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<DIV><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>UNITED
STATES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
AND EXCHANGE COMMISSION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>WASHINGTON,
D.C. 20549</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>FORM
8-K</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>CURRENT
REPORT</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(D) OF</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>THE
SECURITIES AND EXCHANGE ACT OF 1934</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>May
19, 2005</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
report (Date of earliest event reported)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>ACCERIS
COMMUNICATIONS INC.</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><STRONG><FONT size=2></FONT></STRONG>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
Name of Registrant as Specified in its Charter)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>FLORIDA</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State of
Other Jurisdiction of</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporation
or Organization)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=bottom width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=bottom width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=bottom width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>0-17973</STRONG></FONT></DIV></TD>
    <TD vAlign=bottom width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>59-2291344</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
      File No.) </FONT></DIV></TD>
    <TD vAlign=bottom width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=top align=middle width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
      Employer Identification No.)</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>1001
Brinton Road, Pittsburgh, PA 15221</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
of Principal Executive Offices and Zip Code)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(412)&nbsp;244-2100</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrants
Telephone Number, Including Area Code)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>N/A</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
Name or Former Address, if Changed Since Last Report)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ &nbsp;]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&nbsp; ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&nbsp; ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&nbsp; ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></DIV>
<DIV><BR></DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG>&nbsp;</DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Section
1 - Registrant&#8217;s Business and Operations</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
1.01</STRONG></FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Entry
into a Material Definitive Agreement</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Acceris
Communications Inc., a Florida corporation (&#8220;ACI&#8221; or the &#8220;Company&#8221;), its
wholly-owned subsidiary Acceris Communications Corp., a Delaware corporation
(&#8220;ACC&#8221;), and its majority stockholder, Counsel Corporation (&#8220;Counsel&#8221;) (Counsel
together with ACI and ACC, the &#8220;Sellers&#8221;), entered into an Asset Purchase
Agreement, dated as of May 19, 2005 (&#8220;APA&#8221;) to sell substantially all of the
assets and to transfer certain liabilities of ACC to Acceris Management and
Acquisition LLC, a Minnesota limited liability company and wholly-owned
subsidiary of North Central Equity LLC (&#8220;NCE&#8221;) (&#8220;Buyer&#8221;) (NCE and Buyer are
collectively described as &#8220;North Central Equity&#8221;). NCE is a Minnesota-based
privately owned holding company, established in 2004, with experience in the
telecommunications industry. In addition, the parties executed the MSA, Security
Agreement, Note, Proxy and Guaranty (all defined and described herein). Copies
of the APA, MSA, Security Agreement, Note, Proxy and Guaranty are attached as
Exhibits 10.1, 10.2, 10.4, 10.5, 10.6 and 10.7 hereto, respectively. All readers
of this Current Report are encouraged to read the entire texts of these
agreements.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
16, 2005, Counsel agreed to extend the maturity dates of all outstanding and
future loans, payable by ACI to Counsel, to December 31, 2006 from their current
maturity of April 30, 2006. All other terms of the loan agreements remain in
full force and effect. The extension is subject to the legal closing of the APA
(the &#8220;Condition Precedent&#8221;). On May 16, 2005, Counsel also agreed to extend its
Keep Well agreement (the &#8220;Keep Well&#8221;) with ACI, which was scheduled to expire on
June 30, 2005, to December 31, 2006. The Keep Well requires Counsel to fund,
through long-term inter company advances or equity contributions, all capital
investment, working capital or other operational cash requirements of ACI. The
extension of the Keep Well is also subject to the Condition Precedent described
above. A copy of the letter documenting the extensions is attached as Exhibit
10.3 hereto. All readers of this Current Report are encouraged to read the
entire text of the letter.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
16, 2005, ACI modified its compensation arrangement with Mr. Allan Silber in his
capacity as Chief Executive Officer of ACI. Effective July 1, 2005, Mr. Silber&#8217;s
annual compensation will be reduced from a base salary of $275,000, plus a
discretionary bonus of 100% of the base salary, to $137,500, plus a
discretionary bonus of 100% of the base salary. The foregoing modification was
made in light of the reduced complexity of Acceris&#8217; business following the
expected disposition of its telecommunications business. A copy of the letter
documenting the&nbsp;modification&nbsp;is attached as Exhibit 10.3 hereto. All
readers of this Current Report are encouraged to read the entire text of the
letter.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Asset
Purchase Agreement</EM></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
19, 2005, ACI, with the assistance and guidance of its independent advisors, CIT
Capital Securities LLC (&#8220;CIT Capital Securities&#8221;), completed an evaluation of
ACI&#8217;s future business direction. Based upon its review and consideration of the
analysis prepared by management and CIT Capital Securities, the Board of
Directors (the &#8220;Board&#8221;) has elected to dispose of ACI&#8217;s telecommunications
business in the asset sale transaction described below.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-2-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
evaluation process which led to the disposition decision commenced in June 2004.
CIT Capital Securities, along with ACI&#8217;s management, examined the markets in
which the telecommunications business operates to assess potential merger and
acquisition opportunities. In this process ACI contacted approximately 100
potential partners. Having assessed various market opportunities, ACI
management's negotiations with a number of potential targets, and with ACI
management&#8217;s recommendation, the Board has determined that the proposed
transaction was in the best interests of ACI&#8217;s stockholders.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Buyer
and the Sellers entered into the APA to sell substantially all of the assets and
to transfer certain liabilities of ACC to the Buyer. The assets included in the
asset sale transaction include substantially all of the assets of the
telecommunications segment (the &#8220;Acquired Assets&#8221;) as reported by ACI in its
Annual Report on Form 10-K for the year ended December 31, 2004, with a book
value as at April 30, 2005 of approximately $19.2 million<SUP>1</SUP>. The
consideration for the Acquired Assets and operations is the Buyer&#8217;s assumption
of certain designated liabilities of the telecommunications segment in the
aggregate amount of approximately $24.2 million<SUP>2</SUP>. This transaction
will result in an estimated gain on disposition of $5.0 million,
excluding&nbsp;closing costs. In addition, any funding provided by NCE under the
MSA would constitute additional purchase consideration at legal closing. Such
amounts are not estimable at this time.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The APA
also contains indemnification, non-solicitation and other provisions customary
for agreements of this nature.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Closing
of the APA is contingent upon obtaining the approval of the ACI stockholders,
the approval of the Federal Communications Commission and various state public
utilities commissions, the approval of ACI&#8217;s and ACC's senior and subordinated
lenders (as applicable), and other customary closing conditions. The transaction
is expected to close by September 30, 2005. The absence of these approvals at
this stage presents transaction risks. Accordingly, the transaction does not
meet the conditions of &#8220;discontinued operations&#8221; for accounting
purposes.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
foregoing is a summary description of the terms of the APA and by its nature is
incomplete. It is qualified in its entirety by the text of the APA, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K. All readers
of this Current Report are encouraged to read the entire text of the APA
attached hereto. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Break-up
Fee and Related Agreements</EM></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The APA,
among other things, contemplates a secured break-up fee in the event of
termination or if the parties otherwise fail to close on the transaction
contemplated therein. The parties to the APA executed several ancillary
agreements relating to the break-up fee provisions of the APA, which agreements
are described herein below.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Security
Agreement</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under the
terms and provisions of a Security Agreement by and between ACC and ACI, on the
one hand, and the Buyer, on the other hand, dated as of the execution date of
the APA (the &#8220;Security Agreement&#8221;), ACC and ACI granted to the Buyer a security
interest in all of ACI&#8217;s and ACC&#8217;s assets and property and certain other assets
as set forth in the Security Agreement, including (without limitation):
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 90pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">accounts,
      documents, instruments, investment property, letter-of-credit rights,
      letters of credit, chattel paper, general intangibles, other rights to
      payment, deposit accounts, money, patents, patent applications,
      trademarks, trademark applications, copyrights, copyright applications,
      trade names, other names, software, payment intangibles, inventory,
      equipment, and fixtures; </FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV>
<HR align=left width="10%" color=#000000 noShade SIZE=1>
</DIV>
<DIV align=left>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="70%">
  <TR bgColor=#ffffff>
    <TD width="1%"><FONT size=2>1.&nbsp;&nbsp; </FONT></TD>
    <TD vAlign=bottom align=left width="84%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">584,694</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
      receivable </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11,518,725
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
    width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      current assets </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=right
    width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,475,310
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="84%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13,578,728</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="84%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right
    width="11%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Furniture,
      fixtures and equipment, net </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,690,845</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Intangible
      assets, net </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,094,839
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Goodwill
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">947,287
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
    width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      long term assets </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=right
    width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">882,913
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="84%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="1%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,615,883</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="84%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right
    width="11%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
      assets disposed </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=left
      width="1%"><DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=right
    width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19,194,611</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR></TABLE></DIV>
<DIV align=left>&nbsp;</DIV>
<DIV align=left>
<DIV align=left>
<TABLE id=10001 cellSpacing=0 cellPadding=0 width="70%">
  <TR bgColor=#ffffff>
    <TD width="1%"><FONT size=2>2.&nbsp;&nbsp; </FONT></TD>
    <TD vAlign=bottom align=left width="84%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD>
    <TD vAlign=bottom align=right width="11%">&nbsp;</TD>
    <TD vAlign=bottom align=left width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff><FONT size=2>&nbsp;&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revolving
      credit facility </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="1%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3,533,180</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
      payable and accrued liabilities</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18,215,247
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unearned
      revenue</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">883,754
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
      payable</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=right width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">763,611
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ccffcc>
    <TD width="1%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ccffcc solid" vAlign=bottom align=left
    width="84%">
      <DIV align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Obligations
      under capital leases</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=bottom align=right
    width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">808,777
      </FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ccffcc thin solid" vAlign=bottom align=left
    width="1%">&nbsp;</TD></TR>
  <TR bgColor=#ffffff>
    <TD width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
    width="84%"><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
      liabilities assumed&nbsp;</FONT></TD>
    <TD style="BORDER-BOTTOM: #ffffff thin solid" width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=left
      width="1%"><DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black double" vAlign=bottom align=right
    width="11%">
      <DIV><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24,204,569</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: #ffffff solid" vAlign=bottom align=left
      width="1%">&nbsp;</TD></TR></TABLE></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-3-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV>&nbsp;</DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 90pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">accessions,
      additions and improvements to, replacements of, and substitutions for any
      of the foregoing; </FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 90pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">all
      products and proceeds of any of the foregoing; and
</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE id=list cellSpacing=0 cellPadding=0 width="100%">
  <TR style="LINE-HEIGHT: 1.25" vAlign=top>
    <TD style="WIDTH: 90pt" align=right><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&nbsp;&nbsp;</FONT></TD>
    <TD>
      <DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">books,
      records and data in any form relating to any of the
    foregoing.</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ACC and
ACI granted the security interest in the above-referenced assets to secure the
payment and performance of their obligations. ACC&#8217;s or ACI&#8217;s failure to pay
their respective obligations when due constitutes an &#8220;event of default&#8221;, which,
in turn, triggers remedies available to the Buyer under the terms of the
Security Agreement and applicable commercial laws. The foregoing is a summary
description of the terms of the Security Agreement and by its nature is
incomplete. It is qualified in its entirety by the text of such Security
Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report on
Form 8-K. All readers of this Current Report are encouraged to read the entire
text of the Security Agreement attached hereto.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Secured
Promissory Note</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
addition, ACC and ACI executed a Secured Promissory Note (the &#8220;Note&#8221;) payable to
the Buyer in a principal sum equal to (a) any advances made by the Buyer to ACC
which were made in connection with any written agreements between the parties,
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>less</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> the
amount of any such advances already recovered by the Buyer; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>plus</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> (b) an
amount equal to ACC&#8217;s net income from the period beginning on April 30, 2005 and
ending on APA&#8217;s termination date; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>plus</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> (c) an
amount equal to 5% of ACC&#8217;s net income during the same period. No interest shall
accrue on the principal amount of the Note. The foregoing is a summary
description of the terms of the Note and by its nature is incomplete. It is
qualified in its entirety by the text of the Note, a copy of which is filed as
Exhibit 10.5 to this Current Report on Form 8-K. All readers of this Current
Report are encouraged to read the entire text of the Note attached
hereto.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">C.
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Irrevocable
Proxy</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Further,
under the terms and provisions of an Irrevocable Proxy (the &#8220;Proxy&#8221;) by and
between Counsel and the Buyer, Counsel agreed to vote all of its security
interest in ACI in favor of the asset sale transaction at any meetings of the
ACI stockholders called to consider and vote to approve the transaction. As of
the date hereof, Counsel beneficially owns 17,517,269 shares, or approximately
92%, of ACI&#8217;s outstanding stock. The foregoing is a summary description of the
terms of the Proxy and by its nature is incomplete. It is qualified in its
entirety by the text of such Proxy, a copy of which is filed as Exhibit 10.6 to
this Current Report on Form 8-K. All readers of this Current Report are
encouraged to read the entire text of the Proxy attached hereto.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">D.
</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Guaranty</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Counsel
executed a Guaranty (the &#8220;Guaranty&#8221;) in favor of the Buyer as security for ACI&#8217;s
and ACC&#8217;s obligations under the Note whereby it absolutely and unconditionally
guaranteed to the Buyer such payments and performance when due and payable. The
foregoing is a summary description of the terms of the Guaranty and by its
nature is incomplete. It is qualified in its entirety by the text of such
Guaranty, a copy of which is filed as Exhibit 10.7 to this Current Report on
Form 8-K. All readers of this Current Report are encouraged to read the entire
text of the Guaranty attached hereto.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-4-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM></EM></FONT>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Management
Services Agreement</EM></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
19, 2005, the Buyer, on the one hand, and ACC and ACI, on the other hand,
executed a Management Services Agreement (the &#8220;MSA&#8221;), wherein the Buyer, on an
exclusive basis, agreed to establish and implement operational policies and to
provide general management and direction of the day-to-day operations of ACC,
subject to reporting duties to the Chief Executive Officer of ACC and its Board.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As its
compensation for management services under the MSA, the Buyer shall be entitled
to a fee equal to ACC&#8217;s net income during the period the MSA is in effect, plus
5% of such net income. Further, the Buyer has agreed to provide, from time to
time, funds to ACC to fund its continued operations. In the event that ACC&#8217;s net
income is not sufficient to entitle the Buyer to a management fee under the MSA,
then the Buyer shall not be entitled to any reimbursement from ACC for funds it
may have advanced to ACC or its creditors and such advances instead shall be
considered non-reimbursable expenses incurred by the Buyer in the performance of
its duties under the MSA (other than the break-up fee described above). Further,
any reimbursement by ACC to the Buyer for such funds paid over to ACC shall not
exceed the amount of the net income. The term of the MSA is from May 19, 2005 to
the earlier of: (i) the APA closing date, or (ii) the termination of the
APA.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">North
Central Equity has agreed to fund the operations of the business, subject to the
terms of the MSA, during the period of the MSA on the condition that the
transaction is completed no later than September 30, 2005. Any funding,
including amounts payable under the MSA, evidenced in the Note, would constitute
additional purchase consideration at legal closing.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
foregoing is a summary description of the terms of the MSA and by its nature is
incomplete. It is qualified in its entirety by the text of the MSA, a copy of
which is filed as Exhibit 10.2 to this Current Report on Form 8-K. All readers
of this Current Report are encouraged to read the entire text of the MSA
attached hereto. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Press
Release</EM></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
20, 2005, the Company issued a press release announcing the foregoing events. A
copy of this press release is attached as Exhibit 99.1 hereto. The reader is
advised to read this press release in its entirety.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-5-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
9.01</STRONG></FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Financial
Statements and Exhibits.</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(a)
Financial Statements of Businesses Acquired. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
applicable.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(b)
Pro Forma Financial Information. </STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
applicable.</FONT></FONT></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>
<DIV><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG></STRONG></FONT>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>(c)
Exhibits</STRONG></FONT></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV align=left>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Exhibit
      No.</U></FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>Description</U></FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Asset
      Purchase Agreement, dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
      Services Agreement, dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
      from Counsel Corporation dated as of May 16, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Security
      Agreement, dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Secured
      Promissory Note, dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.6</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Irrevocable
      Proxy, dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.7</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Guaranty,
      dated as of May 19, 2005</FONT></DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="12%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top width="88%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release dated May 20, 2005</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-6-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SIGNATURES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 thereunto
duly authorized.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=center width="37%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=center width="35%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Acceris
      Communications, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT size=2></FONT>&nbsp;</DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT size=2></FONT>&nbsp;</DIV></TD>
    <TD vAlign=center width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=center width="37%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
      May 25, 2005</FONT></DIV></TD>
    <TD vAlign=top width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: black thin solid" vAlign=center width="32%"
    colSpan=2>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
      Gary M. Clifford</FONT></DIV></TD>
    <TD vAlign=center width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=center width="37%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=center width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=top width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name:</FONT></DIV></TD>
    <TD vAlign=center width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gary
      M. Clifford</FONT></DIV></TD>
    <TD vAlign=center width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD></TR>
  <TR>
    <TD vAlign=center width="37%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=center width="3%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD>
    <TD vAlign=top width="6%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:</FONT></DIV></TD>
    <TD vAlign=center width="25%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer and Vice President of Finance</FONT></DIV></TD>
    <TD vAlign=center width="10%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=justify>&nbsp;</DIV></TD></TR></TABLE></DIV>
<DIV>&nbsp;</DIV>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt" face="Times New Roman">-7-</FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
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{"company-data": {"conformed-name": "ACCERIS COMMUNICATIONS INC", "cik": "0000849145", "assigned-sic": "4822", "irs-number": "592291344", "state-of-incorporation": "FL", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-17973", "film-number": "05857440"}, "business-address": {"street1": "9775 BUSINESSPARK AVENUE", "city": "SAN DIEGO", "state": "CA", "zip": "92131", "phone": "8585475700"}, "mail-address": {"street1": "1001 BRINTON ROAD", "city": "PITTSBURGH", "state": "PA", "zip": "15221"}, "former-company": [{"former-conformed-name": "I LINK INC", "date-changed": "19971020"}, {"former-conformed-name": "MEDCROSS INC", "date-changed": "19920703"}]}
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES AND EXCHANGE ACT OF 1934
May
19, 2005
Date of
report (Date of earliest event reported)
ACCERIS
COMMUNICATIONS INC.
(Exact
Name of Registrant as Specified in its Charter)
FLORIDA
(State of
Other Jurisdiction of
Incorporation
or Organization)
0-17973
59-2291344
(Commission
      File No.)
(I.R.S.
      Employer Identification No.)
1001
Brinton Road, Pittsburgh, PA 15221
(Address
of Principal Executive Offices and Zip Code)
(412) 244-2100
(Registrants
Telephone Number, Including Area Code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[  ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[  ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[  ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[  ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Section
1 - Registrant's Business and Operations
Item
1.01
Entry
into a Material Definitive Agreement
Acceris
Communications Inc., a Florida corporation ("ACI" or the "Company"), its
wholly-owned subsidiary Acceris Communications Corp., a Delaware corporation
("ACC"), and its majority stockholder, Counsel Corporation ("Counsel") (Counsel
together with ACI and ACC, the "Sellers"), entered into an Asset Purchase
Agreement, dated as of May 19, 2005 ("APA") to sell substantially all of the
assets and to transfer certain liabilities of ACC to Acceris Management and
Acquisition LLC, a Minnesota limited liability company and wholly-owned
subsidiary of North Central Equity LLC ("NCE") ("Buyer") (NCE and Buyer are
collectively described as "North Central Equity"). NCE is a Minnesota-based
privately owned holding company, established in 2004, with experience in the
telecommunications industry. In addition, the parties executed the MSA, Security
Agreement, Note, Proxy and Guaranty (all defined and described herein). Copies
of the APA, MSA, Security Agreement, Note, Proxy and Guaranty are attached as
Exhibits 10.1, 10.2, 10.4, 10.5, 10.6 and 10.7 hereto, respectively. All readers
of this Current Report are encouraged to read the entire texts of these
agreements.
On May
16, 2005, Counsel agreed to extend the maturity dates of all outstanding and
future loans, payable by ACI to Counsel, to December 31, 2006 from their current
maturity of April 30, 2006. All other terms of the loan agreements remain in
full force and effect. The extension is subject to the legal closing of the APA
(the "Condition Precedent"). On May 16, 2005, Counsel also agreed to extend its
Keep Well agreement (the "Keep Well") with ACI, which was scheduled to expire on
June 30, 2005, to December 31, 2006. The Keep Well requires Counsel to fund,
through long-term inter company advances or equity contributions, all capital
investment, working capital or other operational cash requirements of ACI. The
extension of the Keep Well is also subject to the Condition Precedent described
above. A copy of the letter documenting the extensions is attached as Exhibit
10.3 hereto. All readers of this Current Report are encouraged to read the
entire text of the letter.
On May
16, 2005, ACI modified its compensation arrangement with Mr. Allan Silber in his
capacity as Chief Executive Officer of ACI. Effective July 1, 2005, Mr. Silber's
annual compensation will be reduced from a base salary of $275,000, plus a
discretionary bonus of 100% of the base salary, to $137,500, plus a
discretionary bonus of 100% of the base salary. The foregoing modification was
made in light of the reduced complexity of Acceris' business following the
expected disposition of its telecommunications business. A copy of the letter
documenting the modification is attached as Exhibit 10.3 hereto. All
readers of this Current Report are encouraged to read the entire text of the
letter.
Asset
Purchase Agreement
On May
19, 2005, ACI, with the assistance and guidance of its independent advisors, CIT
Capital Securities LLC ("CIT Capital Securities"), completed an evaluation of
ACI's future business direction. Based upon its review and consideration of the
analysis prepared by management and CIT Capital Securities, the Board of
Directors (the "Board") has elected to dispose of ACI's telecommunications
business in the asset sale transaction described below.
-2-
The
evaluation process which led to the disposition decision commenced in June 2004.
CIT Capital Securities, along with ACI's management, examined the markets in
which the telecommunications business operates to assess potential merger and
acquisition opportunities. In this process ACI contacted approximately 100
potential partners. Having assessed various market opportunities, ACI
management's negotiations with a number of potential targets, and with ACI
management's recommendation, the Board has determined that the proposed
transaction was in the best interests of ACI's stockholders.
The Buyer
and the Sellers entered into the APA to sell substantially all of the assets and
to transfer certain liabilities of ACC to the Buyer. The assets included in the
asset sale transaction include substantially all of the assets of the
telecommunications segment (the "Acquired Assets") as reported by ACI in its
Annual Report on Form 10-K for the year ended December 31, 2004, with a book
value as at April 30, 2005 of approximately $19.2 million
1
. The
consideration for the Acquired Assets and operations is the Buyer's assumption
of certain designated liabilities of the telecommunications segment in the
aggregate amount of approximately $24.2 million
2
. This transaction
will result in an estimated gain on disposition of $5.0 million,
excluding closing costs. In addition, any funding provided by NCE under the
MSA would constitute additional purchase consideration at legal closing. Such
amounts are not estimable at this time.
The APA
also contains indemnification, non-solicitation and other provisions customary
for agreements of this nature.
Closing
of the APA is contingent upon obtaining the approval of the ACI stockholders,
the approval of the Federal Communications Commission and various state public
utilities commissions, the approval of ACI's and ACC's senior and subordinated
lenders (as applicable), and other customary closing conditions. The transaction
is expected to close by September 30, 2005. The absence of these approvals at
this stage presents transaction risks. Accordingly, the transaction does not
meet the conditions of "discontinued operations" for accounting
purposes.
The
foregoing is a summary description of the terms of the APA and by its nature is
incomplete. It is qualified in its entirety by the text of the APA, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K. All readers
of this Current Report are encouraged to read the entire text of the APA
attached hereto.
Break-up
Fee and Related Agreements
The APA,
among other things, contemplates a secured break-up fee in the event of
termination or if the parties otherwise fail to close on the transaction
contemplated therein. The parties to the APA executed several ancillary
agreements relating to the break-up fee provisions of the APA, which agreements
are described herein below.
A.
Security
Agreement
.
Under the
terms and provisions of a Security Agreement by and between ACC and ACI, on the
one hand, and the Buyer, on the other hand, dated as of the execution date of
the APA (the "Security Agreement"), ACC and ACI granted to the Buyer a security
interest in all of ACI's and ACC's assets and property and certain other assets
as set forth in the Security Agreement, including (without limitation):
·
accounts,
      documents, instruments, investment property, letter-of-credit rights,
      letters of credit, chattel paper, general intangibles, other rights to
      payment, deposit accounts, money, patents, patent applications,
      trademarks, trademark applications, copyrights, copyright applications,
      trade names, other names, software, payment intangibles, inventory,
      equipment, and fixtures;
1.
Cash
$
584,694
Accounts
      receivable
11,518,725
Other
      current assets
1,475,310
$
13,578,728
Furniture,
      fixtures and equipment, net
$
2,690,845
Intangible
      assets, net
1,094,839
Goodwill
947,287
Other
      long term assets
882,913
$
5,615,883
Total
      assets disposed
$
19,194,611
2.
Revolving
      credit facility
$
3,533,180
Accounts
      payable and accrued liabilities
18,215,247
Unearned
      revenue
883,754
Notes
      payable
763,611
Obligations
      under capital leases
808,777
Total
      liabilities assumed
$
24,204,569
-3-
·
accessions,
      additions and improvements to, replacements of, and substitutions for any
      of the foregoing;
·
all
      products and proceeds of any of the foregoing; and
·
books,
      records and data in any form relating to any of the
    foregoing.
ACC and
ACI granted the security interest in the above-referenced assets to secure the
payment and performance of their obligations. ACC's or ACI's failure to pay
their respective obligations when due constitutes an "event of default", which,
in turn, triggers remedies available to the Buyer under the terms of the
Security Agreement and applicable commercial laws. The foregoing is a summary
description of the terms of the Security Agreement and by its nature is
incomplete. It is qualified in its entirety by the text of such Security
Agreement, a copy of which is filed as Exhibit 10.4 to this Current Report on
Form 8-K. All readers of this Current Report are encouraged to read the entire
text of the Security Agreement attached hereto.
B.
Secured
Promissory Note
.
In
addition, ACC and ACI executed a Secured Promissory Note (the "Note") payable to
the Buyer in a principal sum equal to (a) any advances made by the Buyer to ACC
which were made in connection with any written agreements between the parties,
less
the
amount of any such advances already recovered by the Buyer;
plus
(b) an
amount equal to ACC's net income from the period beginning on April 30, 2005 and
ending on APA's termination date;
plus
(c) an
amount equal to 5% of ACC's net income during the same period. No interest shall
accrue on the principal amount of the Note. The foregoing is a summary
description of the terms of the Note and by its nature is incomplete. It is
qualified in its entirety by the text of the Note, a copy of which is filed as
Exhibit 10.5 to this Current Report on Form 8-K. All readers of this Current
Report are encouraged to read the entire text of the Note attached
hereto.
C.
Irrevocable
Proxy
.
Further,
under the terms and provisions of an Irrevocable Proxy (the "Proxy") by and
between Counsel and the Buyer, Counsel agreed to vote all of its security
interest in ACI in favor of the asset sale transaction at any meetings of the
ACI stockholders called to consider and vote to approve the transaction. As of
the date hereof, Counsel beneficially owns 17,517,269 shares, or approximately
92%, of ACI's outstanding stock. The foregoing is a summary description of the
terms of the Proxy and by its nature is incomplete. It is qualified in its
entirety by the text of such Proxy, a copy of which is filed as Exhibit 10.6 to
this Current Report on Form 8-K. All readers of this Current Report are
encouraged to read the entire text of the Proxy attached hereto.
D.
Guaranty
.
Counsel
executed a Guaranty (the "Guaranty") in favor of the Buyer as security for ACI's
and ACC's obligations under the Note whereby it absolutely and unconditionally
guaranteed to the Buyer such payments and performance when due and payable. The
foregoing is a summary description of the terms of the Guaranty and by its
nature is incomplete. It is qualified in its entirety by the text of such
Guaranty, a copy of which is filed as Exhibit 10.7 to this Current Report on
Form 8-K. All readers of this Current Report are encouraged to read the entire
text of the Guaranty attached hereto.
-4-
Management
Services Agreement
On May
19, 2005, the Buyer, on the one hand, and ACC and ACI, on the other hand,
executed a Management Services Agreement (the "MSA"), wherein the Buyer, on an
exclusive basis, agreed to establish and implement operational policies and to
provide general management and direction of the day-to-day operations of ACC,
subject to reporting duties to the Chief Executive Officer of ACC and its Board.
As its
compensation for management services under the MSA, the Buyer shall be entitled
to a fee equal to ACC's net income during the period the MSA is in effect, plus
5% of such net income. Further, the Buyer has agreed to provide, from time to
time, funds to ACC to fund its continued operations. In the event that ACC's net
income is not sufficient to entitle the Buyer to a management fee under the MSA,
then the Buyer shall not be entitled to any reimbursement from ACC for funds it
may have advanced to ACC or its creditors and such advances instead shall be
considered non-reimbursable expenses incurred by the Buyer in the performance of
its duties under the MSA (other than the break-up fee described above). Further,
any reimbursement by ACC to the Buyer for such funds paid over to ACC shall not
exceed the amount of the net income. The term of the MSA is from May 19, 2005 to
the earlier of: (i) the APA closing date, or (ii) the termination of the
APA.
North
Central Equity has agreed to fund the operations of the business, subject to the
terms of the MSA, during the period of the MSA on the condition that the
transaction is completed no later than September 30, 2005. Any funding,
including amounts payable under the MSA, evidenced in the Note, would constitute
additional purchase consideration at legal closing.
The
foregoing is a summary description of the terms of the MSA and by its nature is
incomplete. It is qualified in its entirety by the text of the MSA, a copy of
which is filed as Exhibit 10.2 to this Current Report on Form 8-K. All readers
of this Current Report are encouraged to read the entire text of the MSA
attached hereto.
Press
Release
On May
20, 2005, the Company issued a press release announcing the foregoing events. A
copy of this press release is attached as Exhibit 99.1 hereto. The reader is
advised to read this press release in its entirety.
-5-
Item
9.01
Financial
Statements and Exhibits.
(a)
Financial Statements of Businesses Acquired.
Not
applicable.
(b)
Pro Forma Financial Information.
Not
applicable.
(c)
Exhibits
Exhibit
      No.
Description
10.1
Asset
      Purchase Agreement, dated as of May 19, 2005
10.2
Management
      Services Agreement, dated as of May 19, 2005
10.3
Letter
      from Counsel Corporation dated as of May 16, 2005
10.4
Security
      Agreement, dated as of May 19, 2005
10.5
Secured
      Promissory Note, dated as of May 19, 2005
10.6
Irrevocable
      Proxy, dated as of May 19, 2005
10.7
Guaranty,
      dated as of May 19, 2005
99.1
Press
      Release dated May 20, 2005
-6-
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 thereunto
duly authorized.
Acceris
      Communications, Inc.
Date:
      May 25, 2005
By:
/s/
      Gary M. Clifford
Name:
Gary
      M. Clifford
Title:
Chief
      Financial Officer and Vice President of Finance
-7-