Exhibit 10.4
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PURCHASE AGREEMENT
THIS AGREEMENT made this 13th day of November 1998 by and among Mr.
Xxxxx Xxxxx, Xx. Xxxxxxx Xxxxxxxxx, Xx. Xxxxx Xxxxxx and Xx. Xxxxxxx Xxxxxx, for
and on behalf of Xxxxxx Xxxxx (hereinafter collectively referred to as
"Seller"), and FSGI Corporation, a Florida Corporation (hereinafter referred to
as "FSGI") ("Buyer");
WHEREAS, Seller has agreed to sell to FSGI and FSGI has agreed to
purchase the Business upon and subject to the terms and conditions hereof; and
WHEREAS, Seller is the legal and beneficial owner of all of the issued
and outstanding shares of the capital stock of Xxxxxx Xxxxx, P.C., and
WHEREAS, in order to induce FSGI to purchase the Business, Seller has
agreed to the conditions and covenants herein contained and to make the
warranties and representations hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained the parties hereto hereby covenant and
agree as follows:
WITNESS THAT:
1. SUPERSEDING EFFECT
This Agreement supersedes all oral or written agreements, if any,
between the parties and constitutes the entire agreement between the parties
with respect to this Agreement.
2. ASSETS TO BE SOLD
A. The Seller shall sell and the Buyer shall purchase, free from all
liabilities and encumbrances the business of the Seller including access to, and
the right to service the Seller's credit union clients (hereinafter referred to
as the "Business") throughout the State of Georgia and wherever else they may be
located (the "Territory").
B. In addition to the representation and servicing of credit union
clients, the Business includes: all information regarding such clients that may
be contained in hard copy or computer software. The Business' credit union
clients and all information which pertains thereto are specifically detailed in
Exhibit "A", attached hereto and made a part hereof, entitled "Credit Union
clients of Xxxxxx Xxxxx, P.C."
3. PURCHASE PRICE
FSGI shall pay to Seller or in the event of his death to his estate, a
purchase ("Purchase Price") of $80,000.00. Said price shall be paid in
restricted stock of FSGI over a 2 year period as outlined below.
4. PAYMENT
The purchase price shall be paid in FSGI restricted common stock, at a
value of $2.00 per share. Therefore, FSGI will issue, after this agreement has
been signed, 40,000 shares of restricted common stock subject to the following
conditions and restrictions:
A. 20,000 shares of restricted common stock of FSGI, valued at
$2.00 per share will be issued. The stock will bear a
restrictive legend for a period of 12 months. Also, if the
average bid price for the five (5) trading days prior to the
12 month anniversary date is less than $2.00, then FSGI will
issue additional shares in order to ensure a value of
$40,000.00 to the Seller. If the five (5) day average is $2.00
or higher, no additional shares will be issued for the first
$40,000.00 (one half of the purchase price).
B. An additional 20,000 shares of restricted common stock of
FSGI, valued at $2.00 per share, will also be issued
representing the second half of the purchase price. This stock
will be bear a restrictive legend for 24 months. Also, if the
average bid price for the five (5) trading days prior to the
24 month anniversary date is less than $2.00, then FSGI will
issue additional shares in order to ensure a value of
$40,000.00 to the Seller. If the five (5) day average is $2.00
or higher, no additional shares will be issued for the second
$40,000.00 (second half of the purchase price).
C. Should the gross revenue (see Exhibit "B") for the twelve
month period immediately succeeding the consummation (closing
date) of this transaction not equal or exceed 80% of the
purchase price ($64,000.00), then the share adjustment
provisions outlined above will not apply. Said provisions
refer to the issuance of additional shares if the 5 day
average bid price falls below $2.00. As a result, the Seller
would receive a total of 40,000 shares of common stock of FSGI
and no additional shares would be given by the Buyer to the
Seller. All other terms and conditions as outlined in this
contract, will remain in full force and effect.
5. REPRESENTATIONS OF SELLER
As an inducement to FSGI to purchase the Business, the Seller warrants
and represents as follows:
A. Xxxxx Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxx have
the full power and right to execute this Agreement and to sell the Business.
B. Xxxxx Xxxxx as an officer and shareholder, is the owner of and has
good and marketable title to all the Business assets being sold hereunder, or
has the right to transfer Xxxxxx Xxxxx' interest in any such asset.
C. None of the Sellers, on behalf of Xxxxxx Xxxxx, have entered into
any other contract to sell all or any part of the Business, nor have they
pledged any revenue from the Business to any third parties.
D. Seller or Xxxxxx Xxxxx have not entered into any contracts, leases
or other agreements with respect to the Business.
E. Seller, or on behalf of Xxxxxx Xxxxx, has or shall pay in full
through the Closing Date all federal, state, city or other local taxes including
withholding, personal property, sales, use, social security and unemployment.
Seller shall also pay any sales taxes resulting from the transfer of Business to
the Buyer.
F. (1) There are no suits, claims or other proceedings in law or
equity pending or to Seller's knowledge threatened against the
Business.
(2) There are no suits, claims or other proceedings in law or
equity pending or contemplated in which Xxxxxx Xxxxx is a
plaintiff, petitioner or a party.
G. There is not now nor shall there be at the time of the Closing any
judgments, liens or other encumbrances outstanding against Xxxxxx Xxxxx or the
Business.
H. there have been no federal, state, city or local investigations with
respect to Xxxxxx Xxxxx or the Business.
I. Seller's have no power of attorney outstanding with respect to the
Business.
6. INDEMNIFICATION BY SELLER
Seller, for and on behalf of, jointly and severally, shall indemnify
and hold harmless FSGI and its successors and assigns from all demands, claims,
actions, assessments, losses, damages and attorney's fees and costs resulting
from any state of facts existing prior to the time of Closing.
7. ADDITIONAL DOCUMENTS
Seller shall execute any and all documents, prior to and after the
closing Date, that are required to implement the terms and intent of this
Agreement.
8. USE OF SELLER'S NAME
FSGI is authorized to use the trade name "Xxxxxx Xxxxx, P.C." in
connection with the Business following the Closing only until all credit union
clients have been contacted, but under no circumstances longer than 180 days.
9. NOTICE TO CLIENTS
As soon as possible after signing of this agreement, Seller will issue
a joint notice to the clients of the Business advising them of the purchase of
the Business by FSGI.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Seller, for and on behalf of
Xxxxxx Xxxxx, shall survive the Closing.
11. BINDING ON SUCCESSORS
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of Seller and FSGI.
12. BROKERS
A. Seller and FSGI warrant and represent to each other than neither has
employed any broker, finder or other person or entity in connection with the
sale contemplated by this Agreement.
B. Seller and FSGI shall indemnify each other from any claim and any
costs associated therewith by any such broker, finder, person or entity.
13. CHANGES TO SELLER'S WARRANTIES AND REPRESENTATIONS
Prior to the Closing, if there are any changes to the Sellers'
warranties or representations set forth in this Agreement, Seller shall
immediately notify FSGI in writing by certified or registered mail, return
receipt requested or by delivery to FSGI in person of such writing.
14. ARTICLE HEADINGS
The heading or subheadings of articles contained hereto are used for
convenience and ease of reference and shall not limit the scope or intent of the
article.
15. ARBITRATION AND APPLICABLE LAW
Any controversy or claim arising out of or relating to this Agreement
or the breach thereof, shall be settled by arbitration to be held in Atlanta,
Georgia in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. This Agreement shall be
governed by the laws of the State of Georgia.
16. NOTICES AND CORRESPONDENCE
A. To Seller: Xxxxx Xxxxx
0000 Xxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
B. To FSGI: FSGI Corporation
000 Xxxxxxxxxx Xx.
Xxxxx X
Xxxxxxxxx Xxxx, XX 00000
or any address provided prior written notice is given to the other
party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
which is effective as of November 23, 1998.
Witness: XXXXX XXXXX
/s/ Xxxxx Xxxxx
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By: Xxxxx Xxxxx
Witness: XXXXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxxxxx
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By: Xxxxxxx Xxxxxxxxx
Witness: XXXXXXX XXXXXX
/s/ Xxxxxxx Xxxxxx
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By: Xxxxxxx Xxxxxx
Witness: XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
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By: Xxxxx Xxxxxx
Witness: FSGI CORPORATION
/s/ Xxxxx Xxxxx
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By: Xxxxx Xxxxx
President
