<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1997
Commission File No. 333-25521
-----------------
UNIFI Communications, Inc.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3097640
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 Chelmsford Street
Lowell, Massachusetts 01851
----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 551-7500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant has required to file such reports), and 2) has been subject to such
filing requirements for the past 90 days. YES X NO
---- ----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
3,826,509 shares of Common Stock, $0.01 par value, outstanding September
30, 1997.
===============================================================================
<PAGE>
UNIFI Communications, Inc.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Part I. Financial Information: Page
<S> <C>
Consolidated Condensed Balance Sheets.................. 1 - 2
Consolidated Condensed Statements of Operations........ 3
Consolidated Condensed Statement of Cash Flows......... 4 - 5
Notes to Consolidated Condensed Financial Statements... 6 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 9 - 15
Part II. Other Information:
Item 2: Changes in Securities......................... 16
Item 5: Other Information............................. 17
Item 6: Exhibits and Reports on Form 8-K.............. 18
Signatures............................................. 21
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
UNIFI Communications, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 69,807,382 $ 4,538,343
Restricted cash 24,000,528 1,091,484
Accounts receivable, net 7,917,096 4,700,403
Prepaid expenses and other current assets 880,686 811,374
------------ -----------
Total current assets 102,605,692 11,141,604
------------ -----------
Property and Equipment, net 23,477,625 24,824,329
Restricted Cash - net of current portion 11,821,498 ---
Minority Interest in Fax Japan 590,000 1,000,000
Deferred Financing Costs, net 8,640,213 2,764,152
Other Assets, net 2,106,951 1,454,323
------------ -----------
$149,241,979 $41,184,408
============ ===========
</TABLE>
The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.
1
<PAGE>
UNIFI Communications, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets (continued)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------- --------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Current portion of notes payable $ 2,447,068 $ 2,776,753
Current portion of notes payable to principal
stockholder 1,003,546 4,232,348
Current portion of capital lease obligation 1,014,291 1,483,413
Advances from principal stockholder 1,683,351 4,317,563
Accounts payable 3,380,529 13,659,604
Accrued expenses 14,498,217 10,608,224
------------- ------------
Total current liabilities 24,027,002 37,077,905
------------- ------------
Long-term Liabilities:
Senior notes payable 165,285,780 ---
Capital lease obligations, net of current
portion 1,129,358 1,821,074
Notes payable, net of current portion 3,423,458 3,433,020
Notes payable to principal stockholder 42,499,811 41,359,176
------------- ------------
Total long-term liabilities 212,338,407 46,613,270
------------- ------------
Stockholders' Equity (Deficit):
Convertible preferred stock; $1 par value,
24,715,500 shares authorized, and
13,515,030 shares issued and outstanding
in 1997 and 1996, respectively 13,515,030 13,515,030
Common stock; $.01 par value, 50,000,000
shares authorized; and 3,826,509 and
3,786,025 issued and outstanding in
1997 and 1996, respectively 38,261 37,856
Additional paid-in capital 35,836,342 23,664,373
Accumulated deficit (137,224,405) (80,286,448)
Cumulative translation adjustment 711,342 562,422
------------- ------------
Total stockholders' deficit (87,123,430) (42,506,767)
------------- ------------
Total Liabilities and Stockholders'
Equity (Deficit) $ 149,241,979 $ 41,184,408
============= ============
</TABLE>
The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.
2
<PAGE>
UNIFI Communications, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
1997 1996 1997 1996
------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C>
Revenues $ 11,722,468 $ 7,185,513 $ 32,172,963 $ 16,835,251
------------ ------------ ------------ ------------
Cost of Revenues 9,647,264 7,409,802 27,425,572 16,400,796
Cost of Revenues - Depreciation 1,074,824 969,204 3,035,583 2,625,773
------------ ------------ ------------ ------------
Total Cost of Revenues 10,722,088 8,379,006 30,461,155 19,026,569
Gross Margin 1,000,380 (1,193,493) 1,711,808 (2,191,318)
Operating expenses:
Selling, general and administrative 9,267,563 8,375,736 29,884,173 21,313,306
Research and development 3,623,763 3,308,223 9,018,368 7,946,303
Depreciation and amortization 1,266,198 606,189 3,556,491 1,824,557
------------ ------------ ------------ ------------
Total operating expenses 14,157,524 12,290,148 42,459,032 31,084,166
Loss from operations (13,157,144) (13,483,641) (40,747,224) (33,275,484)
Interest Income 1,432,236 14,250 4,176,411 124,217
Interest Expense (8,204,503) (718,902) (20,367,144) (1,474,196)
------------ ------------ ------------ ------------
Loss before minority interest (19,929,411) (14,188,293) (56,937,957) (34,625,463)
Minority Interest in Fax Japan --- 168,299 --- 929,276
------------ ------------ ------------ ------------
Net Loss $(19,929,411) $(14,019,994) $(56,937,957) $(33,696,187)
============ ============ ============ ============
Net Loss per common share $ (5.22) $ (3.74) $ (14.99) $ (9.00)
============ ============ ============ ============
Weighted Average Common Shares
Outstanding 3,818,189 3,746,356 3,798,642 3,741,360
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.
3
<PAGE>
UNIFI Communications, Inc. and Subsidiaries
Consolidated Condensed Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997, 1996,
-------------- -------------
<S> <C> <C>
Operating activities:
Net Loss $ (56,937,957) $ (33,696,187)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 6,990,133 4,905,080
Amortization of financing costs and warrants 981,824
Minority interest in Fax Japan --- (929,276)
Compensation expense related to options 112,712
Loss on disposal of property and equipment 162,794 ---
Write-off of minority interest 410,000
Changes in assets and liabilities:
Accounts receivable (3,390,521) (1,800,809)
Accounts receivable from stockholder --- (681,908)
Prepaid expenses and other current assets (111,272) 81,540
Accounts payable (10,179,016) 3,308,430
Accrued expenses 4,091,300 6,830,519
-------------- -------------
Net cash used in operating activities (57,870,003) (21,982,611)
-------------- -------------
Investing activities:
Purchases of property and equipment (5,221,648) (15,313,199)
Proceeds from sale of property and equipment (260,988) ---
Purchase of short-term investments --- (2,770,365)
Increase in other assets (819,815) (328,566)
Cash acquired in purchase of SingCom --- 162,004
-------------- -------------
Net cash used in investing activities (6,302,451) (18,250,126)
-------------- -------------
Financing activities:
Net proceeds from issuance of long-term debt 4,075,722 4,931,295
Net proceeds from issuance of Senior Notes 163,276,004 ---
Net (payments) proceeds from notes payable to
principal stockholder (3,228,802) 28,000,000
Proceeds from exercise of stock options and warrants 147,899 55,805
-------------- -------------
Net cash provided by financing activities 164,270,823 32,987,100
-------------- -------------
Effects of exchange rates on cash ( 98,788) (259,632)
-------------- -------------
Increase in restricted cash (34,730,542) ---
-------------- -------------
Increase (Decrease) in cash and equivalents 65,269,039 (7,505,269)
Cash and equivalents at beginning of period 4,538,343 11,123,620
-------------- -------------
Cash and equivalents at end of period $ 69,807,382 $ 3,618,351
============== =============
</TABLE>
The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.
4
<PAGE>
UNIFI Communications, Inc. and Subsidiaries
Consolidated Condensed Statement of Cash Flows (continued)
Supplemental disclosure of non-cash financing activity:
In connection with the debt restructuring agreement with SingTel NA in the first
quarter of 1997, the Company recorded a $5 million non-cash transaction relating
to the conversion of advances from stockholder to senior notes.
In connection with the issuance of warrants, the Company recorded a discount of
$11.9 million relating to the senior notes payable and notes payable to
principal stockholder.
In conjunction with the ORIX stock redemption by the Company's majority-owned
subsidiary, Fax Japan, the Company recorded a $.4 million non-cash transaction
relating to the Company's minority interest in Fax Japan.
Supplemental Disclosure of Cash Flow Information:
<TABLE>
<CAPTION>
Cash paid for September 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Interest $13,854,201 $108,934
Income Taxes $ --- $ ---
</TABLE>
The accompanying notes are an integral part of these Consolidated Condensed
Financial Statements.
5
<PAGE>
UNIFI Communications, Inc.
Notes to Consolidated Condensed Financial Statements
Form 10-Q, September 30, 1997
(Unaudited)
Note 1: Interim Financials
The accompanying consolidated condensed financial statements have been prepared
by UNIFI Communications (together with its consolidated subsidiaries, the
"Company") in accordance with generally accepted accounting principles for
interim financial statements and with the instructions to Form 10-Q and
Regulation S-X pertaining to interim financial statements. Accordingly, these
interim financial statements do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. The financial statements reflect all adjustments and accruals which
management considers necessary for a fair presentation of the Company's
financial position as of September 30, 1997 and December 31, 1996, and results
of operations for the three and nine months ended September 30, 1997 and
September 30, 1996. The results for the interim periods presented are not
necessarily indicative of results to be expected for any future period. The
financial statements should be read in conjunction with the audited financial
statements and the notes thereto included in the Company's Registration
Statement on Form S-4 (Registration No. 333-25521).
Note 2: Net Loss Per Common Share
Net loss per common share is computed using the weighted average number of
common shares outstanding during each period in accordance with the treasury
stock method.
Note 3: New Accounting Standards
In February 1997, the Financial Standards Board (FASB) issued SFAS No. 128,
Earnings Per Share which is effective for the fiscal year ending after December
15, 1997 and early adoption is not permitted. The Company does not expect the
adoption of this standard to have a material effect on its net loss per common
share as currently presented.
In June 1997, FASB issued SFAS No. 130, Reporting Comprehensive Income which is
effective for the fiscal years beginning after December 15, 1997. The Company
has not yet assessed the impact of the adopting this new accounting standard.
In June 1997, FASB issued SFAS No. 131, Disclosure about Segments of an
Enterprise and Related Information which is effective for fiscal year beginning
after December 15, 1997 and early adoption is encouraged. The Company is not
required to adopt SFAS No. 131 for interim financial statements in the initial
year of its application. Unless impracticable, the Company will be required to
restate prior period information upon adoption.
The Company plans to adopt SFAS No. 128, 130 and 131 in connection with its
Annual Report on Form 10-K for the fiscal year ending December 31, 1998.
Note 4: Senior Note Offering
On February 21, 1997, the Company sold 175,000 Units, each consisting of $1,000
principal amount of 14% Senior Notes due March 1, 2004 and one Warrant to
purchase 27.524674 shares of the Company's common stock, $.01 par value per
share ("Common Stock") at an exercise price per share of $0.25, for an aggregate
purchase price of $175 million Interest is due semi-annually on March 1 and
September 1 of each year beginning September 1, 1997. The sale of the Senior
Notes resulted in net proceeds to the Company of approximately $105 million,
after offering expenses and the payment of certain obligations including
approximately $46 million which has been escrowed for certain Senior Note
interest payments.
On July 28, 1997, the Company commenced an exchange offer for the Senior Notes,
pursuant to which holders of the Senior Notes were permitted to exchange the
Senior Notes for Senior Notes of like tenor that
6
<PAGE>
UNIFI Communications, Inc.
Notes to Consolidated Condensed Financial Statements
Form 10-Q, September 30, 1997
(Unaudited)
were registered under the Securities Act of 1933, as amended. During the
Company's exchange offer, which closed on September 3, 1997, the entire $175
million in original principal amount of privately placed Senior Notes was
exchanged by the holders for registered Senior Notes.
The Senior Notes are redeemable, in whole or in part, at the option of the
Company at any time on or after March 1, 2001 at the redemption price, as
defined in the Indenture governing the Senior Notes, plus any accrued interest.
Upon a change of control, as defined in the Indenture, each noteholder will have
the right to require the Company to repurchase the Senior Notes at 101% of face
value, plus accrued interest. The Indenture contains certain restrictive
operating covenants, including amount other things restrictions on payment of
dividends, incurrence of additional indebtedness, mergers, and sales by the
Company of its assets.
Each Warrant becomes exercisable on or after the earlier of (I) one year from
the date of issuance, and (ii) the occurrence of another exercise event, as
defined in the Warrant Agreement. Unless exercised, the Warrants will
automatically expire on March 1, 2007. In addition, in the event that the
Company does not consummate an initial public offering of its equity securities
("IPO"), resulting in gross proceeds to the Company of at least $35 million, by
September 1, 1999, the Company will be required to issue additional Warrants to
the holders of the Senior Notes in an amount equal to 8% of the Company's then
outstanding fully diluted Common Stock. If an IPO has not occurred by March 1,
2002, the Company will be required to repurchase the Warrants at their then-fair
market value, as determined in accordance with the Warrant Agreement. The
Company has valued these Warrants using the Black-Scholes method and has reduced
the face carrying amount of the Senior Notes by $10.2 million, which represents
the aggregate fair value of the Warrants issued with the Senior Notes. The
company will record additional interest expense of $10.2 million over the term
of the Senior Notes. The Company recorded $0.2 million and $0.5 million of
such interest expense for the three and nine months ended September 30, 1997,
respectively.
Note 5: Singapore Telecommunications Financing
Effective on February 21, 1997, the Company entered into a debt restructuring
agreement with SingTel (Netherlands Antilles) Pte N.V. ("SingTel NA"), an
affiliate of SingTel Global Services Pte Ltd. ("SingTel Global"), a principal
stockholder of the Company. SingTel NA and SingTel Global are affiliates of
Singapore Telecommunications Limited ("SingTel"), a major provider of
telecommunications services in Singapore. The debt agreement amended the
Company's credit facility and asset facility with SingTel NA to provide for a
final maturity under each of such facilities on the later of (i) March 1, 2005
or (ii) the date on which the Senior Notes are paid, defeased, redeemed or
otherwise satisfied in full (provided that if the Senior Notes are repaid in
full prior to March 1, 2005, borrowings under the credit and asset facilities
will become due 91 days after the date on which the Senior Notes are so repaid).
Also as part of the debt restructuring agreement, the Company granted SingTel
Global a warrant to purchase 2,000,000 shares of the Company's Common Stock at
an exercise price of $1.83. The value ascribed to this warrant, using the
Black-Scholes valuation method, is approximately $0.85 per warrant share. The
Company recorded a discount of the SingTel NA debt of approximately $1.7 million
in respect of this warrant, which will be amortized to interest expense over the
remaining life of the SingTel NA debt. The unamortized value of the warrant at
September 30, 1997 approximately $1.6 million.
Note 6: Certificate of Amendment to the Certificate of Incorporation
On February 21, 1997, the Company filed a Certificate of Amendment to its
Certificate of Incorporation, as amended, with the Delaware Secretary of State.
The Amendment eliminated the Company's authorized but unissued Series H
Convertible Preferred Stock, $1.00 par value per share and authorized 8,570,000
shares of new Series I Convertible Preferred Stock, $1.00 par value per share.
At September 30, 1997, no shares of Series I Convertible Preferred Stock were
issued and outstanding.
7
<PAGE>
UNIFI Communications, Inc.
Notes to Consolidated Condensed Financial Statements
Form 10-Q, September 30, 1997
(Unaudited)
Note 7: Share Purchase between Fax International Japan, Inc. (FIJ) and ORIX
Corporation (ORIX)
On May 27, 1997, the Company was notified by ORIX Corporation, a minority
stockholder of Fax International Japan, Inc., UNIFI's majority-owned Japanese
subsidiary, that it had elected to exercise its special exit right under the
Stockholders Agreement among the Company, FIJ and the other stockholders of FIJ.
On June 25, 1997 FIJ entered into an agreement with ORIX (which was finalized
during the quarter ended September 30, 1997) to purchase all 80 shares of FIJ
stock held by ORIX and its affiliates for an aggregate purchase price of
approximately $1.00. FIJ intends to retire the shares repurchased from ORIX.
Under the Japanese Commercial Code, FIJ is required to give public notice to its
creditors requesting them to state their objections to FIJ's proposed reduction
of its capital. As of September 30, 1997, FIJ recorded a $1.8 million
adjustment against retained earnings for the repurchase and retirement of the
ORIX shares. FIJ plans to hold a shareholders' meeting in December 1997 to
obtain approval to offset ORIX's remaining additional paid in capital against
retained earnings. As a result of the repurchased shares, the relative
ownership interest in FIJ held by the Company and Nichimen Corporation (the
remaining minority FIJ stockholder) are 63% and 37%, respectively, as of
September 30, 1997. In the three months ended September 30, 1997, the Company
expensed $410,000 of the previously capitalized minority interest related to
ORIX.
Note 8 Reclassifications
Certain prior year amounts have been reclassified to conform with the current
year presentation.
8
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Cautionary Statements with Respect to Forward Looking Statements
This Quarterly Report contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Although the Company believes that
its plans, intentions and expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such plans, intentions
or expectations will be achieved. Important factors that could cause actual
results to differ materially from the Company's forward-looking statements are
described in the Company's Registration Statement on Form S-4 (Registration No.
333-25521) and the accompanying Prospectus dated July 28, 1997, each as filed
with the Securities and Exchange Commission, under the caption "Risk Factors".
Overview
- --------
UNIFI Communications, Inc. (UNIFI) is a rapidly growing multinational
telecommunications company that provides business-to-business domestic and
international fax document delivery services and voice transmission services.
The Company commenced operations in April 1992, offering international fax
document delivery services between the United States and Japan. From April 1992
to the present, the company has continued to expand its Intelligent Delivery
Network and its telecommunications service operations by means of funds received
in numerous equity and debt financings and from operations. As of September 30,
1997, UNIFI, either directly (including through wholly-owned subsidiaries) or
through affiliates, offered its fax document delivery services in the United
States, Canada, United Kingdom, France, Germany, Hong Kong, the Republic of
Korea (South Korea), Japan, Australia, Singapore, the Republic of China
(Taiwan) and the People's Republic of China.
The Company's revenues are derived primarily from monthly service charges based
on the actual number of minutes (or fractions thereof) of international fax
document transmission provided to customers. The Company's principal operating
costs are sales and customer service personnel, fax document transmission costs,
and research and development expense. There are two broad categories of
transmission cost: on-net costs, which are the costs of transmission and
delivery to countries in which the Company has installed a network node, and
(ii) off-net costs, which are the costs of transmission and delivery to
countries where the Company has no network facilities. Typically, off-net
transmission and delivery costs are higher than on-net costs. As the Company
continues to expand its Intelligent Delivery Network, the Company expects to
experience improvements in gross margins by reducing the percentage of its
international fax document traffic that is off-net.
Operating Results
- -----------------
Revenues. Revenues increased to $11.7 million and $32.2 million for the three
- --------
and nine months ended September 30, 1997, respectively, from $7.2 million and
$16.8 million, respectively, for the comparable periods in 1996. These increases
are due primarily to increases in fax document traffic and numbers of active
customers in geographical markets in which the Company first began offering its
services during 1996 and early 1997. Revenues derived from the Company's foreign
subsidiaries in international markets were approximately $8.7 million and $23.2
million for the three and nine months ended September 30, 1997, respectively,
compared to $4.6 million and $9.4 million, respectively for the comparable
periods in 1996.
9
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Operating Results (continued)
- -----------------------------
During the three and nine months ended September 30, 1997, the Company derived
ten percent or more of its consolidated revenues from operations in North
America (excluding Canada), Japan, and Hong Kong, and from the operations of the
Company's Singapore affiliate, as follows:
<TABLE>
<CAPTION>
Revenues as Percentage of UNIFI Total Consolidated Revenues for
Three Months Ended September 30, Nine Months Ended September 30,
UNIFI CI Unit 1997 1996 1997 1996
- ------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
North America 25.7% 36.2% 27.6% 44.0%
Japan 18.7% 25.2% 18.9% 27.8%
Hong Kong 12.1% 6.7% 11.6% 3.4%
Singapore 11.9% 15.7% 11.1% 14.2%
</TABLE>
The Company expects that revenues from its North America operations will
continue to represent ten percent or more of the Company's total consolidated
revenues for the foreseeable future, primarily because of the significant size
of the market for telecommunications services in North America, and because the
Company's recently introduced broadcast fax service and its line of the desktop
computer-based fax services, currently under development, will be deployed
initially and, the Company believes, the most comprehensively, in North America.
While the Company expects the absolute amount of revenues from operations in all
of its geographic markets to increase, the Company cannot presently project
which other geographic markets, if any, will represent ten percent or more of
the Company's consolidated revenues in future periods, due to the uncertainty
surrounding the deployment and market acceptance in such other markets of the
Company's broadcast fax service, its desktop computer-based fax services,
currently under development, and other new services. There can be no assurance
that adverse political, regulatory or market conditions in any of the Company's
geographic markets will not develop and adversely affect the Company's revenues
derived from such markets. Moreover, following deployment of the Company's line
of desktop-computer-based fax services, the Company believes that the
percentages of its total revenues derived from Asian markets may decline
relative to percentages of total revenues derived from North American and
European markets, as customers in Asian markets are expected to adopt such new
services at a slower rate than customers in North America and Europe.
Revenues from the Company's core FI-Direct service were approximately $10.6
million and $29.3 million for the three and nine months ended September 30,
1997, respectively, compared to $6.7 million and $16.0 million, respectively,
in the comparable period in 1996. FI-Direct service revenues as a percentage of
total revenues were 90.8% and 91.2% for the three and nine months ended
September 30, 1997, respectively, compared to 93.5% and 94.8%, respectively, in
the comparable period in 1996. The number of active customers increased to
approximately 11,714 at September 30, 1997, as compared to 7,383 at September
30, 1996. The Company believes that the general decline in worldwide
telecommunications rates resulting from the WTO Agreement and from deregulation
efforts underway in many of the Company's markets will continue into the
foreseeable future. The worldwide environment of declining telecommunications
prices will require the Company to lower its per-minute transmission charges to
users of its FI-Direct service in order to remain competitive with other data
telecommunications service providers. Consequently, the Company does not expect
revenues from its FI-Direct service to continue to grow at historical rates,
even though the Company expects the total number of FI-Direct transmission
minutes to continue to increase. The Company anticipates that revenues from its
broadcast fax service, (from which commercial revenue was first earned in the
third quarter of 1997) and from its line of desktop-computer-based fax services
will contribute increasing percentages of the Company's total consolidated
revenues as such services are deployed and gain market acceptance. However,
the failure of the
10
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Operating Results (continued)
- -----------------------------
Company to successfully develop and deploy such services or to gain market
acceptance or, if required, regulatory approval, of such services would have a
material adverse effect on the Company's revenues.
The Company presently estimates that its consolidated total revenues for the
year ending December 31, 1997 will be approximately $45 million. In its
Exchange Offer Prospectus dated July 28, 1997, the Company forecasted total 1997
revenues of approximately double its total 1996 revenues of $25.2 million. The
primary reasons for the expected decline in the Company's actual total 1997
revenues from the forecast given in the Exchange Offer Prospectus are the delays
experienced by the Company in the second half of 1997 in completing development
and commercial introduction of its broadcast fax services and its
desktop-computer-based fax services, together with lower than expected growth in
the volume of transmissions sent using the Company's core FI-Direct
international fax service.
Cost of Revenues. Cost of revenues increased to $10.7 million and $30.5
- ----------------
million for the three and nine months ended September 30, 1997, respectively,
compared to $8.4 million and $19.0 million, respectively, for the comparable
periods in 1996. These increases are due primarily to increases in the third-
party transmission and delivery costs the Company must pay in connection with
off-net transmissions and the Company's continued expansion of its Intelligent
Delivery Network during such periods. Cost of revenues as a percentage of
revenues decreased to 91.5% and 94.7% for the three and nine months ended
September 30, 1997, respectively, as compared to 116.6% and 113.0%,
respectively, for the comparable periods in 1996. The Company believes that its
ongoing efforts to reduce these off-net costs through least-cost routing
techniques, negotiation of favorable rates with telecommunications service
providers and other means, combined with the Company's continued expansion of
its network, the corresponding reduction in the percentage of customer
transmissions that are off-net, and the use of new technology to increase
efficiencies in data transmission, will result in a continued decline in cost of
revenues as a percentage of revenues. However, there can be no assurance that
changes in customer transmission patterns will not result in greater than
expected transmissions to off-net destinations, thereby increasing the Company's
off-net transmission costs beyond current expectations, or that the Company will
be able to install and operate network facilities in countries that are
currently off-net, or that the Company will be able to continue to operate its
network facilities in countries that are currently on-net. Moreover, as the
Company continues to introduce new service offerings, such as broadcast fax
services, and its desktop-computer-based fax services currently under
development, the Company expects cost of revenues as a percentage of revenue to
decline on a consolidated basis. However, there can be no assurance that the
Company's costs of revenue associated with its newer services will not be higher
than costs of revenue associated with its core service, and consequently that as
the percentage of total revenue contributed by such newer services increases,
the Company's costs of revenue on a consolidated basis will not increase.
Gross Margin. Gross margin as a percentage of revenues improved to 8.5%
- ------------
and 5.3% for the three and nine months ended September 30, 1997, respectively,
as compared to (16.6%) and (13.0%), respectively, for the comparable periods in
1996. The positive improvement in gross margin is due primarily to the Company's
ongoing cost reduction efforts as well as to increases in the percentage of the
Company's total fax document traffic that is delivered on-net, made possible by
the Company's continued expansion of its network in new geographical markets.
The Company's on-net/off-net traffic ratio improved to approximately 65:37 in
the month of September, 1997 as compared to approximately 57:43 in the month of
September, 1996, but declined from the 69:31 ratio achieved by the Company in
June 1997. The improvement in the Company's on-net to off-net ratio between
September 1997 and September 1996 is due primarily to the continued installation
of network nodes by the Company in additional countries during such period. The
number of network nodes increased from 16 at September 30, 1996 to 32 at
September 30, 1997. The decline in the Company's on-net to off-net ratio between
June 1997 and September 1997 is due to the termination of the Company's
international private line circuit connecting its node in Guangzhou, China to
its node in Hong Kong, as discussed below.
The improvement to the Company's gross margin for the three and nine months
ended September 30, 1997 occurred despite the fact that the Company's average
net revenue per minute of international fax traffic decreased by 17.1% to $0.63
per minute at September 30, 1997 from $0.76 per minute September 30, 1996. The
Company anticipates further declines in its average net revenue per minute of
international fax traffic as worldwide telecommunications prices continue to
decline as a result of the WTO Agreement and deregulation of telecommunications
markets, requiring the Company to further lower its per minute transmission
charges to customers in order to remain competitive. However, there can be no
assurance that worldwide telecommunications prices will not decline faster or
more steeply than the Company currently
11
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Operating Results (continued)
- -----------------------------
anticipates, requiring the Company to lower its average per minute rates faster
or more steeply than currently anticipated and having an adverse effect on the
Company's gross margin. Moreover, to the extent that the Company derives higher
than expected revenues from operations in geographic markets where gross margins
are lower than in other markets, the Company's consolidated gross margin could
be adversely affected. In addition, the Company cannot presently project the
gross margins associated with revenues from the Company's line of desktop-
computer-based fax services, currently under development; such gross margins
could be lower than for other service offerings, thereby reducing the Company's
consolidated gross margin.
In late August 1997 the Company was informed that the international private line
telecommunications circuit connecting its network facilities in Guangzhou, China
to its network facilities in Hong Kong had been terminated by action of the
Guangzhou PTT. The termination of this circuit, the procurement and maintenance
of which is by contract the responsibility of the Company's business partner in
China, is believed by the Company to have been the result of a review by the
Chinese MPT of many value-added network service providers in China and the MPT's
determination that certain of these providers, including the Company's business
partner, were operating beyond the scope of their respective VAN licenses. The
principal effect on the Company of the termination of this circuit has been to
make China an off-net country for purposes of delivery by the Company of
international fax transmissions into China. Until this circuit or an equivalent
one is reestablished, the Company must deliver fax traffic into China through
third-party carriers at increased cost. The Company and its business partner in
China are actively seeking to reestablish an international private line circuit
connecting one or more of the Company's network nodes outside of China to its
node inside of China. Until such circuit is reestablished, the Company is
pursuing other strategies for reducing the cost of off-net delivery of faxes
into China. There can be no assurance that the Company or its China business
partner will be successful in reestablishing an international private line
circuit into China on terms satisfactory to the Company or at all. The Company
presently estimates that the termination of its international private line
circuit to China will result in approximately $900,000 in additional fax
delivery costs during the fourth quarter of 1997. Such additional costs,
combined with lower-than-expected revenues in the fourth quarter, could have a
material adverse effect on the Company's consolidated fourth quarter gross
margin.
Selling, General and Administrative expenses. Selling, general and
- --------------------------------------------
administrative expenses increased to $9.3 million and $29.9 million for the
three and nine months ended September 30, 1997, respectively, compared to $8.4
million and $21.3 million, respectively, for the comparable periods in 1996.
Included in general, selling and administrative expenses are related sales and
customer service expense which decreased to $6.5 million and increased $22.4
million for the three and nine months ended September 30, 1997, respectively,
compared to $6.8 million and $16.9 million, respectively, for the comparable
periods in 1996. The overall increases were primarily the result of additions
to sales and customer service personnel from approximately 165 at September 30,
1996 to approximately 298 at September 30, 1997. In addition, general and
administrative expenses increased to $2.8 million and $7.5 million for the
three and nine months ended September 30, 1997, respectively, compared to $1.6
million and $4.4 million, respectively in the comparable periods in 1996
primarily as a result of start-up expenses incurred to support the geographic
country expansion. Selling, general and administrative expenses as a percentage
of revenues decreased to 79.1% for the three months and to 92.9% for the nine
months ended September 30, 1997 as compared to 116.5% and 126.6%, respectively
in the comparable periods in 1996. The Company expects selling, general and
administrative expenses to continue to decline as a percentage of revenues as
revenue growth occurs.
12
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Operating Results (continued)
- -----------------------------
Research and development expenses. Research and development expenses increased
- ---------------------------------
to $3.6 million and $9.0 million for the three and nine months ended September
30, 1997, respectively, compared to $3.3 million and $7.9 million, respectively,
for the comparable periods in 1996. The number of research and development
personnel remained relatively constant between reported periods, increasing
slightly from approximately 105 at September 30, 1996 to approximately 107 at
September 30, 1997. Research and development expenses as a percentage of
revenues decreased to 30.9% and 28.0% for the three and nine months ended
September 30, 1997, respectively, compared to 46.0% and 47.2%, respectively, for
the comparable periods in 1996. The Company's research and development
expenditures are made for the purpose of developing new services as well as
maintaining and enhancing existing services. The most substantial component of
research and development expense is personnel, including full-time employees and
independent contractors. The Company expects that its actual research and
development expenses will remain at present levels or increase slightly until
the Company completes development and initial deployment of its desktop-computer
based fax services. As the Company's total consolidated revenue increases, the
Company expects research and development expenses as a percentage of revenue to
decline further. However, there can be no assurance that problems or delays
encountered in developing, deploying or supporting the Company's desktop-
computer-based fax services, or its development of new services the Company
determines are required in order to remain competitive, will not result in an
increase in research and development expenses beyond the Company's current
expectations.
Interest income and expense. Interest income increased to $1.4 million
- ---------------------------
and $4.2 million for the three and nine months ended September 30, 1997,
respectively. Interest income for the comparable periods in 1996 were not
significant. These increases were primarily the result of interest earned on
net proceeds received from the sale of Senior Notes by the Company on February
21, 1997. The Company expects interest income to decrease as it continues to
utilize non-restricted cash for operations and as it begins to pay down interest
due on its debt financing.
Interest expense increased to $8.2 million and $20.4 million for the three and
nine months ended September 30, 1997, respectively, compared to $0.7 million and
$1.5 million, respectively, for the comparable periods in 1996. The increase
was primarily the result of borrowings by the Company evidenced by the Senior
Notes. Interest expense relating to the Senior Notes totaled $14.4 million
for the nine months ended September 30, 1997.
EBITDA. Gross margin EBITDA (revenues less cost of revenues, excluding
- ------
depreciation associated with cost of revenues) increased to $2.1 million and
$4.7 million for the three and nine months ended September 30, 1997,
respectively, from $(0.2) million and $0.4 million, respectively, for the
comparable periods in 1996. EBITDA gross margin percentage increased to 17.7%
and to 14.8%, respectively, for the three and nine months ended September 30,
1997 compared to (3.12)% and 2.6%, respectively, for the comparable periods in
1996. The substantial improvement in the Company's gross margin EBITDA between
reported periods is due to the increase in revenues derived from the seven new
geographic markets in which the Company commenced operations between September
30, 1996 and September 30, 1997, as well as the Company's ongoing cost reduction
efforts.
EBITDA (earnings before interest expense, taxes, depreciation and amortization)
improved by 19.6% to approximately $(9.4) million for the three months ended
September 30, 1997, compared to approximately $(11.7) million for the comparable
period in 1996. EBITDA declined by 7.9% to approximately $(30.0) million for
the nine months ended September 30, 1997, compared to approximately $(27.8)
million for the comparable period in 1996. The decline in EBITDA between the
comparable nine month periods is due largely to the significant start-up costs
incurred by the Company in late 1996 and early 1997 in connection with its
establishment of operations in seven new geographic markets during such period.
The substantial improvement in EBITDA between the
13
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Operating Results (continued)
- -----------------------------
comparable three month periods is due mainly to the increase in revenues derived
from operations in these new markets after their establishment and the Company's
ongoing cost reduction efforts during 1997.
The projected increase in fourth quarter fax delivery costs resulting from the
termination of the Company's international private line circuit into China could
have a material adverse effect on the Company's fourth quarter gross margin
EBITDA and/or EBITDA. There can be no assurance that the Company's gross margin
EBITDA and/or EBITDA will not be materially adversely affected by other factors
beyond the Company's control, particularly third-party transmission and delivery
costs incurred by the Company in connection with its off-net delivery of
international faxes and its domestic delivery of faxes by users of the Company's
broadcast and desktop-computer-based fax services. In addition, gross margin
EBITDA and/or EBITDA could be materially adversely affected if the Company is
required to lower its per-minute transmission charges to customers faster or
more steeply than currently anticipated due to faster or more steep declines in
worldwide telecommunications prices. Failure by the Company to sustain
improvements to its gross margin EBITDA and EBITDA would have a material adverse
effect on the Company's operations and could cause the Company to default on its
payment obligations under the Senior Notes after the final disbursement of the
escrowed interest payments.
Liquidity and Capital Resources
- -------------------------------
The Company has historically financed its cash requirements for operations and
investments primarily through private sales of equity and debt securities as
well as equipment financing arrangements and other borrowings. Cash and
equivalents increased to $69.8 million at September 30, 1997 compared to $5.6
million at December 31, 1996 and $3.6 million at September 30, 1996. This
increase is due primarily to approximately $105 million in net proceeds
received from the Company's sale of Units (consisting of Senior Notes and
Warrants to purchase the Company's Common Stock) on February 21, 1997. Under
the Escrow Agreement, the Company was required to place the first four interest
payments on the Senior Notes in an escrow account as restricted cash. The
Company made its first interest payment from the escrow account of approximately
$13.0 million in the third quarter of 1997. The Company has restricted cash of
$35.8 million at September 30, 1997 compared to $1.1 million at December 31,
1996. The Company's current ratio at September 30, 1997 increased to 4.27 from
0.3 at December 31, 1996 and 0.5 at September 30, 1996.
Increases in accounts receivable, attributable to the growth in revenue, and in
other current assets used cash of $4.0 million and $1.9 million, respectively,
for the nine months ended September 30, 1997. The average age of the Company's
accounts receivable increased by approximately five days from 53 at September
30, 1996 to 58 at September 30, 1997, primarily as a result of longer payment
cycles in certain of the Company's emerging European markets.
Property and equipment expenditures for the nine months ended September 30, 1997
of $5.2 million were offset by $0.2 million of proceeds generated from the sale
of property and equipment. Additions to property and equipment were primarily
for equipment and software used to build out the Company's Intelligent Delivery
Network and FaxLink autodialers used by the Company's customers.
Net cash provided by financing activities was $164.3 million in the nine months
ended September 30, 1997. The most significant of these financing activities
was the sale of Units by the Company on February 21, 1997. Gross proceeds to
the Company from the sale of the Units were $175 million, of which $5.0 million
was used to repay certain advances from SingTel under the Intercompany Operating
Agreement between the Company and SingTel, $6.7 million was allocated to
deferred costs incurred in connection with the offering and sale of the Units,
$12 million was used to retire certain accrued trade payables, and $46 million
was deposited into an escrow account as restricted cash for the purpose of
payment of the first
14
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Form 10-Q, September 30, 1997
Liquidity and Sources of Capital (continued)
- --------------------------------------------
four interest installments on the Company's Senior Notes. Cash flow related to
Senior Notes net of deferred offering costs totaled $163.3 million during the
nine months ended September 30, 1997. Other proceeds from financing activities
include $5.9 million received from SingTel as advances under the Intercompany
Operating Agreement between the Company and SingTel during January and February
of 1997.
The Company does not have a significant source of liquidity other than the net
proceeds (less the amount placed in escrow) received from the sale of the Units.
If the Company's current projection of its future net operating losses or future
cash flows from operations is inaccurate in any material respect, the Company's
cash needs could exceed its cash availability, which would have a material
adverse impact on the Company. The Indenture governing the Senior Notes permits
the Company and its subsidiaries to incur additional indebtedness under certain
circumstances to fund the expansion of the Company's network and for other
permitted purposes. However, there can be no assurance that the Company will be
able to secure additional indebtedness as permitted under the Indenture on terms
satisfactory to the Company, or at all. The Company believes that its existing
cash balances, funds generated from operations, and borrowings permitted under
the Indenture will be sufficient to finance the Company's operations for the
next twelve months.
15
<PAGE>
PART II: OTHER INFORMATION
Item 2: Changes in Securities
- ------------------------------
(c) Unregistered sales of equity securities during the Quarter ended
September 30, 1997
During the three months ended September 30, 1997, the Company issued
shares of Common Stock to employees, contractors and/or consultants of the
Company pursuant to such persons' exercises of stock options granted under the
Company's Amended and Restated 1993 Stock Option Plan, as follows:
<TABLE>
<CAPTION>
Number of Shares of Aggregate Cash
Date of Sale Common Stock Exercise Price
- ------------ ------------ --------------
<S> <C> <C>
7/14/97 464 $ 747.90
7/21/97 13,000 12,950.00
7/29/97 442 464.10
7/31/97 990 1,039.50
8/27/97 394 642.50
9/8/97 1,000 350.00
9/15/97 119 255.85
9/16/97 386 738.60
9/23/97 3,541 3,018.05
9/29/97 189 406.35
</TABLE>
All of the foregoing sales by the Company were made pursuant to the exemptions
from registration set forth in Section 4 (2) and Rule 701 under, the Securities
Act of 1933, as amended.
16
<PAGE>
Item 5: Other Information
- --------------------------
Completion of Acquisition of Fax International Australia Pty. Limited and of Fax
Business of SingCom (Australia) Pty. Limited
On September 29, 1997, the Company entered into a definitive agreement with the
shareholders of Fax International Australia Pty. Limited ("FIA") whereby the
Company acquired all of the issued and outstanding capital stock of FIA for an
aggregate purchase price of approximately $1,500. On September 30, 1997, FIA
entered into a definitive agreement with SingCom (Australia) Pty. Limited
("SingCom") whereby FIA (with funds provided by the Company) purchased certain
assets and assumed certain liabilities relating to the fax business of SingCom.
SingCom and the prior FIA shareholders are affiliates of Singapore
Telecommunications Limited ("SingTel"), an affiliate of a principal stockholder
of the Company. These transactions were consummated pursuant to a letter of
intent between the Company and SingTel and are effective as of April 1, 1996.
On and as of such date, by agreement with SingTel, the Company assumed
operational control of FIA and the fax business of SingCom. The aggregate
purchase price payable by the Company for SingCom's fax business assets is
approximately $2.5 million, of which two-thirds was paid at closing and the
remaining one-third is payable two and one-half years following the closing. In
addition, at the closing the Company paid approximately $1.4 million to SingTel
in repayment of certain indebtedness of SingCom to SingTel relating to the fax
business of SingCom.
17
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit No. Description
---------- -----------
<S> <C>
+3.1 Certificate of Incorporation, as amended, of UNIFI
Communications, Inc.
+3.2 By-Laws of UNIFI Communications, Inc.
+4.1 Indenture, dated as of February 21, 1997, between UNIFI
Communications, Inc. and Fleet National Bank, as trustee,
relating to $175,000,000 in aggregate principal amount of 14%
Senior Notes due 2004.
+4.2 Specimen Certificate of 14% Senior Notes due 2004 (the
"Private Notes") (included in Exhibit 4.1).
+4.3 Specimen Certificate of 14% Senior Notes due 2004 (the
"Exchange Notes") (included in Exhibit 4.1).
+4.4 Registration Rights Agreement, dated as of February 21, 1997,
between UNIFI Communications, Inc. and Smith Barney Inc.
+4.5 Unit Agreement, dated as of February 21, 1997, between UNIFI
Communications, Inc. and Fleet National Bank, as unit agent.
+4.6 Escrow Agreement, dated as of February 21, 1997, between
UNIFI Communications, Inc. and Fleet National Bank, as escrow
agent.
+10.1 Credit Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte
N.V.
+10.2 Amendment, dated as of February 21, 1997, to the Credit
Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte.
N.V.
+10.3 Term Loan Agreement-Equipment, dated as of April 10, 1995
among UNIFI Communications, Inc. and SingTel (Netherlands
Antilles) Pte. N.V.
+10.4 Amendment, dated as of February 21, 1997, to the Term Loan
Agreement-Equipment, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte.
N.V.
+10.5 Intercompany Operating Agreement, dated as of April 10, 1995,
between UNIFI Communications, Inc. and Singapore
Telecommunications Limited, as amended by Amendment No. 1
dated as of September 30, 1996 (the "Intercompany Operating
Agreement").
+10.6 Amendment No. 1 to the Intercompany Operating Agreement dated
September 30, 1996 between UNIFI Communications, Inc. and
Singapore Telecommunications Limited.
+10.7 Amendment, dated as of February 21, 1997, to the Intercompany
Operating Agreement dated April 10, 1995, among UNIFI
Communications, Inc. and Singapore Telecommunications
Limited.
+10.8 Series G Convertible Preferred Stock Purchase Agreement,
dated as of April 10, 1995, among UNIFI Communications, Inc.
SingTel Global Services Pte Ltd.
+10.9 First Amendment, dated as of February 5, 1997, of the Series
G Convertible Preferred Stock Purchase Agreement, dated as of
April 10, 1995, among UNIFI Communications, Inc. SingTel
Global Services Pte Ltd, as amended.
+10.10 Second Amendment, dated as of February 21, 1997, of the
Series G Convertible Preferred Stock Purchase Agreement,
dated as of April 10, 1995, between UNIFI Communications,
Inc., SingTel Global Services Pte Ltd, as amended.
+10.11 Amended Restated Registration Rights Agreement, dated as of
April 10, 1995 among UNIFI Communications, Inc. and various
investors named therein.
+10.12 Amended, dated as of February 21, 1997, of the Amended and
Restated Registration Rights Agreement, dated as of April 10,
1995 among UNIFI Communications, Inc. and various investors
named therein.
</TABLE>
18
<PAGE>
<TABLE>
<S> <C>
+10.13 Consent and Waiver, dated as of February 20, 1997, of the
Amended and Restated Registration Rights Agreement, dated as
of April 10, 1995 among UNIFI Communications, Inc. and
various investors named therein.
+10.14 Stockholders Agreement, dated as of April 10, 1995, among
UNIFI Communications, Inc. and the stockholders named
therein.
+10.15 First Amendment to the Stockholders Agreement, dated February
21, 1997, among UNIFI Communications, Inc., SingTel Global
Services Pte. Ltd and certain stockholders named therein.
+10.16 Employment Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and Douglas J. Ranalli.
+10.17 Warrant to purchase 2,000,000 shares of the Company's Common
Stock, issued to SingTel Global Services Pte. Ltd, dated
February 21, 1997
+10.18 Warrant Agreement, dated as of February 21, 1997, between
UNIFI Communications, Inc. and Fleet National Bank, as
warrant agent.
+10.19 Specimen Warrant Certificate (included in Exhibit 10.25).
+10.20 Warrant Shares Registration Rights Agreement, dated as of
February 21, 1997, between UNIFI Communications, Inc. and
Smith Barney, Inc.
+10.21 Lease dated August 2, 1996 between UNIFI Communications, Inc.
and Cross Point Limited Partnership.
+10.22 Agreement dated August 2, 1996 between UNIFI Communications,
Inc. and Cross Point Limited Partnership (included in exhibit
10.21 hereto).
+10.23 Subordination Agreement dated August 2, 1996 between UNIFI
Communications, Inc., Cross Point Limited Partnership and
SingTel (Netherland Antilles) Pte N.V. (included in Exhibit
10.21).
+10.24 Software License and Services Agreement dated September 20,
1996 between UNIFI Communications, Inc. and Control Data
Systems, Inc.
+10.25 $2,049,315 Convertible Term Note, dated as of April 1, 1997,
of UNIFI Communications, Inc. dated as of April 1, 1997,
issued to Control Data Systems, Inc.
+10.26 Warrant to purchase up to 50,406 shares of Common Stock of
UNIFI Communications, Inc., dated as of April 1, 1997, issued
to Control Data Systems, Inc.
*10.27 Share Sale Agreement (Fax International Australia Pty.
Limited) dated as of September 29, 1997 among UNIFI
Communications, Inc., Graham Bruce Darley and Sin Hang Boon.
*10.28 Agreement for Sale of Business dated as of September 30, 1997
between SingCom (Australia) Pty. Limited and Fax
International Australia Pty. Limited.
*10.29 First Amendment to Lease, dated as of June 25, 1997, between
UNIFI Communications, Inc. and Cross Point Limited
Partnership.
*10.30 Second Amendment to Lease, dated as of October 21, 1997,
between UNIFI Communications, Inc. and Cross Point Limited
Partnership.
*11.0 Statement re: Computation of Net Loss per Common Shares
*27.0 Financial Data Schedule.
</TABLE>
- ----------------------------
*Filed herewith
+Previously filed with registrant's Registration Statement on Form S-4
(Registration No. 333-25521) and incorporated herein by reference.
19
<PAGE>
(b) There were no reports on Form 8-K filed during the quarter ended September
30, 1997.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIFI Communications, Inc.
By: /s/ Douglas J. Ranalli
------------------------------
Douglas J. Ranalli
Chief Executive Officer and Acting
Chief Financial Officer (Principal
Financial Officer)
Date: November 14, 1997
21
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- --- -----------
+3.1 --Certificate of Incorporation, as amended, of UNIFI Communications, Inc.
+3.2 --By-Laws of UNIFI Communications, Inc.
+4.1 --Indenture, dated as of February 21, 1997, between UNIFI Communications,
Inc. and Fleet National Bank, as trustee, relating to $175,000,000 in
aggregate principal amount of 14% Senior Notes due 2004.
+4.2 --Specimen Certificate of 14% Senior Notes due 2004 (the "Private Notes")
(included in Exhibit 4.1).
+4.3 --Specimen Certificate of 14% Senior Notes due 2004 (the "Exchange
Notes") (included in Exhibit 4.1).
+4.4 --Registration Rights Agreement, dated as of February 21, 1997, between
UNIFI Communications, Inc. and Smith Barney Inc.
+4.5 --Unit Agreement, dated as of February 21, 1997, between UNIFI
Communications, Inc. and Fleet National Bank, as unit agent.
+4.6 --Escrow Agreement, dated as of February 21, 1997, between UNIFI
Communications, Inc. and Fleet National Bank, as escrow agent.
+10.1 --Credit Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte N.V.
+10.2 --Amendment, dated as of February 21, 1997, to the Credit Agreement,
dated as of April 10, 1995, among UNIFI Communications, Inc. and SingTel
(Netherlands Antilles) Pte N.V.
+10.3 --Term Loan Agreement-Equipment, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte N.V.
+10.4 --Amendment, dated as of February 21, 1997, to the Term Loan
Agreement-Equipment, dated as of April 10, 1995, among UNIFI
Communications, Inc. and SingTel (Netherlands Antilles) Pte N.V.
+10.5 --Intercompany Operating Agreement, dated as of April 10, 1995, between
UNIFI Communications, Inc. and Singapore Telecommunications Limited, as
amended by Amendment No. 1 dated as of September 30, 1996 (the
"Intercompany Operating Agreement").
+10.6 --Amendment No. 1 to the Intercompany Operating Agreement dated September
30, 1996 between UNIFI Communications, Inc. and Singapore
Telecommunications Limited.
+10.7 --Amendment, dated as of February 21, 1997, to the Intercompany Operating
<PAGE>
Agreement, dated as of April 10, 1995, among UNIFI Communications, Inc.
and Singapore Telecommunications Limited.
+10.8 --Series G Convertible Preferred Stock Purchase Agreement, dated as of
April 10, 1995 among UNIFI Communications, Inc., SingTel Global Services
Pte Ltd.
+10.9 --First Amendment, dated as of February 5, 1997 to the Series G
Convertible Preferred Stock Purchase Agreement, dated as of April 10,
1995, between UNIFI Communications Inc., SingTel Global Services Pte
Ltd.
+10.10 --Second Amendment, dated as of February 21, 1997, of the Series G
Convertible Preferred Stock Purchase Agreement, dated as of April 10,
1995, among UNIFI Communications, Inc., SingTel Global Services Pte Ltd,
as amended.
+10.11 --Amended and Restated Registration Rights Agreement, dated as of April
10, 1995 among UNIFI Communications, Inc. and various investors named
therein.
+10.12 --Amendment, dated as of February 21, 1997, to the Amended and Restated
Registration Rights Agreement, dated as of April 10, 1995 among UNIFI
Communications, Inc, and various investors named therein.
+10.13 --Consent and Waiver, dated as of February 20, 1997, of the Amended and
Restated Registration Rights Agreement, dated as of April 10, 1995 among
UNIFI Communications, Inc. and various investors named therein.
+10.14 --Stockholders Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and the stockholders named therein.
+10.15 --First Amendment to the Stockholders Agreement, dated February 21, 1997,
among UNIFI Communications, Inc., SingTel Global Services Pte Ltd and
certain stockholders named therein.
+10.16 --Employment Agreement, dated as of April 10, 1995, among UNIFI
Communications, Inc. and Douglas J. Ranalli.
+10.17 --Warrant to purchase 2,000,000 shares of the Company's Common Stock,
issued to SingTel Global SErvices Pte Ltd, dated February 21, 1997.
+10.18 --Warrant Agreement, dated as of February 21, 1997, between UNIFI
Communications, Inc. and Fleet national Bank, as warrant agent.
+10.19 --Specimen Warrant Certificate (included in Exhibit 10.25).
+10.20 --Warrant Shares Registration Rights Agreement, dated as of February 21,
1997, between UNIFI Communications, Inc. and Smith Barney Inc.
+10.21 --Lease dated August 2, 1996 between UNIFI Communications, Inc. and Cross
Point Limited Partnership.
+10.22 --Agreement dated August 2, 1996 between UNIFi Communications, Inc. and
<PAGE>
Cross Point Limited Partnership (included in exhibit 10.21 hereto).
+10.23 --Subordination Agreement dated August 2, 1996 between UNIFI
Communications, Inc., Cross Point Limited Partnership and SingTel
(Netherland Antilles) Pte N.V. (included in Exhibit 10.21).
+10.24 --Software License and Services Agreement dated September 20, 1996
between UNIFI Communications, Inc. and Control Data Systems, Inc.
+10.25 --$2,049,315 Convertible Term Note, dated as of April 1, 1997, of UNIFI
Communications, Inc. in favor of Control Data Systems, Inc.
+10.26 --Warrant to purchase up to 56,406 shares of Common Stock of UNIFI
Communications, Inc., dated as of April 1, 1997, issued to Control Data
Systems, Inc.
*10.27 --Share Sale Agreement (Fax International Australia Pty. Limited)
dated as of September 29, 1997 among UNIFI Communications, Inc., Graham
Bruce Darley and Sin Hang Boon.
*10.28 --Agreement for Sale of Business dated as of September 30, 1997 between
SingCom (Australia) Pty. Limited and Fax International Australia Pty.
Limited.
*10.29 --First Amendment to Lease, dated as of June 15, 1997, between UNIFI
Communications, Inc. and Cross Point Limited Partnership.
*10.30 --Second Amendment to Lease, dated as of October 21, 1997, between UNIFI
Communications, Inc. and Cross Point Limited Partnership.
*11 --Statement re: Computation of Net Loss Per Common Share.
*27.1 --Financial Data Schedule.
- ------------
* Filed herewith.
+ Previously filed with registrant's Registration Statement on Form S-4
(Registration No. 333-25521 and incorporated herein by reference)
<PAGE>
EXHIBIT 10.27
-------------
SHARE SALE AGREEMENT
FAX INTERNATIONAL AUSTRALIA PTY LIMITED
THIS AGREEMENT made the 29th day of September 1997
BETWEEN: GRAHAM BRUCE DARLEY of 8/39 King Street, Waverton, Sydney, New
South Wales, Company Director ("the First Vendor")
AND: SIN HANG BOON of
("the Second Vendor")
AND: UNIFI COMMUNICATIONS INC. of 900 Chelmsford Street, Lowell,
Massachusetts 10851 USA ("the Purchaser")
RECITALS:
A. The Company is a company duly incorporated in Australia under the
Corporations Law.
B. The Company has an issued share capital of $2 made up of two (2) ordinary
shares of $1 each, both of which are fully paid up.
C. The Vendors are the registered holders of the Shares.
D. The Vendors have agreed to sell and the Purchaser has agreed to purchase
the Shares upon and subject to the terms and conditions hereinafter
contained.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. DEFINITIONS:
1.1 In this Agreement, including the Recitals, the following expressions
have the following meanings:
<PAGE>
2.
"Agreement" means this Share Sale Agreement dated 1997.
"Business Day" means a day on which trading banks are open for business in the
City of Sydney, Australia.
"Claim" means a claim made in writing by the Purchaser pursuant to the indemnity
in Clause 9.
"Completion" means completion of the sales and purchase hereby made.
"Completion Date" means the date of this Agreement.
"the Company" means Fax International Australia Pty. Limited ACN 068 596 529, an
Australian Company.
"Corporations Law" means the Austrialian Corporations Law.
"Effective Date" means 1 April, 1996.
"Interdependent Agreement" means as agreement between the Company as purchaser
and SingCom as vendor in respect of the acquisition by the Company of SingCom's
store and forward fax service business.
"Party" means a party to this Agreement.
"Purchase Price" means $1,942.
"Related Body Corporate" has the same meaning as in the Corporations Law.
"Shares" means the two (2) issued ordinary shares of $1.00 each in the capital
of the Company which are held by the Vendors.
"SingCom" means SingCom (Australia) Pty. Limited ACN 002 864 897.
<PAGE>
3.
"Vendors" means collectively the First Vendor and the Second Vendor.
2. INTERPRETATION
2.1 (a) Words importing the singular include the plural and vice versa;
(b) words importing a gender include every gender,
(c) reference to any document (including this Agreement) includes a
reference to that document as amended, consolidated, supplemented,
novated or replaced;
(d) where any word or phrase has a particular meaning in this Agreement
any part of speech or other grammatical form of the word or phrase has
a corresponding meaning;
(e) references to dollars, $, cost, value and price are to Australian
currency;
(f) headings are for convenience only and must be ignored in construing
this Agreement;
(g) references to any person or any Party include references to their or
its respective successors, permitted assigns and substitutes,
executors and administrators;
(h) references to any law are references to that law as amended,
consolidated, supplemented or replaced and includes references to
regulations and other instruments under it;
(i) references to judgment include references to any order, injunction,
decree, determination or award of any court or tribunal;
(j) reference to deliver include cause to be delivered and references to
sell,
<PAGE>
4.
transfer or assign include (respectively) procure the sale, transfer
or assignment of;
(k) reference to time and dates in connection with the performance of an
obligation are references to the time and date in Sydney, Australia,
even if the obligation is to be performed elsewhere;
(l) a warranty, representation, covenant, liability, obligation or
agreement given or entered into by more than one person binds them
jointly and severally;
(m) if a period of time is specified and dates from, after or before a
given day or the day of an act or event, it is to be calculated
inclusive of that day;
(n) if an event must (but for this clause) occur or be done on a day which
is not a Business Day, then the stipulated day will be taken to be the
next Business Day.
3. AGREEMENT FOR SALE AND PURCHASE OF SHARES
3.1 The Vendors agree to sell and the Purchaser agrees to purchase from the
Vendors free of any mortgage, lien, charge, encumbrance or adverse claim or
interest of any nature whatsoever the Shares together with all benefits,
rights, and entitlements accrued or attaching thereto for the Purchase
Price payable in cash on Completion.
3.2 The Parties acknowledge and agree that the Purchaser has exercised
effective control over the Company as and from the Effective Date.
4. PAYMENT OF THE PURCHASE PRICE
4.1 The Purchaser shall pay the Purchase Price by bank cheque to the Vendors or
as they shall direct, in writing, on the Completion Date;
<PAGE>
5.
5. INTERDEPENDENT AGREEMENT
5.1 Completion of the sale and purchase hereby made is conditional upon and
interdependent with the completion of the Interdependent Agreement within
three (3) days of the Completion Date. If for any reason the Interdependent
Agreement is not entered into or is rescinded or terminated then this
Agreement shall ipso facto be terminated.
5.2 Subject to Clause 17, if this Agreement is terminated each Party is
released from its obligations hereunder and neither Party may make any
claim or demand or take any action or proceedings against the other Party
by reason thereof.
6. COMPLETION
6.1 Completion of this Agreement shall take place in Sydney on the Completion
Date.
6.2 On Completion, the Vendors shall:
(a) deliver to the Purchaser a duly executed transfer in favour of the
Purchaser of the Shares together with the Share Certificates for those
shares;
(b) procure and cause a directors meeting of the company to be held at
which:
(i) the registration of the transfer of the Shares to the Purchaser
shall be approved; and
(ii) the persons nominated by the Purchaser shall be appointed
directors and secretary of the Company and the present directors
and secretary shall resign by written resignation.
7. WARRANTIES BY THE VENDORS
7.1 The Vendors give the following warranties and assurances having effect as
at the
<PAGE>
6.
Completion Date, namely:-
7.1.1 The Vendors are entitled to sell the Shares to the Purchaser on the terms
and conditions of this Agreement.
7.1.2 The Shares:
(a) are all of the issued shares in the capital of the Company;
(b) have been allotted and fully paid up and no moneys are owing to the
Company in respect of them.
7.1.3 There are no agreements or arrangements in force under which any person
has the right to call for the issue of any shares in the Company nor are
there any options over any such shares.
7.1.4 The Company is duly incorporated, validly existing and in good standing
in the jurisdiction of its incorporation.
7.1.5 To the knowledge of the Vendors or either of them, there are no actions,
suits, proceedings, claims or investigations formally instituted and
pending or threatened against or directly or indirectly effecting the
Company or the Shares at law or in equity, before any governmental
department, tribunal, court, agency, bureau, board, commission or
instrumentality, domestic or foreign.
7.1.6 The issue of the Shares to the Vendors did not, and the sale by each
Vendor and purchased by the Purchaser of the Shares will not, violate any
applicable Australian securities laws, rules or regulations. The Shares
are not required to be registered with any Australian securities agency
or department.
7.1.7 The Vendors and each of them have not caused the Company to give any
guarantee.
<PAGE>
7.
7.1.8 To the knowledge of the Vendors or either of them, the Company
has not gone into liquidation nor passed any resolution that it
be wound up and no application for the winding up of the Company
has been made and there are no writs of execution in existence
against the Company nor has a receiver or administrator been
appointed of the whole or any part of the undertaking or the
assets of the Company.
7.2 The Vendors give the following warranties and assurances having effect as
at the Effective Date, namely:
7.2.1 The Company has not traded since the date of its incorporation
and has not undertaken any activities other than:-
(a) arranging for the registration of the business name "Fax
International"; and
(b) entry into a preliminary supply contract with DSC
Communications Pty. Limited.
8. WARRANTIES BY THE PURCHASER
8.1 The Purchaser gives the following warranties and assurances:
8.1.1 The Purchaser is duly incorporated under the laws of Delaware in
the United States of America.
8.1.2 The Purchaser has full corporate power to enter into this
Agreement.
8.1.3 The entering into and performance under this Agreement by the
Purchaser has been duly authorised by all necessary corporate
procedures.
<PAGE>
8.
9. INDEMNITIES
9.1 The Vendors agree to indemnify and hold the Purchaser harmless against any
losses, claims, damages or liabilities to which the Purchaser, the Company
or either of them may become subject in so far as such losses, claims,
damages or liability (or actions in respect thereof) arise out of or are
based upon any material breach by the Vendors of any representation,
warranty, covenant or agreement contained in this Agreement.
9.2 The Purchaser hereby indemnifies and agrees to indemnify and hold the
Vendors harmless against any losses, claims, damages or liabilities to
which the Vendors may become subject in so far as such losses, claims,
damages or liability (or actions in respect thereof) arise out of or are
based upon any material breach by the Purchaser of any representation,
warranty, covenant or agreement contained in this Agreement.
10. LIMITATION OF LIABILITY
10.1 The Vendors are not liable to the Purchaser for any Claim unless written
notice has been given to the Vendors setting out specific details of the
Claim within twelve (12) months from the date hereof;
10.2 If either of the Vendors is liable to the Purchaser for any Claim, then
the maximum amount which the Purchaser may recover against that Vendor is
an amount of $250,000.
10.3 No Party will be liable to another Party for any Claim to the extent that
any loss or damage suffered by such other Party is made good or
compensated for without cost such other Party, including any loss which is
recovered by such other Party under a policy of insurance.
<PAGE>
9.
11. DEFAULT
11.1 If the Purchaser defaults in the observance or performance of any
obligation imposed on the Purchaser under or by virtue of this Agreement
the Vendors shall be entitled to sue for specific performance or claim
damages for breach of contract.
11.2 If the Vendors default in the observance or performance of any obligation
imposed on the Vendors under or by virtue of this Agreement the Purchaser
shall be entitled to sue for specific performance or claim damages for
breach of contract.
12. No Merger and Survival
12.1 The conditions, representations and warranties contained in this Agreement
shall not merge upon Completion.
12.2 The indemnities and covenants contained in this Agreement shall survive
Completion for the benefit of the Parties respectively entitled thereto.
13. COSTS AND STAMP DUTY
13.1 The Purchaser shall be responsible for payment of all stamp duty which may
be charged or levied upon this Agreement and upon any document or
instrument created hereunder to give effect to the transactions herein
contemplated.
13.2 Except as otherwise herein provided, each party shall be responsible for
the payment of its own costs and expenses incurred by such party in
connection with this Agreement and the transactions contemplated hereby.
14. COMPLETE AGREEMENT
14.1 The terms and conditions set forth in this Agreement expressly or by
statutory implication cover and comprise the whole of the terms and
conditions by which the parties shall be bound with respect to the subject
matter hereof and no further or other covenants, agreements, warranties,
provisions or terms shall be deemed to
<PAGE>
10.
be implied herein or to arise between the Vendors and the Purchaser by way
of collateral or other agreement or by reason of any promise,
representation, warranty or undertaking given or made by the Vendors or the
Purchaser to the other on or before the execution of this Agreement and the
existence of any such implication or collateral or other agreement is
hereby expressly negatived.
15. NOTICES
15.1 Except as otherwise expressly provided herein, all notices required or
permitted to be given in connection with this Agreement and any transaction
contemplated hereunder shall be in writing and shall be delivered by hand
or sent by registered mail or telex or facsimile to the other party as
follows:
(a) If to the Vendors:-
The Company Secretary
SingCom (Australia) Pty Limited
50 Bridge Street
Sydney N.S.W. 2000
(Fax) (02) 9219 6948
(b) If to the Purchaser:-
The Company Secretary
Fax International Australia Pty. Limited
323 Castlereagh Street
SYDNEY N.S.W. 2000
(Fax) (02) 9212 5019
In the case of notice given by telex or facsimile, such notice shall be
deemed to have been received at the time of transmission. In the case of
notices given by mail such notice shall be deemed to have been received
three (3) business days after the date of posting of same. A party may
change its address for the purpose of notices hereunder by giving not less
than three (3) days' prior notice of such change to the other party as
provided above.
16. LAW AND JURISDICTION
16.1 This Agreement shall be governed by the laws for the time being operating
in the
<PAGE>
11.
State of New South Wales, Australia and the Parties irrevocably submit
to the non-exclusive jurisdiction of the Courts of New South Wales.
17. FURTHER ASSISTANCE
17.1 The Parties agree that each shall with all due diligence execute and
deliver to the other any and all documents and do or carry out such acts
and things as may reasonably be required or requested to effect the
transactions contemplated by this Agreement.
17.2 In the event that the Interdependent Agreement is not entered into in
accordance with Clause 5 or is subsequently rescinded or terminated, the
Parties agree that each shall with all due diligence execute and deliver
to the other any and all documents and do or carry out such acts and
things as may be required to retransfer the Shares to the respective
Vendors or as they may direct at the Purchase Price and, in particular,
the Purchaser shall:
(a) deliver to the Vendors a duly executed transfer of the Shares in
favour of the Vendors or as they may direct together with the
Share Certificates for those Shares;
(b) procure and cause a directors meeting of the Company to be held
at which;
(i) the registration of the retransfer of the Shares to the
Vendors shall be approved; and
(ii) the persons nominated by the Vendors shall be appointed
directors and secretary of the Company and the present
directors and secretary shall resign by written
resignation.
(c) if requested so to do, deliver to the Vendors duly completed
authorities for the alteration of the signatories to the Bank
Accounts in the manner required by the Vendors;
<PAGE>
12.
(d) if requested so to do, the Purchaser shall provide such warranties
as may reasonably be required by the Vendor in respect of the
period during which the Purchaser has owned the Shares.
18. DISCLAIMER
18.1 The Purchaser acknowledges that it is buying the Shares after conducting
its own due diligence and that it has not relied upon any projections,
budgets, forecasts, opinions or information expressed or supplied by the
Vendors, SingCom or a Related Body Corporate or upon any conduct of the
Vendors, SingCom or Related Body Corporate in this regard.
19. NO ASSIGNMENT
19.1 The rights hereby vested in and the obligations hereby undertaken by the
Parties under the provisions of this Agreement shall not be capable of
assignment.
IN WITNESS WHEREOF the Parties have hereunto set their hands on the day and year
first hereinbefore mentioned.
SIGNED by GRAHAM BRUCE DARLEY )
In the presence of: ) .............................
..........................
Witness
SIGNED by SIN HANG BOON )
In the presence of: ) [SIGNATURE APPEARS HERE]
..............................
[SIGNATURE APPEARS HERE]
..........................
<PAGE>
13.
SIGNED for and on behalf of UNIFI )
COMMUNICATIONS INC. )
by its duly authorized officer ) /s/ [SIGNATURE APPEARS HERE]
) ----------------------------
Director
/s/ [SIGNATURE APPEARS HERE]
- -------------------------------
Witness
<PAGE>
Exhibit 10.28
-------------
DATED 30 day of September, 1997
SINGCOM (AUSTRALIA) PTY. LIMITED
ACN 002 864 897
("the Vendor")
AND
FAX INTERNATIONAL AUSTRALIA PTY. LIMITED
ACN 068 596 529
("the Purchaser")
AGREEMENT FOR SALE OF BUSINESS
<PAGE>
AGREEMENT FOR SALE OF BUSINESS
THIS AGREEMENT is made the 30 day of September 1997
BETWEEN: SINGCOM (AUSTRALIA) PTY. LIMITED (ACN 002 864 897) of 50 Bridge
Sydney in the State of New South Wales ("the Vendor")
AND: FAX INTERNATIONAL AUSTRALIA PTY. LIMITED (ACN 068 596 529) of 323
Castlereagh Street, Sydney in the State of New South Wales ("the
Purchaser")
WHEREAS:-
A. The Vendor carries on business in the State of New South Wales as a
provider of store and forward fax services.
B. The Vendor has agreed to sell and the Purchaser has agreed to purchase the
Business and the Assets and assume the liabilities relating thereto upon
the terms and conditions hereinafter set forth.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:-
1. DEFINITIONS:
1.1 In this Agreement:
"Assets" means the Fixed Assets, the Book Debts, the Prepayments, the Cash
and the Goodwill.
"Book Debts" means the book and other debts owing to the Vendor in
connection with the Business at the Effective Date and referred to in
Schedule 2B.
"Business Day" means a day on which trading banks are open for business in
the City of Sydney.
<PAGE>
2.
"Business" means the store and forward fax services business provided by
the Vendor to the Customers under the Contracts.
"Cash" means $206,217, being part of the amount held by the Vendor or on
deposit in its account at the ANZ Bank, Haymarket Branch, George Street,
Sydney as at the Effective Date.
"Claim" means a claim made in writing by a Party pursuant to an indemnity
contained in Clause 12.
"Completion" means completion of the sale and purchase of the Business and
Assets and assumption of liabilities in accordance with this Agreement.
"Completion Date" means the date of this Agreement.
"Continuing Employees" means those of the Employees who accept the
Purchaser's offer of employment pursuant to Clause 8.
"Contracts" means all of the Vendor's right, title and interest in and to
the contracts entered into prior to the date hereof by or on behalf of the
Vendor with Customers for the provision of services by the Vendor in
connection with the Business and still subsisting at the date hereof
including, without limitation, the contracts referred to in Schedule 1.
"Customer" means a customer referred to in Schedule 1 to whom the Vendor
provides, has provided or may provide store and forward fax services.
"Effective Date" means the date referred to in Clause 6.1.
"Employees" means those persons specified in Schedule 4.d.
"Fixed Assets" means the assets described in Schedule 2A.
<PAGE>
3.
"Goodwill" means the goodwill of the Vendor in relation to the Business.
"Government Agency" includes any government, whether federal, state,
territorial or local, any minister, department, office, commission,
delegate, instrumentality, agency, board, authority or organ of government,
whether statutory or otherwise.
"Liabilities" means those liabilities of the Business and the Assets
outstanding as at the Effective Date as set out in Schedule 5.
"Party" means a party to this Agreement.
"Prepayments" means all and any deposits and prepayments made by the Vendor
in relation to the Business up to the Effective Date referred to in
Schedule 2C.
"Purchase Price" means the amount referred to in Clause 3.
"Related Body Corporate" has the same meaning as in the Corporations Law.
"Supplier" means a person providing services to the Vendor.
"Supply Contracts" means all of the Vendor's right, title and interest in
and to the contracts between the Vendor and Suppliers as specified in
Schedule 3.
"UNIFI" means UNIFI Communications Inc., a company incorporated in the
State of Delaware and having its principal office at 900 Chelmsford Street,
Lowell, Massachusetts 01851 USA.
INTERPRETATION:
1.2 (a) words importing the singular include the plural and vice versa;
(b) words importing a gender include every gender;
<PAGE>
4.
(c) reference to any document (including this Agreement) includes a
reference to that document as amended, consolidated, supplemented,
novated or replaced;
(d) where any word or phrase has a particular meaning in this Agreement
any part of speech or other grammatical form of the word or phrase
has a corresponding meaning;
(e) references to dollars, $, cost, value and price are to Australian
currency;
(f) headings are for convenience only and must be ignored in construing
this Agreement;
(g) references to any person or any Party include references to their
or its respective successors, permitted assigns and substitutes,
executors and administrators;
(h) references to any law are references to that law as amended,
consolidated, supplemented or replaced and includes references to
regulations and other instruments under it;
(i) references to judgment include references to any order, injunction,
decree, determination or award of any court or tribunal;
(j) references to deliver include cause to be delivered and references
to sell, transfer or assign include (respectively) procure the
sale, transfer or assignment of;
(k) references to time and dates in connection with the performance of
an obligation are references to the time and date in Sydney,
Australia, even if the obligation is to be performed elsewhere;
<PAGE>
5.
(l) a warranty, representation, covenant, liability,
obligation or agreement given or entered into by more
than one person binds them jointly and severally;
(m) if a period of time is specified and dates from,
after or before a given day or the day of an act or
event, it is to be calculated inclusive of that day;
(n) if an event must (but for this clause) occur or be
done on a day which is not a Business Day, then the
stipulated day will be taken to be the next Business
Day.
2. SALE AND PURCHASE OF BUSINESS
2.1 The Vendor as beneficial owner hereby sells and assigns and
the Purchaser hereby purchases and takes assignment of as a
going concern and with the effect from the Effective Date the
Business, the Assets and the Contracts for the Purchase Price
and assumes all liabilities relating thereto upon and subject
to the terms and conditions herein contained.
3. PURCHASE PRICE
3.1 The Purchase Price to be paid by the Purchaser to the Vendor
shall be $3,520,000 calculated as follows:
<TABLE>
<CAPTION>
$
<S> <C>
Fixed Assets 227,980
Book Debts 519,786
Prepayments 63,516
Cash 206,217
Goodwill 2,502,501
---------
Total 3,520,000
=========
</TABLE>
3.2 The Parties hereby agree and acknowledge that the amounts set
out in Clause 3.1 represent the fair value of the Assets as
at the Effective Date.
<PAGE>
6.
4. PAYMENT OF PURCHASE PRICE
4.1 The Purchaser shall pay the Purchase Price as follows:
(a) $2,346,666.60 by bank cheque to the Vendor or as the
Vendor shall direct in writing on the Completion
Date; and
(b) $1,173,333.40 by bank cheque to the Vendor or as the
Vendor shall direct in writing on or before the
expiration of two and one half (2.5) years from the
Completion Date.
5. COMPLETION
5.1 Completion of this Agreement shall take place in Sydney on
the Completion Date.
5.2 On Completion the Vendor shall cancel the Supply Contracts
other than those in respect of which written notice has been
received from a Supplier prior to the Completion Date that
the Supply Contract has been on will be transferred to or
novated with the Purchaser such that the Vendor has ceased or
will cease to have any liability to the supplier.
5.3 On Completion the Vendor shall deliver to the Purchaser
copies of the Contracts and other documents relating to the
Business as the Purchaser shall reasonably require together
with staff records and wages records relating to the
Continuing Employees.
5.4 The obligations of the Purchaser under this Agreement are
subject to the satisfaction on or prior to the Completion
Date of the following conditions:
5.4.1 UNIFI and the shareholders of the Purchaser shall
have executed and delivered a Share Sale Agreement,
in form and substance satisfactory to each party
thereto, pursuant to which the said shareholders
shall have
<PAGE>
7.
sold, and UNIFI shall have purchased, all of the issued and
outstanding capital stock of the Purchaser, and the said
shareholders shall have delivered certificates representing
all such issued and outstanding shares of capital stock in
the Purchaser to UNIFI and performed all other agreements and
conditions required therein to be performed on or prior to
the Completion Date; and
5.4.2.. the Vendor and the Purchaser shall have executed and
delivered a Lease Agreement, in form and substance
satisfactory to each such party, respecting the Atlas Switch
presently used by the Vendor in connection with the Business.
6. DATE OF EFFECT
6.1 The Parties acknowledge and agree that UNIFI has possessed and
exercised effective control over the operation of the Business and
the Assets as and from 1 April 1996 and this Agreement will have
effect as if the Business and the Assets were sold by the Vendor to
the Purchaser on that date.
7. NOVATION OR ASSIGNMENT OF CONTRACTS
7.1 The Parties shall use their best endeavours to have each Customer
transfer or novate its Contract to or with the Purchaser.
7.2 On the Completion Date the Parties shall give written notice in a
mutually agreed form to each Customer seeking the Customer's consent
to the transfer or novation of its contract to or with the Purchaser.
7.3 Where a Customer refuses or fails to transfer or novate its Contract
with the Purchaser, the Vendor as beneficial owner hereby agrees to
assign to the Purchaser absolutely all of the Vendor's right, title
and interest in the Contracts as and from the Effective Date and the
Purchaser thereafter will be solely responsible for the
<PAGE>
8.
provision of services to Customers.
7.4 The Purchaser will indemnify and hold the Vendor harmless against any
losses, expenses, damages and costs incurred or awarded against the
Vendor as a result of any claim against it under any of the Contracts
arising after the Effective Date out of any event or events occurring
after the Effective Date.
7.5 The Vendor will indemnify and hold the Purchaser harmless against any
losses, expenses, damages and costs incurred or awarded against the
Purchaser as a result of any claim against it under the Contracts
arising before the Effective Date out of an event or events occurring
before the Effective Date.
8. PROVISIONS RELATING TO EMPLOYEES
8.1 The Vendor will prior to Completion give to each of the Employees
specified in Schedule 4 hereto notice of the sale of the Business and
will ask the Employees whether they wish to be employed by the
Purchaser.
8.2 Prior to the Completion Date the Purchaser will offer employment to
those Employees who wish to be employed by the Purchaser with effect
from the Completion Date on terms and conditions generally no less
favourable than those enjoyed by them prior to the Completion Date.
Those of the Employees who accept the Purchaser's offer of employment
are hereinafter called "the Continuing Employees".
8.3 The Purchaser will be liable for all expenses, including those
relating to accrued long service leave entitlements as specified in
Schedule 4, in respect of the Continuing Employees from the Effective
Date.
8.4 The Purchaser shall be responsible for paying to each Employee who is
not a Continuing Employee all wages, salary, superannuation, sick
pay, holiday pay, long service leave pay, severance and/or redundancy
payments and all other amounts
<PAGE>
9.
of whatsoever nature to which such employee may be entitled and shall
indemnify the Vendor against all claims, demands and liabilities in
respect thereto.
9. LIABILITIES, DEBTORS AND CREDITORS
9.1 As from the Effective Date all liabilities, including periodical or re-
occurring outgoings in respect of the Business and the Assets, shall be
borne and paid for by the Purchaser.
9.2 The Purchaser is liable for rent and all other outgoings in respect of the
premises occupied by the Vendor from the Effective Date.
10. WARRANTIES BY THE VENDOR
10.1 The Vendor gives the following warranties and assurances having effect as
at the Completion Date, namely:-
10.1.1 The Vendor is duly incorporated and has full power and authority
to carry out the terms, conditions and provisions of this
Agreement.
10.1.2 The execution of this Agreement and the due performance of the
obligations hereunder will not breach the Articles of Association
of the Vendor.
10.1.3 The execution of this agreement by the Vendor and the due
performance of obligations hereunder have been duly authorised by
the Directors of the Vendor and that, except as referred to
herein, no other corporate proceedings are necessary to authorise
the performance or compliance by the Vendor with any of the
terms, provisions or conditions of this Agreement.
10.1.4 The Vendor is entitled to sell the Business and the Assets to the
<PAGE>
10.
Purchaser on the terms and conditions of this Agreement.
10.1.5 No document submitted to the Purchaser by or on behalf of the
Vendor in relation to the sale of the Business or the sale of the
Assets contains, to the knowledge of the Vendor, any mis-
statement or any fact known not to be true by the Vendor.
10.1.6 The Vendor is not aware as to any matter, event or thing which
would materially adversely effect any Contract set out in
Schedule 1 or the Supply Contracts set out in Schedule 3.
10.1.7 The Vendor has not:
(i) had a liquidator or provisional liquidator appointed;
(ii) passed any resolution that it be wound up; or
(iii) received notification that an application to wind-up the
company has been made
10.1.8 No receiver, receiver and manager, trustee, controller, official
manager or similar officer has been appointed over all or part of
the business or assets of the Vendor.
10.1.9 The Vendor is not aware of any liability relating to the Business
or the Assets or of any fact or circumstance which may give rise
to a liability in respect of the period prior to 1 April 1996
except those set out in Schedule 5.
10.1.10 The Vendor is not aware of any liability relating to the Business
or the Assets or of any fact or circumstance with may give rise
thereto for the period from 1 April 1996 to the date hereof which
has not been disclosed
<PAGE>
11.
to either the Chief Executive Officer or the Finance Manager of
the Vendor or the Purchaser.
10.1.11 The Vendor is the beneficial owner of the Assets free of any
encumbrance.
10.1.12 All consents and approvals required in connection with the sale
of the Business or the Assets or the assignment of any Contract
by the Vendor, or the assumption of any liability relating to the
Business or the Assets by the Purchaser, or otherwise in
connection with any other agreement described in Clause 5.4 shall
have been received by the Vendor and shall be in writing where so
required, other than any consent or approval which might be
required by the Purchaser pursuant to the Foreign Acquisitions
and Takeovers Act 1975 or from AAP Telecommunications Pty.
Limited (now AAPT Limited) ACN 052 082 416 PROVIDED THAT nothing
herein provided shall effect the warranties contained in Clauses
10.1.4 and 10.1.5.
10.2 The Vendor gives the following warranties and assurances having effect as
at the Effective Date, namely:
10.2.1 All books and records relating to the Business and the Assets to
be delivered to the Purchaser by the Vendor on Completion will
set out all material information reasonably required to be
recorded therein and to the best of the Vendor's knowledge and
belief will accurately record such information.
10.2.2 The Vendor is not aware of any default or breach of any contract,
agreement, lease or other document relating to the Business
alleged to have been committed by it which has any material
adverse effect on any such contract, agreement, lease or other
document.
<PAGE>
12.
10.2.3 The execution of the Agreement and the due performance of the
obligations hereunder does not materially breach any agreement,
instrument, order, judgment or decree to which the Vendor is a
party or by which the Vendor is bound as at the Effective Date
and would not result in the imposition of any lien, encumbrance,
charge or claim upon any of the Assets or the Business.
11. WARRANTIES BY THE PURCHASER
11.1 The Purchaser warrants that:
11.1.1 The Purchaser is duly incorporated under the laws of New South
Wales in Australia.
11.1.2 The Purchaser has full corporate power and is duly authorised to
enter into this Agreement.
12. INDEMNITIES
12.1 The Vendor agrees to indemnify and hold the Purchaser harmless against any
losses, claims, damages or liabilities to which the Purchaser may become
subject, in so far as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any material
breach by the Vendor of any representation, warranty, covenant or
agreement contained in this Agreement.
12.2 The Purchaser hereby indemnifies and agrees to indemnify and hold the
Vendor harmless against any losses, claims, damages or liabilities to
which the Vendor may become subject in so far as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any material breach by the Purchaser of any representation,
warranty, covenant or agreement contained in this Agreement.
<PAGE>
13.
12.3 In addition to the indemnities referred to in Clauses 7.4 and 12.2, the
Purchaser hereby indemnifies and agrees to indemnify and hold the Vendor
harmless against any losses, claims, damages or liabilities to which the
Vendor may become subject in so far as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon:-
12.3.1 any liability of the Vendor which is by the terms of this
Agreement to be assumed by or assigned to the Purchaser; or
12.3.2 any failure or neglect by the Purchaser to duly perform or
observe any obligation on its part to be performed or observed
upon or by reason of its execution of this Agreement
12.4 The Purchaser shall be liable for and hereby indemnifies and agrees to
indemnify the Vendor from and against any liability of whatsoever kind or
nature arising out of any claim by any person for any breach of any
condition or warranty (whether express or implied) and whether given by
the Purchaser or arising by operation of law in respect of any products
sold or service furnished by the Purchaser after the Effective Date.
13. LIMITATION OF LIABILITY OF THE VENDOR
13.1 The Vendor is not liable to the Purchaser for any Claim unless:
13.1.1 The Purchaser has given written notice to the Vendor setting out
specific details of the Claim within twelve (12) months of the
date hereof; and
13.1.2 The Claim is agreed, compromised or settled within six (6) months
of giving notice in respect of the Claim under Clause 13.1.1.
13.2 The Vendor is only liable to the Purchaser for any Claim if:
<PAGE>
14.
13.2.1 The amount finally adjudicated or agreed as being payable in
respect of the Claim exceeds $10,000; and
13.2.2 Then only to the extent that the aggregate amount finally
adjudicated or agreed as being payable in respect of all Claims
which may be recoverable under Clause 13.2.1 is greater than
$50,000.
13.3 The maximum aggregate amount which the Purchaser may recover from the
Vendor in respect of all Claims is $3,520,000, less any amount received by
UNIFI pursuant to a claim made under Clause 9 of the agreement described
in Clause 5.4.1.
13.4 The Vendor is not liable to the Purchaser for any Claim to the extent that
any loss or damage suffered by the Purchaser is made good or compensated
for without cost to the Purchaser, including any loss which is recovered
by the Purchaser under a policy of insurance.
13.5 The Vendor is not liable to the Purchaser for any Claim arising from or
relating to any statement, representation, warranty, promise, undertaking
or agreement in connection with the sale of the Business made by the
Vendor or a Related Body Corporate of the Vendor or any person acting, or
purporting to act, on behalf of the Vendor or a Related Body Corporate of
the Vendor or resulting from or implied by conduct made in the course of
communication or negotiations in connection with the sale of the Business
not expressly set out in this Agreement ("Excluded Representations") and
the Purchaser now waives and releases the Vendor, its Related Bodies
Corporate and any person acting or purporting to act on behalf of the
Vendor or a Related Body Corporate of the Vendor from any and all
liability in respect of any Excluded Representation to the fullest extent
permitted by law.
13.6 Other than as referred to in this clause, no claim, demand, action or
proceedings may be made or brought against the Vendor arising out of this
Agreement.
<PAGE>
15.
14. LIABILITY OF THE PURCHASER
14.1 The Purchaser is not liable to the Vendor for any Claim unless:
14.1.1 The Vendor has given written notice to the Purchaser setting out
specific details of the Claim; and
14.1.2 The Claim is agreed, compromised or settled within six (6) months
of giving notice in respect of the Claim under Clause 14.1.1.
15. DEFAULT
15.1 If the Purchaser defaults in the observance or performance of any
obligation imposed on the Purchaser under or by virtue of this Agreement
the Vendor shall be entitled to sue for specific performance or claim
damages for breach of contract.
15.2 If the Vendor defaults in the observance or performance of any obligation
imposed on the Vendor under or by virtue of this Agreement the Purchaser
shall be entitled to sue for specific performance or claim damages for
breach of contract.
16. LEASE OF OFFICE SPACE
16.1 The Parties agree to execute a Deed of Assignment of Lease similar in form
to that set out in Schedule 6.
16.2 Nothing in this clause effects the operation of Clause 9.2.
17. ACCESS TO BUSINESS RECORDS
17.1 The Purchaser shall keep and maintain the books and records of the
Business (delivered by the Vendor to the Purchaser on the Completion Date
pursuant to Clause 5.3) in good order and condition for a term of six (6)
years from the
<PAGE>
16.
Completion Date and shall permit the Vendor (by its duly authorised
representatives) to have access to such books and records from time to time
and at any time on two (2) days' notice for the purpose of inspecting same
and making copies thereof and taking extracts therefrom.
18. NO MERGER AND SURVIVAL
18.1 The conditions, representations and warranties contained in this Agreement
shall not merge upon completion.
18.2 The indemnities and covenants contained in this Agreement shall survive
completion for the benefit of the Parties respectively entitled thereto.
19. COSTS AND STAMP DUTY
19.1 The Purchaser shall be responsible for payment of all stamp duty which may
be charged or levied upon this Agreement and upon any document or
instrument created hereunder to give effect to the transactions herein
contemplated.
19.2 The Purchaser shall be responsible for payment of any costs associated
with the transfer of the Contracts, the Supply Contracts, the Lease, the
Deed of Assignment of Lease and any document or instrument created
hereunder to give effect to the transactions herein contemplated.
19.3 Except as otherwise herein provided, each party shall be responsible for
the payment of its own costs and expenses incurred by such party in
connection with this Agreement and the transactions contemplated hereby.
20. COMPLETE AGREEMENT
20.1 The terms and conditions set forth in this Agreement expressly or by
statutory implication cover and comprise the whole of the terms and
conditions by which the
<PAGE>
17.
parties shall be bound with respect to the subject matter hereof and no
further or other covenants, agreements, warranties, provisions or terms
with respect to such subject matter shall be deemed to be implied herein
or to arise between the Vendor and the Purchaser by way of collateral or
other agreement or by reason of any promise, representation, warranty or
undertaking given or made by either the Vendor or the Purchaser to the
other on or before the execution of this Agreement and the existence of
any such implication or collateral or other agreement is hereby expressly
negatived.
21. NOTICES
21.1 Except as otherwise expressly provided herein, all notices required or
permitted to be given in connection with this Agreement and any
transaction contemplated hereunder shall be in writing and shall be
delivered by hand or sent by registered mail or telex or facsimile to the
other party as follows:-
(a) If to the Vendor:-
The Company Secretary
SingCom (Australia) Pty. Limited
50 Bridge Street
SYDNEY N.S.W. 2000
(Fax) (02) 9219 6948
(b) If to the Purchaser:-
The Company Secretary
Fax International Australia Pty. Limited
323 Castlereagh Street
SYDNEY N.S.W. 2000
(Fax) (02) 9212 5019
In the case of notice given by telex or facsimile, such notice shall be
deemed to have been received at the time of transmission. In the case of notices
given by mail such notice shall be deemed to have been received three (3)
business days after the date of posting of same. A party may change its address
for the purpose of notices hereunder by giving not less than three (3) days'
prior notice of such change to the other party as provided above.
<PAGE>
18.
22. FURTHER ASSURANCE
22.1 The parties agree that each shall with all due diligence execute and
deliver to the other any and all documents and do or carry out such acts
and things as may reasonably be required or requested to effect the
transactions contemplated by this Agreement.
23. LAW AND JURISDICTION
23.1 This Agreement is governed by the laws of New South Wales and the Parties
irrevocably submit to the non-exclusive jurisdiction of the Courts of New
South Wales.
24. NO ASSIGNMENT
24.1 The rights hereby vested in and the obligations hereby undertaken by the
parties hereto under the provisions of this Agreement shall not be capable
of assignment.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands on the day
and year first hereinbefore mentioned.
SIGNED for and on behalf of SINGCOM ) /s/ [SIGNATURE APPEARS HERE]
(AUSTRALIA) PTY. LIMITED by its duly ) ----------------------------
authorised officer in the presence of: ) Director
/s/ [SIGNATURE APPEARS HERE]
- --------------------------------
Witness
/s/ Peter M. Fraser
- ---------------------------------
Barrister
<PAGE>
19.
SIGNED for and on behalf of FAX )
INTERNATIONAL AUSTRALIA PTY. ) [SIGNATURE APPEARS HERE]
LIMITED by its duly authorised officer ) ----------------------------
in the presence of: ) Director
[SIGNATURE APPEARS HERE]
- -------------------------------
Witness
<PAGE>
20.
AGREEMENT FOR SALE OF BUSINESS
------------------------------
BETWEEN SINGCOM (AUSTRALIA) PTY. LIMITED AND
FAX INTERNATIONAL AUSTRALIA PTY. LIMITED
DATED AS OF SEPTEMBER 30, 1997
EXHIBITS
--------
[INTENTIONALLY OMITTED]
<PAGE>
Exhibit 10.29
-------------
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (this "First Amendment") is hereby entered
into as of the 25th day of June, 1997 by and between CROSS POINT LIMITED
PARTNERSHIP, a Massachusetts limited partnership having an address at 900
Chelmsford Street, Lowell, Massachusetts 01851 ("Landlord"), and UNIFI
COMMUNICATIONS, INC. (formerly known as FAX International, Inc.) a Delaware
corporation having an address at 900 Chelmsford Street, Lowell, Massachusetts
01851 ("Tenant").
WHEREAS, Landlord, as landlord, and Tenant, as tenant, entered into that
certain Lease dated as of August 2, 1996, by which Landlord leased to Tenant a
portion of the building (the "Building") known and numbered as 900 Chelmsford
Street, Lowell, Massachusetts consisting of the entire tenth, eleventh and
twelfth floors of Tower 3 of the Building, as more particularly described in
Item 6 of the Schedule of the Lease and on Exhibit "A" of the Lease (the
"Premises").
WHEREAS, Tenant has agreed to relinquish its rights as set forth in
Section 29 of the Lease to the ninth floor of the Tower 3 of the Building and
Landlord has agreed to give to Tenant a right of first offer with respect to the
ninth floor of Tower 3 of the Building and the tenth, eleventh, twelfth and
thirteenth floors of Tower 2 of the Building, all in accordance with the terms
and provisions of this First Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and in the Lease, Landlord and Tenant hereby agree
as follows:
1. Section 28 of the Lease is hereby amended by deleting all of such
Section 28 such that Tenant shall have no further rights with respect to any or
all of the eighth floor of Tower 3 of the Building.
2. Section 29 of the Lease is hereby amended by deleting all of such
Section 29, such that, except as provided below in this First Amendment, Tenant
shall have no further rights with respect to any or all of the ninth floor of
Tower 3 of the Building.
3. Notwithstanding anything in Section 24 of the Lease to the
contrary, from and after June 1, 1997, Tenant's allocable share of vehicular
parking spaces in the Parking Lot (as defined in Section 24 of the Lease) shall
be 381 vehicular parking spaces and not 508 vehicular parking spaces as set
forth in Section 24 of the Lease, but in no event shall Tenant's allocable share
of vehicular parking spaces in the Parking Lot be less than 3.5 vehicular
parking spaces per 1,000 square fee of rentable floor area in the Premises.
Notwithstanding anything in Section 24 of the Lease to the contrary, from and
after June 1, 1997, Tenant shall have the right to use up to 27 parking spaces
in the parking garage referred to in the second paragraph of Section 24 of the
Lease.
4. The Lease is hereby amended by adding after Section 35 of the Lease
the following new Section 36 as follows:
<PAGE>
"36. TENANT'S RIGHTS OF FIRST OFFER TO LEASE
A. First Right of First Offer. Tenant shall have the right to add to
--------------------------
the Premises, upon the terms and conditions set forth in this Section 36.A, the
entire ninth floor of Tower 3 of the Building (the "First Expansion Space").
Tenant's rights hereunder with respect to the First Expansion Space shall be
subject to the rights of the existing tenant of the First Expansion Space as of
the effective date of this Section 36.A and shall be subject to the rights of
the other Building tenants with respect to the First Expansion Space as of the
effective date of this Section 36.A. Whenever during the Term on and after the
effective date of this Section 36.A, Landlord determines to lease all or any
portion of the First Expansion Space to any party other than the existing tenant
of the First Expansion Space, Landlord shall first offer to lease Tenant such
portion of the First Expansion Space in an "as is" condition; such offer shall
be in writing and shall specify the rent to be paid for such portion of the
First Expansion Space and the date on which such portion of the First Expansion
Space shall be included in the Premises (the "First Offer Notice"). Tenant shall
notify Landlord in writing whether Tenant elects to lease such portion of the
First Expansion Space at the rental rate set forth in the First Offer Notice
within ten (10) days after Landlord delivers to Tenant the First Offer Notice.
If Tenant timely elects to lease such portion of the First Expansion Space, then
Landlord shall execute an amendment to this Lease no later than fourteen (14)
days after Tenant notifies Landlord of Tenant's elections to lease such portion
of the First Expansion Space, effective as of the date such portion of the First
Expansion Space is to be included in the Premises, on the same terms and
conditions as set forth in this Lease for the original Premises except that (a)
the rentable area of the Premises shall be increased by the rentable area in
such portion of the First Expansion Space (and Tenant's Proportionate Share
shall be adjusted accordingly), (b) the Base Rent shall be increased by the
amount specified for such portion of the First Expansion Space in the First
Offer Notice, and (c) Landlord shall not provide to Tenant any allowances (e.g.,
----
moving allowance, construction allowance, and the like) or any other tenant
inducements. If Tenant fails or is unable to timely exercise its right
hereunder with respect to such portion of the First Expansion Space, then such
right shall lapse time being of the essence with respect to the exercise
thereof, and, subject to the following three (3) sentences, Landlord may lease
such portion of the First Expansion Space to third parties on such terms as
Landlord may elect. Notwithstanding anything herein to the contrary, Landlord
may not enter into such third party lease at a net effective rent of less than
ninety percent (90%) of the net effective rent set forth in the most recent
First Offer Notice to Tenant with respect to such portion of the First Expansion
Space without first offering to lease to Tenant such portion of the First
Expansion Space at such net effective rent being offered to such third party. As
used in this Section 36.A, the phrase "net effective rent" shall mean the Base
Rent for such portion of the First Expansion Space less the cost of tenant
improvements and other tenant inducements which are included in such Base Rent.
In addition, if Landlord fails to enter into any such third party lease within
six (6) months after Tenant has elected not to lease such portion of the First
Expansion Space after receipt of a First Offer Notice with respect thereto, then
such portion of the First Expansion Space shall again be subject to Tenant's
rights under this Section 36.A. Notwithstanding anything in this Section 36.A to
the contrary, Landlord shall have no obligation to first offer to lease to
Tenant all or any portion of the First Expansion Space in accordance with this
Section 36.A if at the time Landlord would have sent to Tenant a First Offer
Notice Tenant is then in default of any of its covenants or
-2-
<PAGE>
obligations under this Lease (beyond applicable notice and cure periods). If
Tenant is so then in default, Landlord may proceed to lease all or any portion
of the First Expansion Space to any third party on such terms as Landlord may
elect without Tenant having any prior rights to lease all or any portion of the
First Expansion Space.
B. Second Right of First Offer. Tenant shall have the right to add to
---------------------------
the Premises, upon the terms and conditions set forth in this Section 36.B, the
entire tenth floor of Tower 2 of the Building (the "Second Expansion Space").
Tenant's rights hereunder with respect to the Second Expansion Space shall be
subject to the rights of the existing tenant of the Second Expansion Space as of
the effective date of this Section 36.B and shall be subject to the rights of
the other Building tenants with respect to the Second Expansion Space as of the
effective date of this Section 36.B. Whenever during the Term on and after the
effective date of this Section 36.B, Landlord determines to lease all or any
portion of the Second Expansion Space to any party other than the existing
tenant of the Second Expansion Space, Landlord shall first offer to lease Tenant
such portion of the Second Expansion Space in an "as is" condition; such offer
shall be in writing and shall specify the rent to be paid for such portion of
the Second Expansion Space and the date on which such portion of the Second
Expansion Space shall be included in the Premises (the "Second Offer Notice").
Tenant shall notify Landlord in writing whether Tenant elects to lease such
portion of the Second Expansion Space at the rental rate set forth in the
Second Offer Notice within ten (10) days after Landlord delivers to Tenant the
Second Offer Notice. If Tenant timely elects to lease such portion of the Second
Expansion Space, then Landlord shall execute an amendment to this Lease no later
than fourteen (14) days after Tenant notifies Landlord of Tenant's election to
lease such portion of the Second Expansion Space, effective as of the date such
portion of the Second Expansion Space is to be included in the Premises, on the
same terms and conditions as set forth in this Lease for the original Premises
except that (a) the rentable area of the Premises shall be increased by the
rentable area in such portion of the Second Expansion Space (and Tenant's
Proportionate Share shall be adjusted accordingly), (b) the Base Rent shall be
increased by the amount specified for such portion of the Second Expansion Space
in the Second Offer Notice, and (c) Landlord shall not provide to Tenant any
allowances (e.g., moving allowance, construction allowance, and the like)
----
or any other tenant inducements. If Tenant fails or is unable to timely exercise
its right hereunder with respect to such portion of the Second Expansion Space,
then such right shall lapse time being of the essence with respect to the
exercise thereof, and, subject to the following three (3) sentences, Landlord
may lease such portion of the Second Expansion Space to third parties on such
terms as Landlord may elect. Notwithstanding anything herein to the contrary,
Landlord may not enter into such third party lease at a net effective rent of
less than ninety percent (90%) of the net effective rent set forth in the most
recent Second Offer Notice to Tenant with respect to such portion of the Second
Expansion Space without first offering to lease to Tenant such portion of the
Second Expansion Space at such net effective rent being offered to such third
party. As used in this Section 36.B, the phrase "net effective rent" shall mean
the Base Rent for such portion of the Second Expansion Space less the cost of
tenant improvements and other tenant inducements which are included in such Base
Rent. In addition, if Landlord fails to enter into any such third party lease
within six (6) months after Tenant has elected not to lease such portion of the
Second Expansion Space after receipt of a Second Offer Notice with respect
thereto, then such portion of the Second Expansion Space shall again be subject
to Tenant's rights under this Section 36.B. Notwithstanding anything in this
-3-
<PAGE>
Section 36.B to the contrary, Landlord shall have no obligation to first offer
to lease to Tenant all or any portion of the Second Expansion Space in
accordance with this Section 36.B if at the time Landlord would have sent to
Tenant a Second Offer Notice Tenant is then in default of any of its covenants
or obligations under this Lease (beyond applicable notice and cure periods). If
Tenant is so then in default, Landlord may proceed to lease all or any portion
of the Second Expansion Space to any third party on such terms as Landlord may
elect without Tenant having any prior rights to lease all or any portion of the
Second Expansion Space.
C. Third Right of First Offer. Tenant shall have the right to add to the
--------------------------
Premises, upon the terms and conditions set forth in this Section 36.C, the
entire eleventh floor of Tower 2 of the Building (the "Third Expansion Space").
Tenant's rights hereunder with respect to the Third Expansion Space shall be
subject to the rights of the existing tenant of the Third Expansion Space as of
the effective date of this Section 36.C and shall be subject to the rights of
the other Building tenants with respect to the Third Expansion Space as of the
effective date of this Section 36.C. Whenever during the Term on and after the
effective date of this Section 36.C, Landlord determines to lease all or any
portion of the Third Expansion Space to any party other than the existing tenant
of the Third Expansion Space, Landlord shall first offer to lease Tenant such
portion of the Third Expansion Space in an "as is" condition; such offer shall
be in writing and shall specify the rent to be paid for such portion of the
Third Expansion Space and the date on which such portion of the Third Expansion
Space shall be included in the Premises (the "Third Offer Notice"). Tenant shall
notify Landlord in writing whether Tenant elects to lease such portion of the
Third Expansion Space at the rental rate set forth in the Third Offer Notice
within ten (10) days after Landlord delivers to Tenant the Third Offer Notice.
If Tenant timely elects to lease such portion of the Third Expansion Space, then
Landlord shall execute an amendment to this Lease no later than fourteen (14)
days after Tenant notifies Landlord of Tenant's election to lease such portion
of the Third Expansion Space, effective as of the date such portion of the Third
Expansion Space is to be included in the Premises, on the same terms and
conditions as set forth in this Lease for the original Premises except that (a)
the rentable area of the Premises shall be increased by the rentable area in
such portion of the Third Expansion Space (and Tenant's Proportionate Share
shall be adjusted accordingly), (b) the Base Rent shall be increased by the
amount specified for such portion of the Third Expansion Space in the Third
Offer Notice, and (c) Landlord shall not provide to Tenant any allowances (e.g.,
----
moving allowance, construction allowance, and the like) or any other tenant
inducements. If Tenant fails or is unable to timely exercise its right hereunder
with respect to such portion of the Third Expansion Space, then such right shall
lapse time being of the essence with respect to the exercise thereof, and,
subject to the following three (3) sentences, Landlord may lease such portion of
the Third Expansion Space to third parties on such terms as Landlord may elect.
Notwithstanding anything herein to the contrary, Landlord may not enter into
such third party lease at a net effective rent of less than ninety percent (90%)
of the net effective rent set forth in the most recent Third Offer Notice to
Tenant with respect to such portion of the Third Expansion Space without first
offering to lease to Tenant such portion of the Third Expansion Space at such
net effective rent being offered to such third party. As used in this Section
36.C, the phrase "net effective rent" shall mean the Base Rent for such portion
of the Third Expansion Space less the cost of tenant improvements and other
tenant inducements which are included in such Base Rent. In addition, if
Landlord fails to enter into any such
-4-
<PAGE>
third party lease within six (6) months after Tenant has elected not to lease
such portion of the Third Expansion Space after receipt of a Third Offer Notice
with respect thereto, then such portion of the Third Expansion Space shall again
be subject to Tenant's rights under this Section 36.C. Notwithstanding anything
in this Section 36.C to the contrary, Landlord shall have no obligation to first
offer to lease to Tenant all or any portion of the Third Expansion Space in
accordance with this Section 36.C if at the time Landlord would have sent to
Tenant a Third Offer Notice Tenant is then in default of any of its covenants or
obligations under this Lease (beyond applicable notice and cure periods). If
Tenant is so then in default, Landlord may proceed to lease all or any portion
of the Third Expansion Space to any third party on such terms as Landlord may
elect without Tenant having any prior rights to lease all or any portion of the
Third Expansion Space.
D. Fourth Right of First Offer. Tenant shall have the right to add to
---------------------------
the Premises, upon the terms and conditions set forth in this Section 36.D, the
entire twelfth floor of Tower 2 of the Building (the "Fourth Expansion Space").
Tenant's rights hereunder with respect to the Fourth Expansion Space shall be
subject to the rights of the existing tenant of the Fourth Expansion Space as of
the effective date of this Section 36.D and shall be subject to the rights of
the other Building tenants with respect to the Fourth Expansion Space as of the
effective date of this Section 36.D. Whenever during the Term on and after the
effective date of this Section 36.D, Landlord determines to lease all or any
portion of the Fourth Expansion Space to any party other than the existing
tenant of the Fourth Expansion Space, Landlord shall first offer to lease Tenant
such portion of the Fourth Expansion Space in an "as is" condition; such offer
shall be in writing and shall specify the rent to be paid for such portion of
the Fourth Expansion Space and the date on which such portion of the Fourth
Expansion Space shall be included in the Premises (the "Fourth Offer Notice").
Tenant shall notify Landlord in writing whether Tenant elects to lease such
portion of the Fourth Expansion Space at the rental rate set forth in the
Fourth Offer Notice within ten (10) days after Landlord delivers to Tenant the
Fourth Offer Notice. If Tenant timely elects to lease such portion of the
Fourth Expansion Space, then Landlord shall execute an amendment to this Lease
no later than fourteen (14) days after Tenant notifies Landlord of Tenant's
election to lease such portion of the Fourth Expansion Space, effective as of
the date such portion of the Fourth Expansion Space is to be included in the
Premises, on the same terms and conditions as set forth in this Lease for the
original Premises except that (a) the rentable area of the Premises shall be
increased by the rentable area in such portion of the Fourth Expansion Space
(and Tenant's Proportionate Share shall be adjusted accordingly), (b) the Base
Rent shall be increased by the amount specified for such portion of the Fourth
Expansion Space in the Fourth Offer Notice, and (c) Landlord shall not provide
to Tenant any allowances (e.g., moving allowance, construction allowance, and
----
the like) or any other tenant inducements. If Tenant fails or is unable to
timely exercise its right hereunder with respect to such portion of the Fourth
Expansion Space, then such right shall lapse time being of the essence with
respect to the exercise thereof, and, subject to the following three (3)
sentences, Landlord may lease such portion of the Fourth Expansion Space to
third parties on such terms as Landlord may elect. Notwithstanding anything
herein to the contrary, Landlord may not enter into such third party lease at a
net effective rent of less than ninety percent (90%) of the net effective rent
set forth in the most recent Fourth Offer Notice to Tenant with respect to such
portion of the Fourth Expansion Space without first offering to lease to Tenant
such portion of the Fourth Expansion Space at such net effective rent being
offered to such third party. As
-5-
<PAGE>
used in this Section 36.D, the phrase "net effective rent" shall mean the Base
Rent for such portion of the Fourth Expansion Space less the cost of tenant
improvements and other tenant inducements which are included in such Base Rent.
In addition, if Landlord fails to enter into any such third party lease within
six (6) months after Tenant has elected not to lease such portion of the Fourth
Expansion Space after receipt of a Fourth Offer Notice with respect thereto,
then such portion of the Fourth Expansion Space shall again be subject to
Tenant's rights under this Section 36.D. Notwithstanding anything in this
Section 36.D to the contrary, Landlord shall have no obligation to first offer
to lease to Tenant all or any portion of the Fourth Expansion Space in
accordance with this Section 36.D if at the time Landlord would have sent to
Tenant a Fourth Offer Notice, Tenant is then in default of any of its covenants
or obligations under this Lease (beyond applicable notice and cure periods). If
Tenant is so then in default, Landlord may proceed to lease all or any portion
of the Fourth Expansion Space to any third party on such terms as Landlord may
elect without Tenant having any prior rights to lease all or any portion of the
Fourth Expansion Space.
E. Fifth Right of First Offer. Tenant shall have the right to add to the
--------------------------
Premises, upon the terms and conditions set forth in this Section 36.E, the
entire thirteenth floor of Tower 2 of the Building (the "Fifth Expansion
Space"). Tenant's rights hereunder with respect to the Fifth Expansion Space
shall be subject to the rights of the existing tenant of the Fifth Expansion
Space as of the effective date of this Section 36.E and shall be subject to the
rights of the other Building tenants with respect to the Fifth Expansion Space
as of the effective date of this Section 36.E. Whenever during the Term on and
after the effective date of this Section 36.E, Landlord determines to lease all
or any portion of the Fifth Expansion Space to any party other than the existing
tenant of the Fifth Expansion Space, Landlord shall first offer to lease Tenant
such portion of the Fifth Expansion Space in an "as is" condition; such offer
shall be in writing and shall specify the rent to be paid for such portion of
the Fifth Expansion Space and the date on which such portion of the Fifth
Expansion Space shall be included in the Premises (the "Fifth Offer Notice").
Tenant shall notify Landlord in writing whether Tenant elects to lease such
portion of the Fifth Expansion Space at the rental rate set forth in the Fifth
Offer Notice within ten (10) days after Landlord delivers to Tenant the Fifth
Offer Notice. If Tenant timely elects to lease such portion of the Fifth
Expansion Space, then Landlord shall execute an amendment to this Lease no later
than fourteen (14) days after Tenant notifies Landlord of Tenant's election to
lease such portion of the Fifth Expansion Space, effective as of the date such
portion of the Fifth Expansion Space is to be included in the Premises, on the
same terms and conditions as set forth in this Lease for the original Premises
except that (a) the rentable area of the Premises shall be increased by the
rentable area in such portion of the Fifth Expansion Space (and Tenant's
proportionate share shall be adjusted accordingly), (b) the Base Rent shall be
increased by the amount specified for such portion of the Fifth Expansion Space
in the Fifth Offer Notice, and (c) Landlord shall not provide to Tenant any
allowances (e.g., moving allowance, construction allowance, and the like) or any
----
other tenant inducements. If Tenant fails or is unable to timely exercise its
right hereunder with respect to such portion of the Fifth Expansion Space, then
such right shall lapse time being of the essence with respect to the exercise
thereof, and, subject to the following three (3) sentences, Landlord may lease
such portion of the Fifth Expansion Space to third parties on such terms as
Landlord may elect. Notwithstanding anything herein to the contrary, Landlord
may not enter into such third party lease at a net effective
-6-
<PAGE>
rent of less than ninety percent (90%) of the net effective rent set forth in
the most recent Fifth Offer Notice to Tenant with respect to such portion of the
Fifth Expansion Space without first offering to lease to Tenant such portion of
the Fifth Expansion Space at such net effective rent being offered to such third
party. As used in this Section 36.E, the phrase "net effective rent" shall mean
the Base Rent for such portion of the Fifth Expansion Space less the cost of
tenant improvements and other tenant inducements which are included in such Base
Rent. In addition, if Landlord fails to enter into any such third party lease
within six (6) months after Tenant has elected not to lease such portion of the
Fifth Expansion Space after receipt of a Fifth Offer Notice with respect
thereto, then such portion of the Fifth Expansion Space shall again be subject
to Tenant's rights under this Section 36.E. Notwithstanding anything in this
Section 36.E to the contrary, Landlord shall have no obligation to first offer
to lease to Tenant all or any portion of the Fifth Expansion Space in accordance
with this Section 36.E if at the time Landlord would have sent to Tenant a Fifth
Offer Notice, Tenant is then in default of any of its covenants or obligations
under this Lease (beyond applicable notice and cure periods). If Tenant is so
then in default, Landlord may proceed to lease all or any portion of the Fifth
Expansion Space to any third party on such terms as Landlord may elect without
Tenant having any prior rights to lease all or any portions of the Fifth
Expansion Space."
5. After request by Tenant from time to time during the Term of the Lease,
Landlord shall provide to Tenant updated information with regard to available
office space in the Building.
6. Tenant represents to Landlord that Tenant has not dealt with any broker
in connection with this First Amendment and that, insofar as Tenant knows, no
broker negotiated this First Amendment or is entitled to any commission or fee
in connection herewith. Tenant agrees to indemnify, defend and hold Landlord,
its asset manager or its property manager and their respective agents and
employees harmless from and against any claims for fee or commission made by any
broker claiming to have acted by or on behalf of Tenant in connection with this
First Amendment.
7. Submission of this First Amendment of examination or signature by
Tenant does not constitute a reservation of space or an option for lease, and
this First Amendment shall not be effective unless and until execution and
delivery thereof by both Landlord and Tenant.
8. In all other respects, Landlord and Tenant hereby reaffirm all of the
covenants, agreements, terms, conditions and other provisions of the Lease,
except as modified hereby, and the Lease is hereby incorporated in full herein
by this reference. The terms and provisions of this First Amendment shall be
effective as of the date first above written, except as may otherwise be
provided herein.
-7-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment to Lease as a sealed instrument as of the date first above written.
LANDLORD:
CROSS POINT LIMITED PARTNERSHIP
By: ONE INDUSTRIAL AVENUE CORP.,
its Operating General Partner
By: /s/ [SIGNATURE APPEARS HERE]
-------------------------------
Name: [NAME APPEARS HERE]
Title: Exec. V.P.
TENANT:
UNIFI COMMUNICATIONS, INC.
By: /s/ Paula Litscher
--------------------------
Name: Paula Litscher
Title: V.P. Finance
-8-
<PAGE>
Exhibit 10.30
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease (this "Second Amendment") is hereby
entered into as of the 21 day of October, 1997 by and between CROSS POINT
LIMITED PARTNERSHIP, a Massachusetts limited partnership having an address at
900 Chelmsford Street, Lowell, Massachusetts 01851 ("Landlord"), and UNIFI
COMMUNICATIONS, INC. (formerly known as FAX International, Inc.), a Delaware
corporation having an address at 900 Chelmsford Street, Lowell, Massachusetts
01851 ("Tenant").
WHEREAS, Landlord, as landlord, and Tenant, as tenant, entered into that
certain Lease (the "Original Lease") dated as of August 2, 1996, by which
Landlord leased to Tenant a portion of the building (the "Building") known and
numbered as 900 Chelmsford Street, Lowell, Massachusetts consisting of the
entire tenth, eleventh and twelfth floors of Tower 3 of the Building, as more
particularly described in Item 6 of the Schedule of the Lease and on Exhibit "A"
attached to the Lease (the "Premises").
WHEREAS, Landlord and Tenant entered into that certain First Amendment
to Lease dated as of June 26, 1997 (the "First Amendment"), by which Tenant
relinquished its rights as set forth in Section 29 of the Original Lease to the
ninth floor of Tower 3 of the Building and Landlord gave to Tenant a right of
first offer with respect to the ninth floor of Tower 3 of the Building and the
tenth, eleventh, twelfth and thirteenth floors of Tower 2 of the Building, all
in accordance with the terms and provisions of the First Amendment.
WHEREAS, the Original Lease as amended by the First Amendment is
hereinafter referred to as the "Lease".
WHEREAS, Landlord and Tenant have agreed to modify certain terms and
provisions of the Lease with regard to the payment of charges for heat and air
conditioning during non-Normal Business Hours.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and in the Lease, Landlord and Tenant hereby agree
as follows:
1. Effective on and after November 1, 1997, Item 9 of the Schedule of
the Lease is hereby amended by deleting all of such Item 9 and inserting in its
place the following:
"9. Annual Base Rent: For the period from the Commencement Date
----------------
through and including the day prior to the date which is six (6) months
after the Commencement Date, $648,240.60 per year; for the period from
the date which is six (6) months after the Commencement Date through and
including October 31, 1997, $1,220,865.60 per year: and for the period
from November 1, 1997 through and including the Expiration Date,
$1,275,339.60."
2. Effective on and after November 1, 1997, Item 10 of the Schedule
of the Lease is hereby amended by deleting all of such Item 10 and inserting in
its place the following:
<PAGE>
"10. Monthly Base Rent: For the period from the Commencement Date
-----------------
through and including the day prior to the date which is six (6) months
after the Commencement Date, $54,020.05 per month; for the period from the
date which is six (6) months after the Commencement Date through and
including October 31, 1997, $101,738.80 per month; and for the period from
November 1, 1997 through and including the Expiration Date, $106,278.30 per
month."
3. Effective on and after November 1, 1997, Section 5.B of the Lease is
hereby amended by deleting the last sentence of such Section 5.B and inserting
in its place the following:
"Notwithstanding anything in this Section 5.B to the contrary, Landlord
shall furnish heat and air conditioning in accordance with the requirements
and conditions set forth in Exhibit "C" attached hereto to the entire tenth
and eleventh floors of Tower 3 of the Building twenty-four (24) hours per
day, three hundred sixty-five (365) days per year during the Term at no
additional cost to Tenant."
4. Submission of this Second Amendment for examination or signature by
Tenant does not constitute a reservation of space or an option for lease, and
this Second Amendment shall not be effective unless and until execution and
delivery thereof by both Landlord and Tenant.
5. In all other respects, Landlord and Tenant hereby reaffirm all of the
covenants, agreements, terms, conditions and other provisions of the Lease,
except as modified hereby, and the Lease is hereby incorporated in full herein
by this reference. The terms and provisions of this Second Amendment shall be
effective as of the date first above written, except as otherwise provided
herein.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment
to Lease as a sealed instrument as of the date first above written.
LANDLORD:
CROSS POINT LIMITED PARTNERSHIP
By: ONE INDUSTRIAL AVENUE CORP.,
its Operating General Partner
By: /s/ [SIGNATURE APPEARS HERE]
-----------------------------
Name: [NAME APPEARS HERE]
Title: Exec. V.P.
-2-
<PAGE>
TENANT:
UNIFI COMMUNICATIONS, INC.
By: /s/ Paula Litscher
-------------------------
Name: Paula Litscher
Title: V.P, Finance
-3-
<PAGE>
EXHIBIT 11.0
UNIFI Communications, Inc.
Computation of Net Loss Per Share (1)
Form 10-Q, September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
--------------------------------- -------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net loss $(19,929,411) $(14,019,994) $(56,937,957) $(33,696,187)
============ ============ ============ ============
Weighed average number of
common shares outstanding
during period. 3,818,189 3,746,356 3,798,642 3,741,360
============ ============ ============ ============
Net loss per common share $ (5.22) $ (3.74) $ (14.99) $ (9.00)
============ ============ ============ ============
</TABLE>
(1) Fully diluted net loss per share has not been separately presented, as the
amounts would not be meaningful.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 FOR UNIFI
COMMUNICATIONS INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 105,629,408
<SECURITIES> 0
<RECEIVABLES> 8,441,815
<ALLOWANCES> 524,719
<INVENTORY> 0
<CURRENT-ASSETS> 102,605,692
<PP&E> 39,356,793
<DEPRECIATION> 15,879,168
<TOTAL-ASSETS> 149,241,979
<CURRENT-LIABILITIES> 24,027,002
<BONDS> 0
0
13,515,030
<COMMON> 38,261
<OTHER-SE> (100,676,721)
<TOTAL-LIABILITY-AND-EQUITY> 149,241,979
<SALES> 11,722,468
<TOTAL-REVENUES> 11,722,468
<CGS> 9,647,264
<TOTAL-COSTS> 10,722,088
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,204,503
<INCOME-PRETAX> (19,929,411)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,929,411)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,929,411)
<EPS-PRIMARY> (5.22)
<EPS-DILUTED> 0
</TABLE>
