Exhibit 10.2
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AGREEMENT is entered into in Midland Texas by and between Xxxxx X.
Xxxx, Xxxxxxx X. Xxxx, Xxxxx Xxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxx
("Seller") and Wireless Frontier Internet, Inc, (`Purchaser").
I.
Recitals
1. Seller is owner of all the issued and outstanding capital stock in
Office Products Incorporated Computer Division, a Kansas Corporation
(the "Corporation").
2. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller all the issued and outstanding capital stock of
the Corporation on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in order to consummate the purchase and sale of the
Corporation's stock aforementioned, it is hereby agreed as follows:
II.
Agreement
A. Purchase and Sale of Stock
1. Subject to the terms and conditions hereinafter set forth, at the closing
of the transaction contemplated hereby, on the Closing Date (hereinafter
defined) the Seller shall sell, transfer and deliver to the Purchaser
certificates representing such stock, and the Purchaser shall purchase
from the Seller the Corporation's Stock in consideration of the purchase
price set forth in this Agreement. The certificates representing the
Corporation' Stock shall be duly endorsed for transfer or accompanied by
appropriate stock transfer powers duly executed in blank, in either case
with signatures guaranteed in the customary fashion, and shall have all
the necessary documentary transfer tax affixed thereto at the expense of
the Seller. Thereafter, Seller shall execute and deliver such other
documents and instruments, and take such other actions, as Purchaser may
reasonably request, in order to more fully vest in Purchaser perfect title
to all of the Corporation's Stock and any and all right, title, interest,
claim or demand of any kind that Seller may have in the properties, assets
or businesses of the Corporation.
B. Purchase Price
Consideration: As total consideration for the purchase and sale of the
Corporation's Stock pursuant to this Agreement the Purchaser shall pay to
the Seller and each of them in proportions as they direct, the following
sums in cash or stock at Buyer's option pursuant to the following
formulas:
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 1 of 8
(a) on or before 90 day after execution of this agreement, a sum of
Eighty-three Thousand Six Hundred Thirty-eight Dollars ($83,638.00)
representing 142 wireless customers at $589.00 per customer. This
figure will be adjusted up or down as the audit of Buyer confirms
the actual number of customers on the date of payment of this sum.
If Buyer elects to pay in stock, they shall use for this part of the
formula free trading stock, without restrictions, in Buyer. Buyer
shall deliver no less than the number of share needed to convey the
final sum determined by the number of customers base on the price of
stock as it trading on the day of payment, however, the stock shall
not be valued at a price greater than $0.75 per share even if it is
trading for more on the day of payment.
(b) on or before 90 day after execution of this agreement a sum of
Eighty Hundred Thirty-eight Thousand Five Hundred Forty-four Dollars
($838.544.00) representing the base sale price. This figure will be
adjusted up or down on a dollar per dollar basis as the audit of
Buyer confirms the actual book value of assets of Corporation as of
December 31st 2003, using a baseline of $309,512.00. If Buyer elects
to pay in stock, they shall use for this part of the formula rule
144 stock, with restrictions, in Buyer. Buyer shall deliver no less
than the number of share needed to convey the final sum determined
after adjustment for asset value based on the price of its stock as
it trading on the day of closing, however, the stock shall not be
valued at a price greater than $0.75 per share even if it is trading
for more on the day of payment Thereafter, Buyer insures that
Buyer's Rule 144 stock shall maintain its value per share as of the
date of payment for a period of one year from the date of delivery
of said shares. If such shares shall drop below said value, Seller
agrees to issue additional Rule 144 stock to offset the decrease in
value on the above delineated date.
(c) on or before 90 day after execution of this agreement Buyer will
make payment of all out standing debt owed by the Corporation as of
January 1st, 2004 to Office Products, Inc and its notes to its
stockholders as it exist at the time of payment Buyer acknowledges
this figure is Three Hundred Seventy-three Two Hundred Fifty-two
Dollars (373,252.00) as of December 31st, 2003. This figure will be
adjust up or down as determined by the final audit by Buyer. This
sum shall be paid in part with cash of Two Hundred Seventy-five
Thousand ($275,00.00) by Buyer placing in escrow an undisclosed
number of shares for the retirement of the outstanding debt. The
balance of said Debt, at Buyer's option may be paid by delivering
rule 144 stock, with restrictions, in Buyer. Buyer shall deliver no
less than the number of share needed to convey the final sum
determined after adjustment based on the price of its stock as it
trading on the day of payment, however, the stock shall not be
valued at a price greater than $0.75 per share even if it is trading
for more on the day of payment
(d) on all 144, restricted, stock issued as a part of this agreement,
Buyer agrees to issue, additional stock in an amount necessary to
increase Seller's holding to a value equal to the value of said
stock on the date of the original issue of said 144 Stock up to 60
days after the restriction on trading is removed from the 144 Stock.
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 2 of 8
C. Closing and Closing Date
The Closing Date of this Agreement will be on the date of this agreement,
Feb 9th, 2004, but effective as of the 1st day of January 2004, in the Law
Offices of Xxxxxxx X. Xxxxxxx, Xx., which Agreement can be effected in multiple
counterparts. At the Closing, Seller and Buyer shall deliver all documents,
necessary or desirable to convey to Buyer all right, title and interest in the
Corporation in a form suitable to both Buyer and Seller and Purchaser's and
Seller's counsel including:
(a) Seller shall sell, transfer and deliver to the Purchaser
certificates representing such stock, and the Purchaser shall
purchase from the Seller the Corporation's Stock in consideration of
the purchase price set forth in this Agreement. The certificates
representing the Corporation' Stock shall be duly endorsed for
transfer or accompanied by appropriate stock transfer. powers duly
executed in blank, in either case with signatures guaranteed in the
customary fashion, and shall have all the necessary documentary
transfer tax affixed thereto at the expense of the Seller.
(b) Seller shall execute and deliver such other documents and
instruments, and take such other actions, as Purchaser may
reasonably request, in order to more fully vest in Purchaser perfect
title to all of the Corporation's Stock and any and all right,
title, interest, claim or demand of any kind that Seller may have in
the properties, assets or businesses of the Corporation.
(c) As of January 1st, 2004, all operations of Corporation shall be
assumed by Buyer and upon execution of this agreement all of Seller
who are officers, directors or have any other corporate control of
Corporation shall resign. Office Products, Inc. and Buyer shall
balance their account for all accounts receivables that it has
processed for Corporation and have offset against the operating
funds it has advanced to Corporation and Buyer and Office Products
shall settle with each other for operations since January 1st, 2004
by March 1st, 2004. Office Products shall have no additional claims
for any uncollectible receivables prior to January 1st, 2004 that it
has kept whether collectable or not. Office Products shall continue
to finance any additional needs of Corporation for operating funds
until final settlements of the accounts on or before March 1st,
2004. If Office Products, Inc. continues to process accounts
receivables for Corporation after settlement, its shall receive a
reasonable fee for the service, but shall have no claim to any of
Corporations accounts or collections.
D. Representations and Warranties by Seller
Seller represents and warrants to Purchaser as follows:
1. Title to Seller's Stock. Seller has good, absolute and marketable
title to the Seller's Shares. Seller has the complete and
unrestricted right, power and authority to sell, transfer and
assign Seller's Shares pursuant to this Agreement. The eventual
delivery of Seller's Shares to Purchaser will vest Purchaser with
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 3 of 8
good, absolute, and marketable title to all Seller's Shares free
and clear of all encumbrances except for those disclosed
heretofore.
2. Organization. The Corporation is duly organized and validly
existing Kansas corporation, in good standing, with all requisite
corporate power and authority to carry on its business as
presently conducted. Seller agree to produce and execute any
necessary minutes or other corporate records Buyer determine
necessary to complete the corporate records of Corporation
3. Compliance with Law and Other Instruments. The business and
operation of the Corporation have been and are being conducted in
accordance with all applicable laws, rules and regulations of all
authorities.
4. Title to Associations's Assets. The Corporation has good,
absolute and marketable title to Corporation's assets. All assets
are transferred without warranty of merchantability or fitness
for a particular purpose also known as "AS IS".
5. Patents and Trademarks. To the best of Seller's knowledge and
belief, the Corporation owns, possesses, and has good title to
all copyright, trademarks, trademark rights, patents, patent
rights and licenses necessary in the conduct of the Corporation's
business.
6. No Brokers or Finders. Seller will not be obligated in any way
for any commission fee or other remuneration to any finder,
broker or the like in connection with this Agreement or its
negotiation, execution or performance.
7. Risk of Loss. Seller bears all risk of loss to fire, acts of god,
or any other event which would destroy all or part of the
Corporation's assets, prior to closing of this Agreement. If any
such loss should occur, Purchaser at Purchaser's discretion may
void this Agreement.
8. Litigation. There are no legal actions, suits, arbitration or
other legal, administrative or other governmental proceeding
pending, threatened, contemplated against the Corporation, its
properties, assets or business. Neither the Seller nor the
Corporation is aware of any facts that might result in any such
action, suit, arbitration, or other proceeding. In the event any
such actions, suits, arbitrations or other legal, administrative
or other governmental proceeding arise as a result of activities
undertake prior to January 1st, 2004, Seller will hold harmless
and indemnify Buyer from and against any and all losses, claims,
demands, costs, damages, liabilities, expenses of any nature
(including attorneys' fees and disbursements), judgments, flues,
settlements, and other amounts arising from any and all claims,
demands, actions, suits, or proceedings, civil, criminal,
administrative, or investigative as result thereof.
9. Covenant not to Compete. After the sale of the stock, Seller and
Office Products, Inc, under the control of two of the
Stockholder's of Corporation, not compete in
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 4 of 8
the sale and service currently provided by Corporation except o
the extent necessary to continue its sales of digital copiers,
scanners, laser printer or document distribution solutions and to
the extent necessary to install network cabling and software to
implement the use of these items.
10. Free Internet Service. Buyer agrees to provide Internet service
under the same terms and conditions as it other customers, free
of charge, to each member of Seller and to Office Products, Inc.
in all locations it may conduct business, as long as they are in
the Corporation's service area for life.
E. Representations of Purchaser
1. Disclosure. Purchaser has been furnished by Seller with access
and all information requested concerning the proposed operations,
affairs, and current financial condition of the Corporation. Such
information and access has been available to the extent the
Purchaser considers necessary and advisable to aid the Purchaser
in making an intelligent investment decision. The Purchaser
understands that the securities purchased hereby are of a
speculative nature and that there is neither a market for these
securities at this time, nor is there any guaranty that such a
market for these securities will exist in the future. The
Purchaser also understands that the Corporation may need to make
considerable capital commitments in the future to implement its
business plan and that there is no assurances that the
Corporation will continue to be a successful venture.
2. Resale. The shares of Seller's common stock, for which Purchaser
will receive under the terms of this contract will be acquired
solely for the account of Purchaser, for investment and not with
a view to the resale or distribution thereof, are not being
purchased for subdivision or fractionalization thereof, and the
Purchaser has no contract, undertaking or agreement or
arrangement with any person to sell transfer or pledge to any
persons and does not intend to enter into such contract or
arrangement.
3. Securities Act. The Purchaser will not take or cause to be taken,
any action that would cause him to be deemed and underwriter, as
defined in Section 2(11) of the Securities Act of 1933, as
amended (the "Act") of the shares.
The Purchaser acknowledges and is aware of the following:
(a) That the common stock is a speculative investment which could
involve a high degree of loss by the Purchaser of the Purchaser's
investment and there is no assurance of any income from such
investment.
(b) No federal or state agency has made any findings or determination
as to fairness of the investment, nor any recommendation or
endorsement of the stock of Seller.
(c) The shares have not been registered under the Act, or under the
securities laws of any state, and must be held by the Purchaser
indefinitely and may not be sold or
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 5 of 8
disposed of unless Seller has been furnished with an opinion of
counsel and other evidence satisfactory in form and substance to
it that such transfer will not be in violation of the Act; that
Seller is under no obligation to register the shares under the
Act or to comply with the requirements for any exemption which
might otherwise be available. That the certificates for the
shares will contain a restrictive legend to the effect that a
stock transfer order will be placed against the shares; that
there will be no public market for the common stock and
accordingly, it may not be possible for the Purchaser readily to
liquidate the investment in case of an emergency.
4. Reliance. The Purchaser recognizes that the offer of common stock
to the purchaser was based upon the foregoing representations and
warranties, and the Purchaser hereby agrees to indemnify Seller
and to hold Seller and Seller's professional advisors harmless
against liability, costs or expenses (including attorney's fees)
arising by reason of or in connection with any misrepresentation
or any breach of such warranty by Purchaser, or arising as a
result of the sale or distribution of any shares of such common
stock by the Purchaser in violation of the Securities Act of
1933, as amended, or other applicable law.
5. Covenant not to Compete. Buyer after the purchase of the stock
will not compete with Office Products, Inc. in the sale of
digital copiers, laser printers, scanners or document
distribution solutions or other office products currently handled
by Office Products, Inc except with the express consent or
pre-approval of Office Products, Inc. This includes the
implementation of any "paperless office system" weather or not a
copier system or scanner and printer system is utilized. This
covenant shall extent for 10 years and with in a radius of 60
miles of Great Bend, Kansas. Further, Buyer convents that it will
not assign or sell any of its asset or customer list to anyone
who would compete in the same manner as restricted herein.
F. Conditions to Obligations of Purchaser.
The obligations of Purchaser under this Agreement shall be subject to
the following conditions:
Purchaser Shall not have discovered any material error, misstatement,
or omission in the representations or warranties made by Seller
throughout the provisions of this Agreement
G. Arbitration Clause.
Any controversy or claim arising out of or relating to this contract,
or the breach thereof, or any claim or dispute between the parties to
this contract, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator(s) may be
entered in any Court having jurisdiction thereof All arbitration
proceedings shall be held in Pecos County, Texas and all arbitrators
shall be appointed be appointed by the American Arbitrators
Association under their rules.
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 6 of 8
H. Mutual Release
Seller and Purchaser mutually agree to release and hold harmless each
other from any claims or liabilities with regard to any transactions
which occurred prior to this Agreement except as herein set out in
Paragraph D(8).
I. Nature and Survival of Representations and Warranties
All representations and warranties of the parties shall survive the
Closing.
J. Counterpart Execution
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together
constitute but one and the same instrument.
K. Integrated Agreement
This Agreement constitutes the entire agreement between the parties.
This Agreement supersedes all prior agreements and understandings
between the parties.
L. Amendment and Waiver
This Agreement may be amended or modified at any time, but only by
means of an instrument in writing executed by both Seller and
Purchaser.
M. Choice of Law
The laws of the State of Texas shall apply in all respects to this
transaction and the dealing of all parties to this Agreement.
N. Revocation of Agreement
Seller shall have the exclusive right to withdraw from this agreement
for 90 days after execution hereof or until full payment has been
made by Buyer. If Seller exercise said option, every effort shall be
made to place both parties in the same position as they would of been
if not for the transaction.
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AGREEMENT FOR PURCHASE AND SALE OF STOCK Page 7 of 8
EXECUTED this 9th day of February, 2004.
SELLER
/s/ Xxxxx X. Xxxx /s/ Xxxxxxx X. Xxxx
----------------- -------------------
Xxxxx X. Xxxx Xxxxxxx X. Xxxx
/s/ Xxxx Xxxxxxxx /s/ Xxxxx Xxxxx
----------------- ---------------
Xxxx Xxxxxxxx Xxxxx Xxxxx
/s/ Xxx Xxxxxx /s/ Xxxxx Xxxx
-------------- --------------
Xxx Xxxxxx Xxxxx Xxxx
Purchaser
Wireless Frontier Internet, Inc.
/s/ Xxxx Xxxxxxxx
-----------------
Xxxx Xxxxxxxx
Affiliated Party
Office Products, Inc.
/s/ Xxxxx Xxxx
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Xxxxx Xxxx, President
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