<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 16, 1997
PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 33-80547 59-3074176
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building, Suite 400
Atlanta, Georgia 30326
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 30, 1997, Premiere Technologies, Inc. (the "Company")
completed the acquisitions, in separate transactions, of: (i) Voice-Tel
Enterprises, Inc. ("VTE"); (ii) VTN, Inc., the general partner of Voice-Tel
Network Limited Partnership ("VTNLP"), an affiliate of VTE; (iii) the limited
partner interests in VTNLP owned by Merchandising Productions, Inc.; and (iv)
certain independently owned and operated franchisees of VTE (the "Wave One
Franchisees"). The Company filed the required financial statements of the Wave
One Franchisees that meet the significance tests of Rule 3-05 of Regulation S-X
promulgated by the Securities and Exchange Commission ("Rule 3-05"), and the
required pro forma information of the Company as part of a Current Report on
Form 8-K dated April 30, 1997. On May 31, 1997, the Company completed the
acquisitions (the "Wave Two Acquisitions"), in separate transactions, of certain
additional independently owned and operated franchisees of VTE (referred to
herein individually as a "Wave Two Franchisee" and collectively as the "Wave Two
Franchisees"). The Wave Two Acquisitions were made pursuant to separate Transfer
Agreements by and among the Company, each Wave Two Franchisee and the owner(s)
of each Wave Two Franchisee (the "Owner(s)").
An aggregate of approximately 2,400,000 shares (the "Shares") of the
Company's $.01 par value common stock were issued in exchange for all of the
issued and outstanding common stock of the Wave Two Franchisees and for the
purchase of certain loans payable to Owner(s) of certain of the Wave Two
Franchisees. Approximately 10% of the Shares were placed in escrow pursuant to
Escrow Agreements by and among the Company, the escrow agent and the Owner(s) of
each Wave Two Franchisee in order to secure certain indemnification obligations
of those Owners. In addition, the Company granted certain demand and piggyback
registration rights to holders of the Shares issued pursuant to the Wave Two
Acquisitions. The Wave Two Franchisees will continue to operate as, or within,
wholly-owned subsidiaries of the Company.
Certain of the individually insignificant Wave Two Franchisees and
certain of the individually insignificant Wave One Franchisees when aggregated
meet the significance tests of Rule 3-05 (referred to herein individually as a
"Significant Franchise" and collectively as the "Significant Franchisees"). All
of the Wave Two Acquisitions of Significant Franchisees will be accounted for
under the pooling-of-interests method of accounting. In addition, the Company
has entered into a non-binding letter of intent with respect to the acquisition
of Greater Mahoney Valley, Ltd. ("Mahoney"), which will be considered a
Significant Franchisee. The Company intends to complete the Mahoney acquisition,
which will be accounted for under the purchase method of accounting, by June 30,
1997 and to file an amendment to this Form 8-K upon its completion.
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ITEM 7. EXHIBITS.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is impractical to provide the required financial statements of the
Significant Franchisees at the date of the filing of this Form 8-K. The
required financial statements will be provided as soon as practicable but
not later than 60 days after the date on which this Form 8-K must be filed.
(B) PRO FORMA FINANCIAL INFORMATION.
It is impractical to provide the required pro forma financial
information of the Company at the date of the filing of this Form 8-K. The
required pro forma financial information will be provided as soon as
practicable but not later than 60 days after the date on which this Form
8-K must be filed.
(C) EXHIBITS.
2.1 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Communications Concepts, Inc. and Owners of
Communications Concepts, Inc.(1)
2.2 Transfer Agreement dated as of May 20, 1997 by and among Premiere
Technologies, Inc., DARP, Inc. and Owners of DARP, Inc.
2.3 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Hi-Pak Systems, Inc. and Owners of Hi-Pak Systems,
Inc.(1)
2.4 Transfer Agreement dated as of May 29, 1997 by and among Premiere
Technologies, Inc. MMP Communications, Inc. and Owners of MMP
Communications, Inc.
2.5 Transfer Agreement dated as of May 16, 1997 by and among Premiere
Technologies, Inc., Lar-Lin Enterprises, Inc., Lar-Lin Investments,
Inc. and Voice-Mail Solutions, Inc. and Owners of Lar-Lin Enterprises,
Inc., Lar-Lin Investments, Inc. and Voice-Mail Solutions, Inc.(2)
2.6 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Voice-Net Communications Systems, Inc. and Owners
of Voice-Net Communications Systems, Inc. and Transfer Agreement dated
as of April 2, 1997 by and among Premiere Technologies, Inc., VT of
Long Island Inc. and Owners of VT of Long Island Inc.(1)(2)
2.7 Transfer Agreement dated as of May 22, 1997 by and among Premiere
Technologies, Inc., Voice Systems of Greater Dayton, Inc. and Owner of
Voice Systems of Greater Dayton, Inc. and Transfer Agreement dated as
of May 22,
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1997 by and among Premiere Technologies, Inc., Premiere Acquisition
Corporation, L'Harbot, Inc. and the Owners of L'Harbot, Inc.(2)
2.8 Transfer Agreement dated as of May 30, 1997 by and among Premiere
Technologies, Inc., Audioinfo Inc. and Owners of Audioinfo Inc.
2.9 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Dowd Enterprises, Inc. and Owners of Dowd
Enterprises, Inc. (incorporated by reference to Exhibit 2.10 to the
Company's Current Report on Form 8-K dated April 30, 1997).(1)
2.10 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., D & K Communications Corporation and Owners of
D & K Communications Corporation.(1)
2.11 Transfer Agreement dated as of May 19, 1997 by and among Premiere
Technologies, Inc., Voice-Tel of South Texas, Inc. and Owners of
Voice-Tel of South Texas, Inc.
2.12 Transfer Agreement dated as of May 31, 1997 by and among Premiere
Technologies, Inc., Indiana Communicator, Inc. and Owner of Indiana
Communicator, Inc.
2.13 Uniform Terms and Conditions, Exhibit A to Transfer Agreements by and
among Premiere Technologies, Inc., Wave One Franchisees and Owners of
Wave One Franchisees (incorporated by reference to Exhibit A to
Exhibit 2.4 to the Company's Current Report on Form 8-K dated April 2,
1997).
2.14 Uniform Terms and Conditions, Exhibit A to Transfer Agreements by and
among Premiere Technologies, Inc., Wave Two Franchisees and Owners of
Wave Two Franchisees.
2.15 Press Release dated April 2, 1997 (incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated April
2, 1997).
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(1) Wave One Franchisee(s).
(2) Certain of the Significant Franchisees operate through multiple, but
commonly owned, business entities.
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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.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
------------------------------------------
Patrick G. Jones
Senior Vice President of Finance and Legal
Dated: June 2, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
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<C> <S> <C>
2.1 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Communications Concepts, Inc. and Owners of
Communications Concepts, Inc.(1)
2.2 Transfer Agreement dated as of May 20, 1997 by and among Premiere
Technologies, Inc., DARP, Inc. and Owners of DARP, Inc.
2.3 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Hi-Pak Systems, Inc. and Owners of Hi-Pak Systems,
Inc.(1)
2.4 Transfer Agreement dated as of May 29, 1997 by and among Premiere
Technologies, Inc. MMP Communications, Inc. and Owners of MMP
Communications, Inc.
2.5 Transfer Agreement dated as of May 16, 1997 by and among Premiere
Technologies, Inc., Lar-Lin Enterprises, Inc., Lar-Lin Investments,
Inc. and Voice-Mail Solutions, Inc. and Owners of Lar-Lin Enterprises,
Inc., Lar-Lin Investments, Inc. and Voice-Mail Solutions, Inc.(2)
2.6 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Voice-Net Communications Systems, Inc. and Owners
of Voice-Net Communications Systems, Inc. and Transfer Agreement dated
as of April 2, 1997 by and among Premiere Technologies, Inc., VT of
Long Island Inc. and Owners of VT of Long Island Inc.(1)(2)
2.7 Transfer Agreement dated as of May 22, 1997 by and among Premiere
Technologies, Inc., Voice Systems of Greater Dayton, Inc. and Owner of
Voice Systems of Greater Dayton, Inc. and Transfer Agreement dated as
of May 22, 1997 by and among Premiere Technologies, Inc., Premiere
Acquisition Corporation, L'Harbot, Inc. and the Owners of L'Harbot,
Inc.(2)
2.8 Transfer Agreement dated as of May 30, 1997 by and among Premiere
Technologies, Inc., Audioinfo Inc. and Owners of Audioinfo Inc.
2.9 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., Dowd Enterprises, Inc. and Owners of Dowd
Enterprises, Inc. (incorporated by reference to Exhibit 2.10 to the
Company's Current Report on Form 8-K dated April 30, 1997).(1)
2.10 Transfer Agreement dated as of April 2, 1997 by and among Premiere
Technologies, Inc., D & K Communications Corporation and Owners of
D & K Communications Corporation.(1)
</TABLE>
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2.11 Transfer Agreement dated as of May 19, 1997 by and among Premiere
Technologies, Inc., Voice-Tel of South Texas, Inc. and Owners of
Voice-Tel of South Texas, Inc.
2.12 Transfer Agreement dated as of May 31, 1997 by and among Premiere
Technologies, Inc., Indiana Communicator, Inc. and Owner of Indiana
Communicator, Inc.
2.13 Uniform Terms and Conditions, Exhibit A to Transfer Agreements by and
among Premiere Technologies, Inc., Wave One Franchisees and Owners of
Wave One Franchisees (incorporated by reference to Exhibit A to
Exhibit 2.4 to the Company's Current Report on Form 8-K dated April 2,
1997).
2.14 Uniform Terms and Conditions, Exhibit A to Transfer Agreements by and
among Premiere Technologies, Inc., Wave Two Franchisees and Owners of
Wave Two Franchisees.
2.15 Press Release dated April 2, 1997 (incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated April
2, 1997).
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(1) Wave One Franchisee(s).
(2) Certain of the Significant Franchisees operate through multiple, but
commonly owned, business entities.
<PAGE>
EXHIBIT 2.1
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
COMMUNICATION CONCEPTS, INC.
AND
OWNERS OF COMMUNICATION CONCEPTS, INC.
DATED AS OF APRIL 2, 1997
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), Communication Concepts, Inc., a Massachusetts corporation (the
"Company"), and those parties listed on the signature pages hereto as the owners
of the Company (the "Owners").
W I T N E S S E T H:
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WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own one hundred percent (100%) of the equity interests in
the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of Massachusetts (the "Massachusetts Act") and the laws of the State
of Georgia (the "Georgia Act"). Merger Corp shall be the surviving corporation
resulting from the Merger, shall thereafter conduct the business and operations
of the Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
Articles or a Certificate of Merger, as appropriate, executed in accordance with
the relevant provisions of the Massachusetts Act and a Certificate of Merger
executed in accordance with the relevant provisions of the Georgia Act and shall
make all other filings or recordings required under each such Act as soon as
practicable on or after the Closing Date. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Articles or Certificate of Merger, as appropriate, reflecting the
Merger becomes effective with the Secretary of State of the State of
Massachusetts and the Certificate of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of Georgia (the "Effective
Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the capital stock, no par value per share, of
the Company ("Company Stock") (excluding treasury shares and excluding shares
held by shareholders who perfect their statutory dissenters' rights as provided
in Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing (A)
the product of .9 multiplied by the Company Purchase Price, by
(B) the Average Closing Price; and
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(ii) the number of shares of Premiere Stock determined by dividing (A)
the product of .1 multiplied by the Company Purchase Price, by
(B) the Average Closing Price (the "General Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount and the Specific Escrow Amount in negotiable form to the
Escrow Agent to be held in escrow pursuant to the terms and conditions of the
Escrow Agreement in the forms attached hereto as Exhibit B, respectively, which
shall be executed and delivered by Premiere and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $10,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$868,444.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement") .
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(f) "Stock Multiple" shall be six (6).
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the Massachusetts Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
Massachusetts Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
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(b) such Owner is acquiring Premiere Stock for such Owner's own
account and not with a view to or for sale in connection with any public
distribution thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Articles or Certificate of Merger, as appropriate, with the Secretary of
State of the State of Massachusetts and a Certificate of Merger with the
Secretary of State of the State of Georgia in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates,
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from and against any and all Losses suffered or incurred by any such party by
reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on Schedule 2.19 or
in the Financial Statements).
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere agrees that it shall publish such results within forty-five (45) days
after the end of the first fiscal quarter of Premiere containing the required
period of post-Merger combined operations and that it shall notify the Company
and each of the Owners promptly following such publication. Premiere shall be
entitled to place the following restrictive legend on the shares of Premiere
Stock issued pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act.
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The Company shall use its reasonable efforts to cause each such Person to
deliver to Premiere as soon as reasonably practicable following the execution of
this Agreement, a written agreement, substantially in the form attached hereto
as Exhibit D."3
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the Massachusetts Act and the Company shall
have provided Premiere certified copies of such resolutions, and Owners holding
no more than ten percent (10%) of the Company Common Stock issued and
outstanding immediately prior to the Effective Time shall have exercised any of
the rights described in Section 2.4.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the Franchisee
Companies shall have executed and delivered Grand Solution Documents reflecting
the terms described in Exhibit E hereto in form and substance reasonable
satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
in the form attached hereto as Exhibit F containing representations related to
the pooling of interests accounting treatment.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
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<PAGE>
4.5 Waiver of Rights of First Refusal. Each Owner shall have waived any and
all rights to purchase shares of capital stock of the Company arising by virtue
of the Transactions, including without limitation, rights arising under the
Company's Certificate of Incorporation.
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
delivered a Registration Rights Agreement.
VI. MISCELLANEOUS
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
36 Washington Street Baker & Hostetler LLP
Suite 250 1900 East 9th Street
Wellesley Hills, MA 02181 Cleveland, OH 44114-3485
Attn: Garrie C. O'Neil Attn: Michael P. McNamara, Jr.
Phone: (617) 239-0430 Phone: (216) 621-0200
Fax: (617) 239-0603 Fax: (216) 696-0740
If to the Owners: With a copy to:
36 Washington Street Baker & Hostetler LLP
Suite 250 1900 East 9th Street
Wellesley Hills, MA 02181 Cleveland, OH 44114-3485
Attn: Garrie C. O'Neil Attn: Michael P. McNamara, Jr.
Phone: (617) 239-0430 Phone: (216) 621-0200
Fax: (617) 239-0603 Fax: (216) 696-0740
6.2 Owner's Representative. The Owners' Representative for purposes of
Section 10.2 of the Uniform Terms shall be Garrie C. O'Neil, who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
-8-
<PAGE>
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean April 30, 1997.
(b) "Knowledge" of the Company shall mean the personal knowledge after
due inquiry of those facts that are known or should reasonably have been
known after due inquiry by Michael C. Chacho, Garrie C. O'Neill, Neil E.
Gold and Nathan A. Horowitz and the knowledge of any such Persons
obtained or which would have been obtained from a reasonable
investigation.
(c) "Outside Closing Date" shall mean June 30, 1997.
[Signatures begin on next page]
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
/s/ Patrick G. Jones
By: _________________________________
Sr. V.P.
Title: _______________________________
Attest:
/s/ Douglas B Hadaway
By: ____________________________
Asst. Sec.
Title: _________________________
COMPANY:
COMMUNICATION CONCEPTS, INC.,
a Massachusetts corporation
By: __________________________________
Title: _______________________________
Attest:
By: ____________________________
Title:__________________________
OWNERS:
/s/ Michael C. Chacho
______________________________________
MICHAEL C. CHACHO,
an individual resident of the
State of Massachusetts
Witness:
By: ____________________________
Name: __________________________
<PAGE>
/s/ Garrie C. O'Neill
___________________________________
GARRIE C. O'NEILL,
an individual resident of the
State of Massachusetts
Witness:
By: ____________________________
Name: __________________________
/s/ Neal E. Gold
___________________________________
NEAL E. GOLD,
an individual resident of the
State of Massachusetts
Witness:
By: ____________________________
Name: __________________________
/s/ Nathan A. Horowitz
___________________________________
NATHAN A. HOROWITZ,
an individual resident of the
State of Massachusetts
Witness:
By: ____________________________
Name: __________________________
<PAGE>
EXHIBIT 2.2
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 20, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, DARP, INC. (the
"Company"), a corporation organized and existing under the laws of New Jersey
(the "Company Jurisdiction"), and the party or parties listed on the signature
pages hereto as the owners of the Company (whether one or more, referred to as
the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $10,000.
6. "Multiple" shall mean 6.
7. "Reference Number" shall mean $280,170.
8. Russell L. Paul shall serve as the Owner's Representative under the
terms of Section 8.2. of the Uniform Terms.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
_______________________________________
By: Patrick G. Jones
Its: Senior Vice President-Finance
and Legal
COMPANY:
DARP, INC.
/s/ Russell L. Paul
_______________________________________
Russell L. Paul
President
OWNER:
/s/ Russell L. Paul
_______________________________________
Russell L. Paul
OWNER:
/s/ Dorothy E. Paul
_______________________________________
Dorothy E. Paul
2
<PAGE>
EXHIBIT 2.3
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
HI-PAK SYSTEMS, INC.
AND
OWNERS OF HI-PAK SYSTEMS, INC.
DATED AS OF APRIL 2, 1997
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), Hi-Pak Systems, Inc., a Michigan corporation (the "Company"), and
those parties listed on the signature pages hereto as the owners of the Company
(the "Owners").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own one hundred percent (100%) of the equity interests in
the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of Michigan (the "Michigan Act") and the laws of the State of Georgia
(the "Georgia Act"). Merger Corp shall be the surviving corporation resulting
from the Merger, shall thereafter conduct the business and operations of the
Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
Articles of Merger, as appropriate, executed in accordance with the relevant
provisions of the Michigan Act and a Certificate of Merger executed in
accordance with the relevant provisions of the Georgia Act and shall make all
other filings or recordings required under each such Act as soon as practicable
on or after the Closing Date. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger, as appropriate, reflecting the Merger becomes effective with the
Secretary of State of the State of Michigan and the Certificate of Merger
reflecting the Merger becomes effective with the Secretary of State of the State
of Georgia (the "Effective Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the capital stock, par value $1.00 per share,
of the Company ("Company Stock") (excluding treasury shares and excluding shares
held by shareholders who perfect their statutory dissenters' rights as provided
in Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing
(A) the product of .9 multiplied by the Company Purchase
Price, by (B) the Average Closing Price; and
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<PAGE>
(ii) the number of shares of Premiere Stock determined by dividing
(A) the product of .1 multiplied by the Company Purchase
Price, by (B) the Average Closing Price (the "General Escrow
Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $5,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$510,852.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement").
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<PAGE>
(f) "Stock Multiple" shall be six (6).
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the Michigan Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
Michigan Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
-4-
<PAGE>
(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Articles of Merger, as appropriate, with the Secretary of State of the State
of Michigan and a Certificate of Merger with the Secretary of State of the State
of Georgia in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates,
-5-
<PAGE>
from and against any and all Losses suffered or incurred by any such party by
reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on
Schedule 2.19 or in the Financial Statements); and
(b) the claim by Julienne Showey against the Company (irrespective of
whether disclosed in the Schedules to the Uniform Terms).
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere agrees that it shall publish such results within forty-five (45) days
after the end of the first fiscal quarter of Premiere containing the required
period of post-Merger combined operations and that it shall notify the Company
and each of the Owners promptly following such publication. Premiere shall be
entitled to place the following restrictive legend on the shares of Premiere
Stock issued pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial
-6-
<PAGE>
results covering at least 30 days of combined operations after the
effective date of the merger through which the business combination was
effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere as soon as reasonably
practicable following the execution of this Agreement, a written agreement,
substantially in the form attached hereto as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the Michigan Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than ten percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the Franchisee
Companies shall have executed and delivered Grand Solution Documents reflecting
the terms described in Exhibit E hereto in form and substance reasonable
satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
in the form attached hereto as Exhibit F containing representations related to
the pooling of interests accounting treatment.
-7-
<PAGE>
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
4.5 Voice Response Corporation. All of the Company's obligations to or in
respect of Voice Response Corporation, including without limitation guarantees
of indebtedness, shall have been terminated. Further, Voice Response
Corporation shall vacate the office or other commercial space currently occupied
by the Company, within a reasonable period of time after the Closing, provided
however, under no condition will Voice Response Corporation remain in the space
90 days after closing or interfere with the operations of Premiere past closing.
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
delivered a Registration Rights Agreement.
VI. MISCELLANEOUS
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
Marvin Kasoff Michael P. McNamara, Jr.
Hi-Pak Systems, Inc. Baker & Hostetler LLP
31033 Schoolcraft Street 1900 East 9th Street
Suite 100 Cleveland, OH 44114-3485
Lavonia, MI 48150
Phone: (313) 458-5110 Phone: (216) 621-0200
Fax: (313) 458-2835 Fax: Fax: (216) 696-0740
Voice-Tel (313) 458-6278
-8-
<PAGE>
If to the Owners: With a copy to:
Marvin Kasoff Michael P. McNamara, Jr.
Hi-Pak Systems, Inc. Baker & Hostetler LLP
31033 Schoolcraft Street 1900 East 9th Street
Suite 100 Cleveland, OH 44114-3485
Lavonia, MI 48150
Phone: (313) 458-5110 Phone: (216) 621-0200
Fax: (313) 458-2835 Fax: (216) 696-0740
Voice-Tel (313) 458-6278
6.2 Owner's Representative. The Owners' Representative for purposes of
Section 10.2 of the Uniform Terms shall be Marvin Kasoff, who shall serve as the
Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean April 30, 1997.
(b) "Knowledge" of the Company shall mean the personal knowledge after
due inquiry of those facts that are known or should reasonably have been
known after due inquiry by Marvin Kasoff and Barbara Kasoff and the
knowledge of any such Persons obtained or which would have been obtained
from a reasonable investigation.
(c) "Outside Closing Date" shall mean June 30, 1997.
[Signatures begin on next page.]
-9-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
By: /s/ Patrick G. Jones
_________________________________
Title: Sr. V.P.
______________________________
Attest:
By: /s/ Douglas B. Hadaway
____________________________
Title: Asst. Sec.
_________________________
COMPANY:
HI-PAK SYSTEMS, INC.,
a Michigan corporation
By: /s/ Marvin Kasoff
______________________________
Title: President
____________________________
Attest:
By: /s/ Barbara Kasoff
____________________________
Title: Sec.
_________________________
OWNERS:
/s/ Marvin Kasoff
_________________________________
MARVIN KASOFF,
an individual resident of the
State of Michigan, and as sole
trustee of MARVIN KASOFF
REVOCABLE TRUST
Witness:
By: /s/ Barbara Kasoff
____________________________
Name: Barbara Kasoff
__________________________
[Signatures continued on next page.]
<PAGE>
/s/ Barbara Kasoff
___________________________________
BARBARA KASOFF,
an individual resident of the
State of Michigan, and as sole
trustee of BARBARA KASOFF
REVOCABLE TRUST
Witness:
/s/ Marvin Kasoff
By: ____________________________
Marvin Kasoff
Name: __________________________
<PAGE>
EXHIBIT 2.4
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 29, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, MMP
COMMUNICATIONS, INC. (the "Company"), a corporation organized and existing under
the laws of CALIFORNIA (the "Company Jurisdiction"), and the party or parties
listed on the signature pages hereto as the owners of the Company (whether one
or more, referred to as the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $10,000.00.
6. "Multiple" shall mean 6.
7. "Reference Number" shall mean $434,873.
<PAGE>
8. MARK J. MONRO shall serve as the Owner's Representative under the terms
of Section 8.2. of the Uniform Terms.
9. EXHIBIT 5.10. (Additional Deliveries)
Letter Agreement cancelling Buy-Sell Agreement
Fully executed and delivered Transfer Agreement relating to Taft
Communications, Inc., and all documents required by said Transfer Agreement
10. EXHIBIT 6.1.2. (Additional Indemnification Matters)
None
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
_____________________________________
By: Patrick G. Jones
Its: Senior Vice President-Finance
and Legal
COMPANY:
MMP COMMUNICATIONS, INC.
/s/ Mark J. Monro
_____________________________________
By: MARK J. MONRO
Its: President
OWNER:
/s/ Mark J. Monro
_____________________________________
MARK J. MONRO
1314 Oakhurst Ct.
Camarilo, CA 93010
OWNER:
/s/ Doug McMillan
_____________________________________
DOUG MCMILLAN
26565 Oceanview Dr.
Malibu, CA 90265
<PAGE>
EXHIBIT 2.5
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
This Transfer Agreement (this "Agreement") is entered into as of
May 16, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, LAR-LIN
ENTERPRISES, INC. LAR-LIN INVESTMENTS, INC. AND VOICE-MAIL SOLUTIONS, INC. (each
a "Company" and collectively, the "Companies"), each a corporation organized and
existing under the laws of KANSAS (the "Company Jurisdiction"), and the party or
parties listed on the signature pages hereto as the owners of each Company
(whether one or more, referred to as the "Owners").
BACKGROUND
This Agreement provides for the acquisition of each Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Companies held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and each Company have approved
the terms and conditions set forth in this Agreement. This Agreement provides
for all of the Owners' equity interests in the Companies to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms. As used in
the Uniform Terms, the "Company" shall mean the "Companies."
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $10,000.00.
6. "Multiple" shall mean 6.
7. "Reference Number" for Lar-Lin Enterprises, Inc. shall mean $384,587,
for Lar-Lin Investments, Inc. shall mean $219,293, and for Voice-Mail Solutions,
Inc. shall mean $112,838.
8. Lawrence W. Roaseau shall serve as the Owner's Representative under
the terms of Section 8.2. of the Uniform Terms.
9. EXHIBIT 5.10. (Additional Deliveries)
Amendment to letter agreement with Ruiz & Flint, PC, PA
<PAGE>
Assignment of vehicle leases to Owners
10. EXHIBIT 6.1.2. (Additional Indemnification Matters)
None
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
__________________________________
By: Patrick G. Jones
Its: Senior VicePresident-Finance
and Legal
COMPANIES:
LAR-LIN ENTERPRISES, INC.
/s/ Lawrence W. Roaseau
__________________________________
By: Lawrence W. Roaseau
Its: President
LAR-LIN INVESTMENTS, INC.
/s/ Lawrence W. Roaseau
__________________________________
By: Lawrence W. Roaseau
Its: President
VOICE-MAIL SOLUTIONS, INC.
/s/ Lawrence W. Roaseau
__________________________________
By: Lawrence W. Roaseau
Its: President
OWNERS:
/s/ Lawrence W. Roaseau
__________________________________
Lawrence W. Roaseau
/s/ Linda C. Roaseau
__________________________________
Linda C. Roaseau
2
<PAGE>
EXHIBIT 2.6
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
VOICE-NET COMMUNICATIONS SYSTEMS, INC.
AND
OWNERS OF VOICE-NET COMMUNICATIONS SYSTEMS, INC.
DATED AS OF APRIL 2, 1997
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), VOICE-NET COMMUNICATIONS SYSTEMS, INC., a New York corporation
(the "Company"), and those parties listed on the signature pages hereto as the
owners of the Company (the "Owners").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own at least ninety-six percent (96 %) of the equity
interests in the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of New York (the "New York Act") and the laws of the State of Georgia
(the "Georgia Act"). Merger Corp shall be the surviving corporation resulting
from the Merger, shall thereafter conduct the business and operations of the
Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
a Certificate of Merger executed in accordance with the relevant provisions of
the New York Act and a Certificate of Merger executed in accordance with the
relevant provisions of the Georgia Act and shall make all other filings or
recordings required under each such Act as soon as practicable on or after the
Closing Date. The Merger and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Articles Certificate of
Merger reflecting the Merger becomes effective with the Secretary of State of
the State of New York and the Certificate of Merger reflecting the Merger
becomes effective with the Secretary of State of the State of Georgia (the
"Effective Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the no par value capital stock of the Company
("Company Stock") (excluding treasury shares and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing (A)
the product of .9 multiplied by the Company Purchase Price, by
(B) the Average Closing Price; and
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<PAGE>
(ii) the number of shares of Premiere Stock determined by dividing (A)
the product of .1 multiplied by the Company Purchase Price, by
(B) the Average Closing Price (the "General Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $5,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$594,985.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement").
-3-
<PAGE>
(f) "Stock Multiple" shall be six (6).
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the New York Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
New York Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
-4-
<PAGE>
(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
-5-
<PAGE>
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Certificate of Merger with the Secretary of State of the State of New York
and a Certificate of Merger with the Secretary of State of the State of Georgia
in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates, from and against
any and all Losses suffered or incurred by any such party by reason of or
arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on
Schedule 2.19 or in the Financial Statements.
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere
-6-
<PAGE>
agrees that it shall publish such results within forty-five (45) days after the
end of the first fiscal quarter of Premiere containing the required period of
post-Merger combined operations and that it shall notify the Company and each of
the Owners promptly following such publication. Premiere shall be entitled to
place the following restrictive legend on the shares of Premiere Stock issued
pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to
a business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act. The Company shall use its reasonable
efforts to cause each such Person to deliver to Premiere as soon as reasonably
practicable following the execution of this Agreement, a written agreement,
substantially in the form attached hereto as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the New York Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than 10 percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
-7-
<PAGE>
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
Franchisee Companies shall have executed and delivered Grand Solution Documents
reflecting the terms described in Exhibit E hereto in form and substance
reasonably satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
containing representations related to the pooling of interests accounting
treatment, in the form attached hereto as Exhibit F.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
4.5 Kane Miller Obligations. All obligations owing by the Company to Kane
Miller Corp. shall be satisfied in full, and Kane Miller Corp. shall have
released its security interest in shares of the Company's capital stock.
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
delivered a Registration Rights Agreement.
VI. MISCELLANEOUS
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
3011 Middletown Road Baker & Hostetler LLP
Bronx, NY 1900 East 9th Street
___________________ Cleveland, OH 44114-3485
Attn: ______________ Attn: Michael P. McNamara, Jr.
Phone: (___) ___-____ Phone: (___) ___-____
Fax: (718) 829-3818 Fax: (___) ___-____
-8-
<PAGE>
If to the Owners: With a copy to:
3011 Middletown Road Baker & Hostetler LLP
Bronx, NY 1900 East 9th Street
___________________ Cleveland, OH 44114-3485
Attn: ______________ Attn: Michael P. McNamara, Jr.
Phone: (___) ___-____ Phone: (___) ___-____
Fax: (718) 829-3818 Fax: (___) ___-____
6.2 Owner's Representative. The Owners' Representative for purposes of
Section 10.2 of the Uniform Terms shall be Banner K. Hughes, who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
and in the Uniform Terms, as used in this Agreement:
(a) "Anticipated Closing Date" shall mean April 30, 1997.
(b) "Knowledge" of the Company shall mean the personal knowledge after
due inquiry of those facts that are known or should reasonably have been
known after due inquiry by Banner K. Hughes and Richard W. Hughes and
the knowledge of any such Persons obtained or which would have been
obtained from a reasonable investigation.
(c) "Outside Closing Date" shall mean June 30, 1997.
[Signatures continued on following page.]
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<PAGE>
IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED THIS AGREEMENT AS OF THE
DAY AND year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
/s/ Patrick G. Jones
By: _____________________________
Sr. V.P.
Title: __________________________
Attest:
/s/ Douglas B. Hadaway
By: ____________________________
Asst. Sec.
Title: _________________________
COMPANY:
VOICE-NET COMMUNICATIONS
SYSTEMS, INC.
a New York corporation
/s/ Richard W. Hughes
By: _____________________________
President
Title: __________________________
Attest:
/s/ Geoffrey W. Crowley
By: ____________________________
Ex. Vice President
Title: _________________________
OWNERS:
/s/ Banner K. Hughes
_________________________________
BANNER K. HUGHES,
an individual resident of the
State of New York
Witness:
/s/ Geoffrey W. Crowley
By: ____________________________
Geoffrey W. Crowley
Name: __________________________
[signatures continued on following page]
<PAGE>
/s/ Richard W. Hughes
_________________________________
RICHARD W. HUGHES,
an individual resident of the
State of New York
Witness:
/s/ Geoffrey W. Crowley
By: ____________________________
Geoffrey W. Crowley
Name: __________________________
<PAGE>
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES INC.,
VT OF LONG ISLAND INC.
AND
OWNERS OF VT OF LONG ISLAND INC.
DATED AS OF APRIL 2, 1997
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
April 2, 1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), VT of Long Island Inc., a New York corporation (the "Company"),
and those parties listed on the signature pages hereto as the owners of the
Company (the "Owners").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own one hundred percent (100%) of the equity interests in
the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of New York (the "New York Act") and the laws of the State of Georgia
(the "Georgia Act"). Merger Corp shall be the surviving corporation resulting
from the Merger, shall thereafter conduct the business and operations of the
Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
a Certificate of Merger executed in accordance with the relevant provisions of
the New York Act and a Certificate of Merger executed in accordance with the
relevant provisions of the Georgia Act and shall make all other filings or
recordings required under each such Act as soon as practicable on or after the
Closing Date. The Merger and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Certificate of Merger
reflecting the Merger becomes effective with the Secretary of State of the State
of New York and the Certificate of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of Georgia (the "Effective
Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the no par value capital stock of the Company
("Company Stock") (excluding treasury shares and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing
(A) the product of .9 multiplied by the Company Purchase
Price, by (B) the Average Closing Price; and
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<PAGE>
(ii) the number of shares of Premiere Stock determined by dividing
(A) the product of .1 multiplied by the Company Purchase
Price, by (B) the Average Closing Price (the "General Escrow
Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the Normalized EBITDA of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $5,000.
(d) "Normalized EBITDA" of the Company shall be an amount equal to
$80,690.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement") .
(f) "Stock Multiple" shall be six (6).
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<PAGE>
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the New York Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
New York Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner, represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
- 4 -
<PAGE>
(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be offered,
sold, transferred or otherwise disposed of unless registered with
the Securities and Exchange Commission of the United States and the
securities regulatory authorities of applicable states or unless an
exemption from such registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Certificate of Merger with the Secretary of State of the State of New York
and a Certificate of Merger with the Secretary of State of the State of Georgia
in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates,
- 5 -
<PAGE>
from and against any and all Losses suffered or incurred by any such party by
reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on Schedule 2.19 or
in the Financial Satements).
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing. Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere agrees that it shall publish such results within forty-five (45) days
after the end of the first fiscal quarter of Premiere containing the required
period of post-Merger combined operations and that it shall notify the Company
and each of the Owners promptly following such publication. Premiere shall be
entitled to place the following restrictive legend on the shares of Premiere
Stock issued pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests"
and may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30
days of combined operations after the effective date of the merger
through which the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act.
- 6 -
<PAGE>
The Company shall use its reasonable efforts to cause each such Person to
deliver to Premiere as soon as reasonably practicable following the execution of
this Agreement, a written agreement, substantially in the form attached hereto
as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the New York Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than ten percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
Franchisee Companies shall have executed and delivered Grand Solution Documents
reflecting the terms described in Exhibit E hereto in form and substance
reasonably satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter from the Company
in the form attached hereto as Exhibit F containing representations related to
the pooling of interests accounting treatment.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
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<PAGE>
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 REGISTRATION RIGHTS. PREMIERE AND EACH OWNER SHALL HAVE EXECUTED AND
DELIVERED A REGISTRATION RIGHTS AGREEMENT.
VI. MISCELLANEOUS
6.1 NOTICES. THE ADDRESSES FOR NOTICES IN ACCORDANCE WITH SECTION 10.1 OF
THE UNIFORM TERMS FOR THE COMPANY AND THE OWNERS ARE AS FOLLOWS:
IF TO THE COMPANY: WITH A COPY TO:
3011 MIDDLETOWN ROAD BAKER & HOSTETLER LLP
BRONX, NY 1900 EAST 9TH STREET
___________________ CLEVELAND, OH 44114-3485
ATTN: RICHARD W. HUGHES ATTN: MICHAEL P. MCNAMARA, JR.
PHONE: (___) ___-____ PHONE: (___) ___-____
FAX: (718) 829-3818 FAX: (___) ___-____
IF TO THE OWNERS: WITH A COPY TO:
3011 MIDDLETOWN ROAD BAKER & HOSTETLER LLP
BRONX, NY 1900 EAST 9TH STREET
___________________ CLEVELAND, OH 44114-3485
ATTN: ______________ ATTN: MICHAEL P. MCNAMARA, JR.
PHONE: (___) ___-____ PHONE: (___) ___-____
FAX: (718) 829-3818 FAX: (___) ___-____
6.2 OWNER'S REPRESENTATIVE. THE OWNERS' REPRESENTATIVE FOR PURPOSES OF
SECTION 10.2 OF THE UNIFORM TERMS SHALL BE BANNER K. HUGHES, WHO SHALL SERVE AS
THE OWNER'S REPRESENTATIVE UNDER THE TERMS OF SAID SECTION 10.2 OF THE UNIFORM
TERMS.
6.3 CERTAIN DEFINITIONS. IN ADDITION TO THE TERMS DEFINED ELSEWHERE HEREIN
AND IN THE UNIFORM TERMS, AS USED IN THIS AGREEMENT:
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<PAGE>
(A) "ANTICIPATED CLOSING DATE" SHALL MEAN APRIL 30, 1997.
(B) "KNOWLEDGE" OF THE COMPANY SHALL MEAN THE PERSONAL KNOWLEDGE AFTER
DUE INQUIRY OF THOSE FACTS THAT ARE KNOWN OR SHOULD REASONABLY HAVE BEEN
KNOWN AFTER DUE INQUIRY BY BANNER K. HUGHES, RICHARD W. HUGHES AND
GEOFFREY W. CROWLEY AND THE KNOWLEDGE OF ANY SUCH PERSONS OBTAINED OR
WHICH WOULD HAVE BEEN OBTAINED FROM A REASONABLE INVESTIGATION.
(C) "OUTSIDE CLOSING DATE" SHALL MEAN JUNE 30, 1997.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
/s/ Patrick G. Jones
By: ________________________________
Sr. V.P.
Title: _____________________________
Attest:
/s/ Douglas B. Hadaway
By: ____________________________
Asst. Sec.
Title: _________________________
COMPANY:
VT OF LONG ISLAND INC.,
a New York corporation
/s/ Richard W. Hughes
By: ________________________________
Vice President
Title: _____________________________
Attest:
/s/ Geoffrey W. Crowley
By: ____________________________
Treasurer
Title: _________________________
OWNERS:
/s/ Banner K. Hughes
____________________________________
BANNER K. HUGHES,
an individual resident of the
State of New York
Witness:
/s/ Geoffrey W. Crowley
By: ____________________________
Geoffrey W. Crowley
Name: __________________________
[Signatures continued on following page.]
<PAGE>
/s/ Richard W. Hughes
___________________________________
RICHARD W. HUGHES,
an individual resident of the
State of New York
Witness:
/s/ Geoffrey W. Crowley
By: ____________________________
Geoffrey W. Crowley
Name: __________________________
/s/ Geoffrey W. Crowley
___________________________________
GEOFFREY W. CROWLEY,
an individual resident of the
State of New York
Witness:
/s/ Banner K. Hughes
By: ____________________________
Banner K. Hughes
Name: __________________________
<PAGE>
EXHIBIT 2.7
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 22, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, VOICE SYSTEMS OF
GREATER DAYTON, INC. (the "Company"), a corporation organized and existing under
the laws of Ohio (the "Company Jurisdiction"), and the party or parties listed
on the signature pages hereto as the owners of the Company (whether one or more,
referred to as the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $5,000.
6. "Multiple" shall mean 6.
7. "Reference Number" shall mean $106,430.
8. Elinor C. Ziv shall serve as the Owner's Representative under the
terms of Section 8.2. of the Uniform Terms.
9. EXHIBIT 5.10. (Additional Deliveries)
[none]
<PAGE>
10. EXHIBIT 6.1.2. (Additional Indemnification Matters)
[none]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
--------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
COMPANY:
VOICE SYSTEMS OF GREATER DAYTON, INC.
/s/ Elinor C. Ziv
--------------------------------------------
By: Elinor C. Ziv
Its: President
OWNER:
/s/ Elinor C. Ziv
--------------------------------------------
Elinor C. Ziv
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
Telecopy: (513) 679-4909
Telephone: (513) 679-4900
2
<PAGE>
TRANSFER AGREEMENT
(FORWARD TRIANGULAR MERGER)
(CORPORATION-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 22, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, PREMIERE
ACQUISITION CORPORATION , a corporation organized under the laws of Georgia
("Merger Corp"), L'HARBOT, INC. (the "Company"), a corporation organized and
existing under the laws of Ohio (the "Company Jurisdiction"), and the party or
parties listed on the signature pages hereto as the owners of the Company
(whether one or more, referred to as the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a forward triangular merger in which Premiere will issue shares of
its Common Stock as the consideration for a merger of the Company with and into
Merger Corp (the "Merger"). The respective Boards of Directors of Premiere and
the Company have approved the terms and conditions set forth in this Agreement.
This Agreement provides for all of the Owners' equity interests in the Company
to be exchanged for the consideration described below in the Merger.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Merger for all shareholders who own 3 or more
shares of Common Stock of will be determined in accordance with the following
provisions of the Uniform Terms: Article 11, entitled "Forward Triangular
Merger," and, as to such shareholders, Section 11.2, entitled "Forward
Triangular Merger (Stock Consideration)." The following provisions of the
Uniform Terms shall not apply as to such shareholders: Section 11.3, entitled
"Forward Triangular Merger (Cash Consideration)," Article 10, entitled "Share
Exchange," and Article 12, entitled "Reverse Triangular Merger."
3. The consideration for the Merger for all shareholders who own 2 or
fewer shares of Common Stock of will be determined in accordance with the
following provisions of the Uniform Terms: Article 11, entitled "Forward
Triangular Merger," and, as to such shareholders, Section 11.3, entitled
"Forward Triangular Merger (Cash Consideration)." The following provisions of
the Uniform Terms shall not apply as to such shareholders: Section 11.2,
entitled "Forward Triangular Merger (Stock Consideration)," Article 10, entitled
"Share Exchange," and Article 12, entitled "Reverse Triangular Merger."
4. It is the intention of the parties hereto that the business combination
to be effected by the Merger be accounted for as a pooling of interests.
<PAGE>
5. It is the intention of the parties hereto that the form of the
transactions with respect to the Merger and the Company and Premiere shall
qualify as a "reorganization" within the meaning of Section 368(a)(1)(B) of the
Code for federal income tax purposes.
6. "Deductible Amount" shall mean $5,000.
7. "Multiple" shall mean 6.
8. "Reference Number" shall mean $224,019.
9. Elinor C. Ziv shall serve as the Owner's Representative under the terms
of Section 8.2 of the Uniform Terms.
10. The parties acknowledge and agree that that certain account payable
owed by the Company to VTE in an amount of approximately $900, which by its
terms was not payable in 30 days, shall not be considered an account payable
over thirty days old for purposes of determining the consideration issuable in
the Merger.
11. The parties acknowledge and agree that if either Elinor C. Ziv or
Robert N. Ziv ceases to be an employee of the Company, Premiere or an affiliate
of Premiere following the Closing, then such person shall have the right to
purchase the laptop computer then being used by such person in the course of his
or her employment for an amount equal to the fair market value thereof. In the
event of such a purchase, the purchaser shall provide to the Company or Premiere
copies of all Company- or Premiere-related data, files and other information
stored in any manner on such computer and, following the delivery of such
copies, shall delete all such Company- or Premiere-related information from such
computer's memory and hard drive.
12. EXHIBIT 5.10. (Additional Deliveries)
[none]
13. EXHIBIT 6.1.2. (Additional Indemnification Matters)
[none]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
--------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
MERGER CORP
PREMIERE ACQUISITION CORPORATION
/s/ Patrick G. Jones
--------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
2
<PAGE>
COMPANY:
L'HARBOT, INC.
/s/ Elinor C. Ziv
--------------------------------------------
By: Elinor C. Ziv
Its: President
OWNER:
/s/ Elinor C. Ziv
--------------------------------------------
Elinor C. Ziv
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
/s/ William S. Ziv
--------------------------------------------
William S. Ziv
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
/s/ Andrea Z. Lavine
--------------------------------------------
Andrea Z. Lavine
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
/s/ Edward A. Ziv
--------------------------------------------
Edward A. Ziv
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
/s/ Robert N. Ziv
--------------------------------------------
Robert N. Ziv
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
/s/ Francine Z. Behrman
--------------------------------------------
Francine Z. Behrman
2606 Fair Oaks Lane
Cincinnati, Ohio 45237
3
<PAGE>
EXHIBIT 2.8
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 31, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, AUDIOINFO INC.
(the "Company"), a corporation organized and existing under the laws of TEXAS
(the "Company Jurisdiction"), and the party or parties listed on the signature
pages hereto as the owners of the Company (whether one or more, referred to as
the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $10,000.
6. "Multiple" shall mean 6.
7. "Reference Number" shall mean $174,565.
<PAGE>
8. David R. Skiba shall serve as the Owner's Representative under the
terms of Section 8.2. of the Uniform Terms.
10. EXHIBIT 6.1.2. is attached hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
--------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
COMPANY:
Audioinfo Inc.
/s/ David R. Skiba
--------------------------------------------
By: David R. Skiba
Its: President
OWNER:
/s/ David R. Skiba
--------------------------------------------
David R. Skiba
/s/ H. William King
--------------------------------------------
H. William King
2
<PAGE>
EXHIBIT 2.10
TRANSFER AGREEMENT
BY AND AMONG
PREMIERE TECHNOLOGIES, INC.,
D & K COMMUNICATIONS CORPORATION
AND
OWNERS OF D & K COMMUNICATIONS CORPORATION
DATED AS OF APRIL 2, 1997
<PAGE>
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of April 2,
1997 by and among Premiere Technologies, Inc., a Georgia corporation
("Premiere"), D & K Communications Corporation, a Tennessee corporation (the
"Company"), and those parties listed on the signature pages hereto as the owners
of the Company (the "Owners").
W I T N E S S E T H:
WHEREAS, this Agreement provides for the acquisition of the Company by
Premiere pursuant to the merger of the Company with and into a wholly owned
subsidiary of Premiere ("Merger Corp"), with Merger Corp as the surviving
corporation in such merger (the "Merger");
WHEREAS, the respective Boards of Directors of Premiere and the Company have
approved the terms and conditions set forth in this Agreement;
WHEREAS, the Owners own one hundred percent (100%) of the equity interests
in the Company;
WHEREAS, this Agreement provides for all of the Owners' equity interests in
the Company to be converted into the right to receive shares of Premiere Stock
in connection with the Merger;
WHEREAS, it is also the intention of the parties hereto that the form of the
transactions with respect to the Company, Premiere and Merger Corp shall qualify
as a "reorganization" within the meaning of Section 368(a) of the Code for
federal income tax purposes; and
WHEREAS, it is also the intention of the parties hereto that the business
combination to be effected by the Merger be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
I. UNIFORM TERMS AND CONDITIONS
1.1 Incorporation by Reference. The Uniform Terms and Conditions attached
hereto as Exhibit A (the "Uniform Terms") are hereby made a part of and
incorporated herein as if fully restated herein. Capitalized terms not defined
herein shall have the meanings provided in the Uniform Terms.
<PAGE>
II. TERMS OF MERGER
2.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time, the Company shall be merged with and into Merger Corp in
accordance with the provisions of the business corporation act under the laws of
the State of Tennessee (the "Tennessee Act") and the laws of the State of
Georgia (the "Georgia Act"). Merger Corp shall be the surviving corporation
resulting from the Merger, shall thereafter conduct the business and operations
of the Company as a wholly owned subsidiary of Premiere and shall continue to be
governed by the laws of the State of Georgia. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
the respective boards of directors of Premiere, Merger Corp and the Company.
(b) Subject to the provisions of this Agreement, the parties shall file
a Certificate of Merger executed in accordance with the relevant provisions of
the Tennessee Act and a Certificate of Merger executed in accordance with the
relevant provisions of the Georgia Act and shall make all other filings or
recordings required under each such Act as soon as practicable on or after the
Closing Date. The Merger and other transactions contemplated by this Agreement
shall become effective on the date and at the time the Certificate of Merger
reflecting the Merger becomes effective with the Secretary of State of the State
of Tennessee and the Certificate of Merger reflecting the Merger becomes
effective with the Secretary of State of the State of Georgia (the "Effective
Time").
(c) The charter and Bylaws of Merger Corp in effect immediately prior
to the Effective Time shall be the charter and Bylaws of the surviving
corporation until otherwise amended or repealed, the directors of Merger Corp
immediately prior to the Effective Time shall serve as the directors of the
surviving corporation from and after the Effective Time, and the officers of
Merger Corp in office immediately prior to the Effective Time shall serve as the
officers of the surviving corporation from and after the Effective Time.
2.2 Conversion of Shares. Subject to the provisions of this Section 2.2,
and in consideration for the transactions contemplated hereby, at the Effective
Time, by virtue of the Merger and without any action on the part of the parties
hereto or the shareholders of any of the parties hereto, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Premiere Stock and each share of Merger Corp common
stock issued and outstanding at the Effective Time shall remain issued and
outstanding after the Effective Time.
(b) All of the shares of the no par value capital stock of the Company
("Company Stock") (excluding treasury shares and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 2.4 of this Agreement) issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive:
(i) the number of shares of Premiere Stock determined by dividing (A)
the product of .9 multiplied by the Company Purchase Price, by
(B) the Average Closing Price; and
-2-
<PAGE>
(ii) the number of shares of Premiere Stock determined by dividing (A)
the product of .1 multiplied by the Company Purchase Price, by
(B) the Average Closing Price (the "General Escrow Amount");
all as determined in accordance with Section 2.3 below (collectively, the
"Consideration"). Subject to Section 2.2(d) below, the Consideration shall be
issuable to the Owners pro rata in accordance with their ownership of Company
Common Stock pursuant to Section 2.6, which ownership the Owners represent has
not been adjusted in contemplation of the transactions described herein.
(c) Any and all shares of Company Common Stock held as treasury shares
by the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
(d) Upon consummation of the Merger, the Owners shall deliver the
General Escrow Amount in negotiable form to the Escrow Agent to be held in
escrow pursuant to the terms and conditions of the Escrow Agreement in the form
attached hereto as Exhibit B, which shall be executed and delivered by Premiere
and the Owners at the Closing.
2.3 Calculation of Consideration. For purposes of determining the
Consideration issuable to the Owners pursuant to Section 2.2(b) above, the
following shall apply:
(a) "Average Closing Price" shall be the average of the daily last sale
prices of Premiere Stock for the period consisting of twenty (20) consecutive
trading days on which such shares are actually traded on the Nasdaq National
Market (as reported by the Wall Street Journal or, if not reported thereby, any
other authoritative source selected by Premiere) ending at the close of trading
on the first trading day immediately preceding the Closing; provided, however,
that the Average Closing Price shall not be less than $22.50 nor more than
$30.50 (collectively, $22.50 and $30.50 are referred to as the "Average Closing
Price Limitations").
(b) "Company Purchase Price" shall be the sum of (i) the amount
determined by multiplying the 1996 Revenues of the Company by the Stock
Multiple, plus (ii) the amount of cash reflected on the Closing Date Balance
Sheet, minus (iii) the aggregate amount of principal and accrued and unpaid
interest under funded debt and capital lease obligations reflected on the
Closing Date Balance Sheet, and minus (iv) the amount by which the Transaction
Costs exceed the Deductible Amount.
(c) "Deductible Amount" shall be an amount equal to $10,000.
(d) "1996 Revenues" of the Company shall be an amount equal to
$1,486,772.00.
(e) "Registration Right" shall mean the right to include Premiere Stock
issued in the Merger in a registration statement which Premiere intends to file
promptly after the end of the first full fiscal quarter of Premiere containing
the period of post-Merger combined operations required by ASRs 130 and 135,
pursuant to the terms and conditions of the Stock Restriction and Registration
Rights Agreement in the form attached hereto as of Exhibit C (the "Registration
Rights Agreement") .
(f) "Stock Multiple" shall be 1.7.
-3-
<PAGE>
(g) "Transaction Costs" shall mean all amounts incurred but unpaid by
the Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the preparation of the Audited Financial Statements, (iii) the
consummation of the Transactions and (iv) one-half of the costs and expenses of
public record searches pursuant to Section 5.9(b) of the Uniform Terms.
2.4 Dissenting Shareholders. Subject to Section 4.2, any holder of shares
of voting capital stock of the Company who perfects any available dissenters'
rights in accordance with and as contemplated by the Tennessee Act shall be
entitled to receive the value of such shares in cash from the Company after the
Effective Time as determined pursuant to such provision of law; provided, that
no such payment shall be made to any dissenting shareholder unless and until
such dissenting shareholder has complied with the applicable provisions of the
Tennessee Act and surrendered to the Company the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting shareholder of the Company fails to perfect, or effectively withdraws
or loses, its right to appraisal and of payment for its shares, Premiere shall
issue and deliver the consideration to which such holder of shares of Company
capital stock is entitled under this Article II (without interest) upon
surrender of certificates representing such shares held by such holder.
2.5 Closing. The Closing shall take place at the offices of Alston & Bird
LLP, Atlanta, Georgia, at 10:00 a.m. local time, on the date set forth in the
Uniform Terms, provided all conditions set forth in Articles V and VI of the
Uniform Terms and Articles IV and V of this Agreement have been satisfied or
waived, or on such other date or at such other place and time mutually agreed
upon by the parties.
2.6 Exchange of Shares. Promptly after the Effective Time, Premiere and
Company shall cause to be mailed to the former Company shareholders appropriate
transmittal materials for the surrender of the certificate or certificates
formerly representing their shares of Company Common Stock in exchange for
shares of Premiere Stock as provided in this Agreement. Until surrendered for
exchange in accordance herewith, each certificate theretofore representing
shares of Company Common Stock shall from and after the Effective Time represent
only the right to receive the Consideration provided in this Agreement in
exchange therefor. No certificates representing fractional shares will be
issued as a result of the Merger. Each holder of shares of Company Common Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of Premiere Common Stock shall receive, in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Premiere Common Stock multiplied by the Average Closing Price.
2.7 Purchase for Investment, Etc. Each Owner, represents and warrants the
following to Premiere:
(a) such Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of the
Transfer Agreement and the statements therein are true and correct and
acknowledges that Premiere has relied upon such statements in entering into this
Agreement;
-4-
<PAGE>
(b) such Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public distribution
thereof within the meaning of the Securities Act;
(c) such Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits and risks
of an investment in Premiere Stock, (ii) has the ability to bear the economic
risk of acquiring Premiere Stock for an indefinite period and to afford a
complete loss thereof and (iii) has had an opportunity to ask questions of and
to receive answers from the officers of Premiere and to obtain additional
information in writing as requested, which has been made available to and
examined by such Owner or such Owner's advisors; and
(d) such Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without registration
thereunder or exemption therefrom, (ii) agrees not to transfer all or any
Premiere Stock received by such Owner unless such transfer has been registered
or is exempt from registration under applicable securities laws and (iii)
acknowledges that the certificate(s) representing Premiere Stock shall bear the
following legend with respect to the restrictions on transfer under applicable
securities laws:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold,
transferred or otherwise disposed of unless registered with the Securities
and Exchange Commission of the United States and the securities regulatory
authorities of applicable states or unless an exemption from such
registration is available."
2.8 Accounting, Tax and Regulatory Matters. Each Owner and the Company,
jointly and severally, represents and warrants to Premiere that neither the
Company, any Owner nor any Affiliate thereof has taken or agreed to take any
action or has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying for pooling-of-interests
accounting treatment or as a reorganization within the meaning of Section 368(a)
of the Code, or (ii) materially impede or delay receipt of any consents referred
to in Section 5.6 of the Uniform Terms or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
III. ADDITIONAL AGREEMENTS
3.1 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Company and Merger Corp shall execute and file
the Articles Certificate of Merger with the Secretary of State of the State of
Tennessee and a Certificate of Merger with the Secretary of State of the State
of Georgia in connection with the Closing.
3.2 Conditions to Closing. The Company, the Owners and Premiere agree to
use their commercially reasonable best efforts to satisfy the closing conditions
set forth in Articles IV and V of this Agreement by the date indicated therein
or the Closing Date, as applicable.
3.3 Additional Indemnification Items. Subject to Sections 8.2 through 8.6
of the Uniform Terms, the Owners and, if the Transactions involve an Asset
Transfer, the Company, shall jointly and severally indemnify and hold harmless
Premiere, and its officers, directors, agents or affiliates,
-5-
<PAGE>
from and against any and all Losses suffered or incurred by any such party by
reason of or arising out of any of the following:
(a) a breach of Section 2.19 of the Uniform Terms as it relates to
liability for sales tax (irrespective of whether disclosed on Schedule 2.19 or
in the Financial Statements).
3.4 Tax Matters. Each of the Company, the Owners and Premiere undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify as a "reorganization" within
the meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Merger, (ii) the Closing is not subject to a condition that an Internal Revenue
Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Merger, and (iii) the Company and the
Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Merger.
3.5 Registration Rights. At the Closing, Premiere and the Owners shall
execute and deliver the Registration Rights Agreement.
3.6 Accounting Treatment.
(a) The Company and each of the Owners has accurately completed the
Pooling Questionnaire required by Premiere prior to or contemporaneous with the
execution of this Agreement, and the statements therein are true and correct.
(b) Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Merger, and to take no action which would cause
the Merger not, to qualify for treatment as a pooling of interests for
accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Merger until such time as
Premiere notifies the Company and each such Owner that the requirements of ASRs
130 and 135 have been met. The Company and each of the Owners understands that
ASRs 130 and 135 relate to the publication of financial results of at least
thirty (30) days of post-Merger combined operations of Premiere and the Company.
Premiere agrees that it shall publish such results within forty-five (45) days
after the end of the first fiscal quarter of Premiere containing the required
period of post-Merger combined operations and that it shall notify the Company
and each of the Owners promptly following such publication. Premiere shall be
entitled to place the following restrictive legend on the shares of Premiere
Stock issued pursuant to the Merger to enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to a
business combination which is accounted for as a "pooling of interests" and
may not be sold, nor may the owner thereof reduce his risks relative
thereto in any way, until such time as Premiere Technologies, Inc.
("Premiere") has published the financial results covering at least 30 days
of combined operations after the effective date of the merger through which
the business combination was effected.
3.7 Affiliate Agreements. The Company has disclosed in Schedule 3.7 all
Persons whom it reasonably believes is an "affiliate" of the Company for
purposes of Rule 145 under the 1933 Act.
-6-
<PAGE>
The Company shall use its reasonable efforts to cause each such Person to
deliver to Premiere as soon as reasonably practicable following the execution of
this Agreement, a written agreement, substantially in the form attached hereto
as Exhibit D.
3.8 Tax Representations. In connection with the opinion to be rendered to
Premiere by Alston & Bird to the effect that the transactions contemplated
hereby will constitute a tax-free reorganization within the meaning of Section
368(a) of the Code, the Owners shall furnish such counsel with such
representations as to their plans for the disposition of the shares of Premiere
Stock to be received in the Transactions as such counsel shall reasonably
request.
3.9 Restricted Stock. All contractual restrictions or limitations on
transfer with respect to Company Common Stock under any plan, program, contract
or arrangement, to the extent that such restrictions or limitations have not
already lapsed (whether as a result of the Transactions or otherwise), and
except as otherwise expressly provided in such plan, program, contract or
arrangement, shall remain in full force and effect with respect to shares of
Premiere Stock into which such restricted stock is converted pursuant to Section
2.2 of this Transfer Agreement.
3.10 Exchange Listing. Premiere shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of
Premiere Stock to be issued to the Owners pursuant to the Transactions, and
Premiere shall give all notices and make all filings with the NASD required in
connection with the Transactions.
IV. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF PREMIERE
In addition to the conditions of Premiere contained in Article V of the
Uniform Terms, the obligation of Premiere to consummate the Transactions is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
4.1 Approval of Owners. The Owners shall have approved the Merger in
accordance with the requirements of the Tennessee Act and the Company shall have
provided Premiere certified copies of such resolutions, and Owners holding no
more than ten percent (10%) of the Company Common Stock issued and outstanding
immediately prior to the Effective Time shall have exercised any of the rights
described in Section 2.4.
4.2 Grand Solution Documents. VTNLP, VTE, the NAP and each of the
Franchisee Companies shall have executed and delivered Grand Solution Documents
reflecting the terms described in Exhibit E hereto in form and substance
reasonable satisfactory to Premiere.
4.3 Pooling Letter. Premiere shall have received a letter, in form and
substance satisfactory to Premiere, from the Company containing representations
related to the pooling of interests accounting treatment, in the form attached
hereto as Exhibit F.
4.4 Reorganization Opinion. Premiere shall have received an opinion of
Alston & Bird LLP, counsel to Premiere, to the effect that the transactions
contemplated by the Agreement, including the Merger, will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code.
-7-
<PAGE>
4.5 Employee Loans. The loan from the Company to Donald N. Dally referenced
on Schedule 1.5 to the Agreement shall be fully satisfied.
V. SUPPLEMENTAL CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE OWNERS
In addition to the conditions of the Company and the Owners contained in
Article VI of the Uniform Terms, the obligation of the Company and the Owners to
consummate the Transactions is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions:
5.1 Approval of Premiere and Merger Corp. The Board of Directors of
Premiere and the Board of Directors and the shareholder of Merger Corp shall
have approved the Merger in accordance with the requirement of applicable state
law. Premiere and Merger Corp shall have provided the Company certified copies
of such resolutions.
5.2 Registration Rights. Premiere and each Owner shall have executed and
delivered a Registration Rights Agreement.
VI. MISCELLANEOUS
6.1 Notices. The addresses for notices in accordance with Section 10.1 of
the Uniform Terms for the Company and the Owners are as follows:
If to the Company: With a copy to:
2158 Judicial Drive Baker & Hostetler LLP
Germantown, TN 38138 1900 East 9th Street
______________________ Cleveland, OH 44114-3485
Attn: _______________ Attn: Michael P. McNamara, Jr.
Phone: (___) ___-____ Phone: (216) 621-0200
Fax: (___) ___-____ Fax: (216) 696-0740
If to the Owners: With a copy to:
2158 Judicial Drive Baker & Hostetler LLP
Germantown, TN 38138 1900 East 9th Street
______________________ Cleveland, OH 44114-3485
Attn: _______________ Attn: Michael P. McNamara, Jr.
Phone: (___) ___-____ Phone: (216) 621-0200
Fax: (___) ___-____ Fax: (216) 696-0740
6.2 Owner's Representative. The Owners' Representative for purposes of
Section 10.2 of the Uniform Terms shall be Don J. Dally, Sr., who shall serve as
the Owner's Representative under the terms of said Section 10.2 of the Uniform
Terms.
6.3 Certain Definitions. In addition to the terms defined elsewhere herein
and in the Uniform Terms, as used in this Agreement:
-8-
<PAGE>
(a) "Anticipated Closing Date" shall mean April 30, 1997.
(b) "Knowledge" of the Company shall mean the personal knowledge after
due inquiry of those facts that are known or should reasonably have been
known after due inquiry by Don J. Dally, Sr. and Kitty C. Dally and the
knowledge of any such Persons obtained or which would have been obtained
from a reasonable investigation.
(c) "Outside Closing Date" shall mean June 30, 1997.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE.]
-9-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.,
a Georgia corporation
By: /s/ Patrick G. Jones
--------------------
Title: Sr. V.P.
Attest:
By: /s/ Douglas B. Hadaway
----------------------
Title: Asst. Sec.
COMPANY:
D & K COMMUNICATIONS CORPORATION,
a Tennessee corporation
By: /s/ Donald J. Dally
-------------------
Title: President
Attest:
By: /s/ Kitty C. Dally
------------------
Title: Secretary
OWNERS:
By: /s/ Donald J. Dally
-------------------
DONALD J. DALLY,
an individual resident of the
State of Tennessee
Witness:
By: /s/ Kitty C. Dally
Name: Kitty C. Dally
--------------
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE.]
<PAGE>
/s/ Kitty C. Dally
------------------
KITTY C. DALLY,
an individual resident of the
State of Tennessee
Witness:
By: /s/ Donald J. Dally
-------------------
Name: Donald J. Dally
-------------------
<PAGE>
EXHIBIT 2.11
TRANSFER AGREEMENT
(SHARE EXCHANGE)
(CORPORATION-STOCK-POOLING)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of
May 19, 1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a
corporation organized and existing under the laws of Georgia, VOICE-TEL OF SOUTH
TEXAS, INC. (the "Company"), a corporation organized and existing under the laws
of Texas (the "Company Jurisdiction"), and the party or parties listed on the
signature pages hereto as the owners of the Company (whether one or more,
referred to as the "Owners").
BACKGROUND
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," and Article 12, entitled "Reverse
Triangular Merger."
3. It is the intention of the parties hereto that the business combination
to be effected by the Share Exchange be accounted for as a pooling of interests.
4. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
5. "Deductible Amount" shall mean $10,000.00.
6. "Multiple" shall mean 6.
7. "Reference Number" shall mean $213,218.
8. Henry C. Johnson shall serve as the Owner's Representative under the
terms of Section 8.2. of the Uniform Terms.
9. EXHIBIT 5.10. (Additional Deliveries)
[none]
<PAGE>
10. EXHIBIT 6.1.2. (Additional Indemnification Matters)
[none]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
---------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
COMPANY:
VOICE-TEL OF SOUTH TEXAS, INC.
/s/ Henry C. Johnson
---------------------------------------------
By: Henry C. Johnson
Its: President
OWNER:
/s/ Henry C. Johnson
---------------------------------------------
Henry C. Johnson
5 Westcourt Lane
San Antonio, Texas 78257
/s/ Mary E. Johnson
---------------------------------------------
Mary E. Johnson
5 Westcourt Lane
San Antonio, Texas 78257
2
<PAGE>
EXHIBIT 2.12
Transfer Agreement
(Share Exchange)
(Corporation-Stock-Purchase)
THIS TRANSFER AGREEMENT (this "Agreement") is entered into as of May 31,
1997 by and among PREMIERE TECHNOLOGIES, INC. ("Premiere"), a corporation
organized and existing under the laws of Georgia, Indiana Communicator, Inc.
(the "Company"), a corporation organized and existing under the laws of Indiana
(the "Company Jurisdiction"), and the party or parties listed on the signature
pages hereto as the owners of the Company (whether one or more, referred to as
the "Owners").
Background
This Agreement provides for the acquisition of the Company by Premiere
pursuant to a share exchange in which Premiere will issue shares of its Common
Stock for the stock of the Company held by the Owners (the "Share Exchange").
The respective Boards of Directors of Premiere and the Company have approved the
terms and conditions set forth in this Agreement. This Agreement provides for
all of the Owners' equity interests in the Company to be exchanged for the
consideration described below in the Share Exchange.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. The Uniform Terms and Conditions attached hereto as EXHIBIT A (the
"Uniform Terms") are hereby made a part of and incorporated herein as if fully
restated herein. Capitalized terms used and not defined herein shall have the
meanings provided in the Uniform Terms. The Transfer Agreement shall control in
the event of any conflict with any provision of the Uniform Terms.
2. The consideration for the Share Exchange will be determined in
accordance with the following provisions of the Uniform Terms: Article 10,
entitled "Share Exchange," and Section 11.2, entitled "Share Exchange (Stock
Consideration)." The following provisions of the Uniform Terms shall not apply:
Section 10.3, entitled "Share Exchange (Cash Consideration)," Article 11,
entitled "Forward Triangular Merger," Article 12, entitled "Reverse Triangular
Merger," and Article 14, entitled "Accounting Matters."
3. It is the intention of the parties hereto that the form of the
transactions with respect to the Share Exchange and the Company and Premiere
shall qualify as a "reorganization" within the meaning of Section 368(a)(1)(B)
of the Code for federal income tax purposes.
4. "Deductible Amount" shall mean $10,000.00.
5. "Multiple" shall mean 6.
6. "Reference Number" shall mean $483,333.33.
<PAGE>
7. Major Bashinsky shall serve as the Owner's Representative under the
terms of Section 8.2. of the Uniform Terms.
8. EXHIBIT 5.10. (Additional Deliveries)
(a) Letter regarding vehicle lease
(b) Agreement related to certain obligations of Owner to the Company
(c) Non-compete letter agreement signed by former owners
(d) Release signed by former owners
(e) Agreement related to certain indebtedness to former owners
9. The third and fourth sentences of Section 2.22. of the Uniform Terms
shall be amended to provide at the end of each sentence the following: ", except
as set forth on Schedule 2.22. hereof."
10. EXHIBIT 6.1.2. (Additional Indemnification Matters)
None
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.
PREMIERE:
PREMIERE TECHNOLOGIES, INC.
/s/ Patrick G. Jones
---------------------------------------------
By: Patrick G. Jones
Its: Senior Vice President-Finance and Legal
[Signatures continued on next page]
- 2 -
<PAGE>
COMPANY:
INDIANA COMMUNICATOR, INC.
/s/ Peter D. Fagan
---------------------------------------------
By: Peter D. Fagan
Its: President
OWNER:
Print or type full name and full mailing address,
phone and fax numbers:
/s/ Peter D. Fagan
---------------------------------------------
Peter D. Fagan
---------------------------------------------
---------------------------------------------
Phone:
-------------------------
Fax:
-------------------------
- 3 -
<PAGE>
EXHIBIT 2.14
Exhibit A
UNIFORM TERMS AND CONDITIONS
CONTENTS
1. Representations and Warranties of the Owners.......................... 1
1.1. Ownership Interest Held........................................ 1
1.2. Organization, Authority and Capacity........................... 1
1.3. Authorization and Validity..................................... 1
1.4. Absence of Conflicting Agreements or Required Consents......... 2
1.5. Interested Transactions........................................ 2
1.6. Statements True and Correct.................................... 2
2. Representations And Warranties Of The Owners And The Company.......... 2
2.1. Organization, Authority and Capacity........................... 2
2.2. Authorization and Validity..................................... 3
2.3. Absence of Conflicting Agreements or Required Consents......... 3
2.4. Franchise Matters.............................................. 3
2.5. Outstanding and Authorized Capitalization...................... 3
2.6. Subsidiaries, Investments and Predecessors..................... 4
2.7. Financial Statements; Accounting Records....................... 4
2.8. Absence of Changes............................................. 4
2.9. No Undisclosed Liabilities..................................... 5
2.10. Litigation, etc............................................... 6
2.11. No Violation of Law........................................... 6
2.12. Real and Personal Property.................................... 6
2.13. Contracts and Commitments..................................... 7
2.14. Employment and Labor Matters.................................. 8
2.15. Employee Benefit Matters...................................... 9
2.16. Insurance Policies............................................ 10
2.17. Environmental Matters......................................... 11
2.18. Accounts Receivable and Payable............................... 11
2.19. Taxes......................................................... 11
2.20. Statements True and Correct................................... 12
2.21. Intellectual Property Rights.................................. 12
2.22. Company Products and Services................................. 14
2.23. Schedules..................................................... 14
2.24. Company Information........................................... 14
2.25. Telco, Vendor and Facilities Information...................... 15
3. Representations And Warranties Of Premiere............................ 15
3.1. Organization, Authority and Capacity........................... 15
3.2. Authorization and Validity..................................... 15
3.3. Absence of Conflicting Agreements or Required Consents......... 15
3.4. Outstanding and Authorized Capitalization...................... 15
3.5. SEC Filings; Financial Statements.............................. 16
3.6. Statements True and Correct.................................... 16
4. Additional Covenants And Agreements................................... 16
4.1. Public Announcements........................................... 16
4.2. Noncompetition, Nonsolicitation and Nondisclosure.............. 16
4.3. Approval of Transactions....................................... 18
<PAGE>
4.4. Tax Returns.................................................... 18
4.5. State Takeover Laws............................................ 19
4.6. Documents of the Company....................................... 19
4.7. Owner Covenant................................................. 19
4.8. Consents....................................................... 19
4.9. Release by the Company......................................... 19
4.10. Release by Owners............................................. 20
4.11. Termination of Employment Agreements.......................... 21
4.12. Adoption of Registration Rights Agreement..................... 21
4.13. Assignment of Franchise Agreement and SRA..................... 21
4.14. Exchange Listing.............................................. 21
4.15. Personal Guaranties........................................... 21
4.16. Resignations.................................................. 21
5. Closing............................................................... 22
5.1. Closing........................................................ 22
5.2. Document Delivery by the Company and Owners - General.......... 22
5.3. Document Delivery by the Company and Owners - Stock Transfer... 22
5.4. Document Delivery by Premiere - General........................ 23
5.5. Document Delivery by Premiere - Stock Transfer................. 23
5.6. Escrow Agreement............................................... 23
5.7. Employment Agreements.......................................... 23
5.8. [This Section intentionally omitted.].......................... 23
5.9. [This Section intentionally omitted.].......................... 23
5.10. Additional Deliveries......................................... 23
6. Indemnification....................................................... 23
6.1. Indemnification of Premiere.................................... 23
6.2. Notice and Opportunity to Defend............................... 24
6.3. Survival and Insurance......................................... 25
6.4. Establishment of Escrow........................................ 25
6.5. Arbitration.................................................... 25
6.6. Limitations as to Amount....................................... 25
6.7. Other Rights and Remedies Not Affected......................... 26
7. Certain Definitions................................................... 26
8. Miscellaneous Provisions.............................................. 30
8.1. Notices........................................................ 30
8.2. Owner's Representative......................................... 30
8.3. Expenses....................................................... 31
8.4. Further Assurances............................................. 31
8.5. Waiver......................................................... 31
8.6. Assignment..................................................... 31
8.7. Binding Effect................................................. 31
8.8. Entire Agreement............................................... 31
8.9. Governing Law; Severability.................................... 32
8.10. Counterparts.................................................. 32
8.11. Brokers....................................................... 32
8.12. Schedules and Exhibits........................................ 32
8.13. Headings...................................................... 32
8.14. Amendment..................................................... 32
8.15. Enforcement................................................... 32
- ii -
<PAGE>
8.16. No Benefit to Third Parties................................... 32
9. Company Purchase Price................................................ 33
10. Share Exchange....................................................... 33
10.1. Share Exchange (General)...................................... 33
10.2. Share Exchange (Stock Consideration).......................... 33
10.2.1. Stock Consideration............................... 33
10.2.2. Treasury Shares................................... 33
10.3. Share Exchange (Cash Consideration)........................... 34
10.3.1. Cash Consideration................................ 34
10.3.2. Treasury Shares................................... 34
11. Forward Triangular Merger............................................ 34
11.1. Forward Triangular Merger (General)........................... 34
11.1.1. Merger Corp to be Surviving Corporation........... 34
11.1.2. Filing of Merger Certificates..................... 34
11.1.3. Articles and Bylaws............................... 34
11.1.4. Dissenting Shareholders........................... 35
11.2. Forward Triangular Merger (Stock Consideration)............... 35
11.2.1. Conversion of Shares.............................. 35
11.2.2. Treasury Shares................................... 35
11.3. Forward Triangular Merger (Cash Consideration)................ 35
11.3.1. Conversion of Shares.............................. 35
11.3.2. Treasury Shares................................... 36
12. Reverse Triangular Merger............................................ 36
12.1. Reverse Triangular Merger (General)........................... 36
12.1.1. Company to be Surviving Corporation............... 36
12.1.2. Filing of Merger Certificates..................... 36
12.1.3. Articles and Bylaws............................... 36
12.1.4. Dissenting Shareholders........................... 37
12.2. Reverse Triangular Merger (Stock Consideration)............... 37
12.2.1. Conversion of Shares.............................. 37
12.2.2. Treasury Shares................................... 37
12.3. Reverse Triangular Merger (Cash Consideration)................ 37
12.3.1. Conversion of Shares.............................. 37
12.3.2. Treasury Shares................................... 38
13. Tax Representations and Undertakings................................. 38
13.1. Reorganization................................................ 38
13.2. Reorganization-Related Representations........................ 38
13.3. Continuity of Interest........................................ 41
14. Accounting Matters................................................... 41
14.1. Pooling of Interests.......................................... 41
14.2. Pooling-Related Representations............................... 41
14.3. Limitation on Disposition..................................... 42
14.4. Contractual Restrictions...................................... 42
15. Securities Matters................................................... 42
15.1. Affiliate Status.............................................. 42
15.2. Purchase for Investment....................................... 43
15.3. Covenants and Warranties of the Owners........................ 43
15.4. Legends, Etc.................................................. 44
15.5. Understanding of Restrictions on Dispositions................. 44
- iii -
<PAGE>
15.6. Filing of Reports by Premiere................................. 44
15.7. Transfer Under Rule 145(d).................................... 44
15.8. Acknowledgments............................................... 45
- iv -
<PAGE>
UNIFORM TERMS AND CONDITIONS
1. Representations and Warranties of the Owners
Each Owner, jointly and severally, represents and warrants the
following to Premiere:
1.1. OWNERSHIP INTEREST HELD.
1.1.1. Owner is the owner of all right, title and interest (legal,
record and beneficial) in and to the Company Equity Securities shown as owned by
Owner on SCHEDULE 2.5.1, free and clear of any and all liens, encumbrances or
restrictions of any nature whatsoever (except for any restrictions on transfer
imposed by securities laws), and Owner has no other interest in the Company
Equity Securities of the Company.
1.1.2. Except as provided in SCHEDULE 1.1.2. or as specifically
contemplated by this Agreement, no person or entity has any right or privilege
(whether preemptive or contractual) for the purchase of any Company Equity
Securities from Owner.
1.1.3. SCHEDULE 1.1.3. contains a complete list of all agreements or
arrangements, whether written or oral, to which Owner is a party that relate in
any way to the Company Equity Securities. If the Transactions involve a Stock
Transfer, the delivery of such Company Equity Securities pursuant thereto will
transfer to Premiere good and marketable title to all such Company Equity
Securities held by such Owner, free and clear of all liens, encumbrances or
restrictions of any nature whatsoever other than any restrictions on transfer
imposed by federal or state securities laws.
1.2. ORGANIZATION, AUTHORITY AND CAPACITY.
If Owner is a natural person, Owner has the full authority and capacity
necessary to execute, deliver and perform his or her obligations under the
Transaction Documents to be executed and delivered by Owner (the "Owner
Transaction Documents"). If Owner is not a natural person, (i) Owner is an
entity of the type described in the Transfer Agreement, is duly organized,
validly existing and in good standing under the laws of its state of
organization, with the full corporate, partnership or other power and authority
necessary to execute, deliver and perform its obligations under the Owner
Transaction Documents, and (ii) Owner is duly qualified to do business and is in
good standing in each jurisdiction in which the failure to be so qualified or in
good standing could have a material adverse effect on Owner's ability to perform
its obligations under the Owner Transaction Documents.
1.3. AUTHORIZATION AND VALIDITY.
1.3.1. If Owner is not a natural person, (i) the execution, delivery
and performance of the Owner Transaction Documents have been duly authorized by
all necessary action on the part of Owner, and (ii) the Owner Transaction
Documents have been or will be, as the case may be, duly executed and delivered
by Owner and constitute or will constitute the legal, valid and binding
obligations of Owner, enforceable in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, fraudulent conveyance or
other laws affecting creditors' rights generally, or as may be modified by a
court of equity.
1.3.2. If Owner is a natural person, Owner has the legal capacity
required for executing, delivering and performing the Owner Transaction
Documents. If Owner is married and Owner's interest in the Company constitutes
community property, the Transaction Documents to be executed and delivered by
Owner's spouse have been or will be, as the case may be, duly executed and
delivered by Owner's spouse and constitute or will constitute the legal, valid
and binding obligations of Owner's spouse, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency or other
laws affecting creditors' rights generally, or as may be modified by a court of
equity.
<PAGE>
1.4. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except as set forth on SCHEDULE 1.4., the execution, delivery and
performance by Owner of each of the Owner Transaction Documents (i) do not
require the consent of or notice to any governmental or regulatory authority or
any other third party; (ii) if Owner is not a natural person, will not conflict
with any organizational document of Owner; (iii) will not conflict with or
result in a violation of any law, ordinance, regulation, ruling, judgment, order
or injunction of any court or governmental instrumentality to which Owner is
subject or by which Owner is bound; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the acceleration of any
performance required by the terms of any agreement, instrument, license or
permit material to the Transactions; and (v) will not create any encumbrance or
restriction upon the Company Equity Securities if the Transactions involve a
Stock Transfer.
1.5. INTERESTED TRANSACTIONS.
1.5.1. Except as set forth on SCHEDULE 1.5.1., no (i) Owner, (ii)
Affiliate of an Owner or (iii) employee of the Company is a party to any
contract, loan or other transaction with the Company and does not have any
direct or indirect interest in or affiliation with any party to any such a
contract, loan or other transaction.
1.5.2. Except as set forth on SCHEDULE 1.5.2., Owner is not an
employee, consultant, partner, principal, director or owner of, and does not
have any other direct or indirect interest in or affiliation with, or membership
in, any Person that is engaged in a business that competes with or is similar to
the business of the Company.
1.6. STATEMENTS TRUE AND CORRECT.
No representation or warranty made herein by Owner, nor in any
statement, certificate or instrument furnished or to be furnished to Premiere by
Owner pursuant to any Transaction Document, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein and therein not misleading.
2. Representations And Warranties Of The Owners And The Company
The Company and the Owners jointly and severally represent and warrant
the following to Premiere:
2.1. ORGANIZATION, AUTHORITY AND CAPACITY.
2.1.1. The Company is an entity of the type described in the SCHEDULE
2.1.1., is duly organized or formed under the laws of the jurisdiction listed on
said Schedule, is validly existing, and is in good standing under the laws of
said jurisdiction, and has the full corporate, partnership or other power and
authority necessary to (i) execute, deliver and perform its obligations under
the Transaction Documents to be executed and delivered by the Company (the
"Company Transaction Documents") and (ii) carry on its business as it has been
and is now being conducted and to own and lease the Assets which it now owns or
leases.
2.1.2. The Company is duly qualified to do business and is in good
standing in the jurisdictions set forth in SCHEDULE 2.1.2., which includes every
jurisdiction in which the failure to be so qualified or in good standing would
have a material adverse effect on (i) the Company's ability to perform its
obligations under the Company Transaction Documents or (ii) the Assets, results
of operations or prospects of the Company.
- 2 -
<PAGE>
2.2. AUTHORIZATION AND VALIDITY.
The execution, delivery and performance of the Company Transaction
Documents have been duly authorized by all necessary corporate, partnership or
other action on the part of the Company. The Company Transaction Documents have
been or will be, as the case may be, duly executed and delivered by the Company
and constitute or will constitute the legal, valid and binding obligations of
the Company, enforceable in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, or other laws affecting creditors'
rights generally, or as may be modified by a court of equity.
2.3. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
Except as set forth on SCHEDULE 2.3., the execution, delivery and
performance by the Company of the Company Transaction Documents: (i) do not
require the consent of or notice to any governmental or regulatory authority or
any other third party; (ii) will not conflict with any provision of the
Company's organizational documents; (iii) will not conflict with or result in a
violation of any law, ordinance, regulation, ruling, judgment, order or
injunction of any court or governmental instrumentality to which the Company is
subject or by which the Company or any of its Assets are bound; (iv) will not
conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, require any notice under, or accelerate or permit
the acceleration of any performance required by the terms of any agreement,
instrument, license or permit to which the Company is a party or by which the
Company or any of its properties are bound; and (v) will not create any lien,
encumbrance or restriction upon any of the Assets owned or leased by the
Company. Neither the Company, any Owner nor any Affiliate thereof has taken or
agreed to take any action or has any knowledge of any fact or circumstance that
is reasonably likely to materially impede or delay receipt of any consents
necessary for the consummation of the transactions contemplated hereby or result
in the imposition of a condition or restriction of the type that would
materially adversely impact the economic or business benefits of the
Transactions such that, had such condition or restriction been known, Premiere
would not have entered into this Agreement.
2.4. FRANCHISE MATTERS.
2.4.1. Attached to SCHEDULE 2.4.1. is a true and complete copy of (i)
the Franchise Agreement, (ii) the SRA, (iii) the NAP Agreement, (iv) each other
written agreement to which the Company or any Owner, on one hand, and VTE, VTN
or any Affiliate thereof, on the other hand, are party, and (v) a description of
all material terms of any oral agreement to which the Company or any Owner, on
one hand, and VTE, VTN or any Affiliate thereof, on the other hand, are party.
2.4.2. Except as set forth on SCHEDULE 2.4.2., the Company (i) has not
received a notice of financial or other Default under any of the agreements
attached to or described in SCHEDULE 2.4.1., and (ii) has not notified any other
party to any such agreement that it considers such party in Default under such
agreement.
2.4.3. Attached to SCHEDULE 2.4.3. is a true, complete and correct copy
of the operating manual or other document containing all operating policies,
codes and requirements imposed on the Company by VTE pursuant to the Franchise
Agreement.
2.5. OUTSTANDING AND AUTHORIZED CAPITALIZATION.
2.5.1. SCHEDULE 2.5.1. is an accurate and complete list of all
authorized and outstanding Company Equity Securities, showing the identity of
the holders thereof, the type of security, the number of such securities held,
and such other information requested in such schedule, by category or type. All
outstanding Company Equity Securities are listed and held of record as indicated
on said Schedule and have been duly and validly issued, are fully paid and
nonassessable.
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2.5.2. If the Company is a corporation, no shares of capital stock are
held in the treasury of the Company except as set forth on SCHEDULE 2.5.2. None
of such Company Equity Securities were issued in violation of preemptive rights
of any past or present holder of any Company Equity Security. Except as set
forth on said SCHEDULE 2.5.2., there are no outstanding warrants, options,
rights, calls or other commitments of any nature relating to Company Equity
Securities and there are no outstanding securities of the Company convertible
into or exchangeable for, any Company Equity Securities, in either case which
have been granted or created by the Company.
2.5.3. Except as set forth on SCHEDULE 2.5.3., the Company is not
obligated to issue or repurchase any Company Equity Securities for any reason
and no person or entity has any right or privilege (whether preemptive or
contractual) for the purchase, subscription or issuance of any unissued Equity
Securities of the Company. There are no outstanding rights to demand
registration of securities of the Company or to sell securities of the Company
in connection with a registration by the Company under the Securities Act.
2.6. SUBSIDIARIES, INVESTMENTS AND PREDECESSORS.
2.6.1. Except as set forth on SCHEDULE 2.6.1., the Company has not
owned and does not currently own, directly or indirectly, of record,
beneficially or equitably, any capital stock or other equity, ownership or
proprietary interest in any corporation, partnership, limited liability company,
association, trust, joint venture or other entity.
2.6.2. Set forth on SCHEDULE 2.6.2. is a listing for the last five (5)
years of all predecessor companies of the Company, including the names of any
entities from whom the Company previously acquired material Assets, and any
other entity of which the Company has been a subsidiary or division.
2.6.3. Except as listed on SCHEDULE 2.6.3., the Company has not sold or
disposed of, by way of Asset sale, stock sale, spin-off or otherwise, any
material Assets or business of the Company.
2.7. FINANCIAL STATEMENTS; ACCOUNTING RECORDS.
2.7.1. Attached hereto as SCHEDULE 2.7.1. are the financial statements
of the Company for the three (3) most recent fiscal years, and interim financial
statements for all interim periods subsequent to the most recently ended fiscal
year, including for the Company's most recently ended interim period, which
reflect the results of operations and financial condition of the Company for
such periods and as of the dates indicated (collectively, the "Financial
Statements").
2.7.2. The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied other than as
indicated on SCHEDULE 2.7.2. and except for (i) the omission of notes to interim
Financial Statements, and (ii) the fact that interim Financial Statements are
subject to normal and customary year-end adjustments which will not, in the
aggregate, be material. The Financial Statements present fairly in all material
respects the financial position of the Company as of the dates indicated and
present fairly in all material respects the results of the Company's operations
for the periods then ended, and are in accordance with the books and records of
the Company, which have been properly maintained and are complete and correct in
all material respects.
2.7.3. SCHEDULE 2.7.3. contains true, correct and complete responses to
the information requested in such schedule, by category or type, with respect to
the Company's accounting, banking or other business records.
2.8. ABSENCE OF CHANGES.
Except as set forth on SCHEDULE 2.8., and except as contemplated by
this Agreement, since the date of the Latest Balance Sheet, the Company has
conducted its business only in the ordinary course and has not:
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(a) suffered any material adverse change in its working capital,
condition (financial or otherwise), Assets, liabilities, reserves,
business or operations, except for distributions to the Owners for
payment of taxes in the ordinary course of business and consistent with
past practice (except for the timing of such distributions);
(b) paid, discharged or satisfied any liability other than in the
ordinary course of business and consistent with past practices;
(c) written off as uncollectible any account receivable other than
in the ordinary course of business and in amounts not exceeding the
reserve or allowance for doubtful accounts included in the Latest
Balance Sheet;
(d) compromised any debts, claims or rights or disposed of any of
its properties or Assets other than in the ordinary course of business
and consistent with past practices;
(e) entered into any commitments or transactions not in the
ordinary course of business or made capital expenditures or
commitments;
(f) made any change in any method of accounting or accounting
practice;
(g) subjected any of its Assets, tangible or intangible, to any
lien, encumbrance or restriction of any nature whatsoever, except for
liens for current property taxes not yet due and payable;
(h) increased any salaries, wages or employee benefits for any
employee of the Company;
(i) hired, committed to hire or terminated any independent
contractor, or employee;
(j) declared, set aside or made any payment, dividend or other
distribution to any holder of a Company Equity Security or purchased,
redeemed or otherwise acquired, directly or indirectly, any Company
Equity Security;
(k) terminated or amended any material contract, license or other
instrument to which the Company is a party or suffered any loss or
termination or threatened loss or termination of any existing business
arrangement or supplier or customer, the termination or loss of which,
in the aggregate, could materially and adversely affect the Company;
(l) issued any Company Equity Security or otherwise effected any
change in its capital structure;
(m) commenced or settled any litigation; or
(n) agreed, whether in writing or otherwise, to take any action
described in this Section 2.8.
2.9. NO UNDISCLOSED LIABILITIES.
Except as set forth on SCHEDULE 2.9., the Company has no liabilities or
obligations, whether accrued, absolute, contingent or otherwise, except for
liabilities and obligations (i) reflected in the Financial Statements or (ii)
incurred in the ordinary course of its business since the date of the Latest
Balance Sheet and immaterial in amount or effect on the business, prospects,
financial condition or results of operations of the Company.
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2.10. LITIGATION, ETC.
2.10.1. Except as set forth on SCHEDULE 2.10.1., (i) there are no
claims, lawsuits, actions, arbitrations, administrative or other proceedings
instituted or pending against the Company or against any director or employee
(in such individual's capacity as a director or employee), employee benefit plan
or Asset of the Company, and, to the Knowledge of the Company and the Owners, no
such matter is threatened (or unasserted but considered probable of assertion
and which if asserted would have at least a reasonable probability of an
unfavorable outcome); (ii) to the Knowledge of the Company and the Owners, there
are no governmental or administrative investigations or inquiries pending that
involve the Company or any of its Assets; (iii) there are no judgments against
or consent decrees binding on the Company or any of its Assets; and (iv) there
are no material claims, individually or in the aggregate, not covered by
insurance.
2.10.2. SCHEDULE 2.10.2. contains a brief description of any claim,
lawsuit, action, arbitration, administrative or other proceeding involving the
Company settled or otherwise concluded since January 1, 1992.
2.11. NO VIOLATION OF LAW.
2.11.1. Except as set forth on SCHEDULE 2.11.1., the Company has not
been and is not in violation of any applicable local, state or federal law,
ordinance, regulation, order, injunction or decree, or any other requirement of
any governmental body, agency or authority or court binding on it, or relating
to its property or business or its advertising, sales or pricing practices,
except for any such violations as would not individually or in the aggregate
have a material adverse effect on the Company, financial or otherwise.
2.11.2. SCHEDULE 2.11.2. lists all Permits necessary for the Company to
own, lease and operate its Assets and to conduct its business as it has been and
is currently conducted. Except as set forth on said Schedule, the Company (i)
has and has always had in effect the Permits listed on said Schedule, and (ii)
there has occurred no Default under any such Permit.
2.12. REAL AND PERSONAL PROPERTY.
2.12.1 SCHEDULE 2.12.1. sets forth a list of all material Assets of the
Company, including, without limitation, all furniture, fixtures and equipment,
but excluding real property described on SCHEDULE 2.12.2., and contains true,
correct and complete responses to the information requested in such schedule, by
category or type, with respect to the Company's fixed assets and computer
equipment. Except as set forth on said Schedule, the Company (i) has good and
valid title to all of its Assets, including all the Assets reflected in the
Financial Statements; and (ii) owns such Assets free and clear of all liens,
encumbrances or restrictions of any nature whatsoever.
2.12.2. SCHEDULE 2.12.2. contains a true and correct description of all
real property owned or leased by the Company, including all improvements located
thereon, and except as set forth on said Schedule, the Company has good and
marketable title to all real property owned by it, free and clear of any liens,
encumbrances or restrictions of any nature whatsoever. Attached to said Schedule
are true, correct and complete copies of all leases, deeds, easements and other
documents and instruments relating to said real property and improvements. No
condemnation or similar actions are currently in effect or pending against any
part of any real property owned or leased by the Company and, to the best
knowledge of the Company and the Owners, no such action is threatened against
any such real property. To the Knowledge of the Company, there are no
encroachments, leases, easements, covenants, restrictions, reservations or other
burdens of any nature which impair in any material respect the use of any owned
or leased real property in a manner consistent with past practices nor does any
part of any building structure or any other improvement thereon encroach on any
other property.
2.12.3. [This Subsection intentionally omitted]
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2.12.4. The present zoning, subdivision, building and other ordinances
and regulations applicable to any owned or leased real property permit the
continued operation, use, occupancy and enjoyment of such real property
consistent with past practices, and the Company is in compliance with, in all
material respects, and has received no notices of violations of, any applicable
zoning, subdivision or building regulation, ordinance or other law, regulation,
or requirement including, but not limited to, certificate of need. The Company
has all rights and easements necessary for public ingress thereto and egress
therefrom and for the provision of all utility services thereto, including any
required curb cut or street opening permits or licenses for vehicular access
over presently existing roads and driveways.
2.12.5. The Company's Assets (including all buildings and improvements
in connection therewith) are in good operating condition and repair, ordinary
wear and tear excepted, and such Assets include all rights, properties,
interests in properties, and Assets necessary to permit Premiere to carry on the
Company's business as presently conducted.
2.12.6. SCHEDULE 2.12.6. contains true, complete and correct copies of
the most recent tax bills for each piece of real property owned by the Company.
Except as set forth on said Schedule, each piece of real property owned by the
Company is separately assessed for real property tax assessment purposes and is
not combined with any other real property for such tax assessment purposes.
2.13. CONTRACTS AND COMMITMENTS.
2.13.1. SCHEDULE 2.13.1. contains a complete and accurate list of all
contracts, agreements, commitments, instruments and obligations (whether written
or oral, contingent or otherwise) of the Company concerning the following
matters (the "Company Agreements"):
(a) the lease (as lessee or lessor) or license (as licensee or
licensor) of any real or personal property (tangible or intangible);
(b) the employment, termination, severance or engagement of or with
respect to any officer, director, employee, consultant or agent;
(c) any arrangement between or among the Company, its Affiliates,
the Owners, any director, officer or employee thereof and/or Related
Persons, including without limitation loans, guarantees and credit
arrangements;
(d) any arrangement limiting the freedom of the Company to compete
in any manner in any line of business or requiring the Company to share
profits;
(e) any arrangement that could reasonably be anticipated to have a
material adverse effect on the Company, financial or otherwise;
(f) any arrangement not in the ordinary course of business;
(g) any power of attorney, whether limited or general, granted by
or to the Company;
(h) any other arrangement that requires performance for a period of
more than 90 days or that requires payments in excess of $10,000;
(i) any loan agreement, contract or other arrangement relating to
the borrowing of money by the Company and the amount outstanding
thereunder or the guarantee by the Company of any third party
obligation;
(j) any agreement or arrangement involving Intellectual Property
Rights (other than contracts entered into in the ordinary course of
business with customers and "shrink-wrap" software licenses);
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(k) any contract or arrangement relating to the provision of data
processing, network communication or other technical services to or by
the Company or any Affiliate thereof; and
(l) any contract or arrangement relating to the provision, purchase
or sale of goods or services, other than contracts entered into in the
ordinary course of business and involving payments not in excess of
$5,000.
Except as indicated on said Schedule, attached to said Schedule are true and
complete copies of all of the Company Agreements.
2.13.2. Except as set forth on SCHEDULE 2.13.2., (a) the Company
Agreements are valid and effective in accordance with their terms, (b) there is
not under any Company Agreement (i) any existing or claimed Default by the
Company or (ii) to the Knowledge of the Company and the Owners, any existing or
claimed Default by any other party, and (c) the continuation, validity and
effectiveness of the Company Agreements will not be affected by the Transactions
and the Transactions will not result in a breach of or Default under, or require
the consent of any other party to, any of the Company Agreements. There is no
actual or, to the Knowledge of the Company and the Owners, threatened
termination, cancellation or limitation of any Company Agreements that would
have a material adverse effect on the Company, financial or otherwise. To the
Knowledge of the Company and the Owners, there is no pending or threatened
bankruptcy, insolvency or similar proceeding with respect to any other party to
the Company Agreements.
2.14. EMPLOYMENT AND LABOR MATTERS.
2.14.1. SCHEDULE 2.14.1. sets forth (i) the number of all full-time and
part-time employees of the Company; (ii) the number of independent contractors
utilized by the Company and (iii) the name and compensation paid to each
independent contractor, employee of or consultant to the Company who received
salary and bonuses for either of the Company's two most recently ended fiscal
years in excess of $20,000.
2.14.2. To the Knowledge of the Company and the Owners, the Company is
in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours, occupational safety and health, including laws concerning unfair
labor practices within the meaning of Section 8 of the National Labor Relations
Act, and the employment of non-residents under the Immigration Reform and
Control Act of 1986.
2.14.3. Except as disclosed on SCHEDULE 2.14.3.,
(a) there are no charges, governmental audits, investigations,
administrative proceedings or complaints concerning the Company's
employment practices pending or, to the Knowledge of the Company and
the Owners, threatened before any federal, state or local agency or
court, and, to the Knowledge of the Company and the Owners, no basis
for any such matter exists;
(b) the Company is not a party to any union or collective
bargaining agreement, and, to the Knowledge of the Company and the
Owners, no union attempts to organize the employees of the Company have
been made, nor are any such attempts now threatened; and
(c) the Company has not experienced any organized slowdown, work
interruption, strike, or work stoppage by its employees.
2.14.4. SCHEDULE 2.14.4. contains true, correct and complete responses
to the information requested in such schedule, by category or type, with respect
to the processing of the Company's payroll.
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2.14.5. SCHEDULE 2.14.5. contains true, correct and complete responses
to the information requested in such schedule, by category or type, with respect
to the automatic deposit of the Company's payroll.
2.14.6. SCHEDULE 2.14.6. contains true, correct and complete responses
to the information requested in such schedule, by category or type, with respect
to each employee of the Company. With respect to each such employee, the Company
has attached to said Schedule a copy of (i) such employee's job description,
(ii) any confidentiality agreement to which the Company and such employee are
party, (iii) any employment agreement to which the Company and such employee are
party and (iv) such employee's most recent performance review.
2.15. EMPLOYEE BENEFIT MATTERS.
2.15.1. SCHEDULE 2.15.1. contains a list and brief description of all
profit sharing, pension, simplified employee pension ("SEP"), salary reduction
simplified employee pension ("SARSEP"), employee stock ownership, 401(k) or
other retirement plans or programs maintained by the Company for the benefit of
the Owners or the Company's officers, directors, employees, former employees or
independent contractors (the "Retirement Plans"). Attached to said Schedule are
copies of the following documents for all qualified plans listed on said
Schedule: (i) official plan document and all amendments thereto, (ii) summary
plan description, (iii) trust document and all amendments thereto, (iv) most
recent IRS determination letter (except for SEPs and SARSEPs, which do not have
determination letters), (v) most recent IRS Form 5500 (except for SEPs and
SARSEPs, which do not have Form 5500s), (vi) the name and telephone number of
each plan's recordkeeper, and (vii) with respect to defined benefit plans only,
the most recent actuarial statement and the name and telephone number of the
plan's actuary.
2.15.2. SCHEDULE 2.15.2. contains a list and brief description of all
current and deferred compensation, severance, vacation, stock purchase, stock
option, bonus, incentive compensation, cafeteria, medical, hospital, life,
health, disability, death or other fringe and welfare benefit plans or programs
(whether or not insured) maintained by the Company for the benefit of the Owners
or the Company's officers, directors, employees, former employees or independent
contractors, including without limitation any unwritten compensation, fringe
benefit, payroll or employment practices, procedures or policies (the "Welfare
Plans"). Attached to said Schedule are copies of the following documents for all
benefits listed in said Schedule: (i) summary plan descriptions, official plan
documents and provider agreements (e.g., HMO contracts) for all medical plans,
(ii) summary plan descriptions and any other available documents (e.g.,
insurance contracts) for all plans and arrangements other than medical plans and
(iii) the name and telephone number of the insurance broker and/or third party
administrator for each plan.
2.15.3. The Retirement Plans and the Welfare Plans (collectively, the
"Benefit Plans") are the only employee benefit plans and agreements maintained
by the Company for the benefit of the Owners or the Company's officers,
directors, employees, former employees or independent contractors. Except as
disclosed on SCHEDULE 2.15.3., there are no contributions or payments due with
respect to any of the Benefit Plans, nor will any such contributions or payments
be due or required to be paid on or prior to the Closing Date. Each Benefit Plan
of the Company has been operated and administered in substantial compliance with
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"),
and the provisions of the Code applicable to it. No Benefit Plan of the Company
or its ERISA Affiliates which is subject to the minimum funding standards of
ERISA or the Code, if any, has incurred any accumulated funding deficiency
within the meaning of ERISA or the Code. All contributions with respect to a
Benefit Plan of the Company or its ERISA Affiliates that is subject to Code
Section 412 or ERISA Section 302 have been timely made and there is no lien or
expected to be a lien under Code Section 412(n) or ERISA Section 302(f) or tax
under Code Section 4971. No Benefit Plan of the Company or its ERISA Affiliates
has a "liquidity shortfall" as defined in Code Section 412(m)(5). Neither the
Company nor its ERISA
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Affiliates are subject to or can reasonably be expected to become subject to a
lien under Code Section 401(a)(29). No event has occurred in connection with a
Benefit Plan of the Company or its ERISA Affiliates that could result in
liability to the Company under Title IV of ERISA. The Company has not incurred
any liability to the Pension Benefit Guaranty Corporation in connection with any
Benefit Plan of the Company or its ERISA Affiliates which is subject to Title IV
of ERISA, if any. The Assets of each Benefit Plan of the Company or its ERISA
Affiliates that is subject to Title IV of ERISA, if any, are sufficient to
provide all "benefit liabilities" (as defined in ERISA Section 4001(a)(16) under
such Benefit Plan if such Benefit Plan terminated, and are also sufficient to
provide all other benefits due under the Benefit Plan (including, but not
limited to, ancillary, disability, shutdown, early retirement and welfare
benefits). Neither the Company nor its ERISA Affiliates have had an "obligation
to contribute" (as defined in ERISA Section 4212) to a "multiemployer pension
plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A) at any time. No
event which constitutes a reportable event as defined in Section 4043 of ERISA
has occurred or is continuing with respect to any Benefit Plan covered by ERISA.
No facts exist which will result in a material increase in the premium costs of
any Benefit Plan for which benefits are insured or a material increase in
benefit costs of any Benefit Plan which provides self-insured benefits. No
"prohibited transaction" (as defined in ERISA Section 406 or Code Section 4975)
has occurred with respect to any Benefit Plan. None of the Benefit Plans has any
current or projected liability in respect of post-employment or post-retirement
health or medical or life insurance benefits for former or retired employees of
the Company, except as required to avoid excise taxes under Code Section 4980B.
All Benefit Plans subject to Code Section 4980B or Part 6 of Title I of ERISA
have been maintained in compliance with the requirements of Code Section 4980B
and Part 6 of Title I of ERISA. There is no contract, agreement, plan or
arrangement covering any employee or former employee of the Company that could
result in the payment of any amount that would not be deductible under Code
Sections 162(m) or 280G. As of the Closing Date, the Company has no material
liabilities under any Benefit Plan that is not reflected in the Financial
Statements, except for accruals for contributions and expenses for the current
year.
2.16. INSURANCE POLICIES.
2.16.1. Except as described on SCHEDULE 2.16.1., all of the Assets and
business of the Company are insured in such amounts and against such losses,
casualties or risks as are reasonably customary for similar properties and
businesses, and the Company has maintained such insurance continuously from the
earlier of (i) the date of its inception and (ii) the date of inception of any
of its predecessors.
2.16.2. SCHEDULE 2.16.2. sets forth a complete and accurate list and
description of all insurance policies in force naming the Company, or any
employee, consultant or independent contractor thereof, or Owner, as an insured
or beneficiary or as a loss payee or for which the Company has paid or is
obligated to pay all or part of the premiums, including, without limitation, all
liability, professional liability, fire, health and life insurance policies. All
such policies are in full force and effect and the premiums due thereon have
been timely paid. The Company has not received notice of any pending or
threatened termination or premium increase (retroactive or otherwise) with
respect thereto, and, to the Knowledge of the Company and the Owners, the
Company and the Owners are in compliance with all conditions contained therein.
Except as set forth on said Schedule, (a) there are no pending claims against
such insurance by the Company as to which insurers are defending under
reservation of rights or have denied liability, and (b) there exists no claim
under such insurance that has not been properly filed by the Company. To the
Knowledge of the Company and the Owners, there are no outstanding or unfulfilled
requirements or recommendations of any insurance company insuring the Company
regarding any repairs to or work to be performed with respect to the Assets of
the Company. The Company has complied with any such requirements and
recommendations as to which the Company has received notice.
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2.16.3. SCHEDULE 2.16.3. contains a listing of all claims made and loss
histories in respect of any insurance maintained by the Company or any
predecessor during the past three (3) years.
2.17. ENVIRONMENTAL MATTERS.
To the Knowledge of the Company and the Owners and except as set forth
in SCHEDULE 2.17., there is no present or past Environmental Condition in any
way relating to the business, properties or Assets of the Company.
"Environmental Condition" means (a) the introduction into the environment of any
pollution, including without limitation any contaminant, irritant or pollutant
or other toxic or hazardous substance, in violation of any federal, state or
local law, ordinance or governmental rule or regulations, as a result of any
spill, discharge, leak, emission, escape, injection, dumping or release of any
kind whatsoever of any substance or exposure of any type in any work places or
to any medium, including without limitation air, land, surface waters or ground
waters, or from any generation, transportation, treatment, discharge, storage or
disposal of waste materials, raw materials, hazardous materials, biomedical
waste including blood, toxic materials or products of any kind or from the
storage, use or handling of any hazardous or toxic materials or other
substances, as a result of which the Company has or may become liable to any
person or by any reason of which any of the Assets of the Company may suffer or
be subjected to any lien, encumbrance or restriction of any nature, or (b) any
noncompliance with any federal, state or local environmental law, rule,
regulation or order as a result of or in connection with any of the foregoing.
2.18. ACCOUNTS RECEIVABLE AND PAYABLE.
2.18.1. Except as set forth on SCHEDULE 2.18.1., the accounts
receivable outstanding as of the date of the Latest Balance Sheet are, and the
accounts receivable outstanding as of the Effective Time will be, (i) valid and
genuine accounts receivable arising solely out of bona fide sales and delivery
of goods, performance of services and other business transactions in the
ordinary course of business consistent with past practice, (ii) subject to no
asserted defenses, counterclaims, or rights of setoff, and (iii) collectible
within ninety (90) days after billing at the full recorded amount thereof less
the recorded allowance for doubtful accounts reflected on the Latest Balance
Sheet or the Closing Date Balance Sheet, as applicable.
2.18.2. Except as set forth on SCHEDULE 2.18.2., no accounts payable of
the Company are, at this date, over 30 days old. Attached to said Schedule is an
aged list of the Company's accounts receivable and accounts payable for the most
current period and for the Company's most recent fiscal year.
2.19. TAXES.
2.19.1. Except as set forth on SCHEDULE 2.19.1. or as reflected in the
Financial Statements, there does not exist and will not after the Effective Time
exist any liability for Taxes which may be asserted by any taxing authority
against, and no lien or other encumbrance for Taxes will attach to, the Company
or any of its Assets other than (i) Taxes due in respect of periods for which
tax returns are not yet due and for which adequate accruals have been made in
the Financial Statements and (ii) Taxes accrued in the ordinary course of
business between the date of the Financial Statements and the Closing Date.
Except as listed in said Schedule all federal, state and local tax returns and
tax reports required to be filed prior to the date hereof with respect to the
Company have been filed (other than returns for which extensions to file have
been granted) with the appropriate governmental agencies in all jurisdictions in
which such returns and reports are required to be filed, all of which are true,
correct and complete, and all amounts shown as owing thereon have been paid.
2.19.2. Except as set forth on SCHEDULE 2.19.2., (a) the Company has
not received notice of any tax claims being asserted or any proposed assessment
by any taxing authority; (b) no tax returns of the Company have been examined by
the Internal Revenue Service (the "IRS") or the appropriate state agencies for
any fiscal year or period ended prior to the date hereof; (c) the Company is not
presently under, nor has it received notice of any, contemplated investigation
or audit by the IRS or any state agency
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concerning any fiscal year or period ended prior to the date hereof; and (d) the
Company has not executed any extension or waivers of any statute of limitations
on the assessment or collection of any Tax due that is currently in effect.
2.19.3. Except as set forth on SCHEDULE 2.19.3., the Company and any
predecessors in interest have withheld or collected from each payment made to
each of their employees the amount of all Taxes required to be withheld or
collected therefrom and the Company and any predecessors in interest have paid
the same to the proper tax depositories or collecting authorities.
2.19.4. "Taxes" shall mean any federal, state, county, local, foreign
or other tax, charge, imposition or other levy (including interest or penalties
thereon) including without limitation, income taxes estimated taxes, excise
taxes, sales taxes, use taxes, gross receipts taxes, franchise taxes, taxes on
earnings and profits, employment and payroll related taxes, property taxes, real
property transfer taxes, Federal Insurance Contributions Act taxes, taxes on
value added and import duties, whether or not measured in whole or in part by
net income, imposed by the United States or any political subdivision thereof or
by any jurisdiction other than the United States or any political subdivision
thereof.
2.19.5. Unless otherwise specified on SCHEDULE 2.19.5., the Company has
been a Subchapter S corporation within the meaning of the Code at all times
throughout its existence under federal law and corresponding provisions of any
applicable state law and does not have any net unrealized built-in gain within
the meaning of Section 1374 of the Code.
2.19.6. Attached to SCHEDULE 2.19.6. are (i) copies of the documents
requested in such schedule, by category or type, with respect to various federal
tax matters, and (ii) responses to the federal income tax questionnaire included
in such schedule.
2.19.7. Attached to SCHEDULE 2.19.7. are (i) copies of the documents
requested in such schedule, by category or type, with respect to various state
and local tax matters and (ii) responses to the State and Local Tax
Questionnaire included in such schedule.
2.20. STATEMENTS TRUE AND CORRECT.
No representation or warranty made herein by the Company or any of the
Owners, nor in any statement, certificate or instrument furnished to Premiere by
the Company or any of the Owners pursuant to any Transaction Document, contains
any untrue statement of material fact or omits to state a material fact
necessary to make these statements contained herein and therein not misleading.
2.21. INTELLECTUAL PROPERTY RIGHTS.
2.21.1. SCHEDULE 2.21.1. sets forth (i) a brief description of each
Company Intellectual Property Right (other than any Intellectual Property Right
licensed to the Company by any Person), and (ii) with respect to each Company
Intellectual Property Right registered or capable of registration with any
regulatory authority or for which an application for registration has been filed
with any regulatory authority, the names of the jurisdictions covered by the
applicable registration or application, if any.
2.21.2. SCHEDULE 2.21.2. identifies and provides a brief description of
each Intellectual Property Right licensed to the Company by any Person (except
for any Intellectual Property Right that is licensed to the Company under any
third party software license generally available to the public at a cost of less
than Ten Thousand Dollars ($10,000)), and identifies the license agreement under
which such Intellectual Property Right is being licensed to the Company. The
Company is not in Default under any such license agreements.
2.21.3. Except as set forth in SCHEDULE 2.21.3., the Company has valid
and marketable title to all Company Intellectual Property Rights used in or
reasonably necessary for the conduct of its business free
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and clear of all liens and other encumbrances, except for third party
Intellectual Property Rights licensed to the Company, as to which it has a valid
right to use with respect to such Company Intellectual Property Rights. No
present or former employee or owner of the Company and no other Person owns or
has any proprietary, financial or other interest, direct or indirect, in whole
or in part, in any Intellectual Property Right which the Company owns, possesses
or uses in its operations as now or heretofore conducted. All personnel,
including employees, agents, consultants, and contractors, who have contributed
to or participated in the conception and development of any Company Intellectual
Property Right (i) have been party to a "work-for-hire" relationship with the
Company that has accorded the Company full, effective, and exclusive original
ownership of all tangible and intangible property thereby arising with respect
to such Company Intellectual Property Right, and/or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company full, effective, and exclusive ownership of all
tangible and intangible property thereby arising with respect to such Company
Intellectual Property Right.
2.21.4. Except as set forth in SCHEDULE 2.21.4., the Company is not
obligated to make any material payment to any Person for the use of any Company
Intellectual Property Right.
2.21.5. Except as set forth in SCHEDULE 2.21.5., the Company has not
developed jointly with any other Person any Company Intellectual Property Right
with respect to which such other Person has any rights. The Company is the owner
of or has a license to any Intellectual Property Right sold or licensed to a
third party by the Company in connection with its business operations, and the
Company has the right to convey by sale or license any Intellectual Property
Rights so conveyed.
2.21.6. Except as set forth in SCHEDULE 2.21.6., (a) the Company has
taken all reasonable and customary measures and precautions necessary to protect
and maintain the confidentiality and secrecy of all Company Intellectual
Property Rights (except Company Intellectual Property Rights whose value would
be unimpaired by public disclosure) and otherwise to maintain and protect the
value of all Company Intellectual Property Rights; and (b) the Company has not
disclosed or delivered, or permitted the disclosure or delivery to any Person of
the source code, or any portion or aspect of the source code, of any Company
Intellectual Property Rights.
2.21.7. The Company is not infringing, misappropriating or making any
unlawful use of, and no the Company has not at any time infringed,
misappropriated or made any unlawful use of, and, except as set forth in
SCHEDULE 2.21.7., the Company has not received any notice or other communication
(in writing or otherwise) of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Intellectual Property
Right owned or used by any other Person. To the Knowledge of the Company, no
other Person is infringing, misappropriating or making any unlawful use of, and
no Intellectual Property Right owned or used by any other Person infringes or
conflicts with, any Company Intellectual Property Right.
2.21.8. The Company Intellectual Property Rights constitute all the
Intellectual Property Rights necessary to enable the Company to conduct its
business in the manner in which such business has been and is being conducted.
The Company has not licensed any of the Company Intellectual Property Rights to
any Person on an exclusive basis and, except as set forth in SCHEDULE 2.21.8.,
the Company has not entered into any covenant not to compete or contract
limiting its ability to exploit fully any of the Company Intellectual Property
Rights or to transact business in any market or geographical area or with any
Person.
2.21.9. Except as disclosed in SCHEDULE 2.21.9., every officer,
director, or employee of the Company is a party to a contract which requires
such officer, director or employee to assign any interest in any Intellectual
Property Right to the Company and to keep confidential any trade secrets,
proprietary data, customer information, or other business information of the
Company, and no such officer, director or employee is party to any contract with
any Person other than the Company which requires such officer,
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director or employee to assign any interest in any Intellectual Property Right
to any Person other than the Company or to keep confidential any trade secrets,
proprietary data, customer information, or other business information of any
Person other than the Company.
2.21.10. Except as disclosed in SCHEDULE 2.21.10., no officer, director
or employee of the Company is party to any contract which restricts or prohibits
such officer, director or employee from engaging in activities competitive with
any Person, including the Company.
2.22. COMPANY PRODUCTS AND SERVICES.
The Company Products and Services conform in all material respects with
any specification, documentation, performance standard, representation or
statement made or provided with respect thereto by or on behalf of the Company,
and there has not been during the last three (3) years any claim made against
the Company by any customer of the Company or by any other Person alleging that
any Company Product and Service (including each version thereof that has been
licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the Knowledge of the Company, there is not a
reasonable basis for any such claim. No product liability or warranty claims
which individually or in the aggregate could exceed the reserves therefor on the
Financial Statements have been communicated in writing to or threatened in
writing against the Company. To the knowledge of the Company and the Owners, the
Company Products and Services, as of the date hereof, during and after the
calendar year 2000 A.D., include design, function and performance capabilities
such that the Company Products and Services shall not abnormally end and/or have
invalid and/or incorrect results from and/or performance or functional
degradation because of the then-current date. To the knowledge of the Company
and the Owners, the design and function of the Company Products and Services
ensure year 2000 A.D. functionality and include, but not be limited to, date
data century recognition, calculations that accommodate same century and
multicentury formulas and date values, and date data interface values that
reflect the century.
2.23. SCHEDULES.
Any item disclosed in a disclosure schedule hereto shall be deemed
disclosed for all other disclosure schedules hereto that require a listing,
description or identification of information (except that SCHEDULE 2.5.1.,
SCHEDULE 2.5.2., and SCHEDULE 2.5.3. shall include a complete list); provided
that there shall be no deemed disclosure of any exceptions to the
representations and warranties set forth in this Article 2.
2.24. COMPANY INFORMATION.
2.24.1. SCHEDULE 2.24.1. contains an organizational chart reflecting
the current staff of the Company.
2.24.2 If the Company is a corporation, SCHEDULE 2.24.2. sets forth the
names and addresses of the officers and directors of the Company.
2.24.3. SCHEDULE 2.24.3. contains a brief description of all business
operations of the Company which are outside of the ordinary course of business
conducted by the Company in its capacity as a Franchisee.
2.24.4. If the Company is a corporation, attached to SCHEDULE 2.24.4.
are true, correct and complete copies of (i) the Company's articles of
incorporation and bylaws (including all amendments), (ii) minutes of the
Company's board of directors and shareholders and (iii) stock ledger. If the
Company is a partnership, attached to SCHEDULE 2.24.4. is a true, correct and
complete copy of the Company's partnership agreement (including all amendments).
If the Company is a limited liability company, attached
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to SCHEDULE 2.24.4. is a true, correct and complete copy of the Company's
organizational and governing documents (including all amendments).
2.24.5. SCHEDULE 2.24.5. contains true, correct and complete responses
to the information requested in such schedule, by category or type, with respect
to the Company's sales and marketing activities.
2.25. TELCO, VENDOR AND FACILITIES INFORMATION.
SCHEDULE 2.25. contains true, correct and complete responses to the
information requested in such schedule, by category or type, with respect to (i)
telecommunications services purchased by the Company, (ii) the Company's vendors
and (iii) the Company's facilities.
3. Representations And Warranties Of Premiere
Premiere hereby represents and warrants the following to the Company
and the Owners:
3.1. ORGANIZATION, AUTHORITY AND CAPACITY.
Premiere is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Georgia and has the full power and
authority necessary to (i) execute, deliver and perform its obligations under
the Transaction Documents to be executed and delivered by it (the "Premiere
Transaction Documents"), and (ii) carry on its business as it has been and is
now being conducted and to own and lease the properties and Assets which it now
owns or leases. Premiere is duly qualified to do business and is in good
standing in each jurisdiction in which a failure to be so qualified or in good
standing would have a material adverse effect on (i) Premiere's ability to
perform its obligations under the Premiere Transaction Documents or, (ii) the
Assets, results of operations or prospects of Premiere.
3.2. AUTHORIZATION AND VALIDITY.
The execution, delivery and performance of the Premiere Transaction
Documents have been duly authorized by all necessary action by Premiere. The
Premiere Transaction Documents have been or will be, as the case may be, duly
executed and delivered by Premiere and constitute or will constitute the legal,
valid and binding obligations of Premiere, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, or other
laws affecting creditors' rights generally, or as may be modified by a court of
equity.
3.3. ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS.
The execution, delivery and performance by Premiere of the Premiere
Transaction Documents: (i) do not require the consent of or notice to any
governmental or regulatory authority or any other third party; (ii) will not
conflict with any provision of Premiere's articles of incorporation or bylaws;
(iii) will not conflict with or result in a violation of any law, ordinance,
regulation, ruling, judgment, order or injunction of any court or governmental
instrumentality to which Premiere is a party or by which Premiere or any of its
properties are bound; (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, require any
notice under, or accelerate or permit the acceleration of any performance
required by the terms of any agreement, instrument, license or permit to which
Premiere is a party or by which Premiere or any of its properties are bound; and
(v) will not create any lien, encumbrance or restriction upon any of the assets
owned or leased by Premiere.
3.4. OUTSTANDING AND AUTHORIZED CAPITALIZATION.
The authorized capital stock of Premiere consists of (a) one hundred
and fifty million (150,000,000) shares of common stock, par value $.01 per
share, of which twenty-four million eighty-nine thousand seven hundred sixty
nine (24,089,769) shares were issued and outstanding as of March 17, 1997,
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and (b) five million (5,000,000) shares of preferred stock, par value $.01 per
share, none of which are issued and outstanding as of the date of this
Agreement. Any Premiere Stock issuable to the Owners pursuant to the terms
hereof shall be duly and validly issued, and fully paid and non-assessable.
3.5. SEC FILINGS; FINANCIAL STATEMENTS.
3.5.1. Premiere has timely filed and made available to the Owners and
the Company all SEC Documents required to be filed by Premiere since March 5,
1996 (the "Premiere SEC Reports"). The Premiere SEC Reports (i) at the time
filed, complied in all material respects with the applicable requirements of the
Securities Laws and other applicable laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing), contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Premiere SEC Reports or necessary in order to make the statements in such
Premiere SEC Reports, in light of the circumstances under which they were made,
not misleading. No Premiere Subsidiary is required to file any SEC Documents.
3.5.2. Each of the Premiere Financial Statements (including, in each
case, any related notes) contained in the Premiere SEC Reports complied in all
material respects with the applicable published rules and regulations of the SEC
with respect thereto, was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements or, in the case of unaudited interim
statements, as permitted by Form 10-Q of the SEC), and fairly presented in all
material respects the consolidated financial position of Premiere and its
Subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring year-
end adjustments which were not or are not expected to be material in amount or
effect.
3.6. STATEMENTS TRUE AND CORRECT.
No representation or warranty made herein by Premiere, nor in any
statement, certificate or instrument to be furnished to the Company or any of
the Owners by Premiere pursuant to any Transaction Document, contains or will
contain any untrue statement of material fact or omits or will omit to state a
material fact necessary to make these statements contained therein not
misleading.
4. Additional Covenants And Agreements
4.1. PUBLIC ANNOUNCEMENTS.
Neither the Company nor the Owners, nor any of their representatives,
shall make any public announcement with respect to the Transfer Agreement or the
Transactions without the prior written consent of Premiere, and Premiere shall
not make the initial public announcement with respect thereto without the prior
written consent of the Company, unless, in either case, required by law or
judicial process, in which case notification shall be given to Premiere or to
the Company, as the case may be, prior to such disclosure.
4.2. NONCOMPETITION, NONSOLICITATION AND NONDISCLOSURE.
4.2.1. The parties acknowledge:
(a) that each Owner has substantial special expertise and
experience in the Business Activities (as defined below) and that such
Owner possesses substantial contacts with suppliers and customers of
the Company, and that such expertise, experience and contacts have been
built up over a number of years, including such Owner's period of
ownership of Company Equity Securities;
(b) that each Owner will be well-compensated under this Agreement
for the expertise, knowledge and contacts he or she has obtained, as
well as the goodwill that he or
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she has built up in the Company, and that this Section is being
executed as an integral part of such Owner's sale of all of his or her
Company Equity Securities to Purchaser pursuant to the Transactions, an
express element of which includes the sale of the goodwill such Owner's
ownership and service has generated, and for which sale such Owner will
receive substantial remuneration hereunder;
(c) that each Owner has occupied a position of trust and
responsibility with the Company in which he or she has had access to a
substantial amount of Confidential Information (as defined below) and
Trade Secrets (as defined below), and that Premiere is entering into
this Agreement in reliance upon such Owner's agreement not to use or
disclose such Trade Secrets and Confidential Information, not to
compete against Premiere or any Affiliate, and not to solicit
Premiere's or any such Affiliate's customers during the time periods
set forth in this Agreement;
(d) that due to each Owner's special experience and his or her
close identification with goodwill of the Company, the harm caused by
such Owner's violation of the provisions of this Section cannot
reasonably or adequately be compensated solely by damages in an action
at law;
(e) that Owner is capable of competing with and substantially
harming Premiere and its Affiliates and has more than adequate capital,
experience, customer contact, supplier contact, name recognition and
industry reputation to start a competing business, which would deprive
Premiere of all or substantially all of its bargained for goodwill and
other consideration in the Transactions; and
(f) that the terms of this Section are necessary to protect
Premiere's legitimate business interests, Trade Secrets and
Confidential Information and that Owner's competition with Premiere or
any of its Affiliates or other violation of the covenants set forth
below would cause substantial and irreparable harm to Premiere.
4.2.2. For purposes of this Section, the following terms shall have the
meanings set forth below:
"Business Activities" shall mean the provision of interactive voice
messaging services.
"Confidential Information" means information, other than Trade
Secrets, which relates to the Company, the Company's business, or the
Company's suppliers or customers that is not generally known by persons
not employed by the Company or VTE and which Owner has learned as a
consequence of his or her relationship to the Company or VTE. Such
information includes, without limitation, to the extent it is not
considered a Trade Secret, financial information, strategic plans and
forecasts, marketing plans and forecasts, customer lists, customer
pricing and order data, supplier lists, or technical information
relating to the Company's products or services. "Confidential
Information" shall not include information which has become generally
available to the public by the act of one who has the right to disclose
such information without violating a legal right of Premiere or the
Company.
"Trade Secrets" shall mean all secret, proprietary or confidential
information regarding the Company or its business, including any and
all information not generally known to, or ascertainable by, persons
not employed by the Company or VTE, the disclosure or knowledge of
which would permit those persons to derive actual or potential economic
value therefrom or to cause economic or financial harm to the Company
or VTE. "Trade Secrets" shall not include information that has become
generally available to the
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public by the act of one who has the right to disclose such information
without violating a legal right of Premiere or the Company.
4.2.3. For three (3) years immediately following the Closing, no Owner
shall, directly or indirectly, by himself or herself or in conjunction with any
person, firm or corporation other than Premiere, engage in Business Activities,
or help anyone else engage in the Business Activities, within the Protected
Territory. Notwithstanding anything contained herein to the contrary, Owner may
own up to two percent (2%) of the shares of a publicly-held corporation which
competes with Premiere or any of its Affiliates, provided none of his or her
other relationships with such corporation violate the terms of this Section.
4.2.4. For three (3) years immediately following the Closing, no Owner
shall, for himself or herself or on behalf of others, use or disclose any
Confidential Information except in the furtherance of the business of Premiere
or any of its Affiliates. No Owner shall, for himself or herself or on behalf of
others, use or disclose any Trade Secrets except in the furtherance of the
business of Premiere or any of its Affiliates, and each Owner acknowledges that
Trade Secrets shall not lose the protection of this provision at the end of the
three-year period immediately following the Closing. No Owner shall use or
disclose any Trade Secret at any time while the information remains a Trade
Secret. Nothing in this provision shall limit the protections available to
Premiere under any federal, state or local statute or legal principle governing
confidential information or trade secrets.
4.2.5. Notwithstanding anything else in this Agreement to the contrary,
the terms of this Section 4.2. shall survive the expiration or termination of
this Agreement. If an Owner violates any portion of this Section, he or she
shall forfeit and return to Premiere the portion of the Escrow Fund due to him
or her pursuant to any Escrow Agreement.
4.2.6. Each Owner acknowledges that his or her agreement not to compete
with Premiere or any of its Affiliates is necessarily of a special, unique and
extraordinary nature, and that the loss arising from a breach thereof cannot
reasonably be compensated by money damages and will cause Premiere and any such
Affiliate irreparable harm. Accordingly, upon the failure of any Owner to comply
with the terms of this Section at any time, Premiere and any such Affiliate
shall be entitled to injunctive or other extraordinary relief in case of such
breach, such injunctive or other extraordinary relief to be cumulative to, but
not in limitation of, any other remedies to which Premiere or any such Affiliate
may be entitled.
4.2.7. Premiere and the Owners intend that Premiere have the broadest
possible protection from unfair competition by the Owners with Premiere or any
of its Affiliates, consistent with public policy. Accordingly, should any court
of competent jurisdiction determine that, consistent with the established
precedent of the forum state, the public policy of such state requires a more
limited restriction in duration, geographic area, nature of restricted activity,
or any combination thereof, it would be in furtherance of the intentions of the
parties hereto for the court to so interpret and construe the terms of this
Agreement, or to modify the Agreement, to apply to only such more limited
restrictions to an appropriate degree.
4.3. APPROVAL OF TRANSACTIONS.
Each Owner, through the execution and delivery of the Transfer
Agreement, irrevocably votes for and approves the Transactions in its capacity
as a holder of Company Equity Securities, and each such Owner does hereby waive
any required notice for any meeting concerning such matters. Each Owner
acknowledges and agrees that he, she or it has had adequate opportunity to
review the terms and conditions of the Transactions and to seek independent
legal, tax and financial advice.
4.4. TAX RETURNS.
The Owners shall cause to be prepared and filed, at their expense, a
short-period tax return of the Company ending on the Closing Date, which shall
be provided to Premiere for its prior review and approval, such approval not to
be unreasonably withheld or delayed. If the Company is a Subchapter S
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corporation within the meaning of the Code, the Company shall maintain through
the Effective Time its status as a Subchapter S corporation under the Code and
any corresponding provisions of any applicable state law through the Closing
Date and shall file such short-period return with that status. Premiere agrees
to make available any information in its or the Company's possession which may
reasonably be required by the Owners to complete any such short-period return.
4.5. STATE TAKEOVER LAWS.
The Company and each of the Owners have taken, and shall take, all
steps necessary for the Company to exempt the Transactions from, or if necessary
to challenge the validity or applicability of, any applicable "moratorium,"
"fair price," "business combination," "control share," or other anti-takeover
laws.
4.6. DOCUMENTS OF THE COMPANY.
To the extent not previously provided pursuant to Section 2.24.4.
hereof, true and correct copies of (i) the organizational documents and all
amendments thereto of the Company (certified by the Secretary of State of the
state in which the Company was organized, as applicable), (ii) the Company's
minutes, which accurately reflect all proceedings of the board of directors of
the Company (and all committees thereof) and (iii) the record books of the
Company, which contain true, complete and accurate records of the ownership of
the Company, shall be provided to Premiere at Closing; and if any or all of said
documents are not provided to Premiere at Closing, each Owner, jointly and
severally, shall be obligated to provide to Premiere within 20 days of the
Closing all such documents not previously delivered to Premiere. Notwithstanding
anything to the contrary in this Agreement, the obligations of this paragraph
shall survive the Closing.
4.7. OWNER COVENANT.
Each Owner acknowledges and agrees that such Owner does not have and
will not claim any individual interest in the Assets, property or rights of the
Company and, after the Closing, will claim no further equity or other interest
in the Company or its Assets, properties or rights.
4.8. CONSENTS.
The Company and the Owners shall use commercially reasonable efforts to
obtain all necessary consents that have not been obtained prior to the Closing.
Each Owner and the Company, jointly and severally, represents and warrants to
Premiere that neither the Company, any Owner nor any Affiliate thereof has taken
or agreed to take any action or has any knowledge of any fact or circumstance
that is reasonably likely to materially impede or delay receipt of any necessary
consents or result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section. In order, however, that the
full value of the Company's contracts and agreements may be realized, at
Premiere's request, direction and expense, the Owners and the Company shall take
such action as shall be reasonably necessary in order to preserve for the
benefit of Premiere and the Company the rights and obligations of the Company
under such contracts and agreements.
4.9. RELEASE BY THE COMPANY
The Company, on its own behalf and on behalf of any person or entity
claiming through it, hereby releases, remises, and forever discharges VTE, VTN,
the NAP and their respective Representatives, Affiliates, and insurers, and
their respective successors and assigns, and each of them (referred to in this
section individually and collectively as the "Releasees") of and from any and
all claims, demands, debts, accounts, covenants, agreements, obligations, costs,
expenses, actions or causes of action of every nature, character or description,
now accrued or which may hereafter accrue, without limitation of law, equity or
otherwise, based in whole or in part on any facts, conduct, activities,
transactions, events or occurrences known or unknown, which have or allegedly
have existed, occurred, happened, arisen or transpired from the
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beginning of time to the Effective Time (referred to in this section as the
"Released Claims"). The Company represents and warrants that no Released Claim
released herein has been assigned, expressly, impliedly, or by operation of Law,
and that all Released Claims released herein are owned by the Company (or an
Owner, as the case may be), which has the sole authority to release them. The
Company agrees that it shall forever refrain and forebear from commencing,
instituting or prosecuting any lawsuit action or proceeding, judicial,
administrative, or otherwise, or otherwise attempting to collect or enforce any
Released Claims which are released and discharged herein.
4.10. RELEASE BY OWNERS
Each Owner, on such Owner's own behalf and on behalf of any person or
entity claiming through such Owner, in all capacities (including, without
limitation, as a shareholder, director, officer, employee or agent) hereby
releases, remises, and forever discharges (i) Premiere, the Company, and each of
their respective individual, joint or mutual, past, present and future agents,
Affiliates, stockholders, controlling persons, Subsidiaries, predecessors,
successors, assigns, attorneys, employees, officers, directors and insurers
(individually, a "Company Releasee" and collectively, "Company Releasees") and
(ii) VTE, VTN, the NAP, and each of their respective individual, joint or
mutual, past, present and future agents, Affiliates, stockholders, controlling
persons, Subsidiaries, predecessors, successors, assigns, attorneys, employees,
officers and directors and insurers (individually, a "VTE Releasee" and
collectively "VTE Releasees") (in this Section, "Releasee" refers to either a
Company Releasee or a VTE Releasee, and "Releasees" refers to either the Company
Releasees or the VTE Releasees) of and from any and all claims, demands,
proceedings, causes of action, Orders, obligations, contracts, agreements, debts
and liabilities whatsoever, whether known or unknown, suspected or unsuspected,
fixed or contingent, both at law and in equity, which such Owner or any person
or entity claiming through such Owner (other than the Company) now has, has ever
had or may hereafter have against any Releasee arising contemporaneously with or
prior to the Closing Date or on account of or arising out of any matter, cause
or event occurring contemporaneously with or prior to the Closing Date,
including but not limited to, claims arising under federal, state or local
securities laws or laws prohibiting employment discrimination and claims growing
out of any legal restrictions on rights to terminate its employees or to take
any other employment action, whether statutory, contractual or arising under
common law or case law, and any rights to indemnification or reimbursement from
the Company, whether pursuant to the Company's Articles of Incorporation or
Certificate of Incorporation, as the case may be, the Company's bylaws, any
contract or otherwise, and whether or not relating to claims pending on, or
asserted after, the Closing Date; provided, however, that nothing contained
herein shall operate to release Owner's claim against a Company Releasee for (a)
payment of the Purchase Price under this Agreement, (b) accrued wages and
benefits disclosed in the Schedules hereto, or (c) any debt of the Company to
Owner to the extent that such debt (i) was disclosed in the Schedules and (ii)
is not subject to an Agreement Regarding Purchase of Certain Indebtedness.
Owner hereby irrevocably covenants to refrain from asserting, directly or
indirectly, any claim or demand, or commencing, instituting or causing to be
commenced, directly or indirectly, any proceeding of any kind against any
Releasee, based upon any matter purported to be released hereby. Without
limiting any of the rights and remedies otherwise available to any Releasee, the
Owner shall indemnify and hold harmless each Releasee from and against all loss,
claim, damage (including incidental and consequential damages) or expense
(including all costs of investigation and defense and reasonable attorney's
fees) whether or not involving third party claims, arising directly or
indirectly from or in connection with (x) the assertion by or on behalf of the
Owner or any person claiming through the Owner of any claim or other matter
purported to be released pursuant to this release and (y) the assertion by any
third party of any claim or demand against any Releasee, which claim or demand
arises directly or indirectly from, or in connection with, any assertion by or
on behalf of the Owner or any person claiming through the Owner against such
third party of any claims or other matters purported to be released hereunder.
If any provision of this Section 4.10 is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Section shall
remain in
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full force and effect. Any provision held invalid or unenforceable only in part
or degree will remain in full force and effect to the extent not held invalid or
unenforceable.
4.11. TERMINATION OF EMPLOYMENT AGREEMENTS.
The Company and each Owner hereby agrees that any employment or
management agreement to which they are parties is hereby terminated, and the
Company shall have no liability or obligation thereunder of any nature or kind.
4.12. ADOPTION OF REGISTRATION RIGHTS AGREEMENT.
Each Owner acknowledges and agrees that Premiere has entered into a
Stock Restriction and Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of April 30, 1997, by and among Premiere, those
stockholders of VTE appearing as signatories thereto, those stockholders of VTN
appearing as signatories thereto and those stockholders or other equity owners
of franchisees of VTE that adopt the terms of the Registration Rights Agreement
in the form attached to the Transfer Agreement as EXHIBIT B. Each Owner hereby
agrees to become a party to and be bound by the terms and conditions of the
Registration Rights Agreement effective as of the date hereof, and Premiere
agrees that each Owner shall have, subject to the terms and conditions of the
Registration Rights Agreement, the rights specified therein of Premiere Stock,
if any, received pursuant to the Transfer Agreement and any Agreement Relating
to Purchase of Certain Indebtedness entered into in connection therewith to
include shares in a registration statement filed by Premiere in accordance with
such Registration Rights Agreement. Premiere acknowledges and agrees that the
execution and delivery by the Owners of the Transfer Agreement into which this
Section 4.12 has been incorporated has the same effect as execution and delivery
of an Adoption Agreement in the form of Exhibit A to the Registration Rights
Agreement.
4.13. ASSIGNMENT OF FRANCHISE AGREEMENT AND SRA.
To the extent that any Owner is a party to one or more (i) Franchise
Agreements, (ii) SRAs, or (iii) NAP Agreements, such Owner does hereby sell,
convey, transfer, assign and deliver to the Company all of such Owner's rights
under the Franchise Agreements, the SRAs and the NAP Agreements, and the Company
hereby assumes and agrees to satisfy, discharge, perform and fulfill all of such
Owner's obligations under each such Franchise Agreement, SRA and NAP Agreement.
4.14. EXCHANGE LISTING.
Premiere shall use its reasonable efforts to list, prior to the
Effective Time, on the Nasdaq National Market, the shares of Premiere Stock to
be issued to the Owners pursuant to the Transactions, and Premiere shall give
all notices and make all filings with the NASD required in connection with the
Transactions.
4.15. PERSONAL GUARANTIES.
Premiere shall use commercially reasonable efforts to terminate the
personal guaranties of any of the Owners to repay Company indebtedness (to the
extent the guaranties are disclosed in the Schedules hereto including SCHEDULE
4.15. hereto) as of the Closing, and to the extent any such guaranties have not
been terminated as of the Closing, Premiere shall continue such efforts
following the Closing and shall indemnify each such Owner as an "Indemnified
Party" in accordance with Section 6.2. for Losses incurred by such Owner if
required to satisfy such guaranty.
4.16. RESIGNATIONS
As of the Effective Time, each Owner hereby resigns as a director of
the Company, and hereby resigns from any officer positions held by such Owner
with the Company.
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5. Closing
5.1. CLOSING.
The consummation of the Transactions (the "Closing") shall take place
at the offices of Alston & Bird, One Atlantic Center, 1201 West Peachtree
Street, Atlanta, Georgia 30309-3424, at such time and date as Premiere, the
Company and the Owners may mutually agree.
5.2. DOCUMENT DELIVERY BY THE COMPANY AND OWNERS - GENERAL.
The Company and the Owners shall deliver the following
contemporaneously with the execution and delivery of this Agreement:
5.2.1. A good standing certificate regarding the Company certified by
the Secretary of State of the Company Jurisdiction dated within fifteen (15)
business days of the Closing;
5.2.2. Resolutions of the Company in form and substance satisfactory to
Premiere approving the execution, delivery and performance of this Agreement and
the consummation of the Transactions, certified by an appropriate officer of the
Company;
5.2.3. An incumbency certificate certifying the identity of the
officers of the Company;
5.2.4. If any Owner is not a natural person, (i) a good standing
certificate regarding any such Owner, certified by the Secretary of State of
such Owner's state of organization dated within fifteen (15) business days of
the Closing; (ii) a resolution of any Owner in form and substance satisfactory
to Premiere approving the execution, delivery and performance of this Agreement
and the consummation of the Transactions, certified by an appropriate officer of
such Owner; and (iii) an incumbency certificate certifying the identity of the
officers of any such Owner; and
5.2.5. A certificate of the chief financial officer of the Company
certifying that the Closing Date Balance Sheet presents fairly in all material
respects the financial condition of the Company as of the Closing Date and is in
accordance with the books and records of the Company.
5.3. DOCUMENT DELIVERY BY THE COMPANY AND OWNERS - STOCK TRANSFER.
If the Transactions involve a Stock Transfer, the Company and the
Owners, as applicable, shall deliver the following contemporaneously with the
execution and delivery of this Agreement:
5.3.1. Certificates representing the Company Equity Securities being
purchased, exchanged or converted into the consideration specified in the
Transfer Agreement, as the case may be, together with accompanying stock
transfer powers or instruments of assignment, duly endorsed in blank;
5.3.2. Resignations of each of the officers and directors of the
Company other than an Owner (each of whom has resigned pursuant to Section 4.16
hereof) effective as of the Effective Time;
5.3.3. Releases, in form and substance satisfactory to Premiere, of
each officer and director of the Company or any other party that is a party to
an employment or consulting Agreement with the Company, other than an Owner
(each of whom has executed a release pursuant to Section 4.10 hereof),
concerning any claim against the Company, VTE, VTN and the NAP, other than
accrued wages and benefits disclosed in the Schedules delivered pursuant to this
Agreement;
5.3.4. All books and records of the Company, including all corporate
and other records, minute books, stock record books, stock registers, books of
accounts, contracts, agreements and such other documents or certificates as
shall be reasonably requested by Premiere;
5.3.5. Such documents as shall be reasonably acceptable to Premiere by
which the Company shall convey and assign to any Owner, and by which any Owner
shall accept and assume, any Asset or liability
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of the Company as specified by the Transfer Agreement to be conveyed to and
assumed by any such Owner;
5.3.6. Confirmation that all agreements or arrangements, whether
written or oral, between the Company and any other Person, including without
limitation any Owner, that relate in any manner to the Company Equity Securities
have been terminated.
5.4. DOCUMENT DELIVERY BY PREMIERE - GENERAL.
Premiere shall deliver the following contemporaneously with the
execution and delivery of this Agreement:
5.4.1. The consideration required under this Agreement; and
5.4.2. Resolutions adopted by the Board of Directors of Premiere in
form and substance satisfactory to the Company and the Owners approving the
execution, delivery and performance of this Agreement and the consummation of
the Transactions, certified by the Secretary of Premiere.
5.5. DOCUMENT DELIVERY BY PREMIERE - STOCK TRANSFER.
If the Transactions involve a Stock Transfer, Premiere shall deliver,
or arrange for SunTrust Bank, Atlanta, Premiere's transfer agent to deliver,
reasonably promptly following the execution and delivery of this Agreement,
certificates representing the issuance of shares of Premiere Stock as required
by this Agreement; provided, however, that no certificates representing
fractional shares will be issued as a result of the Share Exchange. Each holder
of shares of Company Common Stock exchanged pursuant to the Transactions who
would otherwise have been entitled to receive a fraction of a share of Premiere
Common Stock shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Premiere Common Stock
multiplied by $23.9438.
5.6. ESCROW AGREEMENT.
The Escrow Agent, each of the Owners and the Company shall execute and
deliver the Escrow Agreement substantially in the form attached to the Transfer
Agreement as EXHIBIT C contemporaneously with the execution and delivery of this
Agreement.
5.7. EMPLOYMENT AGREEMENTS.
As of the Closing, the Company shall have terminated any employment
agreements or management agreements to which the Company is a party that are not
terminable by the Company with less than thirty (30) days notice without any
penalty or payment and shall deliver evidence of such termination
contemporaneously with the execution and delivery of this Agreement.
5.8. [THIS SECTION INTENTIONALLY OMITTED.]
5.9. [THIS SECTION INTENTIONALLY OMITTED.]
5.10. ADDITIONAL DELIVERIES.
Any deliveries or conditions set forth on EXHIBIT 5.10 to the Transfer
Agreement shall have been made, satisfied or waived as of the Closing Date.
6. Indemnification
6.1. INDEMNIFICATION OF PREMIERE.
6.1.1. Subject to the provisions of this Article 6, each Owner shall,
severally and not jointly, indemnify and hold harmless Premiere, and its
officers, directors, agents or Affiliates, from and against any and all demands,
claims, actions or causes of action, assessments, losses, diminution in value,
damages
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(including special and consequential damages), liabilities, costs and expenses,
including but not limited to reasonable attorneys' fees ("Losses"), suffered or
incurred by any such party by reason of or arising out of any of the following:
(a) the breach by such Owner of any representation or warranty
contained in Article 1. hereof or in any document or instrument
delivered by such Owner in connection with the Transaction Documents;
and
(b) the non-fulfillment of any covenant or agreement of such Owner
contained in Article 4. hereof or in the Transfer Agreement.
6.1.2. Subject to the provisions of this Article 6., the Owners shall
jointly and severally indemnify and hold harmless Premiere, and its officers,
directors, agents or Affiliates, from and against any and all Losses suffered or
incurred by any such party by reason of or arising out of any of the following:
(a) the breach by the Company of any representation or warranty
contained in Article 2. hereof or in any Transaction Document or any
document or instrument delivered by the Company in connection
therewith;
(b) the non-fulfillment of any covenant or agreement of the Company
or the Owners contained in any Transaction Document;
(c) any claim or demand by any person asserting any interest in any
Company Equity Security or seeking dissenter's or appraisal rights or
any other claim in respect of the Transactions, provided that
indemnification as to dissenter's or appraisal rights shall not apply
in respect and to the extent of any claim thereof as to which the
Company notified Premiere in writing prior to the Closing;
(d) any liability for sales taxes on account of periods ending on
or prior to the Effective Time, whether or not such liability is a
breach of Section 2.19. or is disclosed on SCHEDULE 2.19. or in the
Financial Statements; and
(e) the items, if any, listed on an EXHIBIT 6.1.2. to the Transfer
Agreement.
6.1.3. If the Transaction is to be accounted for as a pooling of
interests, no claim for indemnification with respect to any alleged
misrepresentation or breach of warranty under Section 6.1.1.(a) or Section
6.1.2.(a) may be made after the later of (i) the ninetieth (90th) day after
receipt by Premiere of its audited financial statements covering a period of at
least thirty (30) days after the Effective Time or (ii) for matters that would
not be reasonably expected to be encountered in the audit process, one year
following the Effective Time; provided, however, that the right to
indemnification shall extend beyond such period with respect to any claim for
which written notice was given to the Owners during such period but shall expire
on the expiration of the applicable statutes of limitations unless an action has
been brought with respect thereto, and provided further, that the
representations and warranties set forth in Sections 1.1. through 1.4., Sections
2.1. through 2.3., Section 2.5., Section 2.9. and Section 2.19. shall survive
until the expiration of the statutes of limitations applicable to any claims or
causes of actions with respect to matters covered thereby. Other than as set
forth above, (i) claims for indemnification with respect to any matter in a
Transaction to be accounted for as a pooling of interests, and (ii) without
regard to the limitations set forth above, all claims for indemnification with
respect to a Transaction to be accounted for as a purchase or other than as a
pooling of interests, may be made at any time prior to the expiration of the
applicable statutes of limitations with respect to the matter.
6.2. NOTICE AND OPPORTUNITY TO DEFEND.
The party indemnified under this Article 6. (the "Indemnified Party")
shall notify in writing the indemnifying party (the "Indemnifying Party") of any
matter giving rise to an obligation to indemnify and
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the Indemnifying Party shall defend such claim at its expense with counsel
reasonably acceptable to the Indemnified Party, provided that the Indemnifying
Party may not settle any such claim without the consent of the Indemnified
Party, which consent will not be unreasonably withheld or delayed. The
Indemnified Party agrees to cooperate with the Indemnifying Party and to make
reasonably available to the Indemnifying Party any necessary records or
documents in the possession of the Indemnified Party which are necessary to
defend such claim. If the Indemnifying Party does not defend or settle such
claim, the Indemnified Party may do so without the Indemnifying Party's
participation, in which case the Indemnifying Party shall pay the expenses of
such defense, and the Indemnified Party may settle or compromise such claim
without the Indemnifying Party's consent. The failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent that the Indemnifying Party is
actually prejudiced by such failure to give notice.
6.3. SURVIVAL AND INSURANCE.
The representations and warranties of the parties contained in the
Transaction Documents or in any document or instrument delivered in connection
therewith shall survive the Closing and shall not be extinguished thereby
notwithstanding any investigation or other examination by any party. Any
indemnified Loss that is not covered by insurance maintained by the Indemnifying
Party shall be reduced by the amount of any insurance proceeds actually received
from insurance maintained by the Indemnified Party.
6.4. ESTABLISHMENT OF ESCROW.
At the Effective Time, Premiere, on behalf of the Owners, shall deliver
to the Escrow Agent certificates, or cash, as the case may be, representing the
General Escrow Amount. The General Escrow Amount shall be held by the Escrow
Agent pursuant to the terms of the Escrow Agreement.
6.5. ARBITRATION.
All disputes arising under this Article 6. (other than claims in
equity) shall be resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Arbitration shall be
by a single arbitrator experienced in the matters at issue and selected by the
Owners' Representative and Premiere in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be held in such place in Atlanta, Georgia as may be specified by the arbitrator
(or any place agreed to by the Owners' Representative, Premiere and the
arbitrator). The decision of the arbitrator shall be final and binding as to any
matters submitted under this Article 6.; provided, however, if necessary, such
decision and satisfaction procedure may be enforced by either the Owners'
Representative or Premiere in any court of record having jurisdiction over the
subject matter or over any of the parties to this Agreement. All costs and
expenses incurred in connection with any such arbitration proceeding (including
reasonable attorneys fees) shall be borne by the party against which the
decision is rendered, or, if no decision is rendered, such costs and expenses
shall be borne equally by the Indemnitors as one party and the Indemnitees as
the other party. If the arbitrator's decision is a compromise, the determination
of which party or parties bears the costs and expenses incurred in connection
with any such arbitration proceeding shall be made by the arbitrator on the
basis of the arbitrator's assessment of the relative merits of the parties'
positions.
6.6. LIMITATIONS AS TO AMOUNT.
The Indemnifying Parties shall not be liable for Losses relating to a
claim for indemnification under Section 6.1.1. or 6.1.2. in excess of the value
of the shares of Premiere Common Stock deposited with the Escrow Agent pursuant
to the Escrow Agreement, and the Escrow Agreement shall be the sole and
exclusive remedy for all such Losses incurred by the Indemnified Parties,
provided, however, that the limitations set forth in this Section shall not
apply to (i) any intentional misrepresentation or intentional
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breach of warranty of any Indemnifying Party, (ii) any intentional failure to
perform or comply with any covenant or agreement of any Indemnifying Party,
(iii) breach of any of the representations set forth in Sections 1.1. through
1.4., Section 2.5., Section 2.9. or Section 2.19., or (iv) any matter
indemnified pursuant to Section 6.1.2.(d) or Section 6.1.2(e).
6.7. OTHER RIGHTS AND REMEDIES NOT AFFECTED.
Except as specifically limited in this Article 6, the rights of the
Indemnitees under this Article 6. are independent of and in addition to such
rights and remedies as the Indemnitees may have at law or in equity or otherwise
based upon any inaccuracy, untruth, incompleteness or breach of any
representation or warranty of any Indemnitor contained herein or in any
certificate, schedule or exhibit furnished by such party in connection herewith,
or based upon the failure of an Indemnitor to perform any covenant, agreement or
undertaking required by the terms hereof to be performed by such Indemnitor,
including without limitation the right to seek specific performance, recession
or restitution, none of which rights or remedies shall be affected or diminished
hereby.
7. Certain Definitions
In addition to the terms defined elsewhere herein, following terms used
herein shall have the meanings set forth below:
"1933 Act" - the Securities Act of 1933, as amended.
"1934 Act" - the Securities Exchange Act of 1934, as amended.
"Affiliate" - of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
"Agreement" - The Transfer Agreement to which these Uniform Terms are
appended, and these Uniform Terms, including the Appendices, Exhibits and
Schedules delivered pursuant thereto and hereto.
"ASRs 130 and 135" shall mean SEC Accounting Series Release Nos. 130
and 135.
"Assets" - of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
"Closing Date Balance Sheet" - The unaudited balance sheet of the
Company as of the close of business on the Closing Date prepared by the Company.
"Closing Date" - The date upon which the closing of the Transactions
shall occur.
"Closing" - The closing of the Transactions.
"Code" - The Internal Revenue Code of 1986, as amended.
"Company Equity Securities" - equity securities of the Company of any
type, including but not limited to common stock, preferred stock, limited
partnership interests, general partnership interests, limited liability company
interests, options to purchase any of the foregoing and securities convertible
into any of the foregoing.
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"Company Intellectual Property Rights" - any Intellectual Property
Right used by or reasonably useful to the Company in the course of its business.
"Company Products and Services" - the interactive voice messaging
services and related equipment provided by the Company to customers in the
course of its business operations.
"Company Stock" - the capital stock of the Company.
"Company" - The entity identified as such in the Transfer Agreement.
"Contract" - any written or oral agreement, arrangement, authorization,
commitment, contract, indenture, instrument, lease, obligation, plan, practice,
restriction, understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or its
capital stock, Assets or business.
"Default" - (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, (ii)
any occurrence of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.
"Effective Time" - the time when all deliveries to be made hereunder at
or prior to Closing have been made and all actions to be taken have been taken,
and the parties are agreed that the Closing has occurred.
"ERISA Affiliate" - of any entity means any other entity which,
together with such entity, would be treated as a single employer (i) under
Section 414(b) or (c) of the Code or (ii) for purposes of any Benefit Plan
subject to Title IV of ERISA, under Section 414(b), (c), (m) or (o) of the Code.
"Escrow Agent" - the entity identified as such in the Escrow Agreement.
"Escrow Agreement" - the Escrow Agreement or Agreements substantially
in the form or forms attached as exhibits to the Transfer Agreement.
"Exchange Act" - the Securities Exchange Act of 1934, as amended.
"Franchise Agreement" - a franchise or license agreement and all
amendments, supplements and modifications thereto entered into by VTE with the
Company, an Owner, an Affiliate of an Owner or any predecessor of the Company,
an Owner or an Owner's Affiliate relating to a Franchise.
"Franchise" - the rights granted by VTE relating to the ownership
and/or operation of one or more VTE Centers in one or more Sales Territories
within a Protected Territory pursuant to a Franchise Agreement.
"GAAP" - generally accepted accounting principles, consistently
applied.
"Intellectual Property Rights" - (a) any patent, patent application,
trademark (whether registered or unregistered), trademark application, trade
name, fictitious business name, service mark (whether registered or
unregistered), service mark application, copyright (whether registered or
unregistered), copyright application, maskwork, maskwork application, trade
secret, know-how, customer list, system, computer software or computer program
(including any source or object codes therefor or documentation relating
thereto), invention, design, blueprint, engineering drawing, proprietary
product, technology,
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proprietary right or other intellectual property right or intangible Asset; and
(b) any right to use or exploit any of the foregoing.
"IRS" - the Internal Revenue Service.
"Knowledge" of the Company shall mean the personal knowledge after due
inquiry of those facts that are known or should reasonably have been known after
due inquiry by each of the Owners and the knowledge of each of the Owners
obtained or which would have been obtained from a reasonable investigation.
"Latest Balance Sheet" - the latest balance sheet included in the
Financial Statements.
"Law" - any code, law (including common law), ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a Person or
its Assets, Liabilities, or business, including those promulgated, interpreted
or enforced by any Regulatory Authority.
"Liability" - any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, cost or expense (including costs of
investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.
"NAP Agreement" - an agreement executed by the Company and VTE in which
the Company agreed to be bound by the bylaws of the NAP Board of Directors.
"NAP" - the National Accounts Program of VTE.
"Order" - any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of any
federal, state, local or foreign or other court, arbitrator, mediator, tribunal,
administrative agency, or Regulatory Authority.
"Owner" - The individuals or entities identified as such under the
Transfer Agreement.
"Permit" - any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, Assets, or
business.
"Person" - a natural person or any legal, commercial or governmental
entity, such as, but not limited to, a corporation, general partnership, joint
venture, limited partnership, limited liability company, trust, business
association, group acting in concert, or any person acting in a representative
capacity.
"Premiere Financial Statements" - (i) the consolidated balance sheets
(including related notes and schedules, if any) of Premiere as of December 31,
1996 and 1995, and the related statements of operations, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three fiscal years ended December 31, 1996, 1995 and 1994,
as filed by Premiere in SEC Documents, and (ii) the consolidated balance sheets
of Premiere (including related notes and schedules, if any) and related
statements of operations, changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to December 31, 1996.
"Premiere Stock" - Common Stock, $.01 par value per share, of Premiere.
"Premiere" - Premiere Technologies, Inc., a Georgia corporation.
"Protected Territory" - the territory in which the Company solicits and
provides services and products to customers for digital voice messaging services
as such territory is defined in the Franchise Agreement.
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"Regulatory Authority" - the SEC, the NASD, the Federal Trade
Commission, the United States Department of Justice, or other federal, state,
county, local or other governmental or regulatory agencies, authorities
(including self-regulatory authorities), instrumentalities, commissions, boards
or bodies having jurisdiction over the parties hereto and their respective
Subsidiaries.
"Related Person" - with regard to any Owner or any director, officer or
employee of the Company, his or her spouse, parent, sibling, child, aunt, uncle,
niece, nephew, in-law, grandparent and grandchild (including by adoption or
remarriage) and any trustees or other fiduciaries for the benefit of such
relatives.
"Sales Territory" - the geographic areas into which a Protected
Territory is divided under the Franchise Agreement.
"Schedules" - the disclosure schedules referred to in this Agreement.
"SEC Documents" - all forms, proxy statements, registration statements,
reports, schedules, and other documents filed, or required to be filed, by
Premiere pursuant to the Securities Laws.
"Securities Laws" - the 1933 Act, the 1934 Act, the Investment Company
Act of 1940, as amended, the Investment Advisors Act of 1940, as amended, the
Trust Indenture Act of 1939, as amended, and the rules and regulations of any
Regulatory Authority promulgated thereunder.
"SRA" - a service representative agreement executed by VTE and a
service representative, relating to the provision of services on behalf of VTE
with respect to the Franchise.
"Stock Transfer" - The purchase by Premiere, or any of its Affiliates,
pursuant to the Transactions, of Company Equity Securities, including by means
of any merger, consolidation, share exchange or other transaction by which the
Company becomes a subsidiary of Premiere or any of its Affiliates or merges with
and into a subsidiary of Premiere or any of its Affiliates.
"Subsidiaries" - all those corporations, associations, or other
business entities of which the entity in question either (i) owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent (provided, there
shall not be included any such entity the equity securities of which are owned
or controlled in a fiduciary capacity), (ii) in the case of partnerships, serves
as a general partner, (iii) in the case of a limited liability company, serves
as a managing member, or (iv) otherwise has the ability to elect a majority of
the directors, trustees or managing members thereof.
"Transaction Documents" - the Transfer Agreement, including these
Uniform Terms, and all other agreements, instruments and documents to be
executed and delivered in connection with this Agreement and the transactions
contemplated thereby.
"Transactions" - the transactions contemplated by this Agreement and
the other Transaction Documents.
"Transfer Agreement" - that certain Transfer Agreement among Premiere,
the Company and the Owners which incorporates the Uniform Terms by reference.
"VTE Center" - a site owned or operated by the Company which houses one
or more Centigram voice mail servers used to store messages for retrieval by
users within the local service area of VTE Center, and, where applicable, one or
more network interface boxes and routers used to transmit voice message packet
data to a hub via the T1 local loop.
"VTE" - Voice-Tel Enterprises, Inc., a Delaware corporation.
"VTN" - VTN, Inc., an Ohio corporation and the sole general partner of
VTNLP.
"VTNLP" - Voice-Tel Network Limited Partnership, a Delaware limited
partnership.
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8. Miscellaneous Provisions
8.1. NOTICES.
8.1.1. Any notice sent in accordance with the provisions of this
Section 8.1. shall be deemed to have been received (even if delivery is refused
or unclaimed) on the date which is : (i) the date of proper posting, if sent by
certified U.S. mail or by Express U.S. mail or private overnight courier; or
(ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original to be sent by certified U.S. mail, addressed
as follows:
If to the Company or the Owners: To the addresses set forth in the
Transfer Agreement.
If to Premiere:
Premiere Technologies, Inc.
The Lenox Building, Suite 400
3399 Peachtree Road, NE
Atlanta, Georgia 30326
Attn: Boland T. Jones, President
Telephone: (404)262-8400
Facsimile: (404)262-8540
with a copy to:
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Jeffrey A. Allred, Esq.
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
8.1.2. Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this
Section 8.1.
8.2. OWNER'S REPRESENTATIVE.
8.2.1. The Owners have and do hereby irrevocably make, constitute and
appoint the individual designated as the Owner's Representative in the Transfer
Agreement as their agent (the "Owner's Representative") and authorize and
empower him or her to fulfill the role of Owner's Representative hereunder. In
the event of the resignation of the Owner's Representative, the resigning
Owner's Representative shall appoint a successor from among the Owners and who
shall agree in writing to accept such appointment. If the Owner's Representative
should die or become incapacitated, his or her successor shall be appointed
within 15 days of his death or incapacity by a majority of the Owners, and such
successor shall be an Owner. The choice of a successor Owner's Representative
appointed in any manner permitted above shall be final and binding upon all of
the Owners. The decisions and actions of any successor Owner's Representative
shall be, for all purposes, those of a Owner's Representative as if originally
named in the Transfer Agreement.
8.2.2. Each Owner has made, constituted and appointed and by the
execution of this Agreement hereby irrevocably makes, constitutes and appoints
the Owner's Representative as such person's true and lawful attorney in fact and
agent, for such person and in such person's name, place and stead for all
purposes necessary or desirable in order for the Owner's Representative to take
the actions contemplated by
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the Transaction Documents on behalf of the Owners, with the ability to execute
and deliver all instruments, certificates and other documents of every kind
incident to the foregoing to all intents and purposes and with the same effect
as such Owner could do personally, and each such Owner hereby ratifies and
confirms as his, her, or its own act, all that the Owner's Representative shall
do or cause to be done pursuant to the provisions hereof. All Claim Notices and
all other notices and communications directed to Owners under this Agreement
shall be given to the Owner's Representative.
8.2.3. The death or incapacity of any Owner shall not terminate the
authority and agency of the Owner's Representative.
8.2.4. The Owners hereby agree to indemnify the Owner's Representative
and to hold him or her harmless against any and all loss, liability or expense
incurred without bad faith on the part of the Owner's Representative and arising
out of or in connection with his or her duties as Owner's Representative,
including the reasonable costs and expenses incurred by the Owner's
Representative in defending against any claim or liability in connection
herewith.
8.3. EXPENSES.
8.3.1. Except as otherwise provided in this Section 8.3. or in an
Exhibit to the Transfer Agreement, each of the parties hereto shall bear and pay
all direct costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel.
8.3.2. Nothing contained in this Section 8.3. shall constitute or shall
be deemed to constitute liquidated damages for the willful breach by a party
hereto of the terms of this Agreement or otherwise limit the rights of a
nonbreaching party.
8.4. FURTHER ASSURANCES.
Each party covenants that at any time, and from time to time, after the
Closing, it will execute such additional instruments and take such actions as
may be reasonably requested by the other parties to confirm or perfect or
otherwise to carry out the intent and purposes of this Agreement.
8.5. WAIVER.
Any failure on the part of any party to comply with any of its
obligations, agreements or conditions hereunder may be waived by any other party
to whom such compliance is owed. No waiver of any provision of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver.
8.6. ASSIGNMENT.
Premiere may assign its rights under this Agreement to any Affiliated
entity, but otherwise this Agreement shall not be assignable by any of the
parties hereto without the written consent of all other parties. Any such
assignment shall not relieve Premiere of its obligations hereunder.
8.7. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, executors,
administrators, successors and assigns. This Agreement shall survive the
Closing and not be merged therein.
8.8. ENTIRE AGREEMENT.
This Agreement and the Exhibits, Schedules, certificates and other
documents delivered pursuant hereto or incorporated herein by reference, contain
and constitute the entire agreement among the parties
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<PAGE>
and supersede and cancel any prior agreements, representations, warranties, or
communications, whether oral or written, among the parties relating to the
transactions contemplated by this Agreement. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by an agreement in writing signed by the party against whom or which the
enforcement of such change, waiver, discharge or termination is sought.
8.9. GOVERNING LAW; SEVERABILITY.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia without regard to conflicts of laws principles.
Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
8.10. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.11. BROKERS.
The Owners, the Company and Premiere each represent to the others that
no broker or finder has been employed in connection with the transactions
hereunder.
8.12. SCHEDULES AND EXHIBITS.
All Schedules and Exhibits attached to this Agreement are by reference
made a part hereof.
8.13. HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
8.14. AMENDMENT.
To the extent permitted by law, this Agreement may be amended by a
subsequent writing signed by each of the parties hereto upon the approval of
each of such parties, whether before or after stockholder approval of this
Agreement has been obtained; provided, that after any such approval by the
holders of Company Common Stock, there shall be made no amendment that reduces
or modified in any material respect the consideration to be received by holders
of Company Common Stock.
8.15. ENFORCEMENT.
The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement was not performed in
accordance with its specific terms or was otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
8.16. NO BENEFIT TO THIRD PARTIES.
This Agreement is not intended to benefit, and shall not be construed
to benefit, any person other than the parties hereto or create any third-party
beneficiary right for any other person.
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9. Company Purchase Price
As used in this Agreement:
"Company Purchase Price" shall be the sum (expressed in dollars) of (i)
the amount determined by multiplying the Reference Number by the Multiple, plus
(ii) the amount of cash reflected on the Closing Date Balance Sheet, plus (iii)
the amount payable by VTE to the Company with respect to the May 20, 1997 NAP
Reconciliation Statement Payment (to the extent such amount is not in the amount
of cash reflected on the Closing Date Balance Sheet, minus (iv) the aggregate
amount of principal and accrued and unpaid interest under funded debt and
capital lease obligations reflected on the Closing Date Balance Sheet, minus (v)
the amount by which the Transaction Costs exceed the Deductible Amount.
"Deductible Amount" shall be the amount set forth in the Transfer
Agreement.
"Reference Number" shall be the amount set forth in the Transfer
Agreement.
"Multiple" shall be the number set forth in the Transfer Agreement.
"Transaction Costs" shall mean all amounts incurred but unpaid by the
Company in connection with (i) the negotiation and preparation of this
Agreement, (ii) the consummation of the Transactions and (iii) one-half of the
costs and expenses of public record searches conducted by Premiere in
contemplation of the Transactions, but if Audited Financial Statements are
required, shall exclude all of the costs and expenses of Arthur Andersen LLP
incurred by Premiere in connection with preparation of the Audited Financial
Statements.
10. Share Exchange
10.1. SHARE EXCHANGE (GENERAL)
Subject to the terms and conditions of this Agreement, at the Effective
Time, each Owner shall transfer and convey to Premiere all Company Stock owned
by such Owner for the Consideration specified in the Transfer Agreement such
that the Company becomes a wholly owned subsidiary of Premier at the Effective
Time.
10.2. SHARE EXCHANGE (STOCK CONSIDERATION)
10.2.1. Stock Consideration.
Subject to the provisions of this Section 12.2.1., and in consideration
for the transactions contemplated hereby, at the Effective Time, all shares of
Company Stock owned by the Owners issued and outstanding at the Effective Time
shall be exchanged for the right to receive:
(a) the number of shares of Premiere Stock determined by dividing
(i) ninety percent (90%) of the Company Purchase Price by (ii)
$23.9438; and
(b) the number of shares of Premiere Stock determined by dividing
(i) the ten percent (10%) of the Company Purchase Price, by (ii)
$23.9438 (the "General Escrow Amount").
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be issuable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
10.2.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
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<PAGE>
10.3. SHARE EXCHANGE (CASH CONSIDERATION)
10.3.1. Cash Consideration.
Subject to the provisions of this Section 12.3.1., and in consideration
for the transactions contemplated hereby, at the Effective Time, all shares of
Company Stock owned by the Owners issued and outstanding at the Effective Time
shall be exchanged for the right to receive:
(a) an amount of cash equal to ninety percent (90%) of the Company
Purchase Price; and
(b) an amount of cash equal to ten percent (10%) of the Company
Purchase Price (the "General Escrow Amount")
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be payable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
10.3.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
11. Forward Triangular Merger
11.1. FORWARD TRIANGULAR MERGER (GENERAL)
11.1.1. Merger Corp to be Surviving Corporation
Subject to the terms and conditions of this Agreement, at the Effective
Time, in accordance with the Transfer Agreement, the Company shall be merged
with and into Merger Corp in accordance with the provisions of the business
corporation act under the laws of the Company Jurisdiction (the "Company
Jurisdiction Act") and the laws of the State of Georgia (the "Georgia Act").
Merger Corp shall be the surviving corporation resulting from the Merger and
shall thereafter conduct the business and operations of the Company as a wholly
owned subsidiary of Premiere. The Merger shall be consummated pursuant to the
terms of this Agreement.
11.1.2. Filing of Merger Certificates
Subject to the provisions of this Agreement, the parties shall file
Articles or a Certificate of Merger, as appropriate (the "Company Jurisdiction
Merger Certificate") executed in accordance with the relevant provisions of the
Company Jurisdiction Act and a Certificate of Merger executed in accordance with
the relevant provisions of the Georgia Act (the "Georgia Merger Certificate")
and shall make all other filings or recordings required under each such Act as
soon as practicable on or after the Closing Date. The Merger and other
transactions contemplated by this Agreement shall become effective on the date
and at the time the Company Jurisdiction Merger Certificate becomes effective
with the Secretary of State of the Company Jurisdiction and the Georgia Merger
Certificate becomes effective with the Secretary of State of Georgia (the
"Effective Time").
11.1.3. Articles and Bylaws
The charter and Bylaws of Merger Corp in effect immediately prior to
the Effective Time shall be the charter and Bylaws of the surviving corporation
until otherwise amended or repealed; the directors of Merger Corp immediately
prior to the Effective Time shall serve as the directors of the surviving
corporation from and after the Effective Time; and the officers of Merger Corp
in office immediately prior to the Effective Time shall serve as the officers of
the surviving corporation from and after the Effective Time.
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<PAGE>
11.1.4. Dissenting Shareholders.
Any holder of shares of voting capital stock of the Company who
perfects any available dissenters' rights or appraisal rights in accordance with
and as contemplated by the Company Jurisdiction Act ("Dissenters' Rights") shall
be entitled to receive the value of such shares in cash from the Company after
the Effective Time as determined pursuant to such provision of law; provided,
that no such payment shall be made to any dissenting shareholder unless and
until such dissenting shareholder has complied with the applicable provisions of
the Company Jurisdiction Act and surrendered to the Company the certificate or
certificates representing the shares for which payment is being made. In the
event that a dissenting shareholder of the Company fails to perfect, or
effectively withdraws or loses, its Dissenters' Rights, Premiere shall issue and
deliver the consideration to which such holder of shares of Company capital
stock is entitled (without interest) upon surrender of certificates representing
such shares held by such holder.
11.2. FORWARD TRIANGULAR MERGER (STOCK CONSIDERATION)
11.2.1. Conversion of Shares.
Subject to the provisions of this Section, and in consideration for the
transactions contemplated hereby, at the Effective Time, by virtue of the Merger
and without any action on the part of the parties hereto or the shareholders of
any of the parties hereto, the shares of the constituent corporations of the
Merger shall be converted as follows:
Each share of Premiere Stock and each share of Merger Corp common stock
issued and outstanding at the Effective Time shall remain issued and outstanding
after the Effective Time.
All of the shares of the Company Stock (excluding treasury shares and
excluding shares held by shareholders who perfect their Dissenters' Rights)
issued and outstanding at the Effective Time shall cease to be outstanding and
shall be converted into and exchanged for the right to receive:
(a) the number of shares of Premiere Stock determined by dividing
(i) ninety percent (90%) of the Company Purchase Price by (ii)
$23.9438; and
(b) the number of shares of Premiere Stock determined by dividing
(i) the ten percent (10%) of the Company Purchase Price, by (ii)
$23.9438 (the "General Escrow Amount").
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be issuable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
11.2.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
11.3. FORWARD TRIANGULAR MERGER (CASH CONSIDERATION)
11.3.1. Conversion of Shares.
Subject to the provisions of this Section, and in consideration for the
transactions contemplated hereby, at the Effective Time, by virtue of the Merger
and without any action on the part of the parties hereto or the shareholders of
any of the parties hereto, the shares of the constituent corporations of the
Merger shall be converted as follows:
Each share of Premiere Stock and each share of Merger Corp common stock
issued and outstanding at the Effective Time shall remain issued and outstanding
after the Effective Time.
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<PAGE>
All of the shares of the capital stock of the Company ("Company Stock")
(excluding treasury shares and excluding shares held by shareholders who perfect
their Dissenters' Rights) issued and outstanding at the Effective Time shall
cease to be outstanding and shall be converted into and exchanged for the right
to receive:
(a) an amount of cash equal to ninety percent (90%) of the Company
Purchase Price; and
(b) an amount of cash equal to ten percent (10%) of the Company
Purchase Price (the "General Escrow Amount")
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be payable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
11.3.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
12. Reverse Triangular Merger
12.1. REVERSE TRIANGULAR MERGER (GENERAL)
12.1.1. Company to be Surviving Corporation
Subject to the terms and conditions of this Agreement, at the Effective
Time, in accordance with the Transfer Agreement, Merger Corp shall be merged
with and into the Company in accordance with the provisions of the business
corporation act under the laws of the Company Jurisdiction (the "Company
Jurisdiction Act") and the laws of Georgia (the "Georgia Act"). The Company
shall be the surviving corporation resulting from the Merger and shall
thereafter conduct the business and operations of the Company as a wholly owned
subsidiary of Premiere. The Merger shall be consummated pursuant to the terms
of this Agreement.
12.1.2. Filing of Merger Certificates
Subject to the provisions of this Agreement, the parties shall file
Articles or a Certificate of Merger, as appropriate (the "Company Jurisdiction
Merger Certificate") executed in accordance with the relevant provisions of the
Company Jurisdiction Act and a Certificate of Merger executed in accordance with
the relevant provisions of the Georgia Act (the "Georgia Merger Certificate")
and shall make all other filings or recordings required under each such Act as
soon as practicable on or after the Closing Date. The Merger and other
transactions contemplated by this Agreement shall become effective on the date
and at the time the Company Jurisdiction Merger Certificate becomes effective
with the Secretary of State of the Company Jurisdiction and the Georgia Merger
Certificate becomes effective with the Secretary of State of Georgia (the
"Effective Time").
12.1.3. Articles and Bylaws
The charter and Bylaws of Merger Corp in effect immediately prior to
the Effective Time shall be the charter and Bylaws of the surviving corporation
until otherwise amended or repealed; the directors of Merger Corp immediately
prior to the Effective Time shall serve as the directors of the surviving
corporation from and after the Effective Time; and the officers of Merger Corp
in office immediately prior to the Effective Time shall serve as the officers of
the surviving corporation from and after the Effective Time.
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<PAGE>
12.1.4. Dissenting Shareholders.
Any holder of shares of voting capital stock of the Company who
perfects any available dissenters' rights or appraisal rights in accordance with
and as contemplated by the Company Jurisdiction Act ("Dissenters' Rights") shall
be entitled to receive the value of such shares in cash from the Company after
the Effective Time as determined pursuant to such provision of law; provided,
that no such payment shall be made to any dissenting shareholder unless and
until such dissenting shareholder has complied with the applicable provisions of
the Company Jurisdiction Act and surrendered to the Company the certificate or
certificates representing the shares for which payment is being made. In the
event that a dissenting shareholder of the Company fails to perfect, or
effectively withdraws or loses, its Dissenters' Rights, Premiere shall issue and
deliver the consideration to which such holder of shares of Company capital
stock is entitled (without interest) upon surrender of certificates representing
such shares held by such holder.
12.2. REVERSE TRIANGULAR MERGER (STOCK CONSIDERATION)
12.2.1. Conversion of Shares.
Subject to the provisions of this Section 12.2.1., and in consideration
for the transactions contemplated hereby, at the Effective Time, by virtue of
the Merger and without any action on the part of the parties hereto or the
shareholders of any of the parties hereto, the shares of the constituent
corporations of the Merger shall be converted as follows:
Each share of Premiere Stock issued and outstanding at the Effective
Time shall remain issued and outstanding after the Effective Time, and each
share of Merger Corp common stock issued and outstanding at the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive one share of Company Stock.
All of the shares of the Company Stock (excluding treasury shares and
excluding shares held by shareholders who perfect their Dissenters' Rights)
issued and outstanding at the Effective Time shall cease to be outstanding and
shall be converted into and exchanged for the right to receive:
(a) the number of shares of Premiere Stock determined by dividing
(i) ninety percent (90%) of the Company Purchase Price by (ii)
$23.9438; and
(b) the number of shares of Premiere Stock determined by dividing
(i) the ten percent (10%) of the Company Purchase Price, by (ii)
$23.9438 (the "General Escrow Amount").
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be issuable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
12.2.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
12.3. REVERSE TRIANGULAR MERGER (CASH CONSIDERATION)
12.3.1. Conversion of Shares.
Subject to the provisions of this Section 12.3.1., and in consideration
for the transactions contemplated hereby, at the Effective Time, by virtue of
the Merger and without any action on the part of the parties hereto or the
shareholders of any of the parties hereto, the shares of the constituent
corporations of the Merger shall be converted as follows:
Each share of Premiere Stock issued and outstanding at the Effective
Time shall remain issued and outstanding after the Effective Time, and each
share of Merger Corp common stock issued and outstanding
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at the Effective Time shall cease to be outstanding and shall be converted into
and exchanged for the right to receive one share of Company Stock.
All of the shares of the capital stock of the Company ("Company Stock")
(excluding treasury shares and excluding shares held by shareholders who perfect
their Dissenters' Rights) issued and outstanding at the Effective Time shall
cease to be outstanding and shall be converted into and exchanged for the right
to receive:
(a) an amount of cash equal to ninety percent (90%) of the Company
Purchase Price; and
(b) an amount of cash equal to ten percent (10%) of the Company
Purchase Price (the "General Escrow Amount")
(collectively, the "Consideration"). Subject to Section 6.4., the Consideration
shall be payable to the Owners pro rata in accordance with their ownership of
Company Common Stock.
12.3.2. Treasury Shares
Any and all shares of Company Common Stock held as treasury shares by
the Company shall be canceled and retired at the Effective Time, and no
consideration shall be issued in exchange therefor.
13. Tax Representations and Undertakings.
If the Transfer Agreement contemplates that the Transactions will be a
reorganization under Section 368(a) of the Code, then the provisions of this
Article 13. shall apply.
13.1. REORGANIZATION.
Each Owner and the Company, jointly and severally, represents and
warrants to Premiere that neither the Company, any Owner nor any Affiliate
thereof has taken or agreed to take any action or has any knowledge of any fact
or circumstance that is reasonably likely to prevent the Transactions from
qualifying as a reorganization within the meaning of Section 368(a) of the Code,
and each of the Company, the Owners and Premiere undertakes and agrees to use
its reasonable efforts to cause the Transactions, and to take no action which
would cause the Transactions not, to qualify as a "reorganization" within the
meaning of Section 368(a) of the Code for federal income tax purposes.
Notwithstanding the foregoing, the Owners understand that (i) Premiere makes no
representation or warranty regarding the tax treatment of this Agreement or the
Transactions, (ii) the Closing is not subject to a condition that an Internal
Revenue Service ruling or tax opinion be obtained as to the federal income tax
consequences of this Agreement or the Transactions, and (iii) the Company and
the Owners shall look to their respective advisors for advice concerning the tax
consequences of this Agreement and the Transactions.
13.2. REORGANIZATION-RELATED REPRESENTATIONS.
In connection with the opinion to be rendered to Premiere by Alston &
Bird to the effect that the Transactions will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code, the Company and
the Owners hereby represent, jointly and severally, as follows:
(a) The Company has access to the information which is the subject
of the representations contained in Article 13.
(b) To the Knowledge of the Company, the representations contained
in this Article 13. are true, correct and complete.
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(c) The fair market value of the Premiere Stock received by each
Owner will, in each instance, be approximately equal to the fair market
value of the Company Stock surrendered in exchange therefor.
(d) In the Transactions, Merger Corp or Premiere will acquire
assets representing at least ninety percent (90%) of the fair market
value of the net assets and at least seventy percent (70%) of the fair
market value of the gross assets held by Company immediately prior to
the Transactions. For this purpose, all redemptions and distributions
(except for regular, normal dividends) made by Company immediately
preceding the Transactions and all amounts paid out of the assets of
Company as reorganization expenses will be considered as assets held by
Company immediately prior to the Transactions. In addition, assets
disposed of in contemplation of the Transactions will be considered as
assets held by Company immediately prior to the Transactions.
(e) The liabilities of Company to be assumed by Merger Corp. or
Premiere in the Transactions (and the liabilities to which the assets
to be transferred are subject) were incurred or will be incurred by
Company in the ordinary course of its business.
(f) There is not now nor will there be at the time of the
Transactions any intercorporate indebtedness existing between Company
and Premiere or between Company and Merger Corp. that was issued,
acquired, or will be settled at a discount.
(g) Company will pay direct costs and expenses incurred by it or on
its behalf in connection with the Transactions. Shareholders of the
Company will pay their own expenses, if any, incurred in connection
with the Transactions.
(h) For the Company, not more than twenty-five percent (25%) of the
fair market value of Company's adjusted total assets consists of stock
and securities of any one issuer, and not more than fifty percent (50%)
of the fair market value of its adjusted total assets consists of stock
and securities of five or fewer issuers. For purposes of the preceding
sentence, (a) a corporation's adjusted total assets exclude cash, cash
items (including accounts receivable and cash equivalents), and United
States government securities, (b) a corporation's adjusted total assets
exclude stock and securities issued by any subsidiary at least fifty
percent (50%) of the voting power or fifty percent (50%) of the total
fair market value of the stock of which is owned by the corporation,
but the corporation is treated as owning directly a ratable share
(based on the percentage of the fair market value of the subsidiary's
stock owned by the corporation) of the assets owned by any such
subsidiary, and (c) all corporations that are members of the same
"controlled group" within the meaning of section 1563(a) of the Code
are treated as a single issuer.
(i) The Company is not under the jurisdiction of a court in a case
under Title 11 of the United States Code, a receivership, foreclosure,
or similar proceeding in a federal or state court.
(j) The fair market value and adjusted basis of the assets to be
transferred from Company to Merger Corp. or Premiere as a result of the
Transactions will equal or exceed the sum of the liabilities of Company
to be assumed by Merger Corp. or Premiere (plus the amount of
liabilities to which the assets to be transferred are subject).
(k) The payment of cash to Company shareholders in lieu of
fractional shares of Premiere Stock will not be a separately bargained
for consideration, but will be undertaken solely for the purpose of
avoiding the expense and inconvenience of issuing and transferring
fractional shares. The total cash consideration that will be paid to
Company
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<PAGE>
shareholders in lieu of fractional shares of Premiere Stock will
represent less than one percent (1%) of the total consideration issued
in the Transactions.
(l) None of the compensation received by any shareholder-employee
of Company represents separate consideration for, or is allocable to,
any of his Company Stock. None of the Premiere Stock that will be
received by Company shareholder-employees in the Transactions
represents separately bargained for consideration which is allocable to
any employment agreement or arrangement. Any compensation to be paid to
a Company shareholder-employee who continues as an employee of Premiere
or Merger Corp. subsequent to the Transactions will be for services
rendered and will be commensurate with amounts paid to third parties
bargaining at arms length for similar services.
(m) Company has no plan or intention to make, and has not made, any
distributions other than regular, normal dividends to shareholders
prior to the Transactions.
(n) Company has not reacquired or redeemed any of its stock within
the last three (3) years.
(o) At all times during the five-year period ending on the
effective date of the Transactions, the fair market value of all of
Company's United States real property interests was and will have been
less than fifty percent (50%) of the total fair market value of (a) its
United States real property interests, (b) its interests in real
property located outside the United States, and (c) its other assets
used or held for use in a trade or business. For purposes of the
preceding sentence, (x) United States real property interests include
all interests (other than an interest solely as a creditor) in real
property and associated personal property (such as movable walls and
furnishings) located in the United States or the Virgin Islands and
interests in any corporation (other than a controlled corporation)
owning any United States real property interest, (y) Company is treated
as owning its proportionate share (based on the relative fair market
value of its ownership interest to all ownership interests) of the
assets owned by any controlled corporation or any partnership, trust,
or estate in which Company is a partner or beneficiary, and (z) any
such entity in turn is treated as owning its proportionate share of the
assets owned by any controlled corporation or any partnership, trust,
or estate in which the entity is a partner or beneficiary. As used in
this paragraph, "controlled corporation" means any corporation at least
fifty percent (50%) of the fair market value of the stock of which is
owned by Company, in the case of a first-tier subsidiary of Company, or
by a controlled corporation, in the case of a lower-tier subsidiary.
(p) Company is not a party to, and holds no assets subject to, a
"safe harbor lease" under former section 168(f)(8) of the Code and the
Regulations thereunder.
(q) There is a valid business reason for establishing the escrow
pursuant to the Escrow Agreement.
(r) Shares will be held pursuant to the Escrow Agreement and shall
be dealt with in the manner set forth therein.
(s) The Agreement represents the entire understanding of Company,
Premiere, and Merger Corp. with respect to the Transactions.
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13.3. CONTINUITY OF INTEREST.
In connection with the opinion to be rendered to Premiere by Alston &
Bird to the effect that the Transactions will constitute a tax-free
reorganization within the meaning of Section 368(a) of the Code, the Company and
the Owners hereby represent that there is no plan or intention by any of the
shareholders of Company who own one percent (1%) or more of the outstanding
Company Stock, and to the Knowledge of the management of Company, the remaining
Company shareholders have no plan or intention, to sell, exchange, or otherwise
dispose of a number of shares of Premiere Stock that they will receive in the
Transactions that will reduce on the part of the Company shareholders such
shareholders' ownership of Premiere Stock to a number of shares having an
aggregate value as of the Effective Date of less than fifty percent (50%) of the
aggregate value of all of the stock of Company outstanding immediately prior to
the Transactions. For purposes of this representation, shares of Company Stock
that are disposed of or exchanged for cash in lieu of fractional shares of
Premiere Stock will be treated as outstanding Company Stock immediately prior to
the Transactions. Moreover, shares of Company Stock and shares of Premiere Stock
held by Company shareholders and otherwise sold, redeemed, or disposed of prior
or subsequent to the Transactions will be considered outstanding immediately
prior to the Transactions in making this representation. Shares subject to the
Escrow Agreement will be considered disposed of for purposes of this
representation.
14. Accounting Matters.
If the Transfer Agreement contemplates that the Transactions will be
accounted for as a pooling of interests, then the provisions of this Article 14.
shall apply.
14.1. POOLING OF INTERESTS.
Each Owner and the Company, jointly and severally, represents and
warrants to Premiere that neither the Company, any Owner nor any Affiliate
thereof has taken or agreed to take any action or has any knowledge of any fact
or circumstance that is reasonably likely to prevent the Merger from qualifying
for pooling-of-interests accounting treatment. The Owners represent that the
ownership of Company Common Stock has not been adjusted in contemplation of the
Transactions.
14.2. POOLING-RELATED REPRESENTATIONS.
Each of the Company and the Owners, jointly and severally, represents
and warrants the following to Premiere:
(a) The Company is autonomous and is not currently, and was not for
the two years preceding the date on which the major terms of the
Transactions were announced to the Owners (the "Initiation Date"), a
subsidiary or division of another corporation;
(b) The Company has not changed the equity interest of its voting
common stock in contemplation of effecting the Transactions either
within two (2) years before the Initiation Date or between the
Initiation Date and the Effective Date;
(c) Except as set forth in SCHEDULE 2.5.2., the Company has not
purchased treasury stock within the last two years; and
(d) The Company does not intend and has not agreed to any financial
arrangement in connection with the Transactions for the benefit of the
Owners or of Premiere, except for the consideration provided for in the
Transaction Documents.
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14.3. LIMITATION ON DISPOSITION.
Premiere, the Company and each of the Owners agrees to use its
reasonable efforts to cause the Transactions, and to take no action which would
cause the Transactions not, to qualify for treatment as a pooling of interests
for accounting purposes. Without limiting the foregoing, the Company and each of
the Owners agrees not to sell, transfer, or otherwise dispose of his, her or its
interests in, or reduce his, her or its risk relative to, any of the shares of
Premiere Common Stock received in connection with the Transactions until such
time as Premiere notifies the Company and each such Owner that the requirements
of ASRs 130 and 135 have been met. The Company and each of the Owners
understands that ASRs 130 and 135 relate to the publication of financial results
of at least thirty (30) days of post-Transaction combined operations of Premiere
and the Company. Premiere agrees that it shall publish such results within
forty-five (45) days after the end of the first fiscal quarter of Premiere
containing the required period of post-Transaction combined operations and that
it shall notify the Company and each of the Owners promptly following such
publication. Premiere shall be entitled to place the following restrictive
legend on the shares of Premiere Stock issued pursuant to the Transactions to
enforce the foregoing restrictions:
"The shares represented by this certificate were issued pursuant to
a business combination which is accounted for as a "pooling of
interests" and may not be sold, nor may the owner thereof reduce his
risks relative thereto in any way, until such time as Premiere
Technologies, Inc. ("Premiere") has published the financial results
covering at least 30 days of combined operations after the effective
date of the merger through which the business combination was
effected."
Such legend will also be placed on any certificate representing
Premiere securities issued subsequent to the original issuance of the Premiere
Common Stock pursuant to the Transactions as a result of any transfer of such
shares or any stock dividend, stock split, or other recapitalization as long as
the Premiere Common Stock issued to Owner pursuant to the Merger has not been
transferred in such manner to justify the removal of the legend therefrom. Upon
the request of Owner, Premiere shall cause the certificates representing the
shares of Premiere Common Stock issued to Owner in connection with the Merger to
be reissued free of any legend relating to restrictions on transfer by virtue of
ASR 130 and 135 as soon as practicable after the requirements of ASR 130 and 135
have been met.
14.4. CONTRACTUAL RESTRICTIONS.
All contractual restrictions or limitations on transfer with respect to
Company Common Stock under any plan, program, contract or arrangement, to the
extent that such restrictions or limitations have not already lapsed (whether as
a result of the Transactions or otherwise), and except as otherwise expressly
provided in such plan, program, contract or arrangement, shall remain in full
force and effect with respect to shares of Premiere Stock into which such
restricted stock is converted pursuant to this Agreement.
15. Securities Matters.
If the Transfer Agreement contemplates that the Premiere Stock will be
issued to the Owners in the Transactions, then the provisions of this Article 15
shall apply.
15.1. AFFILIATE STATUS.
Owner understands and agrees that as to the Company he or she is an
"affiliate" under Rule 145(c) as defined in Rule 405 of the Rules and
Regulations of the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended ("1933 Act"), and the undersigned anticipates
that he or she will be such an "affiliate" at the time of the Transactions.
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15.2. PURCHASE FOR INVESTMENT.
(a) Owner has accurately completed the Investor Questionnaire
required by Premiere prior to or contemporaneous with the execution of
this Agreement, and the statements therein are true and correct, and
Owner acknowledges that Premiere has relied upon such statements in
entering into this Agreement;
(b) Owner is acquiring Premiere Stock for such Owner's own account
and not with a view to or for sale in connection with any public
distribution thereof within the meaning of the Securities Act;
(c) Owner (i) has sufficient knowledge and experience in financial
and business matters to enable him, her or it to evaluate the merits
and risks of an investment in Premiere Stock, (ii) has the ability to
bear the economic risk of acquiring Premiere Stock for an indefinite
period and to afford a complete loss thereof, and (iii) has had an
opportunity to ask questions of and to receive answers from the
officers of Premiere and to obtain additional information in writing as
requested, which has been made available to and examined by such Owner
or such Owner's advisors; and
(d) Owner (i) acknowledges that Premiere Stock has not been
registered under any securities laws and cannot be resold without
registration thereunder or exemption therefrom, (ii) agrees not to
transfer all or any Premiere Stock received by such Owner unless such
transfer has been registered or is exempt from registration under
applicable securities laws, and (iii) acknowledges that the
certificate(s) representing Premiere Stock shall bear the legend set
forth in Section 13.3.4 with respect to the restrictions on transfer
under applicable securities laws.
15.3. COVENANTS AND WARRANTIES OF THE OWNERS.
Each Owner represents, warrants and agrees that:
(a) Premiere has informed Owner that any distribution by Owner of
Premiere Common Stock has not been registered under the 1933 Act and that
shares of Premiere Common Stock received pursuant to the Transactions can
only be sold by the undersigned (1) following registration under the 1933
Act, or (2) in conformity with the volume and other requirements of Rule
145(d) promulgated by the SEC as the same now exist or may hereafter be
amended, or (3) to the extent some other exemption from registration
under the 1933 Act might be available. Owner understands that except as
set forth in the Registration Rights Agreement, Premiere is under no
obligation to file a registration statement with the SEC covering the
disposition of Owner's shares of Premiere Common Stock or to take any
other action necessary to make compliance with an exemption from such
registration available.
(b) Owner will, and will cause each of the other parties whose
shares are deemed to be beneficially owned by Owner to, have all shares
of Company Common Stock beneficially owned by Owner registered in the
name of the Owner or such parties, as applicable, prior to the effective
date of the Transactions and not in the name of any bank, broker-dealer,
nominee or clearinghouse.
(c) During the 30 days immediately preceding the Effective Time of
the Transactions, Owner has not sold, transferred, or otherwise disposed
of his or her interests in, or reduced his or her risk relative to, any
of the shares of Company Common Stock beneficially owned by Owner as of
the record date for determination of stockholders entitled to vote at the
Stockholders' Meeting of the Company held to approve the Transactions.
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15.4. LEGENDS, ETC.
Owner understands and agrees that stop transfer instructions with
respect to the shares of Premiere Stock received by Owner pursuant to the
Transactions will be given to Premiere's Transfer Agent and that, in addition to
any applicable legend under Section 13.2.3, there will be placed on the
certificates for such shares, or shares issued in substitution thereof, a legend
stating in substance:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be sold, transferred
or otherwise disposed of unless registered with the Securities and
Exchange Commission of the United States and the securities regulatory
authorities of applicable states or unless an exemption from such
registration is available."
Such legend will also be placed on any certificate representing
Premiere securities issued subsequent to the original issuance of the Premiere
Common Stock pursuant to the Transactions as a result of any transfer of such
shares or any stock dividend, stock split, or other recapitalization as long as
the Premiere Common Stock issued to Owner pursuant to the Transactions has not
been transferred in such manner to justify the removal of the legend therefrom.
If the provisions of Rules 144 and 145 are amended to eliminate restrictions
applicable to the Premiere Common Stock received by Owner pursuant to the
Transactions, or at the expiration of the restrictive period set forth in Rule
145(d), Premiere, upon the request of Owner, will cause the certificates
representing the shares of Premiere Common Stock issued to Owner in connection
with the Transactions to be reissued free of any legend relating to the
restrictions set forth in Rules 144 and 145(d) upon receipt by Premiere of an
opinion of its counsel to the effect that such legend may be removed.
15.5. UNDERSTANDING OF RESTRICTIONS ON DISPOSITIONS.
Owner has carefully read this Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of Premiere Common Stock received by Owner, to the extent he or
she believes necessary, with his or her counsel or counsel for the Company.
15.6. FILING OF REPORTS BY PREMIERE.
Premiere agrees, for a period of two years after the effective date of
the Transactions, to file on a timely basis all reports required to be filed by
it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, so
that the public information provisions of Rule 145(d) promulgated by the SEC as
the same are presently in effect will be available to Owner in the event Owner
desires to transfer any shares of Premiere Common Stock issued to Owner pursuant
to the Transactions.
15.7. TRANSFER UNDER RULE 145(d).
If Owner desires to sell or otherwise transfer the shares of Premiere
Common Stock received by him in connection with the Transactions at any time
during the restrictive period set forth in Rule 145(d), Owner will provide the
necessary representation letter to the transfer agent for Premiere Common Stock
together with such additional information as the transfer agent may reasonably
request. If Premiere's counsel concludes that such proposed sale or transfer
complies with the requirements of Rule 145(d), Premiere shall cause such counsel
to provide such opinions as may be necessary to Premiere's Transfer Agent so
that Owner may complete the proposed sale or transfer.
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15.8. ACKNOWLEDGMENTS.
Owner recognizes and agrees that the foregoing provisions also apply to
all shares of the capital stock of the Company and Premiere that are deemed to
be beneficially owned by Owner pursuant to applicable federal securities laws,
which Owner agrees may include, without limitation, shares owned or held in the
name of (i) Owner's spouse, (ii) any relative of Owner or of Owner's spouse who
has the same home as Owner, (iii) any trust or estate in which Owner, Owner's
spouse, and any such relative collectively own at least a 10% beneficial
interest or of which any of the foregoing serves as trustee, executor, or in any
similar capacity, and (iv) any corporation or other organization in which Owner,
Owner's spouse and any such relative collectively own at least 10% of any class
of equity securities or of the equity interest. Owner further recognizes that,
in the event that Owner is a director or officer of Premiere or becomes a
director or officer of Premiere upon consummation of the Transactions, among
other things, any sale of Premiere Common Stock by Owner within a period of less
than six months following the effective time of the Transactions may subject
Owner to liability pursuant to Section 16(b) of the Securities Exchange Act of
1934, as amended.
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