ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into
this 4th day of February, 1997, by and between Brite Voice Systems, Inc., a
Kansas corporation (hereinafter referred to as "Brite") and Preferred/telecom,
Inc., a Delaware corporation (hereinafter referred to as "Preferred").
WHEREAS, Preferred is in the business of providing domestic and
international long-distance telecommunications services to customers (the
"Business"); and
WHEREAS, Brite desires to purchase from Preferred and Preferred desires
to sell to Brite all of the Assets (as herein defined) of the Business, subject
to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Purchase and Sale of Assets. Preferred hereby agrees to sell, transfer,
assign, convey and deliver to Brite and Brite hereby agrees to purchase and
acquire from Preferred, on the Closing Date, all right, title and interest of
Preferred in the assets of the Business including (a) all of Preferred's rights
with respect to the existing customers of the Business (other than accounts
receivable); (b) all documents, notebooks, records and files relating to all
tariffs and all applications for authorization to resell long-distance services
filed by Preferred with any state government agency or commission or any federal
agency or commission, including, but not limited to, all electronic readable
copies of such tariffs, applications and documents; (c) all documents,
notebooks, records and files containing third party tariff pricing and
telecommunications information relating to the sale, resale or purchase of
long-distance services; (d) all documents, notebooks, records and files relating
to Preferred's customer billing and collection operations; (e) all documents,
notebooks, records and files relating to Preferred's customer service
operations; (f) all documents, notebooks, records and files relating to the
Business; (g) all of Preferred's rights in the billing programs and systems
currently utilized by Preferred, whether or not provided by third parties to
Preferred; (h) the billing software and system currently being developed by or
on behalf of Preferred; (i) all of Preferred's rights in all authorizations to
resell long-distance services granted by any state regulatory authority ("State
Permits"); (j) all of Preferred's rights in Carrier Identification Code "844" or
"10844" (the "CIC Code"); (k) all of Preferred's rights in the Section 214
authority granted by the Federal Communications Commission (the "214
Authority"); and (l) that certain Agreement by and among Seller, Proxhill
Marketing Ltd., and Barter Corp. dated July 5, 1996 (the "Proxhill Agreement").
All of the foregoing are herein collectively referred to as the "Assets".
2. Assets Excluded from Sale. Unless specifically identified in this
Agreement, no assets of Preferred, including, without limitation, Preferred's
cash and accounts receivable, are being sold by Preferred hereunder.
3. Liabilities. From and after the Effective Time, Brite shall assume the
obligations and liabilities of Preferred under the Proxhill Agreement. Any and
all other debts, liabilities, obligations, contracts, loans, commitments, or
undertakings of Preferred, whether fixed, liquidated, absolute or contingent,
shall be and remain the sole obligations and liabilities of Preferred and Brite
shall not be obligated in any respect therefor.
4. Purchase Price. Brite shall pay to Preferred for the sale, transfer,
conveyance, and delivery of the Assets to Brite, the sum of Seven Hundred
Forty-Three Thousand Dollars ($743,000) on the Closing Date. Such amount shall
be payable (a) by wire transfer of Two Hundred Fifty Thousand Dollars ($250,000)
pursuant to wire transfer instructions received from MCI (b) Three Hundred
Forty-One Thousand Dollars ($341,000) by wire transfer to Preferred, account
number 1885483006, Bank One, Texas, N.A., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇, ABA Number ▇▇▇▇▇▇▇▇▇; (c) One Hundred Forty-Three Thousand Dollars
($143,000) by crediting such amount against the amount due Brite pursuant to
that certain promissory note of Preferred dated November 1, 1996 (the
"Promissory Note"); and (d) Nine Thousand Dollars ($9,000) by crediting such
amount against the amount due Brite pursuant to the BVS SecureCard Agreement
dated April 19, 1995 (the "SecureCard Agreement").
5. Closing.
A. Time and Place. The closing of the transaction (the "Closing") shall be
held at Brite's offices, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
on February 5, 1997 ("Closing Date"), or at such other place or earlier
or later time as may be mutually approved in writing by the parties.
Preferred's conveyance of the Assets to Brite shall be effective at
12:01 a.m. (CDST), on February 1, 1997 (the "Effective Time").
B. Deliveries. To effect the transfer referred to in Section 1 hereof,
Preferred will, on the Closing Date, execute and deliver to Brite an
Assignment and ▇▇▇▇ of Sale substantially in the form attached hereto
as Exhibit A conveying in the aggregate all of the Assets, and Brite
shall deliver to Preferred the consideration therefor in the amount and
in the manner specified in Section 4 hereof. In addition, Preferred
shall execute and deliver to Brite the promissory note in the form
attached hereto as Exhibit E, and Brite shall accept such promissory
note in replacement of the Promissory Note.
6. Representations and Warranties of Preferred. Preferred hereby makes the
following representations, warranties and covenants to Brite, each of which is
true and correct on the date hereof and will be true and correct on the Closing
Date, each of which shall be unaffected by any investigation heretofore or
hereafter made by Brite, and each of which shall survive the Closing:
A. Organization and Qualification. Preferred is a corporation duly
organized and validly existing under the laws of the State of Delaware.
Preferred is duly qualified as a foreign corporation to do business and
is in good standing in each jurisdiction where the character of its
activities is such that qualification as a foreign corporation in that
jurisdiction is required by law, except as otherwise indicated in
Exhibit B hereto.
B. Authority and Adequacy of Rights. Preferred has taken, or will take
prior to the Closing Date, all necessary and proper corporate action to
authorize and approve this Agreement. The execution and delivery hereof
will not and does not violate any provision of any judicial or
governmental decree, order or judgment to which Preferred is a party
nor conflict with or result in a breach of or constitute a default
under the Articles of Incorporation or Bylaws of Preferred or any
material agreement or instrument to which Preferred is a party or by
which it is bound. This Agreement constitutes the legal, valid and
binding obligation of Preferred in accordance with its terms.
C. Title. Preferred has good and marketable title to the Assets and such
Assets are not now, and will not on the Closing Date be, subject to any
liens, rights to liens, claims, encumbrances or restrictions of any
kind.
D. No Litigation or Adverse Events. No suit, action or legal,
administrative, arbitration or other proceeding or, to the best of
Preferred's knowledge, no investigation by any governmental agency
pertaining to the Assets, is pending or has been threatened against
Preferred which could adversely affect the prospects for the Business
or any of the Assets.
E. No Consent or Approval Required. Except as may be required with respect
to the Proxhill Agreement, the State Certificates, the CIC Code, and
the 214 Authority, no consent, approval or authorization of, or
declaration, filing, or registration with, any person is required to be
made or obtained by Preferred in connection with the execution and
delivery of this Agreement by Preferred, the performance by Preferred
of its obligations hereunder, and the consummation of the transactions
contemplated hereby.
7. Brite's Representations and Warranties. Brite hereby makes the following
representations and warranties to Preferred, each of which is true and correct
on the date hereof, and will be true and correct as of the Closing Date, each of
which shall be unaffected by any investigation heretofore or hereafter made by
Preferred and each of which shall survive the Closing of the transactions
contemplated hereby:
A. Authorization for Agreement. The execution, delivery and
performance of this Agreement by Brite and the consummation of
the transactions contemplated hereby have been duly authorized by
all necessary actions and proceedings prior to the Closing, and
this Agreement is, and any documents or instruments to be
executed and delivered by Brite pursuant hereto will be, legal,
valid and binding obligations of Brite enforceable in accordance
with their terms.
B. Corporate. Brite is a corporation duly organized and validly
existing and in good standing under the laws of the State of
Kansas, and has all requisite corporate power and authority to
own its property and operate its business as and where it is now
being conducted. Brite has complete and unrestricted power and
authority to purchase the Assets.
8. Conditions Precedent to Brite's Obligations. Each and every obligation of
Brite to be performed on the Closing Date shall be subject to the satisfaction,
prior to or on the Closing Date, of the following conditions, unless waived in
writing by Brite:
A. Representations and Warranties True. The representations and
warranties made by Preferred in this Agreement shall be true and
correct on and as of the Closing Date with the same effect as
though such representations and warranties had been made or given
on and as of the Closing Date.
B. Compliance with Agreement. Preferred shall have performed and
complied with all of its obligations under this Agreement which
are to be performed or complied with by it prior to or on the
Closing Date.
C. Documents and Resolutions. Preferred shall have delivered or
caused to be delivered to Brite:
(1) evidence of the actions taken by Preferred with respect to this Agreement,
including duly adopted resolutions of its Board of Directors and stockholders
approving the sale of the Assets; and
(2) a certificate from the Secretary of State of Delaware evidencing Preferred's
good standing.
D. MCI Agreement. Brite, Preferred and MCI shall have entered into
an agreement pursuant to which MCI shall have agreed to continue
the provision of long-distance service to the Business on terms
and conditions satisfactory to Brite.
E. Proxhill Agreement. Proxhill Marketing, Ltd. and Barter Corp.
shall have consented in writing to Preferred's assignment of the
Proxhill Agreement to Brite.
F. Instruments of Transfer. Preferred shall have delivered to Brite
an Assignment and ▇▇▇▇ of Sale substantially in the form attached
hereto as Exhibit A, a License Agreement substantially in the
form attached hereto as Exhibit C, and such other assignments and
other instruments of transfer and conveyance as Brite shall deem
to be necessary or desirable to vest in Brite all right, title
and interest in and to the Assets.
G. Certificate of Preferred. Brite shall have received from
Preferred a certificate of Preferred dated the Closing Date and
signed by the President and Chairman of the Board of Preferred,
substantially in the form of Exhibit D hereto.
H. Proceedings and Instruments Satisfactory. All proceedings,
corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement and all appropriate
documents incident thereto shall be satisfactory in form and
substance to Brite's counsel, and Preferred shall have made
available to Brite for examination the originals or true and
correct copies of all records and documents which Brite may
reasonably request in connection with the transactions
contemplated hereby.
9. Conditions Precedent to Preferred's Obligations. Each and every obligation of
Preferred to be performed on the Closing Date shall be subject to Brite having
performed and complied with all of its obligations under this Agreement which
are to be performed or complied with by it prior to or on the Closing Date.
10. Post-Closing Operations and Responsibilities.
A. General. Preferred and Brite agree that title to the Assets, as
well as all benefits and risks associated with the ownership and
operation of the Business, shall be vested in Brite as of the
Effective Time. However, the parties acknowledge that, because of
certain applicable federal and state regulatory requirements,
Preferred shall continue to conduct certain aspects of the
Business as Brite's agent, as described herein.
B. Appointment. Brite hereby appoints Preferred as its agent for
purposes of conducting the customer service and billing functions
with respect to the Business and Preferred hereby accepts such
appointment. Preferred shall perform such services substantially
in the manner as the same were conducted immediately prior to the
Closing Date, subject to such changes as Brite may reasonably
direct in writing, and shall at all times use its commercially
reasonable best efforts in performing such activities. Preferred
shall perform such services as an independent contractor and
nothing contained herein shall be construed as creating a
partnership, joint venture, or other association between Brite
and Preferred with respect to the Business, or otherwise. For the
period during which Preferred performs such services and until
such time as Brite shall have otherwise directed, the Business
shall be operated under the name "Preferred Telecom".
▇. ▇▇▇▇▇▇▇▇; Receivables. Until such time as Brite otherwise
directs, Preferred shall prepare and mail monthly statements to
customers of the Business in the manner in effect as of the
Closing Date. Effective March 10, 1997, all customer payments
shall be deposited to a bank account to be specified by Brite and
all subsequent invoices shall provide for payment to be delivered
as specified by Brite. Preferred may include in customers'
▇▇▇▇▇▇▇▇ charges for amounts due as of the Closing Date. Upon
receipt of a customer's payment, Brite shall remit to Preferred
the amount due to Preferred from such customer as of the Closing
Date; provided, however, that if a customer pays less than the
full amount of its invoice, such payment shall be allocated among
Preferred and Brite based upon each party's percentage interest
in the aggregate amount due from such customer.
D. Fees and Payments. For and in consideration of its services
hereunder, Brite shall pay Preferred an amount equal to the cost
of performing such services. As used herein, the term "cost"
shall mean the sum of (a) the salaries of two customer service
representatives (estimated to be $5,431 per month), (b) the
salary of one billing employee (estimated to be $1,250 per
month), (c) Preferred's documented out-of-pocket costs incurred
for "Platinum Inc." account processing, "Data Dallas" billing
tape formatting, PIC Processing (LEC/IXC) and postage and other
supplies, and (d) a flat fee of $950 per month for equipment
usage and general and administrative overhead.
Preferred shall invoice Brite on a monthly basis for the amounts
due pursuant to the immediately preceding paragraph and Brite
shall make payment thereof within thirty (30) days of its receipt
of any such invoice; provided, however, that Brite shall be
entitled to offset against any such amount, any amount which is
past due under either the Promissory Note or the SecureCard
Agreement.
E. Transfers; Power of Attorney. Preferred shall take such actions
and execute such requests, agreements, assignments and other
documents as may be necessary to fully vest in Brite all of the
Assets, including without limitation, the State Certificates, the
CIC Code, the 214 Authority and all of Preferred's rights under
any existing state or federal tariffs. In addition, in order to
facilitate transfers of the State Certificates, Preferred shall
promptly take such actions as may be necessary to re-establish
its good standing as a foreign corporation in those jurisdictions
where such good standing has been terminated. Preferred hereby
designates and appoints Brite as Preferred's attorney-in-fact to
execute any and all documents on Preferred's behalf and to take
all such actions on Preferred's behalf which may be necessary to
vest in Brite all of its rights and interests in and to the
Assets.
F. Termination. Preferred shall provide the services described in
this Section 10 for a period of six months from the Closing Date;
provided, however, that Brite may terminate such services
immediately upon delivery of written notice to Preferred either
personally or by facsimile transmission to the notice address set
forth in Section 16 hereof. If Brite elects to terminate
Preferred's services, it shall promptly pay to Preferred upon
receipt of Preferred's invoice an amount equal to Preferred's
costs for the month of operations then in progress and, if such
notice of termination is delivered on or after the 16th of such
month, an amount equal to 50% of Preferred's invoiced costs for
the immediately preceding month, subject only to Brite's right of
offset as set forth above.
11. Indemnification.
A. By Preferred. Preferred agrees to defend, indemnify and hold
harmless Brite and its officers, directors, employees, agents,
representatives, successors and assigns from, against and in
respect of any and all loss, liability and expense resulting
from:
(1) all liabilities of Preferred of every kind and nature, without
limitation, known or unknown, contingent or otherwise;
(2) any misrepresentation or breach of warranty or nonfulfillment
of any obligation by Preferred under this Agreement or
from any misrepresentation in or omission from any
certificate or other instrument furnished or to be
furnished to Brite pursuant to this Agreement; and
(3) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including legal
expenses) incident to any of the foregoing provisions.
Without limiting the generality of the foregoing, Preferred agrees that it will
continue to defend at its expense actions brought against Brite which are based
on dealings prior to the Closing Date, and Brite agrees to cooperate fully with
Preferred in such matters by providing access to files and other information
accessible to Brite and helpful to Preferred in defense of such claims.
B. By Brite. Brite shall indemnify and hold harmless Preferred and
its officers, directors, employees, agents representatives,
successors and assigns from, against and in respect of any and
all loss, liability and expense resulting from:
(1) any misrepresentation or breach of warranty or nonfulfillment
of any obligation by Brite under this Agreement; and
(2) Brite's conduct of the Business subsequent to the Closing Date.
C. Claims. Should any claim be made by a person not a party to this
Agreement with respect to any matter to which the foregoing
indemnities relate, the indemnified party, on not less than
thirty (30) days' notice to the indemnifying party, may make
settlement of such claim and such settlement shall be binding on
the indemnifying party; provided, however, that if, within said
thirty (30) day period, the indemnifying party shall have
requested the indemnified party to contest any such claim at the
expense of the indemnifying party, the indemnified party will
promptly comply and the indemnifying party shall have the right
to direct the defense of such claim or any litigation based
thereon at its own expense through counsel acceptable to the
indemnified party; provided that to the satisfaction of the
indemnified party, the indemnifying party shall indemnify and
secure the indemnified party against such contested claims and
for the expenses of contesting and defending the claims.
D. Costs. If any legal action or other proceeding is brought for the
enforcement or interpretation of any of the rights or provisions
of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party
shall be entitled to recover reasonable attorneys' fees and all
other costs and expenses incurred in that action or proceeding,
in addition to any other relief to which it may be entitled.
12. Termination and Abandonment. This Agreement may be terminated and
abandoned on or prior to the Closing Date as follows:
(1) by mutual consent of the parties hereto;
(2) by Preferred if the conditions precedent contained in
Section 8 hereof have not been fulfilled or waived, in
writing, on or prior to the Closing Date;
(3) by Brite if the conditions precedent contained in Section
9 hereof have not been fulfilled or waived, in writing, on
or prior to the Closing Date; or
(4) by Brite or Preferred if the closing has not occurred by
February 10, 1997.
In the event of termination by any party as provided above, written
notice shall promptly be given to the other party, and each party shall pay its
own expense, incident to the preparation for the consummation of this Agreement,
and the transactions contemplated hereby. A termination pursuant to the
provisions of this Section 12 shall not prejudice any claim for damages that any
party may have hereunder or in law or in equity.
13. Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other party and any
attempted assignment without such written consent shall be null
and void and without legal effect.
14. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the law of the State of
Kansas.
15. Amendment and Modification. The parties may amend, modify and
supplement this Agreement in such manner as may be mutually
agreed by them in writing.
16. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to be duly given if delivered by hand,
if mailed by certified mail, registered mail or recognized
overnight delivery service, or if sent by facsimile transmission,
as follows:
Preferred/telecom, Inc.
Attention: President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Brite Voice Systems, Inc.
Attention: President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may provide to the other in writing.
17. Entire Agreement. This Agreement embodies the entire agreement
between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than
those set forth or provided for herein.
18. Execution and Delivery. This Agreement shall be binding upon and
shall inure to the benefit of each of the parties hereto and to
their respective successors and assigns and may be executed in
two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute but one and
the same instrument. This Agreement, and any assignment,
certificate, license or other writing required pursuant to the
terms hereof, may be executed and duly delivered by a party by
facsimile transmission thereof to the other party at the
facsimile number of such party as set forth in Section 16 hereof.
The parties agree that if they execute and deliver this Agreement
or any certificate or other document to be delivered hereunder by
facsimile transmission, they will promptly circulate manually
signed originals of this Agreement or such other certificate or
document in order that each party may have an original "ribbon
copy" thereof for its files.
19. Headings. The headings used in this Agreement are for convenience
only and shall not constitute a part of this Agreement.
20. Exhibits. All of the exhibits attached hereto are incorporated
herein and made a part of this Agreement by reference thereto.
21. Negotiated Transaction. The provisions of this Agreement were
negotiated by the parties hereto and said Agreement shall be
deemed to have been drafted by both of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PREFERRED/TELECOM, INC.
By:
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇
President
BRITE VOICE SYSTEMS, INC.
By:
-------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
EXHIBIT A
ASSIGNMENT AND ▇▇▇▇ OF SALE
This Assignment and ▇▇▇▇ of Sale is made effective this 1st day of
February, 1997, by Preferred/telecom, Inc. ("Seller"), a Delaware corporation,
in favor of Brite Voice Systems, Inc., a Kansas corporation ("Buyer").
WHEREAS, Buyer and Seller have entered into an Asset Purchase Agreement
("Purchase Agreement"), pursuant to which Buyer agreed to purchase from Seller
and Seller agreed to sell, convey, assign, transfer and deliver to Buyer certain
assets of Seller and Seller further agreed to execute an Assignment and ▇▇▇▇ of
Sale with respect to such assets.
NOW, THEREFORE, pursuant to the Purchase Agreement and in consideration
of the premises and of other valuable consideration, the receipt and sufficiency
whereof are hereby acknowledged, Seller by these presents does give, grant,
convey, assign, transfer, sell, remise, release, alienate, set over and confirm
unto Buyer, the business property, assets, rights and interests described as
follows:
all right, title and interest of Preferred in the assets of the
Business (as such term is defined in the Purchase Agreement) including
(a) all of Preferred's rights with respect to its existing customers
(other than accounts receivable); (b) all documents, notebooks, records
and files relating to all tariffs and all applications for
authorization to resell long-distance services filed by Preferred with
any state government agency or commission or any federal agency or
commission, including, but not limited to, all electronic readable
copies of such tariffs, applications and documents; (c) all documents,
notebooks, records and files containing third party tariff pricing and
telecommunications information relating to the sale, resale or purchase
of long-distance services; (d) all documents, notebooks, records and
files relating to Preferred's customer billing and collection
operations; (e) all documents, notebooks, records and files relating to
Preferred's customer service operations; (f) all documents, notebooks,
records and files relating to the Business; (g) all of Preferred's
rights in the billing programs and systems currently utilized by
Preferred, whether or not provided by third parties to Preferred; (h)
the billing software and system currently being developed by or on
behalf of Preferred; (i) all of Preferred's rights in all
authorizations to resell long-distance services granted by any state
regulatory authority; (j) all of Preferred's rights in Carrier
Identification Code "844" or "10844"; (k) all of Preferred's rights in
the Section 214 authority granted by the Federal Communications
Commission; and (l) all of Preferred's rights under that certain
agreement between Preferred, Proxhill Marketing Ltd. and Barter Corp.
dated July 5, 1996, to have and to hold all of the aforesaid unto Buyer
to and for the use of Buyer, its successors and assigns forever.
IN WITNESS WHEREOF, Seller has executed this Assignment and ▇▇▇▇ of
Sale effective as of the day and year first above written.
PREFERRED/TELECOM, INC.
By:
----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
President
EXHIBIT B
PREFERRED TELECOM
AUTHORIZATIONS TO RESELL
LONG DISTANCE SERVICES
AUTHORIZED TO RESELL APPLICATION
NAME OF STATE PENDING
Alabama Pending
Alaska Not applied for
Arizona Granted
Arkansas Granted
California Granted
Colorado Granted
Connecticut Granted
Delaware Granted
Florida * Granted
Georgia Granted
Hawaii Not applied for
Idaho Granted
Illinois Granted
Indiana Granted
Iowa Granted
Kansas Granted
Kentucky Granted
Louisiana Granted
Maine Pending
Maryland Granted
Massachusetts Granted
Michigan Granted
Minnesota Denied
Mississippi Granted
Missouri * Granted
Montana Granted
Nebraska Granted
Nevada Granted
New Hampshire Denied
New Jersey Granted
New Mexico Pending
New York Granted
North Carolina Granted
North Dakota Granted
Ohio Granted
Oklahoma Granted
Oregon * Granted
Pennsylvania Granted
Rhode Island Revoked
South Carolina Granted
South Dakota Granted
Tennessee Granted
Texas Granted
Utah Granted
Vermont * Granted
Virginia * Granted
Washington Granted
West Virginia Granted
Wisconsin * Granted
Wyoming Granted
* Preferred Telecom, Inc.'s authorization to act as corporation has either
been revoked or Preferred Telecom is delinquent in filing its annual report
and/or owes funds for the privilege of doing business.
EXHIBIT C
LICENSE AGREEMENT
THIS LICENSE AGREEMENT, effective as of February 1, 1997, is by and
between BRITE VOICE SYSTEMS, INC., a Kansas corporation ("Brite"), and
PREFERRED/TELECOM, INC., a Delaware corporation ("Preferred");
WHEREAS, Brite has acquired Preferred's long distance telephone
reseller business pursuant to a certain Asset Purchase Agreement dated February
1, 1997 ("Purchase Agreement"); and
WHEREAS, Preferred is the owner of certain service marks and trademarks
used in the long distance telephone reseller business; and
WHEREAS, Brite desires to use such service marks and trademarks in
connection with such business.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth, the parties agree as follows:
1. Definitions.
A. "Business" shall have the meaning given such term in the Purchase
Agreement.
B. "Marks" shall mean the following service marks and trademarks:
SecureCard, VIP 800, Preferred Collect, Preferred Telecom and
Preferred/telecom along with all other service marks and
trademarks that are or have been utilized in connection with the
Business.
2. Continuation of Business. The parties acknowledge that Brite intends to
and shall have the right to operate the Business, including offering any and all
services that are identified by the Marks.
3. Grant of License. Preferred grants to Brite a perpetual, nonexclusive,
royalty free license to use the Marks and associated good will in connection
with the Business.
4. Ownership of Marks. Brite acknowledges ownership of the Marks in
Preferred, and shall take no action inconsistent with such ownership. Brite
further acknowledges that nothing in this License Agreement shall give Brite any
right, title or interest in the Marks, other than the right to use the Marks in
accordance with this License Agreement. Brite shall not attack the title of
Preferred to the Marks.
5. Use of Marks. Use of the Marks shall be in Brite's discretion, but shall
be subject to Preferred's right to reasonably review such use and to suggest
changes in usage. Brite shall cooperate with Preferred in facilitating
Preferred's right to review, if such right is exercised by Preferred.
6. Unauthorized Third Party Use. Brite shall notify Preferred of any
unauthorized use of the Marks by others that becomes known to Brite. Both Brite
and Preferred shall have the right to bring infringement or unfair competition
proceedings involving the Marks.
7. Assignment. This License Agreement may be assigned by Brite in
connection with a transfer of the Business, in whole or in part.
8. Choice of Law. This License Agreement shall be interpreted according to
the laws of the State of Kansas.
9. Entire Agreement. This License Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements, understandings,
negotiations or contracts between the parties, written or oral, with respect to
license of the Marks. This Agreement may be effectively amended or modified only
by a writing that has been executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed effective as of February 1, 1997.
PREFERRED/TELECOM, INC.
-----------------------------------
By:________________________________
Title:_____________________________
BRITE VOICE SYSTEMS, INC.
-----------------------------------
By:________________________________
Title:_____________________________
EXHIBIT D
CERTIFICATE OF PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS
OF PREFERRED/TELECOM, INC.
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇, the President and
Chairman of the Board of Directors, respectively, of Preferred/telecom, Inc.(the
"Company"), certify that:
1. Attached hereto as Exhibit 1 is a true, complete and correct copy of the
Articles of Incorporation of the Company, which Articles of Incorporation are in
full force and effect as of the date hereof, there having been no amendments or
other documents filed affecting the Articles of Incorporation;
2. Attached hereto as Exhibit 2 is a true and complete copy of the Company's
Bylaws and said Bylaws are in full force and effect as of the date hereof;
3. Attached hereto as Exhibit 3 is a true and correct copy of the Resolutions of
the Board of Directors of the Company dated January 31, 1997 (the "Board
Resolutions") which authorize and approve the Asset Purchase Agreement dated as
of February 4, 1997 between Brite Voice Systems, Inc. and the Company (the
"Agreement"). Such Board Resolutions have not been amended, modified or revoked
and are in full force and effect on the date hereof;
4. Attached hereto as Exhibit 4 is a true and correct copy of the Resolutions
adopted and approved by the stockholders of the Company by written consent
dated January 31, 1997;
5. The stockholders having executed the written consent attached hereto as
Exhibit 4, own in the aggregate in excess of 66% of the issued and outstanding
common stock of the Company;
6. The representations and warranties made by the Company in the Agreement
are true and complete in all material respects as if made on and as of the date
hereof;
7. All covenants, obligations and conditions of the Agreement to be performed by
the Company on or before the date hereof have been so performed in all material
respects or waived.
In witness whereof, the undersigned have executed this Certificate this
_____ day of February, 1997.
------------------------------------ ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
President Chairman of the Board
EXHIBIT E
This Note has not been registered under the Securities Act of 1933, as
amended (the "Act"), and may not be sold, transferred, assigned or
otherwise disposed of unless the person requesting the transfer of the
Note shall provide an opinion of counsel to Preferred/telecom, Inc.
(the "Company") (both counsel and opinion to be satisfactory to the
Company) to the effect that such sale, transfer, assignment or
disposition will not involve any violation of the registration
provisions of the Act or any similar or superseding statute.
PROMISSORY NOTE
PREFERRED/TELECOM, INC. (herein called the "Maker"), for value
received, promises and agrees to pay to the order of BRITE VOICE SYSTEMS, INC.
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as it
may designate, in lawful money of the United States of America, in immediately
available funds, the sum of Eighty Four Thousand Eight Hundred Thirty One
Dollars and 31/100 ($84,831.31), bearing interest at the Note Rate, payable in
eleven (11) monthly installments in equal amounts based upon the amortized loan
balance and the then applicable Note Rate. As used herein the term "Note Rate"
shall vary monthly on the first day of each month and shall be 2% above the
prime rate as listed in the Money Rates section of the Wall Street Journal
published on the first day of each month, or on the next date such publication
is published, if not published on the first day of a month. The initial Note
Rate applicable under this Promissory Note shall be 10.25%. Payment of the first
installment shall be due on March 1, 1997 and subsequent payments shall be due
on the first day of each of the next 10 consecutive months, as shown in the
following schedule:
Payment No. Payment Due Amount
----------- ----------- ------
1 03/01/97 $8,111.62
2 04/01/97 $8,111.62
3 05/01/97 $8,111.62
4 06/01/97 $8,111.62
5 07/01/97 $8,111.62
6 08/01/97 $8,111.62
7 09/01/97 $8,111.62
8 10/01/97 $8,111.62
9 11/01/97 $8,111.62
10 12/01/97 $8,111.62
11 01/01/98 $8,111.62
At the time of any change in the Note Rate, the amount of payments
numbered 1 through 11, due after the date of such change, shall be recalculated
to reflect the amortized amount necessary to fully pay off the remaining balance
due hereunder, at the new Note Rate, in equal payments on the remaining payment
due dates.
All payments shall be applied first to the payment of accrued interest
and then to the payment of principal.
In the event default is made in any payment hereof, then all of the
unpaid indebtedness hereunder shall, at the option of the holder, immediately
become due and payable and bear interest at the rate of 18% per annum from the
date of such default. Failure to exercise this option shall not constitute a
waiver of the right to declare all of the unpaid indebtedness due and payable at
once at any subsequent time.
Maker shall have the right to prepay any and all amounts due hereunder
without penalty for the privilege of doing so.
Should there be a default in the payment of the indebtedness
represented by this Note or any part thereof, and thereafter amounts payable
under this Note should be collected at law, in equity, in bankruptcy,
receivership or other court proceeding, or should this Note be placed in the
hands of an attorney for collection after default, the Maker agrees to pay
reasonable attorneys' fees and litigation costs in addition to principal and
interest due and payable thereon.
The provisions hereof shall bind and the benefits and advantages hereof
shall inure to the parties hereto and their respective successors, assigns,
personal or legal representatives, trustees, heirs, beneficiaries, legatees and
devisees.
This Note shall in all respects be governed by and construed and
enforced in accordance with the laws of the State of Kansas and Maker agrees to
jurisdiction and venue in the Sedgwick County, Kansas District Court in Wichita,
Kansas and the United States District Court in Wichita, Kansas.
MAKER: PREFERRED/TELECOM, INC.
By_____________________________________
Name___________________________________
Title__________________________________
