<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 1999
TECH ELECTRO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Texas
(State of other jurisdiction of incorporation)
0-27210 75-2408297
(Commission File Number) (IRS Employer Identification No.)
477 Madison Avenue
24th Floor
New York, New York 10022
(Address of principal executive officers)(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 583-0900
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 22, 1999, Tech Electro Industries, Inc, (the "Company")
acquired all of the issued and outstanding shares of capital stock (the
"Shares") of AlphaNet Hospitality Systems, Inc., a Delaware corporation
("AlphaNet") and certain intellectual property, copyrights and trademarks
utilized in AlphaNet's business (the "AlphaNet Property") from
PricewaterhouseCoopers, Inc., in its capacity as Trustee ("Trustee") of the
Estate of AlphaNet Telecom Inc. ("ATI"), a bankrupt, all as reflected and set
forth in that certain Bill of Sale dated as of August 31, 1999 between the
Company and the Trustee (the "Bill of Sale") and letter agreement between the
parties dated October 21, 1999 ("Letter Agreement"). ATI is a Canadian company
based in Toronto, Ontario.
As set forth in the Bill of Sale and Letter Agreement, the Company paid
to the Trustee for the Shares and the AlphaNet Property US $3,450,000, plus a
closing date extension fee of US $25,000 and a bridge loan fee of US $25,000 for
an aggregate price of US $3,500,000 (the "Purchase Price"). The Company paid the
Purchase Price to the Trustee, as follows:
(i) US $1,400,000 in cash;
(ii) Delivery of the Company's four- (4) month, non-interest
bearing promissory note payable to the Trustee in the
principal amount of US $2,100,000 (the "Note").
The Note is due and payable on February 21, 2000 and is secured by a
pledge of the Shares to the Trustee as evidenced by that certain Pledge
Agreement
Page 2
<PAGE> 3
dated October 21, 1999 between the Company and the Trustee (the "Pledge
Agreement".
The Bill of Sale, Letter Agreement, Note and Pledge Agreement are
attached hereto as Exhibits 2(a), 2(b), 2(c) and 2(d), respectively, and
incorporated by reference herein.
The Company negotiated the Purchase Price and terms of payment through
armslength negotiations with the Trustee. The Company reviewed and analysed
AlphaNet's assets, liabilities and historical financial statements (including
its ebitda) and in place management in determining the amount of the
consideration (Purchase Price) to pay for the Shares and the AlphaNet Property.
The Company raised the said US $1,400,000 cash that it paid to the
Trustee as part of the Purchase Price through the private placement sale of
2,036,364 shares of common stock of the Company and five-year warrants to
purchase a like number of shares of common stock, exercisable at US $0.75 per
share. The purchasers of these Company shares and warrants include a company
affiliated with William Tan, President of the Company.
The Company also arranged for a $2,525,000 one-year loan to AlphaNet to
pay existing AlphaNet indebtedness. The Company is now actively seeking
additional financing to pay off the Note and to refinance the said AlphaNet
$2,525,000 loan.
AlphaNet is a leading provider of in-room facsimile and unattended
business center services to hotels serving business travelers. AlphaNet has its
InnFax(R) facsimile installations in over 50,000 hotel rooms worldwide. AlphaNet
has installed The Office(TM), its unattended 24-hour hotel business center,
equipped
Page 3
<PAGE> 4
with a personal computer, printer, facsimile and photocopier, as well as e-mail
and Internet access, in over 70 hotels.
The Company intends that AlphaNet will continue to operate and grow its
InnFax(R) and The Office(TM) businesses and to use those products and services
as a platform to build a diversified company serving business travelers
worldwide.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
The AlphaNet financial statements including pro forma financial
statements required to be filed because of the Company's acquisition of the
outstanding capital stock of AlphaNet shall be filed by amendment to this report
prior to January 7, 2000.
EXHIBITS
2(a) Bill of Sale executed by PricewaterhouseCoppers,
Inc. and the Company.
2(b) Letter Agreement between PricewaterhouseCoopers,
Inc. and the Company.
2(c) Promissory Note of the Company payable to
PricewaterhouseCoopers, Inc., as Trustee.
2(d) Pledge Agreement between the Company and
PricewaterhouseCoopers, Inc.
Page 4
<PAGE> 5
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.
Date: November 5, 1999 Tech Electro Industries, Inc.
By /S/ Ian Edmonds
-----------------------------------
Ian Edmonds
Vice President
By /S/ Mee Mee Tan
-----------------------------------
Mee Mee Tan, Secretary
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2(a) Bill of Sale executed by PricewaterhouseCoppers, Inc. and the
Company.
2(b) Letter Agreement between PricewaterhouseCoopers, Inc. and the
Company.
2(c) Promisssory Note of the Company payable to
PricewaterhouseCoopers, Inc., as Trustee.
2(d) Pledge Agreement between the Company and
PricewaterhouseCoopers, Inc.
</TABLE>
<PAGE> 1
EXHIBIT 2A
BILL OF SALE
THIS INDENTURE made as of the 31st day of August, 1999
BETWEEN:
PRICEWATERHOUSECOOPERS INC., in its capacity as
Trustee of the Estate of AlphaNet Telecom Inc.,
a bankrupt and not in its personal capacity
(hereinafter referred to as the "Vendor")
OF THE FIRST PART
- -- and --
TECH ELECTRO INDUSTRIES, INC., a corporation
incorporated pursuant to the laws of Texas
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART
RECITALS:
WHEREAS AlphaNet Telecom Inc. on February 8, 1999 made an assignment
in bankruptcy and PricewaterhouseCoopers Inc. was appointed as Trustee of the
Estate of AlphaNet Telecom Inc., a bankrupt;
AND WHEREAS the appointment of PricewaterhouseCoopers Inc. as Trustee
of the said bankrupt estate was duly confirmed at the first meeting of
creditors;
AND WHEREAS the Purchaser has agreed to purchase from the Vendor all
of its right, title and interest, if any, in and to the property and assets of
the bankrupt more particularly described in Schedule "A" attached hereto;
NOW THEREFORE IN CONSIDERATION of the payment to the Vendor by the
Purchaser of Ten Dollars ($10.00) of lawful money of the United States of
America and for other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged) the parties hereby agree as
follows;
<PAGE> 2
1.0 PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS
The Vendor hereby sells, transfers, assigns and conveys to the
Purchaser all of the Vendor's right, title and interest, if any, in and to the
assets of AlphaNet Telecom Inc. listed in Schedule "A" hereto (the "Purchased
Assets").
1.2 TAXES
The Purchaser shall be responsible for the payment of all taxes
exigible in connection with the purchase and sale of the Purchased Assets,
including, without limitation, all applicable goods and services tax pursuant to
the Excise Tax Act (Canada) and any other sale or transfer taxes exigible on the
Purchased Assets. The Purchaser hereby indemnifies and holds the Vendor harmless
from and against any claims for non-payment of such taxes, including, without
limitation, interest, penalties and costs (including legal fees and
disbursements).
1.3 AS IS, WHERE IS
The Purchaser acknowledges that the Purchased Assets are being sold
on an "as is, where is" basis as they exist on the date hereof and that, except
as expressly provided herein, no representations or warranties, express or
implied, have been given by the Vendor as to title, encumbrances, assignability,
description, value, fitness for any purpose, merchantability, quantity, quality,
state, condition, location or any other matter whatsoever concerning the
Purchased Assets and no representation or warranty of any kind can be implied at
law or in equity, by statute or otherwise, with respect to the Purchased Assets.
The Purchaser acknowledges that it has inspected the Purchased Assets and has
relied entirely upon its own inspections and investigations. The description of
the Purchased Assets contained in all schedules hereto is for the purpose of
identification only and no representation or warranty is being given by the
Vendor concerning the accuracy, completeness or any other matter concerning such
description. The Vendor shall not be liable, nor shall the Purchaser have a
remedy, for recovery of any damages, including, but not limited to economic loss
of any kind, arising out of any claim that the Purchased Assets infringe the
rights of any other person.
1.4 NO OBLIGATION TO DELIVER
The Purchaser acknowledges that the Vendor has no obligation to
deliver the Purchased Assets to the Purchaser. The Purchaser acknowledges that
it has taken possession of the Purchased Assets. Notwithstanding the above, at
the closing and in a simultaneous exchange, Vendor will have delivered to
Purchaser a duly endorsed stock certificate (or certificates) representing all
issued and outstanding shares Vendor holds in AlphaNet Hospitality Systems, Inc.
("AHS").
<PAGE> 3
2.0 REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying on such representations and warranties
in executing this indenture:
(a) the Purchaser is a corporation duly incorporated,
organized and subsisting under the laws of the State of
Texas and has the requisite power and authority to enter
into this indenture.
2.2 REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor represents and warrants to the Purchaser as follows and
acknowledges that the Purchaser is relying on such representations and
warranties in executing this indenture:
(a) the Vendor was duly appointed the Trustee of the Estate of
AlphaNet Telecom Inc., a bankrupt, in accordance with the
provisions of the Bankruptcy and Insolvency Act (Canada)
and has the power and authority to execute this Indenture;
(b) the Vendor has done no act to encumber the Purchased
Assets; and
(c) the Vendor is not a non-resident of Canada within the
meaning of that term as used in the Income Tax Act
(Canada).
(d) Vendor has mailed to all creditors, within five days after
the date of the trustee's appointment, a notice of the
bankruptcy and that the trustee called in the prescribed
manner a first meeting of creditors held on March 12, 1999
at 10.00 a.m. at a location that was to be determined or
at such other time and place as may later be requested by
the official receiver.
(e) The requisite number of inspectors by Resolution have
authorized the trustee to compromise, settle and discharge
any and all intercompany debt between AlphaNet Telecom,
Inc. and AHS.
(f) Each document Vendor has supplied to counsel for Appel
Investments, Inc. is, to the best of Vendor's knowledge
and belief, complete and authentic and specifically the
letter from Equant Network Services, Inc. ("Equant") dated
July 29, 1999 is authentic, and that its waiver of lien
status as to the bankruptcy estate is equally applicable
to all assets being sold by Vendor to Purchaser and that
to the best of Vendor's knowledge and belief Equant's lien
is limited to telecommunication network equipment and that
such assets are not included in the assets being sold.
<PAGE> 4
(g) The following parties who may be secured parties in
certain assets of AlphaNet Telecom, Inc. as a result of
the recordation of Personal Property Security Act liens
hold no lien that has attached to the assets being sold:
Mark Holzberg, Andre Label, Claude Samson, Brian E.
Wilson, Nuno C. Romao, Yves Laliberte, Kevin Hickey, Bruce
Caven and John Taylor and that no information has come to
the Vendor's attention to suggest that Commcorp Financial
Services, Inc. PHH Vehicle Management Services, Inc.,
General Electric Capital Canada, Inc., Clearnet Inc.,
Newcourt Financial Ltd., or BML Leasing Limited are the
holders of any lien that has attached to the assets being
sold.
3.0 MISCELLANEOUS
3.1 SUCCESSORS AND ASSIGNS
This indenture and all of its provisions shall ensure to the benefit
of and be binding upon the parties and their respective successors and assigns.
3.2 GOVERNING LAW
This Indenture shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
3.3 FURTHER ASSURANCES
Each of the parties hereto shall, at the request and expense of the
other, take or cause to be taken such action and execute and deliver or cause to
be executed and delivered to the other such documents and further assurances as
may be reasonably necessary to give effect to this indenture.
3.4 ENTIRE AGREEMENT
This indenture and the attached schedules constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior negotiations and understandings.
3.5 COUNTERPARTS AND DELIVERY BY FAX
This Bill of Sale may be executed and delivered in counterparts, each
of which when executed and delivered is an original but all of which taken
together constitute one and the same instrument. Either party may deliver an
executed copy of this Bill of Sale by fax but that party shall immediately
deliver to the other party an originally executed copy of this Bill of Sale.
<PAGE> 5
IN WITNESS WHEREOF the parties have executed this indenture on the ____
day of September, 1999.
PRICEWATERHOUSECOOPERS INC., in its
capacity as Trustee of the Estate of
AlphaNet Telecom Inc., a bankrupt,
and not in its personal capacity
Per: /s/ ANDRE LABEL
--------------------------------
TECH ELECTRO INDUSTRIES, INC.
Per: /s/ ILLEGIBLE
--------------------------------
<PAGE> 6
SCHEDULE A - PATENTS PAGE 1 OF 6
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Our Ref. Applicant Title Country Type Status Appln. No.
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6774-ICA Alphanet Telecom Inc. COMMUNICATION Canada Patent Abandoned 568,263
SYSTEM (Possible to
Reinstate)
6774-2-ICA Alphanet Telecom Inc. COMMUNICATION Canada Patent Issued 615,567
SYSTEM
6774-2CA Alphanet Telecom Inc. COMMUNICATION Canada Patent Issued 572,480
SYSTEM
6774AU Alphanet Telecom Inc. COMMUNICATION Australia Patent Issued 10432/88
NETWORK
6774CA Alphanet Telecom Inc. COMMUNICATION Canada Patent Issued 498,601
SYSTEM
6774CH Alphanet Telecom Inc. COMMUNICATION Switzerland Patent Issued 88900083.2
NETWORK
6774DE Alphanet Telecom Inc. COMMUNICATION Germany Patent Issued 88900083.2
NETWORK
6774EP Alphanet Telecom Inc. COMMUNICATION European Patent Office Patent Issued 88900083.2
NETWORK
6774FR Alphanet Telecom Inc. COMMUNICATION France Patent Issued 88900083.2
NETWORK
6774GB Alphanet Telecom Inc. COMMUNICATION United Kingdom Patent Issued 88900083.2
NETWORK
6774HK Alphanet Telecom Inc. COMMUNICATION Hong Kong Patent Issued
NETWORK
6774IT Alphanet Telecom Inc. COMMUNICATION Italy Patent Issued 88900083.2
NETWORK
6774JP Alphanet Telecom Inc. COMMUNICATION Japan Patent Issued 63-500405
NETWORK
6774SG Alphanet Telecom Inc. COMMUNICATION Singapore Patent Issued
NETWORK
6774US Alphanet Telecom Inc. COMMUNICATION U.S.A Patent Issued 06/813,229
NETWORK
7300AU Alphanet Telecom Inc. DATA TRANSMISSION Australia Patent Issued 28286/89
SYSTEM
7300CA Alphanet Telecom Inc. DATA COMMUNICATION Canada Patent Issued 555,185
SYSTEM
7300CH Alphanet Telecom Inc. DATA TRANSMISSION Switzerland Patent Issued 89900869.2
SYSTEM
7300DE Alphanet Telecom Inc. DATA TRANSMISSION Germany Patent Issued 89900869.2
SYSTEM
7300EP Alphanet Telecom Inc. DATA TRANSMISSION European Patent Office Patent Issued 8900869.2
SYSTEM
7300FR Alphanet Telecom Inc. DATA TRANSMISSION France Patent Issued 89900869.2
SYSTEM
7300GB Alphanet Telecom Inc. DATA TRANSMISSION United Kingdom Patent Issued 89900869.2
SYSTEM
<CAPTION>
- --------------------------------------------------------------------------------------
Our Ref. Applicant Filing Date Serial No. Issue Date
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6774-ICA Alphanet Telecom Inc. May 31, 1988 1,269,773 May 29, 1990
6774-2-ICA Alphanet Telecom Inc. Nov 27, 1989 1,289,279 Sep 17, 1991
6774-2CA Alphanet Telecom Inc. Jul 19, 1988 1,267,448 Apr 3, 1990
6774AU Alphanet Telecom Inc. Dec 14, 1987 613335 Nov 28, 1991
6774CA Alphanet Telecom Inc. Dec 24, 1985 1,240,429 Aug 9, 1988
6774CH Alphanet Telecom Inc. Dec 14, 1987 0 393 023 Feb 10, 1994
6774DE Alphanet Telecom Inc. Dec 14, 1987 37 89 454.4-08 Feb 10, 1994
6774EP Alphanet Telecom Inc. Dec 14, 1987 0 393 023 Feb 10, 1994
6774FR Alphanet Telecom Inc. Dec 14, 1987 0 393 023 Feb 10, 1994
6774GB Alphanet Telecom Inc. Dec 14, 1987 0 393 023 Feb 10, 1994
6774HK Alphanet Telecom Inc. 968/1995 Jun 15, 1995
6774IT Alphanet Telecom Inc. Dec 14, 1987 0 393 023 Feb 10, 1994
6774JP Alphanet Telecom Inc. Dec 14, 1987 1898662 Jan 23, 1995
6774SG Alphanet Telecom Inc. Dec 14, 1987 9590579-0 Dec 14, 1987
6774US Alphanet Telecom Inc. Dec 24, 1985 4,713,837 Dec 15, 1987
7300AU Alphanet Telecom Inc. Dec 23, 1988 634,466 Jun 18, 1993
7300CA Alphanet Telecom Inc. Dec 23, 1988 1,278,121 Dec 18, 1990
7300CH Alphanet Telecom Inc. Dec 23, 1988 0 400 017 Apr 20, 1994
7300DE Alphanet Telecom Inc. Dec 23, 1988 P38 89 228.6 Apr 20, 1994
7300EP Alphanet Telecom Inc. Dec 23, 1988 0 400 017 Apr 20, 1994
7300FR Alphanet Telecom Inc. Dec 23, 1988 0 400 017 Apr 20, 1994
7300GB Alphanet Telecom Inc. Dec 23, 1988 0 400 017 Apr 20, 1994
</TABLE>
<PAGE> 7
PAGE 2 OF 6
SCHEDULE A - PATENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Our Ref. Applicant Title Country Type Status Appln. No.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
7300HK Alphanet Telcom Inc. DATA TRANSMISSION Hong Kong Patent Issued
SYSTEM
7300IT Alphanet Telcom Inc. DATA TRANSMISSION Italy Patent Issued 89900869.2
SYSTEM
7300JP Alphanet Telcom Inc. DATA TRANSMISSION Japan Patent Issued 1-500796
SYSTEM
7300SG Alphanet Telcom Inc. DATA TRANSMISSION Singapore Patent Issued
SYSTEM
7300US Alphanet Telcom Inc. DATA COMMUNICATION U.S.A. Patent Issued 07/137,799
SYSTEM
7353US Alphanet Telcom Inc. SELECTIVE U.S.A. Patent Issued 07/187,908
DISSEMINATION OF
INFORMATION
7625AU Alphanet Telcom Inc. DATA TRANSMISSION Australia Patent Issued 5632890
ARRANGEMENT
7625CA Alphanet Telcom Inc. DATA TRANSMISSION Canada Patent Pending 2,008,574
ARRANGEMENT
7625CH Alphanet Telcom Inc. DATA TRANSMISSION Switzerland Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625DE Alphanet Telcom Inc. DATA TRANSMISSION Germany Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625EP Alphanet Telcom Inc. DATA TRANSMISSION European Patent Office Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625FR Alphanet Telcom Inc. DATA TRANSMISSION France Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625GB Alphanet Telcom Inc. DATA TRANSMISSION United Kingdom Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625JP Alphanet Telcom Inc. DATA TRANSMISSION Japan Patent Pending 2-507143
ARRANGEMENT
7625NL Alphanet Telcom Inc. DATA TRANSMISSION The Netherlands Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625SE Alphanet Telcom Inc. DATA TRANSMISSION Sweden Patent Issued 90906806.6
ARRANGEMENT (ALPHA
NUMBER)
7625SG Alphanet Telcom Inc. DATA TRANSMISSION Singapore Patent Issued 0 527 722
ARRANGEMENT
7625US Alphanet Telcom Inc. DATA TRANSMISSION U.S.A. Patent Issued 07/305,113
ARRANGEMENT
7626AU Alphanet Telcom Inc. LOCATION Australia Patent Issued 5643290
IDENTIFICATION
<CAPTION>
- ------------------------------------------------------------------------------
Our Ref. Applicant Filing Date Serial No. Issue Date
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7300HK Alphanet Telcom Inc. 1824/1995 Nov 30, 1995
7300IT Alphanet Telcom Inc. Dec 23, 1988 0 400 017 Apr 20, 1994
7300JP Alphanet Telcom Inc. Dec 23, 1988 2,628,216 Apr 18, 1997
7300SG Alphanet Telcom Inc. Dec 23, 1988 9591854-6 Apr 20, 1994
7300US Alphanet Telcom Inc. Dec 24, 1987 4,905,273 Feb 27, 1990
7353US Alphanet Telcom Inc. Apr 29, 1988 4,922,518 May 1, 1990
7625AU Alphanet Telcom Inc. May 9, 1990 655,914 May 4, 1995
7625CA Alphanet Telcom Inc. Jan 25, 1990
7625CH Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625DE Alphanet Telcom Inc. May 9, 1990 690 14 209.9 Nov 17, 1994
7625EP Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625FR Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625GB Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625JP Alphanet Telcom Inc. May 9, 1990
7625NL Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625SE Alphanet Telcom Inc. May 9, 1990 0 527 722 Nov 17, 1994
7625SG Alphanet Telcom Inc. 9691168-0 Jun 28, 1996
7625US Alphanet Telcom Inc. Feb 2, 1989 4,969,184 Nov 6, 1990
7626AU Alphanet Telcom Inc. May 9, 1990 657,085 May 9, 1990
</TABLE>
<PAGE> 8
PAGE 3 OF 6
SCHEDULE A - PATENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Our Ref. Applicant Title Country Type Status Appln. No. Filing Date
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7626CA Alphanet Telecom Inc. LOCATION Canada Patent Pending 2,008,573 Jan 25, 1990
IDENTIFICATION
7626CH Alphanet Telecom Inc. LOCATION Switzerland Patent Issued 90906810.8 May 9, 1990
IDENTIFICATION
7626DE Alphanet Telecom Inc. LOCATION Germany Patent Issued 90906810.8 May 9, 1990
IDENTIFICATION
7626EP Alphanet Telecom Inc. LOCATION European Patent Office Patent Issued 90906810.8 May 9, 1990
IDENTIFICATION
7626FR Alphanet Telecom Inc. LOCATION France Patent Issued 90906810.8 May 9, 1990
IDENTIFICATION
7626GB Alphanet Telecom Inc. LOCATION United Kingdom Patent Issued 90906810.8 May 9, 1990
IDENTIFICATION
7626US Alphanet Telecom Inc. LOCATION U.S.A. Patent Issued 07/305,445 Feb 2, 1989
IDENTIFICATION
8389AU Alphanet Telecom Inc. FACSIMILE Australia Patent Issued 3340993 Jan 15, 1993
ARRANGEMENT
8389CA Alphanet Telecom Inc. FACSIMILE Canada Patent Pending 2,127,332 Jan 15, 1993
ARRANGEMENT
8389CH Alphanet Telecom Inc. FACSIMILE Sweden Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389DE Alphanet Telecom Inc. FACSIMILE Germany Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389EP Alphanet Telecom Inc. FACSIMILE European Patent Office Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389FR Alphanet Telecom Inc. FACSIMILE France Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389GB Alphanet Telecom Inc. FACSIMILE United Kingdom Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389HK Alphanet Telecom Inc. FACSIMILE Hong Kong Patent Issued
ARRANGEMENT
8389IT Alphanet Telecom Inc. FACSIMILE Italy Patent Issued 93 901 995.6 Jan 15, 1993
ARRANGEMENT
8389JP Alphanet Telecom Inc. FACSIMILE Japan Patent Pending 5-512811 Jan 15, 1993
ARRANGEMENT
8389US Alphanet Telecom Inc. FACSIMILE U.S.A. Patent Issued 07/823,455 Jan 22, 1992
ARRANGEMENT
8880CA Alphanet Telecom Inc. FACSIMILE SYSTEM Canada Patent Pending 2,105,540 Sep 3, 1993
FOR PERSONAL
COMPUTING DEVICES
8880JP Alphanet Telecom Inc. FACSIMILE SYSTEMS Japan Patent Pending 6-517472 Aug 26, 1994
FOR PERSONAL
COMPUTING DEVICES
8929CA Alphanet Telecom Inc. MODEM CONTROL AND Canada Patent Pending 2,181,251 Dec 14, 1994
COMMUNICATION
ARRANGEMENT
8929US Alphanet Telecom Inc. MODEM CONTROL AND U.S.A. Patent Issued 08/183,935 Jan 21, 1994
COMMUNICATION
ARRANGEMENT
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Our Ref. Applicant Serial No. Issue Date
- ----------------------------------------------------------------
<S> <C> <C> <C>
7626CA Alphanet Telecom Inc.
7626CH Alphanet Telecom Inc. 0 527 723 Apr 10, 1996
7626DE Alphanet Telecom Inc. 690 26515.8-08 Apr 10, 1996
7626EP Alphanet Telecom Inc. 0 527 723 Apr 10, 1996
7626FR Alphanet Telecom Inc. 0 527 723 Apr 10, 1996
7626GB Alphanet Telecom Inc. 0 527 723 Apr 10, 1996
7626US Alphanet Telecom Inc. 4,942,599 Jul 17, 1990
8389AU Alphanet Telecom Inc. 668705 Jan 15, 1993
8389CA Alphanet Telecom Inc.
8389CH Alphanet Telecom Inc. 0 627 152 Sep 3, 1997
8389DE Alphanet Telecom Inc. 693 13 621.9- Sep 3, 1997
08
8389EP Alphanet Telecom Inc. 0 627 152 Sep 3, 1997
8389FR Alphanet Telecom Inc. 0 627 152 Sep 3, 1997
8389GB Alphanet Telecom Inc. 0 627 152 Sep 3, 1997
8389HK Alphanet Telecom Inc. HK1000952 May 8, 1998
8389IT Alphanet Telecom Inc. 0 627 152 Sep 3, 1997
8389JP Alphanet Telecom Inc.
8389US Alphanet Telecom Inc. 5,425,081 Jun 13, 1995
8880CA Alphanet Telecom Inc.
8880JP Alphanet Telecom Inc.
8929CA Alphanet Telecom Inc.
8929US Alphanet Telecom Inc. 5,619,725 Apr 8, 1997
</TABLE>
<PAGE> 9
SCHEDULE A - TRADE MARKS PAGE 4 OF 6
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Our Ref. Applicant TradeMark Country Type Status
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T-5099AR Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Argentina TradeMark Registered
T-5099AU Alphanet Telecom Inc. FOLLOWFAX Australia TradeMark Registered
T-5099BR Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Brazil TradeMark Registered
T-5099CA Alphanet Telecom Inc. FOLLOWFAX Canada TradeMark Registered
T-5099CN Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) China TradeMark Pending
T-5099DE Alphanet Telecom Inc. FOLLOWFAX Germany TradeMark Registered
T-5099FR Alphanet Telecom Inc. FOLLOWFAX France TradeMark Registered
T-5099HK Alphanet Telecom Inc. FOLLOWFAX Hong Kong TradeMark Registered
T-5099ID Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Indonesia TradeMark Registered
T-5099IN Alphanet Telecom Inc. FOLLOWFAX India TradeMark Pending
T-5099JP Alphanet Telecom Inc. FOLLOWFAX Japan TradeMark Registered
T-5099KR Alphanet Telecom Inc. FOLLOWFAX (Cl. 106) Korea, Republic of TradeMark Registered
T-5099MC Alphanet Telecom Inc. FOLLOWFAX (CL. 38) Monaco TradeMark Registered
T-5099MX Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Mexico TradeMark Registered
T-5099NZ Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) New Zealand TradeMark Registered
T-5099SG Alphanet Telecom Inc. FOLLOWFAX Singapore TradeMark Pending
T-5099TW Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Taiwan TradeMark Registered
T-5099US Alphanet Telecom Inc. FOLLOWFAX U.S.A. TradeMark Registered
T-5099VN Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) Vietnam Socialist Republic TradeMark Registered
T-5099ZA Alphanet Telecom Inc. FOLLOWFAX (Cl. 38) South Africa TradeMark Registered
T-6237GB Alphanet Telecom Inc. INNSERVE (CL. 38) United Kingdom TradeMark Registered
T-6295CA Alphanet Telecom Inc. INNMAIL Canada TradeMark Pending
T-6295EP Alphanet Telecom Inc. INNMAIL European Patent Office TradeMark Pending
T-6295JP Alphanet Telecom Inc. INNMAIL Japan TradeMark Registered
T-6295US Alphanet Telecom Inc. INNMAIL U.S.A. TradeMark Pending
T-6298EP Alphanet Telecom Inc. INNDIAL European Patent Office TradeMark Pending
T-6298US Alphanet Telecom Inc. INNDIAL U.S.A. TradeMark Pending
T-6544EP Alphanet Telecom Inc. INNFAX (Cl. 38) European Patent Office TradeMark Registered
T-6548US Alphanet Telecom Inc. INNPHONE U.S.A. TradeMark Pending
T-6710BR Alphanet Telecom Inc. ALPHANET Brazil TradeMark Pending
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Our Ref. Applicant Appin. No. Filing Date Regn. No. Regn. Date
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T-5099AR Alphanet Telecom Inc. 1996854 Aug 25, 1995 1,606,090 Jul 12, 1996
T-5099AU Alphanet Telecom Inc. A644918 Nov 7, 1994 644918 Nov 7, 1994
T-5099BR Alphanet Telecom Inc. 818832703 Oct 10, 1995 818832703 Aug 4, 1998
T-5099CA Alphanet Telecom Inc. 695,256 Dec 12, 1991 412,109 May 2, 1993
T-5099CN Alphanet Telecom Inc. 950119131 Sep 20, 1995
T-5099DE Alphanet Telecom Inc. 394 00 961.4 Nov 8, 1994 394 00 961 Aug 7, 1995
T-5099FR Alphanet Telecom Inc. 95/585087 Aug 18, 1995 95585087 Aug 18, 1995
T-5099HK Alphanet Telecom Inc. 13599/94 Nov 18, 1994 B4724/97 Apr 24, 1997
T-5099ID Alphanet Telecom Inc. H4.HC.01-01- Nov 24, 1994 350497 Nov 24, 1994
21868
T-5099IN Alphanet Telecom Inc. 676778 Aug 14, 1995
T-5099JP Alphanet Telecom Inc. 6-113550 Nov 9, 1994 4,024,382 Jul 11, 1997
T-5099KR Alphanet Telecom Inc. 910/95 Feb 6, 1995 33876 Dec 23, 1996
T-5099MC Alphanet Telecom Inc. 16649 Oct 25, 1995 95.16580 Oct 25, 1995
T-5099MX Alphanet Telecom Inc. 240491 Aug 18, 1995 588651 Sep 30, 1998
T-5099NZ Alphanet Telecom Inc. 242853 Nov 8, 1994 242853 Aug 5, 1997
T-5099SG Alphanet Telecom Inc. S/9688/94 Nov 8, 1994
T-5099TW Alphanet Telecom Inc. 84-009198 Mar 2, 1995 78875 Oct 1, 1995
T-5099US Alphanet Telecom Inc. 74/183,331 Jul 8, 1991 1,805,554 Nov 16, 1993
T-5099VN Alphanet Telecom Inc. 21796 Feb 25, 1995 18238 Sep 20, 1995
T-5099ZA Alphanet Telecom Inc. 95/10384 Aug 11, 1995 95/10384 Aug 11, 1995
T-6237GB Alphanet Telecom Inc. 2117870 Dec 6, 1996 2117870 Jul 18, 1997
T-6295CA Alphanet Telecom Inc. 820,112 Aug 8, 1996
T-6295EP Alphanet Telecom Inc. 000465393 Feb 11, 1997
T-6295JP Alphanet Telecom Inc. 9-13560 Feb 10, 1997 4,204,485 Oct 30, 1998
T-6295US Alphanet Telecom Inc. 75/238,211 Feb 7, 1997
T-6298EP Alphanet Telecom Inc. 000472829 Feb 13, 1997
T-6298US Alphanet Telecom Inc. 75/238,210 Feb 7, 1997
T-6544EP Alphanet Telecom Inc. 000566505 Jun 24, 1997 000566505 Jun 24, 1997
T-6548US Alphanet Telecom Inc. 75/316,201 Jun 21, 1997
T-6710BR Alphanet Telecom Inc. 820608092
</TABLE>
<PAGE> 10
PAGE 5 OF 6
SCHEDULE A - TRADE MARKS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Our Ref. Applicant Trademark Country Type Status
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T-3594CA Alphanet Telecom Inc. ALPHANET Canada Trade Mark Registered
T-4148AU Alphanet Telecom Inc. ALPHANET (Cl. 38) Australia Trade Mark Registered
T-4148BX Alphanet Telecom Inc. ALPHANET Benelux Trade Mark Registered
T-4148CA Alphanet Telecom Inc. ALPHANET Canada Trade Mark Registered
T-4148CH Alphanet Telecom Inc. ALPHANET Switzerland Trade Mark Registered
T-4148FR Alphanet Telecom Inc. ALPHANET (Cl. 38) France Trade Mark Registered
T-4148IT Alphanet Telecom Inc. ALPHANET (Cl. 38 and 9) Italy Trade Mark Registered
T-4148NO Alphanet Telecom Inc. ALPHANET Norway Trade Mark Registered
T-4148SG Alphanet Telecom Inc. ALPHANET (Cl. 9) Singapore Trade Mark Registered
T-4148US Alphanet Telecom Inc. ALPHANET U.S.A. Trade Mark Registered
T-4161CA Alphanet Telecom Inc. ALPHA DESIGN Canada Trade Mark Registered
T-4161GB Alphanet Telecom Inc. ALPHA LOGO (Cl. 9) United Kingdom Trade Mark Registered
T-4161US Alphanet Telecom Inc. DISTINCTIVE "ALPHA" U.S.A. Trade Mark Registered
LOGO
T-5065US Alphanet Telecom Inc. INNFAX U.S.A. Trade Mark Registered
T-5086-IMY Alphanet Telecom Inc. INNFAX (word mark - cl. 9) Malaysia Trade Mark Pending
T-5086-38AE Alphanet Telecom Inc. INNFAX Cl. 38 United Arab Emirates Trade Mark Pending
T-5086AR Alphanet Telecom Inc. INNFAX (Cl. 38) Argentina Trade Mark Registered
T-5086AU Alphanet Telecom Inc. INNFAX (Cl. 38) Australia Trade Mark Registered
T-5086BR Alphanet Telecom Inc. INNFAX (Cl. 38) Brazil Trade Mark Pending
T-5086CA Alphanet Telecom Inc. INNFAX Canada Trade Mark Registered
T-5086DE Alphanet Telecom Inc. INNFAX Germany Trade Mark Registered
T-5086DZ Alphanet Telecom Inc. INNFAX (Cl. 38) Algeria Trade Mark Registered
T-5086FJ Alphanet Telecom Inc. INNFAX (Cl. 8) Fiji Trade Mark Pending
T-5086FR Alphanet Telecom Inc. INNFAX (Cl. 9 and 38) France Trade Mark Registered
T-5086GB Alphanet Telecom Inc. INNFAX (Cl. 38) United Kingdom Trade Mark Registered
T-5086HK Alphanet Telecom Inc. INNFAX Hong Kong Trade Mark Registered
T-5086ID Alphanet Telecom Inc. INNFAX (Cl. 38) Indonesia Trade Mark Registered
T-5086IN Alphanet Telecom Inc. INNFAX (Cl. 9) India Trade Mark Pending
T-5086JP Alphanet Telecom Inc. INNFAX (Cl. 38) Japan Trade Mark Pending
T-5086KR Alphanet Telecom Inc. INNFAX (Cl. 106) Korea, Republic of Trade Mark Registered
T-5086MC Alphanet Telecom Inc. INNFAX (Cl. 38) Monaco Trade Mark Registered
T-5086MX Alphanet Telecom Inc. INNFAX (Cl. 38) Mexico Trade Mark Registered
T-5086MY Alphanet Telecom Inc. INNFAX Malaysia Trade Mark Pending
T-5086NZ Alphanet Telecom Inc. INNFAX (Cl. 38) New Zealand Trade Mark Registered
T-5086PH Alphanet Telecom Inc. INNFAX (Cl. 38) Philippines Trade Mark Pending
T-5086SA Alphanet Telecom Inc. INNFAX Cl. 38 Saudi Arabia Trade Mark Registered
T-5086SG Alphanet Telecom Inc. INNFAX (Cl. 38) Singapore Trade Mark Registered
T-5086TH Alphanet Telecom Inc. INNFAX (Cl. 38) Thailand Trade Mark Registered
T-5086TW Alphanet Telecom Inc. INNFAX Taiwan Trade Mark Registered
T-5086VN Alphanet Telecom Inc. INNFAX (Cl. 38) Vietnam Socialist Republic Trade Mark Registered
T-5086WS Alphanet Telecom Inc. INNFAX (Cl. 9) Samoa Trade Mark Registered
T-5086ZA Alphanet Telecom Inc. INNFAX (Cl. 38) South Africa Trade Mark Registered
<CAPTION>
- -------------------------------------------------------------------------------------------------
Our Ref. Applicant Appln. No. Filing Date Regn. No. Regn. Date
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T-3594CA Alphanet Telecom Inc. 551,382 Oct 25, 1985 336,146 Jan 8, 1988
T-4148AU Alphanet Telecom Inc. 495,093 Sep 9, 1988 A495093 Feb 18, 1991
T-4148BX Alphanet Telecom Inc. 719,382 Sep 14, 1988 451,809 Sep 14, 1988
T-4148CA Alphanet Telecom Inc. 600,836 Feb 15, 1988 360,898 Oct 27, 1989
T-4148CH Alphanet Telecom Inc. 6493/88 Sep 12, 1988 366.562 Sep 12, 1988
T-4148FR Alphanet Telecom Inc. 953,524 Sep 9, 1988 1,487,558 Sep 9, 1988
T-4148IT Alphanet Telecom Inc. 37572C/88 Nov 25, 1988 551,423 Oct 16, 1991
T-4148NO Alphanet Telecom Inc. 884107 Sep 12, 1988 139304 Nov 9, 1989
T-4148SG Alphanet Telecom Inc. S/5478/88 Oct 5, 1988 5478/88 Jul 18, 1990
T-4148US Alphanet Telecom Inc. 73/713,820 Feb 29, 1988 1,625,233 Nov 27, 1990
T-4161CA Alphanet Telecom Inc. 602,532 Mar 9, 1988 409,928 Mar 26, 1993
T-4161GB Alphanet Telecom Inc. 1341381 Apr 13, 1988 1,341,381 Apr 13, 1988
T-4161US Alphanet Telecom Inc. 73/740,686 Jul 18, 1988 1,848,501 Aug 9, 1994
T-5065US Alphanet Telecom Inc. 74/166,293 May 13, 1991 1,802,924 Nov 2, 1993
T-5086-IMY Alphanet Telecom Inc. MA/2664/95 Mar 27, 1995
T-5086-38AE Alphanet Telecom Inc. 17177 Jul 10, 1996
T-5086AR Alphanet Telecom Inc. 1996853 Aug 25, 1995 1,606,089 Jul 12, 1996
T-5086AU Alphanet Telecom Inc. A644919 Nov 7, 1994 644919 Jun 18, 1997
T-5086BR Alphanet Telecom Inc. 818832711 Oct 10, 1995
T-5086CA Alphanet Telecom Inc. 691,918 Oct 18, 1991 405,392 Nov 20, 1992
T-5086DE Alphanet Telecom Inc. 394 00 960.6 Nov 8, 1994 394 00 960.6 Aug 7, 1995
T-5086DZ Alphanet Telecom Inc. 971014 Aug 3, 1997 053797 Aug 3, 1997
T-5086FJ Alphanet Telecom Inc. 27214 Oct 13, 1995
T-5086FR Alphanet Telecom Inc. 95/585088 Aug 18, 1995 95585088 Aug 18, 1995
T-5086GB Alphanet Telecom Inc. 1,481,404 Oct 31, 1991 1,481,404 May 13, 1991
T-5086HK Alphanet Telecom Inc. 13598/94 Nov 18, 1994 B3143/97 Mar 19, 1997
T-5086ID Alphanet Telecom Inc. H4.HC.01-01- Nov 24, 1994 349236 Jan 22, 1997
21867
T-5086IN Alphanet Telecom Inc. 676779 Aug 14, 1995
T-5086JP Alphanet Telecom Inc. 6-113549 Nov 9, 1994
T-5086KR Alphanet Telecom Inc. 909/95 Feb 6, 1995 33875 Dec 23, 1996
T-5086MC Alphanet Telecom Inc. 16648 Oct 25, 1995 95.16579 Oct 25, 1995
T-5086MX Alphanet Telecom Inc. 240490 Aug 18, 1995 588650 Sep 30, 1998
T-5086MY Alphanet Telecom Inc. MA/5334/98 Apr 30, 1998
T-5086NZ Alphanet Telecom Inc. 242852 Nov 8, 1994 242852 Oct 20, 1997
T-5086PH Alphanet Telecom Inc. 100306 Jun 2, 1995 100786 Aug 7, 1997
T-5086SA Alphanet Telecom Inc. 30556 378/67 Jun 12, 1996
T-5086SG Alphanet Telecom Inc. S/9687/94 Nov 8, 1994 B9687/94 Nov 8, 1994
T-5086TH Alphanet Telecom Inc. 284539 Apr 26, 1995 Bor4306 Apr 19, 1996
T-5086TW Alphanet Telecom Inc. 84-009199 Mar 2, 1995 78876 Oct 1, 1995
T-5086VN Alphanet Telecom Inc. 21795 Feb 25, 1995 18237 Sep 20, 1995
T-5086WS Alphanet Telecom Inc. 3162 Oct 12, 1995 3162 Apr 7, 1997
T-5086ZA Alphanet Telecom Inc. 95/10383 Aug 11, 1995 95/10383 Aug 11, 1995
</TABLE>
<PAGE> 11
PAGE 6 OF 6
SCHEDULE "A"
COMMON SHARES OF ALPHANET HOSPITALITY SYSTEMS INC.
Ten (10) common shares of capital stock of AlphaNet Hospitality Systems Inc., a
Delaware corporation, constituting 100% (all) of the issued and outstanding
shares of capital stock of that corporation.
<PAGE> 1
EXHIBIT 2B
[LOGO] [TECH ELECTRO INDUSTRIES, INC. LETTERHEAD]
October 21, 1999
Andrew Wilczynski
PricewaterhouseCoopers, LLC.
145 King Street West
Toronto, Ontario Canada M5H 1V8
Re: Purchase Alphanet Hospitality Systems, Inc. ("AHS") by Tech Electro
Industries, Inc. ("Tele")
Dear Mr. Wilczynski:
Contemporaneously with the execution of this letter, Tele is purchasing
from PricewaterhouseCoopers, LLC, Trustee of the Estate of AlphaNet
Telecom, Inc., a bankrupt, ("Trustee") all of the issued and outstanding
capital stock of AHS, (the "AHS Stock") and certain intellectual property,
copyrights and trademarks (the "AHS Property") all as more fully described
in that certain Bill of Sale executed and delivered by the Trustee
contemporaneously herewith. In accordance with our understanding and
agreement, the purchase price for the AHS Stock and the AHS Property is
US $3,450,000 plus a closing date extension fee of US $25,000 and a bridge
loan fee of US $25,000 for an aggregate consideration of US $3,500,000
("Purchase Price"). Also per our agreement, the Purchase Price is payable
to the Trustee, as follows:
(i) US $1,400,000 cash, heretofore delivered to and received by the
Trustee.
(ii) Delivery of that certain promissory note of Tele in the principal
amount of US $2,100,000 payable to the Trustee, a copy of which is
attached hereto as Exhibit A, and incorporated herein (the "Note").
Tele has pledged the AHS Stock to the Trustee to secure payment of
the Note and has executed a Pledge Agreement with respect thereto. To
further secure the Trustee per its request, Tele makes the following
covenants that shall remain in full force and effect until the Note
is paid in full:
(1) Tele shall not cause or allow AHS to upstream or pay any money or
capital to Tele without the prior written consent of the Trustee
unless AHS has in excess of US $100,000 cash on hand (the "Excess
Cash") and represents in writing to the Trustee that any such payment
upstreaming of capital will
<PAGE> 2
not impair AHS's ability to operate in the normal course of business;
provided however any cash upstreamed or paid to Tele by AHS shall not
exceed in any calendar month the lesser of (i) US $40,000 or (ii) the
Excess Cash; provided further, however, if Tele's receipt of any cash
or upstreaming of capital from AHS impairs AHS's ability to operate in
the normal course of its business, Tele will reimburse AHS the funds
necessary to enable AHS to operate in the normal course of its
business.
(2) Tele shall use its best efforts to refinance that certain indebtedness
of AHS, in the amount of US $2,525,000 incurred contemporaneously
herewith ("AHS indebtedness") and will regularly notify the Trustee of
its efforts and progress in this regard.
(3) Tele will use its best efforts to pay the Note in full or in part prior
to its maturity. Tele has started this process to obtain a loan to
repay the Note. Except for an initial principal payment on the AHS
indebtedness of up to US $150,000, ("AHS initial payment"), Tele
agrees to cause a principal payment to be made on the Note if a
principal payment is made on the AHS indebtedness in excess of the AHS
initial payment (the "excess AHS principal payment"). The amount of
the payment on the Note shall be equal to the percentage amount of the
excess AHS principal payment on the AHS indebtedness. For example, if
10% of the AHS outstanding principal is paid, 10% of the outstanding
principal of the Note shall be paid.
(4) Several weeks ago, Tele asked First Capital Services, Inc. ("FCS") to
deposit with the Trustee US $500,000 intended by FCS and Tele to be a
portion of a loan FCS agreed to make to AHS (the "FCS loan"), part of
the proceeds of which were to be used to pay the Trustee the full
purchase price for the AHS Stock and AHS Property. FCS defaulted on its
obligation to fund the FCS loan causing AHS and Tele to obtain
alternative financing including the deferred payment of the Purchase
Price, as evidence by the Note. Tele and AHS have been damaged by FCS's
said default and intend to prosecute their claims against FCS to
recover their respective damages. Tele acknowledges that said US
$500,000 is not and cannot constitute any part of the Purchase Price.
The Trustee acknowledges that it shall return the said US $500,000 to
FCS. In consideration thereof, Tele shall indemnify and hold harmless
the Trustee against any claims made by FCS against the Trustee with
respect to said US $500,000 and the FCS loan including the costs of
defending the Trustee against any such claims.
The occurrence of a default by Tele of any of its covenants, agreements or
other obligations herein shall constitute a default of the terms of the
Note, and in such case, the Trustee may, in its sole discretion, declare
the principal amount of the Note immediately due and payable.
The attached AHS Closing Statement (Exhibit B hereto and incorporated
herein), evidences the disbursements of the proceeds of the AHS
indebtedness, the Note and the said US $1,400,000 heretofore deposited with
the Trustee, that the Trustee acknowledges receipt of and to which it has
no objection. The Trustee also
<PAGE> 3
acknowledges that AHS does not owe any amount or indebtedness to the
Trustee, Alphanet Telecom, Inc. or any affiliate of Alphanet Telecom, Inc.,
after giving effect to the subject transaction.
If the foregoing is in accord with your understanding and agreement, please
so indicate by signing in the space provided below. Thank you.
Signed:
/s/ IAN EDMONDS
---------------------------------
Ian Edmonds, Vice President
/s/ MEEMEE TAN
---------------------------------
MeeMee Tan, Secretary
Agreed:
PricewaterhouseCoopers, LLC
Trustee
/s/ ANDREW WILCZYNSKI
---------------------------------
By: Andrew Wilczynski
Vice President
<PAGE> 1
EXHIBIT 2C
PROMISSORY NOTE
US$2,100,000.00 New York, New York
October 21, 1999
FOR VALUE RECEIVED, the undersigned, Tech Electro Industries, Inc.
(herein called the "Borrower"), a corporation organized and existing under the
laws of the State of Texas, hereby promises to pay to PricewaterhouseCoopers
Inc., as Trustee (in such capacity, the "Trustee") of the Estate of AlphaNet
Telecom, Inc., a bankrupt, or its assigns, the principal sum of TWO MILLION ONE
HUNDRED THOUSAND UNITED STATES DOLLARS (US$2,100,000), on February 21, 2000
(the "Maturity Date"). Interest on any overdue payment of principal hereunder
shall accrue as of the Maturity Date and shall be payable at a rate of ten
percent (10%) per annum (computed on the basis of a 365-day year).
Payments of principal and interest hereunder are to be made at such
place as the holder hereof shall designate to the Borrower in writing, in lawful
money of the United States of America. The Borrower may prepay this Promissory
Note at any time without premium or penalty.
The Borrower hereby represents to the holder hereof that the execution,
delivery and performance of this Note by the Borrower and the incurrence of the
obligations hereunder by the Borrower do not and will not conflict with any
material agreement or obligation, which conflict will adversely affect the
ability of the Borrower to perform its obligations under this Promissory Note.
This Promissory Note may not be changed orally, but only by an
agreement in writing signed by the party against whom such agreement is sought
to be enforced.
The obligations of the Borrower under this Promissory Note are subject
to, and secured by the pledges, liens and security interests granted under, that
certain Pledge Agreement, dated as of October 21, 1999, between the Borrower, as
pledgor, and the Trustee, as secured party.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS PROMISSORY NOTE,
THE BORROWER WAIVES (TO THE EXTENT PERMITTED BY LAW) THE RIGHT TO A TRIAL BY
JURY, ALL RIGHTS OF SETOFF AND RIGHTS TO IMPOSE COUNTERCLAIMS AND CROSSCLAIMS
AGAINST THE HOLDER AND THE DEFENSES OF FORUM NON CONVENIENS AND IMPROPER VENUE.
THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND OF ANY FEDERAL COURT OF THE UNITED
STATES OF AMERICA LOCATED IN THE CITY
<PAGE> 2
OF NEW YORK, NEW YORK IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS PROMISSORY NOTE. THIS PROMISSORY NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS AND SHALL BE BINDING UPON THE
SUCCESSORS AND ASSIGNS OF THE BORROWER AND SHALL INURE TO THE BENEFIT OF THE
HOLDER AND ITS SUCCESSORS AND ASSIGNS.
The Borrower hereby waives diligence, demand, presentment, protest and
notice of any kind, release, surrender or substitution of security, or
forbearance or other indulgence, without notice.
If any term or provision of this Promissory Note shall be held invalid,
illegal or unenforceable, the validity of all other terms and provisions herein
shall in no way be affected thereby.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Promissory Note on the date first above written.
TECH ELECTRO INDUSTRIES, INC.
By: /s/ IAN EDMONDS
------------------------------
Name: Ian Edmonds
Title: Vice President
By: /s/ MEEMEE TAN
------------------------------
Name: MeeMee Tan
Title: Corporate Secretary
<PAGE> 1
EXHIBIT 2D
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated October 21, 1999 (this "Agreement"), is
made and entered into by and between TECH ELECTRO INDUSTRIES, INC., a
corporation organized and existing under the laws of Texas (the "Pledgor"), and
PRICEWATERHOUSECOOPERS INC. (the "Secured Party"), as Trustee (in such capacity,
the "Trustee") of the Estate of AlphaNet Telecom, Inc., a bankrupt.
W I T N E S S E T H:
WHEREAS, the Pledgor has issued to and in the name of the Secured Party
a certain promissory note, dated October 21, 1999, in the original principal
amount of US$2,100,000.00 (the "Note"), a copy of which is annexed hereto as
Exhibit "A," in partial consideration of the obligations of the Pledgor to the
Secured Party in respect of its purchase of the equity interests in AlphaNet
Hospitality Systems, Inc., a Delaware corporation, and certain intellectual
property of AlphaNet Telecom, Inc.; and
WHEREAS, in order to induce the Secured Party to accept the Note in
partial consideration of the Pledgor's obligations in respect of its purchase of
the equity interests in AlphaNet Hospitality Systems, Inc. and certain
intellectual property of AlphaNet Telecom, Inc., the Pledgor has agreed to enter
into this Agreement and to pledge all shares of capital stock or other equity
interests of
<PAGE> 2
AlphaNet Hospitality Systems, Inc., and its successors and assigns, now or
hereafter owned by Pledgor (collectively, the "Pledged Shares"), including,
without limitation, those shares identified on Schedule 1 hereto, in order to
secure the Note; and
NOW THEREFORE, in consideration of the premises, the Secured Party and
the Pledgor hereby agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges, assigns, hypothecates,
transfers and delivers to the Secured Party, and grants to the Secured Party a
security interest in, the Pledged Shares, and in any certificates which evidence
such Pledged Shares, and, except as expressly set forth in Section 3 of this
Agreement, in all proceeds thereof and therefrom (collectively, the "Pledged
Collateral").
SECTION 2. Security for Obligations. This Agreement secures the payment
and performance of all obligations of the Pledgor now or hereafter existing
under the Note, whether for principal, interest, fees, expenses or otherwise,
and all obligations of the Pledgor now or hereafter existing under this
Agreement (all such obligations of the Pledgor are collectively referred to in
this Agreement as the "Obligations").
2
<PAGE> 3
SECTION 3. Delivery of Pledged Collateral.
(a) Certificated Shares. All certificates or instruments which
represent or evidence the Pledged Shares shall, simultaneously with the
execution and delivery of this Agreement by the Pledgor, be delivered by the
Pledgor to, and be held by or on behalf of, the Secured Party pursuant hereto,
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Secured Party.
(b) Voting Rights. While the Pledged Shares are in the possession of
the Secured Party and unless and until default shall have occurred in payment of
principal or interest under the Note (an "Event of Default"), the Pledgor shall
retain ownership of and shall be entitled to exercise each and all of the voting
rights, dividend rights, liquidation rights and other rights of the Pledged
Shares subject to the lien and security interest granted to the Secured Party.
SECTION 4. Representations, Warranties and Covenants of the Pledgor and
the Secured Party. The Pledgor represents and warrants, and so long as this
Agreement is in effect, shall be deemed continuously to represent and warrant,
that (a) it is the legal record and beneficial owner of, and has good and
(subject to applicable securities laws) marketable title to, the Pledged Shares,
subject to no lien or encumbrance whatsoever, except (i) the lien created by
this Agreement, and (ii) liens in favor of Appel Investments Inc., a British
Virgin Islands corporation, which are and will be at all times junior in
priority to the lien created by this Agreement (collectively, the "Appel
Liens"); (b) it has full power,
3
<PAGE> 4
authority and legal right to pledge all the Pledged Shares pursuant to this
Agreement; (c) this Agreement has been duly authorized, executed and delivered
by the Pledgor and constitutes a legal, valid and binding obligation of the
Pledgor enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law); (d) no consent
of any other person (including, without limitation, stockholders or creditors of
the Pledgor), and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, domestic or foreign, is required to be obtained by
the Pledgor in connection with the execution, delivery and performance of this
Agreement, other than those that have been obtained prior to the date hereof and
other than filings for disclosure purposes pursuant to the United States
Securities Exchange Act of 1934; (e) the execution, delivery and performance of
this Agreement will not violate any provisions of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, or of the certificate
of incorporation or by-laws of the Pledgor, or of any securities issued by the
Pledgor, or of any mortgage, indenture, lease, contract, or other agreement,
instrument or undertaking to which the Pledgor is a party, or which purports to
be binding upon the Pledgor or upon any of its assets, and will not result in
the creation or
4
<PAGE> 5
imposition of any lien or other encumbrance on any of the assets of the Pledgor
except as contemplated by this Agreement; (f) to the Pledgor's knowledge, all
of the Pledged Shares have been duly and validly issued, are fully paid and
nonassessable; (g) the pledge of the Pledged Shares and the perfection of such
pledge, as contemplated in Section 3 of this Agreement, creates a legal, valid
and enforceable lien on, and a security interest in, the Pledged Shares and the
proceeds thereof and therefrom, subject to no prior lien or other encumbrance,
or to any agreement purporting to grant to any third party a lien or other
encumbrance on the property or assets of the Pledgor which would include the
Pledged Shares; and (h) the Pledgor is not an "investment company" as such term
is defined in Section 3 of the United States Investment Company Act of 1940. The
Pledgor covenants and agrees that it will (i) defend the Secured Party's right,
title and security interest in and to the Pledged Collateral against the claims
and demands of all entities, and (ii) have like title to and right to pledge any
other property at any time hereafter pledged to the Secured Party as Pledged
Collateral hereunder, and will likewise defend the Secured Party's right thereto
and security interest therein.
SECTION 5. Further Assurances. The Pledgor agrees that at any time and
from time to time, at its expense it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Secured Party may reasonably request, in
order to perfect and protect the security interest intended to be granted
hereby, and to
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enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any of the Pledged Collateral.
SECTION 6. Voting Rights. Upon the occurrence and during the
continuance of an Event of Default, all rights of Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise
shall cease, and all such rights shall thereupon become vested in the Secured
Party, which shall thereupon have the sole right to exercise such voting and
other consensual rights.
SECTION 7. Stock Dividends and Distributions. If, while this Agreement
is in effect, the Pledgor shall become entitled to receive or shall receive any
additional securities representing a stock dividend upon, or a distribution in
connection with any reclassification or increase or reduction of capital by, or
issued in connection with any reorganization of, Alphanet Hospitality Systems,
Inc. ("Alphanet"), or in addition to, in substitution of, or in exchange for,
any Pledged Shares, or otherwise, the Pledgor agrees to accept the same and to
hold the same in trust on behalf of and for the benefit of the Secured Party and
to pledge the same forthwith to the Secured Party in accordance with the terms
and provisions of this Agreement, as additional Pledged Collateral to secure the
Obligations. Any sums paid upon or in respect of the Pledged Shares upon the
liquidation or dissolution of Alphanet shall similarly be paid over to the
Secured Party to be held by it as additional Pledged Collateral for the
Obligations.
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SECTION 8. Transfers and Other Liens. The Pledgor agrees that it will
not (i) sell or otherwise dispose of, or grant any option or warrant with
respect to, any of the Pledged Collateral or enter into any agreement to do any
of the foregoing, or (ii) create or permit to exist any lien or other
encumbrance upon or with respect to any of the Pledged Collateral, except for
liens or other encumbrances in favor of the Secured Party and except for the
Appel Liens.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Pledgor
hereby appoints the Secured Party attorney-in-fact, with full authority in the
place and stead of Pledgor and in the name of Pledgor or otherwise, from time to
time in the Secured Party's discretion, to take any action and to execute any
instrument which the Secured Party may deem necessary or advisable to accomplish
any of the purposes expressly set forth in this Agreement, including, without
limitation, if and only if an Event of Default has occurred and is continuing,
to receive, endorse and collect all instruments made payable to Pledgor
representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same.
SECTION 10. Secured Party May Perform. If Pledgor fails to perform any
agreement contained herein, the Secured Party may itself perform, or cause the
performance of, such agreement.
SECTION 11. Reasonable Care. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
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Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Secured Party accords its own property, it
being understood that the Secured Party shall not have any responsibility for
(i) ascertaining or taking action with respect to conversions, exchanges, tender
offers or other matters relative to any of the Pledged Collateral, whether or
not the Secured Party has or is deemed to have knowledge of such matters, or
(ii) taking any necessary steps to preserve rights against any entity with
respect to any of the Pledged Collateral.
SECTION 12. Remedies upon Default. (a) Upon the occurrence and during
the continuance of any Event of Default, the Secured Party without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of private sale) to or upon the Pledgor
or any other entity (all and each of which demands, advertisements and notices
are hereby expressly waived by the Pledgor), may, subject to compliance with
U.S. securities laws and transfer restrictions applicable to the Pledged Shares
(i) forthwith collect, receive, appropriate and realize upon the Pledged
Collateral, or any part thereof, and (ii) forthwith sell, assign, give option or
options to purchase, contract to sell or otherwise dispose of and deliver (each,
a "Transfer") the Pledged Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at the Secured Party's offices or
elsewhere, (A) upon no less than 10 days written notice to the Pledgor and such
commercially reasonable terms and conditions as the Secured Party may deem
advisable, (B) for cash or on credit or for
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future delivery without assumption of any credit risk, (C) with the right to the
Secured Party upon any such public or private sale or sales, to purchase the
whole or any part of the Pledged Collateral so sold, free of any right or equity
of redemption in the Pledgor, which right or equity is hereby expressly waived
and released by the Pledgor, and (D) provided that prior to any such Transfer,
the Secured Party shall give written notice thereof to the Board of Directors of
Alphanet.
(b) The Secured Party hereby acknowledges that the Pledgor is a
"control person" (as such term is defined in Rule 405 of the United States
Securities Act of 1933, as amended (the "Securities Act")) of AlphaNet
Hospitality Systems, Inc., the issuer of the Pledged Shares. As such, the
Secured Party acknowledges that any Transfer of such Pledged Shares by the
Secured Party might require registration under the Securities Act. In any event,
the Secured Party hereby covenants that it shall not make any Transfer of the
Pledged Shares in a manner which conflicts with the Securities Act.
(c) The Secured Party shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Pledged Collateral or
in any way related to the rights of the Secured Party hereunder, including
reasonable attorneys' fees and legal expenses, to the payment in whole or in
part, of the Obligations, in such order as the Secured Party may elect, and only
after so paying
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over such net proceeds and after the payment by the Secured Party of any other
amount required by any provision of law, need the Secured Party account for the
surplus, if any, to the Pledgor. The Pledgor agrees that the Secured Party need
not give more than ten days notice of the time after which a public or private
sale or other intended disposition is to take place, and that such notice is
reasonable notification of such matters. No notification need be given to the
Pledgor if it has signed after default a statement renouncing or modifying any
right to notification of sale or other intended disposition. In addition to the
rights and remedies granted to it in this Agreement and in any other instrument
or agreement securing, evidencing or related to any of the Obligations, the
Secured Party shall have all the rights and remedies of a secured party under
applicable law. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Pledged Collateral are
insufficient to pay all the Obligations and all other amounts to which the
Secured Party is entitled, and shall also be liable for the fees of any
attorneys employed by the Secured Party to collect such deficiency.
(d) Subject to the restrictions against Transfer of the Pledged Shares
in Sections 12(a) and 12(b) hereof, instead of exercising the power of sale
provided in Section 12(a)(ii) hereof, the Secured Party may proceed by a suit or
suits at law or in equity to foreclose the pledge under this Agreement and sell
the Pledged Collateral or any portion thereof under a judgment or decree of a
court or courts of competent jurisdiction.
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(e) The Secured Party, as attorney-in-fact pursuant to Section 9 hereof
may, in the name and stead of the Pledgor, make and execute all Transfers of the
Pledged Collateral sold pursuant to Section 12(a) hereof
(f) The receipt of the Secured Party for the purchase money paid at any
such Transfer made by it shall be a sufficient discharge therefor to any
purchaser of the Pledged Collateral, or any portion thereof, Transferred as
aforesaid; and no such purchaser (or the representatives or assigns of such
purchaser), after paying such purchase money and receiving such receipt, shall
be bound to see to the application of such purchase money or any part thereof,
or in any manner whatsoever be answerable for any loss, misapplication or
nonapplication of any such purchase money, or any part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any such
Transfer.
(g) No Transfer of all or any part of the Pledged Collateral by the
Secured Party pursuant to this Agreement shall be deemed to relieve the Pledgor
of its obligations in respect of any Obligations except to the extent the
proceeds thereof are applied by the Secured Party to the payment of such
Obligations.
SECTION 13. Secured Party's Right of Set-off. Pledgor recognizes and
agrees that with respect to any time or other deposit, certificate of deposit or
any other balance of account standing to the credit of Pledgor on the books of
the Secured Party wherever located, the Secured Party has a right of set-off to
the full
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extent permitted by law. Pledgor further agrees that the Secured Party may
exercise such right of set-off at any time when an Event of Default shall occur,
regardless of the stated maturity of any time deposit or other such credit
balance.
SECTION 14. Private Sale. Subject to the restrictions on Transfers of
the Pledged Shares set forth in Section 12(a)(ii) hereof, (a) the Pledgor and
the Secured Party recognize that the Secured Party may be unable to effect a
public sale of any or all the Pledged Shares, by reason of certain prohibitions
contained in the Securities Act, and accordingly that the Secured Party may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the
distribution and resale thereof. The Pledgor acknowledges and agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner, and waives any claims against the Secured Party arising by reason of the
fact that the price at which the Pledged Shares may be sold in a private sale
may be less than the price which might have been obtained in a public sale or
was less than the aggregate amount of the Obligations or the stock exchange
market price of the shares of common stock of Alphanet, even if the Secured
Party accepts the first offer received and does not offer the Pledged Shares to
more than one possible purchaser.
(b) The Pledgor agrees to use its best efforts to do or cause to be
done all such other acts and things as may be necessary to make such sale or
sales of any portion of or all the Pledged Collateral valid and binding and in
compliance
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with any and all applicable laws, regulations, orders, writs, injunctions,
decrees or awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any such sale
or sales, all at the Pledgor's expense.
SECTION 15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 16. Security Interest Absolute. All rights of the Secured Party
and security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Note or any
instrument related thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver under, or any consent to any departure from, the
Note;
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(iii) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of, or consent to
departure from, any guaranty for all or any of the Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third-party
pledgor.
SECTION 17. Amendments. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by Pledgor herefrom, shall in any event
be effective unless the same shall be in writing and signed by the Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 18. Addresses for Notices. All notices and other communications
provided for under this Agreement shall be in writing and shall be addressed as
follows:
If to the Secured Party, at:
PricewaterhouseCoopers, Inc.
145 King Street West
Toronto, Ontario
Canada M5H 1V8
Attention: Mr. Andy Wilczynski
Ph: (416) 815-5091
Fax: (416) 941-8378
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If to the Pledgor, at:
Tech Electro Industries, Inc.
477 Madison Avenue
New York, New York 10022
Attention: Mr. Ian Edwards, V.P.
Ph: (212) 583-0900
Fax: (212) 583-0741
or to such other address as one party may notify the other in writing. Notices
sent by letter or telefax shall be effective upon receipt. Each party shall
confirm by letter any telefax notice to the other party to this Agreement.
SECTION 19. Continuing Security Interest; Transfer of Facility. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until payment in full of the Notes
and all other Obligations then due and owing, (ii) be binding upon the Pledgor,
its successors and assigns, and (iii) inure to the benefit of the Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), upon the prior written consent of the Pledgor, the
Secured Party may assign or otherwise transfer the Note, in whole or in part, to
any other person or entity, and such other person or entity shall thereupon
become vested with all the benefits in respect thereof granted to the Secured
Party herein or otherwise. Upon the payment in full of the Note and all other
Obligations then due and owing, Pledgor shall be entitled to the return, upon
its request and at its
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expense, of such of the Pledged Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof.
SECTION 20. No Waiver; Cumulative Remedies. Each right, power and
remedy herein specifically granted to the Secured Party or otherwise available
to it at law or in equity or otherwise shall be cumulative, and shall be in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing at law, in equity or otherwise; and each right, power and
remedy, whether specifically granted herein or otherwise existing, may be
exercised at any time and from time to time as often and in such order as may be
deemed expedient by the Secured Party in its complete discretion; and the
exercise or commencement of exercise of any right, power or remedy shall not be
construed as a waiver of the right to exercise, at the same time or thereafter,
the same or any other right, power or remedy. No delay or omission by the
Secured Party in exercising any such right or power, or in pursuing any such
remedy, shall impair any such right, power or remedy, or be construed to be a
waiver of any default on the part of the Pledgor or an acquiescence therein. No
waiver by the Secured Party of any breach or default of or by the Pledgor
hereunder shall be deemed to be a waiver of any other similar, previous or
subsequent breach or default.
SECTION 21. Governing Law; Terms. This Agreement shall be governed by
and be construed in accordance with the internal laws of the State of New York.
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IN WITNESS WHEREOF, Pledgor and the Secured Party have each caused this
Pledge Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
TECH ELECTRO INDUSTRIES, INC.
By: /s/ IAN EDMONDS
----------------------------
Name: Ian Edmonds
Title: Vice President
By: /s/ MEEMEE TAN
----------------------------
Name: MeeMee Tan
Title: Corporate Secretary
PRICEWATERHOUSECOOPERS INC.
By: /s/ A. WILCZYNSKI
----------------------------
Name: A. Wilczynski
Title: Senior Vice President
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Schedule 1
Pledged Shares
Ten (10) common shares of the capital stock of AlphaNet Hospitality
Systems, Inc., a Delaware corporation, constituting all of the issued and
outstanding shares of such corporation as of October 21, 1999.
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EXHIBIT A
Promissory Note
