membership
Interests or any of the Contributed Assets; or (c) to enable the Company to own
and operate the Contributed Assets following the Closing Date, or Final Closing
Date, as the case may be, except where any such failure to obtain such Approval
or Third Party Consent would not, individually or in the aggregate, be Material.
4.9 Financial Information.
Schedule 4.9 sets forth the Unaudited Financial Statements. The Unaudited
------------
Financial Statements were prepared from the Books and Records of each Seller and
fairly present, in all material respects, the financial position of the Business
as of the dates thereof and the results of its operations and its cash flows for
the periods set forth therein, in each case in accordance with past practice and
GAAP during the periods involved (except as otherwise disclosed in the notes
thereto and subject to (a) normal year-end adjustments that would not be
material in amount or effect, (b) the absence of notes, (c) adjustments to
reflect the Excluded Assets and the Excluded Liabilities on the Final Closing
Statement) and (d) the absence of a statement of cash flows for the period ended
January 31, 2002. The Unaudited Financial Statements set forth all intercompany
or other transactions between the Business and each Seller and each Seller's
Affiliates, except as described in Schedule 4.9, except for transactions that do
------------
not individually or
-21-
in the aggregate have a value of $100,000 or more per annum. All material
corporate allocations and other material estimates used to prepare the Unaudited
Financial Statements are shown on Schedule 4.9 and the Unaudited Financial
------------
Statements reflect, in all material respects, the costs of operating the
Business on a standalone basis (other than as set forth in Schedules 4.9 and
4.13).
4.10 Properties; Title.
Schedule 4.10(a) sets forth the tangible assets with a cost of $25,000 or
----------------
more owned by each Seller included in the Contributed Assets. Each Seller has
good title to, or valid leasehold interest in or other valid right to use, free
and clear of Encumbrances other than Permitted Encumbrances, each Seller's
respective assets and properties, owned or leased, personal or mixed, tangible
or intangible, included in the Contributed Assets. The Contributed Assets,
together with any assets, products or services provided to the Company in the
Ancillary Agreements, include all material assets and properties related to, or
necessary for the operation of, the Business, and upon the Closing or Final
Closing, as the case may be, the Company will have good and marketable title to,
or a valid leasehold interest in, the material assets and properties required to
operate the Business in all material respects as it was conducted prior to the
Closing Date, in each case except for such assets, products and services
provided to the Company in the Ancillary Agreements, and except for the effects
of any failures to obtain any Third Party Consents or any Approvals or Permits
that may be required in connection with the transactions described in this
Agreement. Except as set forth in Schedule 4.10(b), the physical properties
----------------
included in the Contributed Assets that are required to operate the Business are
in reasonably good repair and operating condition (reasonable wear and tear
excepted) and adequate for the purposes for which such properties and assets are
currently used or held for use.
4.11 Taxes.
(a) Except as set forth in Schedule 4.11 or to the extent any Tax
-------------
constitutes an Excluded Liability, each Seller has timely filed or will file
(or, where permitted or required, each Sellers' Affiliates have timely filed or
will file) all Tax Returns required to be filed on or prior to the Closing Date
(taking into account extensions to file) with respect to the Business. To the
Sellers' knowledge, all such Tax Returns, including amendments to date, have
been prepared in good faith and are complete and accurate in all material
respects, and all Taxes shown thereon have been paid, and all deposits required
by law to be made with respect to Taxes of the Business have been made, except
where any such failure would not, individually or in the aggregate, be material.
(b) No known adjustment relating to such Tax Returns has been proposed
in writing by any Tax authority (insofar as such adjustment relates to the
activities or income of any Seller). There are no pending or, to any Seller's
knowledge, threatened actions for the assessment or collection of Taxes that
relate to the activities or income of the Business or could result in liability
to the Business. There are no liens for Taxes upon the Contributed Assets other
than liens for Taxes not yet due and payable. Except as set forth in Schedule
--------
4.11, all Taxes which each Seller is required by law to withhold or to collect
----
for payment have been duly withheld and collected, and have been paid over to
the appropriate Tax authorities, or have been appropriately reserved for. There
are no pending or, to any Seller's knowledge, threatened actions for the
assessment or collection of Taxes related to Taxes for sales or use with respect
to
-22-
the operations of the Business. Since December 31, 1999, and to any Seller's
knowledge prior to such date, no issues have been raised by the relevant tax
authorities on audit that are of a recurring nature and that would have an
effect on the Taxes with respect to the operations of the Business.
4.12 Permits.
Each Seller holds all material Permits that are required by any
Governmental Entity to permit them to conduct the Business as presently
conducted. To Sellers' knowledge, no suspension, cancellation or termination of
any material Permit that is a Contributed Asset is overtly threatened or
imminent. Each Seller, and to PTEK's knowledge, each Sellers' respective
directors, officers, consultants or employees (in their capacity as such), are
not in default with respect to any Order or Action of any Governmental Entity or
regulatory authority with respect to the Business in each such case except for
such defaults as would not individually or in the aggregate be Material.
Schedule 4.12 contains a true and complete list of the material Permits, and the
-------------
Telco Permits, and describes any such Permit (other than a Telco Permit) that is
not transferable to the Company.
4.13 Intercompany Transactions.
Since December 31, 2000, except as set forth on Schedule 4.13, no Seller
-------------
has engaged in any material transaction with respect to the Business with PTEK
or any direct or indirect subsidiary of PTEK with respect to any asset, product
or service necessary for the operation of the Business as conducted during such
period, other than assets, products or services described in the Ancillary
Agreements. Schedule 4.13, the Unaudited Financial Statements or the Ancillary
-------------
Agreements set forth the nature of any transaction (except for transactions that
do not individually or in the aggregate have a value of $100,000 or more per
annum) in which the service or product provided to or by the Business to its
Affiliates was provided on terms materially less favorable to the Business than
could have been obtained at the time in any arm's length transaction with an
unaffiliated third party.
4.14 Compliance with Law.
Except as set forth in Schedule 4.14, the Business is not in violation of,
-------------
and has no liability under any Law, which violation or liability would,
individually or in the aggregate, have a Material Adverse Effect. No Seller has
received any written notice from, or otherwise been advised in writing that, any
Governmental Entity or other Person is claiming any violation or potential
violation of any Law with respect to the Business.
4.15 No Brokers or Finders.
Except as set forth on Schedule 4.15, no agent, broker, finder, or
-------------
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of any Seller or their Affiliates in connection with the negotiation,
execution or performance of this Agreement or the Transaction, is or will be
entitled to any brokerage or finder's or similar fee or other commission as a
result of this Agreement or the Transaction.
-23-
4.16 Certain Rights.
To the knowledge of Sellers, PCI has a valid, perfected, first priority
lien in the Telecare Assets that is assignable to the Company.
4.17 Patents, Trademarks and Proprietary Information.
(a) Schedule 4.17 lists the registered Intellectual Property and
-------------
material Proprietary Information of the Business.
(b) Except as set forth on Schedule 4.17, Sellers own all right, title
and interest in and to the registered Intellectual Property listed on Schedule
--------
4.17 and material Proprietary Information listed on Schedule 4.17 necessary to
---- ----------- -------------
operate the Business substantially in the manner it is currently being operated.
A general description material licenses used in the business, if any, is
provided on Schedule 4.17.
-------------
(c) To Sellers' knowledge and except as provided on Schedule 4.17, the
-------------
operation of the Business does not infringe or misappropriate the Proprietary
Information or Intellectual Property of any third party, person or entity. To
Sellers' knowledge, no third party is infringing or misappropriating the
Intellectual Property or Proprietary Information of the Business.
(d) Other than as stated on Schedule 4.17, Sellers have entered into
-------------
no outstanding options, licenses or agreements of any kind granting rights in
the Business' Intellectual Property or Proprietary Information, nor is any
Seller bound by or a party to any such options, licenses or agreements of any
kind with respect to its Intellectual Property or Proprietary Information used
in the Business, including without limitation, any options, licenses, or other
agreements for patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other Proprietary Information and
processes of any other person or entity (other than such licenses or agreements
arising from the purchase of "off- the-shelf" or standard products).
(e) Other than as stated on Schedule 4.17, no Seller has received any
-------------
communications alleging that the Business has violated or, by conducting its
business as presently proposed, would violate any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity, nor is any Seller aware of any basis
therefor.
(f) No Seller is aware that any of its employees in the Business are
obligated under any written contract (including licenses and covenants) or other
written agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to such Seller or
the Business or that would conflict with the Business. Sellers are not aware of
any subject matter contributed to the business by any employee, officer or
consultant which Sellers do not have a right to practice.
-24-
(g) Neither the execution nor the delivery of this Agreement, nor the
conduct of the Business after the Closing, to the extent it is conducted in the
same manner as it is currently conducted, will conflict with, or result in a
breach of, the terms, conditions, or provisions of, or constitute a default
under, any contract, covenant or instrument under which any employee of any
Seller is now obligated to the Sellers.
4.18 Material Contracts.
(a) Except as disclosed in Schedule 4.18, no Seller is a party to any
-------------
of the following Contracts with respect to the Business (the "Material
--------
Contracts"):
---------
(i) Collective bargaining agreements or other contracts with any
labor union, or any contract, whether written or oral (excluding any oral or
written contract that is terminable-at-will under the laws of the relevant
jurisdiction without severance obligations), for the employment of any
Transferred Employee on a full-time, part-time, consulting or other basis, or
any agreement relating to loans to Transferred Employees or their affiliates;
(ii) Agreements or indentures evidencing Assumed Liabilities
relating to the borrowing of money or to the mortgaging, pledging or otherwise
placing an Encumbrance other than Permitted Encumbrances on any asset or group
of assets of Sellers related to the Business;
(iii) Contracts or agreements prohibiting a Seller from freely
engaging or competing in the Business or any similar business anywhere in the
world, to the extent such contract or agreement is binding on Buyer, the Company
or the Contributed Assets in such manner after the Closing;
(iv) Partnership, joint venture, or other similar Contract
arrangement;
(v) Any Contract relating to the acquisition or disposition of
any business of any Seller (whether by merger, sale of stock, sale of assets or
otherwise other than in the ordinary course of business);
(vi) Any other Contract which creates future payment obligations
by or to the Business in excess of $250,000 per year;
(vii) Any Contract (other than any customer contract) which by
its terms does not terminate or would not be terminable without penalty by Buyer
after the Closing upon notice of 90 days or less; or
(viii) Any agreement of the type described above to which the
Company is a party.
(b) Sellers have furnished to Buyer true and complete copies of each
of the Material Contracts to the extent written. Except as set forth on Schedule
--------
4.22, the Business has no oral Material Contracts.
----
-25-
(c) To PTEK and Sellers' knowledge, all of the Contracts are legal,
valid and binding obligations of the Seller that is a party thereto and in full
force and effect. Each Seller has duly performed in all material respects all of
its obligations under each Contract to the extent those obligations have accrued
and no default, violation, or breach of any Seller or, to PTEK's or any Seller's
knowledge, any other party under any Contract has occurred which adversely
affects the enforceability of such Contract or any Sellers' rights thereunder,
including without limitation rights of termination, modification and
acceleration, except where any of the foregoing would not, individually or in
the aggregate, be Material. Except as described in Schedule 4.18, no purchase
-------------
contracts or commitments of the Business (other than those which do not require
the provision of consideration, either to or by the Business, worth at least
$250,000 per year) continue for a period of more than twelve (12) months.
4.19 Absence of Certain Changes or Events.
Except as set forth in Schedule 4.19, since December 31, 2001, there has
-------------
been no Material Adverse Effect. Except as set forth on Schedule 4.19, without
-------------
limiting the foregoing, with respect to the Business, since December 31, 2001
(or such other date as is noted below):
(a) No Seller has increased the level of benefits under any Employee
Benefit Plan, the salary or other compensation (including severance) payable or
to become payable to any of the Transferred Employees or obligated itself to pay
any bonus or other additional salary or compensation to any Transferred
Employee;
(b) No Seller has entered into any Material transaction other than in
the ordinary course of business consistent with past practice;
(c) No Seller has sold, transferred, disposed of, or agreed to sell,
transfer or dispose of, any assets, properties, Intellectual Property or rights
other than in the ordinary course of business consistent with past practice;
(d) No Seller has acquired any material assets, except in the ordinary
course of business, nor acquired or merged with any other business;
(e) No Encumbrances have been incurred or created on any of the
Contributed Assets, other than Permitted Encumbrances, and no Seller has
assigned or sublet any portion of any Included Real Property Lease;
(f) No Seller since December 31, 2000 has made any material change in
any allowance or tax or accounting practice, policy or method or any method of
calculating any bad debt, contingency or other reserve for accounting, financial
reporting or tax purposes or make any material tax election or settle or
compromise any material income tax liability with any Governmental Entity;
(g) There has been no waiver or amendment of any material right
relating to any Seller which would reasonably be expected to be material to the
conduct of the Business;
-26-
(h) Since December 31, 2000, except for Capital Leases disclosed to
Buyer, no Seller has made, or committed to make, any capital expenditure (or
series of related capital expenditures) that is either material or outside the
ordinary course of business;
(i) No Seller has amended, rescinded or terminated (and not renewed)
any existing Material Contract and no such Material Contract has expired or
terminated (and not been renewed) by its terms;
(j) No customer or reseller of any Seller accounting for more than 1%
of revenues of the Business (calculated on the basis of the year ended December
31, 2001) has terminated its relationship with any Seller or notified Seller in
writing that it intends to do so, and no Seller has caused the Business to make
any material change in pricing, marketing, or purchasing policies or methods;
(k) None of the Contributed Assets, individually or in the aggregate,
have been destroyed, damaged or otherwise lost (whether or not covered by
insurance); and
(l) Each Seller has not entered into any commitment (contingent or
otherwise) to do any of the foregoing, other than pursuant to this Agreement.
4.20 Accounts Receivable.
All Accounts Receivable included in the Contributed Assets are (a) valid,
bona fide claims against debtors for sales or other charges, and (b) not subject
to any defenses, set-offs or counterclaims. Each Seller has fully performed in
all material respects, all obligations with respect to such Accounts Receivable
that it was obligated to perform to the date hereof.
4.21 Real Property.
Schedule 4.21 sets forth a complete and accurate list of all Included Real
-------------
Property Leases. Each Included Real Property Lease is a legal, valid, binding
obligation of the parties thereto and, to the knowledge of Sellers, is in full
force and effect and the tenant enjoys peaceful and undisturbed possession
thereunder. All rents and other payments due to date under each Included Real
Property Lease have been paid in full, and there is no existing default,
violation or breach by any Seller or by any third party, which materially and
adversely affects the enforceability of any such Included Real Property Lease or
any party's rights thereunder. With respect to each Included Real Property
Lease, each Seller has not received any notice of any violation of any
applicable zoning ordinance, building code, planning law or regulation, use or
occupancy restriction, or violation of any thereof, or any condemnation action
or proceeding with respect thereto. No Seller owns any real property used in
connection with the Business, except as set forth on Schedule 4.21. Sellers have
-------------
good title in fee simple to the owned real property included in the Contributed
Assets, free and clear of Encumbrances, other than Permitted Encumbrances.
4.22 Customers, Resellers and Suppliers.
Schedule 4.22 sets forth a correct and complete list of all of the Material
-------------
customers, resellers, and suppliers of the Business, in each case which
customer, reseller or supplier paid to
-27-
or received from the Business payments in excess of $250,000 during the year
ended December 31, 2001, or is reasonably expected to pay or receive such amount
during 2002. Except as set forth in Schedule 4.22, there are no outstanding
-------------
disputes with any customers, resellers or supplier that individually or in the
aggregate are material. Except as set forth in Schedule 4.22, since December 31,
-------------
2001, no such customer, reseller or suppliers of the Business has refused to do
business with any Seller or, to the knowledge of Sellers, has stated to any
Seller its intention not to continue to do business with any Seller or to
materially and adversely change its relationship or arrangements with respect to
the Business, whether as a result of the transactions contemplated hereby or
otherwise.
4.23 Employment Matters.
Schedule 4.23 sets forth a complete and accurate list of the name, location
-------------
of employment, nationality, length of service, and current annual rates of
salary or other compensation payments due with respect to each Transferred
Employee, as well as a list of all existing employment or consulting contracts
or severance arrangements which constitute contractual obligations including
bonuses, increases and any form of base or variable pay of each Seller and any
other compensation that may be owed from any Seller upon termination of his or
her employment, or upon the sale of the Contributed Assets, whether pursuant to
a written or oral agreement or arrangement, any policy of any Seller or by
operation of Law (including, without limitation, the Laws of any foreign country
in which any such employee is employed), or in the form of a retention or a
change of control bonus, with respect to any such employees. Except as specified
in Schedule 4.23, none of such employees includes any Persons who are not United
-------------
States citizens. Except as set forth in Schedule 4.23, there are no collective
-------------
bargaining agreements with any union or other bargaining group for any employees
of any Seller related to the Business and there has been no union organizational
efforts involving such employees of any Seller during the last five (5) years
and to Sellers' knowledge no such organization efforts are pending or overtly
threatened. There is no strike, labor dispute, work slowdown or stoppage pending
or, to Sellers' knowledge, overtly threatened against the Business and there has
not been any such strike, labor dispute, work slow down or stoppage within the
past five (5) years. No Transferred Employee is on a leave of absence,
disability leave, extended absence or receiving benefits pursuant to workers'
compensation legislation. All current assessments under workers' compensation
legislation in relation to the Transferred Employees have been paid or accrued
and no Seller has been subject to any special or penalty assessment with respect
to the Business under such legislation which has not been paid.
4.24 Employee Benefit Plans.
Schedule 4.24 sets forth a complete and accurate list of all Employee
-------------
Benefit Plans of each Seller. Each Seller has furnished or made available to
Buyer a true and complete copy of each such Employee Benefit Plan, including all
amendments thereto, all funding agreements, all summary descriptions and
evidence of any registration in respect thereof. Each such Employee Benefit Plan
has been administered in accordance with its terms in all material respects and
complies in all material respects with and has been administered in all material
respects in compliance with the provisions of all applicable Laws. No
improvements to any Seller's Employee Benefit Plan have been promised, and no
improvements or amendments to any Seller's Employee Benefit Plan will be made or
promised prior to the Closing, except as may be
-28-
required by Law or as may be applicable to a class of employees of any Seller
not limited to the Transferred Employees. There is no pending or, to Sellers'
knowledge, overtly threatened legal action, proceeding or investigation against
or involving any Seller's Employee Benefit Plan that would result in liability
to Buyer. Except as disclosed in Schedule 4.24, none of the Employee Benefit
-------------
Plans of the Sellers provides medical, life or other welfare benefits to retired
employees or consultants of the Business or the beneficiaries or dependents of
such retired employees or consultants.
4.25 Environmental Matters.
(a) When used in this Section 4.25 a "Seller" shall includes any
------------
partnerships of which a Seller was a member or any business acquired by a Seller
or to which a Seller has succeeded:
(b) Each Seller and each Site is in compliance with all, and each
Seller has no liability under any, Environmental Laws, except where the failure
to be in such compliance individually or in the aggregate would not have a
Material Adverse Effect.
(c) No Release has occurred at any Site, and there are no present or
past Environmental Conditions in any way relating to any Seller, any Site, or
the Business, except for any such Releases or Environmental Conditions which
would not have a Material Adverse Effect.
(d) Sellers have no environmental audits or other studies or reports
relating to any Environmental Condition or relating to the Business.
(e) To Sellers' knowledge, no Seller is a potentially responsible
party with respect to any foreign, federal, state, or local environmental
clean-up site or with respect to investigations or corrective actions under any
Environmental Law.
(f) No Seller has received written notice of any alleged, actual or
potential responsibility, inquiry, investigation or administrative or judicial
proceeding regarding (i) any Release at any Site or other location, or (ii) any
violation of or non-compliance by any Seller with the conditions of any Permit
required under any Environmental Law or the provisions of any Environmental Law.
No Seller has received any written notice of any other claim, demand or action
by any Person alleging any actual or threatened injury or damage to any Person,
property, natural resource or the environment arising from or relating to any
Release, transportation, disposal or presence of any Hazardous Substances.
(g) To Sellers' knowledge, there are not now and never has been any
underground or above-ground storage tanks located at any Site.
(h) Each Seller has given all notices and warnings, made all reports,
obtained all Permits, licenses and approvals, and has kept, maintained and filed
all records required by, and in compliance with, all Environmental Laws,
including, without limitation any notices and consents required under any
Environmental Laws in connection with the consummation of the Transaction
contemplated by this Agreement, except in each case where the failure to do any
of the foregoing would individually or in the aggregate be Material.
-29-
4.26 Insurance.
Schedule 4.26 sets forth a list of all insurance policies, letters of
-------------
credit and surety bonds covering or relating to the Business. Except as set
forth on Schedule 4.26, there are no pending claims against such insurance by
any Seller as to which the insurers have denied coverage or otherwise reserved
rights. In the last three years, no Seller has been refused any insurance with
respect to the Business nor has its coverage been limited by any carrier to
which it has applied for insurance. Schedule 4.26 lists all claims of each
-------------
Seller related to the Business which are currently pending or which have been
made with an insurance carrier, and all losses incurred with respect to
self-insured risks, in the last three years.
4.27 Disclaimer of Other Representations and Warranties.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PTEK AND SELLERS MAKE NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT
OF ANY OF THEIR ASSETS, LIABILITIES, OPERATIONS OR PROSPECTS, AND ANY SUCH OTHER
REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. BUYER HEREBY
ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN
THIS AGREEMENT, THE BUYER IS PURCHASING THE MEMBERSHIP INTERESTS AND IS
ACQUIRING THE PCI REGULATED ASSETS AND ASSUMING THE PCI LIABILITIES ON AN
"AS-IS, WHERE-IS" BASIS.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as otherwise indicated on Buyer's Disclosure Schedule, Buyer
represents, warrants and agrees as follows:
5.1 Organization and Related Matters.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. Buyer has all necessary authority and
corporate power to own its properties and to carry on its business as now being
conducted and is duly qualified or licensed to do business as a foreign
corporation in good standing in all jurisdictions where the nature of its
business requires licensing or qualification, except where the failure to be so
qualified or licensed would not, individually or in the aggregate, result in a
Buyer Material Adverse Effect.
5.2 Authorization; No Conflicts.
Buyer has all necessary authority and corporate power to execute, deliver
and perform this Agreement. The execution, delivery and performance of this
Agreement by Buyer have been duly and validly authorized by all necessary
corporate action on Buyer's part. This Agreement constitutes Buyer's legally
valid and binding obligation, enforceable against Buyer in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally. Buyer's execution, delivery
and performance of this Agreement will not violate, or constitute a breach or
default under, Buyer's certificate of incorporation, or under its by-laws.
Subject to obtaining the Approvals contemplated in Section 5.4, Buyer's
-----------
execution, delivery and performance of this Agreement will not violate any Law
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except for any violation that would not, individually or in the aggregate,
reasonably be expected to result in a Buyer Material Adverse Effect.
5.3 Legal Proceedings.
There is no Order or Action pending or, to Buyer's Knowledge, threatened
against or affecting Buyer that individually or when aggregated with one or more
other Orders or Actions has or if determined adversely would have a Buyer
Material Adverse Effect.
5.4 Approvals and Third Party Consents.
Section 5.4 of Buyer's Disclosure Schedule lists any Approvals by any
-----------
Governmental Entity and any material Third Party Consents by any Person not a
party to this Agreement required in connection with the execution or performance
of this Agreement by Buyer.
5.5 No Brokers or Finders.
Any brokerage fees and commissions incurred by Buyer will be the sole
responsibility of Buyer, and Sellers will have no obligation with respect to any
agent, broker, finder, investment or commercial banker or other Person or firms
engaged by or acting on behalf of Buyer or its Affiliates in connection with the
negotiation, execution or performance of this Agreement or the Transaction, is
or will be entitled to any broker's or finder's or similar fees or other
commissions as a result of this Agreement or the Transaction.
5.6 Purchase of the Membership Interests; Investment Experience;
Restricted Securities.
(a) The Membership Interests to be purchased by Buyer hereunder will
be acquired for investment for Buyer's own account, not as a nominee or agent,
and not with a view to the public resale or distribution thereof within the
meaning of the Securities Act and Buyer has no present intention of selling,
granting any participation in, or otherwise distributing the same.
(b) Buyer understands that the purchase of the Membership Interests
involves substantial risk. Buyer acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Membership Interests
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of this investment in the
Membership Interests and protecting its own interests in connection with this
investment.
(c) Buyer understands that the Membership Interests are characterized
as "restricted securities" under the Securities Act inasmuch as they are being
acquired from Sellers in a transaction not involving a public offering, and that
under the Securities Act and applicable regulations thereunder, such securities
may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act, except
pursuant to an exemption from such registration available under the Securities
Act. In this connection, Buyer represents and warrants that it is familiar with
Rule 144 of the Securities and Exchange Commission, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
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5.7 Tax Liability.
Buyer has reviewed with its own respective tax advisors the federal, state,
local and foreign Tax consequences of the purchase of the Membership Interests
by Buyer and the transactions contemplated by this Agreement and the Ancillary
Agreements. With respect to the Tax consequences of the purchase of the
Membership Interests, Buyer relies solely on such advisors and not on any
statements, representations or warranties of PTEK or the Sellers or any of their
officers, directors, members, employees, representatives or agents.
5.8 Investigation; No Additional Representations and Warranties.
(a) Buyer is an informed and sophisticated participant in the
transactions contemplated hereby and has undertaken such investigation, and has
been provided with and has evaluated such documents and information, as it has
deemed necessary in connection with the execution, delivery and performance of
this Agreement.
(b) Notwithstanding anything to the contrary contained in this
Agreement, it is the explicit intent of each party hereto that PTEK and the
Sellers are making no representation or warranty whatsoever, express or implied,
beyond those expressly given in this Agreement. It is understood that any cost
estimates, projections or other predictions contained or referred to in Sellers'
Disclosure Schedule, in the offering materials that have been provided to Buyer
with respect to the Business or that have otherwise been disclosed to Buyer are
not and shall not be deemed to be representations or warranties hereunder.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Maintenance of Insurance.
Each Seller hereby agrees to maintain, through the date of each Seller's
transfer of the Contribution Agreement Assets and VCL Assets to the Company and
the Final Closing Date in respect of the PCI Regulated Assets, all existing
insurance policies covering such Contribution Agreement Assets, VCL Assets or
PCI Regulated Assets, except to the extent Contributed Assets are insured by the
Company. The Company shall be added as a named insured under the policies of
Sellers.
6.2 Intentionally omitted
6.3 Access to Information; Notification of Certain Matters.
From the date hereof through the Final Closing, Buyer and its employees,
advisors, attorneys, accountants and other representatives ("Representatives")
---------------
and Buyer's lenders and financial sources shall have reasonable access during
normal business hours to all properties, Books and Records, Contracts, Permits
and other documents of or relating to each Seller relating to the Business in
order to make such investigation as they shall deem desirable. Each Seller shall
furnish or cause to be furnished to Buyer and its Representatives all data,
information and reports concerning the Business and such Seller's properties,
including without limitation, access to officers and employees as may reasonably
be requested. No such investigation performed or
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information received by Buyer or any Representative shall affect in any way the
liability of Seller for the breach of any representation, warranty, covenant or
agreement contained herein or in any Ancillary Agreement.
6.4 Approvals and Permits.
Sellers and Buyer each agree to cooperate and use their commercially
reasonable best efforts to obtain, and will promptly prepare all registrations,
filings and applications, requests and notices preliminary to, all Approvals and
Permits that may be necessary to consummate the Transaction, including but not
limited to, all registrations, filings and applications, requests and notices
preliminary to, all Approvals and Permits necessary for the transfer of the PCI
Regulated Assets to the Company subsequent to the Closing. Notwithstanding the
foregoing, the risks and all costs, liabilities, lost profits, lost revenues,
and all other Losses arising out of or related to the failure of any party to
obtain any such Approvals and Permits shall be Buyer's.
6.5 Government Approvals and Filings.
(a) As promptly as practicable, Buyer and Sellers will file with the
appropriate Government Entity any approvals, if any, as required in connection
with consummation of the transactions contemplated hereby.
(b) The parties acknowledge that they may be required or desire to
communicate with Federal and/or state or foreign regulatory, antitrust
authorities and other related Persons regarding the Transaction both before and
after the Final Closing. Each party agrees to consult with the other in advance
of any material communications with governmental authorities or related Persons
regarding the Transaction and to cooperate with the other party in connection
with any Inquiry arising therefrom. Each party further agrees to forward to the
other copies of any material communications sent by it or its Representatives
to, or received by it from, any governmental authority or related Persons
regarding the Transaction, as well as written summaries of any material oral
communications with respect thereto. All significant information will be
disclosed to the other party promptly after it is learned or its significance is
appreciated. If there is initiated by any Governmental Entity or other Person
any investigation, proceeding, litigation, inquiry, hearing, information or data
request, or information gathering process relating to the Transaction whether
before or after the Final Closing (each, an "Inquiry"), Sellers and Buyer will
-------
use commercially reasonable efforts to coordinate and promptly respond to such
Inquiry. The parties will use commercially reasonable best efforts to disclose
and make available to each other all material information that is not subject to
attorney-client privilege or the work product doctrine in their possession
relating to the Transaction.
6.6 Post-Closing Covenants Regarding Employees.
(a) Prior to Closing, the Company shall make offers of employment to
those employees of Sellers who are employees of the Business as of the Closing
and who are listed on Schedule 6.6(a). Such offers of employment shall be
---------------
subject to the Closing and shall be made on such commercially reasonable terms
as Buyer may prescribe. Such employees shall not commence employment with the
Company until the Closing Date. Those employees who accept
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the Company's employment offer and who report for duty on the Closing Date are
collectively referred to as "Transferred Employees".
(b) Effective as of the Closing Date, Buyer will take all such actions
as are required to cause each of the Transferred Employees to be provided with,
as of such date or as otherwise agreed to in the Transition Services Agreement,
benefits under Buyer's employee benefit plans, programs, policies and
arrangements maintained by Buyer for similarly situated employees of Buyer and
its Affiliates and compensation, including cash and other compensation, that are
substantially comparable in the aggregate, to the compensation and benefits
provided to such employee as of the date of this Agreement. Nothing in this
Agreement will be deemed a guarantee of employment for any specified period, and
nothing herein will confer upon any employee any right to employment or any
right under any benefit, plan, program, policy or arrangement. Transferred
Employees will be credited for eligibility and vesting from the Closing Date
under the benefit plans, programs and arrangements of Buyer or the Company with
their service to Sellers before the Closing Date to the same extent such service
was credited under the comparable plans of the respective Seller. The Company
will give each Transferred Employee full credit for accrued vacation to the
extent accrued on the Final Closing Statement. Buyer will use commercially
reasonable efforts to cause its third party providers of its employee benefit
plans to waive all limitations as to pre-existing conditions, exclusions and
waiting periods with respect to participation and coverage requirements
applicable to Transferred Employees under any welfare plan that such employees
may be eligible to participate in after the Closing Date. Buyer will use
commercially reasonable efforts to provide each Transferred Employee with credit
for any co-payments and deductibles paid before the Closing Date in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Closing Date to the
same extent as if those deductibles or co-payments had been paid under the
welfare plans for which such employees are eligible after the Closing Date.
Buyer and the Company will not be responsible for any run out or deficit funding
obligation for claims prior to the Closing Date. Buyer will cause its
401(k)/profit sharing plan to accept, after the Closing Date, the rollovers of
individual distributions of any Transferred Employee's account in any Seller
401(k)/profit sharing plan, including the acceptance in such transfer of any
outstanding plan loan of such Transferred Employee.
(c) Each Seller will be responsible for making continuation coverage
under Code Section 4980B and Sections 601-608 of ERISA ("COBRA") available to
any Transferred Employee and any eligible spouse or dependent who experiences a
"qualifying event," as defined in Code Section 4980B(f)(3), before or as of
April 30, 2002. Buyer will be responsible for making continuation coverage under
COBRA available to any Transferred Employee and any eligible spouse or dependent
who experiences a "qualifying event," as defined in Code Section 4980B(f)(3),
after April 30, 2002. Buyer will not, pay for, fund or subsidize the purchase of
COBRA continuation coverage by or on behalf of any Transferred Employee, spouse
or dependent after the Closing.
(d) Sellers shall pay all costs and liabilities arising out of the
termination of any of Sellers' employees who are not Transferred Employees,
including (i) compliance with the requirements of the WARN Act, (ii)
administration and payment of severance benefits, and if provided, out placement
assistance, (iii) accrued salary, vacation and benefits, whether or not payable
under an employment Contract, (iv) providing COBRA benefits under applicable
law,
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and (v) any other related obligations. Buyer and Company shall pay all such
costs and liabilities of the type described in clauses (i) through (v) of this
paragraph with respect to all Transferred Employees who are terminated after the
Closing to the extent accrued on the Final Closing Statement or incurred after
Closing.
(e) The Company may with notice to Sellers request delivery of the
original Books and Records pertaining to the personnel files of the Transferred
Employees. Thereafter, the Company shall provide copies of such Books and
Records to Sellers upon any Seller's reasonable request.
(f) After the Closing, the Company or Buyer shall adopt a cafeteria
plan under Section 125 of the Code for the benefit of the Transferred Employees.
At the Closing, Sellers shall provide to Buyer a list of Transferred Employees
participating in Sellers' cafeteria plan, together with a list of their
elections, and any balances in their respective accounts as of the Closing Date.
6.7 Intentionally Omitted.
----------------------
6.8 Covenants Not to Compete and Not to Solicit.
(a) As an inducement for Buyer to enter into this Agreement, PTEK and
each Seller agrees that for five (5) years following the date hereof at any time
or for any reason, PTEK and each Seller shall not, and shall cause its
Affiliates, successors and assigns not to, anywhere in the world (other than
Australia or New Zealand), directly or indirectly (a) engage, without the prior
express written consent of Buyer, in any business or activity, whether as an
employee, consultant, partner, principal, agent, representative, stockholder
(except as a holder of less than five percent (5%) of the combined voting power
of the outstanding stock of a publicly held company) or in any other individual,
corporate or representative capacity, or render any services or provide any
advice to any business, activity, person or entity, if PTEK or such Seller knows
or reasonably should know that such business, activity, service, person or
entity, directly or indirectly, competes in any material manner with the
Protected Business, or (b) meaningfully assist, help, finance or otherwise
support, without the prior express written consent of Buyer, any person,
business, corporation, partnership, or other entity or activity, whether as an
employee, consultant, partner, principal, agent, representative, stockholder
(other than in the capacity as a stockholder of less than five percent (5%) of
the combined voting power of the outstanding shares of stock of a publicly held
company) or in any other individual, corporate or representative capacity, to
create, commence or otherwise initiate, or to develop, enhance or otherwise
further, any business or activity if PTEK or such Seller knows or reasonably
should know that such business or activity, directly or indirectly competes in
any material manner with the Protected Business. As used herein, "Protected
Business" shall mean the provision of hosted voice mail box, network/broadcast
voice messaging, long-distance calling card and inbound interactive voice
response customer management services; provided, however, that "Protected
Business" shall not include the products and services offered by PTEK's
subsidiaries and Affiliates other than the Company and Sellers as of the date of
this Agreement, or ▇▇▇.▇▇▇, Inc. (in which an Affiliate of PTEK owns a minority
equity interest), all as further described on Schedule 6.8.
------------
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(b) As an inducement for Buyer to enter into this Agreement, PTEK and
each Seller agrees that for five (5) years following the date hereof at any time
or for any reason, PTEK and each Seller shall not, and shall cause its
Affiliates, successors and assigns not to, directly or indirectly (i) with
respect to the Protected Business, take any action to solicit or divert any
business (or Potential Business) or clients or customers (or Potential Client or
Potential Customer) away from the Company or any of its Affiliates who they come
in contact with or are involved in the Business, (ii) induce customers,
Potential Customers, clients, Potential Clients, suppliers, agents or other
persons under contact or otherwise associated or doing business with respect to
the Business with the Company, or any of its Affiliates to terminate, reduce or
alter any such associates or business with respect to the Protected Business
with or from the Company or any of its Affiliates, and/or (iii) induce any
person in the employment of the Company or any of its Affiliates in the Business
to (a) terminate such employment, (b) accept employment, or enter into any
consulting arrangement, with anyone other than the Company or any of its
Affiliates, and/or (c) with respect to the Protected Business, interfere with
the customers, suppliers, or clients of the Company or any of its Affiliates in
any manner. For one (1) year following the Closing Date, neither PTEK nor any of
its Affiliates shall hire or employ any employee to whom an offer of employment
was made pursuant to Section 6.6(a) and who did not become a Transferred
--------------
Employee.
(c) PTEK and each Seller hereby agrees that the Confidential
Information, Intellectual Property and Proprietary Information of the Business
shall upon the Closing become the property of Buyer or the Company and that PTEK
and each Seller will not directly or indirectly disclose to any person, or use
or otherwise exploit for its own benefit or for the benefit of any person, other
than the Company and/or its Affiliates, any Confidential Information or
Proprietary Information other than any of the foregoing which becomes public
information without any breach of this Agreement by PTEK or such Seller, except
in each case where disclosure shall be required by applicable Law, after
reasonable prior notice to Buyer and the Company such that they would have the
opportunity to obtain an appropriate protective order.
(d) The parties to this Agreement agree that (i) if PTEK or any Seller
breaches any provision of this Section 6.8, the damage to Buyer will be
-----------
substantial, although difficult to ascertain, and money damage will not afford
Buyer an adequate remedy, and (ii) if PTEK or any Seller is in breach of any
provision of this Section 6.8, or threatens a breach of any provision of this
-----------
Section 6.8, Buyer and the Company shall be entitled, in addition to all other
-----------
rights and remedies as may be provided by law, to specific performance and
injunctive and other equitable relief, without posting of any bond or other
security, to prevent or restrain a breach of any provision of this Section 6.8.
-----------
The rights and remedies provided herein are cumulative and are not exclusive of
any rights or remedies that either party may otherwise have at law or in equity.
6.9 Actions to Effect Transaction and Obtain Consents.
(a) Each of the parties shall use its reasonable efforts to consummate
and make effective as promptly as practicable the transactions contemplated
hereby and to assist each other in their respective efforts to obtain all
necessary waivers, consents and approvals from other parties. From and after the
Closing, Buyer and each Seller agree to cooperate and shall use their
commercially reasonable efforts to obtain any Third Party Consent that is
required to be made or obtained by PTEK or such Seller (i) by virtue of the
execution, delivery or performance
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of this Agreement; (ii) to avoid the loss of any Permit or the breach of any
contract or the creation of an Encumbrance on any of the assets of the Business;
or (iii) to enable Buyer and the Company to own and operate the Business
following the Closing Date as it is operated on the date hereof. Notwithstanding
the foregoing, the risks and all costs, liabilities, lost profits, lost
revenues, and all other Losses arising out of or related to the failure of any
party to obtain any such Third Party Consent shall be Buyer's.
(b) To the extent that any Contract or right included in the
Contributed Assets is not capable of being assigned or transferred without the
consent or waiver of the other party thereto, or any third person, or if such
assignment or transfer or attempted assignment or transfer would constitute a
breach thereof or a violation of any law, decree, order, regulation or other
governmental edict or is otherwise not practicable, this Agreement shall not
constitute an assignment, transfer or sublease thereof, or an attempted
assignment, transfer or sublease thereof until the earlier to occur of (i) the
time that the appropriate consent or waiver is obtained, and (ii) one year from
the Closing. To the extent, and until, any Contract or right included in the
Contributed Assets is not assigned hereunder (the "Non-Assigned Contracts"),
then the Sellers shall use commercially reasonable efforts to preserve and
provide to Company the benefit (including the economic benefit thereof) of the
Non-Assigned Contracts to the extent received by Sellers. If Sellers shall have
made such arrangements with respect to any Non-Assigned Contracts, Company will
assume the obligations of Sellers to be performed on and after the Closing and
will perform and fulfill such obligations as though such Non-Assigned Contracts
have been assigned to Company, in each case except as otherwise provided in the
Management Services Agreement. During any such time Company is performing the
Non-Assigned Contracts, Company and Buyer shall indemnify, defend and hold
harmless PTEK and Sellers, and the Seller Indemnified Parties, for all Losses
arising out of or related to the failure to assign, or obtain a consent to
assign or to the purchase of membership interests, with respect to such
Non-Assigned Contract.
6.10 Litigation Support.
(a) In the event and for so long as any party to this Agreement
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand (each, a "Claim") in
-----
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving the Business, the other party will cooperate with
it and its counsel in the contest or defense, make available their personnel,
and provide such testimony and access to their Books and Records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending party, including without limitation
reimbursement of the reasonable cost of time spent by the employees of the party
making such employees available (unless the contesting or defending party is
entitled to indemnification therefor under Article X below).
---------
(b) Notwithstanding subsection (a), PTEK and PCI shall use their
reasonable best efforts to permit the Company to take title to the Telecare
Assets, including, without limitation, joining in any Action required to effect
the transfer of rights in the Telecare Assets to the Company, and making its
counsel, personnel, Books and Records available for any
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proceeding related to the Telecare Assets; provided, however, that the Company
-------- -------
shall act as the lead party in any such Action and retain its own counsel at its
expense.
6.11 Capital Leases and Included Real Property Leases.
(a) At Closing, Buyer shall assume those Capital Leases included in
the Assumed Liabilities. Prior to and after the Closing, Buyer will use
commercially reasonable efforts to cause PTEK and any Sellers to be released
with respect to any Capital Leases guaranteed in whole or in part by PTEK or any
Seller, or for which PTEK or any Seller would otherwise remain liable after the
Closing, including if necessary by offering the substitution of GTG Holdings,
Inc. as a guarantor or joint and several obligor under any of such Capital
Leases pursuant to a form of guarantee that is satisfactory to such capital
lessor.
(b) Prior to and after Closing, Buyer shall use its commercially
reasonable efforts to cause Sellers to be released from all guarantees by and
other obligations of Sellers with respect to any Included Real Property Leases
that are guaranteed in whole or in part by any Seller or for which any Seller
would otherwise remain liable after the Closing, including if necessary by
offering the substitution of GTG Holdings, Inc. as a guarantor or joint and
several obligor under any of such Included Real Property Leases pursuant to a
form of guarantee that is satisfactory to such lessor.
6.12 PCI Post-Closing Operations.
(a) PCI will, after the Closing, continue to provide the Business'
services to customers of the Business that require the provider to be licensed
with a federal or state governmental authority, which services constitute
"Telecommunications Services" as such term is defined in The Communications Act
of 1934, as amended by The Telecommunications Act of 1996 (the
"Telecommunications Services"). PCI will retain the PCI Regulated Assets for the
purpose of allowing it to continue to provide such Telecommunications Services
pending the Final Closing and the completion of the transfer of such PCI
Regulated Assets to Buyer pursuant to the provisions of Article II. During such
interim period, the Company shall manage PCI's provision of all the
Telecommunications Services pursuant to a Management Services Agreement to be
entered into at the Closing.
(b) Subsequent to the Closing and until such time as the Final Closing
occurs, PCI will promptly notify Buyer if it, PTEK, or any of the other Sellers,
obtains knowledge of any fact or event, change or circumstance occurs relating
to the PCI Regulated Assets that had it occurred prior to the execution of this
Agreement, would have been disclosed on the Schedules hereto.
(c) Subsequent to the Closing and until such time as the Final Closing
occurs, pursuant to the Management Services Agreement, PCI shall cooperate with
the Company so that the Company may make all payments required to conduct
business using the PCI Regulated Assets and PCI shall continue to comply with
all state and federal regulatory requirements applicable to the PCI Regulated
Assets.
(d) During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Final Closing,
PTEK, PCI and the Converted
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Companies, shall not, with respect to the PCI Regulated Assets, without the
written consent of Buyer:
(i) Sell, lease, license, mortgage or otherwise encumber or
otherwise dispose of any of the PCI Regulated Assets;
(ii) Incur or suffer to exist any Encumbrance on the PCI
Regulated Assets, other than Permitted Encumbrances;
(iii) Initiate, compromise, or settle any litigation or
arbitration proceeding relating to the PCI Regulated Assets (other than Actions
related to the Telecare Assets with he consent of Buyer);
(iv) Enter into, or otherwise modify, amend, violate or terminate
any Contract of the Business, or waive, release or assign any rights or claims
relating to the PCI Regulated Assets;
(v) Make or commit to make any capital expenditures, or purchases
of supplies or equipment, or other incurrence of liabilities that would be PCI
Liabilities, except pursuant to the Management Services Agreement;
(vi) Fail to give all notices and other information required to
be given by PCI to any applicable government authority under applicable law in
connection with the transactions provided for in this Agreement;
(vii) Directly or indirectly, through its Affiliates, officers,
directors, employees, representatives and agents, encourage, solicit, initiate,
engage or participate in discussions or negotiations with any Person (other than
Buyer or its Affiliates) concerning any sale of the PCI Regulated Assets;
(viii) Subject to the proviso in Section 6.10(b), take or fail to
---------------
take any action that would prevent, hinder, or delay the acquisition of the
Telecare Assets by the Company; and
(ix) Take, or agree to take, any action that would result in the
failure of the ▇▇▇▇ of Sale and Assignment and Assumption Agreement to comply
with Section 3.5.
-----------
6.13 Centigram Licensed Premises.
(a) Each applicable Seller, as the "tenant" under each of the lease
agreements (collectively, "Centigram Site Leases") with respect to each such
premises (such Seller or any successor, assign, or successor-in-interest as such
"tenant" is referred to as "Licensor" for purposes of this Section 6.13), hereby
------------
grants to Company a license to use each of the premises identified on Schedule
--------
6.13 hereto (collectively, the "Licensed Premises") for the sole purpose of
----
operating, maintaining, repairing, replacing and/or removing the centigram
equipment located therein as of the date hereof and performing and otherwise
complying with the duties and obligations of Company under this Section 6.13.
------------
Each such license shall be subject to the
-39-
following terms and conditions, and Company hereby covenants and agrees as
follows with respect to each Licensed Premises and each Centigram Site Lease:
(i) Term. The term of each license granted under this Section
-------
6.13 shall commence on the Closing Date and shall expire upon the expiration of
----
the term of the applicable Centigram Site Lease, subject to earlier termination
or expiration as set forth in this Section 6.13.
------------
(ii) Provisions of the Centigram Site Leases.
(1) Company shall pay for the use of the Licensed Premises
monthly, based on the Seller's actual cost, in accordance with the terms of the
Transition Services Agreement. Company shall be responsible for the repair and
maintenance of the Licensed Premises and for complying with any rules and
regulations promulgated by the respective "landlords" thereunder during the
terms of the applicable licenses. Except as expressly set forth hereinabove, all
duties, obligations, liabilities and responsibilities of Licensor as "tenant"
under each Centigram Site Lease shall remain the duties, obligations,
liabilities and responsibilities of Licensor. To the extent of Company's
obligations thereunder, Licensor shall have all of the rights of the "landlord"
under the applicable Centigram Site Lease as against Company.
(2) Company covenants and agrees that Company will not
knowingly do anything that would cause a default by Licensor under any Centigram
Site Lease.
(3) Each license granted in this Section 6.13 and any other
------------
rights of Company in connection therewith are hereby expressly made subject and
subordinate to the applicable Centigram Site Lease. Company acknowledges that
its possession and use of each of the Licensed Premises shall at all times be
subject to the rights of the "landlord" under the applicable Centigram Site
Lease. Upon the expiration of the term of any Centigram Site Lease or any
earlier termination thereof, the license with respect to the Licensed Premises
thereunder, and any other rights of Company with respect thereto, shall
automatically be extinguished and terminated as of the date of such termination
or expiration. Licensor shall provide Company with at least thirty (30) days'
written notice prior to any early termination of a Centigram Site Lease. In such
event, all payments due under the Transition Services Agreement in connection
with the Centigram Site Leases for the month during which such termination or
expiration occurs shall be prorated from the first day of the month through and
including such termination or expiration date, and neither party shall
thereafter have any duty, obligation, covenant, agreement, liability or
responsibility to the other arising out of this Agreement relating to periods of
time after such termination or expiration date, except as set forth hereinbelow.
(iii) Equipment. All furniture, fixtures, and equipment of Seller
(including, without limitation, any centigram equipment) located in any Licensed
Premises at Closing shall be deemed to be a part of the FF&E, and in no event
shall Licensor have any duties, obligations, responsibility, or liability
whatsoever with respect thereto (including, without limitation, with respect to
the maintenance and repair thereof). Company may remove, sell, or retain such
equipment in the Licensed Premises in Company's sole discretion.
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(iv) "As Is" Condition; Alterations. Company agrees to accept
each Licensed Premises in its "as is" condition, as of the date of this
Agreement. Company shall be permitted to make any alterations, additions,
installations or improvements of any kind to any Licensed Premises to the extent
"tenant" is permitted to do so under each applicable Centigram Site Lease.
(v) Assignment and Other Transfers. Company shall not voluntarily
or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer
or encumber all or any part of any Licensed Premises or any license or other
rights with respect thereto or permit any person other than Licensor or Company
or an affiliate of Company to use the Licensed Premises without (i) the prior
written consent of Licensor, which consent shall not be unreasonably withheld,
conditioned, or delayed, or (ii) if all of the Membership Interests or all or
substantially all of the assets of the Company are sold.
(vi) Indemnity. Company shall indemnify and hold harmless
Licensor from and against any and all claims arising from Company's use of any
Licensed Premises, or from the conduct of Company's business or from any
activity, work or thing done, permitted or suffered by Company in or about any
Licensed Premises or elsewhere. Company agrees that should any action or
proceeding be brought against Licensor by reason of any such claim, upon notice
from Licensor, Company shall defend the same at Company's expense by counsel
reasonably satisfactory to Licensor. Sellers shall indemnify and hold harmless
Company from and against any and all claims in connection with the Licensed
Premises or the Centigram Site Leases arising out of events occurring prior to
the Closing Date or after the expiration or termination of the applicable
license. Sellers agree that should any action or proceeding be brought against
Company by reason of any such claim, upon notice from Company, Sellers shall
defend the same at Sellers' expense by counsel reasonably satisfactory to
Company. The terms and provisions of this subparagraph (vi) are cumulative of
and in addition to any other term or provision of this Agreement.
(vii) Holdover. Company shall indemnify and hold harmless
Licensor from and against any and all claims arising from any hold over not
approved by Licensor.
(viii) Access. Licensor and its agents shall have the right to
enter any Licensed Premises at reasonable times, upon reasonable notice to
Company, for the purpose of inspecting the same. In addition, Licensor shall
have the right to enter the Licensed Premises to perform such actions as are
required of it as tenant pursuant to the applicable Centigram Site Lease.
(b) Termination.
(i) In the event Licensor receives any written notice of
termination from the landlord under any Centigram Site Lease (including, without
limitation, any such notice relating to the termination of any month-to-month
tenancy resulting from any hold over beyond the expiration date of the
applicable Centigram Site Lease), Licensor shall, promptly after receipt of
same, give written notice thereof to Company's Representative and otherwise in
accordance with Section 11.11 hereof.
-------------
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(ii) Notwithstanding anything to the contrary contained herein,
Company shall not have the right to terminate any license granted hereunder
until the expiration of the current term of the applicable Centigram Site Lease,
including any month-to-month tenancy resulting from any holdover; provided,
however, that Company shall have the right to terminate any such license granted
hereunder upon forty-five (45) days written notice thereof addressed to
Licensor's Representative and otherwise in accordance with Section 11.11 hereof
-------------
if the applicable Centigram Site Lease is terminable by Licensor with thirty
(30) days notice, in which event such license shall terminate upon such
termination.
The terms and provisions of this Section 6.13 shall survive the Closing.
------------
ARTICLE VII
TAX MATTERS
7.1 Tax Indemnification; Tax Returns.
(a) All Taxes of the Company and all Taxes related to the Business for
taxable periods beginning before the Closing Date and ending on or after the
Closing Date will be allocable between the partial taxable period ending on the
Closing Date and the partial period beginning on the day after the Closing Date
and ending at any time thereafter by means of closing the books and records for
each of the Company, the Converted Companies and the Business on the Closing
Date, provided that any such Taxes that are calculated on an annual basis shall
be based upon the assessment in place as of the Closing Date and shall be
allocated between the partial taxable period ending on the Closing Date and the
partial taxable period beginning on the day after the Closing Date in proportion
to the number of days in each such partial taxable period. Taxes allocated to
the partial taxable period ending on the Closing Date, including, without
limitation, except as provided in Section 7.4, any and all Taxes payable as a
-----------
result of the transactions contemplated by this Agreement (the "Indemnified Tax
Liabilities") shall be paid by Sellers, and the Buyer Indemnified Parties shall
be indemnified and held harmless by Sellers, jointly and severally, from and
against any and all such Taxes. Taxes allocable to the partial taxable periods
beginning on the day after the Closing Date and ending at any time thereafter
are the responsibility of Buyer and Buyer shall pay such Taxes or cause such
Taxes to be paid and shall indemnify and hold PTEK, Sellers and their Affiliates
harmless from and against any and all such Taxes.
(b) Each Seller shall be liable for, shall pay or cause to be paid and
shall indemnify and hold Buyer and its Affiliates, including, after the Closing,
the Company, and all of their officers, liabilities, costs, expenses (including
reasonable attorneys' fees and the cost and expenses of enforcing such
indemnification against Sellers), interest and penalties, if any, arising out of
or based upon or for or in respect of each of the following: (i) any and all
Taxes with respect to the Business or the Company for any taxable period (or any
partial period) ending on or before the Closing Date; (ii) any and all Taxes of
Sellers; (iii) any and all Taxes resulting solely from the Company's having been
included in any consolidated, combined or unitary tax return that included
Sellers or the Company for any taxable period (or portion thereof) ending on or
before the Closing Date pursuant to Treasury Regulation Section 1.1502-6(a) or
any analogous or similar state, local or foreign law or regulations (other than
any liability arising under such Treasury Regulation or analogous law by reason
of the Company becoming a
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member of the consolidated, combined or unitary group of which Buyer is a
member); (iv) any and all other Taxes with respect to the Business or the
Company for any Tax period ending on or prior to the Closing Date or with
respect to periods beginning before the Closing Date and ending after the
Closing Date to the extent allocated to the Company or to the Sellers pursuant
to Section 7.1(a) hereof and not previously paid.
--------------
(c) Each Seller will be responsible for the preparation and filing of
all Tax Returns for such Seller and the Converted Companies for all periods as
to which Tax Returns are due after the Closing Date (including the consolidated,
unitary, and combined Tax Returns for Sellers which include the operations of
the Business, the Company and the Converted Companies for any period ending on
or before the Closing Date). Buyer will be responsible for the preparation and
filing of all Tax Returns for the Business and the Company for all periods as to
which Tax Returns are due after the Closing Date (other than for Taxes with
respect to periods for which the consolidated, unitary, and combined Tax Returns
of Sellers will include the operations of the Business and the Company).
7.2 Tax Cooperation.
After the Closing, Sellers and Buyer will, and Buyer will cause its
Affiliates to, cooperate fully with each other in the preparation and filing of
all Tax Returns and any Tax investigation, audit or other proceeding regarding
the Business (a "Tax Proceeding") and will provide, or cause to be provided, any
records and other information in their possession or control or in the control
of their representatives reasonably requested by such other party in connection
therewith as well as access to, and the cooperation of, their respective
auditors. Buyer will notify Sellers in writing promptly upon receipt by Buyer or
any Affiliate of Buyer of any notice of any pending or threatened audits or
assessments relating to Taxes other than Taxes as to which Sellers and/or their
Affiliates have no indemnification obligation or other liability relating to
Taxes. Sellers will have the right to control the handling and disposition of
such audit and any related administrative or court proceeding (and to employ
counsel of their choice at their expense) if the audit or proceeding might
result in increased Tax liabilities of Sellers or any of their Affiliates for
the period covered by the Tax Proceeding or an increase in its indemnification
obligations to Buyer under this Agreement, provided that Sellers submits to
Buyer an executed acknowledgement that they are liable for those Taxes payable
for taxable periods (or portions thereof) ending on or before the Closing Date
resulting from such contest. In any such audit or contest, Buyer will take such
action as Sellers may by written notice reasonably request in connection with
such audit or contest, at Sellers' expense. If the outcome of the Tax Proceeding
could have an adverse effect on Buyer or its Affiliates, then Buyer may
participate in the Tax Proceeding and Sellers will use commercially reasonable
efforts to keep Buyer fully informed in a timely manner as to the status and
resolution of the Tax Proceeding. Buyer and Sellers will bear their respective
costs and expenses in connection with any Tax Proceeding.
7.3 Maintain Records.
Until the later of seven (7) years after the Closing Date or the expiration
of the applicable statute of limitations for the Tax Return in question, Buyer
and Sellers will maintain all Tax records, working papers, and other supporting
financial records and documents relating to the Tax Returns filed by, on behalf
of, or relating to any Taxes for the last closed year and for all
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open years (including the taxable year in which the Closing Date occurs)
relating to the purchase of the Purchased Assets. At the end of the period set
forth above, Sellers or Buyer, as the case may be, may dispose of such
documents, provided that notice of such disposition must be given to the other
party at least sixty (60) days in advance of such disposition. Upon receipt of
such notice, Sellers or Buyer, as the case may be, may request, at the
requesting party's expense, that such documents be delivered to them instead of
disposing of such documents.
7.4 Transfer Taxes.
Notwithstanding anything herein to the contrary, all sales, use, gross
receipts, registration, business and occupation, transfer, stamp duty,
securities transactions, real estate, and similar taxes and notarial fees
assessed or payable in connection with the transfer of the Purchased Assets or
other transactions contemplated by this Agreement, regardless of whether such
taxes become due or payable on or after the Closing Date, shall be paid by
Sellers, and promptly upon receipt of supporting documentation, one-half of the
amount paid shall be reimbursed to Sellers by Buyer or the Company.
Notwithstanding the foregoing, PTEK or VCL shall pay all transfer taxes
associated with the VCL Agreement.
7.5 Tax Sharing Agreements.
As of the Closing Date, any and all Tax Sharing, indemnity or allocation
agreements shall terminate as between the Company on the one hand, and PTEK or
any of its subsidiaries or Affiliates, on the other hand.
7.6 Survival of Obligations.
The obligations of the parties set forth in this Article VII shall be
unconditional and absolute and shall remain in effect without limitation as to
time, except that the obligations to indemnify and hold harmless a party hereto
pursuant to Section 7.1 shall terminate at the time the applicable statutes of
-----------
limitations with respect to the Tax liabilities in question expire (giving
effect to any extension thereof); provided, however, such obligations to
indemnify and hold harmless shall not terminate with respect to any item as to
which the indemnitee or the related party thereto shall have, before the
expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim) to
the indemnifying party.
ARTICLE VIII
CONDITIONS OF PURCHASE
8.1 General Conditions.
The obligations of the parties to effect the Closing will be subject to the
following conditions, unless waived in writing by both parties:
(a) No Law or Order will have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity at what would otherwise be
the Closing Date that prohibits or restricts the transactions contemplated by
this Agreement; and
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(b) All Approvals required to be obtained from any Governmental Entity
will have been received or obtained on or before the Closing Date, other than
those Approvals relating to and necessary to transfer the PCI Regulated Assets
on the Final Closing Date, and other than such Approvals the failure of which to
obtain would not prevent or materially delay the consummation of the
transactions contemplated by this Agreement, or would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect or
a Buyer Material Adverse Effect.
8.2 Conditions to Obligations of Buyer.
The obligations of Buyer to effect the Closing will be subject to the
following conditions, unless waived in writing by Buyer:
(a) The representations and warranties of PTEK and each Seller in this
Agreement will be true at the Closing Date with the same effect as though made
at such time except for any failure that, individually or in the aggregate, has
not resulted in or would not result in a Material Adverse Effect;
(b) PTEK and each Seller will have performed all obligations and
complied with all covenants and conditions required by this Agreement to be
performed or complied with by it at or before the Closing Date except for any
failure that, individually or in the aggregate, has not resulted in and would
not result in a Material Adverse Effect;
(c) PTEK and each Seller will have delivered to Buyer a certificate of
such Seller in form and substance satisfactory to Buyer, dated the Closing Date
and signed by an executive officer of such Seller to the effect set forth in
paragraphs (a) and (b) of this Section 8.2;
-----------
(d) PTEK and each Seller, as applicable, shall have delivered to Buyer
a duly executed counterpart of the Ancillary Agreements;
(e) All actions to be taken by each Seller in connection with the
consummation of the transactions contemplated hereby and the form and substance
of all certificates, instruments and other documents delivered to Buyer under
this Agreement shall be reasonably satisfactory in all material respects to
Buyer and its counsel;
(f) Each Seller shall have delivered to the Company a general
conveyance document and contract, patent, copyright and trademark assignments
dated the Closing Date transferring title to the Contributed Assets in such form
as Buyer reasonably requests;
(g) VCL shall have delivered to the Company grant deeds and any other
instrument of conveyance required to vest in the Company good title in fee
simple to the owned real property assets of VCL; and
(h) Buyer shall have received from each of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
counsel for PTEK and Sellers, and Friend, ▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for PTEK and
Sellers, its opinion dated the Closing Date.
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8.3 Conditions to Obligations of PTEK and each Seller.
The obligations of PTEK and each Seller to effect the Closing will be
subject to the following conditions, unless waived in writing by PTEK:
(a) The representations and warranties of Buyer in this Agreement will
be true at the Closing Date with the same effect as though made at such time
except for any failure that, individually, or in the aggregate, has not resulted
in or would not result in a Buyer Material Adverse Effect;
(b) Buyer will have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by it at or before the Closing Date except for any failure that,
individually, or in the aggregate, has not resulted in and would not result in a
Buyer Material Adverse Effect;
(c) Buyer will have delivered to Sellers a certificate of Buyer in
form and substance satisfactory to Sellers, dated the Closing Date and signed by
an executive officer of Buyer to the effects set forth in paragraphs (a) and (b)
of this Section 8.3;
-----------
(d) Buyer will have delivered to Seller (i) a duly executed
counterpart of the Ancillary Agreements, as applicable, and (ii) such other
documents required to be delivered by Buyer hereunder; and
(e) PTEK and Sellers shall have received from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for Buyer, an opinion dated the Closing Date.
ARTICLE IX
TERMINATION OF OBLIGATIONS;
NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES
9.1 Termination of Agreement.
Anything herein to the contrary notwithstanding, this Agreement may be
terminated at any time before the Closing as follows and in no other manner:
(a) By mutual consent in writing of Buyer and PTEK.
(b) By either Sellers or PTEK by written notice to the Buyer if any
Governmental Entity has issued an Order or taken any other actions (which the
parties will use their commercially reasonable efforts to lift), in either case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such Order or other action becomes final and
nonappealable.
(c) By Buyer by giving written notice to PTEK and the Sellers at any
time prior to the Closing in the event that PTEK, the Sellers or the Company has
breached any representation, warranty, or covenant contained in this Agreement
in any material respect, the Buyer has notified PTEK in writing of the breach,
and the breach has continued without cure for a period of 30 days after the
notice of breach.
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(d) By PTEK by giving written notice to Buyer at any time prior to the
Closing in the event that Buyer has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, PTEK has notified
Buyer of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach.
(e) By either Buyer or PTEK, by written notice to the other party, if
the Closing shall not have occurred on or before March 29, 2002, and such
failure to consummate the transaction is not caused by a breach of this
Agreement by the terminating party or the failure of the terminating party to
obtain any required consent or approval.
9.2 Effect of Termination.
If this Agreement is terminated pursuant to Section 9.1, all further
-----------
obligations of the parties under this Agreement will terminate without further
liability of any party to another; provided, however, that the obligations of
the parties contained in Section 11.9 (Confidentiality) and Section 11.12
------------ -------------
(Expenses) will survive any such termination. A termination under Section 9.1
-----------
will not relieve any party of any liability for a breach of, or for any
misrepresentation under, this Agreement, or be deemed to constitute a waiver of
any available remedy, including specific performance if available, for any such
breach or misrepresentation.
9.3 Non-Survival of Representations and Warranties.
The representations and warranties contained in or made pursuant to this
Agreement, the Contribution Agreement and VCL Agreement will expire at Closing
or the Final Closing, as the case may be. For the avoidance of doubt, terms of
the Transaction as set forth in Article II are not representations or warranties
----------
for purposes of this Section 9.3.
-----------
ARTICLE X
INDEMNIFICATION
10.1 Obligations of Sellers and PTEK.
PTEK and each Seller, jointly and severally, agrees to indemnify and hold
harmless Buyer, the Company and their directors, officers, employees,
stockholders, Affiliates, agents, representatives, successors and assigns
(collectively, "Buyer Indemnified Persons") from and against any and all Losses
directly or indirectly, as a result of, or based upon or arising from or
resulting from any of the (i) Excluded Liabilities (as defined in the
Contribution Agreement) or (ii) the breach or non-performance of any covenant or
agreement of any Seller in this Agreement or any Ancillary Agreement.
10.2 Obligations of Buyer and the Company.
Buyer and the Company, jointly and severally, agree to indemnify and hold
harmless PTEK and each Seller and their directors, officers, employees,
stockholders, Affiliates, agents, representatives, successors and assigns
(collectively, "Seller Indemnified Persons") from and against any and all
Losses, directly or indirectly, as a result of, or based upon or arising from
(i) Buyer's or the Company's conduct and operation of the Business after the
Closing, (ii) the Assumed Liabilities, (iii) subject to Sellers' obligations
with respect thereto, the failure of any
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party to obtain any Approval, Permit or Third Party Consent, or (iv) the breach
or non-performance of any covenant or agreement of Buyer in this Agreement or
any Ancillary Agreement.
10.3 Procedure.
(a) Any party seeking indemnification with respect to any Loss (the
"Indemnified Party") will in writing promptly (but in any event within such
-----------------
period as may be necessary for the Indemnifying Party to take appropriate action
to resist such claim) notify the party required to provide indemnity hereunder
(the "Indemnifying Party") in accordance with Section 11.11, provided, that the
------------------ ------------- --------
failure to give such notice shall not affect the right of the Indemnified Party
to indemnification except to the extent the failure to give notice prejudices
the Indemnifying Party's ability to defend any claim.
(b) If any claim, demand or liability is asserted by any third party
against any Indemnified Party (a "Third Party Claim"), the Indemnified Party
-----------------
will, upon notice of the claim or demand, promptly notify the Indemnifying
Party, and the Indemnifying Party will defend and/or settle any actions or
proceedings brought against the Indemnified Party in respect of matters embraced
by the indemnity with counsel reasonably satisfactory to the Indemnified Party.
If the Indemnifying Party does not promptly defend or settle any such claims,
the Indemnified Party will have the right to control any defense or settlement,
at the expense of the Indemnifying Party. No claim will be settled or
compromised without the prior written consent of each party to be affected, with
such consent not being unreasonably withheld, and without an unconditional
release from liability of the Indemnified Party. The Indemnified Party will at
all times also have the right to participate fully in the defense at its own
expense unless there is, under applicable law, a conflict on any significant
issue between Indemnifying Party and Indemnified Party, in which case the fees
and expenses of one counsel in respect of such claim incurred by the Indemnified
Party will be paid by Indemnifying Party. The parties will cooperate in the
defense of all Third-Party Claims that may give rise to Indemnifiable Claims
hereunder. In connection with the defense of any claim, each party will make
available to the party controlling such defense, any books, records or other
documents within its control that are reasonably requested in the course of such
defense.
(c) If the Indemnified Party has a claim against the Indemnifying
Party that does not involve a Third Party Claim (an "Inter-Party Claim", and
-----------------
together with a Third Party Claim, an "Indemnifiable Claim"), the Indemnified
-------------------
Party will notify the Indemnifying Party with reasonable promptness of the
claim, and, to the extent known, specifying the nature, estimated amount and the
specific basis for the claim. The Indemnifying Party will respond within thirty
(30) days of receipt of the notice of an Inter-Party Claim. If the Indemnifying
Party fails to respond, the claim specified by the Indemnified Party will be
conclusively deemed a liability of the Indemnifying Party, subject only to proof
of the amount of Loss. If the Indemnifying Party timely disputes the claim, the
Indemnified and the Indemnifying Party will negotiate in good faith to resolve
the dispute, and if not resolved, either party may pursue whatever remedies it
may have.
(d) All payments made pursuant to this Article X shall be treated as
adjustments to the Purchase Price.
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(e) All indemnity payments shall be made in cash upon settlement or
resolution of any claim for indemnification, unless the Indemnified Party
otherwise agrees.
10.4 Exclusive Remedy.
Following the Closing Date, notwithstanding anything in this Agreement to
the contrary, and except for claims for fraud or claims for specific performance
or injunctive relief, the indemnification provisions contained in this Agreement
shall be the exclusive remedy for any breach of any of the covenants or
agreements made by the parties in this Agreement or any of the Ancillary
Agreements or any facts or circumstances constituting such a breach.
10.5 Limitation on Indemnification.
No claim for indemnity under this Agreement shall be asserted by, and no
liability for such indemnity shall be enforced against, any party to the extent
the Indemnified Party has theretofore actually received indemnification or
insurance proceeds related to such claim.
ARTICLE XI
GENERAL
11.1 Amendments; Waivers.
Except as expressly provided herein, this Agreement and any attached
Schedule or Exhibit may be amended only by agreement in writing of all parties
thereto. No waiver of any provision nor consent to any exception to the terms of
this Agreement or any agreement contemplated hereby will be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
11.2 Schedules; Exhibits; Integration.
Each Schedule and Exhibit delivered pursuant to the terms of this Agreement
must be in writing and will constitute a part of this Agreement, although
schedules need not be attached to each copy of this Agreement. This Agreement,
together with such Schedules and Exhibits, and the other agreements and
instruments delivered at Closing, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings of the parties in connection therewith.
11.3 Further Assurances.
Each party will execute and deliver, both before and after the Closing,
such further certificates, agreements and other documents and take such other
actions as the other party may reasonably request or as may be necessary or
appropriate to consummate or implement the Transaction or to evidence such
events or matters, or, in the case of Sellers, to grant the Company title to any
Contributed Asset that should have been delivered at the Closing or the Final
Closing pursuant to the terms hereof, but was not.
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11.4 Governing Law.
This Agreement and the legal relations between the parties will be governed
by and construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to
conflicts of law doctrines unless certain matters are preempted by federal law.
11.5 No Assignment.
Neither this Agreement nor any rights or obligations under it are
assignable by one party without the prior written consent of the other party,
except that Buyer, PTEK or Sellers may pledge any rights hereunder to financing
sources or lenders, without the other parties' consent, provided that no such
pledge shall relieve the assigning party of any of its obligations hereunder.
11.6 Headings.
The descriptive headings of the Sections and subsections of this Agreement
are for convenience only and do not constitute a part of this Agreement.
11.7 Counterparts.
This Agreement and any amendment hereto or any other agreement delivered
pursuant hereto may be executed in one or more counterparts and by different
parties in separate counterparts. All counterparts will constitute one and the
same agreement and will become effective when one or more counterparts have been
signed by each party and delivered to the other party.
11.8 Publicity and Reports.
PTEK and Buyer will coordinate all publicity relating to the Transaction
and no party will issue any press release, publicity statement or other public
notice relating to this Agreement, or the Transaction, without the prior
approval of the other party to the text of such press release, publicity
statement or other public notice (such approval not to be unreasonably
withheld), unless the party has consulted with independent legal counsel and
concluded based on such advice that a particular action is required by
applicable law or stock exchange rules.
11.9 Confidentiality.
Each of PTEK and Buyer agrees that all non-public, confidential information
so received from the other party is deemed received pursuant to the
confidentiality agreement, dated as of May 14, 2001 between PTEK and Buyer's
Affiliate (the "Confidentiality Agreement") and each party will, and will cause
-------------------------
its Representatives (as defined in the Confidentiality Agreement) to, comply
with the provisions of the Confidentiality Agreement with respect to such
information, and the provisions of the Confidentiality Agreement are hereby
incorporated by reference with the same effect as if fully set forth herein. For
the avoidance of doubt, non-public, confidential or proprietary information or
copies thereof retained by PTEK and Sellers regarding the Business is governed
by the Confidentiality Agreement.
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11.10 Parties in Interest.
This Agreement is binding upon and will inure to the benefit of each party
and their respective successors or assigns, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
11.11 Notices.
Any notice or other communication hereunder must be given in writing and:
(a) delivered in person; (b) transmitted by facsimile; (c) delivered via an
overnight courier service of national reputation; or (d) mailed by certified or
registered mail, postage prepaid, receipt requested as follows:
If to Buyer, addressed to:
Voicecom Telecommunications, Inc.
c/o Gores Technology Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Gores Technology Group
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to PTEK or Sellers, addressed to:
c/o PTEK Holdings, Inc.
The ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to such other Person as either party has last
designated by such notice to the other party. Each such notice or other
communication will be effective: (a) if given by facsimile, when transmitted to
the applicable number so specified in this Section 11.11 and an appropriate
-------------
answer is received; (b) if given by mail, three (3) days after such
communication is deposited in the mails with first class postage prepaid,
addressed as above; (c) if given by overnight courier service of national
reputation, one day after such communication is deposited with such courier
service; or (d) if given by any other means, when actually received at such
address.
11.12 Expenses.
Sellers and Buyer will each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the Transaction,
including, the fees, expenses and disbursements of their respective investment
bankers, accountants and counsel.
11.13 Waiver.
No failure on the part of any party to exercise or delay in exercising any
right hereunder will be deemed a waiver thereof, nor will any single or partial
exercise preclude any further or other exercise of such or any other right.
11.14 Attorney Fees.
If there is any Action for the breach of this Agreement by any party, the
prevailing party will be entitled to reasonable attorney's fees, costs and
expenses incurred in such Action (including an allocable portion of in-house
attorney costs). Attorneys fees incurred in enforcing any judgment in respect of
this Agreement are recoverable as a separate item. The preceding sentence is
intended to be severable from the other provisions of this Agreement and to
survive any judgment and, to the maximum extent permitted by law, will not be
deemed merged into any such judgment.
11.15 Representation By Counsel; Interpretation.
Sellers and Buyer each acknowledge that each has been represented by
counsel in connection with this Agreement and the Transaction. Accordingly, any
rule of Law or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived. The provisions of this
-52-
Agreement will be interpreted in a reasonable manner to effect the intent of
Buyer, PTEK and Sellers.
11.16 Severability.
If any provision of this Agreement is held to be unenforceable for any
reason, it will be adjusted rather than voided, if possible, to achieve the
intent of the parties. All other provisions of this Agreement will be deemed
valid and enforceable to the extent possible.
11.17 Specific Performance.
Sellers and Buyer each acknowledge that, in view of the uniqueness of the
Business and the Transaction, each party would not have an adequate remedy at
law for money damages in the event that this Agreement has not been performed in
accordance with its terms. Each party therefore agrees that each party shall be
entitled to specific enforcement of the terms hereof in addition to any other
remedy to which it may be entitled, at law or in equity.
-53-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
"BUYER"
VOICECOM TELECOMMUNICATIONS,
INC.
By: /s/▇▇▇▇▇▇ Blattels
----------------------------------
Name: ▇▇▇▇▇▇ Blattels
Its: Senior Vice President
"COMPANY"
VOICECOM TELECOMMUNICATIONS,
LLC
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
"SELLERS"
PTEK HOLDINGS, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
PREMIERE COMMUNICATIONS, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
VOICE-TEL ENTERPRISES, LLC,
formerly known as
Voice-Tel Enterprises, Inc.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
VOICE-TEL OF CANADA LTD.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
INTELLIVOICE COMMUNICATIONS,
LLC, formerly known as
Intellivoice Communications, Inc.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
Pursuant to Item 601(b)(2) of Regulation S-K, the filing of this Membership
Interests Purchase Agreement omits the following exhibits and schedules (unless
otherwise indicated). The registrant agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon request. Capitalized terms used in
the following lists are defined in the Membership Interests Purchase Agreement.
LIST OF EXHIBITS TO MEMBERSHIP INTERESTS PURCHASE AGREEMENT
Exhibit A......................Form of Voicecom Telecommunications,
LLC Limited Liability Company
Agreement by PCI, ICI and VEI
Exhibit B......................Form of Operating Agreement by PCI
with each of ICI and VEI
Exhibit C*.....................Form of Asset Purchase Agreement by
VCL and the Company
Exhibit D*.....................Form of Contribution Agreement by
PTEK, PCI, VEI, ICI and the Company
Exhibit E......................Estimate of Contributed Assets and
Assumed Liabilities and estimated
Closing Date Statement
*--Filed herewith.
LIST OF SCHEDULES TO MEMBERSHIP INTERESTS PURCHASE AGREEMENT
Schedule 1.1(a)................Products and Services
Schedule 1.1(aa)...............Software License Agreements with
respect to software that is an Excluded
Asset
Schedule 1.1(b)................Excluded Contracts
Schedule 1.1(c)................Knowledge (Sellers)
Schedule 1.1(d)................Knowledge (Buyers)
Schedule 1.1(e)................Permitted Encumbrances
Schedule 1.1(f)................Products
Schedule 2.2(e)................Form of Purchase and Sale Agreement
for Included Owned Real Property
Schedule 3.5(a)(i).............PCI Regulated Assets
Schedule 3.5(a)(ii)............PCI Liabilities
Schedule 4.1...................Organization and Related Matters
Schedule 4.4...................Conflicts
Schedule 4.5...................Additional Liabilities
Schedule 4.7...................Legal Proceedings
Schedule 4.8...................Approvals and Third-Party Consents
Schedule 4.9...................Financial Information
Schedule 4.10(a)...............Properties; Title
Schedule 4.10(b)...............Condition of Properties
Schedule 4.11..................Taxes
Schedule 4.12..................Permits
Schedule 4.13..................Intercompany Transactions
Schedule 4.14..................Compliance with Law
Schedule 4.15..................Brokers and Finders
Schedule 4.17..................Intellectual Property
Schedule 4.18..................Material Contracts
Schedule 4.19..................Absence of Certain Changes and Events
Schedule 4.21..................Included Owned Real Property and
Included Real Property Leases
Schedule 4.22..................Customers, Resellers and Suppliers
Schedule 4.23..................Employment Matters
Schedule 4.24..................Employee Benefit Plans
Schedule 4.26..................Insurance
Schedule 5.4...................Buyer Approvals and Third Party
Consents
Schedule 6.6(a)................Transferred Employees
Schedule 6.8...................Covenants Not to Compete and Not to
Solicit
Schedule 6.13..................Licensed Premises
EXHIBIT C
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of the
--------- -----
day of March , 2002 by and between Voicecom Telecommunications, LLC, a Delaware
limited liability company ("Purchaser") and Voice-Tel of Canada Ltd., a Canadian
---------
corporation ("Seller").
-----
WHEREAS, PTEK Holdings, Inc., a Georgia corporation and the sole
shareholder of the Seller ("PTEK"), proposes to sell its Voicecom operating
----
unit, which is engaged in the development, marketing, distribution, sale and
support of hosted voice mail, network voice messaging, long-distance calling
card and inbound interactive voice response customer management services in the
United States and Canada (the "Business") to Voicecom Telecommunications, Inc.,
--------
a Delaware corporation and an affiliate of Gores Technology Group ("VTI"),
---
pursuant to that certain Membership Interests Purchase Agreement (the "Purchase
--------
Agreement") by and among PTEK, Premiere Communications, Inc., a Florida
---------
corporation ("PCI"), Seller, Intellivoice Communications, Inc., a Delaware
---
corporation ("ICI"), Voice-Tel Enterprises, Inc., a Delaware corporation
---
("VEI"), Purchaser and VTI;
---
WHEREAS, the Purchase Agreement contemplates that, prior to the closing of
the transactions contemplated thereby, Seller will sell to Purchaser, and
Purchaser will acquire, all assets held by Seller used in the operation of the
Business, other than VCL Excluded Assets, and Seller will assign, and Purchaser
will assume, certain liabilities of Seller, each as more particularly described
below and in the Schedules to this Agreement;
WHEREAS, pursuant to that certain Contribution Agreement, dated as of the
date hereof, by and among each of PTEK, PCI, ICI, VEI and Purchaser (the
"Contribution Agreement"), PTEK, PCI, ICI and VEI shall transfer to Purchaser,
----------------------
immediately prior to the consummation of the Transaction contemplated under the
Purchase Agreement, the assets and related liabilities of the Business other
than the Excluded Assets and PCI Regulated Assets; and
WHEREAS, Purchaser wishes to purchase from Seller, and Seller is willing to
sell to Purchaser, all of the assets of Seller constituting used in or related
to the Business, and Purchaser wishes to assume from Seller, and Seller is
willing to assign to Purchaser, only those liabilities of Seller that are
Assumed Liabilities (as defined in the Contribution Agreement), all upon the
terms and conditions set forth in this Agreement (the "Acquisition");
-----------
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
warranties herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Contributed Assets. Subject to the terms and conditions set forth in
------------------
this Agreement, at the Effective Time (as defined herein), Seller hereby sells,
conveys, assigns, transfers and delivers to Purchaser, and Purchaser hereby
accepts, purchases, acquires and takes
C-1
assignment and delivery of, all right, title and interest that Seller possesses
and has the right to transfer in, to and under the assets of Seller used or held
for use in the Business (the "VCL Assets"), wherever located, and whether real
or personal, tangible or intangible, free and clear of all Encumbrances (except
for Permitted Encumbrances), except for the Excluded Assets (as defined in the
Contribution Agreement).
1.2 Assumed Liabilities. At the Effective Time, Purchaser hereby expressly
-------------------
assumes, and agrees to pay, perform or otherwise discharge, as the same shall
become due in accordance with their respective terms, the Assumed Liabilities of
Seller (the "VCL Liabilities") existing on or arising after the Closing Date,
but the Purchaser shall assume no Excluded Liabilities (as defined in the
Contribution Agreement) of Seller.
ARTICLE II
PURCHASE PRICE; CLOSING
2.1 Purchase Price. Purchaser shall execute and deliver a promissory note
--------------
to PTEK (the "Note"), in the principal amount of Fifty Thousand Dollars
----
($50,000), due in a single installment upon the closing of the transactions
contemplated by the Purchase Agreement, and bearing no interest.
2.2 Closing. The consummation of the transactions contemplated in this
-------
Agreement (the "Closing") will take place at the offices of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------
LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ at 10:00
a.m., Atlanta, Georgia time, on March , 2002 (the "Closing Date") or at
----- ------------
such other place and time as the parties mutually agree.
2.3 Closing Deliveries of Seller. At the Closing, the Seller is delivering
----------------------------
the following documents, or is causing the following documents to be delivered,
to Purchaser:
(a) an executed ▇▇▇▇ of Sale and Assignment transferring title to the VCL
Assets in the form attached hereto as Exhibit A; and
---------
(b) an executed Assignment and Assumption of Assumed Liabilities whereby
Seller will assign, and Purchaser will assume, the VCL Liabilities in
the form attached hereto as Exhibit B; and
---------
(c) an executed grant deed and other instruments of conveyance required to
vest in the Company good title to the VCL Assets.
2.4 Closing Deliveries of Purchaser. At the Closing, the Purchaser is
-------------------------------
delivering the following documents, or is causing the following documents to be
delivered, to Seller:
(a) an executed Note;
(b) an executed ▇▇▇▇ of Sale and Assignment in the form attached hereto as
Exhibit A; and
---------
C-2
(c) an executed Assignment and Assumption of Assumed Liabilities in the
form attached hereto as Exhibit B.
---------
2.5 Effective Time. This Agreement shall be deemed effective (the
--------------
"Effective Time") immediately prior to the consummation of the initial Closing
--------------
contemplated by the Purchase Agreement; provided, however, in the event that the
transactions contemplated by the Purchase Agreement are not consummated, this
Agreement shall be null and void.
ARTICLE III
CERTAIN DEFINITIONS
3.1 Definitions. Capitalized terms not otherwise defined in this Agreement
-----------
shall have the meanings assigned to them in the Purchase Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 Amendment; Waivers. This Agreement may not be amended, modified or
-------------------
supplemented unless such amendment is in writing and duly executed by the
parties.
4.2 Counterparts. This Agreement may be executed simultaneously in
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.3 Headings. The headings preceding the text of Articles and Sections of
--------
this Agreement are for reference only and shall not be deemed part of this
Agreement.
4.4 Applicable Law; Forum. This Agreement shall be governed by and
--------------
construed and enforced in accordance with the laws of the State of Delaware,
applicable to contracts executed in and performed entirely within that state.
4.5 Severability. Whenever possible each provision and term of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, or determined to be void
or unenforceable for any reason, then such provision or term shall be
ineffective only to the extent of such prohibition, invalidity or
unenforceability, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Agreement, and the prohibited, invalid or unenforceable provision shall be
modified to the minimum extent necessary to make it permissible, valid and
enforceable, unless the result of any such invalidity or unenforceability shall
be to cause a material failure of consideration to the party seeking to sustain
the validity or enforceability of the subject provision.
C-3
4.6 Remedies. Any dispute or claim arising out of or related to this
--------
Agreement shall be governed by the terms, conditions and provisions of the
Purchase Agreement.
4.7 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. THE SELLER MAKES NO
--------------------------------------------
REPRESENTATION OR WARRANTY TO THE PURCHASER, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, IN RESPECT OF ANY OF ITS ASSETS (INCLUDING, WITHOUT LIMITATION, THE VCL
ASSETS), LIABILITIES (INCLUDING, WITHOUT LIMITATION, THE VCL LIABILITIES) OR
OPERATIONS, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR
WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. THE PURCHASER HEREBY ACKNOWLEDGES
AND AGREES THAT IT IS PURCHASING THE VCL ASSETS ON AN "AS-IS, WHERE-IS" BASIS.
[Signatures on following page]
C-4
IN WITNESS WHEREOF, the parties have executed and caused this Agreement to
be executed and delivered on the date first above written.
VOICECOM TELECOMMUNICATIONS, LLC
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
VOICE-TEL OF CANADA LTD.
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
C-5
EXHIBIT A
▇▇▇▇ OF SALE AND ASSIGNMENT
THIS ▇▇▇▇ OF SALE AND ASSIGNMENT is executed and delivered as of March
, 2002 by and between Voicecom Telecommunications, LLC, a Delaware limited
-----
liability company ("Purchaser") and Voice-Tel of Canada Ltd., a Canadian
---------
corporation ("Seller").
------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of
March , 2002 between Purchaser and Seller (the "Asset Purchase Agreement"),
----- ------------------------
Purchaser has agreed to purchase, and Seller has agreed to sell, convey,
transfer and assign, all of the assets, tangible and intangible, owned by Seller
and associated with or used in the Business; and
WHEREAS, the parties now desire to carry out the intent and purpose of the
Asset Purchase Agreement by Seller's execution and delivery to Purchaser of this
▇▇▇▇ of Sale and Assignment, evidencing the vesting in Purchaser of all the
assets of Seller hereafter described;
NOW, THEREFORE, for and in consideration of the premises and the
considerations provided in the Asset Purchase Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller hereby agree as follows:
1. Terms used herein and not otherwise defined shall have the respective
meanings ascribed thereto in the Asset Purchase Agreement, unless the context
requires otherwise.
2. Seller hereby sells, conveys, assigns, transfers and delivers to
Purchaser, and Purchaser hereby accepts, purchases, acquires and takes
assignment and delivery of as of March , 2002, all right, title and
-----
interest in, to and under the VCL Assets, free and clear of all Encumbrances
(except for Permitted Encumbrances)
TO HAVE AND TO HOLD all the VCL Assets unto Purchaser for its own use and
behalf forever, free and clear of all claims, liens, charges, and encumbrances
whatsoever.
3. Notwithstanding the foregoing, the Purchaser is not acquiring, and
Seller is retaining, all right, title and interest in and to, the Excluded
Assets, which shall not be transferred to the Purchaser under this ▇▇▇▇ of Sale
and Assignment:
4. Seller hereby constitutes and appoints Purchaser as Seller's true and
lawful attorney-in-fact, with full power of substitution, in Seller's name and
stead, by, on behalf of, and for the benefit of Purchaser, to demand and receive
any and all of the rights, titles, interests, assets and properties transferred
hereunder and to give receipts and releases for and in respect of the same, and
any part thereof, and from time to time to institute and prosecute in Seller's
name or otherwise, at the expense and for the benefit of Purchaser, any and all
proceedings at law, in
C-A-1
equity or otherwise, which Purchaser may deem proper for the collection or
reduction to possession of any of the VCL Assets or for the collection and
enforcement of any claim or right of any kind hereby sold, conveyed,
transferred, assigned, and delivered, or intended so to be, and to do all acts
and things in relation to the VCL Assets which Purchaser deems desirable. Seller
hereby declares that the foregoing powers are coupled with an interest and are
and will be irrevocable by Seller in any manner or for any reason whatsoever.
5. Seller shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, deeds, assignments,
transfers, assumptions, conveyances, powers of attorney, receipts,
acknowledgments, acceptances, and assurances as may be necessary or convenient
to procure for Purchaser, and its successors and assigns, or for aiding and
assisting in collecting and reducing to possession, any and all of the VCL
Assets, as Purchaser from time to time reasonably requires.
6. This ▇▇▇▇ of Sale and Assignment will be binding from and after its
execution upon Purchaser and Seller and their respective successors and assigns.
7. This ▇▇▇▇ of Sale and Assignment will be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
8. Any representations and warranties contained in or made pursuant to this
▇▇▇▇ of Sale and Assignment will expire at Closing.
[signatures on following page]
C-A-2
IN WITNESS WHEREOF, the parties hereto have caused this ▇▇▇▇ of Sale and
Assignment to be executed by their duly authorized officers, as of the date and
year first above written.
PURCHASER:
Voicecom Telecommunications, LLC
By:
------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
SELLER:
Voice-Tel of Canada, Ltd.
By:
------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
C-A-3
EXHIBIT B
ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES
THIS ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES is executed and
delivered as of March , 2002 by and between Voicecom Telecommunications,
-----
LLC, a Delaware limited liability company ("Purchaser") and Voice-Tel of Canada
---------
Ltd., a Canadian corporation ("Seller").
------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as
of March , 2002 between Purchaser and Seller (the "Asset Purchase
----- --------------
Agreement"), Purchaser has agreed to purchase, and Seller has agreed to sell,
---------
convey, transfer and assign, these assets, tangible and intangible, owned by
Seller and associated with or used in the Business; and
WHEREAS, all of the instruments, documents and agreements required to
be executed and delivered in order to consummate the transactions provided in
the Asset Purchase Agreement are being executed and delivered by and to the
respective parties to the Asset Purchase Agreement concurrently herewith.
NOW, THEREFORE, in consideration of the premises and the transfer by
Seller concurrently herewith of all of the VCL Assets, in accordance with and
pursuant to the Asset Purchase Agreement, Purchaser hereby agrees as follows:
1. Terms used herein and not otherwise defined shall have the respective
meanings ascribed thereto in the Asset Purchase Agreement, unless the context
requires otherwise.
2. Purchaser hereby expressly assumes, and agrees to pay, perform or
otherwise discharge, as the same shall become due in accordance with their
respective terms, the VCL Liabilities.
3. Purchaser further covenants and agrees with Seller that Purchaser will
do, execute and deliver, or cause to be done, executed and delivered, all such
further instruments, documents, agreements and assurances as may be reasonably
requested by Seller, which may be necessary in order to evidence and provide for
the specific assumption by Purchaser of any one or more of the VCL Liabilities.
4. This Assignment and Assumption of Assumed Liabilities will be binding
from and after its execution upon Purchaser, Seller, and their respective
successors and assigns.
5. This Assignment and Assumption of Assumed Liabilities will be governed
by and construed in accordance with the laws of the State of Delaware.
C-B-1
6. Any representations and warranties contained in or made pursuant to this
Assignment and Assumption of Assumed Liabilities will expire at Closing.
[Signatures on following page]
C-B-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption of Assumed Liabilities to be executed by their duly authorized
officers, as of the date and year first above written.
PURCHASER:
Voicecom Telecommunications, LLC
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
SELLER:
Voice-Tel of Canada, Ltd.
By:
------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
C-B-3
EXHIBIT D
CONTRIBUTION AGREEMENT
This Contribution Agreement (this "Agreement") dated as of March 25, 2002
---------
is entered into by and among PTEK Holdings, Inc., a Georgia corporation
("PTEK"), Premiere Communications, Inc., a Florida corporation and a wholly
----
owned subsidiary of PTEK ("PCI"), Intellivoice Communications, LLC, a Delaware
---
limited liability company and a wholly owned subsidiary of PCI ("ICI"), formerly
---
known as Intellivoice Communications, Inc., Voice-Tel Enterprises, LLC, a
Delaware limited liability company and wholly-owned subsidiary of PCI ("VEI"),
formerly known as Voice-Tel Enterprises, Inc., (VEI, PTEK, PCI and ICI are each
a "Seller" and collectively, the "Sellers"), and Voicecom Telecommunications,
------ -------
LLC, a Delaware limited liability company (the "Company").
-------
R E C I T A L S
- - - - - - - -
A. The Company was formed under the laws of the State of Delaware on
February 22, 2002.
B. PTEK desires to contribute certain assets and certain liabilities to PCI
as a contribution to the capital of PCI, which contribution PTEK shall make by
direct transfer of such assets and liabilities to the Company.
▇. ▇▇▇▇▇▇▇ desire to contribute certain assets and certain liabilities to
the Company in exchange for the issuance to Sellers of the membership interests
in the Company (the "Membership Interests") on the terms and subject to the
--------------------
conditions of this Agreement. The Membership Interests are the membership
interests referred to as the Membership Interests in the Membership Interests
Purchase Agreement (the "Purchase Agreement"), dated as of the date hereof, by
------------------
and among the Company, the Sellers, Voice-Tel of Canada, Ltd. and Voicecom
Telecommunications, Inc. ("Buyer").
-----
D. Simultaneously with the consummation of the transactions contemplated
hereby, the Company shall acquire the assets of and assume certain scheduled
liabilities of Voice-Tel of Canada, Ltd.
E. Immediately following the consummation of the transactions contemplated
hereby, Sellers intend to sell the Membership Interests to Buyer pursuant to the
terms of the Purchase Agreement.
F. Capitalized terms used herein without definition shall have the same
meanings as in the Purchase Agreement.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
D-1
1. Effective Time. This Agreement shall be deemed effective (the "Effective
-------------- ---------
Time") immediately prior to the consummation of the initial Closing contemplated
----
by the Purchase Agreement; provided, however, in the event that the transactions
contemplated by the Purchase Agreement are not consummated, this Agreement shall
be null and void.
2.1 Contribution of Assets. At the Effective Time, each of the Sellers
----------------------
hereby contributes, assigns, transfers and conveys to the Company, free and
clear of all Encumbrances, other than Permitted Encumbrances, and the Company
hereby accepts and assumes, all of the right, title and interest that each of
such Sellers possesses and has the right to transfer in and to the Contribution
Agreement Assets and the Business. The parties acknowledge that the contribution
of PTEK pursuant to the preceding sentence shall be on behalf of and for the
account of PCI. Notwithstanding the foregoing, the Contribution Agreement Assets
shall not in any event include any of the Excluded Assets or any of the PCI
Regulated Assets and all right, title and interest in and to the Excluded Assets
and PCI Regulated Assets shall be retained by each respective Seller. The
"Contribution Agreement Assets" shall consist of each Seller's right, title and
-----------------------------
interest in and to all of the following:
(a) All FF&E used in the Business, including without
limitation as set forth on Schedule 2.1(a) hereto;
---------------
(b) All Receivables;
(c) All Contracts of the Business, including the Material
Contracts listed on Schedule 4.18 to the Purchase Agreement, hereto,
other than the Excluded Contracts, and all rights and claims against
others under such Contracts;
(d) The Included Real Property Leases and the Included Owned
Real Property;
(e) All patents, trademarks and service marks (whether
registered or unregistered) of the Business, including without
limitation the patents, trademarks and service marks set forth on
Schedule 4.17 of the Purchase Agreement;
-------------
(f) All other Proprietary Information, Trade Secrets, and
Intellectual Property of Sellers used in or related to the Business,
including without limitation the Intellectual Property described on
Schedule 4.17 of the Purchase Agreement, except for the Intellectual
-------------
Property which is licensed by any Seller from a third party (other
than an Affiliate of PTEK), which license shall be assigned to and
assumed by the Company;
(g) All design tools, order management and other management
tools, manufacturing tools and test equipment, including laboratory
testing equipment of Sellers, used in or related to the Business,
whether located at the facilities of any Seller or the facilities of a
third party, including without limitation as set forth on Schedule
--------
2.1(g);
------
(h) All Seller Advance Payments;
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(i) All Books and Records;
(j) The Permits used in or related to the Business (other
than permits that are PCI Regulated Assets, (the "Telco Permits")),
but only to the extent that their transfer is permitted by applicable
Law;
(k) All guarantees, warranties, indemnities and similar
rights in favor of each Seller with respect to the Business or any of
the Contribution Agreement Assets;
(l) All telephone and facsimile numbers and post office
boxes of Sellers used in or related to the Business and the bank
accounts used primarily in the Business (including without limitation
those bank accounts as set forth on Schedule 2.1(1), but excluding
---------------
those accounts that are Excluded Assets;
(m) All Sellers' domain names and Internet addresses set
forth on Schedule 2.1(m), and content with respect to internet
---------------
websites used in or related to the Business, including such content in
its electronic form; and
(n) All other intangible personal property of Sellers used
in or related to the Business and all goodwill of the Business (or, in
the case of PTEK, primarily used in or related to the Business).
2.2 Excluded Assets. Notwithstanding the foregoing Section 2.1, the
---------------
Contribution Agreement Assets shall not in any event include any of the Excluded
Assets or any of the PCI Regulated Assets and all right, title and interest in
and to the Excluded Assets and PCI Regulated Assets shall be retained by each
respective Seller. The "Excluded Assets" shall consist of the following:
---------------
(a) Each Seller's rights, titles and interests under or
related to this Agreement or any other document or agreement delivered
to or received by Sellers in connection herewith;
(b) The Excluded Contracts, including those listed on
Schedule 1.1(b) to the Purchase Agreement;
(c) All real property Leases, other than the Included Real
Property Leases;
(d) All assets and property, tangible and intangible, real
or personal, of each Seller that are not used in or related to the
Business;
(e) Cash and cash equivalents and short-term investments,
including without limitation, cash, securities, investments of Sellers
in mutual funds, treasury funds, money market funds, certificates of
deposit and other similar investment instruments (whether negotiable
or non-negotiable), owned by any Seller on the Closing Date, and
earnings thereon, all calculated in accordance with GAAP, and whether
or not generated by the operation of the Business;
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(f) The corporate seals, minutes books, stock books, blank
share certificates, Tax returns and other records relating to the
corporate organization or tax reporting of the Sellers;
(g) All personnel records and other records that Sellers are
required by law to retain in its possession, provided, that the
Company shall be provided copies upon its reasonable request;
(h) All claims for refunds of Taxes and other governmental
charges of whatever nature relating to time periods prior to the
Closing;
(i) All assets and property, tangible and intangible, real
or personal, of Sellers located in New Zealand or Australia
(collectively, the "Australian Operations"), but the Intellectual
---------------------
Property used in the Australian Operations shall be a Contribution
Agreement Asset, regardless of where domiciled;
(j) All FF&E not primarily used in the operation of the
Business situated on floors other than floors 3, 5, and 6 that is
being subleased to the Company of PTEK's corporate headquarters at The
Lenox Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
all as listed and described on Schedule 2.2(k) items 10, 11 and 13 and
---------------
(k) Such other rights, assets and properties listed in
Schedule 2.2(k).
---------------
3.1 Assumption of Liabilities. At the Effective Time, each of the Sellers
-------------------------
hereby contribute, assign, transfer and convey to the Company, and the Company
hereby accepts and assumes and becomes responsible for and agrees to perform and
satisfy, the Assumed Liabilities of such Seller existing on or arising after the
Closing Date. The "Assumed Liabilities" shall consist of the following:
-------------------
(a) The liabilities of the type listed and described on the
Schedule 3.1(a), to the extent used in the computation of the Closing
---------------
Date Net Assets, and the Capital Leases listed and described on
Schedule 3.1(a);
---------------
(b) Each Seller's obligations to customers after the Closing
Date arising from the operation of the Business on or prior to the
Closing Date, but not including (i) any liability, obligation or
commitment of any Seller for any breach thereof by any Seller or a
predecessor-in-interest occurring prior to, on or after the Closing
Date, or (ii) liabilities as of the Closing Date of the type required
by GAAP to be reflected on the Final Closing Statement for future
performance of such obligations in excess of the amount with respect
thereto as reflected on the Final Closing Statement; and
(c) Liabilities, obligations and commitments incurred in the
operation of the Business on and after the Closing Date, and
liabilities,
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obligations and commitments arising out of the Material Contracts and
all other Contracts (other than the Excluded Contracts) or the
Included Real Property Leases, but not including (i) any liability,
obligation or commitment of any Seller for any breach thereof by any
Seller or a predecessor-in-interest occurring prior to, on or after
the Closing Date, or (ii) liabilities as of the Closing Date of the
type required by GAAP to be reflected on the Final Closing Statement
for future performance under the Contracts that are in excess of the
amount thereof that is reflected on the Final Closing Statement;
3.2 Excluded Liabilities. Except as specified in Section 3.1, neither the
-------------------- -----------
Company nor the Buyer shall assume any liabilities, obligations or commitments
of any Seller or any other Person, whether arising before, on or after the
Closing Date or the Final Closing Date, whether fixed, contingent, liquidated,
unliquidated, known or unknown, and all such liabilities, obligations and
commitments (the "Excluded Liabilities") shall remain the exclusive liabilities,
--------------------
obligations and commitments of each respective Seller. As between the Company
and Sellers, Sellers shall be responsible for the payment, performance or
discharge of all of the Excluded Liabilities. Without limiting the generality of
the foregoing, and notwithstanding anything to the contrary that may be
construed from the use of general language in the Contribution Agreements or in
this Agreement or any Ancillary Agreement, the Excluded Liabilities shall
consist of, without limitation:
(a) All Taxes and deferred Tax liabilities of each Seller, and all
Taxes of the Company, and all pay phones provider surcharges, arising from the
conduct of the Business prior to the Closing;
(b) All liabilities and obligations arising under the Contracts or
otherwise with respect to events and periods prior to the Closing Date, unless
accrued for on the Final Closing Statement;
(c) All liabilities and obligations arising out of the Excluded
Contracts;
(d) All liabilities and obligations in respect of benefits under the
Employee Benefit Plans, unless accrued for on the Final Closing Statement (but
the Company in no event shall assume liabilities under any equity incentive or
phantom stock plan of Sellers);
(e) All liabilities and obligations arising out of any real property
Leases, other than the Included Real Property Leases;
(f) All liabilities arising in connection with any Action, private or
public, whether instituted or threatened prior to or after the Closing, arising
out of conduct of the Business prior to and including the Closing Date;
(g) Any obligation or liability for severance, retention, change of
control bonus or other compensation or for Losses arising as a result of or in
connection with the consummation of the Transaction (either alone or in
conjunction with another event, such as a termination of employment or a
Contract), except with respect to Transferred Employees to the extent such
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liabilities arise after the Closing Date (and are not retention or change of
control payments incurred in whole or in part by Seller);
(h) All liabilities in respect of Transferred Employees incurred or
arising prior to the Closing, except liabilities accrued for on the Final
Closing Statement;
(i) All liabilities in respect of employment of any Person other than
Transferred Employees;
(j) Any obligation or liability incurred by any Seller or its
Affiliates to pay any fee or commission to any broker, finder, investment banker
or other intermediary in connection with the transactions contemplated by this
Agreement;
(k) Any liabilities arising out of the manufacturing or sale of
Products by the Business on or prior to the Closing, in excess of any reserve
for product warranty used to compute the Closing Date Net Assets;
(l) Any obligation or liability arising out of or related to any
Seller's ownership or leasehold interest in any real property used in the
Business other than with respect to the Included Real Property Leases and the
Included Owned Real Property;
(m) All liabilities and obligations arising, by operation of law or
otherwise, from the operation of the Business by each Seller for the periods
prior to and including the Closing Date, except as described in Section 3.1;
-----------
(n) All liabilities constituting bank overdrafts and the liabilities
with respect to held checks;
(o) The liabilities arising out of or related to the Australian
Operations;
(p) All liabilities of a Seller to PTEK or one of its Affiliates;
(q) The liabilities of PCI that are not Assumed Liabilities or PCI
Liabilities;
(r) Any liabilities arising from any failure of PTEK or Sellers to
comply with any applicable bulk sale or transfer Law in connection with the
Transaction; and
(s) For purposes of clarification, those liabilities listed on
Schedule 3.2, to the extent that such liabilities arise from the operation of
------------
the Business by each Seller for the periods prior to and including the Closing
Date.
4. Issuance of the Membership Interests. In consideration of the assignment
------------------------------------
of the Contribution Agreement Assets to the Company by Sellers and the
assumption by the Company of the Assumed Liabilities, at the Effective Time, the
Company shall issue to each Seller its respective share of the Membership
Interests, as set forth on Schedule 4 hereto. The Company shall issue to PCI the
----------
Membership Interest attributable to the assignment of the Contribution Agreement
Assets by PTEK and the assumption of the Assumed Liabilities of PTEK.
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5. Remedies. Any dispute or claim arising out of or related to this
--------
Agreement shall be governed by the terms, conditions and provisions of the
Purchase Agreement.
6. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. THE SELLERS MAKE NO
--------------------------------------------
REPRESENTATION OR WARRANTY TO THE COMPANY, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, IN RESPECT OF ANY OF THEIR ASSETS (INCLUDING, WITHOUT LIMITATION, THE
CONTRIBUTION AGREEMENT ASSETS), LIABILITIES (INCLUDING, WITHOUT LIMITATION, THE
ASSUMED LIABILITIES) OR OPERATIONS, INCLUDING, WITHOUT LIMITATION, WITH RESPECT
TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH OTHER
REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. THE COMPANY
HEREBY ACKNOWLEDGES AND AGREES THAT IT IS ACQUIRING THE CONTRIBUTION AGREEMENT
ASSETS ON AN "AS-IS, WHERE-IS" BASIS.
7. Definitions. Capitalized terms not otherwise defined in this Agreement
-----------
shall have the meanings assigned to them in the Purchase Agreement.
8. General Provisions.
------------------
(a) Successors and Assigns. This Agreement will be binding on the
----------------------
parties and their respective legal representatives, successors and permitted
assigns.
(b) No Third Party Beneficiaries. Except as may be expressly provided
----------------------------
in this Agreement, there shall be no third party beneficiaries.
(c) No Assignment. Neither this Agreement nor any rights or
-------------
obligations hereunder are assignable by a party without the prior written
consent of the other party.
(d) Governing Law. This Agreement will be governed by the laws of the
-------------
State of Delaware without regard to any provisions relating to the conflict of
laws.
(e) Further Assurances. Sellers and the Company, at any time and from
------------------
time to time upon the reasonable request of the other party hereto, shall
promptly execute and deliver, or cause to be executed and delivered, all such
further instruments and take all such further actions as may be reasonably
necessary or appropriate to (i) transfer to the Company, or to perfect, record
or effect the Company's title to or interest in, the Contribution Agreement
Assets, (ii) transfer to the Company, and effect the Company's assumption of,
the Assumed Liabilities or (iii) confirm or carry out the purposes and intent of
this Agreement. If, at any time after the Effective Time, either party receives
any payment, correspondence or other property that is intended for or belongs to
the other party, or to which the other party is legally entitled, then the party
receiving such payment, correspondence or other property shall hold it in trust
and promptly pay over such payment or deliver such correspondence or other
property to the other party.
(f) 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 a single agreement.
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(g) Severability. If any provision of this Agreement is held to be
------------
unenforceable for any reason, it will be adjusted rather than voided, if
possible, to achieve the intent of the parties. All other provisions of this
Agreement will be deemed valid and enforceable to the extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SELLERS:
PTEK Holdings, Inc.,
a Georgia corporation
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
Premiere Communications, Inc.,
a Florida corporation
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
Intellivoice Communications, LLC,
a Delaware limited liability company, formerly
known as Intellivoice Communications, Inc.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
Voice-Tel Enterprises, LLC,
a Delaware limited liability company, formerly
known as Voice-Tel Enterprises, Inc.
By:
---------------------------
Name:
---------------------------
Title:
------------------------
D-8
THE COMPANY:
Voicecom Telecommunications, LLC,
a Delaware limited liability company
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
D-9