SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
FEBRUARY 27, 1998
------------------------------------------------
Date of Report (date of earliest event reported)
INTRATEL GROUP, LTD.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-853963 72-1265159
- --------------- ------------ ----------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification Number)
Incorporation)
28050 U.S. HIGHWAY 19 NORTH
CLEARWATER, FLORIDA 34621
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(Address of Principal Executive Offices
Including Zip Code)
(813) 797-9000
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(Registrant's telephone number,
including area code)
Page 1 of 52.
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Item 1. Changes in Control of Registrant
--------------------------------
N/A
Item 2. Acquisition or Disposition of Assets
------------------------------------
On February 27, 1998, the Registrant entered into an
Agreement and Plan of Merger ("Agreement") with North America
Telephone Network, L.L.C., a Georgia limited liability company
("NATN") and each of the individual members of NATN ("Members").
The Agreement provides for NATN to merge with a wholly-owned
subsidiary of the Registrant and each of the individual members
of NATN to receive cash for their interests in NATN. After the
merger, the separate existence of NATN will cease.
NATN is a reseller of long distance and other
telecommunications services. NATN is based in Atlanta, Georgia
and provides service to residential and small business customers
across the Unites States.
The Agreement provides for the payment of approximately
$42.0 million, including approximately $22.0 million due at
Closing and quarterly contingent payment totaling up to $20.0
million based upon NATN achieving specified revenue and earnings
targets during the twelve-month period following the Closing.
The Agreement also provides that the Registrant may either pay
each quarterly contingent payment as it is earned or secure each
such quarterly contingent payments with a letter of credit. The
Agreement further provides that the Registrant will offer to
elect an NATN member to its Board of Directors.
The Agreement and Closing are subject to the Registrant
obtaining necessary regulatory approvals and satisfactory
financing. There can be no assurance that the Registrant will be
successful in satisfying these conditions.
The Agreement contains numerous representations, warranties
and covenants by both parties. A complete description of all
warranties, representations and covenants are set forth in the
Agreement included as an Exhibit to this Report.
Item 3. Bankruptcy or Receivership
--------------------------
N/A
Item 4. Changes in Registrant's Certifying Accountants
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N/A
Item 5. Material Events
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N/A
-2-
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Item 6. Resignations of Registrant's Directors
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N/A
Item 7. Financial Statements and Exhibits
---------------------------------
(a) and (b) The pro forma financial information and audited
financial statements required by this Item will
be filed as an amendment to this Report no later
than sixty (60) days from the date of this
Report.
(c) Exhibits: Filed herewith pursuant to Reg. S-K Item 601
is the following exhibit.
Exhibit No. Page Description
- ----------- ---- -----------
10.12 5 Agreement and Plan of Merger dated February 27,
1998 between the Registrant and NATN.
-3-
<PAGE>
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.
INTRATEL GROUP, LTD.
Dated: March 9, 1998 By: /s/ MURRAY L. SWANSON
-------------------------------
Murray L. Swanson
Director
-4-
EXHIBIT 10.12
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTRATEL GROUP, LTD.,
INTRATEL ACQUISITION CORP.
NORTH AMERICAN TELEPHONE NETWORK, L.L.C.,
NATIONAL SERVICE DIRECT, INC.
AND
EACH OF THE MEMBERS OF
NORTH AMERICAN TELEPHONE NETWORK, L.L.C.
February 27, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
THE BUSINESS COMBINATION . . . . . . . . . . . .1
1.1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 EFFECTIVE TIME OF THE MERGER. . . . . . . . . . . . . . . . .1
1.3 EFFECT OF THE MERGER. . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2
CONVERSION OF MEMBERSHIP INTERESTS; MERGER
CONSIDERATION; ADDITIONAL ACTIONS. . . . . . . . . .2
2.1 CONVERSION OF NATN MEMBERSHIP INTERESTS . . . . . . . . . . .2
2.2 MERGER CONSIDERATION. . . . . . . . . . . . . . . . . . . . .2
2.3 CALCULATION OF CONTINGENT PAYMENT . . . . . . . . . . . . . .2
2.4 DETERMINATION OF CONTINGENT PAYMENT . . . . . . . . . . . . .4
2.5 SECURITY FOR CONTINGENT PAYMENT; PAYMENT OF
CONTINGENT PAYMENT. . . . . . . . . . . . . . . . . . . . . .5
2.6 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 3
CERTIFICATE OF INCORPORATION, BYLAWS,
BOARD DIRECTORS AND OFFICERS . . . . . . . . . . .5
3.1 CERTIFICATE OF INCORPORATION; BYLAWS. . . . . . . . . . . . .5
3.2 DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . . .6
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NATN. . . . . . . . .6
4.1 ORGANIZATION AND QUALIFICATION, ETC . . . . . . . . . . . . .6
4.2 AUTHORIZATION, ETC. . . . . . . . . . . . . . . . . . . . . .6
4.3 NATN MEMBERSHIP INTERESTS . . . . . . . . . . . . . . . . . .6
4.4 NON-CONTRAVENTION . . . . . . . . . . . . . . . . . . . . . .6
4.5 GOVERNMENTAL AND OTHER CONSENTS . . . . . . . . . . . . . . .7
4.6 NO SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . .7
4.7 FINANCIAL STATEMENTS OF NATN. . . . . . . . . . . . . . . . .7
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. . . . . . . . . . . . .7
4.9 GOVERNMENTAL AUTHORIZATION AND COMPLIANCE WITH LAWS . . . . .8
4.10 ABSENCE OF UNDISCLOSED LIABILITIES AND OBLIGATIONS. . . . . .9
4.11 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . .9
4.12 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES, ETC 10
4.13 ADEQUACY; CONDITION . . . . . . . . . . . . . . . . . . . . 11
4.14 MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . 11
4.15 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . 12
4.16 LABOR CONTROVERSIES . . . . . . . . . . . . . . . . . . . . 12
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4.17 INSIDER INTERESTS . . . . . . . . . . . . . . . . . . . . . 12
4.18 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . 12
4.19 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.20 BENEFIT PLANS . . . . . . . . . . . . . . . . . . . . . . . 13
4.21 BANK ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 16
4.22 DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . . 16
4.23 ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS . . . . . 16
ARTICLE 5
REPRESENTATIONS WARRANTIES OF THE MEMBERS. . . . . . . 16
5.1 AUTHORIZATION, ETC. . . . . . . . . . . . . . . . . . . . . 16
5.2 NON-CONTRAVENTION . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6
REPRESENTATIONS WARRANTIES OF INTRATEL AND SUBCORP. . . . . 17
6.1 ORGANIZATION AND QUALIFICATION, ETC . . . . . . . . . . . . 17
6.2 AUTHORIZATION, ETC. . . . . . . . . . . . . . . . . . . . . 17
6.3 NON-CONTRAVENTION . . . . . . . . . . . . . . . . . . . . . 17
6.4 CONSENTS, ETC . . . . . . . . . . . . . . . . . . . . . . . 17
6.5 PERIODIC REPORTS. . . . . . . . . . . . . . . . . . . . . . 18
6.6 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . 18
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. . . . . . . . . . . . 18
6.8 ABSENCE OF UNDISCLOSED LIABILITIES AND OBLIGATIONS. . . . . 18
6.9 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . 18
6.10 ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS . . . . . 19
ARTICLE 7
ADDITIONAL COVENANTS AND AGREEMENTS . . . . . . . . 19
7.1 CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . 19
7.2 HSR ACT FILINGS . . . . . . . . . . . . . . . . . . . . . . 21
7.3 FCC AND STATE PUBLIC UTILITY COMMISSION APPROVALS . . . . . 21
7.4 OTHER CONSENTS, AUTHORIZATIONS, ETC . . . . . . . . . . . . 21
7.5 INVESTIGATION; CONFIDENTIALITY. . . . . . . . . . . . . . . 22
7.6 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.7 NO SOLICITATION OF TRANSACTIONS; EXTENSION FEE. . . . . . . 23
7.8 PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.9 JOINT VENTURE BETWEEN THE SURVIVING CORPORATION AND NSDI. . 24
7.10 CERTAIN OBLIGATIONS OF INTRATEL AND THE SURVIVING
CORPORATION FOLLOWING THE EFFECTIVE TIME. . . . . . . . . . 25
7.11 ELECTION OF JAMES K. NOBLE, JR. AS DIRECTOR OF INTRATEL . . 25
7.12 FUNDS TO PAY MEMBER LOANS . . . . . . . . . . . . . . . . . 25
7.13 PURCHASE OF CALL CENTER COMPANIES . . . . . . . . . . . . . 26
7.14 ACTIONS TO AVOID, AND NOTICES OF, BREACHES OF
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . 26
7.15 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . 26
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ARTICLE 8
CONDITIONS TO THE MERGER . . . . . . . . . . . 26
8.1 CONDITIONS TO MERGER RELATING TO ALL PARTIES. . . . . . . . 26
8.2 CONDITIONS TO MERGER RELATING TO INTRATEL AND SUBCORP . . . 27
8.3 CONDITIONS TO THE MERGER RELATING TO NATN . . . . . . . . . 28
8.4 WAIVER OF CONDITIONS. . . . . . . . . . . . . . . . . . . . 29
ARTICLE 9
CLOSING . . . . . . . . . . . . . . . 30
9.1 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY NATN. . . . . . 30
9.3 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY INTRATEL
AND SUBCORP . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 10
TERMINATION AND ABANDONMENT . . . . . . . . . . 32
10.1 TERMINATION AND ABANDONMENT . . . . . . . . . . . . . . . . 32
10.2 PROCEDURE FOR TERMINATION . . . . . . . . . . . . . . . . . 32
10.3 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . 32
ARTICLE 11
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNITIES . . . . . . . . . . . 33
11.1 SURVIVAL. . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.2 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 33
11.3 LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . 34
11.4 NOTICE OF LOSS OR ASSERTED LIABILITY. . . . . . . . . . . . 35
11.5 OPPORTUNITY TO CONTEST. . . . . . . . . . . . . . . . . . . 35
11.6 SUBROGATION RIGHTS. . . . . . . . . . . . . . . . . . . . . 36
11.7 INDEMNIFICATION PAYMENTS. . . . . . . . . . . . . . . . . . 36
ARTICLE 12
MISCELLANEOUS. . . . . . . . . . . . . . 36
12.1 KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.2 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.3 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.4 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.5 NO BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . 38
12.6 COUNTERPARTS; FACSIMILE DELIVERY. . . . . . . . . . . . . . 39
12.7 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.8 VARIATION AND AMENDMENT . . . . . . . . . . . . . . . . . . 39
12.9 SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 39
12.11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 39
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SCHEDULES TO AGREEMENT
Schedules
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2.2(a) List of Members and NATN Membership Interests Owned
4.1 Jurisdictions Where NATN is Qualified
4.4 Violations by NATN
4.5 Consents (NATN)
4.6 Information Regarding Certain Investments
4.8 Changes or Events
4.9 Non-Compliance
4.11 Tax Matters
4.12 Exceptions to Title
4.13 Adequacy and Condition of Assets
4.14(a) Employment Agreements
4.14(b) Material Contracts
4.15 Litigation
4.17 Insider Interests
4.18 Intellectual Property
4.19 Insurance
4.20 Benefit Plans
4.21 Bank Accounts
4.22 Directors and Officers of NATN
11.3 Indemnification Limitations
Exhibits
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2.3(a) Contingent Payment Calculation (No Termination of Management
Agreement)
2.3(b) Contingent Payment Calculation (Termination of Management
Agreement)
8.1(e) Form of Management Agreement
8.1(f) Form of Telemarketing Service Agreement
iv
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CERTAIN DEFINED TERMS
Term Section
- ---- -------
"Acquisition Proposal" 7.7
"Agreement" Preamble
"Annualized EBITDA" 2.3
"Annualized Revenue" 2.3
"Asserted Liability" 11.4
"Determination Date" 2.3
"calendar quarter" 2.3
"Claims Notice" 11.4
"Closing" 9.1
"Closing Payment" 2.2(a)
"COBRA" 4.20(g)
"Code" 4.11
"Communications Services" 7.13
"Confidential Material" 7.5(c)
"Constituent Corporations" 1.2
"Contest Notice" 11.5
"Contingent Payment" 2.2(b)
"DOJ" 4.5
"DGCL" 1.1
"Earn-Out Period" 2.3
"EBITDA" 2.3
"EBITDA Earn-Out Amount" 2.3
"EBITDA Earn-Out Margin" 2.3
"Effective Time" 1.2
"Employee Benefit Plan" 4.20(a)
"ERISA" 4.20(a)
"ERISA Affiliate" 4.20(a)
"Extension Fee" 7.7
"FCC" 4.5
"Financial Statements" 4.7
"FTC" 4.5
"GAAP" 2.3
"GLLCA" 1.1
"Hodges Promissory Note" 7.12
"HSR Act" 4.5
"Indemnified Party" 11.2(d)
"Indemnifying Party" 11.2(d)
"Intellectual Property" 4.18
"Intellectual Property Agreements" 4.18
"IntraTel" Preamble
"IntraTel Form 10-KSB Report" 6.5
"IntraTel Loss" 11.2(a)
"IntraTel Member-Specific Loss" 11.2(b)
v
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"IntraTel Quarterly Reports" 6.5
"knowledge" 12.1
"Loss" 11.2(d)
"Majority of the Members" 2.3
"Management Period" 2.3
"Material Contract" 4.14
"Member" Preamble
"Merger" Recitals
"Merger Consideration" 2.2
"Merger Filings" 10.1
"Minimum Aggregate Liability Amount" 11.3(b)
"Multiemployer Plan" 4.20(a)
"NATN Loss" 11.2(c)
"NATN Membership Interests" Recitals
"NATN Services" 7.13
"Noble Promissory Note" 7.12
"NSDI" Preamble
"Parent" 4.6
"Past Year's EBITDA" 2.3
"Past Year's Revenue" 2.3
"PBGC" 4.20(b)
"Representatives" 7.5(c)
"Revenue Earn-Out Amount" 2.3
"Revenue Goal" 2.3
"SubCorp" Preamble
"Subsidiary" 4.6
"Surviving Corporation" 1.1
"Taxes" 4.11
vi
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AGREEMENT AND PLAN OF MERGER
THIS IS AN AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of February 27, 1998, by and among INTRATEL GROUP, LTD., a Delaware
corporation ("IntraTel"), INTRATEL ACQUISITION/NATN CORPORATION, a Delaware
corporation ("SubCorp"), NORTH AMERICAN TELEPHONE NETWORK, L.L.C., a
Georgia limited liability company ("NATN"), and each of the members of
NATN, who are listed on the signature pages of this Agreement
(collectively, the "Members" and individually, a "Member"). NATIONAL
SERVICE DIRECT, INC., a Georgia corporation ("NSDI"), has joined as a party
to this Agreement for the limited purpose of agreeing to be bound by
Section 7.9 of this Agreement.
RECITALS:
IntraTel and NATN desire to effect a business combination of SubCorp
and NATN pursuant to which NATN will merge with and into SubCorp (the
"Merger"), and the holders of membership interests in NATN ("NATN
Membership Interests"), will receive cash in exchange for such interests on
the terms and conditions described herein. In furtherance thereof, (i) the
managers and the Members of NATN have approved the Merger; and (ii) the
Board of Directors of IntraTel and the Board of Directors and sole
shareholder of SubCorp have approved the Merger.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, the parties hereto
agree as follows:
ARTICLE 1
THE BUSINESS COMBINATION
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2
hereof), NATN shall be merged with and into SubCorp in accordance with the
provisions of this Agreement, the applicable provisions of the Delaware
General Corporation Law (the "DGCL"), and the applicable provisions of the
Georgia Limited Liability Company Act (the "GLLCA"), and the separate
existence of NATN shall thereupon cease, and SubCorp, as the surviving
corporation in the Merger (the "Surviving Corporation"), shall continue its
corporate existence under the laws of the State of Delaware.
1.2 EFFECTIVE TIME OF THE MERGER. As soon as practicable following
fulfillment of the conditions set forth in Article 8, and provided that
this Agreement has not been terminated pursuant to Article 10, NATN and
SubCorp (collectively the "Constituent Corporations") shall cause
appropriate Articles of Merger to be duly prepared, executed and filed with
the Secretary of State of Delaware, in accordance with the provisions of
the DGCL, and with the Secretary of State of Georgia, in accordance with
the provisions of the GLLCA. The Merger shall become effective at the time
specified in the Articles of Merger (the "Effective Time").
1.3 EFFECT OF THE MERGER. At and after the Effective Time, the
Merger shall have all of the effects provided by applicable law.
<PAGE>
ARTICLE 2
CONVERSION OF MEMBERSHIP INTERESTS; MERGER
CONSIDERATION; ADDITIONAL ACTIONS
2.1 CONVERSION OF NATN MEMBERSHIP INTERESTS. At the Effective Time
and as a result of the Merger:
(a) NATN MEMBERSHIP INTERESTS. Each NATN Membership Interest
shall, automatically and without further act of any of the Constituent
Corporations, IntraTel or the holder of any such NATN Membership Interest,
be converted into and shall thereafter represent only the right to receive
the Merger Consideration as set forth in Section 2.2 and shall not
thereafter represent any other rights.
(b) SUBCORP COMMON STOCK. Each issued and outstanding share of
common stock of SubCorp shall remain unchanged.
2.2 MERGER CONSIDERATION. The "Merger Consideration" shall be
$40,000,000.00 (plus or minus any amount due based on the formula set forth
in EXHIBIT 2.3 hereto), payable in cash as follows:
(a) PAYMENTS AT CLOSING. At the Closing, SubCorp shall pay to
the Members by wire transfer of immediately available funds an amount equal
to $20,000,000.00 (the "Closing Payment"). The Closing Payment shall be
paid to each Member in proportion to such Member's ownership of NATN
Membership Interests as set forth on SCHEDULE 2.2(a) hereto.
(b) CONTINGENT PAYMENT. As of each "Determination Date" (as
defined herein) and as soon as its amount is finally determined pursuant to
Section 2.4 below, the Surviving Corporation shall pay to the Members an
additional payment of up to $20,000,000.00 (plus or minus any amount due
based on the formula set forth in EXHIBIT 2.3 hereto) in cash (the
"Contingent Payment"), calculated pursuant to Section 2.3 below.
2.3 CALCULATION OF CONTINGENT PAYMENT.
(a) As used in this Agreement:
(i) "Annualized EBITDA" shall mean, at any Determination
Date (I) the total EBITDA earned by the Surviving Corporation (including,
if applicable, NATN prior to the Effective Time) during the three-month
period immediately preceding such Determination Date, MULTIPLIED BY (II)
four (4).
(ii) "Annualized Revenue" shall mean, at any Determination
Date (I) the total revenue earned by the Surviving Corporation (including,
if applicable, NATN prior to the Effective Time) during the three-month
period immediately preceding such Determination Date, MULTIPLIED BY (II)
four (4).
2
<PAGE>
(iii) "calendar quarter" means any three-month period
ending on any March 31, June 30, September 30 or December 31.
(iv) "Determination Date" shall mean and include (A) the
last day of each calendar quarter during the Earn-Out Period, (B) the last
day of the month during which the Earn-Out Period expires, (C) in the event
the Revenue Goal is achieved prior to the expiration of the Earn-Out
Period, the last day of the month during which the Surviving Corporation
achieves such Revenue Goal, and (D) if the Management Agreement to be
entered into pursuant to Section 8.1(e) of this Agreement is terminated
prior to the expiration of the Earn-Out Period, the last day of the month
during which such termination occurs.
(v) "Earn-Out Period" means the twelve-month period
immediately following the Effective Time.
(vi) "EBITDA" means total Earnings Before Interest, Taxes,
Depreciation and Amortization, calculated in accordance with GAAP.
(vii) "EBITDA Earn-Out Amount" shall mean, at any
Determination Date, the result obtained by (I) adding Annualized EBITDA to
Past Year's EBITDA, and (II) by dividing the sum of such amounts by two -
i.e., -
Annualized EBITDA + Past Year's EBITDA
--------------------------------------
2
(viii) "EBITDA Earn-Out Margin" shall mean, at any
Determination Date, the result obtained BY DIVIDING the EBITDA Earn-Out
Amount by the Revenue Earn-Out Amount.
(ix) "GAAP" means generally accepted accounting principles
as interpreted by the Securities and Exchange Commission consistently
applied.
(x) "Majority of the Members" shall be determined by
reference to a majority percentage of the NATN Membership Interests as set
forth on SCHEDULE 2.2(a) hereto, and may be constituted by as few as one
Member holding more than 50% of the NATN Membership Interests.
(xi) "Management Period" means the period from the Effective
Time until the date that any and all Contingent Payment due hereunder has
been finally determined and fully paid in accordance with the terms of this
Agreement.
(xii) "Past Year's EBITDA" shall mean, at any
Determination Date, the total EBITDA earned by Surviving Corporation
(including, if applicable, NATN prior to the Effective Time) during
the 12-month period immediately preceding such Determination Date.
(xiii) "Past Year's Revenue" shall mean, at any
Determination Date, the total revenue earned by Surviving Corporation
(including, if applicable, NATN prior to the Effective Time) during
the 12-month period immediately preceding such Determination Date.
3
<PAGE>
(xiv) "Revenue Earn-Out Amount" shall mean, at any
Determination Date, the result obtained by (I) adding Annualized Revenue to
Past Year's Revenue, and (II) by dividing the sum of such amounts by two -
i.e., -
Annualized Revenue + Past Year's Revenue
----------------------------------------
2
(xv) "Revenue Goal" means a Revenue Earn-Out Amount equal to
or greater than $70,000,000.
(b) (i) The Contingent Payment due to the Members as of any
Determination Date (other than a Determination Date occurring upon the
termination of the Management Agreement pursuant to subclause (D) of
Section 2.3(a)(iv) shall be the amount determined pursuant to the table set
forth on EXHIBIT 2.3(a) hereto LESS (I) the cumulative amount of all
Contingent Payments previously paid to the Members pursuant to this
Agreement and (II) in the case of any Contingent Payment due to the Members
at the end of the Earn-Out Period, all Customer Acquisition Expense
Advances (as defined in Section 7.10(a), which have not been repaid by the
Surviving Corporation to IntraTel as of the end of the Earn-Out Period;
PROVIDED, HOWEVER, that for the purposes of determining the amount of such
Customer Acquisition Expense Advances, if any, to be so deducted from the
Contingent Payment amount determined pursuant to this clause (II), Customer
Acquisition Expense Advances shall not include any sum that IntraTel shall
have advanced to the Surviving Corporation to replace sums that would have
been available to the Surviving Corporation pursuant to NATN's existing
credit facilities or similar credit facilities.
(ii) The amount of the Contingent Payment due to the Members
as of any Determination Date occurring upon the termination of the
Management Agreement pursuant to subclause (D) of Section 2.3(a)(iv) shall
be the amount determined pursuant to the table set forth on EXHIBIT 2.3(b)
hereto less deducting (I) the cumulative amount of all Contingent Payments
previously paid to the Members pursuant to this Agreement and (II) all
Customer Acquisition Expense Advances which have not been repaid by the
Surviving Corporation to IntraTel as of such termination of the Management
Agreement; PROVIDED, HOWEVER, that for the purposes of determining the
amount of such Customer Acquisition Expense Advances, if any, to be so
deducted from the Contingent Payment amount determined pursuant to this
clause (II), Customer Acquisition Expense Advances shall not include any
sum that IntraTel shall have advanced to the Surviving Corporation to
replace sums that would have been available to the Surviving Corporation
pursuant to NATN's existing credit facilities or similar credit facilities.
2.4 DETERMINATION OF CONTINGENT PAYMENT. Within 15 days after each
Determination Date, the Members shall deliver to IntraTel the Members'
calculation of the Contingent Payment due to the Members for the relevant
period. If IntraTel disagrees with the Members' calculation of the amount
of the Contingent Payment due to the Members, IntraTel shall notify the
Members of such disagreement within 15 days after the receipt of such
calculation, specifying in detail the reasons for such disagreement. If,
within 20 days after the receipt by the Members of IntraTel's notice of
disagreement, IntraTel and a Majority of the Members are unable to reach
agreement on the amount of the Contingent Payment due to the Members,
IntraTel and a Majority of the Members shall select an independent public
accounting firm not used by either IntraTel or the
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Surviving Corporation and such accounting firm shall determine within 90
days after the end of the relevant Determination Date the amount of the
Contingent Payment due to the Members pursuant to this Agreement. The
Surviving Corporation, on the one hand, and the Members, on the other hand,
shall share equally the cost of such independent accounting firm. If
IntraTel and a Majority of the Members cannot jointly agree upon such an
independent public accounting firm, then either IntraTel or a Majority of
the Members may apply to the Atlanta, Georgia office of the American
Arbitration Association for the appointment of such an independent
accounting firm.
2.5 SECURITY FOR CONTINGENT PAYMENT; PAYMENT OF CONTINGENT PAYMENT.
The Contingent Payment shall be secured by a letter of credit issued by a
financial institution reasonably acceptable to the Members, in form, scope
and substance reasonably satisfactory to the Members, which shall, as of
the Effective Time, be in the face amount of $5,000,000.00, with the
Members as the beneficiaries thereof. Within 15 days after receiving the
Members' calculation of any Contingent Payment that would be due following
any Determination Date described in subclause (A) of Section 2.3(a)(iv),
IntraTel shall either (i) cause to be delivered to the Members a
supplemental letter of credit in such an amount that, when added to
existing letters of credit, shall equal the total sum that would be due to
all of the Members if the Contingent Payment were to be made to the Members
as of the end of such calendar quarter, or (ii) pay to the Members in cash
the amount of such supplemental letter of credit. Notwithstanding the
foregoing, upon the earlier of any Determination Date described in
subclauses (B), (C) or (D) of Section 2.3 (a)(iv) the Contingent Payment
earned through such Determination Date will be due in full in cash within
15 days of IntraTel receiving the Members' calculation of the Contingent
Payment earned through such Determination Date. Any Contingent Payment due
hereunder shall be paid by wire transfer of immediately available funds to
each Member in proportion to such Member's ownership of NATN Membership
Interests as set forth on SCHEDULE 2.2(a) hereto.
2.6 FURTHER ASSURANCES. If at any time after the Effective Time any
further assignments or assurances are necessary or desirable to vest or to
perfect or confirm of record in the Surviving Corporation the title to any
property or rights of either of the Constituent Corporations, or otherwise
to carry out the provisions of this Agreement, the officers and directors
of the Surviving Corporation are hereby authorized and empowered on behalf
of the respective Constituent Corporations, in the name of and on behalf of
the appropriate Constituent Corporation, to execute and deliver any and all
things necessary or proper to vest or to perfect or confirm title to such
property or rights in the Surviving Corporation, and otherwise to carry out
the purposes and provisions of this Agreement.
ARTICLE 3
CERTIFICATE OF INCORPORATION, BYLAWS,
BOARD DIRECTORS AND OFFICERS
3.1 CERTIFICATE OF INCORPORATION; BYLAWS. The Certificate of
Incorporation and Bylaws of SubCorp as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation and Bylaws of the
Surviving Corporation.
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3.2 DIRECTORS AND OFFICERS. Except as provided in Section 8.3(b)
with respect to the election of James K. Noble, Jr., the directors and
officers of SubCorp immediately prior to the Effective Time shall be the
directors and officers of the Surviving Corporation, each to hold office
until his or her successor is elected and qualified in accordance with the
DGCL and the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NATN
NATN represents and warrants to, and agrees with, IntraTel and SubCorp
as follows:
4.1 ORGANIZATION AND QUALIFICATION, ETC. NATN is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Georgia, has the corporate power and authority to own
all of its properties and assets and to carry on its business as it is now
being conducted, and is duly qualified to do business and is in good
standing in the respective jurisdictions shown on SCHEDULE 4.1, which,
except as set forth on SCHEDULE 4.1, are the only jurisdictions in which
NATN owns any property or has any place of business or where such
qualification is required and where the failure so to qualify would have a
material adverse effect upon the financial condition of NATN. The copies
of NATN's Articles of Organization and Operating Agreement, as amended to
date, which have been delivered to IntraTel, are complete and correct, and
such instruments, as so amended, are in full force and effect at the date
hereof. The minute books, membership records and other corporate record
books of NATN are complete, accurate and up to date in all material
respects (and were complete, accurate and up to date in all material
respects when made available to IntraTel and its representatives for
review). NATN has at all times since its formation qualified as a limited
liability company and its Members have always conducted the business of
NATN through NATN.
4.2 AUTHORIZATION, ETC. NATN has the corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated on its part hereby. The execution and delivery by NATN of
this Agreement and the consummation by NATN of the transactions
contemplated on its part hereby have been duly authorized by all necessary
corporate action on the part of NATN, including without limitation, the
requisite vote of the Members. This Agreement has been duly executed and
delivered by NATN and is a valid and binding agreement of NATN, enforceable
against NATN in accordance with its terms, subject to (a) bankruptcy,
insolvency and other laws of similar import, (b) principles of equity, and
(c) applicable public policy.
4.3 NATN MEMBERSHIP INTERESTS. The Members are the sole members of
the Company and own all the NATN Membership Interests. NATN has no
commitments to issue or sell any membership interests or any securities or
obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire from NATN, any membership interests, and
no securities or obligations evidencing any such rights are outstanding.
4.4 NON-CONTRAVENTION. Except as set forth in SCHEDULE 4.4, the
execution and delivery of this Agreement by NATN do not, and the
consummation of the transactions contemplated
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hereby will not: (a) violate any provision of the Articles of Organization
or Operating Agreement of NATN, (b) violate any law, governmental rule or
regulation or order binding upon NATN or constitute, in any material
respect, a breach of or constitute a default under, or result in the
acceleration of or entitle any party to accelerate any obligation under, or
result in the creation or imposition of any lien, security interest or
other encumbrance upon any of the property of NATN pursuant to any
provision of, any mortgage, lease, contract or other agreement to which
NATN is a party or by which NATN or its assets is or may be bound.
4.5 GOVERNMENTAL AND OTHER CONSENTS. Except as set forth in SCHEDULE
4.5, and except for (i) the filings with the Federal Trade Commission
("FTC") and the Department of Justice ("DOJ") as required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) the filing of Articles of Merger with the Secretary of
State of Delaware and the Secretary of State of Georgia, and (iii) the
required filings with and approvals by the Federal Communications Commission
("FCC"), (a) no consent, authorization, order or approval of, or filing or
registration with, any governmental agency or authority is required to be
made or obtained by NATN for or in connection with the execution and
delivery of this Agreement by NATN and the consummation by NATN of the
transactions contemplated hereby; and (b) no consents or other actions are
required to be obtained or taken by NATN to permit IntraTel or SubCorp (as
the Surviving Corporation in the Merger) to continue to enjoy, in all
material respects, the same rights and benefits as NATN now enjoys under
any contracts, agreements and other instruments that are disclosed on any
schedule to this Agreement or that are otherwise material to NATN and the
conduct of its business.
4.6 NO SUBSIDIARIES. NATN does not have any Subsidiaries. As used
in this Agreement, the term "Subsidiary" means, with respect to any
corporation or other entity ("Parent"), any corporation or other
organization, whether incorporated or unincorporated, of which at least a
majority of the securities or interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors or
others performing similar functions with respect to such corporation or
other organization is at that time directly or indirectly owned or
controlled by such Parent, or by any one or more of its Subsidiaries, or by
such Parent and one or more of its Subsidiaries. Except as specified in
SCHEDULE 4.6, NATN does not directly or indirectly own any interest in any
corporation, partnership, joint venture or other non-corporate form of
business organization.
4.7 FINANCIAL STATEMENTS OF NATN. Within 30 days after the execution
of this Agreement NATN will furnish IntraTel with true and complete copies
of the audited financial statements of NATN for the years ended December
31, 1997, 1996 and 1995 (collectively, the "Financial Statements"). The
Financial Statements, including, the notes thereto will be (i) prepared in
conformity with GAAP and will present fairly in all material respects the
financial condition of NATN as of their respective dates and the results of
operations for the periods then ended, (ii) reported upon by BDO Seidman,
independent certified public accountants, whose report letter will be
included therewith.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except for this Agreement
and the transactions contemplated hereby or as disclosed on SCHEDULE 4.8
hereto, since December 31, 1997:
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(a) ORDINARY COURSE. NATN has operated its business in the
ordinary and usual course.
(b) NO DAMAGE, ETC . There has not been any damage, destruction
or other casualty loss with respect to property owned by NATN, whether or
not covered by insurance, or any strike, work stoppage or slowdown or other
labor trouble involving NATN, which, in any of such cases or in the
aggregate, materially and adversely affects the financial condition of
NATN.
(c) NO MATERIAL ADVERSE CHANGE. There has not been any material
adverse change in the financial condition, results of operations or
prospects of NATN.
(d) NO ISSUANCES, ETC. There has not been any issuance by NATN
of any membership interests, or options, calls or commitments relating to
membership interests, or any securities or obligations convertible into or
exchangeable for, or giving any person any right to acquire from any of
them, any membership interests, or any redemption, purchase or other
acquisition by NATN of any such membership interests.
(e) MATERIAL CONTRACTS. NATN has not entered into, amended or
terminated any Material Contract (as hereinafter defined).
(f) CERTAIN PAYMENTS. NATN has not made any payment to, or
entered into any transaction with, any Affiliate of NATN or to or with the
Members of NATN other than (i) compensation, expense reimbursement and
similar payments in the ordinary course of business consistent with past
practices, (ii) distributions necessary to enable Members to pay their
respective PRO RATA shares of taxes on income earned by NATN, and (iii)
distributions not in excess of $1,000,000 to Members in an amount equal to
special bonus credits given to NATN by MCI with respect to 1997 carrier
cost payments.
(g) PROPERTY INTERESTS. Except as may have occurred in the
ordinary course of its business, NATN has not (i) sold, assigned, leased,
transferred, encumbered, granted a security interest in or license with
respect to, or disposed of, any of its assets or properties, tangible or
intangible, or (ii) waived or released any rights of value, or cancelled,
compromised, released or assigned any indebtedness owed to it or any claims
held by it.
(h) CAPITAL EXPENDITURES. Except as may have occurred in the
ordinary course of its business, NATN has not made any capital expenditures
in excess of $100,000 individually or $750,000 in the aggregate.
(i) EMPLOYEE COMPENSATION. There has not been any adoption of,
or increase in the payments to or benefits under, any profit sharing,
bonus, deferred compensation, savings, insurance, pension, retirement, or
other employee benefit plan for or with any employees of NATN.
4.9 GOVERNMENTAL AUTHORIZATION AND COMPLIANCE WITH LAWS. Except as
set forth in SCHEDULE 4.9: (a) to NATN's knowledge, the business of NATN
has been operated in compliance with all applicable laws and governmental
rules and regulations, except for violations of such
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laws, rules or regulations which do not individually or in the aggregate
affect materially and adversely the financial condition or business of
NATN, (b) to NATN's knowledge, NATN has all permits, certificates,
licenses, approvals and other authorizations required in connection with
the operation of its business, (c) no notice has been issued and no
investigation or review is pending, or to NATN's knowledge, is contemplated
or threatened by any governmental entity with respect to any alleged (i)
violation by NATN of any such law, rule or regulation, or (ii) failure to
have all permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of the businesses
of NATN. NATN has provided IntraTel with copies of each and every
registration, filing or submission with the FCC since January 1, 1996, and
each filing or submission with any state public service commission or
public utilities commission since January 1, 1996. To NATN's knowledge,
such filings or submissions were in material compliance with applicable law
when filed and no material deficiencies have been asserted by any such
authority with respect to such filings or submissions.
4.10 ABSENCE OF UNDISCLOSED LIABILITIES AND OBLIGATIONS. Except with
respect to (a) $307,700 of indebtedness borrowed by NATN from James K.
Noble, Jr. and Christopher G. Hodges in December, 1997, (b) obligations
incurred in the ordinary course of business to OAN Services, Inc. in
connection with that certain Account Purchase Agreement, dated July 17,
1996, as amended, between NATN and OAN Services, Inc., and (c) other
obligations incurred in the ordinary course of business which do not exceed
$1,000,000 in the aggregate (consisting of billing charges, acquisition
costs, interest expense, long-distance carrier costs, and general accounts
payable), NATN has not incurred any debts, liabilities or obligations
(whether absolute, contingent, accrued or otherwise) since December 31,
1997. To NATN's knowledge, NATN is not in violation of any instrument,
arbitration award, judgment or decree applicable to it or any of its
properties.
4.11 TAX MATTERS. Except as set forth in SCHEDULE 4.11:
(a) FILING OF RETURNS. NATN has filed on a timely basis all
returns for Taxes required to have been filed by it and no extensions of
time in which to file any such returns are currently in effect. Each such
return filed by NATN was true, correct and complete when it was filed and
each return for Taxes that will be filed on or before the Effective Time
will be true, correct and complete when it is filed.
(b) COPIES OF RETURNS. NATN has delivered to IntraTel true,
correct and complete copies of its returns for Taxes for the taxable years
ended since January 1, 1995.
(c) PAYMENT OF TAXES. NATN has paid or made provision for the
payment of all Taxes, if any, shown as due pursuant to the returns
described in paragraph (a) hereof or otherwise required to be paid to any
governmental authority or other person and none of such Taxes is
delinquent. All tax returns required to be filed by NATN for the period
from the date hereof up to and including the Effective Time will be timely
filed and all Taxes for such period will be paid by NATN.
(d) WITHHOLDING, ETC. All Taxes which NATN is or was required
by law to withhold or collect have been duly withheld and collected and
have been paid over to the proper governmental authorities in a timely
fashion or are held by NATN in a depository bank account
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for such payment, and all such withholdings and collections and all other
payments due in connection therewith are duly set forth on the books of
NATN.
(e) EXAMINATIONS, ETC. NATN has not received notice that any
such return has been or is currently being examined by the federal, state
or local tax authorities with taxing authority over NATN and its assets and
business, and (without limiting the foregoing) all deficiencies asserted as
a result of such examinations have been paid or finally settled or are
being contested in good faith by appropriate proceedings, and no issue has
been raised by such authorities in any such examination which, by
application of similar principles, could be expected to result in a
proposed deficiency for any other year not so examined or to result in any
additional Taxes for years for which returns have not been filed.
(f) STATUTE OF LIMITATIONS. There are no outstanding agreements
or waivers extending the statutory period of limitation applicable to any
return for Taxes for any period with respect to NATN.
(g) OTHER TAX REPRESENTATIONS. There are no liens with respect
to Taxes upon any of the properties or assets, real or personal, tangible
or intangible, of NATN. NATN has not agreed, or is it required, to include
in income any adjustment pursuant to Section 481(a) of the Internal Revenue
Code of 1986, as amended (the "Code") by reason of a change in accounting
method or otherwise. There is no agreement, plan, or arrangement or other
contract covering any employee or independent contractor of NATN that could
give rise to the payment of any amount that could not be deductible by NATN
pursuant to Section 280G of the Code. There is no tax sharing agreement
that will require any payment by NATN after the date of this Agreement.
For purposes of this Agreement, the term "Taxes" means all taxes,
assessments, duties, fees, levies or other governmental charges, including
all federal, state, local, foreign or other income, unitary, business,
franchise, property, intangible, withholding, FICA, unemployment
compensation, transfer, sales, use, excise and other taxes, assessments,
duties, fees, or levies or other governmental charges, of any kind
whatsoever, and all deficiency assessments, additions to tax, penalties and
interest with respect thereto.
4.12 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES, ETC.
Except as set forth in SCHEDULE 4.12, NATN has good title to all of its
owned properties and assets, real, personal and mixed, used in its
business, free and clear of any liens, charges, pledges, security interests
or other encumbrances, except as reflected in the Financial Statements and
except for such imperfections of title and encumbrances, if any, as are not
substantial in character, amount or extent, and do not materially detract
from the value, or interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the business
operations of NATN. All leases under which NATN is the lessee of real or
personal property are, to the knowledge of NATN, valid and binding on the
lessors thereunder in accordance with their respective terms; to the
knowledge of NATN, there are no defaults, or conditions under any such
lease that, with lapse of time or notice or both, would constitute defaults
by NATN or any other party thereto; and consummation of the transactions
contemplated hereby will not alter or impair the rights of NATN under any
such lease. Except as set forth on SCHEDULE 4.12, NATN has not leased to
any other person or entity any of the properties owned by it or subleased
to any other person or entity any of the properties leased by it or granted
any other person or entity the right to possess any of its properties.
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4.13 ADEQUACY; CONDITION. Except as set forth on SCHEDULE 4.13: (a)
the real and personal properties owned or leased by NATN are adequate for
the conduct of its business as currently conducted; (b) NATN is not and has
not been, to its knowledge, in violation, in any material respect, of any
applicable building, zoning, environmental, health, safety or other law,
ordinance or regulation in respect of such property, structures or
equipment; (c) NATN has not received notice or has knowledge of (i) any
pending or contemplated condemnation or eminent domain proceeding affecting
such property, (ii) any proposal for increasing the assessed value of such
property for state, county, local or other ad valorem taxes, or (iii) any
pending or contemplated proceedings or public improvements which could or
might result in the levy of any special tax or assessment of a material
nature or amount against such property; and (d) there are no outstanding
requirements or recommendations by NATN's insurance companies requiring or
recommending any repairs or work of a material nature or amount to be done
with respect to such property or any basis for such. Except as set forth
in SCHEDULE 4.13, consummation of the transactions contemplated by this
Agreement will not alter the rights or impair the ability of the Surviving
Corporation to use such properties in the conduct of its business as it is
now being conduced.
4.14 MATERIAL CONTRACTS.
(a) SCHEDULE 4.14(a) is a list of all employment, incentive
compensation, or similar agreements with or for the benefit of any officer,
employee or other person which are not subject to cancellation by NATN
without penalty or increased cost on not more than 30 days' notice.
(b) SCHEDULE 4.14(b) lists all Material Contracts to which NATN
is a party or by which it is otherwise bound. For purposes of this
Agreement, the term "Material Contract" when used with respect to NATN
shall mean: (a) all loan and security agreements, guarantees, surety bonds,
leases of real property, consulting and employment agreements, and other
miscellaneous business agreements material to the operations of NATN, which
are to be performed in whole or in part after the Effective Time; (b) any
single contract pursuant to which any party thereto is obligated to make
payments or provide services after the date of this Agreement aggregating
in value more than $25,000; (c) any contract for the purchase or sale of
another business or a significant amount of assets, entered into (i) since
January 1, 1997 or (ii) prior to January 1, 1997 if any indemnification,
deferred payment or other continuing obligations under such contract are
still in effect; and (d) any contract restricting NATN in the nature of a
covenant not to compete. Except as disclosed in SCHEDULE 4.14(b), all
Material Contracts are in full force and effect and constitute valid and
binding obligations of NATN and, to the knowledge of NATN, any other
parties thereto. There are no defaults (including any conditions or events
that with lapse of time or notice or both would constitute defaults) on the
part of NATN in any obligations to be performed by NATN, or to the
knowledge of NATN, any other party, pursuant to a Material Contract.
Except as disclosed on SCHEDULE 4.14(b), consummation of the transactions
contemplated by this Agreement will not require the consent of any other
party to any Material Contract. Except as disclosed in SCHEDULE 4.14(b),
there are no contracts or options to sell or lease any property or assets,
real, personal or mixed, of NATN. NATN has provided IntraTel true and
correct copies of all written contracts, plans, etc. required to be listed
on SCHEDULE 4.14(b) and complete descriptions of any arrangements required
to be identified on SCHEDULE 4.14(b) which are not in writing.
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4.15 LITIGATION. Except as disclosed in the Financial Statements or
on SCHEDULE 4.15, (a) there is no claim, action, suit, investigation or
proceeding pending or, to the knowledge of NATN, contemplated or threatened
against NATN, or against any of its properties, (i) which seeks damages or
penalties in excess of $25,000, (ii) which seeks to prohibit, restrict or
delay the transactions contemplated hereby, or (iii) which, in the event of
a final determination adverse to NATN, individually or in the aggregate,
would materially and adversely affect the financial condition or business
of NATN, (b) there is not any judgment, decree, injunction, ruling or order
of any court, governmental department, commission, agency or
instrumentality, arbitrator or any other person outstanding against NATN
involving an amount in excess of $25,000 or otherwise having any of the
effects set forth in clause (a) of this Section, and (c) there is no charge
or complaint filed by any employee of NATN with the Equal Employment
Opportunity Commission.
4.16 LABOR CONTROVERSIES. NATN is not a party to any collective
bargaining agreement, nor has any labor union been recognized as the
representative of the employees of NATN, and NATN does not know of any
pending, threatened, or contemplated strikes, work stoppage or other labor
disputes involving the employees of NATN. NATN has, to the best of its
knowledge, complied in all material respects with all legal requirements
relating to employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the payment of
social security and similar taxes, and occupational safety and health.
4.17 INSIDER INTERESTS. Except as disclosed in the Financial
Statements or on SCHEDULE 4.17: (a) no Affiliate, officer or manager, or
former officer or former manager of NATN has any outstanding financial
obligations to NATN or any agreement, whether formal or informal, with
NATN, or any interest in any property, real or personal, tangible or
intangible, including without limitation trade names or trademarks used in
or pertaining to the business of NATN, except for the normal rights as a
member, manager or employee, or has guaranteed any obligations of NATN, and
(b) NATN has not incurred any financial obligations to or for the benefit
of any Affiliate, officer or manager, or former officer or former manager
of NATN except in connection with normal rights as a member or employee.
Without in any way limiting the foregoing, except as disclosed on SCHEDULE
4.17, NATN has never requested any manager, officer, employee or agent of
NATN to serve as a director, manager, trustee, officer, employee or agent
of another domestic or foreign, non-profit or for-profit corporation,
limited liability company, partnership, joint venture, trust or other
enterprise so as to give rise to any insurance or indemnification
obligation by NATN with respect to any liability or expense arising in
connection with any such service to any other enterprise.
4.18 INTELLECTUAL PROPERTY. Except as described in SCHEDULE 4.18,
NATN owns or possesses adequate rights to use all patents, trademarks,
service marks, trade names, copyrights, or applications for the foregoing,
and all computer programs, software, databases and documentation used in,
relating to, or necessary for the conduct of, the business of NATN
(collectively, the "Intellectual Property"). SCHEDULE 4.18 lists: (i) all
such Intellectual Property and (ii) all licenses or other agreements (other
than licenses of generally available computer programs or software licenses
which are immaterial to the business of NATN) pursuant to which NATN has
any right to use or enjoy the Intellectual Property that is owned by others
(the "Intellectual Property Agreements"). Except as otherwise described on
SCHEDULE 4.18, the Intellectual Property owned by NATN is owned free and
clear of all claims of others, including
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present or former employees, agents or independent contractors of NATN, and
NATN has not received notice that use of such Intellectual Property in its
business violates or infringes upon the claimed rights of others. As to
the Intellectual Property Agreements: (a) all such agreements are in full
force and effect; (b) neither NATN nor, to the knowledge of NATN, any other
party thereto, is in default under any such agreements; (c) NATN is not or
will not, by reason of the transactions contemplated by this Agreement,
become obligated to make any royalty or similar payment under such
agreements; (d) the rights of NATN under such agreements will not be
affected by the consummation of the Merger; and (e) NATN has not received
notice that the exercise by NATN of its rights under such agreement
infringes upon the claimed rights of others and has no knowledge that the
rights of NATN with respect to such Intellectual Property are being
infringed upon by any other person. In addition, NATN has not received any
notice that any of the products or services of NATN infringes upon claimed
rights of others. Except as disclosed on SCHEDULE 4.18, NATN has not
granted to any person or entity any license or other right to use in any
manner any of the Intellectual Property owned by NATN and has not granted
any sublicense or right to use any Intellectual Property licensed to NATN
under the Intellectual Property Agreements; nor has NATN granted any
software licenses or sublicenses that would authorize any person or entity
to use any software licensed or sublicensed thereunder for any purpose
other than uses limited solely to such person.
4.19 INSURANCE. SCHEDULE 4.19 summarizes the amount and scope of the
insurance currently in force insuring NATN and its properties against loss
or liability. All such policies or contracts of insurance are in scope and
amount usual and customary for businesses engaged in the business of NATN
and are sufficient for compliance with all requirements of law and of all
agreements to which NATN is a party. All insurance policies pursuant to
which any such insurance is provided are in full force and effect. No
notice of cancellation or termination of any insurance policy has been
given to NATN and all premiums required to be paid in connection with such
insurance policies have been paid in full.
4.20 BENEFIT PLANS.
(a) SCHEDULE 4.20 lists all Employee Benefit Plans of NATN. No
Employee Benefit Plan is or has been, and NATN has never had an obligation
to contribute to, (i) a multiemployer plan within the meaning of Section
3(37) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Multiemployer Plan"), (ii) a "multiple employer plan" within
the meaning of Section 210 of ERISA Section 413(c) of the Code, or (iii) a
"funded welfare plan" within the meaning of Section 419 of the Code. As
used in this Agreement, "Employee Benefit Plan" means each pension,
retirement, profit-sharing, deferred compensation, stock option, employee
stock ownership, severance pay, vacation, bonus or other incentive plan,
any other written or unwritten employee program, arrangement, agreement or
understanding, whether arrived at through collective bargaining or
otherwise, any medical, vision, dental or other health plan, any life
insurance plan, or any other employee benefit plan or fringe benefit plan,
including, without limitation, any "employee benefit plan," as that term is
defined in Section 3(3) of ERISA currently or previously adopted,
maintained by, sponsored in whole or in part by, or contributed to by NATN
or any Affiliate thereof for the benefit of employees, retirees,
dependents, spouses, directors, managers, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, managers, independent contractors or other beneficiaries are
eligible to participate. Except as disclosed on SCHEDULE
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4.20, NATN does not currently have, and in the past five years has not had
any ERISA Affiliates. As used in this Agreement, "ERISA Affiliate" means
(a) any corporation which is a member of a controlled group of
corporations, within the meaning of Section 414(b) of the Code, of which
NATN is a member, (b) any trade or business (whether or not incorporated)
which is a member of group of trades or businesses under common control,
within the meaning of Section 414(c) of the Code, of which NATN is a
member, and (c) any member of an affiliate service group, within the
meaning of Section 414(m) and (o) of the Code, of which NATN or any entity
described in clause (a) or (b) is a member.
(b) With respect to the Employee Benefit Plans listed on
SCHEDULE 4.20, NATN has made or will make available to IntraTel for review:
(i) correct and complete copies of all such plans and any related trust
agreements or other funding arrangements (including insurance contracts),
(ii) all determination letters, rulings, opinion letters, information
letters, or advisory opinions issued by the United States Internal Revenue
Service, the United States Department of Labor, or the Pension Benefit
Guaranty Corporation (the "PBGC"), (iii) annual reports or returns, audited
or unaudited financial statements, actuarial valuations and reports, and
summary annual reports prepared for any Employee Benefit Plan with respect
to the most recent three plan years, and (iv) the most recent summary plan
descriptions and any material modifications thereto.
(c) Except as disclosed in SCHEDULE 4.20, all the Employee
Benefit Plans and the related trusts subject to ERISA comply with and have
been administered in compliance with their terms, and to the extent
applicable, (i) the provisions of ERISA, (ii) all provisions of the Code
relating to qualification and tax exemption under Section 401(a) and
Section 501(a) of the Code or otherwise applicable to secure intended tax
consequences, (iii) all applicable state or federal securities laws, and
(iv) all other applicable Laws and collective bargaining agreements, and
NATN has not received any notice from any governmental authority
questioning or challenging such compliance. All available permits for the
Employee Benefit Plans have been obtained, including, but not limited to,
timely determination letters on the qualification of the Employee Benefit
Plans intended to be qualified under Section 401(e) of the Code and tax
exemption of related trusts under Section 501(a) of the Code, and all such
permits continue in full force and effect. No event has occurred which
will or could give rise to disqualification of any such plan or loss of
intended tax consequences under the Code or to any tax under Section 511 of
the Code. Except as disclosed on SCHEDULE 4.20, with respect to any
Employee Benefit Plan, (i) neither NATN nor any other "disqualified person"
or "party in interest," within the meaning of Section 4975 of the Code and
Section 3(14) of ERISA, respectively, has engaged in any "prohibited
transaction," within the meaning of Section 4975 of the Code or Section 406
of ERISA, respectively, nor have there been any fiduciary violations under
ERISA that could subject NATN (or any officer, director or employee
thereof) to any penalty or tax under Section 502(i) of ERISA or Sections
4971 and 4975 of the Code, (ii) no filing, application or other matter is
pending with the United States Internal Revenue Service, the PBGC, the
United States Department of Labor or any other governmental body, and (iii)
there is no action, suit or claim pending (nor, to the knowledge of the
NATN, any basis for such a claim), other than routine claims for benefits.
Each of the Employee Benefit Plans can be amended, modified or terminated
by NATN within a period of thirty (30) days, without payment of any
additional compensation or amount or the additional vesting or acceleration
of any such benefits, except to the extent that such vesting is required
under the Code as a result of the complete or partial termination of any
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Employee Benefit Plan intended to be qualified within the meaning of
Section 401(a) of the Code.
(d) Except as disclosed in SCHEDULE 4.20, all of the Employee
Benefit Plans are in compliance with the applicable reporting and
disclosure requirements, and all documents and annual reports or returns,
audited or unaudited financial statements, actuarial valuations, summary
annual reports, and summary plan descriptions issued with respect to the
Employee Benefit Plans are correct and complete and there have been no
changes in the information set forth therein.
(e) For any Employee Benefit Plan which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, to the
extent applicable, (i) NATN has not filed a notice of intent to terminate
any such Plan or adopted any amendment to treat any such Plan as
terminated, (ii) the PBGC has not instituted proceedings to terminate any
such Plan, and no other event or condition has occurred which might
constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any such Plan, (iii) there has
been no failure to meet the minimum funding standards of Section 412 of the
Code (whether or not waived in accordance with Section 412(d) of the Code)
or to make by its due date a required installment under Section 412(m) of
the Code with respect to any such Plan, (iv) no accumulated funding
deficiency, whether or not waived, exists, and no condition has occurred or
exists which by the passage of time would be expected to result in an
accumulated funding deficiency, (v) all required premium payments to the
PBGC have been paid when due, (vi) no "reportable event," within the
meaning of Section 4043 of ERISA (whether or not waived) and no event
described in Section 4062(e) or Section 4063 of ERISA has occurred, (vii)
no excise taxes are payable under the Code, (viii) no amendment with
respect to which security is required under Section 307 of ERISA or Section
401(a)(29) of the Code has been made or is reasonably expected to be made,
(ix) there has been no event which could subject NATN to liability under
Section 4064 or 4069 or ERISA, and (x) the funding method used in
connection with such Plan is acceptable under ERISA and the Code and the
actuarial assumptions used in connection with funding such Plan meet the
requirement of ERISA and the Code, and the fair market value of such Plan's
assets equals or exceeds the present value of all benefit liabilities
(whether vested or not) accrued to date by all present or former
participants in such Plan. For this purpose the assumptions prescribed by
the PBGC for valuing plan assets or liabilities upon plan termination shall
be applied and the term "benefits" shall include the value of all benefits,
rights and features protected under Section 411(d)(6) of the Code or its
successors and any ancillary benefits (including disability, shutdown,
early retirement and welfare benefits) provided under any such employee
pension benefit plan.
(f) NATN has not incurred any liability or taken any action, and
does not have any knowledge of any action or event that could cause it to
incur any liability (i) under Section 412 of the Code or Title IV of ERISA
with respect to any "single-employer plan" within the meaning of Section
4001(a)(15) of ERISA, (ii) on account of a partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, respectively, with
respect to any Multiemployer Plan, or (iii) on account of unpaid
contributions to any Multiemployer Plan.
(g) NATN has not, and does not, maintain an Employee Benefit
Plan providing welfare benefits (as defined in ERISA Section 3(1)) to
employees after retirement or other separation of service except to the
extent required under Part 6 of Title I of ERISA or Code
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Section 4980B or their successors ("COBRA") and all such Plans that are
subject to COBRA have been operated in compliance with the requirements
thereof.
(h) Except as disclosed on SCHEDULE 4.20, neither the execution
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) entitle any current or former employee of NATN to
severance pay, unemployment compensation or any payment contingent upon a
change in control or ownership of NATN, or (ii) accelerate the time of
payment or vesting, or increase the amount, of any compensation due to any
such employee or former employee.
4.21 BANK ACCOUNTS. SCHEDULE 4.21 lists all bank accounts and safe
deposit boxes of NATN, specifying the account numbers.
4.22 DIRECTORS AND OFFICERS. SCHEDULE 4.22 lists the name of each
individual serving as a manager or officer of NATN as of the date hereof.
4.23 ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS. All
information concerning NATN contained in this Agreement, in any certificate
furnished to IntraTel pursuant hereto and in each schedule attached hereto
is both complete (in that, except as otherwise stated therein, it
represents all the material information called for by the description of
the respective schedule in this Agreement and does not omit to state any
material fact necessary to make the statements contained therein not
misleading) and accurate in all material respects. All documents furnished
to IntraTel pursuant to this Agreement as being documents described in this
Agreement or in any schedule attached hereto are true and correct copies of
the documents which they purport to represent. Notwithstanding the
foregoing, nothing contained in the Business Plan (as such term is defined
in Section 7.10) shall be deemed a representation or warranty of NATN for
purposes of this Agreement or otherwise.
ARTICLE 5
REPRESENTATIONS WARRANTIES OF THE MEMBERS
Each of the Members, severally, represents and warrants to, and agrees
with, NATN as follows:
5.1 AUTHORIZATION, ETC. Such Member is the lawful owner of his NATN
Membership Interest and has, and at the Effective Time will have, good and
clear title to such NATN Membership Interest, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever. Such Member has, and at the Effective Time will have, full
legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement. This Agreement has been
duly executed and delivered by or on behalf of such Member and is a valid
and binding agreement of such Member, enforceable against such Member in
accordance with its terms.
5.2 NON-CONTRAVENTION. Except as set forth in SCHEDULE 4.4, and
except for the governmental and other consents disclosed pursuant to
Section 4.5 and set forth on SCHEDULE 4.5, the execution and delivery of
this Agreement by such Member does not, and the consummation
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of the transactions contemplated hereby will not, violate any law,
governmental rule or regulation or order binding upon such Member or
constitute, in any material respect, a breach of or a default under, or
result in the acceleration of or entitle any party to accelerate any
obligation under, or result in the creation or imposition of any lien,
security interest or other encumbrance upon such Member's NATN Membership
Interest pursuant to any provision of, any mortgage, lease, contract or
other agreement to which such Member is a party or by which such Member is
or may be bound.
ARTICLE 6
REPRESENTATIONS WARRANTIES OF INTRATEL AND SUBCORP
IntraTel and SubCorp, jointly and severally, represent and warrant to,
and agree with, NATN as follows:
6.1 ORGANIZATION AND QUALIFICATION, ETC. Each of IntraTel and
SubCorp is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate
power and authority to own its properties and assets and to carry on its
business as it is now being conducted.
6.2 AUTHORIZATION, ETC. Each of IntraTel and SubCorp has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby on the part of IntraTel and
SubCorp. The execution and delivery by IntraTel and SubCorp of this
Agreement and the consummation by IntraTel and SubCorp of the transactions
contemplated on their part hereby have been duly authorized by all
necessary corporate action on the part of IntraTel and SubCorp. This
Agreement has been duly executed and delivered by IntraTel and SubCorp and
is a valid and binding agreement of IntraTel and SubCorp, enforceable
against IntraTel and SubCorp in accordance with its terms, subject to (a)
bankruptcy, insolvency and other laws of similar import, (b) principles of
equity, and (c) applicable public policy.
6.3 NON-CONTRAVENTION. The execution and delivery of this Agreement
by IntraTel and SubCorp does not, and consummation of the transactions
contemplated hereby will not: (a) violate any provision of the Certificate
of Incorporation or Bylaws of IntraTel or SubCorp, (b) violate any law,
governmental rule or regulation or order binding upon NATN or constitute,
in any material respect, a breach of or constitute a default under, or
result in the acceleration of or entitle any party to accelerate any
obligation under, or result in the creation or imposition of any lien,
security interest or other encumbrance upon any of the property of IntraTel
or SubCorp pursuant to any provision of, any mortgage, lease, contract or
other agreement to which IntraTel or SubCorp is a party or by which
IntraTel, SubCorp or their assets is or may be bound.
6.4 CONSENTS, ETC. Except for (a) the filings with the FTC and the
DOJ as required by the HSR Act, (b) the filing of Articles of Merger with
the Secretary of State of Delaware and the Secretary of State of Georgia,
and (c) the required filings with and approvals by the FCC and applicable
state regulatory agencies, no consent, authorization, order or approval, or
filing or registration with, any governmental agency or authority is
required to be made or obtained by IntraTel or SubCorp for or in connection
with the execution and delivery of this Agreement by
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IntraTel and SubCorp and the consummation by IntraTel and SubCorp of the
transactions contemplated hereby.
6.5 PERIODIC REPORTS. IntraTel has filed all reports required to
have been filed by it pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended. Further, the information contained in
IntraTel's Annual Report on Form 10-KSB for the year ended December 31,
1996 (the "IntraTel Form 10-KSB Report") and IntraTel's Quarterly Reports
on Form 10-QSB for the quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 (the "IntraTel Quarterly Reports") did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
6.6 FINANCIAL STATEMENTS. The consolidated balance sheets of
IntraTel and its Subsidiaries as of December 31, 1995 and 1996 and the
related consolidated statements of income, shareholders' equity and cash
flows for each of the two years ended December 31, 1995 and 1996, including
the notes thereto, certified by Coopers & Lybrand, L.L.P., independent
certified public accountants, contained in the IntraTel Form 10-KSB Report
and the financial statements, including the notes thereto, contained in the
IntraTel Quarterly Reports have been prepared in conformity with generally
accepted accounting principles consistently applied and present fairly in
all material respects the consolidated financial condition of IntraTel and
its Subsidiaries as of such respective dates and their consolidated results
of operations for the periods then ended, subject, in the case of any
interim financial statements, to normal year-end audit adjustments and any
other adjustments described therein.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
there has not been (a) any damage, destruction or other casualty loss with
respect to property owned by IntraTel or any of its Subsidiaries whether or
not covered by insurance, or any strike, work stoppage or slowdown or other
labor trouble involving IntraTel or any of its Subsidiaries which, in any
of such cases or in the aggregate, materially and adversely affected the
financial condition of IntraTel and its Subsidiaries considered as a whole,
or (b) any material adverse change in the financial condition, results of
operations or prospects of IntraTel and its Subsidiaries, considered as a
whole.
6.8 ABSENCE OF UNDISCLOSED LIABILITIES AND OBLIGATIONS. Except as
set forth on the balance sheet as of September 30, 1997 included in the
most recent IntraTel Quarterly Report, neither IntraTel nor any of its
Subsidiaries had, as of September 30, 1997, any debts, liabilities or
obligations, whether accrued, absolute, contingent or otherwise and whether
due or to become due (including without limitation any liabilities
resulting from failure to comply with any law applicable to the conduct of
its business) required by generally accepted accounting principles to be
set forth on the balance sheet or disclosed in the notes thereto.
6.9 LITIGATION. (a) There is no claim, action, suit, investigation
or proceeding pending or, to the knowledge of IntraTel or SubCorp,
contemplated or threatened against IntraTel, SubCorp, or any of their
properties, (i) which seeks damages or penalties in excess of $25,000, (ii)
which seeks to prohibit, restrict or delay the transactions contemplated
hereby or any of the conditions to consummation of the transactions
contemplated hereby, or (iii) which, in the event of a final adverse
determination, individually or in the aggregate, would materially and
adversely
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affect the financial condition of IntraTel, and (b) there is not any
judgment, decree, injunction, ruling or order of any court, governmental
department, commission, agency or instrumentality, arbitrator or any other
person outstanding against IntraTel involving an amount in excess of
$25,000 or otherwise having any of the effects set forth in clause (a) of
this Section.
6.10 ACCURACY OF SCHEDULES, CERTIFICATES AND DOCUMENTS. All
information concerning IntraTel or SubCorp contained in this Agreement, in
any certificate furnished by IntraTel or SubCorp to NATN pursuant hereto
and in each schedule attached hereto is both complete (in that, except as
otherwise stated therein, it represents all the information called for by
the description of the respective schedule in this Agreement and does not
omit to state any material fact necessary to make the statements contained
therein not misleading) and accurate in all material respects. All
documents furnished by IntraTel or SubCorp pursuant to this Agreement as
being documents described in this Agreement or in any schedule attached
hereto are true and correct copies of the documents which they purport to
represent.
ARTICLE 7
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 CONDUCT OF BUSINESS. NATN covenants that during the period from
the date hereof to the Effective Time:
(a) OPERATIONS BY NATN IN THE ORDINARY COURSE OF BUSINESS.
Except as otherwise provided in or contemplated by this Agreement, NATN
shall conduct its operations according to its ordinary and usual course of
business and use reasonable commercial efforts to: (i) preserve intact its
business organization; (ii) keep available the services of its officers,
employees and agents; and (iii) maintain satisfactory relationships with
licensors, suppliers, distributors, customers and others having business
relationships with it. Officers of NATN shall confer with representatives
of IntraTel to keep it informed with respect to operational matters of a
material nature and to report the general status of the on-going operations
of the business of NATN.
(b) FORBEARANCE BY NATN. Except as otherwise provided in or
contemplated by this Agreement, NATN shall not, without the prior written
consent of IntraTel:
(i) except for obligations incurred in the ordinary course
of business to OAN Services, Inc. in connection with that certain
Account Purchase Agreement, dated July 17, 1996, as amended, between
NATN and OAN Services, Inc., take any action which would increase the
total indebtedness of NATN for borrowed money (including capitalized
leases) by more than $500,000 or, except in the ordinary course of
business, incur any debt, liability or obligation;
(ii) other than in the ordinary course of business, assume,
guarantee, endorse or otherwise become responsible for the obligations
of any other individual, corporation or other entity, or make any
loans or advances to any individual, corporation or other entity;
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(iii) declare or make any distribution on, redeem, or
purchase or otherwise acquire, any additional NATN Membership
Interests, other than (A) distributions made to enable the members of
NATN to pay taxes on income earned by NATN, and (B) distributions not
in excess of $1,000,000 to the Members in an amount equal to special
bonus credits given to NATN by MCI with respect to 1997 carrier cost
payments;
(iv) issue or sell any additional NATN Membership Interests,
or any securities, rights or obligations convertible into or
exchangeable for any additional NATN Membership Interests;
(v) mortgage, pledge or otherwise encumber any material
property or asset other than in connection with increases in
indebtedness for money borrowed permitted by clause (i) of this
subsection 7.1(b);
(vi) other than in the ordinary course of business, sell,
lease, transfer or dispose of any of its properties or assets, waive
or release any rights of value, or cancel, compromise, release or
assign any indebtedness owed to it or any claims held by it;
(vii) other than in the ordinary course of business,
make any investment of a capital nature either by purchase of stock or
securities, contributions to capital, property transfers or otherwise,
or by the purchase of any property or assets of any other individual,
corporation or other entity;
(viii) make any one capital expenditure in an amount
exceeding $100,000 or any series of capital expenditures in an
aggregate amount exceeding $750,000;
(ix) other than in the ordinary course of business, enter
into or terminate any contract, agreement, plan, or lease, or make any
change in any of its contracts, agreements, plans, or leases;
(x) increase in any material amount the compensation or
fringe benefits of any of its officers, employees or agents or pay any
pension or retirement allowance not required by any existing Employee
Benefit Plan to any such officers, employees or agents, or commit
itself to or enter into, amend or modify any employment agreement or
any of the existing Employee Benefit Plans or any new Employee Benefit
Plan with or for the benefit of any officer, employee or other person;
(xi) permit any insurance policy naming it as a beneficiary
or a loss payable payee to be canceled or terminated or any of the
coverage thereunder to lapse, unless simultaneously with such
termination or cancellation replacement policies providing
substantially the same coverage are in full force and effect;
(xii) amend its Articles of Organization or Operating
Agreement, except for amendments necessary to reflect changes in the
ownership of NATN Membership Interests;
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(xiii) enter into any collective bargaining agreement;
(xiv) make any election or file any amended tax return
reflecting any position that could result in a material adverse tax
consequence to NATN;
(xv) enter into an agreement to do any of the things
described in clauses (i) through (xiv).
7.2 HSR ACT FILINGS. As promptly as practicable after the date
hereof, NATN and IntraTel shall make any necessary filings with the FTC and
the DOJ under the HSR Act, with respect to the transactions contemplated by
this Agreement. In connection with such filings NATN and IntraTel shall,
in cooperation with each other, and as promptly as reasonably practicable
from time to time hereafter, make all such further filings and submissions,
and take such further action, as may be required in connection therewith.
Each party shall furnish the other all information in its possession
necessary for compliance by the other with the provisions of this Section
7.2. No party shall withdraw any such filing or submission prior to the
termination of this Agreement without the written consent of the other
party. All governmental or third party fees or charges required to be paid
in connection with such filings shall be paid by IntraTel.
7.3 FCC AND STATE PUBLIC UTILITY COMMISSION APPROVALS. Each party
hereto shall use reasonable commercial efforts to file all applications and
other documents with, and to obtain all consents and approvals from, the
FCC and each state public utility commission or public service commission
having jurisdiction over the transactions contemplated hereby, in each case
as promptly as is practicable. NATN shall take all such actions (other
than the payment of money not then due and owing or the provision of other
consideration) as are reasonably requested by IntraTel to assist IntraTel
in completing all such filings and obtaining all such consents and
approvals as IntraTel is required to make and obtain. IntraTel shall take
all such actions (other than the payment of money not then due and owing or
the provision of other consideration) as are reasonably requested by NATN
to assist NATN in completing all filings and obtaining all consents and
approvals as NATN is required to make and obtain. All governmental or
third party fees or charges required to be paid in connection with such
filings or actions shall be paid by IntraTel.
7.4 OTHER CONSENTS, AUTHORIZATIONS, ETC. In additional to those
filings and actions required by Section 7.3 of this Agreement, each party
hereto will use its best efforts to obtain all consents, authorizations,
waivers, orders and approvals from any governmental commission, board or
other regulatory body, and to make all related filings and registrations
which such party is required to obtain or make for the consummation of the
Merger, for IntraTel to control the Surviving Corporation following the
Merger and for the Surviving Corporation to continue to enjoy, following
the Merger, all of the rights and benefits of NATN, or which such party is
required to obtain or make in connection with the performance by such party
of this Agreement and the consummation by it of the transactions
contemplated hereby. Each party hereto also will use its best efforts to
obtain all consents, authorizations, waivers and approvals from any
nongovernmental third party which such party hereto is required to obtain
or make pursuant to any contract or agreement to which it is a party for
the consummation of the Merger, for IntraTel to control the Surviving
Corporation following the Merger and for the Surviving Corporation to
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continue to enjoy, following the Merger, an of the rights and benefits of
NATN, or which such party is required to obtain or make pursuant to any
contract to which it is a party in connection with the performance by such
party of this Agreement and the consummation by it of the transactions
contemplated hereby. Each party hereto also will cooperate fully with the
other parties in assisting them to obtain such consents, authorizations,
waivers, orders and approvals that the other parties are required to obtain
or make. All governmental or third party fees or charges required to be
paid in connection with the matters referred to in this Section shall be
paid by IntraTel.
7.5 INVESTIGATION; CONFIDENTIALITY.
(a) INVESTIGATION BY INTRATEL. IntraTel may, prior to the
Effective Time, make or cause to be made such investigation of the business
and properties of NATN and its financial and legal condition as IntraTel
reasonably deems necessary or advisable to familiarize itself therewith,
provided that such investigation shall not interfere with normal business
operations of NATN. NATN agrees to permit IntraTel and its authorized
representatives to have or cause them to be permitted to have, after the
date hereof and until the Effective Time, reasonable access to the
premises, books and records, officers and employees of NATN at reasonable
hours for such purposes, and the officers of NATN will furnish IntraTel
with such financial and operating data and other information with respect
to the business and properties of NATN as IntraTel shall from time to time
reasonably request. NATN will permit IntraTel and its representatives,
including its accounting firm, to review the work papers of the accounting
firm of NATN relating to their review or audit of the Financial Statements.
No investigations by IntraTel or its representatives shall affect the
representations and warranties of NATN, and each such representation and
warranty shall, to the extent set forth in Article 11 hereof, survive the
Closing.
(b) INVESTIGATION BY NATN. NATN may, prior to the Effective
Time, make or cause to be made such investigation of the business and
properties of IntraTel and its Subsidiaries, Intelicom International
Corporation, Infinet Software, Inc. and any other entities proposed to be
combined with or acquired by IntraTel substantially concurrently with the
consummation of the transactions contemplated by this Agreement, and their
financial and legal condition as NATN reasonably deems necessary or
advisable to familiarize itself therewith, provided that such investigation
shall not interfere with normal business operations of IntraTel and its
Subsidiaries. IntraTel agrees to permit NATN and its authorized
representatives to have or cause them to be permitted to have, after the
date hereof and until the Effective Time, full access to the premises,
books and records, officers and employees of IntraTel and its Subsidiaries
at reasonable hours for such purposes, and the officers of IntraTel and its
Subsidiaries will furnish NATN with such financial and operating data and
other information with respect to the business and properties of IntraTel
and its Subsidiaries as NATN shall from time to time reasonably request.
IntraTel will permit NATN and its representatives, including its accounting
firm, to review the work papers of the accounting firm of IntraTel relating
to their review or audit of the financial statements as of and for the
three most recent years. No investigations by NATN or its representatives
shall affect the representations and warranties of IntraTel and SubCorp,
and each such representation and warranty shall, to the extent set forth in
Article 11 hereof, survive the Closing.
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(c) CONFIDENTIALITY. Except as otherwise required in public
filings which any party makes with regulatory entities, any information
which any party provides to the other or to the other's Representatives,
whether written or oral, shall be treated as confidential material (the
"Confidential Material"); PROVIDED, HOWEVER, that Confidential Material
shall not include information that is generally available to the public or
becomes generally available to the public other than as a result of a
disclosure by the receiving party or its Representatives. For purposes of
this Agreement, the term "Representatives" shall mean a party's directors,
managers, officers, employees, attorneys, accountants, investment bankers,
brokers, bankers and others engaged by such party or intended to be engaged
by such party to advise it regarding the Confidential Material or the
transactions contemplated hereby or to assist in financing the transactions
contemplated hereby and who receive Confidential Material. It is hereby
agreed that the Confidential Material will be used by the receiving party
and/or its Representatives only for purposes of evaluating and facilitating
the transactions contemplated hereby, and that the Confidential Material
will be kept confidential by the receiving party and its Representatives;
PROVIDED, HOWEVER, that any of such information may be disclosed to the
receiving party's Representatives who need to know such information for
purposes relating to transactions contemplated hereby (it being understood
that such Representatives shall be informed by the receiving party of the
confidential nature of such information and shall be directed by the
receiving party to treat such information confidentially). The provisions
of this subsection (c) shall remain in effect for a period of five years
after the date hereof; PROVIDED, HOWEVER, that nothing herein shall limit
IntraTel's rights to disclose any business information about NATN covered
hereby following any consummation of the transactions contemplated hereby.
7.6 EXPENSES. Except as otherwise provided herein, whether or not
the Merger is consummated, all costs and expenses (including any brokerage
commissions or any finder's fees and including reasonable attorneys' and
accountants' fees) incurred in connection with this Agreement and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses; PROVIDED, HOWEVER, that IntraTel shall pay the
first $50,000 of fees and expenses of counsel for the Members, NATN and
NSDI that may be incurred in connection with negotiation, preparation and
execution of that certain Letter of Intent, dated October 2, 1997, among
IntraTel, the Members, NATN and NSDI, as amended, and this Agreement and
with the Closing and the consummation of the transactions contemplated by
this Agreement; PROVIDED, FURTHER, that, at the Closing, the amount of any
such fees and expenses paid by IntraTel (up to $50,000) may be deducted by
IntraTel from the Closing Payment payable to the Members pursuant to
Section 2.2(a) hereto. In the event the Closing does not occur, neither
NATN, NSDI nor any Member shall have any obligation to return to IntraTel
any amounts previously paid by IntraTel to NATN for such fees and expenses.
7.7 NO SOLICITATION OF TRANSACTIONS; EXTENSION FEE.
(a) Provided NATN has received the $250,000 Extension Fee (as
defined below) on or before the date of the execution of this Agreement,
prior to the close of business on June 1, 1998, neither NATN nor any of its
managers, officers, agents or other Representatives shall directly or
indirectly (i) solicit, initiate or encourage submission of proposals or
offers from any person or entity other than IntraTel relating to any
acquisition or purchase of all or a material part (50% or more) of the
stock or assets of, or any merger, consolidation or business combination
with, NATN (an "Acquisition Proposal"), or (ii) participate in any
discussions or
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negotiations regarding, or furnish to any other person (other than IntraTel
and its Representatives) any information with respect to or otherwise
cooperate in any way or assist, facilitate or encourage any Acquisition
Proposal by any other person. If, notwithstanding the foregoing, NATN
should receive any Acquisition Proposal or any inquiry regarding any such
proposal from a third party, NATN shall promptly inform IntraTel of the
terms of such proposal or inquiry.
(b) The parties hereto acknowledge and agree that the
"Standstill Period" (as such term is defined in that certain Letter of
Intent, dated as of October 2, 1997, as amended, among the parties hereto)
expired on January 31, 1998. As consideration for NATN agreeing to enter
into this Agreement and to agree to the June 1, 1998 date set forth in
Section 7.7(a) above, IntraTel shall pay to NATN, on or before the date of
the execution of this Agreement, a non-refundable extension fee of $250,000
(the "Extension Fee") in immediately available funds. In the event the
Merger is not consummated pursuant to this Agreement on or before June 1,
1998 (unless such failure to consummate has been made impossible by any act
or failure to act by NATN or the Members), NATN shall be entitled to retain
such $250,000 Extension Fee.
7.8 PUBLICITY. Except as otherwise required by law, NATN and
IntraTel shall coordinate with each other with respect to any notices to
third parties, press releases or other public announcements or filings with
respect to this Agreement and the transactions contemplated hereby.
Neither NATN nor IntraTel shall act unilaterally in this regard, except as
may be required by law, without the prior approval of the other party,
which approval shall not be unreasonably withheld.
7.9 JOINT VENTURE BETWEEN THE SURVIVING CORPORATION AND NSDI.
Following the Closing and subject to the occurrence thereof, the Surviving
Corporation and NSDI each agree to enter into good faith negotiations for
the purpose of reaching mutual agreement on or before December 31, 1998 for
the formation of a joint venture entity to be owned equally by the
Surviving Corporation and NSDI, which entity shall pursue and establish
telemarketing service centers in international markets (other than Canada).
The agreement establishing such joint venture shall generally provide that
(a) NSDI shall construct such service centers and establish training
programs for the joint venture, (b) the Surviving Corporation shall be
responsible for the costs of such construction and training, (c) NSDI shall
notify the Surviving Corporation of any international market (other than
Canada) that NSDI desires to serve and shall give the Surviving Corporation
a 30-day option to have such market served by the joint venture rather than
NSDI, (d) in the event that the Surviving Corporation determines that such
international market should not be served by the joint venture (or the
Surviving Corporation fails to respond within such 30-day period), NSDI
shall be permitted to serve such international market on its own, (e) all
profits of the joint venture shall be split equally between NSDI and the
Surviving Corporation, with the calculation of such profits subject to
audit rights to be mutually agreed upon in such joint venture agreement,
and (f) at the end of three years after the formation of the joint venture,
the Surviving Corporation shall have the option to purchase NSDI's 50%
interest in the joint venture at a price determined pursuant to terms and
conditions which shall be specified in the joint venture agreement; and, in
the event the Surviving Corporation does not exercise such option, NSDI
shall have the option to purchase the Surviving Corporation's 50% interest
in the joint venture at a price determined pursuant to terms and conditions
which shall be specified in the joint venture agreement. The foregoing
provisions of this Section 7.9 are intended to represent only non-binding
understandings of IntraTel, SubCorp and NSDI. In the event that NSDI and
the
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Surviving Corporation are unable to agree upon the terms of such joint
venture agreement by December 31, 1998, the obligation to establish such
joint venture shall terminate and no party hereto shall have any further
rights or obligations pursuant to this Section.
7.10 CERTAIN OBLIGATIONS OF INTRATEL AND THE SURVIVING CORPORATION
FOLLOWING THE EFFECTIVE TIME. Except as may be otherwise provided in the
Management Agreement to be entered into pursuant to Section 8.1(e) of this
Agreement, during the Management Period, IntraTel and the Surviving
Corporation shall (i) preserve the separate corporate existence and
business organization of the Surviving Corporation, (ii) permit the
Surviving Corporation to be managed by the Members (or an entity owned or
controlled by the Members) as provided in the Management Agreement to be
entered into pursuant to Section 8.1(e) of this Agreement, and to carry on
its business in the ordinary course substantially as carried on by NATN
prior to the Effective Time, and (iii) take such other actions as may be
necessary or appropriate to enable the Surviving Corporation to meet the
Revenue Goal necessary to enable the Members to earn the full Contingent
Payment. Without limiting the generality of the foregoing:
(a) IntraTel shall provide such financial support to the
Surviving Corporation as may be necessary to enable it to achieve the goals
set forth in the Business Plan for the Surviving Corporation attached as an
exhibit to the Management Agreement to be entered into pursuant to Section
8.1(e) of this Agreement (the "Business Plan"). Without limiting the
generality of the foregoing, IntraTel shall provide to the Surviving
Corporation such funds (herein referred to as "Customer Acquisition Expense
Advances") as may be necessary to enable the Surviving Corporation to pay
$275,000 per week in customer acquisition expenses in the event that the
Surviving Corporation does not generate sufficient revenues internally
(including through the utilization of borrowings from credit facilities
currently in place or replacements therefore) to pay such customer
acquisition expenses.
(b) Neither IntraTel nor the Surviving Corporation shall,
without the consent of a Majority of the Members, take any action to cause
the Surviving Corporation to (i) sell, lease, transfer, or dispose of any
of its properties, assets or cash, (ii) merge with, liquidate into or
otherwise combine with any other Person, or (iii) declare, set aside or pay
any dividend, or make any other distribution (in either case in the form of
cash, property or assets) with respect to the stock of the Surviving
Corporation.
7.11 ELECTION OF JAMES K. NOBLE, JR. AS DIRECTOR OF INTRATEL . No
later than the fifth day prior to the Closing, James K. Noble, Jr. shall
notify IntraTel if he desires to be elected as a director of IntraTel, or
if he desires to have another Member serve in such capacity. If Mr. Noble
so notifies IntraTel, IntraTel shall take all necessary action to elect Mr.
Noble or such nominee to such position for a term to commence on the
Effective Time and to terminate upon expiration of the Management Period.
7.12 FUNDS TO PAY MEMBER LOANS. On or prior to the Closing, IntraTel
shall provide to SubCorp the funds necessary for SubCorp to pay (a) to
James K. Noble, Jr. the outstanding principal balance, plus accrued but
unpaid interest, owed by NATN to Mr. Noble as of the date of the Closing
pursuant to that certain Demand Promissory Note of NATN dated as of
December 31, 1996 in the principal amount of $711,000.00 (such promissory
note being hereinafter referred to as the "Noble Promissory Note"); and (b)
to Christopher G. Hodges the outstanding principal
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balance, plus accrued but unpaid interest, owed by NATN to Mr. Hodges as of
the date of the Closing pursuant to that certain Demand Promissory Note of
NATN dated as of December 31, 1996 in the principal amount of $474,000.00
(such promissory note being hereinafter referred to as the "Hodges
Promissory Note").
7.13 PURCHASE OF CALL CENTER COMPANIES. No later than the 30th day
prior to the Closing, IntraTel shall notify each of James K. Noble, Jr. and
Christopher G. Hodges if it desires to purchase all of the issued and
outstanding shares of NATN Services, Inc. ("NATN Services"), a South
Carolina corporation that owns a call center in Charleston, South Carolina,
and all of the issued and outstanding shares of North American
Communications Systems, Inc. ("Communications Systems"), a South Carolina
corporation that owns a call center in Spartanburg, South Carolina. If
IntraTel so notifies Messrs. Noble and Hodges, IntraTel and Messrs. Noble
and Hodges shall enter into at Closing the Stock Purchase Agreement
referred to in Section 8.1(g) of this Agreement.
7.14 ACTIONS TO AVOID, AND NOTICES OF, BREACHES OF REPRESENTATIONS AND
WARRANTIES. NATN shall: (a) take such actions so that NATN's
representations and warranties in this Agreement remain true and correct
and shall not take any action that would cause such representations and
warranties to cease to be true and correct; and (b) inform IntraTel
promptly of any facts or circumstances that could be reasonably expected to
constitute or result in a breach of any of NATN's representations and
warranties in this Agreement.
7.15 ADDITIONAL AGREEMENTS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable
commercial efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective, as soon
as reasonably practicable, the transactions contemplated by this Agreement.
ARTICLE 8
CONDITIONS TO THE MERGER
8.1 CONDITIONS TO MERGER RELATING TO ALL PARTIES. Consummation of
the Merger is subject to the fulfillment to the reasonable satisfaction of
each of the Members, NATN and IntraTel, prior to or at the Closing, of each
of the following conditions:
(a) FCC AND STATE PUBLIC UTILITY COMMISSION APPROVALS, ETC. All
required approvals shall have been obtained from the FCC and any state
public utility commission or public service commission having jurisdiction
over the transactions contemplated hereby.
(b) HART-SCOTT-RODINO. The applicable waiting period under the
HSR Act shall have expired or been terminated without either (i) a stop
order, a request or other disapproval of the Merger having been issued,
made or threatened by DOJ or FTC, or (b) either DOJ or FTC having requested
any divestiture.
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(c) OTHER CONSENTS, AUTHORIZATIONS, ETC. All other consents,
authorizations, waivers, orders and approvals of, and filings and
registrations with, any governmental commission, board or other regulatory
body or any nongovernmental third party which are required for or in
connection with the execution and delivery by NATN of this Agreement and
the consummation by NATN of the Merger or the other transactions
contemplated hereby or which NATN must obtain to permit IntraTel to control
the Surviving Corporation following the Merger or to permit the Surviving
Corporation to continue to enjoy, in all material respects following the
Merger, all of the rights and benefits of NATN, including the ability of
the Surviving Corporation to continue conducting its business in all
material respects in the same manner as it is now being consumed, shall
have been obtained or made.
(d) NO INJUNCTION, ETC. At the Closing there shall be no
judgment, decree, injunction, ruling or order of any court, governmental
department, commission, agency or instrumentality outstanding against
IntraTel, SubCorp or NATN which prohibits, restricts or delays consummation
of the Merger or any of IntraTel's conditions to the consummation of the
Merger.
(e) MANAGEMENT AGREEMENT. The Surviving Corporation and the
Members (or an entity owned or controlled by the Members) shall have
entered into a Management Agreement in substantially the form attached
hereto as EXHIBIT 8.1(e), providing for the management of the Surviving
Corporation following the Effective Time.
(f) TELEMARKETING SERVICE AGREEMENT. The Surviving Corporation
and NSDI shall have entered into a Telemarketing Service Agreement in
substantially the form attached hereto as EXHIBIT 8.1(f).
(g) SALE OF CALL CENTER COMPANIES. In the event IntraTel
notifies James K. Noble, Jr. and Christopher G. Hodges in accordance with
Section 7.13 of this Agreement that it desires to purchase all of the
issued and outstanding shares of NATN Services and all of the issued and
outstanding shares of Communications Systems, the Surviving Corporation and
each of James K. Noble, Jr. and Christopher G. Hodges shall have entered
into a Stock Purchase Agreement in form, scope and substance reasonably
satisfactory to each of IntraTel, Mr. Noble and Mr. Hodges, pursuant to
which Messrs. Noble and Hodges shall sell to the Surviving Corporation (i)
for $1.00, all of the issued and outstanding shares of NATN Services, and
(ii) for $1.00, all of the issued and outstanding shares of Communications
Systems.
8.2 CONDITIONS TO MERGER RELATING TO INTRATEL AND SUBCORP.
Consummation of the Merger is subject to the fulfillment to the reasonable
satisfaction of IntraTel and SubCorp, prior to or at the Closing, of each
of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH COVENANTS
AND OBLIGATIONS. The representations and warranties of NATN contained in
this Agreement shall have been true and correct at the date hereof and
shall also be true and correct at and as of the Closing, except for changes
contemplated in this Agreement, with the same force and effect as if made
at and as of the Closing, except as such representations and warranties by
their terms relate only to periods of time prior to the Closing; NATN shall
have performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by
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it at or prior to the Closing; and IntraTel shall have received a
certificate of the President of NATN certifying, to the best of his
knowledge, to all of the foregoing effects.
(b) PRIVATE PLACEMENT. IntraTel shall have completed a private
placement of convertible debt securities or debt securities and warrants of
IntraTel on terms reasonably acceptable to IntraTel to enable IntraTel and
SubCorp to consummate the transactions contemplated hereby.
(c) MEMBER RELEASES. Each of James K. Noble, Jr. and
Christopher G. Hodges shall have executed and delivered to SubCorp
appropriate documents evidencing payment in full of the Noble Promissory
Note and the Hodges Promissory Note.
(d) NATN MEMBERSHIP INTERESTS. Each Member shall have delivered
to SubCorp certificates or other instruments, if any, representing the NATN
Membership Interests owned by such Member, duly endorsed for transfer, or
such other documents necessary to transfer all of the NATN Membership
Interests to SubCorp.
(e) OPINION OF NATN'S COUNSEL. IntraTel shall have received an
opinion of counsel to NATN, dated as of the Closing, in form, scope and
substance reasonably satisfactory to IntraTel and its counsel.
(f) ADDITIONAL DOCUMENTS, ETC. NATN shall have furnished to
IntraTel such additional documents and instruments as IntraTel may have
reasonably requested as to any of the conditions set forth in this Section
8.2.
8.3 CONDITIONS TO THE MERGER RELATING TO NATN. Consummation of the
Merger is subject to the fulfillment to the reasonable satisfaction of
NATN, prior to or at the Closing, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH COVENANTS
AND OBLIGATIONS . The representations and warranties of IntraTel and
SubCorp contained in this Agreement shall have been true and correct at the
date hereof and shall also be true and correct in all material respects at
and as of the Closing, except for changes contemplated in this Agreement,
with the same force and effect as if made at and as of the Closing, except
as such representations and warranties by their terms relate only to
periods of time prior to the Closing; each of IntraTel and SubCorp shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
at or prior to the Closing; and NATN shall have received one or more
certificates of the President of each of IntraTel and of SubCorp
certifying, to the best of his or her knowledge, to the foregoing effect.
(b) ELECTION OF JAMES K. NOBLE, JR. AS DIRECTOR OF THE SURVIVING
CORPORATION. IntraTel, as the sole shareholder of the Surviving
Corporation, shall have elected James K. Noble, Jr. as a director of the
Surviving Corporation, for a term to commence on the Effective Time and to
terminate upon expiration of the Management Period.
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(c) ELECTION OF JAMES K. NOBLE, JR. AS DIRECTOR OF INTRATEL. In
the event James K. Noble, Jr. notifies IntraTel in accordance with Section
7.11 of this Agreement that he desires to be elected as a director of
IntraTel or he desires to have another Member serve in such capacity,
IntraTel shall have elected Mr. Noble or such nominee as a director of
IntraTel, for a term to commence on the Effective Time and to terminate
upon expiration of the Management Period.
(d) PAYMENT OF PROMISSORY NOTES. SubCorp shall have paid to (a)
James K. Noble, Jr. the then outstanding principal balance, plus accrued
but unpaid interest, owed by NATN to Mr. Noble pursuant to the Noble
Promissory Note, and (b) Christopher G. Hodges the then outstanding
principal balance, plus accrued but unpaid interest, owed by NATN to Mr.
Hodges pursuant to the Hodges Promissory Note.
(e) RELEASE OF GUARANTEES. Each Member who shall have
guaranteed any liability or indebtedness of NATN shall have been released
therefrom by the holders of any such guarantees of such liability or
indebtedness. Further, in the event IntraTel notifies James K. Noble, Jr.
and Christopher G. Hodges in accordance with Section 7.13 of this Agreement
that it desires to purchase all of the issued and outstanding shares of
NATN Services and all of the issued and outstanding shares of
Communications Systems, each Member who shall have guaranteed any liability
or indebtedness of NATN Services or Communications Systems shall have been
released therefrom by the holders of any such guarantees of such liability
or indebtedness.
(f) LETTER OF CREDIT. IntraTel shall have delivered to the
Members a letter of credit, in form, scope and substance reasonably
satisfactory to the Members, in the face amount of $5,000,000.00, with the
Members as the beneficiary thereof, and issued by a financial institution
reasonably acceptable to the Members, which letter of credit shall secure
payment of the Contingent Payment to the Members.
(g) OPINION OF INTRATEL'S COUNSEL. NATN and the Members shall
have received an opinion of counsel to IntraTel and Subcorp, dated as of
the Closing, in form, scope and substance reasonably satisfactory to NATN
and the Members and their counsel.
(h) ADDITIONAL DOCUMENTS, ETC. IntraTel and SubCorp shall have
furnished to NATN and the Members such additional documents and instruments
as NATN and the Members may have reasonably requested as to any of the
conditions set forth in this Section 8.3.
8.4 WAIVER OF CONDITIONS. Any party may, at its option, waive any or
all of the conditions herein contained to which its obligations hereunder
are subject, except that the conditions contained in Sections 8.1(a) and
8.1(b) may not be so waived.
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ARTICLE 9
CLOSING
9.1 CLOSING. Evidence of the fulfillment or waiver of the conditions
set forth in Article 8 shall be provided by the parties hereto to each
other at a closing (the "Closing") to be held at the offices of Holland &
Knight LLP, Suite 2000, One Atlantic Center, 1201 West Peachtree Street,
Atlanta, Georgia 30309, at 10:00 a.m. local time, on the third business day
following the later of (a) the closing of IntraTel's private placement as
set forth in Section 8.2(b), (b) satisfaction or waiver of the conditions
set forth in Sections 8.1(a) and 8.1(b), or (c) such other date as the
parties may mutually agree.
9.2 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY NATN. At the
Closing, NATN shall deliver, or cause to be delivered, to IntraTel the
following:
(a) The Articles of Merger, executed by NATN.
(b) The Management Agreement referred to in Section 8.1(e),
executed by each of the Members (or an entity owned or controlled by the
Members).
(c) The Telemarketing Service Agreement referred to in Section
8.1(f), executed by NSDI.
(d) If applicable, the Stock Purchase Agreement referred to in
Section 8.1(g), executed by Messrs. Noble and Hodges.
(e) The certificate referred to in Section 8.2(a).
(f) The releases referred to in Section 8.2(c).
(g) The NATN Membership Interests or other documents referred to
in Section 8.2(d).
(h) The opinion referred to in Section 8.2(e).
(i) A copy of the resolutions of the Managers of NATN
authorizing the execution, delivery and performance of this Agreement by
NATN, a copy of the resolutions of the Members of NATN approving this
Agreement, and a certificate of the Secretary or Assistant Secretary of
NATN, dated as of the Effective Time, that such resolutions were duly
adopted and are in full force and effect.
(j) The consents or other authorizations, waivers, orders and
approvals required to be obtained by NATN pursuant to Section 7.4.
(k) Such additional certificates, opinions and other documents
as IntraTel may reasonably request as to any of the conditions set forth in
Section 8.2.
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9.3 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY INTRATEL AND SUBCORP.
At the Closing, IntraTel and SubCorp shall deliver, or cause to be
delivered, to NATN, the following:
(a) The Articles of Merger, executed by SubCorp.
(b) The Management Agreement referred to in Section 8.1(e),
executed by the Surviving Corporation.
(c) The Telemarketing Service Agreement referred to in Section
8.1(f), executed by the Surviving Corporation.
(d) If applicable, the Stock Purchase Agreement referred to in
Section 8.1(g), executed by the Surviving Corporation.
(e) The certificate referred to in Section 8.3(a).
(f) Evidence of the election of James K. Noble, Jr. as a
director of the Surviving Corporation referred to in Section 8.3(b).
(g) If applicable, evidence of the election of James K. Noble,
Jr. as a director of IntraTel referred to in Section 8.3(c).
(h) Evidence of the payment of the Noble Promissory Note and the
Hodges Promissory Note referred to in Section 8.3(d).
(i) Evidence of the release of Member guarantees referred to in
Section 8.3(e).
(j) The Letter of Credit referred to in Section 8.3(f).
(k) The opinion referred to in Section 8.3(g).
(l) Copies of resolutions of the Boards of Directors of IntraTel
and SubCorp authorizing the execution, delivery and performance of this
Agreement by IntraTel and SubCorp and a copy of the resolutions adopted by
IntraTel as sole shareholder of SubCorp approving this Agreement, and
certificates of the Secretary or Assistant Secretary of IntraTel and of
SubCorp, as applicable, dated as of the Effective Time, that such
resolutions were duly adopted and are in full force and effect.
(m) The consents or other authorizations, waivers, orders and
approvals required to be obtained by IntraTel and SubCorp pursuant to
Section 7.4.
(n) Such additional certificates, opinions and other documents
as NATN may reasonably request as to any of the conditions set forth in
Section 8.3.
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ARTICLE 10
TERMINATION AND ABANDONMENT
10.1 TERMINATION AND ABANDONMENT. This Agreement and the Merger may
be terminated and abandoned at any time prior to the filing of the Articles
of Merger with the Secretary of State of Delaware and the Secretary of
State of Georgia (the "Merger Filings"):
(a) BY MUTUAL ACTION. By mutual action of the Boards of
Directors of IntraTel and SubCorp and by the Managers and Members of NATN.
(b) BY NATN. By NATN if the $250,000 Extension Fee is not
received by NATN on or prior to the date of the execution of this
Agreement.
(c) BY INTRATEL OR NATN. By IntraTel and SubCorp or by NATN if
any action, suit or proceeding shall have been instituted by any person,
or, to the knowledge of IntraTel (or SubCorp) or NATN, shall have been
threatened by any public authority, which seeks to prohibit, restrict or
delay consummation of the Merger or any of the conditions to consummation
of the Merger or to the right of IntraTel to control the business of the
Surviving Corporation after the Effective Time, or to subject IntraTel,
SubCorp, NATN, or their respective directors, managers or officers to
liability on the ground that it or they have breached any law or regulation
or otherwise acted improperly in relation to the transactions contemplated
by this Agreement, other than an action, suit or proceeding instituted by
a person other than a public authority which, in the opinion of counsel to
IntraTel and counsel to NATN, does not have a substantial likelihood of
success.
(d) DEADLINE DATE. In the event that the Merger is not
consummated pursuant to this Agreement on or before June 1, 1998, this
Agreement may be terminated and abandoned by IntraTel and SubCorp or by
NATN unless the Boards of Directors of IntraTel and SubCorp and the
Managers and Members of NATN shall have agreed upon an extension of time in
which to consummate the Merger.
10.2 PROCEDURE FOR TERMINATION. The termination of this Agreement by
IntraTel and SubCorp or by NATN, shall be effective upon the giving of
notice of such termination, stating the grounds for such termination and
signed by each terminating party, to the other party.
10.3 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement and the Merger (a) by mutual action of
IntraTel, SubCorp and NATN pursuant to Section 10.1(a); or (b) by either
NATN or IntraTel and SubCorp pursuant to Sections 10.1(b), (c) or (d), no
party shall have any liability hereunder (except pursuant to Sections 7.5
("Investigation; Confidentiality"), 7.6 ("Expenses"), 7.7(b) ("No
Solicitation of Transactions; Extension Fee"), and 12.5 ("No Brokers"),
which shall survive any such termination) unless such failure to consummate
or fulfill a condition is within the reasonable control of either NATN or
IntraTel and SubCorp, in which case such party having reasonable control
shall continue to be liable hereunder.
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ARTICLE 11
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNITIES
11.1 SURVIVAL. The representations, warranties, covenants and
agreements made by IntraTel, SubCorp and the Members in this Agreement and
in the schedules to this Agreement shall survive the Merger and shall not
be affected by any investigation or finding made by the parties hereto
prior to the date hereof or the Effective Time. The representations,
warranties, covenants and agreements made by NATN shall not be affected by
any investigation or finding made by the parties hereto prior to the date
hereof or the Effective Time, but shall not survive the Merger; PROVIDED,
HOWEVER, that such non-survival with respect to NATN shall not in any way
limit the liability of the Members pursuant to this Agreement.
11.2 INDEMNIFICATION. Subject to the provisions of Sections 11.3
through 11.7:
(a) BY THE MEMBERS AND NATN. Each of the Members, jointly and
severally, agree to indemnify, defend and hold IntraTel and SubCorp
harmless from and against any liability, loss, obligation, damage, cost or
expense, including reasonable attorneys' fees and expenses (each such
liability, loss, obligation, damage, cost or expense referred to in this
subsection (a) being referred to herein as an "IntraTel Loss") incurred or
suffered as a result of (i)any material misrepresentation, material breach
of warranty, or material failure to comply with any covenant or agreement,
given or made by NATN or the Members in this Agreement, or (ii) the failure
of the Manager (as defined in the Management Agreement) to comply with any
of its obligations contained in the Management Agreement; PROVIDED,
HOWEVER, that if the Closing shall not occur, any sums payable pursuant to
this subsection (a) shall be payable by NATN only and not by the Members;
and PROVIDED, FURTHER, that any liability of a Member arising solely from
a misrepresentation or breach of warranty, covenant or agreement in Article
5 hereof shall be several rather than joint, as provided in subsection (b)
below.
(b) BY THE MEMBERS INDIVIDUALLY. Each of the Members, severally,
agree to indemnify, defend and hold IntraTel and SubCorp harmless from and
against any liability, loss, obligation, damage, cost or expense, including
reasonable attorneys' fees and expenses (each such liability, loss,
obligation, damage, cost or expense referred to in this subsection (b)
being referred to herein as an "IntraTel Member-Specific Loss") incurred or
suffered as a result of any material misrepresentation, material breach of
warranty, or material failure to comply with any covenant or agreement,
given or made by such Member in Article 5 of this Agreement.
(c) BY INTRATEL. IntraTel hereby agrees to indemnify, defend and
hold harmless NATN and the Members from and against any liability, loss,
obligation, damage, cost or expense, including reasonable attorneys' fees
and expenses (each such liability, loss, obligation, damage, cost or
expense referred to in this subsection (c) being referred to herein as an
"NATN Loss"), incurred or suffered as a result of any material
misrepresentation, material breach of warranty, or material failure to
comply with any covenant or agreement, given or made by IntraTel or SubCorp
in this Agreement.
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(d) CERTAIN DEFINITIONS. For purposes of this Article 10:
(i) In the case of an IntraTel Loss, the "Indemnified
Party" shall be IntraTel and SubCorp, and the "Indemnifying Party"
shall be NATN prior to the Effective Time and thereafter shall be the
Members;
(ii) In the case of an IntraTel Member-Specific Loss, the
"Indemnified Party" shall be IntraTel and SubCorp, and the
"Indemnifying Party" shall be the Member against whom the claim is
asserted.
(iii) In the case of an NATN Loss, the "Indemnified
Party" shall be NATN and the Members prior to the Effective Time and
thereafter shall be the Members, and the "Indemnifying Party" shall be
IntraTel; and
(iv) A "Loss" shall mean an IntraTel Loss, an IntraTel
Member-Specific Loss, or an NATN Loss, as the context requires.
11.3 LIMITATIONS. The indemnification obligations contained in
Section 11.2 are subject to the following limitations:
(a) The Indemnifying Party shall not be required to indemnify
the Indemnified Party under Section 11.2 unless the party claiming
indemnification gives a Claims Notice on or before the second anniversary
of the Effective Time, except for (i) matters covered by Section 4.11 ("Tax
Matters"), as to which a Claims Notice may be given at any time prior to
the date upon which the liability to which any such matter relates is
barred by the applicable statute of limitations, and (ii) those covenants
and agreements in Article 2 and in Section 7.10 ("Certain Obligations of
IntraTel and the Surviving Corporation following the Effective Time"),
which shall expire upon the later of (A) the expiration of the Management
Period, or (B) such second anniversary of the Effective Time.
(b) NATN and the Members shall not be required to indemnify the
Indemnified Party with respect to an IntraTel Loss unless the amount of
such IntraTel Loss, when aggregated with all other such IntraTel Losses,
shall exceed $50,000 (the "Minimum Aggregate Liability Amount"), at which
time IntraTel Losses may be asserted for the Minimum Aggregate Liability
Amount and any amounts in excess thereof; PROVIDED, HOWEVER, that the
foregoing Minimum Aggregate Liability Amount shall not apply to any
IntraTel Loss which results from or arises out of fraud and intentional
misrepresentation on the part of NATN or the Members in this Agreement.
(c) The maximum liability of any Member for all Losses hereunder
shall be limited as follows:
(i) For any Losses arising from (I) a misrepresentation or
breach of warranty in Section 4.9 ("Governmental Authorization and
Compliance with Laws"), or Section 4.14 ("Material Contracts"), or (II) a
violation of Section 2(e) of the Management Agreement ("slamming," etc.),
each Member shall be liable for (A) an amount equal to twelve percent (12%)
of the Merger Consideration actually received by such Member as of the date
of such Loss if the
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Claims Notice with respect to such Loss is given on or prior to the first
anniversary of the Effective Time, and (B) an amount equal to six percent
(6%) of the Merger Consideration actually received by such Member as of the
date of such Loss if the Claims Notice with respect to such Loss is given
after the first anniversary of the Effective Time but on or prior to the
second anniversary of the Effective Time.
(ii) For any other Loss, each Member shall be liable for
such Member's pro rata share of such other Loss, determined by multiplying
the amount of such Loss by the Liability Percentage set forth beside such
Member's name, as shown on SCHEDULE 11.3 to this Agreement, and in no event
shall the aggregate amount of all such Losses for which any Member shall be
responsible exceed the Maximum Dollar Liability set forth beside such
Member's name, as shown on SCHEDULE 11.3 to this Agreement.
11.4 NOTICE OF LOSS OR ASSERTED LIABILITY. Promptly after (a)
becoming aware of circumstances that have resulted, or which may result, in
a Loss for which an Indemnified Party intends to seek indemnification under
Section 11.2, or (b) receipt by an Indemnified Party of written or oral
notice of any demand, claim or circumstances which, with or without the
lapse of time, the giving of notice or both, would give rise to a claim or
the commencement (or threatened commencement) of any litigation that may
result in a Loss (an "Asserted Liability"), such Indemnified Party shall
give notice thereof (a "Claims Notice") to the Indemnifying Party. Any
Claims Notice shall describe the Loss or the Asserted Liability in
reasonable detail, and shall indicate the amount (estimated, if necessary)
of the Loss that has been or which may be suffered by such Indemnified
Party. The Claims Notice may be amended on one or more occasions with
respect to the amount of the Asserted Liability or the Loss at any time
prior to final resolution of the obligation to indemnify relating to the
Asserted Liability or the Loss. If a Claims Notice is not provided
promptly as required by this Section, an Indemnified Party nonetheless
shall be entitled to indemnification by the Indemnifying Party to the
extent that the Indemnifying Party is unable to establish that it has been
prejudiced by such late receipt of the Claims Notice. Notwithstanding the
foregoing sentence, however, if the Claims Notice is not provided prior to
compromise or payment of any Asserted Liability by the Indemnified Party,
the Indemnified Party shall only be entitled to indemnification by the
Indemnifying Party to the extent that the Indemnified Party is able to
establish that the Indemnifying Party has not been prejudiced by such late
receipt of the Claims Notice.
11.5 OPPORTUNITY TO CONTEST. The Indemnifying Party may elect to
compromise or contest, at its own expense and with counsel of its choice
reasonably acceptable to the Indemnified Party, any Asserted Liability. If
the Indemnifying Party elects to compromise or contest such Asserted
Liability, it shall, within 30 days (or sooner, if the nature of the
Asserted Liability so requires), notify the Indemnified Party of its intent
to do so by sending a notice to the Indemnified Party (the "Contest
Notice"), and the Indemnified Party shall cooperate, at the expense of the
Indemnifying Party, in the compromise or contest of such Asserted
Liability. If the Indemnifying Party elects not to compromise or contest
the Asserted Liability, fails to notify the Indemnified Party of its
election as herein provided or contests its obligation to indemnify under
this Agreement, the Indemnified Party (upon further notice to the
Indemnifying Party) shall have the right to pay, compromise or contest such
Asserted Liability on behalf of and for the account and risk of the
Indemnifying Party. Anything in this Section to the contrary
notwithstanding, (i) the Indemnified Party shall have the right, at its own
cost and for its own
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account, to compromise or contest any Asserted Liability, and (ii) the
Indemnifying Party shall not, without the Indemnified Party's written
consent, settle or compromise any Asserted Liability or consent to entry of
any judgment which does not include an unconditional term releasing the
Indemnified Party from all liability in respect of such Asserted Liability.
In any event, the Indemnified Party and the Indemnifying Party may
participate, at their own expense, in the contest of such Asserted
Liability. The Indemnifying Party and the Indemnified Party shall
cooperate fully with each other as to all Asserted Liabilities, shall make
available to each other as reasonably requested all information, records,
and documents relating to all Asserted Liabilities and shall preserve all
such information, records, and documents until the termination of any
Asserted Liability. The Indemnifying Party and the Indemnified Party also
shall make available to each other, as reasonably requested, its personnel,
agents, and other representatives who are responsible for preparing or
maintaining information, records, or other documents, or who may have
particular knowledge with respect to any Asserted Liability.
11.6 SUBROGATION RIGHTS. In the event that the Indemnifying Party
shall be obligated to indemnify the Indemnified Party pursuant to this
Article 11, the Indemnifying Party shall upon payment of such indemnity in
full, be subrogated to all rights of the Indemnified Party with respect to
the Loss to which such indemnification relates; PROVIDED, HOWEVER, that the
Indemnifying Party shall only be subrogated to the extent of any amount
paid by it pursuant to this Article 11 in connection with such Loss.
11.7 INDEMNIFICATION PAYMENTS. Subject to the terms hereof and unless
contested pursuant to Section 11.5, an Indemnifying Party shall pay to the
Indemnified Party the full amount of any Loss (other than a Loss resulting
from an Asserted Liability) under this Article 11 within ten days of
receipt of the Claims Notice thereof and the full amount of any Loss
resulting from an Asserted Liability within ten days of the date such
contest is terminated or the date upon which a final non-appealable
judgment or award is rendered.
ARTICLE 12
MISCELLANEOUS
12.1 KNOWLEDGE. "Knowledge" with respect to any individual, shall
mean such information either actually known by such individual or which
such individual reasonably should have known. With respect to any entity,
"knowledge" shall refer to such information as was actually known by any
officer, director or manager thereof.
12.2 REMEDIES. Absent fraud, misconduct or bad faith, the remedies
contained in Article 2 and Article 11 of this Agreement shall be the
exclusive remedies for any breach or violation of the agreements,
covenants, obligations, representations or warranties set forth in this
Agreement; PROVIDED, HOWEVER, that such provisions shall not prevent a
party from seeking equitable remedies (including specific performance and
injunctive relief) in connection with any such breach or violation.
12.3 WAIVER. The failure of any party hereto at any time or times to
require performance of any provisions hereof shall in no manner affect the
right to enforce the same.
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No waiver by any party of any condition, or the breach of any term,
provision, warranty, representation, agreement or covenant contained in
this Agreement or the other agreements contemplated hereby, whether by
conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach
or a waiver of any other condition or of the breach of any other term,
provision, warranty, representation, agreement or covenant herein or
therein contained.
12.4 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if either (a) delivered
personally or by courier, (b) transmitted by telecopy mechanism, provided
that any notice so given is also sent for delivery as provided in clause
(a) or mailed as provided in clause (c), or (c) sent by registered or
certified mail, postage prepaid, addressed as follows (or to such other
address or person as any party shall have designated by notice to the other
party):
If to IntraTel or Mr. Murray Swanson
SubCorp, or to 28050 US 19 North
NATN after the Clearwater, Florida 34621
Effective Time: Telecopier: (813) 221-7951
with copies to: Benjamin Bronston, Esq.
Nowalsky, Bronston & Gothard
3500 N. Causeway Boulevard
Suite 1442
Metarie, Louisiana 70002
Telecopier: (504) 831-0892
Emanuel S. Cherney, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022-3598
Telecopier: (212) 836-8689
If to NATN North American Telephone Network, L.L.C.
before the 4151 Ashford Dunwoody Road
Effective Suite 550
Time: Atlanta, Georgia 30319
Attn: James K. Noble, Jr.
Telecopier (888) 788-0008
with a copy to: Charles D. Ganz, Esq.
Holland & Knight LLP
Suite 2000
One Atlantic Center
1201 West Peachtree Street, N.E.
Atlanta, Georgia 30309-3400
Telecopier: (404) 881-0470
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If to NSDI: National Service Direct, Inc.
4151 Ashford Dunwoody Road
Suite 550
Atlanta, Georgia 30319
Attn: Christopher G. Hodges
Telecopier: (888) 788-0008
with a copy to: Charles D. Ganz, Esq.
Holland & Knight LLP
Suite 2000
One Atlantic Center
1201 West Peachtree Street, N.E.
Atlanta, Georgia 30309-3400
Telecopier: (404) 881-0470
If to the Members: Mr. James K. Noble, Jr.
455 Shadowlawn Road
Marietta, Georgia 30067
Telecopier: (770) 984-2166
Mr. Christopher G. Hodges
3475 Oak Valley Road, N.E.
Unit #2920
Atlanta, Georgia 30326
Telecopier: (404) 869-0190 (call before sending
by telecopy)
Mr. Hans Kasper
480 Wilde Green Drive
Roswell, Georgia 30075
Telecopier: (770) 754-3130 (call before sending
by telecopy)
Mr. Ronald C. Levitt
350 Dunhill Way Court
Alpharetta, Georgia 30005
Telecopier: (770) 753-9486
12.5 NO BROKERS. No broker's or finder's fee or commission is due or
payable from or by any of the parties hereto, nor has any such fee or
commission been earned by any other third party on behalf of any of the
foregoing in connection with the negotiation and execution of this
Agreement or in any other manner affecting or involving the businesses of
NATN or in connection with the negotiation or execution of this Agreement,
or the consummation of any transaction contemplated hereby. NATN agrees to
indemnify and save IntraTel and SubCorp harmless from and against any and
all claims or demands for broker's or finder's fees or commissions by or
from any person or persons whatsoever, based on any arrangement made by
NATN. IntraTel agrees to indemnify and save NATN harmless from and against
any and all claims or demands for broker's or finder's fees or commissions
from any person or persons whatsoever based on any arrangement made by
IntraTel or SubCorp.
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12.6 COUNTERPARTS; FACSIMILE DELIVERY. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. Any
party may deliver an executed copy of this Agreement and an executed copy
of any documents contemplated hereby by facsimile transmission to another
party except when the law expressly requires physical delivery with respect
to certificates representing membership interests or other special types of
documents, and such delivery shall have the same force and effect as any
other delivery of a manually signed copy of this Agreement or such other
document.
12.7 HEADINGS. The headings herein are for convenience of reference
only, do not constitute a part of this Agreement, and shall not be deemed
to limit or affect any of the provisions hereof.
12.8 VARIATION AND AMENDMENT. This Agreement may be varied or amended
at any time by the Boards of Directors of IntraTel and SubCorp, by the
Managers and Members of NATN and by the Board of Directors of NSDI, by
written instrument executed by the parties hereto prior to filing the
Articles of Merger with the Secretary of State of Delaware and the
Secretary of State of Georgia.
12.9 SCHEDULES. Any matter described or included in any schedule
delivered herewith in response to any disclosure obligation hereunder shall
be deemed disclosed for all other purposes of this Agreement. The cross
references contained in the schedules delivered herewith to particular
provisions of this Agreement are included therein for convenience only and
shall not be deemed a part of the schedules delivered herewith or affect
the construction thereof.
12.10 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party hereto. Upon any such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible.
12.11 MISCELLANEOUS. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter
hereof; (b) is not intended to confer upon any other person any rights or
remedies hereunder; (c) shall not be assigned, by operation of law or
otherwise; PROVIDED, HOWEVER, that any Member may assign his rights
hereunder or all or part of his NATN Membership Interests, but may not
delegate his duties or obligations hereunder; and (d) shall be governed in
all respects, including validity, interpretation and effect, by the laws of
the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the date first above written.
INTRATEL:
[CORPORATE SEAL] INTRATEL GROUP, LTD.
By:_________________________________
Murray Swanson
Attest: President
By:_______________________
Name:
Title: Secretary
SUBCORP:
[CORPORATE SEAL] INTRATEL ACQUISITION/NATN
CORPORATION
By:_________________________________
Name:
Title:
Attest:
By:_______________________
Name:
Title: Secretary
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NATN:
[CORPORATE SEAL] NORTH AMERICAN TELEPHONE
NETWORK, L.L.C.
By:_________________________________
Hans Kasper
President
Attest:
By:_______________________
Name:
Title: Secretary
MEMBERS:
_____________________________ ________________________________
JAMES K. NOBLE, JR. CHRISTOPHER G. HODGES
_____________________________ ________________________________
HANS KASPER RONALD C. LEVITT
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