SALE OF ASSETS AGREEMENT
This Sale of Assets Agreement is entered into this day by and among Axon
Connectivity Technology Inc., a Nevada corporation (hereinafter "Seller" or
"Axon"), and Pacific Telcom, Inc., an Illinois corporation (hereinafter
"Purchaser" or "PacTel").
WHEREAS, the Seller is engaged in the business of Re-Seller of EasyTel services
and products and is the owner of assets including, but not limited to equipment,
telecommunication switches, contract rights, accounts hosted on such switches
leasehold interests and miscellaneous rights used in connection with the
operation of such assets its business; and
WHEREAS, the Purchaser desires to purchase, and the Seller desires to sell the
assets used, or intended to be used, in the operation of the Seller's business
as specifically set forth and described herein.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Assets Purchased.
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The Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase
from the Seller, on the terms and conditions set forth in this Agreement, the
assets set forth as follows ("Assets"):
a. A 6T telecommunication switch located in San Diego, California;
b. A 6T telecommunication switch located in Minneapolis, Minnesota;
c. The rights to the completion of the purchase from EasyTel, or its
affiliate, and installation of a 6T switch in New York, New York;
d. The rights to the completion of the purchase from EasyTel, or its
affiliate, and installation of a 6T switch in Miami, Florida; and
e. Any and all accounts hosted on telecommunications switches in San
Diego, Minneapolis, New York and Miami.
Section 2. Excluded Assets. Excluded from this sale and purchase are the
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Seller's accounts receivable, cash, notes receivable, prepaid accounts, the
corporate seals, minute books, stock transfer books, general ledger and other
accounting records (except as otherwise provided herein), other records related
exclusively to the organization, existence or share capitalization of the
Seller, its affiliates, subsidiaries, and any other assets of the business not
specified in Section 1. The Seller shall make its general ledger and other
accounting records available for inspection by the Purchaser from time to time
upon reasonable request, as they relate to the Assets.
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Section 3. Liabilities Assumed.
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3.1 Except as otherwise provided below, the Purchaser agrees to assume and
pay, discharge or perform, as appropriate, only the liabilities and obligations
of the Seller ("Assumed Liabilities") specifically set forth as follows:
a. The balance of the payment of the T6 switch in New York, New York to
EasyTel;
b. The balance of the payment of the T6 switch in Miami, Florida to
EasyTel; and
c. Dial tone charges and/or other expenses accrued as a result of the use
of the Assets to EasyTel, only from the date of Closing, forward.
3.2 Notwithstanding Section 3.1, the Purchaser shall not assume, agree to
pay, discharge or perform, or incur, as the case may be, any of the following
liabilities:
3.2.1 liabilities (including principal and interest) arising out of loans
and other indebtedness owing to any person or entity, excluding only the Assumed
Liabilities;
3.2.2 liabilities of the Seller not arising in the ordinary course of its
business incurred or accrued prior to the Closing, unless an Assumed Liability;
and
3.2.3 any liability or obligation owed by the Seller and/or arising out of
or in connection with the Assets to EasyTel, or any other party, accrued prior
to the Closing Date.
3.3 The obligations of the Purchaser under this Section are subject to
whatever rights the Purchaser may have under this Agreement or otherwise for
breach by the Seller of any representation, warranty, covenant or agreement
contained in this Agreement, including but not limited to any right of
indemnification provided by this Agreement.
Section 4. Purchase Price. The total aggregate purchase price for the
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Assets is Nine Hundred Sixty-Four Thousand Eighty Dollars ($964,080). The
Purchase price shall be allocated as follows.
4.1 Payments of Cash. Purchaser shall pay Four Hundred Eighty-Two Thousand
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Forty Dollars ($482,040) to be paid to the Seller by Purchaser. The purchase
price after the Initial Closing Date of $482,040 shall be payable by the
Purchaser to the Seller in twelve (12) equal installments of $40,170.00, the
first such installment to be due and payable on November 1, 2000 and once per
month thereafter until fully paid. This obligation shall be represented by an
Installment Note in substantially the form set forth on Exhibit "A" hereto
("Note"), to be made and delivered by the Purchaser to the Seller with 30 days
of the Initial Closing Date.
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4.2 Payment in Common Stock.
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Delivery shall be made by the Purchaser to the Seller with 30 days of the
Initial Closing Date of 192,816 shares of Pacific Telcom, Inc. common stock
which has been duly authorized by the Purchaser. Of the payment in common
stock, Seller agrees that 96,408 shares of Pacific Telcom, Inc. stock will bear
a legend restricting the transferability of such shares for a time period of one
year from the Initial Closing Date. The remaining balance of 96,408 common
shares of Pacific Telcom, Inc. stock will bear a legend restricting the
transferability of such shares for a time period of two years from the Initial
Closing Date. Notwithstanding, Purchaser will permit Seller, by a way of a
written instruction by Purchaser to the public transfer agent of the Purchaser,
the Illinois Stock Transfer Company, to convey all of the shares of Pacific
Telcom, Inc. common stock comprising the payment in common stock to its
shareholders, creditors, or designees. Each of the shares comprising the
payment in common stock of 192,816 shares of Pacific Telcom, Inc. may only be
transferred a single time within 30 days of the Initial Closing Date, as an
exception to the restriction from transferability of the shares representing
payment in common stock. Purchaser shall assist such single transfer by
directing its general counsel to forward a Letter of Opinion to the public
transfer agent of the Purchaser permitting such single transfer of the shares
representing the payment in common stock to Seller.
Section 5. Payment of Purchase Price. The purchase price for the Assets
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shall be paid as set forth in Section 4, unless said terms are modified in a
writing mutually agreed to by the parties.
Section 6. Adjustments. The operation of the assets as part of the Seller's
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business and related income, liabilities and expenses up to the close of
business on the day before the Closing Date shall be for the account of the
Seller and only thereafter for the account of the Purchaser.
Section 7. Use of Names. The Seller agrees that after the Closing, Seller
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shall no longer utilize the name of Seller in any manner whatsoever in
conjunction with, the operation of or the maintenance of the Assets or with any
account hosted on the Assets.
Section 8. Other Agreements. At Closing, the parties shall execute the
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following additional agreements:
<PAGE>
8.1 Assignment. Within 30 days of the Initial Closing Date, the Seller shall
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execute an Assignment substantially in the form set forth on Exhibit B regarding
all equipment, 6T switches regarding the Assets as more fully described in
Section 1.
Section 9. Agreements Concerning Assets. After Closing and until the Note
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is paid in full, the Purchaser covenants and agrees as follows:
9.1 Purchaser's Operation of the Business. The Purchaser will maintain and
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operate the Assets acquired from the Seller pursuant to this Agreement in a
comparable manner to the manner in which it was operated before the Initial
Closing Date and shall operate such business on a continuous and regular basis
in accordance with all local, state, federal and other laws and regulations
governing the conduct of the business. This provision, however, shall not be
construed to preclude the Purchaser from interrupting the operation of the
business temporarily for a reasonable time for the purpose of making repairs,
remodeling or constructing improvements, or because of any emergency or
conditions reasonably beyond the Purchaser's control and reasonably requiring
temporary cessation of operation of the business.
9.2 Maintenance of Equipment. The Purchaser will maintain the Assets in good
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condition and repair, reasonable wear and tear expected.
9.3 Taxes. Except for amounts being contested in good faith, the Purchaser
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will pay, before delinquency, all taxes, license fees and assessments relative
to the Assets or its use and shall pay any and all other taxes, liens,
assessments and charges relative to the Purchaser's conduct of the business,
accrued from the Closing Date forward.
Section 10. Closing and Initial Closing Date.
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10.1 Time and Place. The closing of the sale and purchase of the Assets shall
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take place on September 16, 2000 ("Closing Date" or "Initial Closing Date"), at
a time and place to be determined by the parties. If Closing has not occurred
on or prior to November 30, 2000, then any party may elect to terminate this
Agreement. If, however, the Closing has not occurred because of a breach of
contract by one or more parties, the breaching party or parties shall remain
liable for breach of contract.
10.2 Obligations of Seller at the Closing. Within 30 days of the Initial
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Closing Date, Seller shall deliver to the Purchaser the following:
10.2.1 one or more bills of sale from the Seller conveying all of the Assets
to the Purchaser, in the form as set forth in Exhibit C;
<PAGE>
10.2.2 a copy of the resolutions of the Seller's board of directors and
shareholders, authorizing the execution, delivery and performance of this
Agreement and any other agreement to be entered into by the Seller in connection
herewith, and the transactions contemplated hereby;
10.2.3 within 30 days of the Initial Closing Date all necessary consents of
third parties, including without limitation, EasyTel, InfoUSA, MCI, and AT&T to
be assigned to and/or assumed by the Purchaser hereunder;
10.2.4 such other assignments, bills of sale, instruments of conveyance,
certificates of officers and other documents as reasonably may be requested by
the Purchaser prior to the Closing to consummate this Agreement and the
transactions contemplated hereby.
10.3 Obligations of Purchaser at the Closing. At the Closing, the Purchaser
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shall execute, or cause to be executed, and shall deliver to the Seller the
following:
10.3.1 the Note;
10.3.2 the Common Shares;
10.3.3 such certificates of officers and other documents as reasonably may
be requested by the Seller prior to the Closing to consummate this Agreement and
the transactions contemplated hereby.
Section 11. Seller Obligation Prior to Closing.
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11.1 Seller's Operation of Business Prior to Closing. The Seller agrees that
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between the date of this Agreement and the Closing Date, the Seller will:
11.1.1 Continue to operate the Assets that are the subject of this Agreement in
the usual and ordinary course and in substantial conformity with all applicable
laws, ordinances, regulations, rules or orders, and will use its best efforts to
preserve the Assets organization and preserve the continued operation of the
Assets with its customers, suppliers and others having business relations with
the Seller.
11.1.2 Not assign, sell, lease or otherwise transfer or dispose of any of the
Assets.
11.1.3 Maintain all the Assets in their present condition, reasonable wear
and tear and ordinary usage excepted.
<PAGE>
11.2 Access to Premises and Information. At reasonable times prior to the
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Initial Closing Date, the Seller will provide the Purchaser and its
representatives with reasonable access during business hours to the assets,
titles, contracts and records of the Seller and furnish such additional
information concerning the Seller's Assets as the Purchaser from time to time
may reasonably request.
11.3 Conditions and Best Efforts. The Seller will use its best efforts to
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effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the obligations of the Seller under this Agreement, and will
do all acts and things as may be required to carry out its respective
obligations under this Agreement and to consummate and complete this Agreement.
Section 12. Covenants of Purchaser Prior to Closing.
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12.1 Conditions and Best Efforts. The Purchaser will use its best efforts to
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effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the Purchaser's obligations under this Agreement, and shall do
all acts and things as may be required to carry out the Purchaser's obligations
and to consummate this Agreement.
Section 13. Seller's Representations and Warranties. The Seller represents
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and warrants to the Purchaser as follows:
13.1 Corporate Existence. The Seller is now, and on the Initial Closing Date
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will be, a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada has all requisite corporate power and
authority to own and convey its properties and assets and carry on its business
and is good standing in each jurisdiction in which such qualification is
required.
13.2 Corporation Power and Authorization. The Seller has full corporate
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authority to execute and deliver this Agreement and any other agreement to be
executed and delivered by the Seller in connection herewith, and to carry out
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate and shareholder action. No other
corporate proceedings by the Seller will be necessary to authorize this
Agreement or the carrying out of the transactions contemplated hereby. This
Agreement constitutes a valid and binding Agreement of the Seller in accordance
with its terms.
13.3 Conflict with Other Agreements, Consents and Approvals. With respect to
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(i) the articles of incorporation or bylaws of the Seller, (ii) any applicable
law, statute, rule or regulation, (iii) any contract to which the Seller is a
party or may be bound, or (iv) any judgment, order, injunction, decree or ruling
of any court or governmental authority to which the Seller is a party or
subject, the execution and delivery by the Seller of this Agreement and any
other agreement to be executed and delivered by the Seller in connection
herewith and the consummation of the transactions contemplated hereby will not
<PAGE>
(a) result in any violation, conflict or default, or give to others any interest
or rights, including rights of termination, cancellation or acceleration, (b)
require any authorization, consent, approval, exemption or other action by any
court or administrative or governmental body which has not been obtained, or any
notice to or filing with any court or administrative or governmental body which
has not been given or done, or (c) require the consent of any third party.
13.4 Compliance with Law. The Seller's use of the Assets, wherever located,
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has been in compliance with all applicable federal, state, local or other
governmental laws or ordinances, the non-compliance with which, or the violation
of which, might have a material adverse affect on the Assets, the Assumed
Liabilities or the financial condition, results of operations or anticipated
business prospects of the Purchaser, and the Seller has received no claim or
notice of violation with respect thereto. Without in any way limiting the
generality of the foregoing, the Seller is in compliance with, and is subject to
no liabilities under, any and all applicable laws, governmental rules,
ordinances, regulations and orders pertaining to the presence, management,
release, discharge or disposal of toxic or hazardous waste material or
substances, pollutants (including conventional pollutants) and contaminants.
The Seller has obtained all material permits, licenses, franchises and other
authorizations necessary for the conduct of its business.
13.5 Title to Assets. Seller holds good and marketable title to the Assets,
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free and clear of restrictions on or conditions to transfer or assignment, and
free and clear of liens, pledges, charges or encumbrances.
13.6 Property Rights. Except, in each case, as set forth herein:
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13.6.1 The Seller owns, possesses or has the right to use all intellectual
property rights necessary or required to conduct its business as presently
conducted, or otherwise used by the Seller;
13.6.2 no royalties or other amounts are payable by the Seller to other
persons by reason of the ownership or the use of the any intellectual property
owned or used by the Seller;
13.6.3 The Seller is not a party to, or subject to, any contract which
currently requires, or upon the passage of time or occurrence of an event or
contingency (whether of default or otherwise) will require, the conveyance or
disclosure of secret processes or formulae related to, any intellectual property
of the Seller;
<PAGE>
13.6.4 All 6T hardware and software included among the Assets and currently
used and/or necessary to the conduct of the Seller's business, are in good
working order;
13.6.5 The Seller has obtained and delivered to the Purchaser all consents and
approvals of third parties necessary to duly transfer to the Purchaser all of
the Seller's rights, title and interest in and to all of its intellectual
property included among the Assets.
13.7 Litigation. The Seller has no knowledge of any claim, litigation,
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proceeding or investigation pending or threatened against the Seller that might
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directly result in any material adverse change in the Assets or condition of
Assets being conveyed under this Agreement, except as threatened by Michael
Murphy.
13.8 Accuracy of Representations and Warranties. None of the representations
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or warranties of the Seller contain or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make statements in this Agreement not misleading. The Seller knows of
no fact that has resulted, or that in the reasonable judgment of the Seller will
result in a material change in the business, operations or assets of the Seller
that has not been set forth in this Agreement or otherwise disclosed to the
Purchaser.
Section 14. Representations of Purchaser. The Purchaser represents and
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warrants as follows:
14.1 Corporate Existence. The Purchaser is now, and on the Closing Date will
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be, a corporation duly organized, validly existing and in good standing under
the laws of the State of Illinois, has all requisite corporate power and
authority to enter into this Agreement and perform its obligations hereunder.
14.2 Authorization. The Purchaser has full corporate authority to execute and
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deliver this Agreement and any other agreement to be executed and delivered by
the Purchaser in connection herewith, and to carry out the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate and shareholder action. No other corporate
proceedings by the Purchaser will be necessary to authorize this Agreement or
the carrying out of the transactions contemplated hereby. This Agreement
constitutes a valid and binding Agreement of the Seller in accordance with their
terms.
<PAGE>
14.3 Conflict with Other Agreements, Consents and Approvals. With respect to
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(i) the articles of incorporation or bylaws of the Purchaser, (ii) any
applicable law, statute, rule or regulation, (iii) any contract to which the
Purchaser is a party or may be bound, or (iv) any judgment, order, injunction,
decree or ruling of any court or governmental authority to which the Purchaser
is a party or subject, the execution and delivery by the Purchaser of this
Agreement and any other agreement to be executed and delivered by the Purchaser
in connection herewith and the consummation of the transactions contemplated
hereby will not (a) result in any violation, conflict or default, or give to
others any interest or rights, including rights of termination, cancellation or
acceleration, or (b) require any authorization, consent, approval, exemption or
other action by any court or administrative or governmental body which has not
been obtained, or any notice to or filing with any court or administrative or
governmental body which has not been given or done.
14.4 Brokerage. The Purchaser has not employed any broker, finder or similar
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agent in connection with the transactions contemplated by this Agreement, or
taken action that would give rise to a valid claim against any party for a
brokerage commission, finder's fee or similar compensation.
14.5 Accuracy of Representations and Warranties. None of the representations
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or warranties of the Purchaser contain or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make the statements contained herein not misleading.
Section 15. Conditions Precedent to Purchaser's Obligations. The obligation
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of the Purchaser to purchase the Assets is subject to the fulfillment, prior to
or at the Closing Date, of each of the following conditions, any one or portion
of which may be waived in writing by the Purchaser:
15.1 Representations, Warranties and Covenants of Seller. The representations
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and warranties of the Seller contained herein and the information contained in
the Exhibits and any other documents delivered by the Seller in connection with
this Agreement shall be true and correct in all material respects at the
Closing; and the Seller shall have performed all obligations and complied with
all agreements, undertakings, covenants and conditions required by this
Agreement to be performed or complied with by it or prior to the Closing.
15.2 Conditions of the Business. There shall have been no material adverse
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change in the manner of operation or condition of the Seller's Assets prior to
the Closing Date.
15.3 No Suits or Actions. At the Closing Date no suit, action or other
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proceeding shall have been threatened or instituted to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the contemplated
transactions.
<PAGE>
Section 16. Conditions Precedent to Obligations of the Seller. The
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obligations of the Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the Closing Date, of
each of the following conditions, any one or a portion of which may be waived in
writing by the Seller;
16.1 Representations, Warranties and Covenants of Purchaser. All
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representations and warranties made in this Agreement by the Purchaser shall be
true as of the Closing Date as fully as though such representations and
warranties had been made on and as of the Closing Date, and the Purchaser shall
not have violated or shall not have failed to perform in accordance with any
covenant contained in this Agreement.
Section 17. Transaction Deemed Closed. It is acknowledged by the Purchaser and
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the Seller that at the Initial Closing Date, each party shall have an
affirmative duty to deliver documents as set forth more fully in Section 8,
Section 10.2, and Section 10.3. Purchaser shall further have a duty to make
payment in common stock to the Seller subsequent to the Initial Closing Date.
Pursuant to this Section 17, the transaction set forth in this Agreement shall
be deemed closed on the Initial Closing Date. Each party shall execute such
Agreements, deliver such documents and make such payments in stock as otherwise
required under this Agreement within 30 days from the Initial Closing Date as
part of the Closing herein.
Section 18. Risk of Loss. The risk of loss, damage or destruction to any
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of the equipment, inventory or other personal property to be conveyed to the
Purchaser under this Agreement shall be borne by the Seller to the time of
Closing. In the event of such loss, damage or destruction, the Seller, to the
extent reasonable, shall replace the lost property or repair or cause to repair
the damaged property to its condition prior to the damage. If replacement,
repairs or restorations are not completed prior to Closing, then the purchase
price shall be adjusted by an amount agreed upon by the Purchaser and the Seller
that will be required to complete the replacement, repair or restoration
following Closing. If the Purchaser and the Seller are unable to agree, then
the Purchaser, at its sole option and notwithstanding any other provision of
this Agreement, upon notice to the Seller, may rescind this Agreement and
declare it to be of no further force and effect, in which event there shall be
no Closing of this Agreement and all the terms and provisions of this Agreement
shall be deemed null and void. If, prior to Closing, any of the real properties
that are the subject of the leases to be assumed by the Purchaser are materially
damaged or destroyed, then the Purchaser may rescind this Agreement in the
manner provided above unless arrangements for repair satisfactory to all parties
involved are made prior to Closing.
<PAGE>
Section 19. Indemnification and Survival.
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19.1 Survival of Representations and Warranties. All representations and
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warranties made in this Agreement shall survive the Closing of this Agreement,
except that any party to whom a representation or warranty has been made in this
Agreement shall be deemed to have waived any misrepresentation or breach of
representation or warranty of which such party had knowledge prior to Closing.
Any party learning of a misrepresentation or breach of representation or
warranty under this Agreement shall immediately give written notice thereof to
all other parties to this Agreement. The representations and warranties in this
Agreement shall terminate two years from the Closing Date, and such
representations or warranties shall thereafter be without force or effect,
except any claim with respect to which notice has been given to the party to be
charged prior to such expiration date.
19.2 Seller's Indemnification.
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19.2.1 The Seller hereby agrees to indemnify and hold the Purchaser, it
successors and assigns harmless from and against:
19.2.2 (i) Any and all damages, losses, claims, liabilities, deficiencies and
obligations of every kind and description, contingent or otherwise, arising out
of or related to the operation of the Seller's business prior to the close of
business on the day before the Closing Date, (ii) any liability or obligation of
the Seller which is not an Assumed Liability, (iii) any and all damage or
deficiency resulting from any material misrepresentation, breach of warranty or
covenant, or nonfulfillment of any agreement on the part of the Seller under
this Agreement, and (iv) any and all actions, suits, claims, proceedings,
investigation, audits, demands, assessments, fines, judgments, costs and other
expenses (including, without limitation, reasonable audit and attorneys fees)
incident to any of the foregoing.
19.2.3 The Seller's indemnity obligations under Section 19.2 shall be subject
to the following:
(i) If any claim is asserted against the Purchaser that would give rise to a
claim by the Purchaser against the Seller for indemnification under the
provisions of this Section, then the Purchaser shall promptly give written
notice to the Seller concerning such claim and the Seller shall, at no expense
to the Purchaser, defend the claim.
(ii) The Seller shall not be required to indemnify the Purchaser for an amount
that exceeds the total purchase price paid by the Purchaser under this
Agreement.
<PAGE>
19.3 Purchaser's Indemnification. The Purchaser agrees to defend, indemnify,
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and hold harmless the Seller from and against (i) any and all claims,
liabilities and obligations of every kind and description arising out of or
related to the operation of the business following Closing, or arising out of
the Purchaser's failure to perform obligations of the Seller expressly assumed
by the Purchaser pursuant to this Agreement; (ii) after the Closing, any
liability or obligation of the Seller which is an Assumed Liability, (iii) any
and all damage or deficiency resulting from any material misrepresentation,
breach of warranty or covenant, or nonfulfillment of any agreement on the part
of the Purchaser under this Agreement, and (iv) any and all actions, suits,
claims, proceedings, investigation, audits, demands, assessments, fines,
judgments, costs and other expenses (including, without limitation, reasonable
audit and attorneys fees) incident to any of the foregoing.
Section 20. Default.
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20.1 Remedies. If the Purchaser fails to perform any of the terms, covenants,
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conditions or obligations of this Agreement or the Note, time of payment and
performance being of the essence, then the Seller, subject to the requirements
of the notice provided in this Section, may have any or all of the following
remedies:
20.1.1 The right to declare the full unpaid balance of the Note immediately due
and payable.
20.1.2 The right to exercise each and all of the remedies granted to the Seller
by the Illinois Uniform Commercial Code.
20.1.3 The right to exercise any other remedy available in law or equity to the
Seller.
20.2 Notice of Default. The Purchaser shall not be deemed in default for
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failure to perform the terms, covenants and conditions of this Agreement, other
than failure to make payments on the Note, until notice of the default has been
given to the Purchaser and the Purchaser has failed to remedy the default within
45 days after the notice. If the Purchaser fails to make any payment within
thirty days of the date the same becomes due under the Note, the Purchaser shall
be deemed in default and the Seller shall not be obligated to give notice to the
Purchaser of a declaration of default.
Section 21. Bulk Transfers. The Purchaser waives compliance by the Seller
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with the relevant Bulk Transfers Article of the Uniform Commercial Code, and any
other similar laws in any applicable jurisdiction (collectively "Bulk Transfers
Law") in respect to the transactions contemplated by this Agreement. The Seller
shall indemnify the Purchaser from, and hold it harmless against, any
liabilities, damages, costs and expenses resulting from or arising out of (i)
the parties' failure to comply with any Bulk Transfers Law with respect to the
transactions contemplated by this Agreement, or (ii) any action brought or levy
<PAGE>
made as a result thereof, except for the Assumed Liabilities. If the Seller
fails to comply with the provisions of this Section and the Purchaser is
required to pay any creditor of the Seller in order to protect the property
purchased under this Agreement from claims or liens of the Seller's creditors,
except those assumed by the Purchaser, then the Purchaser may offset the amount
it pays against the balance due the Seller on the Note by furnishing to the
Seller proof of such payment in the form of a receipt from the creditor
involved.
Section 22. Miscellaneous Provisions.
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22.1 Amendment and modification. Subject to applicable law, this Agreement may
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be amended, modified or supplemented, as the parties mutually agree, by a
written Agreement signed by a duly appointed representative of the Purchaser and
Seller.
22.2 Expenses. The parties hereto shall pay all of their own expenses relating
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to the transactions contemplated by this Agreement, including the fees and
expenses of their respective counsel, accountants, and financial advisers.
22.3 Governing Law. The interpretation and construction of this Agreement and
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all matters relating hereto shall be governed by the laws of the State of
Illinois relating to contracts made and to be performed in Illinois.
22.4 Waiver of Terms. Any of the terms or conditions of this Agreement may be
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waived at any time by the party or parties entitled to the benefits thereof, but
only by a written notice signed by an authorized representative of the party or
parties waiving such terms or conditions.
22.5 Captions. The article and section captions used herein are for reference
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purposes only, and shall not in any way affect the meaning or interpretation of
this Agreement.
22.6 Publicity. Prior to the Initial Closing Date, none of the parties hereto
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shall issue any press release or make any other statement to the media relating
to this Agreement or the matters contained herein without obtaining the prior
approval of the Buyer.
22.7 Notices. All notices, requests, demands and other communications required
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or permitted hereunder will be in writing and will be deemed to have been duly
given when delivered by hand or by air express courier.
If to the Purchaser: Pacific Telcom, Inc.
Fountain View Business Park
4270 S. Decatur Blvd., Ste. A-9
Las Vegas, NV 89103
Attention: Bill J. Angelos, President
With a copy to: Kenneth G. Mason, General Counsel
33 N. LaSalle St., Ste. 2131
Chicago, IL 60602
If to the Sellers to: Asher Milgrom, President
Axon Connectivity Technology, Inc.
22 Miners Trail
Irvine, CA 92620
With a copy to: Lon Stephens
Stephens & Kray
5000 Birch St., Ste. 410
Newport Beach, CA 92660
22.8 Entire Agreement. This Agreement contains the entire understanding
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between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
22.9 Agreement Binding. This Agreement shall be binding upon the heirs,
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executors, administrators, successors and assigns of the parties hereto.
22.10 Pronouns and Plurals. All pronouns and any variations thereof shall be
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deemed to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or persons may require.
22.11 Presumption. This Agreement or any section thereof shall not be
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construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
22.12 Further Action. The parties hereto shall execute and deliver all
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documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
<PAGE>
22.13 Parties in Interest. Nothing herein shall be construed to be to the
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benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
22.14 Savings Clause. If any provision of this Agreement, or the application
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of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
this 2nd day of October, 2000.
PACIFIC TELCOM, INC. AXON CONNECTIVITY
an Illinois Corporation TECHNOLOGY, INC., a
Nevada Corporation
By:____________________________ By:____________________________
Bill J. Angelos, President Asher Milgrom, President
<PAGE>
