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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
October 31, 1995
Date of Report (date of earliest event reported)
NETWORK LONG DISTANCE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-23172 72-1122018
(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
525 Florida Street
Baton Rouge, Louisiana 70801
(Address of Principal Executive Offices
Including Zip Code)
(504) 343-3125
(Registrant's telephone number,
including area code)
Page 1 of 5.
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Item 1. CHANGES IN CONTROL OF REGISTRANT
N/A
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 31, 1995, the Registrant acquired all or
substantially all of the assets of Value Tel, Inc. of
Naperville, Illinois ("Value Tel"). These assets consist
of certain of Value Tel's long distance customer accounts
and associated accounts receivable as of October 31,
1995. The customer accounts which were purchased include
retail customer contracts, applications for service,
applications for credit, customer lists, databases,
mailing lists and billing information.
The Registrant purchased the Value Tel assets for
1,085,000. The purchase price was valued at approximately
$12,000,000. The purchase price was based upon a
multiple of the dollar amount of Value Tel's monthly
revenue and accounts receivable subject to future
adjustments for variations in Value Tel's billings over
the next six (6) months. Certain Registrant's shares
issued to Value Tel will be held in escrow subject to the
future adjustments based on a customer evaluation at the
end of the valuation period. The purchase price is
approximately equal to the market price of the shares as
shown on NASDAQ on the day prior to the Closing.
Value Tel and certain of its Officers and Directors
executed five (5) year non-competition agreements with
the Registrant and a six month service agreement subject
to month to month extensions to provide billing/customer
services and use of the Value Tel name.
Registrant believes the acquisition of the Value Tel
assets to be beneficial as it will allow for the
consolidation and reduction in overhead costs while
increasing overall revenues from operations. Registrant
also believes the acquisition will enhance its corporate
image in an area of the country in which it has had
limited operations and may provide additional acquisition
opportunities.
There exists no material relationship between the
Registrant, its officers and directors and Value Tel and
its officers, directors or affiliates. The restricted
common stock used by the Registrant to purchase the
assets of Value Tel were from the Registrant s authorized
but unissued common stock.
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Item 3. BANKRUPTCY OR RECEIVERSHIP
N/A
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
N/A
Item 5. OTHER EVENTS
N/A
Item 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
N/A
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) The pro forma financial information
required by this Item will be filed as an
amendment to this Report not later than
sixty (60) days from the date of this
Report.
(c) Exhibits: Filed herewith pursuant to Reg.
S-K Item 601
EXHIBIT NO. PAGE DESCRIPTION
- ----------- ---- -----------
1 5 Asset Purchase Agreement between the
Registrant and Value Tel, Inc. dated
October 31, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETWORK LONG DISTANCE, INC.
Dated: November 13, 1995 By: /s/ MARC I. BECKER
----------------------------------
Marc I. Becker,
Executive Vice President
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EXHIBIT 1
ASSET
PURCHASE
TRANSACTION
BETWEEN
NETWORK LONG DISTANCE, INC.
AND
VALUE TEL, INC.
DATED
OCTOBER 31, 1995
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TABLE OF CONTENTS
1. Asset Purchase Agreement
2. Schedule 1.1: "The Assets"
3. Schedule 2.3(b)(i): "Qualified Customer Accounts"
4. Schedule 2.3(b)(viii): "Accounts Receivable"
5. Schedule 2.4: Allocation of Purchase Price
6. Schedule 2.5: Liabilities and Obligations Assumed by Purchaser
7. Schedule 3.5: Liens and Encumbrances
8. Schedule 3.6: Material Contracts
9. Schedule 3.8(a): Actions, Suits, Proceedings, etc.
10. Schedule 3.8(c): Licenses, Permits, etc.
11. Exhibit 6.1 Service Agreement
12. Exhibit 11.12(b): Lock-Up Agreement
13. Bill of Sale
14. Master Letter of Agency
15. Deller Noncompete
16. Waterloo Noncompete
17. T. Sledz Noncompete
18. B. Sledz Noncompete
20. Wiltel - Network - Value Tel Tri-Party Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 31st day of October, 1995 between Network Long Distance, Inc., a
Delaware corporation ("PURCHASER"), and Value Tel, Inc., a Delaware
corporation ("SELLER").
WHEREAS, Seller conducts business as a reseller of long distance
telecommunications services and has established retail end user customer
bases in various states in the United States; and
WHEREAS, Purchaser desires to purchase selected assets of Seller on the
terms and subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants, representations and warranties herein contained, it is
hereby agreed as follows:
1. SALE AND TRANSFER OF ASSETS
1.1 ASSETS TO BE SOLD
Subject to the terms and conditions set forth in this Agreement,
Seller agrees to sell, convey, transfer, assign and deliver to Purchaser, and
Purchaser agrees to purchase from Seller, all or substantially all of
Seller's assets (ALL OF WHICH ARE SOMETIMES COLLECTIVELY REFERRED TO AS THE
"ASSETS" AND ALL OF WHICH ARE LISTED, BY TYPE OF ASSET, IN SCHEDULE 1.1
HERETO), as follows:
(a) All Qualified Customer Accounts (as such term is defined
below), including all customer lists, mailing lists, books, records, files,
data, letters of agency and similar items related to the Qualified Customer
Accounts;
(b) All accounts receivable associated with and derived from the
Qualified Customer Accounts and other mutually agreed to accounts receivable;
(c) All of Seller's rights under any agreements, application
forms, term contracts, letters of agency and all other contractual
instruments related to the Qualified Customer Accounts (COLLECTIVELY, THE
"CUSTOMER CONTRACTS"), including but not limited to Seller's right to assert
claims and take other rightful actions in respect of breaches, defaults and
other violations of such Customer Contracts;
(d) All customer and other deposits held or made by Seller related
to the Qualified Customer Accounts; and
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(e) All dialers, T-1's and other equipment currently used by or
for the customers relative to the Qualified Customer Accounts.
1.2 ASSETS RETAINED BY SELLER
All assets of Seller not listed in Schedule 1.1 are being retained
by Seller (and are hereby excluded from the Assets described in Section 1.1).
2. THE CLOSING
2.1 PLACE AND DATE
The closing of the purchase and sale of the Assets (the "Closing")
shall take place at the offices of Purchaser, 525 Florida Street, Baton
Rouge, Louisiana, 70801, at or before 10:00 a.m., local time, on or before
November 1, 1995, provided that the conditions set forth in Section 7 hereof
have been satisfied. The date of the Closing is herein referred to as the
"CLOSING DATE."
2.2 TRANSFER OF ASSETS
(a) At the Closing and subject to the terms and conditions of this
Agreement, Seller shall deliver to Purchaser the following, and
simultaneously with such delivery, Seller shall take such action as may be
necessary or reasonably requested by Purchaser to place Purchaser in
possession and control of the Assets:
(i) Such bills of sale, assignments, novation agreements,
master letters of agency or other instruments of transfer and assignment as
shall be necessary to vest in Purchaser title to the Assets sold and assigned
under this Agreement, free and clear of all liens, claims and encumbrances;
(ii) Copies of resolutions of the Board of Directors of Seller
authorizing the execution, delivery and performance of this Agreement by
Seller and a certificate of Seller's secretary, dated the Closing Date, that
such resolutions were duly adopted and are in full force and effect;
(iii) A current list of the Qualified Customer Accounts to
be transferred with an accounts receivable aging report for such Qualified
Customer Accounts;
(iv) Such other certificates or other documents or instruments
as the Purchaser or Purchaser's counsel may reasonably request.
(b) At the Closing, as a condition to Seller's obligations under
this Agreement, Purchaser shall deliver to Seller the following:
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(i) All instruments as may be reasonably necessary by which
Purchaser assumes the obligations and liabilities to be assumed by it
hereunder;
(ii) Copies of resolutions of the Board of Directors of
Purchaser authorizing the execution, delivery and performance of this
Agreement by Purchaser and a certificate of Purchaser's secretary, dated the
Closing Date, that such resolutions were duly adopted and are in full force
and effect; and
(iii) Such other certificates or other documents or
instruments as Seller or Seller's counsel may reasonably request.
2.3 PURCHASE PRICE; ADJUSTMENTS; PAYMENT OF THE PURCHASE PRICE
(a) In full consideration for the Assets to be transferred to
Purchaser, Purchaser shall pay to Seller a combination of consideration (THE
"PURCHASE PRICE") equal to the total of the Customer Base Purchase Price plus
the Accounts Receivable Purchase Price (as such terms are defined below).
(B) DEFINITIONS:
(i) "QUALIFIED CUSTOMER ACCOUNT" shall mean any end user long
distance telecommunications customer account of Seller which: (1) is not
affiliated with Seller in any way; (2) is not comprised, in whole or in part,
of any outstanding balance(s) which is/are more than sixty (60) days past due
as of the Closing Date (unless mutually agreed to by the parties); and (3) is
listed in SCHEDULE 2.3(b)(i) hereto (which schedule shall be updated as of
the Closing Date).
(ii) "MEASUREMENT PERIOD" shall mean the period commencing
September 1, 1995 and ending October 15, 1995 (THE "MEASUREMENT PERIOD").
(iii) "AVERAGE WEEKDAY NET REVENUE" shall mean the average
daily gross toll usage and pro rata monthly fees for each Qualified Customer
Account for all weekdays (except holidays) during the Measurement Period, net
of any discounts and minus one-time only charges, late fees, finance charges,
pass-through charges, credits, chargebacks, interest, charges stemming from
abuse calls, charges stemming from intra-company or related party calls of
Seller and all taxes.
(iv) "AVERAGE WEEKEND DAY NET REVENUE" shall mean the average
daily gross toll usage and pro rata monthly fees for each Qualified Customer
Account for all weekend days (except holidays) during the Measurement Period,
net of any discounts and minus one-time only charges, late fees, finance
charges, pass-through charges, credits, chargebacks, interest, charges
stemming from abuse calls, charges stemming from intra-company or related
party calls of Seller and all taxes.
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(v) "TOTAL NET REVENUE" shall mean Average Weekday Net
Revenue multiplied by twenty-one (21) plus Average Weekend Day Net Revenue
multiplied by nine (9).
(vi) "BAD DEBT FACTOR" shall mean three percent (3%)
multiplied by Total Net Revenue.
(vii) "CUSTOMER BASE PURCHASE PRICE" shall mean Total Net
Revenue less the Bad Debt Factor multiplied by ten and one-half (10.5).
(EXAMPLE: If Total Net Revenue equals $900,000 and the Bad Debt Factor equals
$27,000, then the Customer Base Purchase Price shall equal $9,166,500).
(viii)"ACCOUNTS RECEIVABLE" shall mean the accounts
receivable, as of midnight on October 31, 1995, which are associated with and
derived from the Qualified Customer Accounts or which are mutually agreed to
by the parties. Accounts Receivable shall be listed, in gross numerical
dollar amounts, in SCHEDULE 2.3(b)(viii) hereto (which schedule shall be
updated as of the Closing Date).
(ix) "ACCOUNTS RECEIVABLE PURCHASE PRICE" shall mean the
total of Seller's gross Accounts Receivable relative to each Qualified
Customer Account as of October 31, 1995 multiplied by a factor of one hundred
percent (100%).
(c) MANNER AND FORM OF PAYMENT: The Purchase Price shall consist
of restricted shares of Purchaser's voting common stock and the assumption of
liabilities in accordance with Section 2.5 below.
(i) The total of all liabilities to be assumed by Purchaser
pursuant to Section 2.5 below shall be deducted from the Purchase Price and
the difference shall be known as the "STOCK PORTION".
(ii) The Stock Portion shall be paid in shares of Purchaser's
voting common stock which are restricted from transfer under SEC Rule 144
(THE "RESTRICTED STOCK").
(iii) The number of shares of Restricted Stock to be paid
shall be computed by dividing the Stock Portion by the "Denominator" (as such
term is defined below).
(1) If the average of the prevailing "bid" and "asked"
price per share as of the close of the stock market on the day before the
Closing is $10, the "DENOMINATOR" shall be equal to $10.
(2) If the average of the prevailing "bid" and "asked"
price per share as of the close of the stock market on the day before the
Closing is not exactly
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$10 but between $8.50 and $11.50, the Denominator shall be equal to one-half
(1/2) of the sum of said average plus $10.
(3) If the average of the prevailing "bid" and "asked"
price per share as of the close of the stock market on the day before the
Closing is less than $8.50, the Denominator shall be equal to $9.25.
(4) If the average of the prevailing "bid" and "asked"
price per share as of the close of the stock market on the day before the
Closing is greater than $11.50, the Denominator shall be equal to $10.75.
(d) ESCROWED SHARES.
(i) At the Closing, ten thousand (10,000) shares of
Restricted Stock shall be placed in an escrow account ("ESCROWED SHARES") as
security for Seller's payment of any reimbursement(s) necessitated by the
Customer Evaluation (as such term is defined below). Any Escrowed Shares
relating to this paragraph which remain in escrow after the Customer
Evaluation shall be released by the escrow agent and delivered to Seller.
(ii) An additional six thousand five hundred (6500) shares
of Restricted Stock shall also be placed in an escrow account at the Closing
as security for Seller's payment of any sums it must indemnify Purchaser for
under the terms of Section 2.6 below. Any Escrowed Shares relating to this
paragraph which remain in escrow after six (6) months from the Closing shall
be released by the escrow agent and delivered to Seller.
(e) CUSTOMER EVALUATION. Upon the expiration or termination of
the Service Agreement, but in no event later than nine (9) months after the
Closing (THE "EVALUATION PERIOD"), the parties shall mutually evaluate
whether there has been an increase or decrease in the Total Net Revenue.
Such evaluation shall be known as the "CUSTOMER EVALUATION".
(i) If the Customer Evaluation reveals an increase in Total
Net Revenue, as measured by comparing the Total Net Revenue of the Qualified
Customer Accounts for the Measurement Period to the Total Net Revenue of
Qualified Customer Accounts assuming, for purposes of this paragraph, that
the Measurement Period equals the six (6) week period ending on the date of
expiration of the Initial Term of the Service Agreement (or termination of
the Service Agreement, whichever occurs earlier), Purchaser shall pay Seller
the amount of the increase multiplied by ten and one-half (10.5). Any
payment resulting from such increase shall be in the form of voting shares of
Purchaser's common stock which are restricted under SEC Rule 144. The number
of shares to be paid shall be calculated using the average of the prevailing
"bid" and "asked" price per share as of the close of the stock market on the
day before the date of the Customer Evaluation.
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(ii) If the Customer Evaluation indicates a decrease in Total
Net Revenue greater than one and one-half percent (1.5%) per month (THE
"ALLOWABLE ATTRITION"), as measured by comparing the Total Net Revenue of the
Qualified Customer Accounts for the Measurement Period to the Total Net
Revenue of Qualified Customer Accounts assuming, for purposes of this
paragraph, that the Measurement Period equals the six (6) week period ending
on the date of expiration of the Initial Term of the Service Agreement (or
termination of the Service Agreement, whichever occurs earlier), the Purchase
Price shall be reduced by an amount equal to ten and one-half (10.5) times
the excess of the decrease over the Allowable Attrition. Any reimbursement
due as a result of such reduction shall be paid from the Escrowed Shares.
The number of Escrowed Shares to be reimbursed shall be calculated using the
average of the prevailing "bid" and "asked" price per share as of the close
of the stock market on the day before the date of the Customer Evaluation.
If the Escrowed Shares are insufficient to fully reimburse Purchaser pursuant
to this paragraph, Seller shall pay Purchaser a sufficient number of shares
out of the Restricted Stock it receives at the Closing in order to complete
the reimbursement.
2.4 ALLOCATION OF PAYMENT OF PURCHASE PRICE
The purchase price shall be allocated in accordance with SCHEDULE
2.4 hereto which shall be submitted by Purchaser at the Closing, and all tax
returns filed by the parties shall be consistent with such Schedule. Seller
and Purchaser shall each file all applicable IRS Forms, including but not
limited to Form 8594, in a consistent manner and in accordance with such
allocation and applicable law and regulations.
2.5 ASSUMPTION OF SPECIFIC LIABILITIES
At the Closing, the Purchaser shall assume and shall subsequently
honor and discharge, in accordance with the relevant governing agreements,
only the obligations of Seller as, and only to the extent, listed on SCHEDULE
2.5 hereto. Purchaser shall further assume and shall subsequently honor and
discharge those obligations or liabilities which arise out of the ownership,
use or operation of the Assets, the factual and causative basis of which said
obligations or liabilities occur after the Closing Date, including but not
limited to any and all applicable sales agent commissions (the "AGENT
COMMISSIONS"), not to exceed seven percent (7%) of Net Total Revenue, for as
long as said Agent Commissions are due and payable under the terms of the
relevant governing agreements between Seller and its various sales agents
(the "AGENT CONTRACTS"). Seller hereby assigns, and Purchaser agrees to
partially assume, the Agent Contracts only as they pertain to the Qualified
Customer Accounts and the obligation to pay Agent Commissions thereon (only
as said Agent Commissions relate to the Qualified Customer Accounts purchased
by Purchaser at the Closing).
2.6 LIMITATION ON ASSUMPTION OF LIABILITIES
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Purchaser shall not be liable for any of the obligations or
liabilities of Seller, of any kind or nature, other than those specifically
assumed by Purchaser hereunder. Seller shall pay, perform and discharge all
of its valid liabilities and obligations which are not so assumed by
Purchaser and shall specifically indemnify and hold harmless Purchaser from
and against same. Such indemnification (THE "INDEMNIFICATION PAYMENT") shall
be due within ten (10) days of Seller's receipt of written notice from
Purchaser. The Indemnifcation Payment shall be paid first in the form of the
Escrowed Shares pursuant to paragraph 2.3(d)(ii). The number of Escrowed
Shares to be reimbursed shall be calculated using the average of the
prevailing "bid" and "asked" price per share as of the close of the stock
market on the day before the date of the Indemnification Payment. If the
Escrowed Shares are insufficient to fully pay the Indemnification Payment,
Seller shall pay Purchaser a sufficient number of shares out of the
Restricted Stock it receives at the Closing in order to complete the
Indemnification Payment.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
3.1 ORGANIZATION AND AUTHORITY
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority to own, operate and lease its properties and to carry on
its business as now being conducted.
3.2 AUTHORIZATION OF AGREEMENT
The Board of Directors of Seller, pursuant to the power and
authority legally vested in it, has duly authorized the execution, sealing
and delivery of this Agreement by Seller and the transactions hereby
contemplated, and no action, confirmation or ratification by the stockholders
of Seller or by any other person, entity or governmental authority is
required in connection therewith. Seller has the power and authority to
execute, seal and deliver this Agreement, to consummate the transactions
hereby contemplated and to take all other actions required to be taken by it
pursuant to the provisions hereof. Seller has taken all actions required by
law, its Certificate of Incorporation, its Bylaws or otherwise to authorize
the execution, sealing and delivery of this Agreement. This Agreement is
valid and binding upon Seller in accordance with its terms. Neither the
execution, sealing and delivery of this Agreement nor the consummation of
said transactions will constitute any violation or breach of the Certificate
of Incorporation or the Bylaws of Seller, or any order, writ, injunction,
decree, law, rule or regulation applicable to Seller.
3.3 NO CONFLICTS
To the best of Seller's knowledge, the execution, delivery and
performance of this Agreement and the consummation of all of the transactions
contemplated hereby:
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(i) do not and will not with or without the giving of notice or passage of
time or both, violate, conflict with or result in a breach or termination of
any provision of, or constitute a default under, or accelerate or permit the
acceleration of the performance required by the terms of, or result in a
creation of any mortgage, security interest, claim, lien, charge or other
encumbrance upon any of the Assets pursuant to, or otherwise give rise to any
liability or obligation under any agreement, mortgage, deed of trust,
license, permit or other agreement or instrument, or any order, judgment,
decree, statute, regulation or any other restriction of any kind or
description to which Seller is a party or by which Seller or the Assets may
be bound; and (ii) will not terminate or result in the termination of any
such agreement or instrument, or in any way affect or violate the terms and
conditions of, or result in the cancellation, modification, revocation or
suspension of, any rights in or to the Assets.
3.4 ACCOUNTS RECEIVABLE
All Accounts Receivable for the Qualified Customer Accounts are
listed (with agings) in SCHEDULE 2.3(b)(viii).
3.5 TITLE TO PURCHASED ASSETS
Seller has, and on the Closing Date will have, good and marketable
title to all of the Assets free and clear of all claims and encumbrances,
except claims and encumbrances listed on SCHEDULE 3.5.
3.6 MATERIAL CONTRACTS
Except as disclosed in SCHEDULE 3.6 hereto, Seller is not a party
to or bound by any material written or oral contracts, obligations or
commitments related to the Qualified Customer Accounts, including any written
or oral commitments to pay commissions or other compensation relative to the
Qualified Customer Accounts. Seller has delivered or made available to
Purchaser correct and complete copies of all of the contracts, agreements and
other documents listed in Schedule 3.6 hereto and all amendments thereto and
waivers granted thereunder. The rights and interest of Seller in all such
contracts and agreements under the heading "Agreements Assumed" may be
assigned to Purchaser without the consent of any other person, except as
otherwise disclosed on Schedule 3.6, and at the Closing, Purchaser will
acquire all such rights and interest. There are no unresolved disputes
pending or, to the best knowledge of Seller, threatened under or in respect
of any such contracts or agreements. All such contracts and agreements are
valid and effective in accordance with their respective terms. It is further
specifically agreed by the parties that, with respect to the Agent Contracts,
Purchaser is only assuming herein the obligation to pay Agent Commissions
with respect to the Qualified Customer Accounts which are being purchased by
Purchaser at the Closing; Purchaser is not assuming the Agent Contracts
themselves.
3.7 CUSTOMER RELATIONSHIPS
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Seller has no knowledge that any Qualified Customer Account has
been terminated or is expected to be terminated, in whole or in part;
provided, however, that this subsection shall not be construed as a
representation, warranty, or guarantee that any such customer will, after the
Closing, maintain its present business relationships with Purchaser. To the
best of Seller's knowledge, no director or officer of Seller has any direct
or indirect interest in any such Qualified Customer Accounts.
3.8 LITIGATION; COMPLIANCE
(a) To the best of Seller's knowledge, except as disclosed in
SCHEDULE 3.8(a) hereto, there are no actions, suits, proceedings or
arbitrations or governmental investigations pending or threatened against, by
or affecting Seller (or to the best of the knowledge of Seller, any basis
therefor) in which, individually or in the aggregate, an unfavorable
determination could materially and adversely affect any of the Assets or
impede execution of the performance of this Agreement. Seller has not
received any notice of any violation of any applicable Federal, State, local
or foreign law, rule, regulation, ordinance, order or decree relating to the
Assets, and Seller is not aware of any threatened claim of such violation or
any basis therefor.
(b) To the best of Seller's knowledge, Seller has complied and is
in compliance in all material respects with all laws, rules, regulations,
ordinances, orders, decrees, writs, injunctions, building codes, safety, fire
and health codes, or other governmental restrictions applicable to Seller, or
the Assets.
(c) To the best of Seller's knowledge, Seller has all governmental
licenses, permits, approvals or other authorizations presently required to
service the Qualified Customer Accounts, all of which are in full force and
effect and all of which are listed on SCHEDULE 3.8(c) hereto.
3.9 BROKERS, FINDERS, ETC.
Seller has employed no finder, broker, agent or other intermediary
in connection with the negotiation or consummation of this Agreement or any
of the transactions contemplated hereby.
3.10 DISCLOSURE
To the best of Seller's knowledge, no representation or warranty by
Seller and no statement or certificate furnished or to be furnished by or on
behalf of Seller to Purchaser pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading.
3.11 ACQUISITION OF SHARES
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Seller represents and warrants to Purchaser that the shares of
Restricted Stock being acquired by Seller pursuant to this Agreement are
being acquired by Seller for investment for its own account and not with a
view to, or for the offer for sale or for the sale in connection with, any
distribution thereof. Seller covenants and agrees that Seller shall not
sell, assign or otherwise transfer the Shares other than in transactions
which are not in violation of the Securities Act of 1933 and applicable state
securities laws. Each stock certificate of Purchaser representing the
Restricted Stock shall bear the following legend, unless such legend may be
removed in accordance with its terms:
"The securities represented by this stock
certificate have not been registered under the
Securities Act of 1933 (the "Act") or applicable
state securities laws (the "State Acts"), and shall
not be sold, pledged, hypothecated, donated, or
otherwise transferred (whether or not for
consideration) by the holder except upon the
issuance to Purchaser of a favorable opinion of
its counsel or submission to the Corporation of
such other evidence as may be satisfactory to
counsel for Purchaser to the effect that any such
transfer shall ot be in violation of the Act and the
State Acts."
3.12 DISCLAIMER OF FRAUDULENT INTENT.
Seller represents and warrants that the transactions described in this
Agreement have been undertaken in good faith, considering its obligations to
any person or entity to whom Seller owes a right to payment, whether or not
the right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured (collectively such persons with such claims are called
"CREDITORS" under this paragraph), and has undertaken these transactions
without any intent to hinder, delay or defraud any such Creditors, and either
has disclosed in the ordinary course of business or will undertake to
disclose to all such Creditors the existence of this transaction, and has not
and will not conceal this transaction or the proceeds ot this transaction
from any such Creditors. Seller further represents and warrants that: (1) it
will not retain possession or control of any of the property transferred
under this Agreement following the Closing, except as expressly provided in
this Agreement and then only for and on behalf of the account of the
Purchaser; (2) the Seller has not been sued or threatened with suit by any
Creditor prior to the execution of this Agreement; (3) the Seller has not
removed or concealed any assets from any Creditors; (4) the Seller has not
incurred any substantial debt that is significantly greater than the normal
and customary debts of the Seller in the ordinary course of business; (5) the
Seller at Closing believes in good faith that Seller will receive
consideration reasonably equivalent to the value of the Assets transferred
under this Agreement.
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4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
4.1 CORPORATE STATUS
Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate
power and authority to carry on its business as now conducted.
4.2 AUTHORITY FOR AGREEMENT
Purchaser has the power and authority to execute and deliver this
agreement and to carry out its obligations hereunder. The execution,
delivery and performance by the Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been duly executed by Purchaser and the transactions
contemplated by it constitute the legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms. No
consent, approval, or authorization of, or declaration, filing, or
registration with, any federal or state governmental or regulatory authority
is required to be made or obtained by Purchaser in connection with the
execution, delivery, and performance of this Agreement and the consummation
of the transactions contemplated by this Agreement, except approval of
applicable public service commissions.
4.3 NO CONFLICTS
To the best of Purchaser's knowledge, the execution, delivery and
performance of this Agreement and the consummation of all of the transactions
contemplated hereby: (i) do not and will not with or without the giving of
notice or passage of time or both, violate, conflict with or result in a
breach or termination of any provision of, or constitute a default under, or
accelerate or permit the acceleration of the performance required by the
terms of, or result in a creation of any mortgage, security interest, claim,
lien, charge or other encumbrance upon any of the Assets pursuant to, or
otherwise give rise to any liability or obligation under any agreement,
mortgage, deed of trust, license, permit or other agreement or instrument, or
any order, judgment, decree, statute, regulation or any other restriction of
any kind or description to which Purchaser is a party or by which Purchaser
or the Assets may be bound; and (ii) will not terminate or result in the
termination of any such agreement or instrument, or in any way affect or
violate the terms and conditions of, or result in the cancellation,
modification, revocation or suspension of, any rights in or to the Assets.
4.4 CONTINUED COMPETITION
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Purchaser hereby acknowledges that Seller is a competitor of
Purchaser in the long distance telecommunications industry. Subject to any
and all applicable noncompetition covenants, Purchaser hereby consents to the
continued competition by Seller and Seller's individual shareholders in the
long distance telecommunications industry.
5. SELLER'S OBLIGATIONS BEFORE CLOSING
Seller covenants that from the date of this Agreement and until the
Closing Date:
(a) Purchaser and its counsel, accountants and other
representatives shall have full access to all properties, books, accounts,
records, contracts and documents of or relating to the Assets, but Purchaser
shall not have access to any information not related to the Assets. Seller
shall furnish or cause to be furnished to Purchaser and its representatives
all data and information concerning the Assets that may be reasonably
requested. Seller agrees that, unless and until the Closing has been
consummated, Seller and its officers, directors and other representatives
will hold in strict confidence, and will not use to the detriment of
Purchaser, all data and information with respect to Purchaser and Purchaser's
business and operations obtained in connection with this transaction or
Agreement. If the transaction contemplated by this Agreement are not
consummated, Purchaser will return to Seller all data and information that
Seller may reasonably request including all documents prepared or made
available to Purchaser by Seller in connection with this Agreement.
(b) Seller will, with respect to the Qualified Customer Accounts,
carry on its business and activities diligently and in substantially the same
manner as they previously have been carried out and shall not make or
institute any unusual or novel methods of management or operations to the
detriment of Purchaser that vary materially from those methods used by Seller
as of the date of this Agreement relating to the Qualified Customer Accounts,
without the prior written consent of Purchaser.
6. COVENANTS
6.1 TRANSITION SERVICES
Seller shall provide billing and customer base transition services
for the transferred customers at Purchaser's expense and in accordance with
the terms of a service agreement between the parties to be executed at the
Closing (THE "SERVICE AGREEMENT"). The Service Agreement shall provide,
among other things, that the fees and charges to be paid to Seller by
Purchaser shall be equal to Seller's actual cost of providing the specified
transition services but in no event shall said fees and charges exceed three
percent (3%) of the Total Net Revenue. The Service Agreement shall further
provide that Purchaser shall pay all applicable sales agent commissions
relative to the Qualified Customer Accounts but in no event shall said sales
agent commissions exceed seven percent (7%) of Total Net Revenue. The
Service Agreement shall be for a period
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of six (6) months. A copy of the Service Agreement is attached hereto and
made a part hereof as Exhibit 6.1.
6.2 FURTHER ASSURANCES
At any time and from time to time after the Closing Date, each
party shall, without further consideration, execute and deliver to the other
such other instruments of transfer and assumption and shall take such other
action as the other may reasonably request to carry out the transfer of the
Assets and the assumption of the specific liabilities contemplated by this
Agreement.
6.3 STANDSTILL; PUBLIC ANNOUNCEMENT
Prior to the Closing or termination of this Agreement, Seller
agrees not to directly or indirectly solicit, entertain or encourage offers
or negotiate with any other person or entity regarding the purchase or sale
of the Assets except with respect to Wiltel's first lien and priority on the
Assets. Seller shall not make any public announcement with respect to the
subject matter of this Agreement without the prior written consent of
Purchaser. Purchaser intends to make an announcement consistent with its
public disclosure obligations.
7. CONDITIONS PRECEDENT
7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to pay the Purchase Price to Seller and
to satisfy its other obligations hereunder shall be subject to fulfillment
(or waiver by Purchaser) at or prior to the Closing, of the following
additional conditions, which Seller agrees to use its best efforts to cause
to be fulfilled:
(a) REPRESENTATIONS, PERFORMANCE
The representations and warranties of Seller contained in
Section 3 hereof shall be true in all material respects at and as of the
Closing Date, except as affected by the transactions contemplated hereby.
Seller shall have duly performed and complied with all agreements and
conditions required by this Agreement to be performed, or complied with, by
it prior to or on the Closing Date. There shall have been no material
adverse change in the Qualified Customer Accounts.
(b) CONSENTS
Any required material approvals, acceptances, and consents of
or to the transactions contemplated hereby, shall have been applied for,
including notice to applicable public service commission.
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<PAGE>
(c) CORPORATE PROCEEDINGS
All corporate and other proceedings of Seller in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such corporate proceedings, shall be reasonably
satisfactory in substance and form to Purchaser, and Purchaser shall have
received all such documents and instruments, or copies thereof.
(d) MINIMUM BILLINGS
That the Total Net Revenue with respect to the Qualified
Customer Accounts for the Measurement Period is, or shall be, not less than
$850,000.
7.2 CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to deliver the bill of sale, assignments,
endorsements and other instruments of transfer relating to the Assets and to
satisfy Seller's other obligations hereunder shall be subject to the
fulfillment, on or prior to the Closing Date (or waiver by Seller), of the
following conditions, which Purchaser agrees to use its best efforts to cause
to be fulfilled:
(a) REPRESENTATIONS, PERFORMANCE
The representations and warranties of Purchaser contained in
Section 4 hereof shall be true at and as of the Closing Date. Purchaser
shall have duly performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed, or
complied with, by it prior to or on the Closing Date.
(b) CORPORATE PROCEEDINGS
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement, and all documents and
instruments incident thereto, shall be satisfactory to Seller and Seller
shall have received all such documents and instruments, or copies thereof.
(c) NO MATERIAL CHANGES
No material changes in the financial position of Purchaser or
material changes in the information previously disclosed to Seller shall have
occurred.
8. USE OF NAME
Purchaser and its affiliated entities shall have the right to use the
names "Value Tel", "Teletrek", "Discount Network Services" and all other
names currently being used by
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<PAGE>
Seller in the conduct of its business with respect to the Qualified Customer
Accounts for the period referenced in the Service Agreement.
9. COVENANT NOT TO COMPETE
As a material inducement for Purchaser to enter into and close this
Agreement, Seller agrees that, for a period of five (5) years from the
Closing Date, neither Seller nor any affiliate of Seller will directly or
indirectly offer any long distance services to the Qualified Customer
Accounts. Further, Seller agrees that neither Seller nor any affiliate of
Seller will use or disclose any information regarding the telecommunication
services of the Qualified Customer Accounts, for a period of five (5) years
following the Closing Date, without the prior written consent of Purchaser,
which consent may be withheld in the sole and absolute discretion of
Purchaser. The covenants contained herein shall apply even if the customer
is not then using the services of Purchaser. Seller acknowledges and agrees
that the extent of damages to Purchaser in the event of a breach of the
covenants contained in this Section would be impossible to ascertain and
there is and will be available to Purchaser no adequate remedy at law to
compensate it in the event of such a breach. Consequently, Seller agrees
that, in the event Seller breaches any such covenants, Purchaser shall be
entitled to enforce any and all of the covenants by injunctive or other
equitable relief ordered by any court of competent jurisdiction.
Notwithstanding any other provision contained in this paragraph to contrary,
Seller may offer, on an unsolicited basis, long distance services to any
Qualified Customer Account which has not used Purchaser's long distance
service for a continuous period of at least one (1) year.
10. INDEMNIFICATION MANNER OF CLAIMS
10.1 INDEMNIFICATION
(a) From and after the Closing Date, Seller will indemnify
Purchaser against, and hold Purchaser harmless from, any and all liability,
damage, deficiency, loss, cost or expense (including reasonable attorney's
fees) that is based upon or that arises out of (i) any misrepresentation or
breach of any representation, warranty or agreement made by Seller herein
(ii) any obligation, debt or liability of Seller to the extent that the same
is not expressly assumed herein by Purchaser, or (iii) the use and ownership
of the Assets on or prior to the Closing Date (other than those liabilities
specifically assumed by Purchaser hereunder).
(b) Purchaser will indemnify Seller against, and hold it harmless
from, any and all liability, damage, deficiency, loss, cost or expense
(including reasonable attorney's fees) that is based on or that arises out of
(i) any misrepresentation or breach of any representation, warranty or
agreement made by Purchaser herein, (ii) the failure by Purchaser to
discharge any and all liabilities, obligations and commitments of Seller to
the extent that the same are assumed by Purchaser hereunder, or (iii) the use
and ownership of the Assets from and after the Closing Date.
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<PAGE>
10.2 MANNER OF CLAIMS
Any notice of a claim by reason of any of the representations and
warranties contained in this Agreement shall state specifically the
representation or warranty with respect to which the claim is asserted, and
the amount of liability asserted against the other party by reason of the
claim.
11. MISCELLANEOUS
11.1 CONSENTS OF THIRD PARTIES
This Agreement shall not constitute an agreement to assign any
interest in any instrument, contract, lease, permit or other agreement or
arrangement of Seller, or any claim, right or benefit arising thereunder or
resulting therefrom, if any assignment without the consent of a third party
would constitute a breach or violation thereof or adversely affect the rights
of the Purchaser or Seller thereunder. If a consent of a third party which
is required in order to assign any instrument, contract, lease, permit or
other agreement or arrangement or any claim, right or benefit arising
thereunder or resulting therefrom, which consent Seller shall use its best
efforts to obtain prior to the Closing, is not obtained prior to the Closing,
or if an attempted assignment would be ineffective or would adversely affect
the ability of Seller to convey its interest to the Purchaser, Seller will
cooperate with Purchaser in any lawful and economically feasible arrangement
to provide that Purchaser shall receive Seller's interest in the benefits
under any such instrument, contract, lease, permit or other agreement or
arrangement; and any transfer or assignment to Purchaser by Seller of any
interest under any such instrument, contract, lease, permit or other
agreement or arrangement that requires the consent of a third party shall be
made subject to such consent or approval being obtained.
11.2 EXPENSES
Subject to the terms of Section 10 hereof, each of the parties
hereto shall bear its own expenses, costs and fees (including attorney's
fees) in connection with the transactions contemplated hereby, including the
preparation and execution of this Agreement and compliance herewith, whether
or not the transactions contemplated hereby shall be consummated.
11.3 SEVERABILITY
If any term or provision of this Agreement shall be held or deemed
to be, or shall in fact be, inoperative or unenforceable as applied in any
particular case because it conflicts with any other provision or provisions
hereof or any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
term or provision in question inoperative or unenforceable in any other case
or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatever, but
such term or provision shall be
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<PAGE>
deemed modified or deleted as or to the extent required by applicable law.
The invalidity of any one or more phrases, sentences, clauses, sections, or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
11.4 NOTICES
All notices, consents, requests, instructions, approvals and other
communications provided for herein in regard hereto shall be validly given,
made or served, if in writing and delivered personally or sent by registered
or certified mail (return receipt requested), postage prepaid, (i) if to
Purchaser at 525 Florida Street, Baton Rouge, Louisiana, 70801, Attn: Mike
Ross, President; and (ii) if to Seller at 1841 Centre Point Drive, Suite 135,
Naperville, Illinois, 60563, Attn: Tim Sledz, President, in each case at such
other address as may be specified in writing to the other parties.
11.5 AMENDMENT
This Agreement may not be amended except by an instrument in
writing, duly executed and delivered on behalf of each of the parties hereto.
11.6 WAIVER
Any party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provisions shall be construed
as a waiver of any other provision. Any waiver must be in writing.
11.7 COUNTERPARTS
This Agreement may executed in multiple counterparts, each of which
shall be deemed an original agreement, and all of which taken together shall
constitute one agreement, notwithstanding that all of the parties are not
signatories to the original or the same counterpart.
11.8 ASSIGNMENT
Any assignment of this Agreement or the rights or obligations
hereunder by any party without the prior written consent of the nonassigning
parties shall be void. Notwithstanding the foregoing, either party may assign
all or any party of its rights and/or obligations to one or more affiliates,
subsidiaries, parent companies or shareholders of said party. No such
assignment shall relieve the assigning party of any of its obligations or
duties under this Agreement.
11.9 COSTS
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<PAGE>
In the event any action is instituted to enforce or interpret the
terms of this Agreement or arises out of this Agreement, the party prevailing
in such action shall be entitled to recover its reasonable attorney's fees
and costs as determined by the court.
11.10 ENTIRE AGREEMENT; APPLICABLE LAW, ETC.
This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. This Agreement shall be governed
in all respects, including validity, interpretation and effect, by the laws
of the State of Louisiana applicable to contracts made and to be performed in
Louisiana.
11.11 INDUSTRY TERMS AND PHRASES
All terms and phrases unique to the telecommunications industry and
used within this Agreement shall be defined in accordance with the everyday
meaning assigned to such terms and phrases within the industry.
11.12 ADDITIONAL TERMS, COVENANTS, ETC.
(a) REGISTRATION OF RESTRICTED STOCK. Purchaser hereby warrants
that, after sixty (60) days from the Closing and upon Seller's request, it
will file a Form S-3 Registration Statement with the Securities Exchange
Commission to apply for registration of the Restricted Stock issued hereby in
order to allow Seller the ability to sell or transfer its Restricted Stock.
Purchaser further warrants that it will, to the extent permitted by any
future underwriter(s) of Purchaser's common stock, to "piggyback" or
register, as part of a secondary offering of Seller's common stock, up to
twenty percent (20%) of all shares of Restricted Stock received by Seller at
the Closing. Any covenants of Purchaser contained in this paragraph (a)
shall be subject to and limited by the terms and conditions of the Lock-Up
Agreement referred to in paragraph (b) below.
(b) LOCK-UP. At the Closing, the parties shall enter into a
mutually acceptable lock-up agreement (the "LOCK-UP AGREEMENT"), a copy of
which is attached hereto as EXHIBIT 11.12(b), containing certain restrictive
covenants regarding share ownership and transfer of shares.
(c) CONSENT AND APPROVAL OF WILTEL. The transactions contemplated
by this Agreement shall be strictly contingent upon the consent and approval,
in writing, of Wiltel, the assumption by Purchaser of Seller's outstanding
contractual obligation to Wiltel under its Wilmax contract (the "VALUE
TEL/WILTEL CONTRACT"), the assumption by Purchaser of Seller's indebtedness to
Wiltel under the Value Tel/Wiltel Contract, the indemnification by Purchaser
of Seller of any and all amounts owed to Wiltel by Seller under the terms of
the Value Tel/Wiltel Contract and the release by Wiltel of Seller from any
further obligations under the Value Tel/Wiltel Contract. Purchaser further
agrees to pay Seller any and all sums which Purchaser recoups, if any, from
Wiltel as a result of any and all
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<PAGE>
penalties and minimum usage commitment payments which were erroneously billed
to Seller by Wiltel for usage which occurs prior to the Closing.
(d) DIRECTORSHIP. Purchaser hereby agrees to appoint Tim Sledz to
Purchaser's Board of Directors commencing with the Closing and terminating
upon the expiration of two (2) years from the Closing.
(e) TAX CONSEQUENCES TO SELLER. The transactions contemplated by
this Agreement shall be strictly contingent upon the opinion of Seller's
accounting and tax advisors that the transaction qualifies as a "C"
Reorganization for federal and state income tax purposes. In the event the
transaction does not qualify as a "C" Reorganization due to any action or
omission of Seller, Purchaser reserves the right to claim any and all tax
and/or accounting benefits which it could not otherwise claim, including but
not limited to any benefits relating to tax basis and asset carrying values.
12. TERMINATION.
12.1 MUTUAL CONSENT. This Agreement may be terminated at any time prior
to the Closing by mutual consent of Seller and Purchaser, expressed by action
of their respective Boards of Directors.
12.2 FINAL DATE. Anything contained in this Agreement to the contrary
notwithstanding, unless extended by mutual consent of Seller and Purchaser,
expressed by action of their respective Boards of Directors, this Agreement
shall terminate if the Closing shall not have occurred by the close of
business on NOVEMBER 15, 1995.
12.3 REMEDIES ON TERMINATION. In the event any party hereto, without
the right to do so under this Agreement, shall fail or refuse to consummate
the transactions contemplated by this Agreement, or if any default under, or
breach of, any representation, warranty, covenant or condition of this
Agreement on the part of any party shall have occurred that results in the
failure to consummate the transactions contemplated hereby, then, in addition
to any other remedies provided in this agreement or by applicable law, the
nondefaulting party shall be entitled to obtain from the defaulting party
costs and expenses, including reasonable attorney's fees, incurred by it in
enforcing its rights hereunder, including but not limited to the right to
seek specific performance of this Agreement.
12.4 TERMINATION UPON VARIATION OF STOCK PRICE. In the event the
average of the prevailing "bid" and "asked" price per share of Purchaser's
common stock as of the close of the stock market on the day before the
Closing is above $11.50 or below $8.50, either party may terminate this
Agreement with no liability to the other party.
13. COVENANTS REGARDING THE PROVISION OF AUDITED FINANCIAL STATEMENTS
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13.1 OBLIGATION TO PROVIDE. Seller agrees to provide Purchaser with
audited financial statements which comply with Regulation S-X of the
Securities Act of 1933, as amended. The financial statements must be
provided no later than fifty (50) days from the Closing and may be filed with
the Securities Exchange Commission.
13.2 RELIEF. If Seller fails and/or refuses to provide Purchaser with
audited financial statements in compliance with paragraph 13.1 above,
Purchaser shall be entitled to obtain, in addition to any other remedies
provided in this Agreement or by applicable law, from Seller all costs and
expenses, including reasonable attorney's fees, incurred by it in enforcing
its rights hereunder, as well as a penalty in the amount of $190,000.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
Network Long Distance, Inc. Value Tel, Inc.:
By: /s/ MIKE ROSS By: /s/ TIM SLEDZ
---------------------------------- ----------------------------------
Name: Mike Ross Name: Tim Sledz
Title: President Title: President
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SCHEDULE 1.1: THE "ASSETS"
The "Qualified Customer Accounts"
The "Accounts Receivable"
The "Customer Contracts"
All "Assets" listed in paragraph 1.1 herein
<PAGE>
LIST OF ACCOUNTS
SECTION #3
(INTENTIONALLY OMITTED DUE TO CAPACITY)
<PAGE>
SCHEDULE 2.3(b)(viii): "ACCOUNTS RECEIVABLE"
0-30 31-60 61-90 OVER 90 TOTAL
ADET_00 $63,520 $86,038 $33,862 $47,412 $230,832
ADET_PB2 $364,568 $233,042 $46,617 $123,577 $767,893
-------- -------- ------- -------- --------
$428,178 $319,080 $80,478 $170,990 $998.72
42.87% 31.95% 8.06% 17.12%
est pay $17,149 $12,779 $3,223 $6,848 $40,000
est $411,029 $306,300 $77,255 $164,141 $958.724
usage $863,350 $411,029 $306,300 $241,396 $1,822,076
fees $42,000
-------- -------- -------- -------- ----------
est at 10/31 $905,350 $411,029 $306,300 $241,396 $1,864,076
<PAGE>
SCHEDULE 2.4: ALLOCATION OF PURCHASE PRICE
(Intentionally left blank)
<PAGE>
SCHEDULE 2.5: LIABILITIES AND OBLIGATIONS ASSUMED BY PURCHASER
<TABLE>
<S> <C>
Network Long Distance, Inc. $ 610,000
American Teltronics 50,000
WilTel 675,000
Nowalsky & Bronston 24,000
----------
$1,359,000
</TABLE>
<PAGE>
SCHEDULE 3.5: LIENS AND ENCUMBRANCES
Security Agreement and UCC-1 Financing Statement in favor of WilTel (SEE
Paragraph 11.12(c) of the Agreement)
<PAGE>
SCHEDULE 3.6: MATERIAL CONTRACTS
The "Value Tel/WilTel Contract"
The "Agent Contracts"
<PAGE>
SCHEDULE 3.8(a): ACTIONS, SUITS, PROCEEDINGS, ETC.
Seller believes that various state and/or federal tax liabilities may exist
???? assets sold herein. Seller shall discharge, pay and/or settle, in full,
all such ????.
<PAGE>
SCHEDULE 3.8(c): LICENSES, PERMITS, ETC.
(None)
<PAGE>
EXHIBIT 6.1
SERVICE AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of this 31st day of
October, 1995, by and between Network Long Distance, Inc. ("Network"), a
Delaware corporation with its headquarters located at 525 Florida Street,
Baton Rouge, Louisiana 70801 and Value Tel, Inc. ("Value Tel"), a Delaware
corporation with its offices located at 1841 Centre Point Drive, Suite 135,
Naperville, Illinois, 60563.
WHEREAS, Network is a switch-based reseller of long distance
telecommunications services; and
WHEREAS, Value Tel is a switchless reseller of long distance
telecommunications services; and
WHEREAS, Network has purchased, or will shortly be purchasing, among
other things, selected accounts and receivables of Value Tel's end user
customers (the "Customer Accounts") currently serviced out of Value Tel's
Naperville, Illinois office (the "Acquisition"); and
WHEREAS, Value Tel has the capability to provide Network with certain
administrative services, including billing, collection and customer service,
with respect to the Customer Accounts for an interim transition period
following the Acquisition; and
WHEREAS, Network desires to utilize said administrative services and pay
Value Tel for same in accordance with the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual representations,
covenants and warranties expressed herein and the payments described below,
the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
A. VENDOR(S): Value Tel's underlying carrier(s), local exchange
carriers, interexchange carriers and other service providers, including but
not limited to billing providers and enhanced services providers.
B. VENDOR COSTS: the costs charged by Vendors and incurred by Value
Tel in the fulfillment of its obligation to provide the Services (as such
term is defined below), on Network's behalf, to the Customer Accounts
pursuant to this Agreement.
C. SERVICES: The administrative services provided by Value Tel and
further enumerated in Article III below, including but not limited to
billing, collection, customer
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service and use of Value Tel's various trade and marketing names, products
and service offerings.
D. All other terms and phrases unique to the telecommunications
industry and used within this Agreement shall be defined in accordance with
the everyday meaning assigned to the terms within the industry.
E. All terms and phrases contained herein shall be construed in
accordance with the meanings accorded to said terms and phrases in the Asset
Purchase Agreement of even date.
ARTICLE II.
TERM AND TERMINATION
A. This Agreement shall be for the term of six (6) months from and
after the effective date of this Agreement (the "Initial Term").
B. Network may, at its sole and exclusive option, renew this Agreement
beyond the Initial Term for one (1) period of three (3) months. Any such
renewal must be in writing and delivered to Value Tel at least thirty (30)
days prior to the end of the term then in effect.
C. If either party materially breaches its obligations under this
Agreement, the other party may terminate this Agreement upon ten (10) days
prior written notice. The breaching party shall have ten (10) days from
receipt of said written notice within which to cure said material breach.
D. Upon termination or expiration of this Agreement, each party shall
immediately deliver to the other all Proprietary Information furnished to it,
including all copies thereof as provided for in this Agreement.
E. Network may, in its sole discretion, terminate this Agreement upon
thirty (30) days prior written notice.
F. Upon expiration or termination of this Agreement, Value Tel must
immediately turn over and deliver to Network any and all information and
documents related in any way to the servicing of the Customer Accounts, and
any other information and documents otherwise necessary for Network's full
use, operation and enjoyment of the Assets acquired pursuant to the Asset
Purchase Agreement of even date.
ARTICLE III.
THE SERVICES
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<PAGE>
Value Tel shall provide the Services to Network in a professional and
diligent manner, including but not limited to billing, collection, customer
service and all of the following specific functions (or specific functions as
selected by Network):
A. Value Tel shall cooperate fully with Network in immediately
arranging and coordinating a smooth and orderly transition and conversion,
from Value Tel to Network, of the Customer Accounts being purchased as part
of the Acquisition and shall execute all documents and take all actions
necessary to accomplish same.
B. At Network's request, Value Tel shall, upon reasonable notice and
as available, provide Network with written, printed, electronic transfer,
computer disk or tape reports detailing all information related in any way to
Value Tel's performance of the Services, including but not limited to ANI's,
billings, collections, bad debt, trouble tickets, call records, credit
checks, accounts receivable ledgers, supporting documentation with respect to
Vendor Costs, CARE reports detailing service cancellations and other LEC
information, LOA's and complete copies of customer files.
C. Value Tel hereby agrees to allow Network, during the term of this
Agreement, to utilize, for all purposes related to the servicing of the
Customer Accounts, the names "Value Tel", "Discount Network Services, Inc.",
"Teletrek" and all other names currently used by Value Tel in the conduct of
its business (the "VALUE TEL NAMES"). This covenant shall specifically
include, without limitation, the right of Network to instruct Value Tel to
"co-brand" all invoices rendered to the Customer Accounts with any or all of
the foregoing names and the name "Network Long Distance". Design of such
invoices must be approved in writing by Network. Value Tel further agrees to
indemnify Network from and against any claims of third parties which result
from Value Tel providing Network with the use of the Value Tel Names pursuant
to this Paragraph III.C. The foregoing indemnification provision shall not
apply to claims resulting from Network's own actions or omissions. The
obligations contained in this Paragraph C shall survive termination of this
Agreement, including but not limited to Network's right to use the Value Tel
Names for as long as is necessary to collect accounts receivable which were
generated using the Value Tel Names but which are not paid at the time this
Agreement terminates.
D. Value Tel hereby agrees to allow Network to utilize, for all
purposes related to the servicing of the Customer Accounts, all products and
service offerings currently provided by Value Tel to its customers.
E. Value Tel shall, as soon as possible, change the information
typically contained on the invoices rendered to the Customer Accounts prior
to the Acquisition to any information reasonably requested by Network,
including but not limited to information regarding the address and/or lockbox
location to which payments should be directed and the 800 numbers to which
billing, customer service or other inquiries should be directed. Value Tel
shall make Network the "RespOrg" on such 800 numbers.
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F. Value Tel shall provide customer service functions to the Customer
Accounts in a professional and diligent manner and shall use its best efforts
to maintain customer satisfaction. Value Tel shall further notify Network
immediately of any complaints, oral or written, received from any of the
Customer Accounts and shall take all reasonable steps necessary to satisfy
said complaints.
G. Value Tel shall provide credit risk analysis functions in
accordance with Network's standard credit policies and procedures.
H. Value Tel shall allow Network to utilize Value Tel's regulatory
tariffs to the extent such utilization is necessary for Value Tel to lawfully
perform the Services pursuant to this Agreement.
I. Value Tel shall have the obligation to advise Network of any
dispute between Value Tel and any Vendor which affect, or has the potential
to affect, the Customer Accounts. In such event, Value Tel agrees to provide
Network with an itemized invoice of the Vendor Costs owed to such Vendor and
hereby grants Network the right to pay such Vendor Costs directly to the
Vendor.
J. Value Tel shall, during business hours or other reasonable mutually
agreed to times, allow access to Network to all documents, computer
printouts, computer disks, databases, files, reports, tapes, and any other
tangible items related in any way to the Services provided by Value Tel
pursuant to this Agreement and shall work in good faith with Network to
construct and reconcile, in detail, such items to the mutual satisfaction of
the parties.
K. Value Tel shall assist Network, in any manner reasonably required,
to immediately set up a new lockbox arrangement and location or change the
ownership of Value Tel's current lockbox over to Network ("Network's
Lockbox") for purposes of receiving payments made on Customer Accounts, and
Value Tel shall facilitate all actions necessary to provide accounts
receivable processing functions with respect to the Customer Accounts,
including but not limited to picking up tapes from Vendors, downloading data
from said tapes and compiling appropriate billing data for purposes of
finalizing and mailing out bills.
L. Value Tel shall, on a daily basis, provide Network with all data,
if available, on all payments on Customer Accounts received in Network's
Lockbox, payments to Vendors and other transactions which occurred the
previous day, including actual bank/lockbox daily transmittal records.
M. Value Tel shall, on a daily basis, provide Network with all data on
payments on Customer Accounts received by Value Tel in order to properly
account for payments
4
<PAGE>
on Customer Accounts which were sent directly to Value Tel, rather than to
Network's Lockbox, including actual bank/lockbox daily transmittal records.
N. Value Tel shall cooperate with Network in facilitating an
electronic interface between Value Tel and Network for the transfer of all
information which Value Tel is obligated to provide pursuant to this
Agreement.
O. Value Tel shall, during business hours or other reasonable mutually
agreed to times, allow access to Network for purposes of cross connect
testing, need-to-service and facilitating all other service tests.
P. Value Tel shall, in no event, when rendering invoices to customers
with respect to the Customer Accounts, change the return address on envelopes
in which invoices are sent, the "send to" address on enclosed remittance
envelopes, the "payment" address on the invoices, the address of "Network's
Lockbox" or the payee on on the invoices unless requested by Network in
writing.
Q. Value Tel assumes the obligation to provide Network with
confirmation of the amount of all Vendor Costs and Value Tel's payment
thereof. Upon Network's request, Value Tel shall immediately execute a
letter authorizing Network to contact a Vendor directly.
R. Value Tel shall, at its cost, provide paper, envelopes, ink,
postage and all other items, tangible and intangible, necessary to facilitate
the billing and invoicing of the Customer Accounts.
S. Value Tel shall fully document all customer service calls received
by Value Tel during the course of fulfilling its obligation to provide same
pursuant to this Agreement, including the name of the customer, the time of
day and the date.
T. Value Tel agrees to and acknowledges that Network owns the Customer
Accounts pursuant to the Asset Purchase Agreement, and accordingly, Network
shall have the primary right, at all times, to collect payments made in
connection with any invoices rendered by Value Tel on behalf of Network
pursuant to this Agreement.
U. Value Tel hereby indemnifies and holds Network harmless from and
against any claims of third parties, including any Vendors and any customers
whose Customer Accounts are being transferred pursuant to the Asset Purchase
Agreement, which arise out of or relate to Value Tel's performance of the
Services pursuant to this Agreement. The foregoing indemnification provision
shall not apply to claims resulting from Network's own actions or omissions.
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V. Value Tel shall cooperate fully with Network in providing use,
shared use, re-arrangement, move assignment, re-routing, authorization and
rights to PIC customers and facilitate access on Value Tel's vendors' CIC's
to Network and to grant and facilitate all current or future underlying
transport services requested by Network at Network's expense with Network's
authorization.
W. Value Tel shall provide mutually agreeable space and access for
systems and Network on-site personnel, as requested by Network, to perform
and assist in the transition process. In addition, a mutually agreeable
transition coordinator shall be assigned by Value Tel and Network to
facilitate a smooth and effective transition and ongoing relationship.
X. Value Tel will provide monthly information that will allow Network
to report current revenues and expenses, aged accounts receivable, meet
timely reporting requirements set by governmental and regulatory authorities,
and which will allow Network to produce accurate traffic reports from call
usage details.
ARTICLE IV.
PAYMENT TERMS
A. Network shall compensate Value Tel for the Services in accordance
with the payment terms described below and the schedule of fees and charges
attached hereto and made a part hereof as ATTACHMENT A. Unless otherwise
specified herein, all Services shall be performed and provided by Value Tel,
and paid for by Network, in accordance with ATTACHMENT A.
B. Value Tel shall render invoices to Network for each monthly billing
period during the term of this Agreement which invoices shall include: (1)
the Vendor Costs incurred by Value Tel on Network's behalf during that
period; (2) the fees charged by Value Tel, in accordance with ATTACHMENT A,
for the Services provided by Value Tel to the Customer Accounts on Network's
behalf during that period; (3) all applicable Federal, State and Local use,
excise, sales or privilege taxes, duties or similar fees incurred in
connection with the provision of the Services during that period.
C. Network shall pay Value Tel for invoices rendered by Value Tel
within thirty (30) days of receipt of same. However, if a Vendor whose
Vendor Costs appear on said invoice requires payment prior to the expiration
of said thirty (30) days, Network shall pay Value Tel for said Vendor Costs
in accordance with said Vendor's payment terms. Upon mutual written agreement
between Network and Value Tel, Network may pay any Vendor Cost directly to
the appropriate Vendor.
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D. Failure of Network to pay any invoices pursuant to this Article IV
will result in the right of Value Tel to terminate this Agreement, and cease
any obligations of Value Tel contained herein, upon ten (10) days prior
written notice.
ARTICLE V.
CONFIDENTIALITY
Each party agrees that all information furnished to it and identified by
the other party as being confidential or proprietary information or trade
secrets (collectively referred to as "Proprietary Information"), is, and
shall continuously remain, the sole and exclusive property of the party
furnishing the same (hereinafter referred to as the "Disclosing Party"). Each
party shall treat the Proprietary Information and the contents of this
Agreement in a confidential manner and, except to the extent necessary in
connection with the performance of its obligations under this Agreement,
neither party shall directly or indirectly disclose the same to any third
party without the written consent of the Disclosing Party, unless required by
law to divulge such information to regulatory authorities or unless required
in connection with enforcing the Receiving Party's rights hereunder. The
obligations contained in this Article V. shall survive termination of this
Agreement.
ARTICLE VI.
GENERAL
A. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
B. Nothing contained within this Agreement shall be construed as
creating a joint venture or employment relationship between the parties
hereto or their employees.
C. Neither Network nor Value Tel shall have the authority to bind the
other, by contract or otherwise, or make representations as to the policies
and procedures of the other, except as provided for herein.
ARTICLE VII.
WAIVER
No waiver by any party or any default by any other party in the
performance of any provision of this Agreement shall be deemed to be a waiver
of, or in any manner release of such party from, performance of any provision
in the future; nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of such right or like right
accruing to it hereafter.
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ARTICLE VIII.
AUTHORITY TO ENTER INTO AGREEMENT
Each party hereto warrants and represents that it has full legal and
regulatory authority to enter into this Agreement and to consummate the
transactions contemplated hereby and that this Agreement is not in conflict
with any other agreement, contract or tariff to which such party is a party
or by which it may be bound. Each party hereto further warrants and
represents that the individuals executing the Agreement have the full power
and authority to bind their respective entities to the terms hereof and have
been authorized to do so in accordance with such entities corporate or other
organization.
ARTICLE IX.
ARBITRATION, CONSTRUCTION AND INTERPRETATION
A. This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of Louisiana. Any claims arising out
of this Agreement or the performance hereof shall be decided by binding
arbitration under the auspices of, and in accordance with the rules of, the
American Arbitration Association. Any arbitration hearing held pursuant to
the terms of this Article IX shall be held in Baton Rouge and shall be
presided over by a panel of three (3) arbitrators.
B. If any term, covenant, or condition of this Agreement or the
application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term covenant or condition to persons or circumstance other than
those to which it is held invalid or unenforceable shall not be affected
thereby and each term, covenant or condition of the Agreement shall be valid
and be enforced to the fullest extent permitted by law.
ARTICLE X.
NOTICES
Any written notice, demand or request, required or authorized by this
Agreement, shall be deemed properly given to or served on Network if mailed
by United States Mail, certified, return receipt requested to:
NETWORK LONG DISTANCE, INC.
525 Florida Street
Baton Rouge, Louisiana 70801
ATTN: Mike Ross, President
and shall be deemed properly given to or served on Value Tel if mailed by
United States
8
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Mail, return receipt requested to:
VALUE TEL, INC.
1841 Centre Point Drive
Suite 135
Naperville, Illinois 60563
Attn: Tim Sledz, President
ARTICLE XI.
ENTIRE AGREEMENT
This Agreement, together with its attachments and exhibits, constitutes
the entire Agreement with respect to use of the services between the parties
hereto and supersedes all prior agreements, proposals, negotiations,
representations, discussions, and correspondence, either written or oral,
with respect to the subject matter hereof. To the extent, however, that any
provision, term, or condition of this Agreement is in conflict with any of
the attachments, exhibits, or addendums hereto, said attachments, exhibits,
or addendums shall be deemed to supercede this Agreement. No amendments to
the Agreement shall be effective unless in writing and signed by both parties
hereto.
IN WITNESS WHEREOF, the parties caused these presents to be executed,
acknowledged and delivered in a form and manner proper and sufficient at law,
all as of the day and year first above written.
NETWORK LONG DISTANCE, INC.
BY: /s/ MIKE ROSS
----------------------------------
NAME: MIKE ROSS
TITLE: PRESIDENT
VALUE TEL, INC.
BY: /s/ TIM SLEDZ
----------------------------------
NAME: TIM SLEDZ
TITLE: PRESIDENT
9
<PAGE>
Attachment A
Schedule of Fees and Charges
The fees and charges to be paid to Value Tel by Network shall be equal to
Value Tel's actual cost of providing the services specified hereunder but in
no event shall said fees and charges exceed three percent (3%) of the Total
Net Revenue (as such term is defined in the Asset Purchase of even date).
Network shall pay all applicable sales agent commissions relative to the
Qualified Customer Accounts (as such term is defined in the Asset Purchase
Agreement) but in no event shall said sales agent commissions exceed seven
percent (7%) of Total Net Revenue.
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<PAGE>
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (the "Agreement") is made and entered as of the
31st day of October, 1995 by and among Network Long Distance, Inc.
("Purchaser") and Value Tel, Inc. ("Seller").
WHEREAS, Seller and Purchaser have this date executed an Asset Purchase
Agreement (the "Asset Purchase Agreement") whereby Seller has agreed to sell,
and Purchaser has agreed to purchase, certain selected assets of Seller (the
"Assets"); and
WHEREAS, as a material condition to Purchaser's performance under the
Asset Purchase Agreement, Seller has agreed to restrict itself from selling
stock received from Purchaser pursuant to the Asset Purchase Agreement (the
"Acquired Shares"); and
WHEREAS, Seller acknowledges that the Acquired Shares are "restricted"
and may not be transferred or sold without a registration statement being in
effect with the respect to the Acquired Shares or unless or until an
exemption is available.
WHEREAS, as a material condition to Purchaser's performance under the
Asset Purchase Agreement, Seller has agreed to restrict itself from effecting
any transfer, stock dividend, liquidation or disposition of the Acquired
Shares to Seller's individual shareholders which would result in any of
Seller's individual shareholders owning more five percent (5%) or more of
Purchaser's outstanding common stock.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants, representations and warranties herein contained, it is
agreed as follows:
1. Seller hereby agrees not to sell, transfer or otherwise dispose of any
portion of the Acquired Shares constituting more than one percent (1%) of all
issued and outstanding shares of Purchaser's common stock every ninety (90)
days. The foregoing covenant shall apply regardless of whether the Acquired
Shares are registered pursuant to a Form S-3 filing, or any other
registration statement filing, with the Securities Exchange Commission. The
restrictions contained in this paragraph shall not apply to any Acquired
Shares which are "piggyback" registered AND SOLD as part of a secondary
offering in accordance with Section 11.12(a) of the Asset Purchase Agreement.
2. Seller hereby agrees not to effect any transfer, stock dividend,
liquidation or disposition of the Acquired Shares to Seller's individual
shareholders which would result in any of Seller's individual shareholders
owning, either directly or indirectly, five percent (5%) or more of all
issued and outstanding shares of Purchaser's common stock at any given time.
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<PAGE>
3. The restrictions and covenants contained herein shall be enforceable
against Seller as well as any subsequent owners, transferees and beneficial
owners of the Acquired Shares.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
Network Long Distance, Inc. Value Tel, Inc.
By: /s/ MIKE ROSS By: /s/ TIM SLEDZ
----------------------------- -----------------------------
Name: Mike Ross Name: Tim Sledz
Title: President Title: President
2
<PAGE>
MASTER LETTER OF AGENCY
Master Letter of Agency ("Master LOA") executed this 31st day of
October, 1995 by and on behalf of Value Tel, Inc., a Delaware corporation
("Seller") in favor of Network Long Distance, Inc., a Delaware corporation
("Purchaser").
Seller hereby names, appoints and authorizes Purchaser to act as the
substitute agent in all matters related to providing long distance service
for the customers whose customer accounts (the "Customer Accounts") are being
transferred to Purchaser pursuant to that certain Asset Purchase Agreement of
even date 1995 between Seller and Purchaser (the "Asset Purchase Agreement").
Seller further hereby authorizes Purchaser to obtain all information
necessary to service the Customer Accounts, including but not limited to
information relating to any account from any telephone company or any credit
reporting service.
Seller further hereby names, appoints and authorizes Purchaser to act as
the "RespOrg" on all Customer Accounts.
Seller and Purchaser hereby agree that this Master LOA may be excluded
in counterparts which, when taken together, shall constitute an original.
Seller
Value Tel, Inc.
By /s/ TIM SLEDZ
------------------------
Tim Sledz, President
Purchaser:
Network Long Distance, Inc.
By /s/ MIKE ROSS
------------------------
Mike Ross, President
<PAGE>
NONCOMPETITION AGREEMENT
AGREEMENT (the "Agreement") made this 31st day of October, 1995 between
Network Long Distance, Inc. a Delaware corporation ("Network"), and Brian
Sledz ("Individual").
RECITALS
WHEREAS, Network is a switch-based reseller of long distance
telecommunications services based in Baton Rouge, Louisiana, and
WHEREAS, Individual is an employee and shareholder of Value Tel, Inc.
("Value Tel"), a switchless reseller of long distance telecommunications
services based in Naperville, Illinois, and
WHEREAS, Network has purchased, or will shortly be purchasing among
other things, selected customer accounts ("Customer Accounts") and related
assets (collectively, the "Assets") of Value Tel's end user customers (the
"Acquisition"), and
WHEREAS, Individual has agreed, as a condition to the Acquisition, to
execute a noncompetition agreement restraining him from contacting, selling,
marketing, soliciting and diverting the Customer Accounts as to long distance
telecommunications products and services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties herein contained, the parties hereby agree as
follows:
1. TERM
1.1 Network and Individual hereby agree that the term of this
Agreement shall be for five (5) years from the date hereof and shall not be
cancellable prior to its expiration unless specifically agreed to in writing
by both parties.
2. CONFIDENTIALITY
2.1 Individual acknowledges that in and as a result of the
Acquisition, he will be making use of, acquiring, and/or adding to
confidential information of a special and unique nature and value relating to
Network's business, including but not limited to, Network's trade secrets,
systems, procedures, manuals, confidential reports, computer print-outs,
lists of customers, computer data base information, as well as the nature and
type of services and goods sold, marketed and/or rendered by Network and the
prices charged therefore, and the equipment and methods preferred and used by
Network and its customers ("Confidential Information").
1
<PAGE>
2.2 As a material inducement to Network to enter into this Agreement
and to consummate the Acquisition. Individual covenants and agrees that (a)
he shall not at any time during or following the term of this Agreement,
directly or indirectly, divulge or disclose for any purpose whatsoever any
Confidential Information that has been obtained by, or disclosed to, him as a
result of the Acquisition and (b) upon termination of this Agreement, he
shall deliver promptly to Network all price lists, commissions schedules,
discount rates, equipment, notes, books, correspondence, drawings, customer
lists, computer print-outs, computer discs or duplicates, hard copy of
computer data worksheets, and any other written and/or graphic records or
materials of any kind relating to Network's business which are in his
possession or under its control.
2.3 Furthermore, Individual acknowledges and agrees that
(a) Individual shall keep secret all Confidential Information
and will not make, use, sell, or reveal any of the same to any competitor or
any other person unless and until the same shall have become a matter of
public knowledge or until written permission shall have been given to him by
Network to such sale, transfer or other disclosure.
(b) At all times Individual shall cooperate with Network or its
designee and their counsel in prosecuting or defending any litigation and/or
administrative proceedings which may arise in connection with Network's
business operations.
(c) No termination of this Agreement shall release Individual
from the above obligations.
2.4 In the event of a breach or threatened breach of Individual of any
of the provisions of this Section 2, Network, in addition to and not in
limitation of any other rights, remedies or damages available to it, shall be
entitled to preliminary and permanent injunctive relief in order to prevent
or restrain such breach or threatened breach of Individual.
3. COVENANTS AGAINST COMPETITION.
3.1 As a material inducement to Network to consummate the Acquisition,
Individual covenants and agrees as follows:
(a) During the term of this Agreement, Individual shall not,
directly or indirectly, own an interest in, operate, join, control,
participate in, or be connected in any manner with any person, firm,
corporation or other entity soliciting orders for selling, distributing, or
otherwise marketing long distance telecommunications services to the Customer
Accounts.
(b) During the term of this Agreement, Individual shall not,
directly or
2
<PAGE>
indirectly, engage in any business activity that would require Individual to
disclose, base judgment upon, or otherwise utilize any Confidential
Information obtained by or disclosed to Individual as a result of the
Acquisition.
(c) During the course of this Agreement, Individual shall not,
directly, indirectly, commit any act or undertake any activity that would
tend to interfere or dispute any existing relationship between Network and
any of the customers whose Customer Accounts were transferred to Network as
part of the Acquisition.
(d) During the term of this Agreement, Individual shall not
contact or solicit any customers of Network whom he learned of as a result of
the Acquisition.
(e) During the term of this Agreement, Individual shall not
contact or solicit any customers and/or potential customers whose accounts
and/or service contracts were transferred to Network by Value Tel as part of
the Acquisition.
3.2 Individual covenants and agrees that if he violates any of the
foregoing covenants, Network shall be entitled to an accounting and repayment
of all profits, compensation, commissions, remuneration or other benefits
that individual directly or indirectly, has realized and/or may realize as a
result of, or in connection with the violation. The foregoing remedies shall
be in addition to, and not in limitation of, any injunctive relief or other
rights or remedies to which Network is or may be entitled at law, in equity,
or under this Agreement.
3.3 Individual has carefully read and considered the foregoing
provisions of this section, and having done so, agrees that the restrictions
contained therein are fair and reasonable and reasonably required for the
protection of the interest of Network. If, notwithstanding the foregoing, any
of the provisions contained in this section shall be held to be invalid or
unenforceable, the remaining provisions thereof nevertheless shall continue
to be valid and enforceable as though the invalid or unenforceable
provisions had not been included in this section. If any restriction
contained in this section is deemed by a court or other tribunal with
jurisdiction to be unreasonable or unenforceable, such restriction shall
become and thereafter shall be the maximum restriction permitted by law.
4. APPLICABLE LAW. This Agreement shall be construed according to
and government by the laws of Louisiana.
5. ASSIGNMENT. Individual may not assign any right or obligation
under this Agreement without the prior written consent of Network. Any
attempted assignment in violation of this section shall be ineffective, null
and void.
6. SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of
3
<PAGE>
this Agreement shall not affect the validity and enforceability of the other
provisions.
7. NOTICE. Any notice required under this Agreement shall be
sufficient and shall be deemed effective if it is in writing and delivered
personally or sent by certified or registered mail, return receipt requested,
first-class postage prepaid, to the addresses listed below.
8. ENTIRE AGREEMENT.
8.1 This Agreement, contains the entire agreement and understanding
by any between Individual and Network with respect to the subject matter
hereof and no representations, promises, agreement, or understandings of any
nature written or oral, not contained herein shall be of any force or effect.
8.2 No modification or amendment of this Agreement shall be valid or
binding unless it is in writing and signed by the parties hereto.
8.3 No waiver of any provisions of this Agreement shall be valid
unless it is in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties have fully executed this Agreement in
duplicate originals before the undersigned competent witnesses:
WITNESSES: NETWORK LONG DISTANCE, INC.
525 Florida Street
Baton Rouge, LA 70801
By /s/ MIKE ROSS
- ----------------------------- ---------------------------------
Name: Mike Ross
Title: President
/s/ WILLIAM PELLER
- ----------------------------- -----------------------------------
William Peller
1841 Centre Point Drive
Suite 135
Naperville, Illinois 60563
4
<PAGE>
NONCOMPETITION AGREEMENT
AGREEMENT (the "Agreement") made this 31st day of October, 1995 between
Network Long Distance, Inc. a Delaware corporation ("Network"), and Brian
Sledz ("Individual").
RECITALS
WHEREAS, Network is a switch-based reseller of long distance
telecommunications services based in Baton Rouge, Louisiana, and
WHEREAS, Individual is an employee and shareholder of Value Tel, Inc.
("Value Tel"), a switchless reseller of long distance telecommunications
services based in Naperville, Illinois, and
WHEREAS, Network has purchased, or will shortly be purchasing among
other things, selected customer accounts ("Customer Accounts") and related
assets (collectively, the "Assets") of Value Tel's end user customers (the
"Acquisition"), and
WHEREAS, Individual has agreed, as a condition to the Acquisition, to
execute a noncompetition agreement restraining him from contacting, selling,
marketing, soliciting and diverting the Customer Accounts as to long distance
telecommunications products and services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties herein contained, the parties hereby agree as
follows:
1. TERM
1.1 Network and Individual hereby agree that the term of this
Agreement shall be for five (5) years from the date hereof and shall not be
cancellable prior to its expiration unless specifically agreed to in writing
by both parties.
2. CONFIDENTIALITY
2.1 Individual acknowledges that in and as a result of the
Acquisition, he will be making use of, acquiring, and/or adding to
confidential information of a special and unique nature and value relating to
Network's business, including but not limited to, Network's trade secrets,
systems, procedures, manuals, confidential reports, computer print-outs,
lists of customers, computer data base information, as well as the nature and
type of services and goods sold, marketed and/or rendered by Network and the
prices charged therefore, and the equipment and methods preferred and used by
Network and its customers ("Confidential Information").
1
<PAGE>
2.2 As a material inducement to Network to enter into this Agreement
and to consummate the Acquisition. Individual covenants and agrees that (a)
he shall not at any time during or following the term of this Agreement,
directly or indirectly, divulge or disclose for any purpose whatsoever any
Confidential Information that has been obtained by, or disclosed to, him as a
result of the Acquisition and (b) upon termination of this Agreement, he
shall deliver promptly to Network all price lists, commissions schedules,
discount rates, equipment, notes, books, correspondence, drawings, customer
lists, computer print-outs, computer discs or duplicates, hard copy of
computer data worksheets, and any other written and/or graphic records or
materials of any kind relating to Network's business which are in his
possession or under its control.
2.3 Furthermore, Individual acknowledges and agrees that
(a) Individual shall keep secret all Confidential Information
and will not make, use, sell, or reveal any of the same to any competitor or
any other person unless and until the same shall have become a matter of
public knowledge or until written permission shall have been given to him by
Network to such sale, transfer or other disclosure.
(b) At all times Individual shall cooperate with Network or its
designee and their counsel in prosecuting or defending any litigation and/or
administrative proceedings which may arise in connection with Network's
business operations.
(c) No termination of this Agreement shall release Individual
from the above obligations.
2.4 In the event of a breach or threatened breach of Individual of any
of the provisions of this Section 2, Network, in addition to and not in
limitation of any other rights, remedies or damages available to it, shall be
entitled to preliminary and permanent injunctive relief in order to prevent
or restrain such breach or threatened breach of Individual.
3. COVENANTS AGAINST COMPETITION.
3.1 As a material inducement to Network to consummate the Acquisition,
Individual covenants and agrees as follows:
(a) During the term of this Agreement, Individual shall not,
directly or indirectly, own an interest in, operate, join, control,
participate in, or be connected in any manner with any person, firm,
corporation or other entity soliciting orders for selling, distributing, or
otherwise marketing long distance telecommunications services to the Customer
Accounts.
(b) During the term of this Agreement, Individual shall not,
directly or
2
<PAGE>
indirectly, engage in any business activity that would require Individual to
disclose, base judgment upon, or otherwise utilize any Confidential
Information obtained by or disclosed to Individual as a result of the
Acquisition.
(c) During the course of this Agreement, Individual shall not,
directly, indirectly, commit any act or undertake any activity that would
tend to interfere or dispute any existing relationship between Network and
any of the customers whose Customer Accounts were transferred to Network as
part of the Acquisition.
(d) During the term of this Agreement, Individual shall not
contact or solicit any customers of Network whom he learned of as a result of
the Acquisition.
(e) During the term of this Agreement, Individual shall not
contact or solicit any customers and/or potential customers whose accounts
and/or service contracts were transferred to Network by Value Tel as part of
the Acquisition.
3.2 Individual covenants and agrees that if he violates any of the
foregoing covenants, Network shall be entitled to an accounting and repayment
of all profits, compensation, commissions, remuneration or other benefits
that individual directly or indirectly, has realized and/or may realize as a
result of, or in connection with the violation. The foregoing remedies shall
be in addition to, and not in limitation of, any injunctive relief or other
rights or remedies to which Network is or may be entitled at law, in equity,
or under this Agreement.
3.3 Individual has carefully read and considered the foregoing
provisions of this section, and having done so, agrees that the restrictions
contained therein are fair and reasonable and reasonably required for the
protection of the interest of Network. If, notwithstanding the foregoing, any
of the provisions contained in this section shall be held to be invalid or
unenforceable, the remaining provisions thereof nevertheless shall continue
to be valid and enforceable as though the invalid or unenforceable
provisions had not been included in this section. If any restriction
contained in this section is deemed by a court or other tribunal with
jurisdiction to be unreasonable or unenforceable, such restriction shall
become and thereafter shall be the maximum restriction permitted by law.
4. APPLICABLE LAW. This Agreement shall be construed according to
and government by the laws of Louisiana.
5. ASSIGNMENT. Individual may not assign any right or obligation
under this Agreement without the prior written consent of Network. Any
attempted assignment in violation of this section shall be ineffective, null
and void.
6. SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of
3
<PAGE>
this Agreement shall not affect the validity and enforceability of the other
provisions.
7. NOTICE. Any notice required under this Agreement shall be
sufficient and shall be deemed effective if it is in writing and delivered
personally or sent by certified or registered mail, return receipt requested,
first-class postage prepaid, to the addresses listed below.
8. ENTIRE AGREEMENT.
8.1 This Agreement, contains the entire agreement and understanding
by any between Individual and Network with respect to the subject matter
hereof and no representations, promises, agreement, or understandings of any
nature written or oral, not contained herein shall be of any force or effect.
8.2 No modification or amendment of this Agreement shall be valid or
binding unless it is in writing and signed by the parties hereto.
8.3 No waiver of any provisions of this Agreement shall be valid
unless it is in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties have fully executed this Agreement in
duplicate originals before the undersigned competent witnesses:
WITNESSES: NETWORK LONG DISTANCE, INC.
525 Florida Street
Baton Rouge, LA 70801
By /s/ MIKE ROSS
- ----------------------------- ---------------------------------
Name: Mike Ross
Title: President
/s/ TOM WATERLOO
- ----------------------------- -----------------------------------
Tom Waterloo
1841 Centre Point Drive
Suite 135
Naperville, Illinois 60563
4
<PAGE>
NONCOMPETITION AGREEMENT
AGREEMENT (the "Agreement") made this 31st day of October, 1995 between
Network Long Distance, Inc. a Delaware corporation ("Network"), and Brian
Sledz ("Individual").
RECITALS
WHEREAS, Network is a switch-based reseller of long distance
telecommunications services based in Baton Rouge, Louisiana, and
WHEREAS, Individual is an employee and shareholder of Value Tel, Inc.
("Value Tel"), a switchless reseller of long distance telecommunications
services based in Naperville, Illinois, and
WHEREAS, Network has purchased, or will shortly be purchasing among
other things, selected customer accounts ("Customer Accounts") and related
assets (collectively, the "Assets") of Value Tel's end user customers (the
"Acquisition"), and
WHEREAS, Individual has agreed, as a condition to the Acquisition, to
execute a noncompetition agreement restraining him from contacting, selling,
marketing, soliciting and diverting the Customer Accounts as to long distance
telecommunications products and services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties herein contained, the parties hereby agree as
follows:
1. TERM
1.1 Network and Individual hereby agree that the term of this
Agreement shall be for five (5) years from the date hereof and shall not be
cancellable prior to its expiration unless specifically agreed to in writing
by both parties.
2. CONFIDENTIALITY
2.1 Individual acknowledges that in and as a result of the
Acquisition, he will be making use of, acquiring, and/or adding to
confidential information of a special and unique nature and value relating to
Network's business, including but not limited to, Network's trade secrets,
systems, procedures, manuals, confidential reports, computer print-outs,
lists of customers, computer data base information, as well as the nature and
type of services and goods sold, marketed and/or rendered by Network and the
prices charged therefore, and the equipment and methods preferred and used by
Network and its customers ("Confidential Information").
1
<PAGE>
2.2 As a material inducement to Network to enter into this Agreement
and to consummate the Acquisition. Individual covenants and agrees that (a)
he shall not at any time during or following the term of this Agreement,
directly or indirectly, divulge or disclose for any purpose whatsoever any
Confidential Information that has been obtained by, or disclosed to, him as a
result of the Acquisition and (b) upon termination of this Agreement, he
shall deliver promptly to Network all price lists, commissions schedules,
discount rates, equipment, notes, books, correspondence, drawings, customer
lists, computer print-outs, computer discs or duplicates, hard copy of
computer data worksheets, and any other written and/or graphic records or
materials of any kind relating to Network's business which are in his
possession or under its control.
2.3 Furthermore, Individual acknowledges and agrees that
(a) Individual shall keep secret all Confidential Information
and will not make, use, sell, or reveal any of the same to any competitor or
any other person unless and until the same shall have become a matter of
public knowledge or until written permission shall have been given to him by
Network to such sale, transfer or other disclosure.
(b) At all times Individual shall cooperate with Network or its
designee and their counsel in prosecuting or defending any litigation and/or
administrative proceedings which may arise in connection with Network's
business operations.
(c) No termination of this Agreement shall release Individual
from the above obligations.
2.4 In the event of a breach or threatened breach of Individual of any
of the provisions of this Section 2, Network, in addition to and not in
limitation of any other rights, remedies or damages available to it, shall be
entitled to preliminary and permanent injunctive relief in order to prevent
or restrain such breach or threatened breach of Individual.
3. COVENANTS AGAINST COMPETITION.
3.1 As a material inducement to Network to consummate the Acquisition,
Individual covenants and agrees as follows:
(a) During the term of this Agreement, Individual shall not,
directly or indirectly, own an interest in, operate, join, control,
participate in, or be connected in any manner with any person, firm,
corporation or other entity soliciting orders for selling, distributing, or
otherwise marketing long distance telecommunications services to the Customer
Accounts.
(b) During the term of this Agreement, Individual shall not,
directly or
2
<PAGE>
indirectly, engage in any business activity that would require Individual to
disclose, base judgment upon, or otherwise utilize any Confidential
Information obtained by or disclosed to Individual as a result of the
Acquisition.
(c) During the course of this Agreement, Individual shall not,
directly, indirectly, commit any act or undertake any activity that would
tend to interfere or dispute any existing relationship between Network and
any of the customers whose Customer Accounts were transferred to Network as
part of the Acquisition.
(d) During the term of this Agreement, Individual shall not
contact or solicit any customers of Network whom he learned of as a result of
the Acquisition.
(e) During the term of this Agreement, Individual shall not
contact or solicit any customers and/or potential customers whose accounts
and/or service contracts were transferred to Network by Value Tel as part of
the Acquisition.
3.2 Individual covenants and agrees that if he violates any of the
foregoing covenants, Network shall be entitled to an accounting and repayment
of all profits, compensation, commissions, remuneration or other benefits
that individual directly or indirectly, has realized and/or may realize as a
result of, or in connection with the violation. The foregoing remedies shall
be in addition to, and not in limitation of, any injunctive relief or other
rights or remedies to which Network is or may be entitled at law, in equity,
or under this Agreement.
3.3 Individual has carefully read and considered the foregoing
provisions of this section, and having done so, agrees that the restrictions
contained therein are fair and reasonable and reasonably required for the
protection of the interest of Network. If, notwithstanding the foregoing, any
of the provisions contained in this section shall be held to be invalid or
unenforceable, the remaining provisions thereof nevertheless shall continue
to be valid and enforceable as though the invalid or unenforceable
provisions had not been included in this section. If any restriction
contained in this section is deemed by a court or other tribunal with
jurisdiction to be unreasonable or unenforceable, such restriction shall
become and thereafter shall be the maximum restriction permitted by law.
4. APPLICABLE LAW. This Agreement shall be construed according to
and government by the laws of Louisiana.
5. ASSIGNMENT. Individual may not assign any right or obligation
under this Agreement without the prior written consent of Network. Any
attempted assignment in violation of this section shall be ineffective, null
and void.
6. SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of
3
<PAGE>
this Agreement shall not affect the validity and enforceability of the other
provisions.
7. NOTICE. Any notice required under this Agreement shall be
sufficient and shall be deemed effective if it is in writing and delivered
personally or sent by certified or registered mail, return receipt requested,
first-class postage prepaid, to the addresses listed below.
8. ENTIRE AGREEMENT.
8.1 This Agreement, contains the entire agreement and understanding
by any between Individual and Network with respect to the subject matter
hereof and no representations, promises, agreement, or understandings of any
nature written or oral, not contained herein shall be of any force or effect.
8.2 No modification or amendment of this Agreement shall be valid or
binding unless it is in writing and signed by the parties hereto.
8.3 No waiver of any provisions of this Agreement shall be valid
unless it is in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties have fully executed this Agreement in
duplicate originals before the undersigned competent witnesses:
WITNESSES: NETWORK LONG DISTANCE, INC.
525 Florida Street
Baton Rouge, LA 70801
By /s/ MIKE ROSS
- ----------------------------- ---------------------------------
Name: Mike Ross
Title: President
/s/ TIM SLEDZ
- ----------------------------- -----------------------------------
Tim Sledz
1841 Centre Point Drive
Suite 135
Naperville, Illinois 60563
4
<PAGE>
NONCOMPETITION AGREEMENT
AGREEMENT (the "Agreement") made this 31st day of October, 1995 between
Network Long Distance, Inc. a Delaware corporation ("Network"), and Brian
Sledz ("Individual").
RECITALS
WHEREAS, Network is a switch-based reseller of long distance
telecommunications services based in Baton Rouge, Louisiana, and
WHEREAS, Individual is an employee and shareholder of Value Tel, Inc.
("Value Tel"), a switchless reseller of long distance telecommunications
services based in Naperville, Illinois, and
WHEREAS, Network has purchased, or will shortly be purchasing among
other things, selected customer accounts ("Customer Accounts") and related
assets (collectively, the "Assets") of Value Tel's end user customers (the
"Acquisition"), and
WHEREAS, Individual has agreed, as a condition to the Acquisition, to
execute a noncompetition agreement restraining him from contacting, selling,
marketing, soliciting and diverting the Customer Accounts as to long distance
telecommunications products and services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties herein contained, the parties hereby agree as
follows:
1. TERM
1.1 Network and Individual hereby agree that the term of this
Agreement shall be for five (5) years from the date hereof and shall not be
cancellable prior to its expiration unless specifically agreed to in writing
by both parties.
2. CONFIDENTIALITY
2.1 Individual acknowledges that in and as a result of the
Acquisition, he will be making use of, acquiring, and/or adding to
confidential information of a special and unique nature and value relating to
Network's business, including but not limited to, Network's trade secrets,
systems, procedures, manuals, confidential reports, computer print-outs,
lists of customers, computer data base information, as well as the nature and
type of services and goods sold, marketed and/or rendered by Network and the
prices charged therefore, and the equipment and methods preferred and used by
Network and its customers ("Confidential Information").
1
<PAGE>
2.2 As a material inducement to Network to enter into this Agreement
and to consummate the Acquisition. Individual covenants and agrees that (a)
he shall not at any time during or following the term of this Agreement,
directly or indirectly, divulge or disclose for any purpose whatsoever any
Confidential Information that has been obtained by, or disclosed to, him as a
result of the Acquisition and (b) upon termination of this Agreement, he
shall deliver promptly to Network all price lists, commissions schedules,
discount rates, equipment, notes, books, correspondence, drawings, customer
lists, computer print-outs, computer discs or duplicates, hard copy of
computer data worksheets, and any other written and/or graphic records or
materials of any kind relating to Network's business which are in his
possession or under its control.
2.3 Furthermore, Individual acknowledges and agrees that
(a) Individual shall keep secret all Confidential Information
and will not make, use, sell, or reveal any of the same to any competitor or
any other person unless and until the same shall have become a matter of
public knowledge or until written permission shall have been given to him by
Network to such sale, transfer or other disclosure.
(b) At all times Individual shall cooperate with Network or its
designee and their counsel in prosecuting or defending any litigation and/or
administrative proceedings which may arise in connection with Network's
business operations.
(c) No termination of this Agreement shall release Individual
from the above obligations.
2.4 In the event of a breach or threatened breach of Individual of any
of the provisions of this Section 2, Network, in addition to and not in
limitation of any other rights, remedies or damages available to it, shall be
entitled to preliminary and permanent injunctive relief in order to prevent
or restrain such breach or threatened breach of Individual.
3. COVENANTS AGAINST COMPETITION.
3.1 As a material inducement to Network to consummate the Acquisition,
Individual covenants and agrees as follows:
(a) During the term of this Agreement, Individual shall not,
directly or indirectly, own an interest in, operate, join, control,
participate in, or be connected in any manner with any person, firm,
corporation or other entity soliciting orders for selling, distributing, or
otherwise marketing long distance telecommunications services to the Customer
Accounts.
(b) During the term of this Agreement, Individual shall not,
directly or
2
<PAGE>
indirectly, engage in any business activity that would require Individual to
disclose, base judgment upon, or otherwise utilize any Confidential
Information obtained by or disclosed to Individual as a result of the
Acquisition.
(c) During the course of this Agreement, Individual shall not,
directly, indirectly, commit any act or undertake any activity that would
tend to interfere or dispute any existing relationship between Network and
any of the customers whose Customer Accounts were transferred to Network as
part of the Acquisition.
(d) During the term of this Agreement, Individual shall not
contact or solicit any customers of Network whom he learned of as a result of
the Acquisition.
(e) During the term of this Agreement, Individual shall not
contact or solicit any customers and/or potential customers whose accounts
and/or service contracts were transferred to Network by Value Tel as part of
the Acquisition.
3.2 Individual covenants and agrees that if he violates any of the
foregoing covenants, Network shall be entitled to an accounting and repayment
of all profits, compensation, commissions, remuneration or other benefits
that individual directly or indirectly, has realized and/or may realize as a
result of, or in connection with the violation. The foregoing remedies shall
be in addition to, and not in limitation of, any injunctive relief or other
rights or remedies to which Network is or may be entitled at law, in equity,
or under this Agreement.
3.3 Individual has carefully read and considered the foregoing
provisions of this section, and having done so, agrees that the restrictions
contained therein are fair and reasonable and reasonably required for the
protection of the interest of Network. If, notwithstanding the foregoing, any
of the provisions contained in this section shall be held to be invalid or
unenforceable, the remaining provisions thereof nevertheless shall continue
to be valid and enforceable as though the invalid or unenforceable
provisions had not been included in this section. If any restriction
contained in this section is deemed by a court or other tribunal with
jurisdiction to be unreasonable or unenforceable, such restriction shall
become and thereafter shall be the maximum restriction permitted by law.
4. APPLICABLE LAW. This Agreement shall be construed according to
and government by the laws of Louisiana.
5. ASSIGNMENT. Individual may not assign any right or obligation
under this Agreement without the prior written consent of Network. Any
attempted assignment in violation of this section shall be ineffective, null
and void.
6. SEVERABILITY. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions of
3
<PAGE>
this Agreement shall not affect the validity and enforceability of the other
provisions.
7. NOTICE. Any notice required under this Agreement shall be
sufficient and shall be deemed effective if it is in writing and delivered
personally or sent by certified or registered mail, return receipt requested,
first-class postage prepaid, to the addresses listed below.
8. ENTIRE AGREEMENT.
8.1 This Agreement, contains the entire agreement and understanding
by any between Individual and Network with respect to the subject matter
hereof and no representations, promises, agreement, or understandings of any
nature written or oral, not contained herein shall be of any force or effect.
8.2 No modification or amendment of this Agreement shall be valid or
binding unless it is in writing and signed by the parties hereto.
8.3 No waiver of any provisions of this Agreement shall be valid
unless it is in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties have fully executed this Agreement in
duplicate originals before the undersigned competent witnesses:
WITNESSES: NETWORK LONG DISTANCE, INC.
525 Florida Street
Baton Rouge, LA 70801
By /s/ MIKE ROSS
- ----------------------------- ---------------------------------
Name: Mike Ross
Title: President
/s/ BRIAN SLEDZ
- ----------------------------- -----------------------------------
Brian Sledz
1841 Centre Point Drive
Suite 135
Naperville, Illinois 60563
4
