<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Mark One)
[x] Annual Report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1996.
[ ] Transition Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___ to ____.
Commission file number 000-21463
Murdock Communications Corporation
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Iowa 42-1337746
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1112 29th Avenue S.W., Cedar Rapids, Iowa 52404
- ----------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 319-362-6900
------------------
Securities registered pursuant to Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
NA NA
------------------- ------------------------
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, No Par Value
--------------------------
(Title of class)
Redeemable Common Stock Purchase Warrants
-----------------------------------------
(Title of class)
<PAGE> 2
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the Issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
---- ----
Check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the best
of Issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
the Form 10-KSB. [ ]
State the issuer's revenues for its most recent fiscal year. $8,164,602
The aggregate market value of the common stock held by nonaffiliates of
the issuer as of February 28, 1997 was $14,077,039.
On February 28, 1997, there were outstanding 4,152,494 shares of the
issuer's no par value common stock.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of the Shareholders
of the issuer to be held May 28, 1997 are incorporated by reference into Part
III of this report.
Item 13 of Part III of the Annual Report on Form 10-KSB of Murdock
Communications Corporation for the fiscal year ended December 31, 1996, filed
with the Securities and Exchange Commission on March 31, 1997, is hereby
amended in its entirety as follows to reflect the information required by such
item.
PART III
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
EXHIBIT NUMBER DOCUMENT DESCRIPTION
- -------------- --------------------
3.1 Restated Articles of Incorporation of the Company (1)
3.2 Amended and Restated By-Laws of the Company (1)
2
<PAGE> 3
4.1 Form of Warrant Agreement between the Company and Firstar Trust
Company (1)
4.2 Form of Redeemable Warrant (1)
10.1 AT&T Management Company Commission Agreement, dated as of
December 16, 1995, by and between the Company and AT&T
Communications, Inc. ("AT&T") (1) (2)
10.2 Amendment No. 1 to AT&T Management Company Commission
Agreement, dated as of January 16, 1996, by and between the
Company and AT&T (1)
10.3 Amendment No. 2 to AT&T Management Company Commission
Agreement, dated as of January 16, 1996, by and between the
Company and AT&T (1) (2)
10.4 Memorandum of Understanding dated July 5, 1995 regarding the
development of DSP technology (1)
10.5 Technical Evaluation Agreement dated July 18, 1996 regarding
the development of DSP technology (1)
10.6 Credit Agreement dated as of May 31, 1994, by and between the
Company and Berthel Fisher & Company Leasing, Inc. (1)
10.7 Letter Agreement dated September 12, 1995 by and between the
Company and J.C. Poss & Co., Inc. (1)
10.8 Indemnification Agreement, dated as of March 3, 1995, by and
between the Company and Larken, Inc. (1)
10.9 Bi-Party Intelli-Max Billing Agreement, dated as of May 8,
1992, by and between the Company and Intellicall Inc. (1)
10.10 Restructuring Agreement, dated as of December 31, 1994, by and
between the Company and Intellicall, Inc. (1)
10.11 $1,000,000 Preferred Stock Subordinated Note from the Company
to Intellicall, Inc. (1)
10.12 License Agreement dated May 31, 1994 by and between the Company
and Intellicall, Inc. (1)
3
<PAGE> 4
10.13 Account Purchase Agreement dated June 25, 1992, by and between
the Company and OAN Services, Inc. (1)
10.14 Operator Billing and Related Services Agreement, dated May 11,
1992, by and between the Company and OAN Services, Inc. (1)
10.15 1993 Stock Option Plan (1) (3)
10.16 Unit Purchase Warrant to purchase 41,667 Units, dated August 5,
1996, from the Company to George N. McDonald (1)
10.17 Promissory Note in the principal amount of $250,000 dated
August 1, 1996, from the Company to George N. McDonald (1)
10.18 Letter Agreement, dated August 5, 1996, by and between the
Company and George N. McDonald (1)
10.19 Credit Agreement, dated as of May 31, 1994, by and between the
Company and Telecommunications Income Fund X, L.P. (1)
10.20 Credit Agreement, dated as of May 31, 1994, by and between the
Company and Telecommunications Income Fund IX, L.P. (1)
10.21 Lease Agreement for Lease #076-18000-012, dated as of February
27, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.22 Lease Agreement for Lease #074-18000-016, dated as of June 14,
1996, by and between the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications Income Fund IX,
L.P. (1)
10.23 Lease Agreement for Lease #076-18000-017, dated as of July 3,
1996, by and between the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications Income Fund X,
L.P. (1)
10.24 Modification Agreement for 21 Leases, dated as of May 30, 1996,
by and between the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications Income Fund IX,
L.P. (1)
4
<PAGE> 5
10.25 Modification Agreement for Lease #063-17000-001, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. (1)
10.26 Modification Agreement for Lease #076-17000-443, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.27 Modification Agreement for Lease #076-17000-943, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.28 Modification Agreement for Lease #076-18000-012, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.29 Modification Agreement for Lease #076-46698-000, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.30 Equipment Lease #076-17000-443, dated as of May 31, 1994, by
and between the Company and Berthel Fisher & Company Leasing,
Inc. (1)
10.31 Equipment Lease #076-46698-000, dated as of January 18, 1995,
by and between the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications Income Fund X,
L.P. (1)
10.32 Equipment Lease/Purchase Agreement #063-18000-000, dated as of
May 30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. (1)
10.33 Assignment of Lease of Security Agreement, dated as of May 31,
1994, from Berthel Fisher & Company Leasing, Inc. to
Telecommunications Income Fund X, L.P. (1)
5
<PAGE> 6
10.34 Demand Note for $50,000, dated as of December 26, 1995, between
the Company and Berthel Fisher & Company Leasing, Inc. (1)
10.35 Demand Note for $200,000, dated as of January 25, 1996, by and
between the Company and Berthel Fisher & Company Leasing, Inc.
(1)
10.36 Demand Note for $200,000, dated as of January 31, 1996, by and
between the Company and Berthel Fisher & Company Leasing, Inc.
(1)
10.37 Demand Note for $100,000, dated as of February 27, 1996, by and
between the Company and Berthel Fisher & Company Leasing, Inc.
(1)
10.38 Equipment Lease, dated as of August 16, 1995, by and between
the Company and Harvey Leasing. (1)
10.39 Lease Agreement for Lease #074-18000-004, dated as of November
30, 1995, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund IX, L.P. (1)
10.40 Lease Agreement for Lease #074-18000-005, dated as of November
30, 1995, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund IX, L.P. (1)
10.41 Lease Agreement for Lease #074-18000-006, dated as of November
30, 1996, by and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for Telecommunications Income
Fund IX, L.P. (1)
10.42 Employment Agreement, dated as of August 16, 1996, by and
between the Company and Guy O. Murdock. (1) (3)
10.43 Employment Agreement, dated as of August 16, 1996, by and
between the Company and Colin P. Halford. (1) (3)
10.44 Employment Agreement, dated as of August 16, 1996, by and
between the Company and David F. Schultz. (1) (3)
6
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10.45 Employment Agreement, dated as of August 16, 1996, by and
between the Company and Bill R. Wharton. (1) (3)
10.46 Amendment No. 3 to AT&T Management Company Commission
Agreement, executed on December 13, 1996, by and between AT&T
and the Company (4)
10.47 Asset Purchase Agreement, dated December 13, 1996, by and
between the Company and Interactive Communications, Inc.
24 Power of Attorney (included as part of the signature page
hereof)
27 Financial Data Schedule (4)
- ------------------
(1) Filed as an exhibit to the Company's Registration Statement on Form SB-2
(File No. 333-05422C) and incorporated herein by reference.
(2) Portions of these exhibits were granted confidential treatment by the
Securities and Exchange Commission by order dated October 21, 1996.
(3) Management contract or compensation plan required to be filed as an
exhibit to this annual report on Form 10-KSB.
(4) Previously filed as an exhibit to the Company's annual report on Form
10-KSB filed with the Securities and Exchange Commission on March 31,
1997.
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K for the three months
ended December 31, 1996.
7
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Form 10-KSB/A to be
signed on its behalf by the undersigned, thereunto duly authorized.
MURDOCK COMMUNICATIONS CORPORATION
By /s/ Guy O. Murdock
-----------------------------------
Guy O. Murdock
Chairman of the Board
Date: April 23, 1997
Each person whose signature appears below hereby appoints Guy O. Murdock
and David F. Schultz, and each of them individually, his true and lawful
attorney-in-fact, with power to act with or without the other and with full
power of substitution and resubstitution, in any and all capacities, to sign
any or all amendments to the Form 10-KSB and file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-KSB/A has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated
/s/ Guy O. Murdock Chairman of the Board and Director
- ------------------ (Principal Executive Officer) April 23, 1997
Guy O. Murdock
/s/ Thomas E. Chaplin Chief Executive Officer and Director April 23, 1997
- ---------------------
Thomas E. Chaplin
/s/ Colin P. Halford President and Director April 23, 1997
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Colin P. Halford
8
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/s/ David F. Schultz Chief Financial Officer and Secretary April 23, 1997
- -------------------- (Principal Financial Officer and
David F. Schultz Principal Accounting Officer)
/s/ John C. Poss Director April 23, 1997
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John C. Poss
/s/ Steven R. Ehlert Director April 23, 1997
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Steven R. Ehlert
9
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EXHIBIT INDEX
SEQUENTIAL PAGE
EXHIBIT NUMBER DOCUMENT DESCRIPTION NUMBER
- -------------- ----------------------------------------------- ---------------
3.1 Restated Articles of Incorporation of the
Company (1)
3.2 Amended and Restated By-Laws of the Company (1)
4.1 Form of Warrant Agreement between the Company
and Firstar Trust Company (1)
4.2 Form of Redeemable Warrant (1)
10.1 AT&T Management Company Commission Agreement,
dated as of December 16, 1995, by and between
the Company and AT&T Communications, Inc.
("AT&T") (1) (2)
10.2 Amendment No. 1 to AT&T Management Company
Commission Agreement, dated as of January 16,
1996, by and between the Company and AT&T (1)
10.3 Amendment No. 2 to AT&T Management Company
Commission Agreement, dated as of January 16,
1996, by and between the Company and AT&T (1)
(2)
10.4 Memorandum of Understanding dated July 5, 1995
regarding the development of DSP technology
(1)
10.5 Technical Evaluation Agreement dated July 18,
1996 regarding the development of DSP
technology (1)
10.6 Credit Agreement dated as of May 31, 1994, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. (1)
10.7 Letter Agreement dated September 12, 1995 by
and between the Company and J.C. Poss & Co.,
Inc. (1)
10.8 Indemnification Agreement, dated as of March
3, 1995, by and between the Company and
Larken, Inc. (1)
<PAGE> 11
10.9 Bi-Party Intelli-Max Billing Agreement, dated
as of May 8, 1992, by and between the Company
and Intellicall Inc. (1)
10.10 Restructuring Agreement, dated as of December
31, 1994, by and between the Company and
Intellicall, Inc. (1)
10.11 $1,000,000 Preferred Stock Subordinated Note
from the Company to Intellicall, Inc. (1)
10.12 License Agreement dated May 31, 1994 by and
between the Company and Intellicall, Inc. (1)
10.13 Account Purchase Agreement dated June 25,
1992, by and between the Company and OAN
Services, Inc. (1)
10.14 Operator Billing and Related Services
Agreement, dated May 11, 1992, by and between
the Company and OAN Services, Inc. (1)
10.15 1993 Stock Option Plan (1) (3)
10.16 Unit Purchase Warrant to purchase 41,667
Units, dated August 5, 1996, from the Company
to George N. McDonald (1)
10.17 Promissory Note in the principal amount of
$250,000 dated August 1, 1996, from the
Company to George N. McDonald (1)
10.18 Letter Agreement, dated August 5, 1996, by and
between the Company and George N. McDonald (1)
10.19 Credit Agreement, dated as of May 31, 1994, by
and between the Company and Telecommunications
Income Fund X, L.P. (1)
10.20 Credit Agreement, dated as of May 31, 1994, by
and between the Company and Telecommunications
Income Fund IX, L.P. (1)
10.21 Lease Agreement for Lease #076-18000-012,
dated as of February 27, 1996, by and between
the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications
Income Fund X, L.P. (1)
ii
<PAGE> 12
10.22 Lease Agreement for Lease #074-18000-016,
dated as of June 14, 1996, by and between the
Company and Berthel Fisher & Company Leasing,
Inc. as agent for Telecommunications Income
Fund IX, L.P. (1)
10.23 Lease Agreement for Lease #076-18000-017,
dated as of July 3, 1996, by and between the
Company and Berthel Fisher & Company Leasing,
Inc. as agent for Telecommunications Income
Fund X, L.P. (1)
10.24 Modification Agreement for 21 Leases, dated as
of May 30, 1996, by and between the Company
and Berthel Fisher & Company Leasing, Inc. as
agent for Telecommunications Income Fund IX,
L.P. (1)
10.25 Modification Agreement for Lease
#063-17000-001, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. (1)
10.26 Modification Agreement for Lease
#076-17000-443, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for
Telecommunications Income Fund X, L.P. (1)
10.27 Modification Agreement for Lease
#076-17000-943, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for
Telecommunications Income Fund X, L.P. (1)
10.28 Modification Agreement for Lease
#076-18000-012, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for
Telecommunications Income Fund X, L.P. (1)
10.29 Modification Agreement for Lease
#076-46698-000, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. as agent for
Telecommunications Income Fund X, L.P. (1)
10.30 Equipment Lease #076-17000-443, dated as of
May 31, 1994, by and between the Company and
Berthel Fisher & Company Leasing, Inc. (1)
iii
<PAGE> 13
10.31 Equipment Lease #076-46698-000, dated as of
January 18, 1995, by and between the Company
and Berthel Fisher & Company Leasing, Inc. as
agent for Telecommunications Income Fund X,
L.P. (1)
10.32 Equipment Lease/Purchase Agreement
#063-18000-000, dated as of May 30, 1996, by
and between the Company and Berthel Fisher &
Company Leasing, Inc. (1)
10.33 Assignment of Lease of Security Agreement,
dated as of May 31, 1994, from Berthel Fisher
& Company Leasing, Inc. to Telecommunications
Income Fund X, L.P. (1)
10.34 Demand Note for $50,000, dated as of December
26, 1995, between the Company and Berthel
Fisher & Company Leasing, Inc. (1)
10.35 Demand Note for $200,000, dated as of January
25, 1996, by and between the Company and
Berthel Fisher & Company Leasing, Inc. (1)
10.36 Demand Note for $200,000, dated as of January
31, 1996, by and between the Company and
Berthel Fisher & Company Leasing, Inc. (1)
10.37 Demand Note for $100,000, dated as of February
27, 1996, by and between the Company and
Berthel Fisher & Company Leasing, Inc. (1)
10.38 Equipment Lease, dated as of August 16, 1995,
by and between the Company and Harvey Leasing.
(1)
10.39 Lease Agreement for Lease #074-18000-004,
dated as of November 30, 1995, by and between
the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications
Income Fund IX, L.P. (1)
10.40 Lease Agreement for Lease #074-18000-005,
dated as of November 30, 1995, by and between
the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications
Income Fund IX, L.P. (1)
iv
<PAGE> 14
10.41 Lease Agreement for Lease #074-18000-006,
dated as of November 30, 1996, by and between
the Company and Berthel Fisher & Company
Leasing, Inc. as agent for Telecommunications
Income Fund IX, L.P. (1)
10.42 Employment Agreement, dated as of August 16,
1996, by and between the Company and Guy O.
Murdock. (1) (3)
10.43 Employment Agreement, dated as of August 16,
1996, by and between the Company and Colin P.
Halford. (1) (3)
10.44 Employment Agreement, dated as of August 16,
1996, by and between the Company and David F.
Schultz. (1) (3)
10.45 Employment Agreement, dated as of August 16,
1996, by and between the Company and Bill R.
Wharton. (1) (3)
10.46 Amendment No. 3 to AT&T Management Company
Commission Agreement, executed on December 13,
1996, by and between the Company and AT&T (4)
10.47 Asset Purchase Agreement, dated December 13,
1996, by and between the Company and
Interactive Communications Inc.
24 Power of Attorney (included as part of the
signature page hereof)
27 Financial Data Schedule (4)
- -----------
(1) Filed as an exhibit to the Company's Registration Statement on Form SB-2
(File No. 333-05422C) and incorporated herein by reference.
(2) Portions of these exhibits were granted confidential treatment by the
Securities and Exchange Commission by order dated October 21, 1996.
(3) Management contract or compensation plan required to be filed as an
exhibit to this annual report on Form 10-KSB.
v
<PAGE> 15
(4) Previously filed as an exhibit to the Company's annual report on Form
10-KSB filed with the Securities and Exchange Commission on March 31,
1997.
vi
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EXHIBIT 10.47
ASSET PURCHASE AGREEMENT
Date: December 13, 1996
Parties: Interactive Communications Inc. ("ICI" or "Seller")
7502 Greenville Ave.
Suite 300
Dallas, Texas 75231
Murdock Communications Corporation ("MCC" or "Buyer")
1112 29th Ave. S.W.
Cedar Rapids, IA 52404
Subject of Agreement:
Seller desires to sell, convey, assign, transfer and deliver the Purchased
Assets (as defined in this agreement) and to assign, convey and transfer the
Assigned Assets (as defined in this agreement) to the Purchaser and the
Purchaser desires to acquire and accept the Purchased Assets and the Assigned
Assets, upon and subject to the terms and conditions set forth in this
Agreement.
The Parties agree as follows:
1. Sale, Purchase and Assignment
1.1. Subject to terms and conditions of this Agreement, the Seller
shall sell, convey, assign, transfer and deliver to the Purchaser
the following assets (the "Purchased Assets"):
1.1.1. all rights and interest of the Seller in the Interactive
Voice Response Hardware ("IVR Hardware") owned by the Seller
which are identified in Schedule 1.1.1.
1.2. Subject to terms and conditions of this Agreement, the Seller
shall assign, transfer and deliver to the Purchaser the following
assets (the "Assigned Assets"):
1.2.1. all rights and interests of the Seller in the telephone
lines connected to IVR Hardware, which are identified in
Schedule 1.2.1;
1.2.2. all rights and interests of the Seller in the telephone
numbers assigned to the telephone lines described in 1.2.1.
above;
<PAGE> 2
1.2.3. all rights and interests of the Seller in the office lease
space in which the IVR Hardware are located, which are
identified in Schedule 1.2.3.
1.3. Subject to the terms and conditions of this Agreement, in
consideration of the sale, conveyance, assignment, transfer and
delivery of the Purchased Assets and the Assigned Assets, at
closing, the Purchaser shall deliver to the Seller the executed
"Audiotext Services Agreement" attached hereto as Exhibit A and a
payment in cash in an amount equal to $299,145.26, paid at closing.
1.4. The Purchaser is assuming no liabilities of the Seller,
provided however, that the Purchaser agrees to reimburse the Seller
for all outstanding telephone and lease costs incurred by the Seller
prior to the date that the costs are assumed by the Purchaser if not
paid by the Purchaser at closing.
1.5. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the
Purchaser on December 10, 1996.
1.6. At the Closing the Seller shall deliver, or cause to be
delivered, to the Purchaser each of the following:
1.6.1. a counterpart of the Assignment and Assumption Agreement,
duly executed by the Seller, attached hereto as Exhibit A;
1.6.2. the certificate described in Section 2.1.3;
1.6.3. all documents reasonably requested by the Purchaser
relating to the existence of the Seller and the authority of
the Seller, all in form and substance reasonably satisfactory
to the Purchaser.
1.7. At the Closing the Purchaser shall deliver to the Seller each
of the following:
1.7.1. a counterpart of the Assignment and Assumption Agreement,
duly executed by the Purchaser, attached hereto as Exhibit A;
1.7.2. immediately available funds in an amount equal to
$299,145.26;
1.7.3. the certificate described in Section 2.2.3;
1.7.4. all documents reasonably requested by the Seller relating
to the existence of the Purchaser and the authority of the
Purchaser, all in form and substance reasonably satisfactory
to the Seller.
2
<PAGE> 3
1.8. The Seller agrees that from time to time after the Closing it
shall execute, deliver, acknowledge, file and record such further
bills of sale, general conveyances, endorsements, assignments and
other instruments of sale, conveyance, assignment, transfer and
delivery as the Purchaser shall reasonably request in order to
complete and perfect the sale, conveyance, assignment, transfer and
livery of the Purchased Assets and Assigned Assets upon the terms
and conditions described in this Agreement.
2. Conditions to Closing
2.1. The obligations of the Seller to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment,
prior to or concurrently with the Closing, of the following
conditions (any one or more of which may be waived, in whole or
part, by the Seller):
2.1.1. The representations and warranties of the Purchaser
contained in this Agreement shall be true and correct as of
the Closing;
2.1.2. The Purchaser shall have performed and complied with all
provisions, covenants and conditions contained in this
Agreement which are required to be performed or complied with
by it prior to or at Closing; and
2.1.3. The Purchaser shall have delivered to the Seller an
officer's certificate, dated as of the Closing, to the effect
that the conditions specified in Sections 2.1.1. and 2.1.2.
have been fulfilled.
2.2 The obligations of the Purchaser to consummate the transactions
contemplated by this Agreement shall be Subject to the fulfillment,
prior to or concurrently with the Closing, of the following
conditions (any one or more of which may be waived, in whole or part,
by the Purchaser):
2.2.1. The representations and warranties of the Seller contained
in this Agreement shall be true and correct as of the
Closing;
2.2.2. The Seller shall have performed and complied with all
provisions, covenants and conditions contained in this
Agreement which are required to be performed or complied with
by it prior to or at Closing; and
2.2.3. The Seller shall have delivered to the Purchaser an
officer's certificate, dated as of the Closing, to the effect
that the conditions specified in Sections 2.2.1. and 2.2.2.
have been fulfilled.
3
<PAGE> 4
2.3. Representations and Warranties of the Seller:
2.3.1. Organization and Qualification. The Seller is a corporation
duly incorporated, validly existing and in good standing
under the laws of the State of Louisiana and has all
corporate power and authority necessary to own and operate
the assets included in the Purchased Assets and to carry on
the portion of its business relating to the Purchased Assets.
The Seller is duly qualified and in good standing as a
foreign corporation authorized to do business in each
jurisdiction in which the nature of its activities in
connection with the Purchased Assets makes such qualification
necessary.
2.3.2. Authority: Binding Effect. The Seller has all necessary
corporate power and authority to enter into and perform its
obligations under this Agreement and the Assignment and
Assumption Agreement and to consummate the transactions
contemplated in the agreements. The execution and delivery
by the Seller of this Agreement and the Assignment and
Assumption Agreement, the performance by it of its
obligations hereunder and thereunder and the consummation by
it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate
action on the part of the Seller. Each of this Agreement
and the Assignment and Assumption Agreement to which the
Seller is a party has been duly executed and delivered by the
Seller and constitutes a legal, valid and binding agreement
of the Seller, enforceable against it in accordance with the
terms hereof and thereof.
2.3.3 Absence of Conflicts. The execution and delivery by the Seller
of this Agreement and the Assignment and Assumption Agreement,
the performance by it of its obligations hereunder and
thereunder and the consummation by it of the transactions
contemplated hereby and thereby will not (I) conflict with, or
result in any violation or breach of, any provision of the
Charter or Bylaws of the Seller, (ii) result in any violation
or breach of, constitute a default under, give rise to any
right of termination or acceleration (with or without notice
or the lapse of time or both) pursuant to any term or
provision of any note, bond, mortgage, indenture, lease,
franchise, permit, license, contract, agreement or other
instrument or document to which the Seller is a party or by
which the Seller or its assets are or may be bound which
affects the portion of the business relating to the Purchased
Assets, or (iii) conflict with, or result in any violation of,
any law, ordinance, statute, rule or regulation of any
Governmental Authority or of any order, writ, injunction,
judgment or decree of any court, arbitrator or Governmental
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Authority applicable to the portion of its business relating
to the Purchased Assets.
2.3.4. Governmental Authorizations and Filings. There is no
requirement applicable to the Seller to obtain any consent,
approval or authorization of, or to make or effect any
declaration, filing or registration with, any Governmental
Authority for the valid execution and delivery by the Seller
of this Agreement or the Assignment and Assumption Agreement,
the due performance by it of its obligations hereunder and
thereunder or the lawful consummation by it of the
transactions contemplated hereby or thereby.
2.3.5. Litigation. There is no action, suit, inquire, investigation
or other proceeding pending or threatened against or affecting
the Seller or its properties or assets in any court or before
any arbitrator or any foreign or United States federal, state
or local Governmental Authority which (I) if adversely
determined, would have a material adverse effect on the
business proposed to be conducted by the Purchaser through the
Purchased Assets or (ii) draws into question the validity of
this Agreement or the Assignment and Assumption Agreement or
seeks to enjoin or prevent the consummation of the transaction
contemplated hereby and thereby.
2.3.6. Compliance with Laws and Other Requirements. The Seller is
not in breach or violation of, or default under, any term or
provision of any lease or contract or agreement included in
the Purchased Assets or of any law, ordinance, statute, rule
or regulation of any Governmental Authority applicable to the
portion of its business relating to the Purchased Assets
(including, but not limited to, the Communications Act,
TOCSIA or any statute, rule or regulation of any
Telecommunications Authority), except for any violation or
default which would not have a material adverse effect on the
business proposed to be conducted by the Purchaser through
the Purchased Assets.
2.3.7. Brokers' or Finders' Fees. The Seller has not authorized
any Person to act as a broker or finder or in any similar
capacity in connection with this Agreement or the Assignment
and Assumption Agreement or any of the transactions
contemplated hereby or thereby in such a manner as to give
rise to a valid claim against the Purchaser for any brokers'
or finders' fees or similar fees or expenses.
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2.4. Representations and Warranties of the Purchaser:
2.4.1. Organization and Qualification. The Purchaser is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of lowa and has all
corporate power and authority necessary to own and operate
the assets included in the Purchased Assets and to carry on
the portion of its business relating to the Purchased Assets.
The Purchaser is duly qualified and in good standing as a
foreign corporation authorized to do business in each
jurisdiction in which the nature of its activities in
connection with the Purchased Assets makes such qualification
necessary.
2.4.2. Authority: Binding Effect. The Purchaser has all necessary
corporate power and authority to enter into and perform its
obligations under this Agreement and the Assignment and
Assumption Agreement and to consummate the transactions
contemplated in the agreements. The execution and delivery
by the Purchaser of this Agreement and the Assignment and
Assumption Agreement, the performance by it of its
obligations hereunder and thereunder and the consummation by
it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate
action on the part of the Purchaser. Each of the this
Agreement and the Assignment and Assumption Agreement to
which the Purchaser is a party has been duly executed and
delivered by the Purchaser and constitutes a legal, valid and
binding agreement of the Purchaser, enforceable against it in
accordance with the terms hereof and thereof.
2.4.3. Absence of Conflicts. The execution and delivery by the
Purchaser of this Agreement and the Assignment and Assumption
Agreement, the performance by it of its obligations hereunder
and thereunder and the consummation by it of the transactions
contemplated hereby and thereby will not (I) conflict with, or
result in any violation or breach of, any provision of the
Charter or Bylaws of the Purchaser, (ii) result in any
violation or breach of, constitute a default under, give rise
to any right of termination or acceleration (with or without
notice or the lapse of time or both) pursuant to any term or
provision of any note, bond, mortgage, indenture, lease,
franchise, permit, license, contract, agreement or other
instrument or document to which the Purchaser is a party or by
which the Purchaser or its assets are or may be bound which
affects the portion of the business relating to the Purchased
Assets, or (iii) conflict with, or result in any violation of,
any law, ordinance, statute, rule or regulation of any
Governmental Authority or of any order, writ, injunction,
judgment or decree of any court, arbitrator
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or Governmental Authority applicable to the portion of its
business relating to the Purchased Assets.
2.4.4. Governmental Authorization and Filings. There is no
requirement applicable to the Purchaser to obtain any
consent, approval or authorization of, or to make or effect
any declaration, filing or registration with, any
Governmental Authority for the valid execution and delivery
by the Purchaser of this Agreement or the Assignment and
Assumption Agreement, the due performance by it of its
obligations hereunder and thereunder or the lawful
consummation by it of the transactions contemplated hereby or
thereby.
2.4.5. Brokers' or Finders' Fees. The Purchaser has not authorized
any Person to act as a broker or finder or in any similar
capacity in connection with this Agreement or the Assignment
and Assumption Agreement or any of the transactions
contemplated hereby or thereby in such a manner as to give
rise to a valid claim against the Seller for any brokers' or
finders' fees or similar fees or expenses.
2.5. Covenant Not to Compete
2.5.1. The Seller hereby agrees that, for a period of three years
from and after the Closing, it will not engage, directly or
indirectly through one or more of its affiliates, in the
business of owning or leasing or operating IVR hardware or
other substantially similar telecommunications devices in
hotels.
2.6 Indemnification
2.6.1. Indemnification by the Seller. The Seller hereby agrees to
indemnify and hold harmless each of the Purchaser and its
Affiliates, directors, officers, shareholders, employees,
agents, and other representatives forma and against any and
all demands, claims, actions, causes of action, proceedings,
assessments, losses, damages, liabilities, settlements,
judgments, fines, penalties, interest, costs and expenses
(including fees and disbursements of counsel) which arise from
or relate to a breach or alleged breach by the Seller of any
of its representations, warranties, covenants or agreements
contained in this Agreement or the Assignment and Assumption
Agreement, whether or not such breach or alleged breach gives
rise to a claim by a third party. The rights to
indemnification afforded to the Purchaser hereunder shall
survive Closing and any investigation made at any time by or
on behalf of the Purchaser in connection
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with this Agreement or any of the transactions contemplated
hereby for a period of two years.
2.6.2. Indemnification by the Purchaser. The Purchaser hereby
agrees to indemnify and hold harmless each of the Seller and
its Affiliates, directors, officers, shareholders, employees,
agents and other representatives forma and against any and
all demands, claims. actions, causes of action, proceedings,
assessments, losses, damages, liabilities, settlements.
judgments, fines, penalties, interest, costs and expenses
(including fees and disbursements of counsel) which arise
from or relate to a breach or alleged breach by the Purchaser
of any of its representations, warranties, covenants or
agreements contained in this Agreement or the Assignment and
Assumption Agreement, whether or not such breach or alleged
breach gives rise to a claim by a third party. The rights to
indemnification afforded to the Seller hereunder shall
survive Closing and any investigation made at any time by or
on behalf of the Seller in connection with this Agreement or
any of the transactions contemplated hereby for a period of
two years.
Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be
given by delivery in person, by the United States mail (first
class with postage prepaid thereon) or by cable, telex or
facsimile transmission to the parties at the following
addresses (or such other address as any party shall have
furnished to the other in accordance with the terms of this
Section 2.7):
If to Seller: Interactive Communications, Inc.
P.O. Box 4032
Monroe, LA 7121l-4032
Attention: Paul Eason
If to Purchaser: Murdock Communications Corporation
1112 29th Ave. S.W.
Cedar Rapids, IA 52404
Attention: Dave Schultz
2.7. Entire Agreement. This Agreement (including Schedules hereto),
together with the Assignment and Assumption Agreement, constitutes
the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
whether written or
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oral, between the parties with respect to the subject matter hereof.
All Schedules hereto are expressly made a part of this Agreement.
2.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Sate of Iowa, without
regard to the principles of conflicts of laws, except to the extent
that mandatory principles of conflicts of law required the
application of laws of another jurisdiction wherein any of the
Purchased Assets are located to determine the validity or effect of
the sale, conveyance, transfer, assignment and delivery thereof upon
the terms and conditions set forth in this Agreement.
2.9. 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
Seller:
Interactive Communications, Inc.
By: /s/ Jackson B. Doege
Name: Jackson B. Doege
Title: Vice President
Purchaser:
Murdock, Remmers & Associates, Inc.
By: /s/ Guy O. Murdock
Name: Guy O. Murdock
Title: Chief Executive Officer
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