AGREEMENT TO TERMINATE
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This Agreement to Terminate ("Termination Agreement") dated this 6th day of
November, 2000 by and among PACIFIC TELCOM, INC., an Illinois corporation
("Buyer"), EASYTEL CANADA CORPORATION, ("Buyer"), a corporation organized under
the laws of the Province of Ontario (the "Corporation"), and RICHARD C.
GOLDSTEIN, being the duly appointed Sellers' Representative of the Selling
Shareholders ("Sellers" or "Selling Shareholders").
WITNESSETH
WHEREAS, the Buyer, the Corporation and the Selling Shareholders have
entered into a Stock Purchase Agreement ("Agreement") whereby the Buyer acquired
100% of issued and outstanding shares of common stock of the Corporation;
WHEREAS, the Agreement provides for certain circumstances and events to
occur regarding Buyer's shares of common stock, the non occurrence of which
gives rise to Sellers' right to terminate and unwind the Agreement and its
terms.
WHEREAS, it is mutually acknowledged by the parties that Buyer will be
unable to fulfill said circumstances and events concerning its common shares of
stock, to wit, that the common shares of Pacific TelCom, Inc., will be publicly
tradable on or before November 15, 2000; and
WHEREAS, the parties to the Agreement, pursuant to the exercise option of
the Selling Shareholders to deem the Agreement terminated, do hereby act on
their mutual best interests by the orderly and mutually agreeable termination
and unwinding of said Agreement by the terms of this Termination Agreement as
set forth as follows:
1. Acknowledgment of Rights. The parties acknowledge that it has been the
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duty of the Buyer to complete the process of having its common shares
of stock publicly tradable on or before November 15, 2000. That
pursuant to Section 4.1 of the Agreement regarding Finality, the
Sellers retained the option to terminate the Agreement and to unwind
and undo the subject transaction of the Agreement.
2. Exercise of Option. Buyer and Sellers agree, based upon the terms of
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Section 4.1 of the Agreement, that the exercise of the option of the
Sellers to terminate the Agreement and to undo the subject transaction
is duly made by the Sellers and has been communicated to the Buyer, as
a valid exercise of the option to terminate set forth in the
Agreement.
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3. Terms of Termination.
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3.1 Return of Selling Shareholders Shares. Pursuant to this
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Termination Agreement, the Buyer shall cause the return of the
certificates representing the outstanding common shares purchased
by the Buyer described in Section 3.2 of the Agreement. Buyer
shall direct the Transfer Agent of the Buyer to forward said
shares in a manner consistent with this Termination Agreement.
3.2 Return of Purchase Price.
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3.2.1No Return of Payment of Cash. Pursuant to Section 2.2 of the
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Agreement, Buyer has previously paid to Seller in US
dollars, the sum of One Hundred Thousand Dollars ($100,000).
The parties acknowledge that the entirety of this sum has
been applied to the expenses and costs of the operation of
the Corporation, in the ordinary course of business. Buyer
and Seller agree that there shall be no return of this
portion of the payment pursuant to Section 2.2 and that
Buyer shall have no right to an accounting thereof.
3.2.2Return of Payment of Common Stock. Pursuant to the terms of
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this Termination Agreement, the Selling Shareholders, by the
Sellers' Representative, shall cause the return of the
certificates representing Buyer's payment in common stock of
the Pacific TelCom, Inc., to the Buyer, at the offices of
the Secretary of Buyer. Payment of certificates in the
amount of One Million Shares, shall be duly endorsed by the
respective Selling Shareholder in a form acceptable to the
Buyer.
3.3 Goods and Services Tax Credit. The Buyer shall be eligible
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to recover from the Sellers a pro rata portion of any tax
refund to the Corporation resulting from the Goods and
Services Tax for its fiscal year ending March 31, 2001, if
any.
3.4 Returning of Control Operations. On the Closing Date of this
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Termination Agreement, Buyer shall relinquish all corporate
control of the Corporation and its operations to the
Sellers.
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3.5 Separation of Management. From the Closing Date henceforth,
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all officers and employees of the Corporation shall cease to
be employed in any capacity by the Buyer. Any officer of the
Corporation serving on the Board of Directors of the Buyer
shall execute a resignation effective as of the Closing Date
and Sellers shall deliver such resignations at Closing.
3.6 Resulting Joint Venture. To the extent that Buyer has failed
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to capitalize the installation of telecommunications
switches in four new cities in Canada, no resulting joint
venture shall survive from the Closing of this Termination
Agreement. Sellers shall be entitled to all revenues from
the Corporation's operations from the Closing Date forward.
3.7 Liabilities. From the Closing Date, the Sellers shall be
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solely responsible for the liabilities incurred by the
Corporation.
3.8 Conveyance of Title to Properties. AS of the Closing Date,
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the Buyer hereby reconveys to the Corporation, on behalf of
the Sellers, title to all properties conveyed by the
Agreement.
3.9 Closing. The parties shall meet at 1:00 p.m. on November 6,
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2000 at the offices of the Buyer at Pacific TelCom, Inc.,
Fountain View Business Park, 4270 S. Decatur Blvd., Ste.
A-9, Las Vegas, NV 89103, to conduct the Closing hereunder.
4. Authorizations. All actions undertaken on the part of Buyer, the
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Corporation and the Selling Shareholders to enter into this
Termination Agreement have been duly and fully authorized on the part
of each party.
5. Closing Tax Returns. All federal and Provincial tax returns required
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to be filed as a result of this Termination Agreement shall be done so
by the parties and each shall cooperate to effectuate the same on a
timely basis.
6. Mutual General Release. In consideration of the mutual covenants and
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Agreements made hereunder, Buyer, the Corporation, the Sellers and the
Shareholders' Representative on behalf of the Selling Shareholders,
and each of their shareholders, directors, officers, representatives,
attorneys and employees, past, present and future, individually and
collectively release each and every other party for any and all causes
of actions, claims, demands, and liabilities each party has or now
has, by reason of any matter or cause whatsoever arising from or in
any way connected to the Agreement or this Termination Agreement.
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7. General Provisions.
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7.1 Expenses. Each party hereto shall pay all of their own expenses
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related to the transactions contemplated by this Termination
Agreement, including the fees and expenses of their respective
counsels, accountants, transfer agents and financial advisers.
7.2 Governing Law. The interpretation and construction of this
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Agreement and 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.
7.3 Captions. The article and section captions used herein are for
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reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement.
7.4 Publicity. Prior to the Closing Date, none of the parties hereto
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shall issue any press release or make any other statement to the
press or media relating to the Agreement or the matters contained
therein.
7.5 Notices. All notices, requests, demands and other communications
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required 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 Buyer: Pacific TelCom, Inc.
4270 S. Decatur Blvd., Ste. A-9
Las Vegas, NV 89103
Attention: Bill J. Angelos
With a copy to: Kenneth G. Mason
General Counsel
33 N. LaSalle St., Ste. 2131
Chicago, IL 60602
If to the Sellers to: Richard C. Goldstein
EasyTel Canada
18 King Street East, Ste. 1402
Toronto, Ontario M5C1C4
Canada
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With a copy to: Barry M. Polisuk
Garfinkle, Biderman
1 Adelaide St. East #1401
Toronto, ON M5C2V9
7.6 Entire Agreement. This Agreement contains the entire
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understanding between and among the parties and supersedes any
prior understandings and agreements among them respecting the
subject matter of this Agreement.
7.7 Savings Clause. If any provision of this Agreement, or the
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application 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
on the day and year first written above.
PACIFIC TELCOM, INC. EASYTEL CANADA CORPORATION
an Illinois Corporation an Ontario
Corporation
By:____________________________ By:______________________________
Bill J. Angelos, President Richard C.Goldstein, President
Selling Shareholders
By:____________________________
Richard C. Goldstein
Sellers' Representative
