U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): December 3, 1999
(November 19, 1999)
Commission file number 0-26013
MULTI-LINK TELECOMMUNICATIONS, INC.
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(Exact name of small business issuer
as specified in its charter)
Colorado 84-1334687
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4704 Harlan Street, Suite 420, Denver, CO 80212
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(Address of principal executive offices)
(303) 831-1977
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(Issuer's telephone number)
Not Applicable
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(Former name, former address, and former fiscal year,
if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 19, 1999, Hellyer Communications Services, Inc. (the
"Company"), a newly formed wholly owned subsidiary of Multi-Link
Telecommunications, Inc. ("Multi-Link"), completed the acquisition of
substantially all of the assets of Hellyer Communications, Inc. ("Hellyer"), a
privately held Indianapolis-based provider of voice messaging, paging, mobile
telephone and telephone consulting services. The assets acquired include
tangible personal property (such as machinery, equipment, inventories, furniture
and motor vehicles), accounts receivable, claims, and intellectual property. The
purchased personal property was used by Hellyer to provide telecommunications
services, and the Company plans to use the personal property for the same
purpose.
The purchase price consisted of $1.1 million in cash and the assumption by
the Company of approximately $2.1 million of Hellyer's liabilities. As part of
the transaction, the Company and Multi-Link entered into a five-year
non-competition agreement and a two-year consulting agreement with Jerry L.
Hellyer, Sr. ("Mr. Hellyer"), the sole shareholder and principal executive
officer of Hellyer, under which Multi-Link will issue to Mr. Hellyer 150,000
shares of restricted common stock with a two-year vesting schedule. In addition,
Multi-Link loaned Mr. Hellyer $300,000, with such loan secured by the restricted
common stock issued to Mr. Hellyer under the non-competition agreement and the
consulting agreement, repayable on or before December 31, 2000 and bearing
interest at 3% in excess of the prime rate.
The funds used in the acquisition were obtained in Multi-Link's initial
public offering, completed in May 1999.
The purchase price and terms were negotiated on an arms-length basis with
Hellyer. No principal of Hellyer had a relationship with Multi-Link or the
Company prior to the transaction.
It is impracticable to provide any financial statements with this filing
that may required to be filed pursuant to Item 7 of Form 8-K. Any financial
statements required to be filed pursuant to Item 7 of Form 8-K will be filed by
amendment within 60 days of the due date of this filing.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibits.
10.14 Amended and Restated Asset Purchase Agreement dated November 17,
1999 by and among Hellyer Communications, Inc., Jerry L. Hellyer,
Sr., Multi-Link Telecommunications, Inc. and Hellyer Communications
Services, Inc. (without exhibits).
10.15 Loan Agreement dated November 17, 1999 by and between Multi-Link
Telecommunications, Inc. and Jerry L. Hellyer, Sr.
10.16 Promissory Note dated November 17, 1999 by and between Multi-Link
Telecommunications, Inc. and Jerry L. Hellyer, Sr.
10.17 Pledge and Security Agreement by and between Multi-Link
Telecommunications, Inc. and Jerry L. Hellyer, Sr.
99.2 Press Release.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MULTI-LINK TELECOMMUNICATIONS,
INC.
Date: December 3, 1999 By: /s/ David J. Cutler
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David J. Cutler, Chief Financial Officer
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Exhibit 10.14
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
By and Among
Hellyer Communications, Inc.,
an Indiana corporation,
Jerry L. Hellyer, Sr.,
Hellyer Communications Services, Inc.,
f/k/a HC Acquisition Corp.,
a Colorado corporation,
and
Multi-Link Telecommunications, Inc.,
a Colorado corporation
Dated as of November 17, 1999
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TABLE OF CONTENTS
Page
Article I PURCHASE OF ASSETS................................................. 1
1.1 Acquired Assets............................................... 1
1.2 Excluded Assets............................................... 2
1.3 Disclaimer of Warranties...................................... 4
1.4 Assumed Liabilities........................................... 4
Article II PURCHASE PRICE.................................................... 5
2.1 Purchase Price................................................ 5
2.2 Payment of Purchase Price..................................... 5
2.3 Allocation of Purchase Price................................. 5
2.4 Funding of Buyer.............................................. 6
2.5 Licensing of Intellectual Property............................ 6
Article III CLOSING; CLOSING DELIVERIES...................................... 6
3.1 Closing....................................................... 6
3.2 Seller's Closing Deliveries................................... 6
3.3 Buyer's Closing Deliveries.................................... 9
Article IV REPRESENTATIONS AND WARRANTIES OF SELLER..........................11
4.1 Organization of Seller........................................11
4.2 Capital Structure of Seller...................................11
4.3 Authorization.................................................11
4.4 Validity; Binding Effect......................................11
4.5 Noncontravention..............................................11
4.6 Title to Acquired Assets......................................12
4.7 Real Estate...................................................12
4.8 Disclosure....................................................12
Article V REPRESENTATIONS AND WARRANTIES OF BUYER............................12
5.1 Organization of Buyer.........................................12
5.2 Authorization.................................................12
5.3 Validity; Binding Effect......................................12
5.4 Noncontravention..............................................12
Article VI COVENANTS PENDING CLOSING.........................................13
6.1 Reasonable Efforts............................................13
6.2 Notices and Consents..........................................13
6.3 Satisfaction of Conditions....................................13
6.4 Full Access...................................................13
6.5 Operation of Business.........................................13
6.6 Notices.......................................................13
6.7 Employees.....................................................14
Article VII SELLER'S CONDITIONS PRECEDENT....................................14
7.1 Performance by Buyer and Multi-Link...........................14
7.2 Accuracy of Representations and Warranties....................14
7.3 No Injunction.................................................14
7.4 Closing Deliveries............................................14
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TABLE OF CONTENTS
(continued)
Page
7.5 Grant of License..............................................14
7.6 Making of the Loan............................................14
Article VIII BUYER'S CONDITIONS PRECEDENT....................................14
8.1 Performance by Seller.........................................14
8.2 Accuracy of Representations and Warranties....................15
8.3 No Injunction.................................................15
8.4 Closing Deliveries............................................15
8.5 Secured Party Approvals.......................................15
8.6 No Material Adverse Change....................................15
8.7 Due Diligence.................................................15
8.8 Agreements with Vendors.......................................15
8.9 Acceptance of Trade Creditors.................................15
8.10 Grant of License..............................................15
Article IX INDEMNIFICATION...................................................15
9.1 Indemnification by Seller.....................................15
9.2 Indemnification by Buyer......................................16
9.3 Survival Period...............................................16
Article X POST CLOSING COVENANTS.............................................16
10.1 Employee Leasing Agreement.....................................16
10.2 Hellyer Companies 401(k) Plan..................................16
10.3 Dental and Disability Insurance................................16
Article XI MISCELLANEOUS.....................................................17
11.1 Confidentiality; Press Release.................................17
11.2 Notices........................................................17
11.3 Expenses.......................................................18
11.4 Governing Law..................................................18
11.5 Partial Invalidity.............................................18
11.6 Assignment.....................................................18
11.7 Successors and Assigns.........................................18
11.8 Execution in Counterparts......................................18
11.9 Titles and Headings; Rules of Construction.....................18
11.10 Entire Agreement; Amendments and Waivers......................19
11.11 Termination...................................................19
11.12 No Negotiation................................................19
11.13 No Third Party Beneficiaries..................................19
11.14 Remedies......................................................19
11.15 Access........................................................19
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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of the 17th day of November, 1999, by and among Hellyer
Communications, Inc., an Indiana corporation ("Seller"), Jerry L. Hellyer, Sr.,
a resident of the State of Indiana ("Shareholder"), Multi-Link
Telecommunications, Inc., a Colorado corporation ("Multi-Link") and Hellyer
Communications Services, Inc., f/k/a HC Acquisition Corp., a Colorado
corporation and a wholly-owned subsidiary of Multi-Link ("Buyer").
RECITALS:
A. Pursuant to the terms and conditions of an Asset Purchase Agreement
dated as of September 17, 1999, among the parties hereto (the "Asset Purchase
Agreement"), Buyer agreed to purchase substantially all of the assets utilized
by Seller in its business of providing telecommunication services to individuals
and businesses (the "Business").
B. The parties hereto desire to amend and restate the terms and conditions
of the Asset Purchase Agreement as provided in this Agreement.
AGREEMENT:
NOW, THEREFORE, the parties hereto agree that the Asset Purchase Agreement
is hereby amended and restated in its entirety to read as follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 Acquired Assets. Upon the terms and subject to the conditions contained
herein, Seller shall sell and transfer to Buyer, and Buyer shall purchase and
acquire from Seller, at the Closing (as hereinafter defined), all of the
properties and assets of Seller used in the operation of the Business as of the
Closing (the "Acquired Assets") other than the Excluded Assets (as hereinafter
defined), free and clear of all security interests, liens, restrictions, claims,
encumbrances or charges of any kind ("Encumbrances") other than Permitted
Encumbrances (as hereinafter defined), including without limitation, the
following:
(a) All tangible personal property (such as machinery, equipment,
inventories, furniture and motor vehicles) owned by Seller;
(b) All accounts, notes and other receivables owned by Seller (other
than those included in the definition of Excluded Assets);
(c) Subject to the provisions of Section 1.4 of this Agreement, all
rights in and with respect to the assets associated with i. the Group
Dental Insurance Policy issued by Seaboard Life Insurance Company, USA to
Seller (the "Dental Policy"), ii. the Group Long Term Disability Insurance
Policy issued by The Paul Revere/Provident Life Insurance Company to Seller
(the "Long Term Policy"), iii. the Group Short Term Disability Insurance
Policy issued by The Paul Revere/Provident Life Insurance Company to Seller
(the "Short Term Policy"), and iv. the Hellyer Companies 401(k) Plan (the
"401(k) Plan"), related Trust Agreement and related Services Agreement (the
"Services Agreement") with Benefit Services Corporation;
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(d) All claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off and rights of
recoupment owned by Seller (other than those included in the definition of
Excluded Assets);
(e) All rights of Seller in, to and under all leases of personal
property entered into by Seller in connection with the Business prior to
the date hereof as set forth in Schedule 1.1 hereto and any other leases
which Buyer shall have agreed in writing to assume as provided in Section
1.4 of this Agreement (collectively, the "Leases");
(f) All of Seller's right, title and interest in and to the name
"Hellyer Communications" and related logos, the trade names related to the
Business, and all customer lists and trade secrets related to the Business;
(g) All rights of Seller in, to and under those contracts,
commitments, purchase and sale orders, work orders, agreements and
arrangements entered into by Seller in connection with the Business prior
to the date hereof as described in Schedule 1.1 hereto and any other
contracts which Buyer shall have agreed in writing to assume as provided in
Section 1.4 of this Agreement (collectively, the "Contracts");
(h) All franchises, approvals, permits, licenses, orders,
registrations, certificates, variances and similar rights obtained from
governments and governmental agencies in which Seller has any right, title
or interest;
(i) All books and records of Seller related specifically to the
Business, including without limitation, property records, current payroll
records, accounting records, supplier lists, parts lists, manuals, files,
and any similar items related to the Acquired Assets or the conduct of the
Business;
(j) All of Seller's intellectual property, the goodwill associated
therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all
jurisdictions (collectively, the "Proprietary Rights"); and
(k) Seller's cash and cash equivalents.
1.2 Excluded Assets. Notwithstanding anything contained in Section 1.1 to
the contrary, Seller shall not sell and transfer to Buyer, and Buyer shall not
purchase or acquire from Seller, at the Closing, any of Seller's assets other
than the Acquired Assets, including the following properties and assets
(collectively, the "Excluded Assets"):
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(a) Seller's corporate charter, qualifications to conduct business as
a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates and other
documents relating to the organization, maintenance and existence of Seller
as a corporation;
(b) Any assets owned by Seller (or assets unrelated to the provision
of services by Seller to its customers incident to its operation of the
Business, which are leased by Seller under any capitalized lease) situated
at the Leased Real Estate (as hereinafter defined) that are affixed to,
embedded in or attached to the Leased Real Estate by means of cement,
plaster, nails, bolts, screws or adhesives, or any assets of Seller so
situated and that constitute fixtures or appliances of the Leased Real
Estate;
(c) Subject to the provisions of Section 1.4 of this Agreement, all
rights in and with respect to the assets associated with the Hellyer
Communications, Inc. Employee Benefit Plan, the related trust agreement,
service contract with Business Administrators & Consultants, Inc., and
Stop-Loss Policy with Guarantee Life Insurance Company and the Hellyer
Companies Flexible Benefit Plan and the related Plan Supervisor Agreement
with Donley & Company, Inc.;
(d) All accounts, notes and other receivables owed to Seller by any
Affiliate of Seller (as hereinafter defined); and
(e) All claims, causes of action, choses in action and rights of
recovery relating to any claims Seller has or may have against Ameritech
(or any of its Affiliates) or any of Seller's former or current employees.
For purposes of this Agreement, "Affiliate" means, with respect to any person or
entity, any person or entity that controls, is controlled by or is under common
control with such person or entity, together with its and their respective
members, managers, partners, venturers, directors, officers, shareholders,
agents, employees, spouses and legal representatives. A person or entity shall
be presumed to have control when it possesses the power, directly or indirectly,
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to direct, or cause the direction of, the management or policies of another
person or entity, whether through ownership of voting securities, by contract,
or otherwise.
1.3 Disclaimer of Warranties. Buyer acknowledges and agrees that the
personal property included within the Acquired Assets is being sold and
transferred to Buyer "AS IS, WHERE IS," with all faults and with no warranties
whatsoever, whether express or implied (including, without limitation,
warranties relating to the condition, merchantability, fitness or freedom from
defects or defaults of such personal property, all of which Seller hereby
expressly disclaims) except as otherwise specifically set forth in Section 4.1
below.
1.4 Assumed Liabilities. On the terms and subject to the conditions set
forth in this Agreement, upon the Closing, Buyer agrees to assume and discharge
i. the liabilities of Seller related to the Contracts and the Leases, ii. such
other liabilities of Seller relating to additional contracts, agreements and
leases of Seller as Buyer shall have agreed in writing to assume, iii. the
obligations of Seller relating to customer prepayments or deposits, iv. any and
all accrued vacation pay of Seller's employees, through November 30, 1999, v.
any and all state sales taxes, interest and penalties owed, owing or to be owed
by Seller, vi. any and all unemployment taxes, interest and penalties owing or
to be owed by Seller, vii. as to employees or former employees of Seller, any
and all liabilities, costs, losses, fees or charges arising from, through or in
any manner related to the duties and obligations of the employer-sponsor of
viii. the Dental Policy, ix. the Long Term Policy, x. the Short Term Policy, xi.
the 401(k) Plan, related Trust Agreement and Services Agreement, xii. the
Hellyer Communications, Inc., Employee Benefit Plan and related trust agreement,
services agreement and stop-loss policy, and xiii. Hellyer Companies Flexible
Benefit Plan and Plan Supervisor Agreement, xiv. any and all liabilities and
obligations relating to the Business of Seller accrued or incurred from
September 1, 1999, until the Closing, and xv. any and all other liabilities or
obligations of Seller as Buyer may hereafter agree to assume (collectively, the
"Assumed Liabilities"); provided, however, that Buyer shall not be obligated to
assume and discharge Assumed Liabilities attributable to subsections (a) and (b)
of this Section 1.4 (collectively, the "Primary Assumed Liabilities") in the
aggregate exceeding $1,105,472.10; and, provided further, that (x) Buyer shall
not be obligated to assume and discharge Assumed Liabilities attributable to
subsections (c) through (i) of this Section 1.4 (collectively, the "Secondary
Assumed Liabilities") in the aggregate exceeding $1,000,000, and (y) Buyer shall
pay and discharge in full all those Secondary Assumed Liabilities described in
Subsections (e) and (f) of this Section 1.4 within seven (7) days of the date of
this Agreement. Except for the Assumed Liabilities described in this Section
1.4, Buyer shall not assume, and Seller shall pay, compromise or otherwise
provide for all debts, obligations and liabilities of Seller (whether absolute,
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contingent, fixed or otherwise) occurring or otherwise relating to the period
prior to the Closing Date (collectively "Seller Retained Liabilities"). Any
Encumbrance which relates to an Assumed Liability shall be a "Permitted
Encumbrance" for purposes of this Agreement.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. In consideration for the Acquired Assets to be sold and
transferred to Buyer and upon the terms and conditions contained herein, Buyer
shall pay or cause to be paid to or for the account of Seller (as set forth in
Section 2.2 below), One Million Fifty-Seven Thousand Dollars ($1,057,000.00),
plus the amount of the Assumed Liabilities assumed by Purchaser pursuant to
Section 1.4 of this Agreement (subject to the limitations set forth therein)
(the "Purchase Price").
2.2 Payment of Purchase Price. Buyer shall pay the Purchase Price to Seller
as follows:
(a) Buyer shall pay the sum of One Million Fifty-Seven Thousand
Dollars ($1,057,000.00) to or for the benefit of Seller at Closing by wire
transfer to an account or accounts designated by Seller at least
forty-eight hours prior to Closing;
(b) Buyer shall assume Seller's obligations under the Primary Assumed
Liabilities in an amount not to exceed $1,105,472.10 at Closing; and
(c) Buyer shall assume Seller's obligations under the Secondary
Assumed Liabilities in an amount not to exceed One Million Dollars
($1,000,000.00) at closing.
2.3 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Acquired Assets by Buyer to be determined within ninety (90) days
after Closing. Buyer shall deliver its determination of such allocation to
Seller within ten (10) days of the date determined. Neither Seller nor Buyer
shall take a position on any tax return (including, without limitation, any Form
8594, and any amendments thereto), before any governmental agency charged with
the collection of any tax, or in any proceeding that is inconsistent with such
allocation (taking into account any subsequent amendments required by law) or
otherwise inconsistent with such allocation without the prior written consent of
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the other party hereto. Seller and Buyer shall make their respective Forms 8594
(and any amendments thereof) available for inspection by the other party for the
purpose of verifying compliance with this Section 2.3.
2.4 Funding of Buyer. Subject to satisfaction of Buyer's conditions
precedent to Closing, on or prior to the Closing Date, Multi-Link shall
contribute to the capital of Buyer $1,057,000.00 and 150,000 shares of its
common stock.
2.5 Licensing of Intellectual Property. Subject to satisfaction of Buyer's
conditions precedent to Closing, at the Closing, Buyer shall grant Seller (or
its assigns), on terms and conditions satisfactory to Buyer and Seller, an
exclusive, perpetual license to use the name "Hellyer Excavation" and the
related logos and trade dress described on Schedule 2.5 hereto in furtherance of
the business of construction and/or excavation at any location within the world
(the "License")
ARTICLE III
CLOSING; CLOSING DELIVERIES
3.1 Closing. The "Closing" means the time at which Seller consummates the
sale and transfer of the Acquired Assets to Buyer, against payment by Buyer of
the Purchase Price, after the satisfaction (or receipt of a duly executed
waiver) of each of the conditions precedent to Closing as hereinafter described.
The Closing shall take place at the offices of Seller's counsel, Sommer &
Barnard, PC, 4000 Bank One Tower, 111 Monument Circle, Indianapolis, Indiana at
10:00 a.m., local time, on November 12, 1999 (the "Closing Date"), or at such
other place and time as the parties may mutually agree.
3.2 Seller's Closing Deliveries. At the Closing, in addition to any other
documents specifically required to be delivered pursuant to this Agreement,
Seller shall, in form and substance reasonably satisfactory to Buyer and its
counsel (except as otherwise specifically set forth herein), deliver to Buyer
the following:
(a) A Bill of Sale and Assignment, duly executed by Seller, conveying
all of Seller's right, title and interest in and to the Acquired Assets to
Buyer;
(b) A counterpart to an Assignment and Assumption Agreement, duly
executed by Seller, in which Seller assigns its rights in the Contracts and
the Leases (and such other contracts, leases and agreements as Buyer agrees
to assume pursuant to Section 1.4 of this Agreement) to Buyer and in which
Buyer assumes Seller's obligations under the same (the "Assignment and
Assumption Agreement");
(c) An agreement, duly executed by Seller and Hellyer Real Estate,
LLC, an Indiana limited liability company ("Landlord") terminating Seller's
leasehold interest in the Leased Real Estate (as hereinafter defined);
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(d) A counterpart to a Non-Competition Agreement, duly executed by
Shareholder, substantially in the form attached hereto as Exhibit A (the
"Non-Competition Agreement");
(e) A counterpart to a Consulting Agreement, duly executed by
Shareholder, substantially in the form attached hereto as Exhibit B (the
"Consulting Agreement");
(f) A counterpart to the License, duly executed by Seller;
(g) A counterpart to a Loan Agreement (the "Loan Agreement") and a
Promissory Note (the "Note") evidencing the Loan (as hereinafter defined)
and a Stock Pledge Agreement securing Shareholder's obligations under the
Loan Agreement and the Note with a security interest in the common capital
stock of Multi-Link received by Shareholder pursuant to the terms of the
Non-Competition Agreement and the Consulting Agreement (the "Stock"), along
with certificates representing such common capital stock and related stock
powers and a proxy endorsed in blank, all duly executed by Shareholder;
(h) Consents of third parties to the assignment of the Contracts and
the Leases (and such other contracts, leases and agreements as Buyer agrees
to assume pursuant to Section 1.4 of this Agreement), to the extent such
consents are required to effect the assignment thereof as contemplated by
this Agreement;
(i) Amended Articles of Incorporation of Seller, amending Seller's
existing Articles of Incorporation to effect a change of Seller's name (the
"Amendment"), along with such other consents or instruments as are
necessary for Seller to deliver in support of an application of Buyer to
qualify to do business as a foreign corporation and under the name "Hellyer
Communications" (or any similar name currently used by Seller in the
operation of the Business) in each jurisdiction in which Seller is so
qualified to do business (including assignments of assumed business names,
as appropriate);
(j) A certificate, duly executed by Seller, certifying that Seller has
performed and complied with all of the terms, provisions and conditions of
this Agreement to be performed and complied with by it at or prior to
Closing and that its representations and warranties are true in all
material respects as of the date of this Agreement and as of the Closing
(except as expressly contemplated or permitted by this Agreement);
(k) A certificate of the Secretary or Assistant Secretary of Seller,
dated the Closing Date, certifying i. the resolutions duly adopted by the
Shareholder and the Board of Directors of Seller authorizing and approving
the execution, delivery and performance of this Agreement and the
transactions contemplated hereby and the Amendment, ii. resolutions of the
Board of Directors terminating Seller's sponsorship of the 401(k) Plan and
assigning the Services Agreement from Seller to Buyer as of December 1,
1999, and iii. that such resolutions have not been rescinded or modified
and remain in full force and effect as of the Closing Date;
(l) A certificate of existence of Seller, dated no more than ten days
prior to the Closing Date, issued by the Secretary of State of the State of
Indiana;
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(m) A copy of the Articles of Incorporation of Seller, duly certified
by the Secretary of State of the State of Indiana, no more than ten days
prior to the Closing Date;
(n) Evidence of the release of all Encumbrances affecting the Acquired
Assets, other than Permitted Encumbrances;
(o) Evidence of Seller's receipt of the Secured Party Approvals (as
hereinafter defined);
(p) An opinion of Sommer & Barnard, PC, counsel for Seller and
Shareholder, dated the Closing Date, addressed to Buyer and Multi-Link to
the effect that:
(i) Seller is a corporation duly organized and validly existing
under the laws of the State of Indiana.
(ii) Seller has full corporate power and authority to i. execute
and deliver this Agreement and to perform its obligations hereunder
and, ii. own and operate its assets, properties and business and carry
on its business as presently conducted (as described to Sommer &
Barnard, PC by Seller in a certificate or certificates to be relied
upon by Sommer & Barnard, PC in rendering such opinion).
(iii) This Agreement has been duly and validly executed and
delivered by Seller and Shareholder and constitutes a valid and
legally binding obligation of Seller and Shareholder, enforceable
against Seller and Shareholder in accordance with its terms.
(iv) The execution, delivery and performance of this Agreement by
Seller has been duly authorized by all necessary corporate action on
the part of Seller, including director and shareholder authorization.
(v) The execution, delivery and performance of this Agreement by
Seller, the consummation of the transactions contemplated hereby and
the compliance with or fulfillment of the terms and provisions hereof
or of any other agreement or instrument to be delivered at the Closing
(the "Closing Instruments"), do not and will not conflict with, or
result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Seller.
(vi) The Closing Instruments are sufficient as a matter of law to
convey to Buyer all of the right, title and interest of Seller in and
to the Specified Acquired Assets (as hereinafter defined) which are
purported to be conveyed thereby.
The opinion may be governed by the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991) and if so governed, the General
Qualifications (as defined in the Accord) shall apply to the opinions expressed
in subsection (iii) and (vi). For purposes of such opinion, the term "Specified
Acquired Assets" shall mean those Acquired Assets which are described in
subsections (a), (b), (d), (f), (i) and (k) of Section 1.1 of this Agreement;
(q) Such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may reasonably request to effect the
transfer of the Acquired Assets contemplated hereby; and
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(r) A letter of instruction to Agency Associates directing it to
change the Policyholder on the Long Term Policy from Seller to Buyer as of
December 1, 1999 (the "Long Term Letter"), duly executed by Seller;
(s) A letter of instruction to Agency Associates directing it to
change the Policyholder on the Short Term Policy from Seller to Buyer as of
December 1, 1999 (the "Short Term Letter"), duly executed by Seller;
(t) A letter of instruction to Agency Associates directing it to
change the Policyholder on the Dental Policy from Seller to Buyer as of
December 1, 1999 (the "Dental Letter"), duly executed by Seller; and
(u) All other previously undelivered items required to be delivered by
Seller at or prior to Closing pursuant to this Agreement or otherwise
required in connection herewith unless waived in writing by Buyer.
3.3 Buyer's Closing Deliveries. At the Closing, in addition to any other
documents specifically required to be delivered pursuant to this Agreement,
Buyer and Multi-Link shall, in form and substance reasonably satisfactory to
Seller and its counsel (except as otherwise specifically set forth herein),
deliver to Seller the following:
(a) A Lease Agreement, duly executed by Buyer and Landlord, for the
letting of the Leased Real Estate to Buyer (as lessee) on terms and
conditions described in Schedule 3.3 hereto;
(b) A counterpart to the Assignment and Assumption Agreement duly
executed by Buyer;
(c) A counterpart to the Non-Competition Agreement duly executed by
Buyer;
(d) A counterpart to the Consulting Agreement, duly executed by Buyer;
(e) A counterpart to the License, duly executed by Buyer;
(f) A counterpart to the Loan Agreement, duly executed by Multi-Link;
(g) Stock certificates representing the Stock duly issued to
Shareholder;
(h) The cash portion of the Purchase Price to be paid at the Closing
pursuant to Section 2.2(a) of this Agreement;
(i) A certificate, duly executed by Buyer, certifying that Buyer has
performed and complied with all of the terms, provisions and conditions of
this Agreement to be performed and complied with by it at or prior to
Closing and that its representations and warranties are true in all
material respects as of the date of this Agreement and as of the Closing
(except as expressly contemplated or permitted by this Agreement);
(j) A certificate of the Secretary or Assistant Secretary of Buyer,
dated the Closing Date, certifying i. the resolutions duly adopted by the
Board of Directors of Buyer authorizing and approving the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby (including the Non-Competition Agreement and the
Consulting Agreement), ii. a resolution of the Board of Directors of Buyer
assuming sponsorship of the 401(k) Plan and accepting assignment of the
Services Agreement from Seller to Buyer as of December 1, 1999, and iii.
that such resolutions have not been rescinded or modified and remain in
full force and effect as of the Closing Date;
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(k) A certificate of the Secretary or Assistant Secretary of
Multi-Link, dated the Closing Date, certifying i. the resolutions duly
adopted by the Board of Directors of Multi-Link authorizing and approving
the execution, delivery and performance of this Agreement and the Loan
Agreement and the transactions contemplated hereby and thereby, and ii.
that such resolutions have not been rescinded or modified and remain in
full force and effect as of the Closing Date;
(l) A certificate of good standing of Buyer, dated no more than ten
days prior to the Closing Date, issued by the Secretary of State of the
State of Colorado;
(m) A certificate of good standing of Multi-Link, dated no more than
ten (10) days prior to the Closing Date, issued by the Secretary of State
of the State of Colorado;
(n) A copy of the Articles of Incorporation of Buyer, duly certified
by the Secretary of State of the State of Colorado, no more than ten days
prior to the Closing Date;
(o) An opinion of Otten, Johnson, Robinson, Neff & Ragonetti, P.C.,
counsel for Buyer and Multi-Link, dated the Closing Date, addressed to
Seller and Shareholder, to the effect that:
(i) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado.
(ii) Buyer has full corporate power and authority to i. execute
and deliver this Agreement and to perform its obligations hereunder,
and ii. own and operate its assets, properties and business and carry
on its business as presently conducted.
(iii) This Agreement has been duly and validly executed and
delivered by Buyer and constitutes a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms.
(iv) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary corporate action on the part
of Buyer, including director authorization.
(v) The execution, delivery and performance of this Agreement by
Buyer, the consummation of the transactions contemplated hereby and
the compliance with or fulfillment of the terms and provisions hereof
or of any other agreement or instrument contemplated hereby, do not
and will not conflict with or result in a breach of any of the
provisions of the Articles of Incorporation or Bylaws of Buyer.
The opinion may be governed by the Accord and if so governed, the General
Qualifications (as defined in the Accord) shall apply to the opinions expressed
in subsection (iii);
(p) The Long Term Letter, duly executed by Buyer;
(q) The Short Term Letter, duly executed by Buyer;
(r) The Dental Letter, duly executed by Buyer; and
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(s) All other previously undelivered items required to be delivered by
Buyer or Multi-Link at or prior to Closing pursuant to this Agreement or
otherwise required in connection herewith unless waived in writing by
Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, Seller represents and warrants to Buyer,
and Buyer in agreeing to pay the Purchase Price and to otherwise consummate the
transactions contemplated by this Agreement has relied upon such representations
and warranties, that, except for certain "Schedules" which are referred to
herein and which have previously been delivered by Seller to Buyer:
4.1 Organization of Seller. Seller is a corporation duly organized and
validly existing under the laws of the State of Indiana and as of the Closing
Date will be qualified to do business as a foreign corporation in good standing
in each other state wherein the nature of its business or activities requires
such qualification.
4.2 Capital Structure of Seller. The authorized capital stock of Seller
consists of 1,000 shares of common stock, no par value, of which 200 shares are
issued and outstanding as of the date of this Agreement and are owned, of record
and beneficially, by Shareholder.
4.3 Authorization. Seller has full corporate power and authority to i.
execute and deliver this Agreement and to perform its obligations hereunder, and
ii. own and operate its assets, properties and business and carry on its
business as presently conducted. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action on the part
of Seller, including director and shareholder authorization.
4.4 Validity; Binding Effect. This Agreement has been duly and validly
executed and delivered by Seller and Shareholder and constitutes a valid and
legally binding obligation of Seller and Shareholder, enforceable against Seller
and Shareholder in accordance with its terms.
4.5 Noncontravention. The execution, delivery and performance of this
Agreement by Seller, the consummation of the transactions contemplated hereby
and the compliance with or fulfillment of the terms and provisions hereof or of
any other agreement or instrument contemplated hereby, do not and will not i.
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Seller, ii. contravene any law which affects or binds
Seller or any of its properties, iii. except as set forth in Schedule 4.5,
conflict with, result in a breach of, constitute a default under, or give rise
to a right of termination or acceleration under any of the Contracts or Leases,
or iv. except as set forth in Schedule 4.5, require Seller to obtain the
approval, consent or authorization of, or to make any declaration, filing or
registration with, any third party or any governmental authority which has not
been obtained in writing prior to the date of this Agreement.
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4.6 Title to Acquired Assets. Seller has, or will have at Closing, good and
marketable title to all of the Acquired Assets, free and clear of any and all
Encumbrances, other than Permitted Encumbrances.
4.7 Real Estate. Seller owns no real estate. Except for its leasehold
interest in the real estate situated in Marion County, Indiana, and commonly
known as 8330 Allison Pointe Trail, Indianapolis, Indiana (the "Leased Real
Estate"), Seller has no leasehold interest in any real estate.
4.8 Disclosure. None of the representations or warranties of Seller
contained in this Article IV, none of the information contained in the Schedules
referred to in this Article IV, and none of the other documents or information
furnished to Buyer or any of its representatives in connection with this
Agreement and the transactions contemplated hereby, is false or misleading in
any material respect or omits to state a fact herein or therein necessary to
make the statements made herein or therein not misleading in any material
respect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated hereby, Buyer represents and warrants to Seller,
and Seller in agreeing to consummate the transactions contemplated by this
Agreement has relied upon such representations and warranties, that:
5.1 Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and is
qualified to do business as a foreign corporation in good standing in each other
state wherein the nature of its business or activities requires such
qualification.
5.2 Authorization. Buyer has full corporate power and authority to i.
execute and deliver this Agreement and to perform its obligations hereunder, and
ii. own and operate its assets, properties and business and carry on its
business as presently conducted. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action on the part
of Buyer, including director authorization.
5.3 Validity; Binding Effect. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and legally binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
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5.4 Noncontravention. The execution, delivery and performance of this
Agreement by Buyer, the consummation of the transactions contemplated hereby and
the compliance with or fulfillment of the terms and provisions hereof or of any
other agreement or instrument contemplated hereby, do not and will not i.
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of Buyer, ii. contravene any law which affects or binds
Buyer or any of its properties, iii. conflict with, result in a breach of,
constitute a default under, or give rise to a right of termination or
acceleration under any contract, agreement, note, deed of trust, mortgage,
trust, lease, governmental or other license, permit or other authorization, or
any other instrument or restriction to which Buyer is a party or by which any of
its properties may be affected or bound, or iv.require Buyer to obtain the
approval, consent or authorization of, or to make any declaration, filing or
registration with, any third party or any governmental authority which has not
been obtained in writing prior to the date of this Agreement.
ARTICLE VI
COVENANTS PENDING CLOSING
The parties agree as follows with respect to the period between the date of
the execution of this Agreement and the Closing:
6.1 Reasonable Efforts. Buyer and Seller shall take all action and do all
things necessary, proper or advisable in order to consummate the transactions
contemplated by this Agreement, including satisfaction, but not waiver, of the
conditions to Closing set forth below.
6.2 Notices and Consents. Buyer and Seller shall notify all lessors under
the Leases and all third parties to the Contracts of the assignment thereof from
Seller to Buyer and will use reasonable efforts to obtain any and all consents
of such lessors and third parties as are necessary to consummate the
transactions contemplated hereby.
6.3 Satisfaction of Conditions. Seller and Buyer shall make reasonable
efforts to satisfy the conditions precedent of each other's obligation to close
(as described in Article VII and Article VIII of this Agreement, as appropriate)
on or prior to the Closing Date.
6.4 Full Access. Seller shall permit the representatives of Buyer to have
full access at all reasonable times, and in a manner so as not to interfere with
the normal business operations of Seller, to all premises, properties,
personnel, books, records (including tax records), contracts and documents of or
pertaining to Seller and the Acquired Assets.
6.5 Operation of Business. From and after the date hereof until the
Closing, Seller will:
(a) operate its business in the ordinary course, consistent with past
practice; i. use its best efforts to preserve its operations so that Buyer
will obtain the benefits intended to be afforded by this Agreement; ii. not
take or permit any action which would result in any representation or
warranty of Seller becoming incorrect or untrue in any material respect or
result in the failure of Seller to comply with its covenants and agreements
herein in any material respect; iii. obtain the prior written approval of
Buyer in connection with all material decisions affecting the business,
operations, assets and liabilities of Seller; and iv. notify Buyer in
writing promptly after Seller becomes aware of the occurrence of any event
that might have a material adverse effect on the business, operations or
financial condition of Seller.
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6.6 Notices. Buyer and Seller will promptly notify the other in writing if
it receives any notice, or otherwise becomes aware, of any action or proceeding
instituted or threatened before any court or governmental agency or by any third
party to restrain or prohibit, or obtain substantial damages in respect of this
Agreement or the consummation of the transactions contemplated hereby.
6.7 Employees. Buyer may, in its sole discretion, offer employment to
certain employees of Seller and all such persons so employed by Buyer will be
considered "new hires" by Buyer.
ARTICLE VII
SELLER'S CONDITIONS PRECEDENT
The obligation of Seller to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing of each of
the following conditions, except to the extent any such condition is waived in
writing by Seller:
7.1 Performance by Buyer and Multi-Link. Buyer and Multi-Link shall have
performed and complied with all of the terms, provisions and conditions of this
Agreement to be performed and complied with by Buyer and Multi-Link at or prior
to the Closing.
7.2 Accuracy of Representations and Warranties. All of the representations
and warranties made by Buyer in this Agreement shall be true in all material
respects as of the date of this Agreement and as of the Closing (except as
expressly contemplated or permitted by this Agreement).
7.3 No Injunction. No injunction, restraining order, judgment or decree of
any court or governmental authority shall be existing against any of the parties
to this Agreement or any of their officers, directors or representatives, which
restrains, prevents or materially alters the transactions contemplated hereby.
7.4 Closing Deliveries. Buyer shall have delivered to Seller each of the
documents required of Buyer under Section 3.3 of this Agreement.
7.5 Grant of License. Buyer and Seller shall have entered into the License
on mutually agreeable terms.
7.6 Making of the Loan. Multi-Link shall have loaned the sum of Three
Hundred Thousand Dollars ($300,000.00) to Shareholder, which amount shall bear
interest at three percent (3%) over the prime rate in effect during the term of
such loan, shall be due and payable on or before December 31, 2000, and shall be
secured by a pledge of the Stock (the "Loan").
ARTICLE VIII
BUYER'S CONDITIONS PRECEDENT
The obligation of Buyer to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing of each of
the following conditions, except to the extent any such condition is waived in
writing by Buyer:
8.1 Performance by Seller. Seller shall have performed and complied with
all of the terms, provisions and conditions of this Agreement to be performed
and complied with by Seller at or prior to the Closing.
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8.2 Accuracy of Representations and Warranties. All of the representations
and warranties made by Seller in this Agreement shall be true in all material
respects as of the date of this Agreement and as of the Closing (except as
expressly contemplated or permitted by this Agreement).
8.3 No Injunction. No injunction, restraining order, judgment or decree of
any court or governmental authority shall be existing against any of the parties
to this Agreement or any of their officers, directors or representatives, which
restrains, prevents or materially alters the transactions contemplated hereby.
8.4 Closing Deliveries. Seller shall have delivered to Buyer each of the
documents required of Seller under Section 3.2 of this Agreement.
8.5 Secured Party Approvals. This Agreement and the transactions
contemplated hereby shall have been approved by (or consented to, as
appropriate) by Heller Financial, Inc. (or Heller Financial Leasing, Inc., as
appropriate), Tokai Financial Services, Inc., Peoples Bank & Trust Company and
Fifth Third Bank of Central Indiana (such approvals, collectively, the "Secured
Party Approvals").
8.6 No Material Adverse Change. There will not have occurred i. any
material adverse change in the financial condition, business or prospects for
future business of Seller, or in the condition of the Acquired Assets, or any
event which may, in the future, cause such a change, or ii. any pending or
threatened material litigation or other proceeding against Seller or the
Acquired Assets or with respect to the transaction contemplated by this
Agreement.
8.7 Due Diligence. Buyer will have been satisfied with the results of its
due diligence investigation of Seller, the Acquired Assets and the Business.
8.8 Agreements with Vendors. Buyer shall have entered into agreements with
such vendors of Seller as are necessary to maintain essential services related
to the Business after the Closing on terms and conditions satisfactory to Buyer.
8.9 Acceptance of Trade Creditors. This Agreement and the transaction
contemplated hereby shall have been consented to by seventy percent (70%) of the
aggregate dollar amount of Seller's trade creditors listed in Schedule 8.10 of
this Agreement.
8.10 Grant of License. Buyer and Seller shall have entered into the License
on mutually agreeable terms.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Seller. Seller shall indemnify and hold Buyer
harmless from and against all damages, claims, causes of action, losses and
expenses, including reasonable attorneys' fees and expenses (collectively,
"Indemnifiable Losses"), incurred in connection with or arising from i. any
nonfulfillment or breach by Seller of any of its agreements or covenants
contained in this Agreement, ii. any breach of any warranty or the inaccuracy of
any representation or warranty of Seller contained in this Agreement or any
certificate, Schedule or other information delivered by or on behalf of Seller
in furthering the transactions contemplated hereby, iii. any Seller Retained
Liabilities, and iv. the operation of the Business prior to the Closing;
provided, however, that Buyer shall not be entitled to make a claim for
indemnification under this Section 9.1 until Buyer's Indemnifiable Losses in the
aggregate equal or exceed Twenty-five Thousand Dollars ($25,000.00) (the
"Threshold Level").
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9.2 Indemnification by Buyer. Buyer shall indemnify and hold Seller
harmless from and against all Indemnifiable Losses incurred in connection with
or arising from i. any nonfulfillment or breach by Buyer of any of its
agreements or covenants contained in this Agreement, ii. any breach of any
warranty or the inaccuracy of any representation or warranty of Buyer contained
in this Agreement or any certificate, Schedule or other information delivered by
or on behalf of Buyer in furthering the transactions contemplated hereby, iii.
any Assumed Liability, and iv. the operation of the Business after the Closing;
provided, however, that Seller shall not be entitled to make a claim for
indemnification under this Section 9.2 until Seller's Indemnifiable Losses in
the aggregate equal or exceed the Threshold Level.
9.3 Survival Period. The representations, warranties, covenants and
indemnifications contained in this Agreement or in any Schedule or certificate
delivered pursuant to this Agreement shall survive the Closing and shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any party hereto, and shall continue for a period of one year after the
Closing Date, at which time all of such representations, warranties, covenants
and indemnification obligations shall terminate. Notwithstanding anything
contained in this Section 9.3 to the contrary, any claim for indemnification
made by any party hereto in writing to the other party hereto prior to the
expiration of the survival period set forth above shall survive until such claim
has been resolved.
ARTICLE X
POST CLOSING COVENANTS
10.1 Employee Leasing Agreement. From the Closing and through November
30,1999, i. Buyer shall lease from Seller persons to perform services for Buyer
("Leased Employees"), and Seller shall maintain for those Leased Employees for
such time period the 401(k) Plan, the Hellyer Communications Inc. Employee
Benefit Plan, the Dental Policy, the Hellyer Companies Flexible Benefit Plan,
and the Short-Term and Long-Term Policies, and ii. Buyer shall pay to Seller any
and all of the costs or liabilities related to the employment of the Leased
Employees by Seller including, but not limited to, the wages, taxes and benefits
of such employees. Effective on December 1, 1999, Buyer shall hire the Leased
Employees as employees of Buyer at wages and benefits substantially similar to
the wages and benefits provide to the Leased Employees by Seller.
10.2 Hellyer Companies 401(k) Plan. Effective December 1, 1999, Buyer shall
adopt and become the sponsoring Employer Administrator of the 401(k) Plan. Buyer
shall also assume all of the duties and obligations of Seller under the related
Trust Agreement and the Services Agreement, and Seller shall assist Buyer in
obtaining the consent of Benefit Services Corporation to assignment of the
Services Agreement from Seller to Buyer. Buyer shall make all contributions to
the 401(k) Plan which are due before or after Closing and perform all reporting
and administrative duties which are due before or after Closing relating to the
401(k) Plan. At and after Closing Buyer shall freeze or terminate the
participation of the employees of Helix Health Centers and Hellyer Excavation in
the 401(k) Plan.
10.3 Dental and Disability Insurance. Effective December 1, 1999, Buyer
shall assume all of the duties and obligations of Seller under i. the Dental
Policy, ii. the Long Term Policy, and iii. the Short Term Policy.
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ARTICLE XI
MISCELLANEOUS
11.1 Confidentiality; Press Release.
(a) Prior to Closing, each party hereto shall treat in confidence, and
not disclose without the prior consent of the other party hereto, all
documents, materials and other information which it shall have obtained
regarding the other party during the course of the negotiations leading to
the consummation of the transactions contemplated hereby (whether obtained
before or after the date of this Agreement), the investigation provided for
herein and the preparation of this Agreement and other related documents,
except for disclosure required by law, relating to arrangements with
creditors of Seller or in connection with any lawsuit between or involving
the parties or any party hereto. The obligation of each party to treat such
documents, materials and other information in confidence shall not apply to
any information which i. such party can demonstrate was already lawfully in
its possession prior to the disclosure thereof by the other party, ii. is
known to the public and did not become so known through any violation of a
legal obligation, or iii. became known to the public through no fault of
such party. Upon termination of this Agreement in accordance with Section
11.11 hereof, each party shall promptly return to the other party hereto
all of the confidential documents, materials and other information it has
obtained from such other party. The obligations imposed by the immediately
preceding sentence shall survive any termination of this Agreement pursuant
to Section 11.11.
(b) No party to this Agreement shall issue any press release or make
any public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of all of the
parties hereto, except for such press releases or public announcements as
Buyer's counsel reasonably determines are required by law to be made by
Buyer or any of its Affiliates.
11.2 Notices. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
i. if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); ii. if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or iii. if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Seller: Jerry L. Hellyer, Sr.
10710 Compass Court
Indianapolis, Indiana 46256
With a copy to: Sommer & Barnard, PC
Attn: Jerald I. Ancel
4000 Bank One Tower
111 Monument Circle
Indianapolis, Indiana 46204
Facsimile No.: 317/236-9802
If to Buyer: Hellyer Communications Services, Inc.
c/o Multi-Link Telecommunications, Inc.
Attn: Nigel Alexander
4704 Harlan Street
Denver, Colorado 80212
Facsimile No.: 303/313-2001
With a copy to: Otten, Johnson, Robinson, Neff & Ragonetti, PC
Attn: Blair L. Lockwood
950 Seventeenth Street, 16th Floor
Denver, Colorado 80202
Facsimile No.: 303/825-6525
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Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 11.2, to
each other party of such change.
11.3 Expenses.
(a) Each party hereto will pay all costs, fees and expenses incident
to its negotiation and preparation of this Agreement and to its performance
and compliance with all agreements contained herein on its part to be
performed, including the fees, expenses and disbursements of its respective
counsel and accountants; provided, however, that brokers' fees to Basore
and Associates, Inc. shall be paid by Seller.
(b) In any legal action between the parties arising out of or related
to this Agreement, the prevailing party shall be entitled to recover its
costs and expenses, including reasonable accounting and legal fees.
11.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without regard to such
jurisdiction's conflict of laws principles.
11.5 Partial Invalidity. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
11.6 Assignment. Neither Seller nor Buyer may assign this Agreement, or any
rights hereunder, to any other party without the prior written consent of the
other party.
11.7 Successors and Assigns. Subject to the provisions of Section 11.6
above, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11.8 Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original counterpart,
and all of which shall be considered to be but one agreement and shall become a
binding agreement when each party shall have executed one counterpart and
delivered it to the other party hereto.
11.9 Titles and Headings; Rules of Construction. Titles and headings to
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. Whenever the context so requires the use of or reference to any
gender includes the masculine, feminine and neuter genders; and all terms used
in the singular shall have comparable meanings when used in the plural and vice
versa.
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11.10 Entire Agreement; Amendments and Waivers. This Agreement contains the
entire understanding of the parties hereto with regard to the subject matter
contained in this Agreement and supersedes all prior agreements or
understandings of the parties. The parties, by mutual agreement in writing, may
amend, modify and supplement this Agreement. The failure of any party to this
Agreement to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
11.11 Termination. This Agreement shall terminate and shall be of no
further force or effect i. upon mutual written agreement of the parties hereto,
or ii. upon notice given by any party to the other party hereto in the event the
Closing has not occurred on or before November 30, 1999. Except for the
provisions of Section 11.1 of this Agreement, upon termination of this
Agreement, this Agreement shall be of no further force or effect. No termination
of this Agreement shall release, or be construed as releasing, any party from
any liability to any other party which may have arisen for any reason. A party's
right to terminate this Agreement is in addition to, and not in lieu of, any
other rights or remedies which such party may have.
11.12 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 11.11 above, Seller and Shareholder will not
directly or indirectly solicit, initiate or encourage any inquiries or proposals
from, discuss or negotiate with, provide any non-public information to, or
consider the merits of any unsolicited inquiries or proposals from, any person
or entity (other than Buyer) relating to any transaction involving the sale of
the Business, the Acquired Assets (other than in the ordinary course of
business), or any of the capital stock of Seller, or any merger, consolidation,
business combination or similar transaction involving Seller.
11.13 No Third Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any person other than the parties and their respective
heirs, successors and assigns, as applicable.
11.14 Remedies. The rights and remedies of the parties hereunder are
cumulative and are not in lieu of, but are in addition to, any other rights or
remedies which the parties may have at law or in equity.
11.15 Access. From and after the Closing Date for a period of five years,
Buyer shall maintain all of the books and records of the Business sold pursuant
to this Agreement and shall permit Seller and Shareholder access to view and
copy such books and records at all reasonable times during such period for
purposes of i. pursuing the claims described in Section 1.2(e) of this
Agreement, ii. completing any and all tax returns required of Seller or
Shareholder, and iii. complying with all other obligations of Seller or
Shareholder contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
"SELLER" "BUYER"
Hellyer Communications, Inc. Hellyer Communications Services, Inc.
By:/s/ Jerry L. Hellyer, Sr. By:/s/ Nigel Alexander
-------------------------------- ----------------------------------------
Jerry L. Hellyer, Sr., President Nigel Alexander, Chief Executive Officer
"SHAREHOLDER" "MULTI-LINK"
Multi-Link Telecommunications, Inc.
/s/ Jerry L. Hellyer, Sr. By:/s/ Nigel Alexander
- ----------------------------------- ----------------------------------------
Jerry L. Hellyer, Sr. Nigel Alexander, Chief Executive Officer
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EXHIBITS
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Exhibit A Form of Non-Competition Agreement
Exhibit B Form of Consulting Agreement
SCHEDULES
---------
Schedule 1.1 Assumed Contracts and Leases
Schedule 2.5 Intellectual Property
Schedule 3.3 Lease Terms
Schedule 4.5 Noncontravention
Schedule 8.10 Acceptance of Trade Creditors
Exhibit 10.15
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), made as of the 17th day of
November, 1999, by Jerry L. Hellyer, Sr., a resident of the State of Indiana
("Borrower") in favor of Multi-Link Telecommunications, Inc., a Colorado
corporation ("Lender"),
WITNESSETH THAT:
WHEREAS, Lender has agreed to loan the sum of Three Hundred Thousand
Dollars ($300,000) to Borrower on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
AMOUNT AND TERMS OF LOAN
1.1 Agreement to Loan and Repay. Lender hereby agrees to lend the sum of
Three Hundred Thousand Dollars ($300,000) (the "Loan") to Borrower, and Borrower
hereby agrees to repay such amount to Lender, upon the terms and conditions set
forth in this Agreement and all other agreements executed in furtherance of this
transaction, including, without limitation, the Stock Pledge Agreement (as
hereinafter defined) (collectively, the "Loan Documents"). The Loan shall bear
interest and shall be payable according to the terms of that certain Promissory
Note of even date herewith (the "Note") in the original principal amount of the
Loan and executed by Borrower in favor of Lender. The Loan is secured by 150,000
shares of the common stock of Lender owned by Borrower pursuant to the terms of
a Stock Pledge Agreement of even date herewith (the "Stock Pledge Agreement").
1.2 Use of Loan. Two Hundred Thousand Dollars ($200,000) of the Loan shall
be disbursed at the direction of Borrower to Peoples Bank & Trust Company in
partial satisfaction of an obligation owed by Borrower to such bank, with the
remaining One Hundred Thousand Dollars ($100,000) of the Loan to be disbursed to
Borrower and to be used as Borrower determines in his sole and absolute
discretion.
<PAGE>
ARTICLE 2
EVENTS OF DEFAULT AND REMEDIES
2.1 Events of Default. Borrower shall be in default under this Agreement,
and each of the Loan Documents, upon the occurrence of any one or more of the
following events (each an "Event of Default"):
(1) If Borrower shall fail to make when due any payment of principal
or interest as required by the Note, or any other amount payable hereunder,
whether at the due date thereof or by acceleration thereof or otherwise;
(2) If Borrower shall fail to duly observe or perform any covenant,
condition or agreement required to be observed or performed hereunder or in
any of the other Loan Documents, and such failure remains uncured for a
period of thirty (30) days after written notice thereof;
(3) If an Event of Default occurs under any of the other Loan
Documents;
(4) If Borrower shall (i) apply for or consent to the appointment of,
or the taking or possession by, a receiver, custodian, trustee or
liquidator of all or a substantial part of his property, (ii) admit in
writing his inability, or be generally unable, to pay his debts as such
debts become due, (iii) make a general assignment for the benefit of his
creditors, (iv) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect), (v) file a petition
seeking to take advantage as debtor of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (vi) fail to controvert in a timely or appropriate
manner, or acquiesce in writing to, any petition filed against Borrower in
an involuntary case under such Bankruptcy Code, or (vii) take any action
(other than to controvert any such petition) for the purpose of effecting
any of the foregoing; or
(5) If any proceeding or case shall be commenced in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of debts, of
Borrower, (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like of Borrower or of all or any substantial part of his
assets, or (iii) similar relief in respect of Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, without the consent of Borrower, and
such proceeding or case shall continue undismissed, or an order, judgment
or decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of thirty (30) days, or an
order for relief against Borrower shall be entered in an involuntary case
under such Bankruptcy Code.
2.2 Remedies upon Default. If there is or shall have occurred an Event of
Default, and such Event of Default has not been cured within any applicable
grace or cure period, then Lender may, at its option, and by or through a
trustee, nominee, assignee or otherwise, to the fullest extent permitted by law,
exercise any or all of the following rights, remedies and recourses, either
successively or concurrently:
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(1) Declare the Note to be forthwith due and payable,
whereupon the Note shall become forthwith due and payable, both as to
principal and interest, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by
Borrower, anything contained herein or in the Note to the contrary
notwithstanding;
(2) Pursue any other remedy set forth in any of the other Loan
Documents; or,
(3) Pursue any other remedy set forth herein, at law, or in equity.
2.3 Non-Waiver. No delay in exercising or failure to exercise by Lender of
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given this Agreement or any law to
Lender may be exercised from time to time and as often as may be deemed
expedient by Lender.
ARTICLE 3
MISCELLANEOUS TERMS AND CONDITIONS
3.1 Time of Essence. Time is of the essence with respect to all provisions
of this Agreement.
3.2 Notices. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
(a) if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); (b) if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or (c) if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Borrower: Jerry L. Hellyer, Sr.
10710 Compass Court
Indianapolis, Indiana 46256
With a copy to: Sommer & Barnard, PC
Attn: Jerald I. Ancel
4000 Bank One Tower
111 Monument Circle
Indianapolis, Indiana 46204
Facsimile No.: 317/236-9802
If to Lender: Multi-Link Telecommunications, Inc.
Attn: Nigel Alexander
4704 Harlan Street
Denver, Colorado 80212
Facsimile No.: 303/313-2001
With a copy to: Otten, Johnson, Robinson, Neff & Ragonetti, PC
Attn: Blair L. Lockwood
950 Seventeenth Street, 16th Floor
Denver, Colorado 80202
Facsimile No.: 303/825-6525
Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 3.2, to each
other party of such change.
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<PAGE>
3.3 Other Instruments and Action. Borrower agrees that he will execute such
other instruments and documents (and take such other action) as are, or become,
necessary or convenient to effectuate and carry out this Agreement and the
transaction contemplated hereby.
3.4 Governing Law; Form. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado, without regard to such
jurisdiction's conflict of laws principles. Any action or proceeding seeking to
enforce any provision of this Agreement shall be brought in the courts of the
State of Colorado and Borrower consents to the jurisdiction of such courts and
waives any objections to venue laid therein.
3.5 Modification. This Agreement shall not be modified except through
written instrument or superseding agreement executed by the parties hereto,
their successors in interest, or their lawful representatives.
3.6 Headings. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matters to be
considered in construing the terms of this Agreement.
3.7 Parties Bound. This Agreement is binding on and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns as permitted by
this Agreement.
3.8 Construction. This Agreement shall not be strictly construed against
any party. This Agreement is executed in conjunction with the other Loan
Documents and is to be construed harmoniously therewith. If there is any
conflict between the terms of this Agreement and any of the other Loan
Documents, the terms of this Agreement shall be controlling.
3.9 Severability. If any provision of this Agreement is held invalid by any
tribunal in a final decision from which no appeal is or can be taken, such
provision shall be deemed modified to eliminate the invalid element, and, as so
modified, such provision shall be deemed a part of this Agreement. If it is not
possible to modify any such provision to eliminate the invalid element, such
provision shall be deemed eliminated from this Agreement. The invalidity of any
provision of this Agreement shall not affect the force and effect of the
remaining provisions.
3.10 Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall, for all purposes, be deemed to be
an original.
3.11 Gender. Wherever the context shall so require, all words in the
masculine gender shall be deemed to include the feminine or neuter gender; all
singular words shall include the plural; and, all plural words shall include the
singular.
3.12 Relationship of the Parties. The relationship between Borrower and
Lender is that of a borrower and a lender only and neither of those parties is,
nor shall it hold itself out to be, the agent, employee, joint venturer or
partner of the other party.
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IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to be
executed by its duly authorized officer as of the date first written above.
"BORROWER" "LENDER"
Multi-Link Telecommunications, Inc.
/s/ Jerry L. Hellyer, Sr. By:/s/ Nigel Alexander
- ------------------------------ ----------------------------------------
Jerry L. Hellyer, Sr. Nigel Alexander, Chief Executive Officer
5
Exhibit 10.16
PROMISSORY NOTE
$300,000.00 November 17, 1999
Indianapolis, Indiana
FOR VALUE RECEIVED, I, Jerry L. Hellyer, Sr. ("Maker"), residing at 10710
Compass Court, Indianapolis, Indiana 46256, do hereby promise to pay to the
order of Multi-Link Telecommunications, Inc., a Colorado corporation ("Holder")
at 4704 Harlan Street, Denver, Colorado 80212, the principal sum of Three
Hundred Thousand Dollars ($300,000) (the "Loan"), with interest thereon at a
rate equal to three percent (3%) in excess of the interest rate published by The
Wall Street Journal as the Prime Rate on the date hereof (which interest rate
shall be adjusted prior to the Maturity Date (as hereinafter defined) to reflect
any change in the Prime Rate between the date hereof and the Maturity Date) on
or before December 31, 2000 (the "Maturity Date"), which obligation is secured
by a pledge of 150,000 common shares of Holder owned by Maker pursuant to a
Stock Pledge Agreement of even date herewith. If more than one Prime Rate is
published in The Wall Street Journal for a day, the average of the Prime Rates
so published shall be used to adjust the interest rate charged on the principal
balance hereof, and such average shall be rounded up to the nearest One-Quarter
of One Percent (.25%). If The Wall Street Journal ceases to publish a Prime
Rate, Holder shall select a substantially similar publication that does publish
a Prime Rate to be used to adjust the interest rate charged on the principal
balance hereof. If the Prime Rate is no longer generally published or becomes
limited, regulated, or administered by a governmental or quasi-governmental
body, Holder shall select a comparable interest rate index to adjust the
interest rate charged on the principal balance hereof.
Upon the failure of Maker to timely pay the Loan, the outstanding principal
balance of the Loan shall at the option of Holder become immediately due and
payable. Upon and during the continuance of such default, the outstanding
principal balance hereof shall bear interest at eighteen percent (18%) per
annum, and Holder shall also have all other remedies available to it under law
or in equity. Maker does hereby waive presentment and demand for payment, notice
of dishonor, protest and notice of protest and nonpayment and all other notices
of any kind. Maker does hereby waive relief from valuation and appraisement
laws. No release of any security for the Loan or extension of time for payment
of any part thereof, and no alteration, amendment or waiver of any provision of
this Note made by agreement between Holder or any person or party shall release,
modify, amend, waive, extend, change, discharge, terminate, or affect the
liability of Maker. No notice to or demand on Maker shall be deemed to be a
waiver of the obligation of Maker or of the right of Holder to take further
action without further notice or demand as provided for in this Note. Further,
acceptance by Holder of any payment in an amount less than the amount then due
shall be deemed an acceptance on account only, and the failure to pay the entire
amount then due shall be and continue to be a default hereunder.
Borrower may prepay the entire outstanding principal balance of the Loan at
any time, without penalty. In the event it is necessary for Holder to retain an
attorney to collect the Loan (or any part thereof) or to protect or foreclose
the security therefor (regardless of whether a legal action is brought), Holder
shall be entitled, in addition to such other relief as may be granted, to a
reasonable sum for the fees of attorneys for services rendered on its behalf.
This Note shall be governed, construed, applied and enforced in accordance
with the laws of the State of Colorado and shall not be modified except through
written instrument or superseding agreement executed by Maker and Holder, their
successors in interest, or their lawful representatives. Any action or
<PAGE>
proceeding seeking to enforce any provision of this Note shall be brought in the
courts of the State of Colorado and Maker consents to the jurisdiction of such
courts and waives any objection to venue laid therein.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the day and
year first above written.
"MAKER"
/s/ Jerry L. Hellyer, Sr.
----------------------------------------
Jerry L. Hellyer, Sr.
2
Exhibit 10.17
STOCK PLEDGE AGREEMENT
FOR VALUE RECEIVED, Jerry L. Hellyer, St., residing at 10710 Compass Court,
Indianapolis, Indiana 46256 ("Pledgor"), hereby transfers, assigns delivers,
sets over, hypothecates and pledges to Multi-Link Telecommunications, Inc., a
Colorado corporation ("Pledgee"), and grants a security interest to Pledgee in
all of Pledgor's right, title and interest in, to those 150,000 shares of the
capital stock of Pledgee owned by Pledgor and represented by stock certificate
numbers _____ and _____ (the "Pledged Stock"), together with all certificates
representing the Pledged Stock and all cash, securities, dividends, interest and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Stock, and all securities hereafter delivered to Pledgor in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such securities, together with all cash, securities,
interest, dividends and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing, and any and all "proceeds" (as such terms is
defined in Section 9-306 of the Colorado Uniform Commercial Code, as amended
(the "Code")) thereof (all of the foregoing being referred to herein
collectively as the "Collateral"), to secure the performance and payment when
due of all of Pledgor's obligations owing Pledgee under the Promissory Note (the
"Note") of even date herewith in the original principal amount of Three Hundred
Thousand Dollars ($300,000), including, without limitation, all obligations of
Pledgor for the payment of principal and interest on (including, without
limitation, interest accruing after the Maturity Date, as defined in the Note,
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
Pledgor whether a claim for post-filing or post-petition interest is allowed in
such proceeding) the Note and all other obligations and liabilities of Pledgor
to Pledgee, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Note, this Agreement and any other document made,
delivered, or given in connection therewith or herewith (including, without
limitation, a Loan Agreement of even date herewith between the parties hereto)
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all reasonable fees
and disbursements of counsel to Pledgee that are required to be paid by Pledgor
to Pledgee pursuant to the Note, the Loan Agreement or this Agreement) or
otherwise (the "Obligations").
1. Delivery of Share Certificates. Concurrently herewith, and subject to
the terms and conditions of this Agreement, Pledgor shall deliver to Pledgee (a)
the original share certificates or other instruments or documents evidencing the
Pledged Stock, together with appropriate stock powers or other instruments of
assignment endorsed in blank, and (b) an Irrevocable Proxy, duly executed by
Pledgor, with respect to the Pledged Stock in the form attached hereto as
Exhibit A (the "Proxy").
<PAGE>
2. Representations and Warranties. Pledgor represents and warrants to
Pledgee that:
(a) Pledgor has the right to transfer the Pledged Stock to Pledgee as
collateral pursuant to the terms of this Agreement, free of any
encumbrances.
(b) Pledgor owns no securities issued directly or indirectly by Pledgee
excepting only the Pledged Stock;
(c) The pledge of and the grant of the security interest in the
Collateral, as provided for in this Agreement, and the delivery of the
certificates evidencing the Pledged Stock are effective to vest in
Pledgee a valid and perfected first priority security interest,
superior to the rights of any other party, in, to and under the
Collateral as set forth herein;
(d) Pledgor has and will maintain at all times full and absolute title to
and ownership of the Collateral, free of all security interests,
liens, encumbrances, charges, claims of third parties and rights of
set-off or recoupment, excepting only the security interest granted
pursuant to this Agreement, and has good right to pledge the
Collateral and to subject the Collateral to the pledge and security
interest herein granted.
3. Voting. So long as there has occurred no Event of Default (as such term
is hereinafter defined), Pledgor will have the right to exercise all voting
rights with respect to the Pledged Stock, if any. Upon and during the
continuance of an Event of Default, Pledgee may vote the Pledged Stock pursuant
to the Proxy.
4. Stock Dividends. In the event any additional shares are issued to
Pledgor as a stock dividend on any of the Pledged Stock, as a result of any
split of the Pledged Stock by reclassification or otherwise, such additional
shares will be immediately delivered to Pledgee and will be subject to this
Agreement as a part of the Collateral to the same extent as the original
Collateral.
5. Covenants. Pledgor covenants and agrees that from and after the date
hereof and until the Obligations are fully satisfied, or the Collateral is
otherwise released and delivered to Pledgor:
(a) Without the prior written consent of Pledgee, Pledgor will not: (i)
sell, assign, transfer, exchange, convert or otherwise dispose of, or
grant any option with respect to, the Collateral, unless concurrently
therewith the transferee in any such instance acknowledges this pledge
and subjects its interest in the Collateral or in any new or
substitute securities issued in exchange therefor to the interest of
Pledgee created by this Agreement; or (ii) take any other action with
respect to any of the Collateral that would impair the interest or
rights of Pledgee or Pledgor in, to or under any of the Collateral;
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(b) Without the prior written consent of Pledgee, Pledgor will not vote to
enable the Company to, or will not otherwise permit the Company to,
nor shall the Company issue any stock or other securities of any
nature in addition to or in exchange or substitution for the Pledged
Stock;
(c) Without the prior written consent of Pledgee, Pledgor will not create,
incur or permit to exist any lien with respect to any of the
Collateral, or any interest therein, except for the lien provided
under this Agreement, and Pledgor will pay prior to delinquency all
taxes and assessments against any of the Collateral and will take any
and all action necessary to remove any such lien; and
(d) Pledgor will, at Pledgor's expense, duly and promptly execute and
delivery any and all further instruments and documents and take such
further action as Pledgee may deem reasonably necessary to perfect and
continue perfected the lien created by this Agreement, including,
without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code, and Pledgor also hereby
authorizes Pledgee to fileany such financing statement or continuation
statement without the signature of Pledgor to the extent permitted by
applicable law.
6. Pledgee Appointed Attorney-in-Fact. Pledgor hereby appoints Pledgee
Pledgor's attorney-in-fact, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Pledgee's
discretion, reasonably exercised, upon the occurrence of an Event of Default, to
take any action and to execute any instrument which Pledgee reasonably may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to receive, endorse and collect all instruments made payable
to Pledgor representing any dividend or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same. This
appointment is coupled with an interest and shall be irrevocable until payment
in full and performance of the Obligations.
7. Reasonable Care. Pledgee shall be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which Pledgee accords its own
property; it being understood that, so long as Pledgee exercises reasonable care
in the custody of the Pledged Stock as above noted, Pledgee shall not have any
responsibility for: (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not Pledgee has or is deemed to have knowledge of such
matters; (b) taking any necessary steps to preserve rights against any parties
with respect to any Collateral; or (c) failing to perform any act pursuant to a
discretionary power with respect to the Collateral conferred upon Pledgee under
this Agreement.
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8. Private Sales.
(a) Pledgor recognizes that Pledgee may be unable to effect a public sale
of any or all of the Pledged Stock by reason of certain prohibitions
contained in applicable federal and state securities laws or
otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in
a commercially reasonable manner. Pledgee shall be under no obligation
to delay a sale of any of the Pledged Stock for the period of time
necessary to permit Pledgee to register such securities for public
sale under applicable federal or state securities laws, even if
Pledgee would agree to do so.
(b) Any sale by Pledgee of any of the Pledged Stock shall require five (5)
business days' prior notice to Pledgor providing reasonable details
with respect to such sale or, as the case may be, the procedures for
such sale (it being agreed that such notice may run concurrently with
any other notice required by law or hereunder).
(c) Pledgor further agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this
Section 8 valid and binding and in compliance with any and all other
applicable requirements of law.
9. Limitation on Duties Regarding Collateral. Pledgee's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Pledgee deals with similar securities and
property for its own account. Neither Pledgee nor any of its directors, officer,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral upon the request of Pledgor or otherwise.
10. Events of Default/Remedies. Default in the payment when due or
performance of the Obligations, or breach by Pledgor of any covenant, provision
or term of this Agreement shall constitute a breach by Pledgor of, and a default
under, this Agreement ("Event of Default").
Upon the occurrence of an Event of Default, Pledgee may, itself or through
one or more nominees, at its option:
(a) Exercise all rights and remedies of a Pledgee and secured party
allowed by applicable law;
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(b) Cause the Pledged Stock to be registered in the name of Pledgee or its
nominee or cause new certificates evidencing the Pledged Stock to be
issued; and
(c) Exercise all voting and corporate rights at any meeting of Pledgee, or
otherwise, and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to
any Pledged Stock as if it were the absolute owner thereof.
11. Waiver: Amendment. All rights and remedies of Pledgee expressed herein
are in addition to all other rights and remedies possessed by it. No delay on
the part of Pledgee in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy. No action of Pledgee permitted hereunder shall impair or affect the
rights of Pledgee in, to and under the Collateral.
None of the terms or provisions of this Agreement may be waived, altered,
modified or amended except by an instrument in writing, duly executed by
Pledgee.
12. Termination. Upon full satisfaction of the Obligation and the other
obligations of Pledgor hereunder, or on such earlier date that Pledgee
voluntarily releases the Collateral to Pledgor, Pledgee shall promptly cause to
be redelivered to Pledgor certificates representing the Pledged Stock and this
Agreement shall terminate forthwith.
13. Successors and Assigns. This Agreement and all obligations of Pledgor
hereunder shall be binding upon Pledgor and its successors and assigns and shall
inure to the benefit of Pledgee and its successors and assigns.
14. General. This Agreement shall be governed by the laws of the State of
Colorado. Any action or proceeding seeking to enforce any provision of this
Agreement shall be brought in the courts of the State of Colorado and Pledgor
consents to the jurisdiction of such courts and waives any objection to venue
laid therein. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
any such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15. Notice. All notices, requests, consents and other communications
hereunder ("Notice") shall be in writing and shall be deemed to have been given
(a) if mailed, the date of receipt of such Notice when sent via first class
United States registered mail, return receipt requested, postage prepaid to the
address listed below for the party to whom the Notice is being sent ("Notice
Party"); (b) if hand delivered or delivered by courier, upon actual delivery of
such Notice to the Notice Party at the address listed below for such Notice
Party; or (c) if sent by facsimile, on the first business day after the date of
the sender's receipt of a confirmed transmission of such Notice to the Notice
Party at the facsimile number, if any, listed below for such Notice Party
provided the party giving such Notice mails a copy of such Notice within two
days after the transmission of such Notice by facsimile to the Notice Party. The
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<PAGE>
addresses and facsimile numbers for each party to this Agreement, as of the date
hereof, are:
If to Pledgor: Jerry L. Hellyer, Sr.
10710 Compass Court
Indianapolis, Indiana 46256
With a copy to: Sommer & Barnard, PC
Attn: Jerald I. Ancel
4000 Bank One Tower
111 Monument Circle
Indianapolis, Indiana 46204
Facsimile No.: 317/236-9802
If to Pledgee: Multi-Link Telecommunications, Inc.
Attn: Nigel Alexander
4704 Harlan Street
Denver, Colorado 80212
Facsimile No.: 303/313-2001
With a copy to: Otten, Johnson, Robinson, Neff & Ragonetti, PC
Attn: Blair L. Lockwood
950 Seventeenth Street, 16th Floor
Denver, Colorado 80202
Facsimile No.: 303/825-6525
Any party may change its address or facsimile number by providing written
notice, in accordance with the foregoing provisions of this Section 11, to each
other party of such change.
Executed and delivered as of this 17th day of November, 1999.
"PLEDGOR"
/s/ Jerry L. Hellyer, Sr.
-----------------------------------------
Jerry L. Hellyer, Sr.
6
<PAGE>
EXHIBIT A
IRREVOCABLE PROXY
Jerry L. Hellyer, Sr., an Indiana resident ("Hellyer"), the owner of record
of 150,000 shares of the outstanding common stock (the "Shares"), of Multi-Link
Telecommunications, Inc., a Colorado corporation ("Multi-Link"), hereby
constitutes and irrevocably appoints Shawn B. Stickle and Nigel V. Alexander,
and each of them, as his proxies to attend meetings of the shareholders of
Multi-Link that may be held between the date hereof and the date of payment in
full of all obligations of Hellyer to Multi-Link, under the Stock Pledge
Agreement and the Note, as described below, or any continuation or adjournment
thereof, with full power to vote and act for Hellyer (including consent to
action in lieu of a meeting) to the same extent that Shawn B. Stickle and Nigel
V. Alexander were present, giving to Shawn B. Stickle and Nigel V. Alexander,
and each of them, and any substitute, full power of substitution. Multi-Link and
its Secretary shall be entitled to consider this Proxy to be effective upon
receipt of (i) a written statement of any holder of this proxy regarding the
continued effectiveness of this Proxy, notwithstanding any notice from any
person to the contrary and (ii) a written notice that an Event of Default has
occurred and is continuing with respect to the Stock Pledge Agreement and
related Note referred to below.
This Proxy is given by Hellyer in connection with that certain Stock Pledge
Agreement of even date herewith (as hereafter amended, modified or supplemented,
the "Stock Pledge Agreement") and related Note of even date herewith, by and
among Hellyer and Multi- Link and shall be deemed a part of such Stock Pledge
Agreement, which is incorporated herein by this reference. This Proxy is coupled
with an interest, shall be irrevocable, and shall continue in effect so long as
the Stock Pledge Agreement (or any modification or substitution thereof) shall
be in effect. Capitalized terms used herein shall have the meanings ascribed to
them in the Stock Pledge Agreement.
Unless and until an Event of Default shall occur and be continuing, the
rights granted pursuant to this Proxy shall be inchoate and the undersigned
shall have full power to attend meeting and vote the Shares in his discretion.
Any and all proxies previously granted are hereby revoked.
Dated this _____ day of November, 1999.
----------------------------------
Jerry L. Hellyer, Sr.
A-1
Exhibit 99.2
Press Release
MULTI-LINK TELECOMMUNICATIONS COMPLETES ACQUISITION OF
HELLYER COMMUNICATIONS, INC.
Acquisition Triples the Size of Multi-Link and Provides For Expansion into the
Midwestern Region
DENVER, Nov. 22 - Multi-Link Telecommunications, Inc. (Nasdaq: MLNK), a rapidly
expanding provider of integrated voice messaging services for small and medium
sized business, today announced that it has completed the acquisition of
Indianapolis-based, Hellyer Communications, Inc. The combination will triple the
size of Multi-Link Telecommunications, and will provide for expansion into key
Midwestern markets.
Multi-Link acquired substantially all of Hellyer's assets for a combination of
cash, assumption of certain liabilities and common stock valued at $4.2 million.
The purchase price was $1.1 million in cash, the assumption of $2.1 million in
liabilities and $1.0 million in restricted common stock with a two year vesting
schedule.
Hellyer Communications, Inc. has been a provider of business messaging services
since 1969, and has grown its commercial and residential voice messaging
subscriber base very profitably. Currently, it posts over 50,000 subscribers in
Indianapolis, Chicago and Detroit. Like Multi-Link, Hellyer offers its services
on the powerful Glenayre MVP platform, which will allow for the addition of many
advanced, integrated messaging services in the future.
"Since announcing the agreement to acquire Hellyer in September we have become
even more excited about the strategic nature of this acquisition. As well as
bringing us some huge new markets, we believe that the benefits of merging
Multi-Link's business messaging model and Hellyer's residential messaging model
can be dramatic" stated Nigel Alexander, Chief Executive Officer of Multi-Link
Telecommunications, Inc. "Although Hellyer operates Glenayre MVP platforms, they
have barely begun using its 'next generation' messaging capabilities, and we
look forward to bringing advanced services to their customers over the next
year."
Following the acquisition, Christina Neher, formerly Vice President of
Operations at Hellyer, will be named President of the Company. "Chris Neher has
done a tremendous job of building Hellyer over the past decade, and we look
forward to supporting her in the future" said Shawn Stickle, Multi-Link's
President and Chief Operating Officer.
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About Multi-Link Telecommunications, Inc.
Denver-based, Multi-Link Telecommunications, Inc. is a provider of voice and
data messaging services. Multi-Link's services link together local lines, mobile
phones, pagers and home phones to allow subscribers to have only one mailbox for
all voice and fax messages. In addition, Multi-Link's "Constant Touch" service
calls all the subscriber's numbers simultaneously to locate the subscriber when
a call is urgent. Founded in 1996, Multi-Link intends to execute a consolidation
of the fragmented voice messaging services industry across the United States.
Safe Harbor Provisions
Information and statements in this report, other than historical information,
should be considered forward looking and reflect management's current views of
future events and financial performance that involve a number of risks and
uncertainties. Factors that could cause actual results to differ materially
include, but are not limited to: the availability of future acquisitions, the
effects of regional economic and market conditions, increases in marketing and
sales costs, intensity of competition, cost of technology, the availability of
financing, contingencies associated with Year 2000 compliance and the Company's
ability to manage its growth.
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