ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (hereinafter referred to as this
"Agreement") made and entered into this 3rd day of September 1997, by and
between RAFT, L.L.C., a South Dakota Limited Liability Company (sometimes
hereinafter referred to as "RAFT" or "Seller"), with principal offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ Oil, Inc., (sometimes
hereinafter referred to as "▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual (sometimes
referred to herein as "▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (sometimes referred to
herein as "▇▇▇▇▇▇▇▇") and Firstel, Inc., a South Dakota corporation, with
principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ (such corporation being hereinafter referred to as "Buyer" or
"Firstel");
W I T N E S S E T H:
WHEREAS, RAFT operates a business which is involved in the sales and
servicing of long distance and local telephone services and related
telecommunications services (referred to as "Business"), and which Business was
formerly conducted by ▇▇▇ COMM, as a division of ▇▇▇ Oil, Inc.; and
WHEREAS, Seller desires to sell and Buyer desires to purchase all of
the assets used in the operation of the Business (except for certain assets
excluded as set forth hereinbelow in Paragraph 2) specifically including, but
not limited to, all customer relationships, whether active or in process as of
the date of closing, and the related computer systems, licenses, certifications
and other assets related to the Business; and
WHEREAS, Seller and Buyer desire to enter into and execute this
Agreement for the purpose of setting forth the terms and conditions of the sale
and purchase contemplated herein;
NOW, THEREFORE, in consideration of the promises and subject to the
conditions in this Agreement, as well as the mutual covenants and agreements
set forth herein and in the Exhibits referenced herein and/or attached hereto,
Buyer and Seller agree as follows:
1. Assets Purchased. Seller shall sell and transfer to Buyer, and Buyer
shall purchase and accept from Seller, all of those assets owned by Seller used
in the operation of the Business, except for those assets referenced
hereinbelow in Paragraph 2, wherever the same may be located, including,
without limitation, the following (hereinafter referred to as "Assets
Purchased");
a. All rights of Seller relating to the Business with respect to
all of the customers of the Business and all contracts set
forth on Exhibit A which is attached hereto and by this
reference incorporated as if fully set forth herein.
b. All equipment utilized by Seller with respect to the Business
as set forth on Exhibit B which is attached hereto and by
this reference incorporated as if fully set forth herein,
including, but not limited to, related computer systems.
c. All of the Seller's rights to conduct business (including use
of the existing trade name "▇▇▇ COMM" which name Seller
represents Buyer will have the right to use; however, the
right to use the trade name "▇▇▇ COMM" shall terminate as of
the close of business on December 31, 1997, at which time all
rights relative to the use of such name shall revert to ▇▇▇).
d. Goodwill.
e. Customer lists and files, personnel records, and records
relating to the operation of the Business, including, but not
limited to all information contained in and related to the
computers (and disks used therein) of the Business. Buyer
shall be responsible for any costs relating to data
conversion to Buyer's system.
f. All licenses and permits associated with the Business, to the
extent assignable or transferable by Seller, subject to
obtaining any required consents.
g. A Covenant Not To Compete as set forth in Exhibit C, a copy
of which is attached hereto and by this reference
incorporated as if fully set forth herein.
2. Assets Excluded. Notwithstanding anything contained herein to the
contrary, Buyer does not purchase and Seller does not sell cash on hand as of
the date of Closing, accounts receivable arising out of operations prior to
closing, or any right to receive amounts, deposits or any other sums of any
nature whatsoever relating to or arising out of operations prior to Closing.
3. Liabilities and Obligations Retained and Assumed. (a) Seller shall be
responsible for each and every liability, obligation and undertaking of the
Seller including, not limited to, any and all secured obligation, accounts
payable, and current liabilities relative to Seller and the Business and any
obligations of Seller to employees for bonus, accrued vacation or other
benefit; (b) Buyer shall assume the obligations of Seller with respect to the
rights, obligations and duties of Seller with regard to the customers and
contracts set forth on Exhibit A and agrees to release Seller from any further
obligations thereunder, to the extent set forth herein, except that with
respect to the WorldCom Service Agreement referenced herein, Buyer's only
obligation shall be to utilize WorldCom for customers of the Business as set
forth on Exhibit A until June 30, 1999, except to the extent otherwise agreed
upon by the parties hereto, and with Seller specifically warranting and
representing that it shall remain responsible for any problems or defaults with
regard to said WorldCom Service Agreement, including, but not
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limited to, defaults arising as the result of this transaction or any failure
of ▇▇▇ to make payments to WorldCom as required by paragraph 9.(c) hereof.
4. Purchase Price. The purchase price shall be the sum of the amount set
forth on Exhibit A, and the amount set forth on Exhibit B, namely,
$183,178.43. In addition to the amount due for customer accounts as set forth on
Exhibit A, there are potential customers of the Business as set forth on Exhibit
D, which is attached hereto and by this reference incorporated as if fully set
forth herein. If the Business and/or Firstel (or Firstel's successor in
interest, if any) obtain a signed contract for services from any of the
potential customers listed on Exhibit D, within sixty (60) days of the date of
closing, or the date of the initial public offering of ACG, Inc., whichever
occurs first, and if such contract for service is for at least one year at
normal rates, the Seller shall be entitled to an increase in the amount of the
Exhibit A amount referenced hereinbelow in paragraph 5 in an amount six times
the estimated monthly billing for such customer. The purchase price shall be
allocated as set forth on Exhibit E, which is attached hereto and by this
reference incorporated as if fully set forth herein.
5. Payment of Purchase Price. The amount due pursuant to Exhibit B shall
be paid in cash at closing. The amount due pursuant to Exhibit A, will be due
(without interest) on December 15, 1997, or the date of completion of the
initial public offering of ACG, Inc. Provided that the initial public offering
of ACG, Inc., occurs as contemplated with Firstel, Inc., participating therein,
Seller shall receive the amount due in shares of stock, valued at the initial
public offering price, in ACG, Inc., equivalent to the Exhibit A amount. It is
currently contemplated that the mechanism utilized to accomplish this effect
would be for the purchase price to be paid to Seller in Firstel stock
immediately prior to the initial public offering; then Firstel stock would be
converted to preferred stock in ACG, Inc. (or a subsidiary of ACG, Inc.), which
would, immediately after the initial public offering, be converted to shares of
common stock in ACG, Inc., in an amount necessary to result in the Exhibit A
amount being paid to Seller as set forth herein. Seller recognizes that it
would need to sign any documents necessary to permit said stock to be issued by
ACG, Inc., as part of its initial public offering, including, but not limited
to, any documents to permit the appropriate modifications to the Registration
Statement on Form S-1 with the SEC and any other documents required by ACG,
Inc. Seller acknowledges that it will (a) be subject to the same transfer
restrictions as required in the S-1 filing, (b) make the same investment
representations, and (c) will have the same registration rights as required in
the S-1 filing, with regard to the stock of ACG, Inc., as those applicable to
Firstel and its shareholders with respect to Firstel's participation in the
proposed initial public offering of ACG, Inc. Alternatively, if Firstel does
not execute a definitive agreement with ACG, Inc, and/or receive ACG, Inc.
stock, Firstel shall have the opportunity to find a new/replacement entity to
establish a relationship which is similar to that which is contemplated between
Firstel and ACG, Inc., prior to December 15, 1997. As a result of a
relationship between Firstel and the new/replacement entity, Firstel may, but
is not obligated to, offer stock in the new/replacement entity as an
alternative to Seller; however, the decision to accept stock or
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cash as referenced hereinbelow shall be determined by Seller in its sole
discretion. If payment is made in stock, it shall be valued in the amount of
Exhibit A. If payment is made in cash, it shall be in an amount equal to eighty
percent (80%) of the amount of Exhibit A. In either event, the Exhibit A
obligation shall be deemed satisfied as paid in full. If the initial public
offering of ACG, Inc, has not occurred by December 15, 1997, or Firstel has not
offered to Seller an acceptable alternative offer of stock in a new/replacement
entity by December 15, 1997, Seller shall have the option on said date to
receive cash in the amount of eighty percent (80%) of the Exhibit A amount.
Additionally, Seller shall have the right to extend the due date relative to
the Exhibit A obligation to May 15, 1998, at which time the election to accept
stock or cash remains Seller's sole decision; however, Seller may require
payment of eighty percent (80%) of the Exhibit A amount in cash on thirty (30)
days notice at any time subsequent to December 15, 1997. In no event, however,
shall the payment date be extended beyond May 15, 1998, and if an acceptable
alternative offer of stock has not been delivered to Seller by May 15, 1998,
Seller shall be paid in cash in an amount equal to eighty percent (80%) of the
Exhibit A amount. It is specifically acknowledged that no payment, other than
in the form of cash, shall be made unless the stock payment has been authorized
pursuant to the appropriate filings made with the SEC and/or the South Dakota
Securities Commission and all documentation related thereto has been completed.
6. Closing. This transaction will be closed on September 3, 1997, at such
time as the parties may mutually agree (the "Closing") at the offices of
Seller's counsel in Sioux Falls, South Dakota, or such other time and place as
the parties may mutually agree. Except as otherwise provided in this Agreement,
at the Closing all instruments, documents and papers required to close the
purchase will be executed by Buyer and Seller (including the documents
referenced herein and/or attached hereto as Exhibits) and possession of the
Assets Purchased will be delivered to Buyer. Closing shall be deemed to have
occurred prior to the start of business September 1, 1997.
7. Representations and Warranties of Seller. Seller makes the following
representations and warranties, which have been relied upon by Buyer in
entering into this Agreement:
a. Good Standing. RAFT, L.L.C, is a limited liability company
existing and in good standing under the laws of the State of South
Dakota. ▇▇▇ Oil, Inc., is a corporation existing and in good standing
under the laws of the State of South Dakota.
b. No Violation of Law or Breach of Agreement. The execution of
this Agreement, the sale of the Assets Purchased and the performance
of Seller's obligations in this Agreement will not violate any
federal, state or local law, or conflict with, or result in a breach
of any of the terms, provisions or conditions of or constitute a
default under, any agreement or conditions of, or constitute a default
under, any agreement or other instrument to which Seller is a party or
by which Seller or any of the Assets Purchased may be effected.
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c. Ownership and Right to Convey. Seller owns, and has good and
marketable title to the Assets Purchased, and can sell, assign and
transfer the Assets Purchased, free and clear of any liens,
encumbrances, charges or claims of third parties. Furthermore, when
the transaction is closed, Buyer will own the Assets Purchased free
and clear of any such liens, encumbrances, charges or claims of third
parties. All legal actions necessary to effect the sale by Seller to
Buyer of the Assets Purchased pursuant to this Agreement have been
taken by Seller. Seller shall have delivered to Buyer, prior to
receipt of the Exhibit A amount, any and all UCC releases and other
documents required to permit the transfer of the Assets Purchased
free and clear of all liens.
d. Litigation. No judgments, liens, actions, arbitrations,
decrees, investigations or proceedings are pending or threatened
before any court or before any federal, state, municipal or other
governmental body, commission or agency against Seller or ▇▇▇ Oil,
Inc., which involved the assets purchased pursuant to this Agreement,
except for the litigation involving One-Call Telecom, Inc., which is
referenced hereinbelow in paragraph 14. Seller agrees to indemnify and
hold Buyer harmless from any matters of litigation that may
subsequently arise but which are the result of actions or inactions
occurring or accruing prior to the date hereof. Similarly, Buyer
agrees to indemnify and hold Seller harmless from any matters of
litigation that may subsequently arise as the result of actions or
inactions occurring or accruing subsequent to the date hereof.
e. Labor.
i. Seller has not entered into any contracts or commitments
with its present or former employees that are not cancelable by Seller
on notice of not more than thirty (30) days without liability, penalty
or premium;
ii. Seller has no collective bargaining or employment
agreements, nor any agreements that contain any severance or
termination pay liabilities or obligations with employees;
iii. Seller has no bonus, deferred compensation, profit
sharing or retirement benefit or allowance due or to come due to any
employee or former employee;
iv. Seller knows of no group, organization or union which has
tried to organize any employee(s) of Seller within the last three (3)
years.
f. Conditions of Assets. The Assets Purchased to be sold under
this Agreement are and will at Closing be in the same quantity and
quality as on the dates of the due diligence review by representatives
of Buyer, and as shown on the financial statements provided by Seller
to Buyer, except for changes occurring because of
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operations conducted since said dates in the ordinary course of
business and/or as previously disclosed to Buyer.
g. Taxes. To Seller's actual knowledge, Seller has timely filed
with the appropriate governmental agencies, all tax returns and tax
reports due and required to be filed by Seller, including all
federal, state, and city profits, income, sales, use, occupation,
property, excise, social security, withholding, unemployment
insurance, licenses and other taxes (including any penalties and
interest) and has paid or has provided for the payment of all such
taxes through the Closing except for payroll taxes and/or sales taxes
accrued, but not yet due, which Seller agrees to pay to the extent
incurred prior to Closing. Seller has no notice or knowledge of any
pending examinations pertaining to or claims for, taxes or assessments
asserted against Seller by any taking authority in respect of any
period prior to the Closing. Seller agrees to pay all sales and
transfer taxes of any nature whatsoever due or becoming due as a
result of this Agreement. Subsequent to the date of Closing,
operations of the Business will be conducted by Buyer and Buyer shall
be responsible for taxes and expenses accruing after the date thereof.
Seller, however, shall file any and all tax and financial reports with
all appropriate government agencies, (at Seller's expense), for
operations through Closing. Each party shall be responsible for the
filing of their appropriate reports for the tax periods occurring
prior and subsequent to the Closing Date,' however, both parties agree
to cooperate with one another relative thereto subsequent to the date
of Closing.
h. Disclosure. No representations or warranties in this
Agreement or any Exhibits hereto contain or will contain any untrue
statement of a material fact, or omit or will omit a material fact
necessary to make the statements contained therein not misleading.
8. Representations and Warranties of Buyer. The Buyer represents and
warrants as follows:
a. Good Standing. Buyer is a corporation existing and in good
standing under the laws of the State of South Dakota.
b. No Violation of Law or Breach of Agreement. The execution of
this Agreement, the purchase of the Assets Purchased and the
performance of Buyer's obligations in this Agreement will not violate
any federal, state or local law, or conflict with, or result in a
breach of, any of the terms, provisions or conditions of, or
constitute a default under, any agreement or other instrument to which
Buyer is a party or by which Buyer or any of the Assets Purchased may
be affected.
c. Dealings with ACG Inc. Buyer hereby warrants and represents
that it is currently negotiating with ACG, Inc., a Delaware
corporation ("ACG"), a
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holding company formed for the purpose of acquiring various entities
involved in the telecommunications industry. Buyer further warrants
and represents that such negotiations concern the acquisition by ACG
of all of the outstanding capital stock of Buyer, and that Buyer
further warrants and represents that Buyer and ACG are in the process
of negotiating a definitive agreement concerning such transaction, and
that Buyer is not currently aware of any matters or events which would
preclude the execution by Buyer and ACG of such definitive agreement.
9. Actions Relating to Closing. Seller agrees that:
a. Full Access. Seller will make available to Buyer copies of
all financial statements, books, records, tax returns or other
documents or instruments affecting the operation of the Business.
Buyer may make inquiry to Seller's creditors, suppliers and others
with whom Seller does business so Buyer may verify information
provided to Buyer and negotiate agreements that will take effect after
the Closing.
b. Operating in Ordinary Course. Seller shall have operated the
Business since August 20. 1997 in its normal and customary manner and
shall not have made any changes in the policies or methods of
operations without Buyer's prior written consent. There shall not have
been any transfers of any assets of Seller subsequent to August 20,
1997, without Buyer's prior written consent.
c. Prorations. The parties acknowledge that ▇▇▇ Oil, Inc.
("▇▇▇") is currently a party to a certain agreement with WorldCom,
Inc. ("WorldCom") concerning the provision of long distance telephone
services to ▇▇▇, to entities related to ▇▇▇ (the "▇▇▇ Entities"), and
to other entities which have contracted with ▇▇▇, for the provision of
such services (the "Other Entities"). The parties further acknowledge
that Buyer shall be assuming certain of PAM's rights, duties and
obligations under the terms of such agreement with WorldCom (the
"WorldCom Agreement") as set forth hereinabove.
The parties acknowledge that WorldCom provides ▇▇▇ with a "Master
▇▇▇▇" for all charges for long distance telephone services (including
any applicable taxes thereon) which are provided to ▇▇▇, the ▇▇▇
Entities and the Other Entities. The parties agree that ▇▇▇ shall
continue to receive the "Master ▇▇▇▇" from WorldCom after the closing
of this Agreement, and shall continue to pay to WorldCom the total
amount designated on the "Master ▇▇▇▇" on a monthly basis. The parties
further agree that Buyer shall reimburse to ▇▇▇, within ten (10) days
of receiving an invoice therefor, for all charges, taxes and itemized
expenses on the "Master ▇▇▇▇", after determining that the requested
reimbursement is correct. The ▇▇▇ Entities shall be billed by Firstel
in the same manner as customers of Firstel. The parties agree that the
provisions of this Subsection 9(c) shall apply as of the date of
closing of this
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Agreement and shall expire on upon the expiration of the WorldCom
Agreement, which shall be June 30, 1999. Notwithstanding anything
else contained herein to the contrary, it is agreed that the amounts to
be received from customers, and the amount owed by the Business with
regard to the WorldCom Service Agreement shall be prorated as of the
date of closing. All statements to be forwarded to customers
subsequent to the date of closing shall be forwarded by Firstel and
amounts received by Firstel attributable to calls made prior to the
date of closing shall be paid to Seller less sales and excise taxes
related thereto which shall be paid by Firstel. Similarly, Seller
shall be required to reimburse Firstel for any and all amounts owed to
WorldCom for calls made prior to the date of closing, but billed after
the date of closing.
d. Use of Space. Seller hereby agrees that Buyer may utilize
space at ▇▇▇ Oil, Inc., currently used by Seller prior to Closing in
the operation of the Business with said use to continue for a period
of ninety (90) days following the date of closing without any charge
or cost to Buyer.
10. Covenant Not to Compete. RAFT. ▇▇▇ Oil, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, both corporately and individually, hereby agree to execute
the covenant not to compete which is attached hereto as Exhibit C and by this
reference incorporated as if fully set forth herein.
11. Delivery of Lists and Other Items. Seller will deliver to Buyer, at
the Closing, all customer lists, files, and other records relating to the
Business, as referenced in Paragraph 1(e) including those maintained by
computer memory or other electronic means. All such information contained in
computer memory or data recording systems connected with computers will be
retained in such form that Buyer will have full access. Buyer shall be
responsible for the expense of data conversion to Buyer's system.
12. Conditions Precedent to Buyer's Obligation to Close and Make Payments.
The obligation of the Buyer to close this transaction and make the payments
required hereby is subject to the following conditions which, unless waived by
Buyer, must be satisfied at Closing:
a. Covenants, Representations and Warranties. The covenants,
representations and warranties made by Seller in this Agreement, the
attachments hereto and in documents previously provided, will be true,
complete and accurate in all material respects at Closing with the
same effect as though such representations, warranties and covenants
had been made or given at Closing.
b. No Material Change. The business, assets and properties of
Seller with respect to the Business will not have been materially
adversely affected as a result of fire, explosion, earthquake,
disaster, accident, casualty, labor dispute or other disruption
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which cannot be resolved without material adverse effect, change in
the business organizations, any action by the United States or of any
other governmental authority; or by flood, drought, embargo, riot,
civil disturbance, uprising, activity of armed forces or act of God or
public enemy. If Buyer waives its right to terminate the Agreement
under this paragraph, all insurance proceeds payable to Seller as a
result of such event will be assigned to and paid over to Buyer at
Closing or when the proceeds are received, whichever is later, and
Seller will cooperate with Buyer to obtain such proceeds.
c. Compliance with Agreement. Seller will have performed and
complied in all material respects with all obligations under this
Agreement which are to be performed or complied with at Closing.
d. Proceedings and Instruments Satisfactory. All documents
required by Seller under this Agreement will have been delivered to
Buyer.
e. Required Contracts. Buyer shall have received contracts with
Seller, and certain affiliates of Seller, as identified on Exhibit F,
which is attached hereto and by this reference incorporated as if
fully set forth herein, agreeing to utilize Firstel for all local and
long distance telephone services for a period of three (3) years
following the date of closing (except that the contract for Seller
only may be for a period of twenty-two (22) months instead of
thirty-six (36 months). In the event that Firstel, or its successor in
interest, is contracting with MCI at the end of the twenty-two (22)
month period, and further provided that Seller contracts to utilize
Firstel and/or its successor in interest for all of its local and long
distance telephone services for a period of an additional two (2)
years following the conclusion of the twenty-two (22) month period,
Seller shall pay Buyer an additional $16,000.00 payable at the time of
execution of the two (2) year contract.
13. Conditions Precedent to Seller's Obligation to Close. The obligation
of Seller to close this transaction is subject to the following conditions
which, unless waived by Seller, must be satisfied at Closing:
a. Covenants, Representations and Warranties. The covenants,
representations and warranties made by Buyer in this Agreement, the
attachments hereto and in documents previously provided, will be true,
complete and accurate in all material respects at Closing with the
same effect as though such representations, warranties and covenants
had been made or given at Closing.
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b. Compliance with Agreement. Buyer will have performed and
complied in all material respects with all obligations under this
Agreement which are to be performed or complied with at Closing.
c. Proceedings and Instruments Satisfactory. All documents
required by Buyer under this Agreement will have been delivered to
Seller.
14. Indemnity and Hold Harmless Agreement. The representations,
warranties and agreements made by Seller in this Agreement will survive the
Closing regardless of any inquiry that may have been made by Buyer. Seller,
▇▇▇ Oil, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will indemnify and hold
Buyer harmless from any liability or expenses resulting from a breach of this
Agreement by Seller, or the inaccuracy or breach of any representation,
warranty or agreement contained in this Agreement, or in any certificate,
document, list, schedule, exhibit or instrument delivered to Buyer by or on
behalf of Seller under this Agreement, including reasonable attorney's fees
incurred by Buyer to defend or prosecute any action or proceeding resulting
from any breach or inaccuracy). This agreement to indemnify and hold the Buyer
harmless will include any liabilities, claims, costs, demands or losses of any
nature incurred by Buyer including violations of the covenant not to compete.
The obligations herein with respect to indemnification and holding Buyer
harmless shall include, but not specifically be limited to, indemnification of
any claims with respect to One-Call Telecom, Inc., a Minnesota corporation, and
MCI for underutilization of services and/or any other claim. Similarly, Buyer
will indemnify and hold Seller harmless from any liability or expense resulting
from a breach of this Agreement by Seller, and obligations arising relative to
the operations of the Business, or related to its customers, subsequent to the
date hereof.
15. Confidential Information. Seller, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, acknowledge that they have access to certain confidential
information, such as customer lists and customer files, which is a valuable
part of the Assets Purchased and which is ordinarily kept secret and
confidential. Seller, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ agree that in
exchange for the consideration of the execution of this Agreement by Buyer,
they shall not, from and after the date hereof, reveal any such information to
any person or organization unless authorized to do so by Buyer in writing, or
unless required or compelled to do so by valid subpoena or court order.
16. Employees. Notwithstanding anything else contained herein to the
contrary, Firstel agrees that it will continue to employ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇ for at least three (3) months following the date of closing provided
that mutually agreeable arrangements relative to such employment can be reached
by Firstel and said two (2) employees. The employment arrangements to be
offered to ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ by Firstel will provide for stock
options in ACG, Inc., and/or any new/replacement entity, provided that the
contemplated transaction with ACG, Inc., and/or any new/replacement entity, is
completed and that said individuals remain employees at that time.
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17. Consulting Services. The parties agree that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ may
provide consulting services to Firstel subsequent to the date of closing, in
his areas of past experience which could include, but not be limited to,
dealing with RBOC and LEC issues, public utility commissions, telemarketing
services, contracts and legislative issues. In the event such consulting
services are provided, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall be compensated in the form of
cash or stock options in amounts to be negotiated prior to the providing of any
such services.
18. Due Diligence. Until the date of closing, Buyer shall be entitled to
continue its due diligence with respect to the proposed transaction in the same
manner as set forth in the Letter of Intent execute by the parties on August
20, 1997.
19. Negotiations. Effective with the execution of this Agreement, RAFT
agrees to refrain from negotiations with any other entity relative to the sale
of its assets, except with regard to the settlement of the One-Call Telecom,
Inc., litigation.
20. Strategic Alliance. The parties hereby agree that effective the date
of closing, Firstel and ▇▇▇ shall form a strategic alliance to solicit and
place ▇▇▇ customers with Firstel. ▇▇▇ will permit Firstel to contact its
customers for which, Firstel will pay ▇▇▇ one percent (1%) of the gross amount
received from both current and future ▇▇▇ customers each month for services
provided by Firstel, exclusive of taxes and pass through items relative which
Firstel does not make a profit, such as cellular roaming charges. In that
event, ▇▇▇ agrees to endorse and include Firstel marketing materials and all
appropriate marketing newsletters and other ▇▇▇ correspondence with monthly
bills and Firstel will be allowed to utilize the ▇▇▇ logo, subject to the prior
written approval of ▇▇▇ to market its services. ▇▇▇ will have its telemarketers
generate leads for Firstel sales personnel. Firstel shall be responsible to pay
for the printing and additional distribution costs associated with sales
materials, unless such sales materials are initiated by ▇▇▇. All references in
this paragraph, and other paragraphs hereof, to Firstel, shall, subsequent to
the acquisition of Firstel by ACG, Inc., and/or any new/replacement entity as
contemplated, at the time of the initial public offering, shall be deemed to
refer to ACG, Inc, and/or any new/replacement entity and/or Firstel, as may be
appropriate.
21. Brokers and Finders. The Seller has not retained or engaged any
broker, finder or other financial intermediary in connection with the
transaction contemplated by this agreement and Seller shall indemnify Buyer
from any obligation to pay any cost or fee associated with any such broker,
finder or other financial intermediary.
22. General Provisions.
a. Entire Agreement. This Agreement is the entire agreement
between Buyer and Seller, and except as appear on the Exhibits
attached to this Agreement or referenced herein. This Agreement may
not be modified except by a writing executed by Buyer and Seller.
11
b. Successors and Assigns. This Agreement is binding upon and
inures to the benefit of and may be enforced by Seller and Buyer and
their respective successors and assigns.
c. Notices. All notices, request, demands and other
communications hereunder will be deemed to have been duly give if
delivered by hand, mail (certified or registered with postage prepaid,
return receipt requested) or overnight courier as follows:
1. If to the Seller: RAFT, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(with a copy to:) ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ii. If to the Buyer: Firstel, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(with a copy to:) ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
e. Severability. If any one or more of the provisions in the
Agreement or any application of the provisions of this Agreement is
declared invalid or illegal or unenforceable by any court of competent
jurisdiction, the validity, legality or enforceability of the
remaining provisions of this Agreement will not be impaired by such
declaration, and this Agreement will be construed as if such invalid,
illegal or unenforceable provision was not contained in this
Agreement.
f. Singular/Plural. The singular of any word shall include the
plural and vice versa unless the context requires otherwise.
g. Choice of Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of South Dakota.
23. Transfers on Closing Date. At Closing, Seller will deliver to Buyer:
a. A ▇▇▇▇ of Sale and all other instruments or assignments
necessary to transfer title to the Assets Purchased, free and clear of
all liens, security interests and encumbrances, containing, where
required, joint and several warranties.
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b. All other agreements, instruments and documents as may be
reasonably required by Buyer to close the purchase and sale of the
Assets referred to in this Agreement.
24. Expenses. Each party shall be responsible for their own fees, costs
and expenses as incurred by them relative to this transaction, including their
own fees for legal and accounting expenses.
Executed and agreed to on the day and year first above written.
SELLER: BUYER:
RAFT, L.L.C, a South Dakota Limited FIRSTEL, INC., a South Dakota
Liability Company, corporation,
By /s/ By /s/
---------------------------------- -----------------------------------
Its President - Partner Its President
------------------------------ -------------------------------
▇▇▇ Oil. Inc., a South Dakota
Corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its President
-------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual