PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is dated for reference purposes on
June 23, 2000 and is by and between XXXXXXX COMMUNICATIONS CORPORATION, an Iowa
corporation, (hereinafter "Xxxxxxx") and MCC ACQUISITION CORPORATION, an Iowa
corporation and wholly owned subsidiary of Xxxxxxx on one hand ("Sellers") and
XXXX XXXXX, a single man, XXXXXXX XXXXXX, a married man, and XXXXXXXX FICACHI, a
married man (hereinafter "Buyers") on the other hand.
At the Closing of this Agreement, the Buyers will be the holders in due
course of all the "Earn Out Notes" between Xxxxxxx and all the following people
and or trusts: Xxxxx Xxxxx; Xxxxxx Xxxxx, Trustee of the Rance Family Trust;
Xxxxxxx Xxxxx; Xxxxx Xxxxx; Xxxxx Xxxxx Xxxxxxx; Xxxxxx Xxxxxx; Xxxx Xxxxxx;
Xxxxxx Xxxxx; Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx, Trustees of the Xxxxx X. Xxxxx
& Xxxxxxx X. Xxxxx Revocable Trust; Xxxx Xxxxxxxxxx, Trustee of the Holderness
Family Trust.
The parties agree as follows:
1. Purchase and Sale of Stock. Subject to the terms of this Agreement,
--------------------------
effective at midnight, Pacific Daylight Savings Time, June 30, 2000 (the
"Closing Time"), Sellers hereby sell and transfer to Buyers and Buyers hereby
purchase and accept, Sellers' 100% of the capital stock of Incomex, Inc., a
California corporation (hereinafter the "Corporation") in return for the
transfer and conveyance of (1) two-hundred fifty thousand (250,000) shares of
common stock of Xxxxxxx. Further consideration for the sale of 100% of the
capital stock of Incomex will be (2) the forgiveness of all intercompany
payables due to the Corporation from Xxxxxxx, all employment compensation, the
liabilities between Xxxxxxx and the Corporation and all remaining unpaid Earn
Out Notes together with all accrued interest. The face value of the notes is
agreed to be $684,919.00.
(a) The balance sheet for the Corporation for the period ended May
31, 2000, is attached as Exhibit A. With the exception of the intercompany
assets and liabilities, this balance sheet evidences the assets and liabilities
that belongs to and are the responsibilities of the Corporation now and will
remain the assets and liabilities of the Corporation after the transfer date.
Other assets not specifically listed on the balance sheet and presently owned by
the Corporation include but are not limited to its wholly owned subsidiary,
Comunicaciones Internacionales de Mexico, S.A. de C.V., a Mexican corporation
(hereinafter "CIM"), Intercommunicall S. de X.X. de C.V., its wholly owned
subsidiary, the Writ owned by CIM, the rights, if any, in the newly acquired
public pay phone
permit, the rights to a return of a prepaid commission from the XX Xxxxx Real
group in the approximate amount of $98,150 USD, the xxxxxx in the face amount of
$1,000,000 due to be returned to the XX Xxxxx Real by Xxxxxxx Xxxxx, the Chapter
7 Trustee of the Central District of the United States Bankruptcy Court, the
alternate operator service business operated by Incomex and Intercommunicall in
Mexico, the office leases in Cancun, Acapulco, D.F., Puerto Vallarta, Cabo San
Xxxxx and Huntington Beach together with all the personal property located
therein. These assets are to remain the property of the Corporation after the
transfer of the shares of stock of the Corporation to buyers.
(b) Prior to and as a condition of the closing, the Corporation
will transfer to Xxxxxxx whatever rights the Corporation has, if any, in the
form of a cancellation penalty in the approximate amount of $1,000,000 USD that
might be recoverable from the XX Xxxxx Real contract. However, the Buyers and
Officers and Directors of Incomex, Inc., make no representation regarding the
existence of rights therein. A copy of said assignment is attached hereto as
Exhibit B.
2. Assumption of Liabilities of Incomex, Inc. Effective as of the
----------------------------------------------
Closing Time, the Corporation shall indemnify and hold harmless Sellers from all
past, present and future claims, liabilities, obligations, debts and duties owed
by the Corporation, arising from the operations and business of the Corporation.
3. Purchase Price and Release. The consideration for the sale of
-----------------------------
Sellers' interest in 100% of the capital stock of Corporation to Buyers, Xxxx
Xxxxx, Xxxxxxx Xxxxxx and Xxxxxxxx Ficachi is (a) 250,000 shares of common stock
in Xxxxxxx, (b) the forgiveness of all intercompany payables due to the
Corporation from Xxxxxxx, (c) the forgiveness all unpaid employment
compensation, if any, and all employment agreements between the Buyers and
Xxxxxxx are cancelled upon the closing of this Agreement, (d) the forgiveness of
the liabilities between Xxxxxxx and the Corporation, (e) together with the
forgiveness of all liability represented by promissory notes originally issued
to the following parties and forgiveness of the accrued interest due thereon:
Xxxx Xxxxx $255,441
Xxxxxxx Xxxxxx $255,441
Xxxxxxxx Ficachi with a remaining balance due of $9,315
Xxxxxx Xxxxx for the Rance Family Trust $25,328
Xxxxx Xxxxx $27,483
Xxxxxxx Xxxxx $25,328
Xxxxx Xxxxx $2,154
Xxxxx Xxxxx Xxxxxxx $8,443
Xxxx Xxxxxx $16,886
Xxxxxx Xxxxx $8,443
Xxxxxx Xxxxxx $8,443
2
Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx, Trustees of the Xxxxx X. Xxxxx & Xxxxxxx X.
Xxxxx Revocable Trust $16,886
Holderness Family Trust $25,328
As consideration for the transfer of Xxxxxxx stock and the forgiveness
of the balances on the promissory notes together with the accrued interest,
Buyers and former Incomex shareholders described directly above in this
paragraph agree to release Sellers and hold them harmless and indemnify them
from any obligation under or by virtue of those certain unsecured promissory
notes described directly above in this paragraph.
To the extent any prepaid commission is due to the Corporation from XX
Xxxxx Real in the approximate amount of ninety-eight thousand, one hundred and
fifty dollars ($98,150) or any lesser amount, Sellers hereby agree that any such
pre-paid commission shall be the property of the Corporation.
The parties agree that Sellers have no right to return of the one
million dollar ($1,000,000) xxxxxx issued by XX Xxxxx Real to Eilco, nor shall
Sellers have any duty to return said xxxxxx to XX Xxxxx Real.
(a) As additional consideration for the performance of the duties
and obligations set forth herein, Sellers hereby forever release Buyers and each
named former shareholder of the Corporation whose names are Xxxx Xxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxx Ficachi, Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxx Xxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx, Xxxx Xxxxxxxxxx, and Xxxxxx Xxxxxx (hereinafter "Former
Shareholders of the Corporation") from any and all claims, known or unknown.
This release shall constitute a full and final release by Buyers as to each
named Former Shareholder of the Corporation, and includes a waiver of any and
all benefits conferred under, and by virtue of California Civil Code Section
1542 which reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
(b) Xxxx Xxxxx, Xxxxxxx Xxxxxx and Xxxxxxxx Ficachi specifically
release Sellers from Sellers' obligation to pay them their "earn out rights," as
defined in the stock purchase agreement between the Former Shareholders of the
Corporation and Sellers and any possible salary bonus that might be payable, as
defined in the employment agreements, and all employment agreements between the
Buyers and Xxxxxxx are cancelled as of the date of
3
closing. Xxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxxx and Xxxxxxxx Ficachi do NOT
release Xxxxxxx or its directors and employees of their duties and obligations
and liability, if any, to repay to Xxxxx Xxxxx, the sum of $850,000, Xxxx Xxxxx,
the sum of $850,000, Xxxxxxx Xxxxxx, the sum of $850,000, and Xxxxxxxx Ficachi,
the sum of $500,000, which sums are all due under the terms of the notes given
to them by Xxxxxxx which are related to the Hartford Carlisle Bank loans.
(c) Buyers hereby release Sellers and their directors and
employees from any claim, with the exception of those rights retained in
paragraph 3(b) above, and waive any right to bring a derivative suit against
Sellers' present or former directors and/or employees arising prior to the
Closing date of this Agreement which arose in connection with their duties,
obligations and responsibilities as directors of seller corporations under the
corporation law of California, Iowa or of the United States.
(d) All of the Former Shareholders of the Corporation who retain
any stock in Xxxxxxx after the Closing date of this Agreement, do not release
Xxxxxxx'x directors and employees from their ongoing duties, obligations and
responsibilities as directors of Xxxxxxx under the corporation law of
California, Iowa or of the United States to properly manage and direct Xxxxxxx
and its subsidiaries inasmuch as they have relied and will continue to rely on
the prudence and business judgment of Xxxxxxx'x directors and employees to
manage and direct Xxxxxxx in accordance with local regulations and applicable
state and federal law.
(e) Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxx Xxxxxxx,
Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and
Xxxx Xxxxxxxxxx hereby release the Sellers and their directors and employees
from any and all claims and liabilities, including unknown claims, arising prior
to the Closing date of this Agreement, including but not limited to claims which
arose in connection their duties, obligations and responsibilities as directors
and employees of Xxxxxxx under the corporation law of California, Iowa or of
the United States.
This release shall constitute a full and final release by the
persons named in the preceding paragraph (e) as to Sellers and their directors
and employees from any and all claims arising prior to the Closing date of this
Agreement.
4
4. Sellers' Representations. Sellers represent and warrant, which
-------------------------
representations shall be true as of the time of the transfer of title to the
Stock that:
(a) They own good and marketable title to the Corporation's stock
they are transferring, free of any lien, encumbrance, lease, interest, proxy,
voting trust or other cloud or restriction on title or marketability and they
will deliver prior to the closing releases of any applicable UCC-1 filing;
(b) They are under no restriction in entering into this Agreement,
other than restrictions which have been waived or released, and the agreements
attached to it and have consulted or have been given the opportunity to consult
legal counsel of their choice before entering into this Agreement;
(c) With the exception of Universal Service fees, which the
parties do not believe apply to Incomex, the taxes on all the operations of
Incomex are paid as of the date of closing of this Agreement;
(d) They are aware of no actual or threatened lawsuit,
administrative proceeding, judgment or threatened claim, unpaid taxes, including
but not limited to Universal Service fees, against Incomex, Inc.;
(e) They understand that no representations or warranties with
respect to this transaction are made to one another except the representations
and warranties contained in this Agreement;
(f) They understand that Xxxxx Xxxxxx represents buyers and that
Reinhart, Boerner, Van Deuren, etc. et al represents sellers, to which
representation all parties hereby consent;
5. Buyers' Representations. Buyers represent and warrant, which
------------------------
representations shall be true as of the time of the transfer of title to the
Stock that:
(a) They own good and marketable title to the Xxxxxxx stock they
are transferring, free of any lien, encumbrance, lease, interest, proxy, voting
trust or other cloud or restriction on title or marketability and they will
deliver prior to the closing releases of any applicable UCC-1 filing;
(b) They are aware of no actual or threatened lawsuit,
administrative proceeding, judgment or threatened claim against Incomex, Inc.;
(c) They are under no restriction in entering into this Agreement
and the agreements attached to it and have consulted with or have been given the
opportunity to consult legal counsel of their choice before entering into this
Agreement;
5
(d) They understand that no representations or warranties with
respect to this transaction are made to one another except the representations
and warranties contained in this Agreement;
(e) They are aware of no actual or threatened lawsuit,
administrative proceeding, judgment or threatened claim, or any liability for
unpaid taxes, including but not limited to Universal Service fees, against
Incomex, Inc.;
(f) They own all right, title and interest in the Earn Out Notes.
(g) They understand that Xxxxx Xxxxxx represents Buyers and that
Reinhart, Boerner, Van Deuren, et al represents Sellers, to which representation
all parties hereby consent;
6. Closing. The closing of the transactions contemplated by this
-------
Agreement shall take place at the law offices of Xxxxx Xxxxxx, located at 0000
XxxXxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX 00000, at 10:00 a.m., on June 30,
2000. At the Closing, the parties shall execute this Agreement, sign and
exchange endorsements and transfer respective stock certificates to Buyers, and
Buyers shall deliver the promissory notes of the Former Shareholders of the
Corporation to Sellers along with 250,000 shares of Xxxxxxx stock; and the
Corporation shall deliver promissory notes in exchange for the Earn Out Notes to
Xxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxxxxx Ficachi, Xxxxxx Xxxxx, Xxxxxx Xxxxx Trustee
of the Rance Family Trust, Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxxx Xxxxxxx,
Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx,
Trustees of the Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx Revocable Trust and Xxxx
Xxxxxxxxxx, Trustee of the Holderness Family Trust. Then and thereafter the
Closing Date, the parties shall cooperate to execute and deliver whatever
documents are necessary to carry out the purposes of this Agreement. The
closing will be deemed to be complete when the above stock transfers have been
accomplished by the transfer agent Firstar Trust Company. Xxxxx Xxxxxx will
hold all other executed documents in trust for the parties for delivery after
the Closing Time. However, the documents will be deemed delivered and exchanged
as of the Closing Time.
7. Miscellaneous. This Agreement shall be construed as if prepared by
-------------
both parties even though it was prepared by one party. This Agreement contains
the entire agreement of the parties and supersedes all previous agreements.
This Agreement may be executed in one or more counterpart or signature pages
each of which pages shall be deemed an original and together which shall
constitute one instrument. No amendment, modification or waiver of any
provision of this Agreement shall be effective unless it is in writing and
signed by all parties. This
6
Agreement is binding upon the parties, their successors and assigns. Each
corporate officer signing this Agreement individually represents and warrants
that such officer has the necessary corporate authority and approval to execute
this Agreement on behalf of his or her corporate principal. Xxxxxxx and MCC
herewith attach RESOLUTIONS of their respective BOARD OF DIRECTORS ratifying and
affirming their authority to enter into this transaction with Buyers. Said
Resolutions are attached hereto as Exhibits C and D. In any action, proceeding
or arbitration to enforce or interpret this Agreement the losing party shall pay
the prevailing party's reasonable attorneys fees. California law shall govern
the interpretation of this Agreement. No covenant, condition, representation or
warranty is made with the intention to benefit any person not a party hereto or
to induce reliance by any person not a party hereto.
8. Forum. Any dispute involving the enforcement or interpretation of
-----
this agreement or any document delivered pursuant thereto shall be decided by in
a proceeding in Orange County, California where the Corporation has its
headquarters. Attorney fees and costs shall be awarded to the prevailing party
or parties.
9. Buyers and the corporation will provide to Xxxxxxx a balance sheet
and income statement as of the Closing Date and will cooperate in providing such
information as may be required by Xxxxxxx in connection with Xxxxxxx'x filings
with the Security and Exchange Commission.
The parties have executed this Agreement to be effective as of the date
first written above.
---------------------------------------
Xxxx Xxxxx, Releasor/Buyer
---------------------------------------
Xxxxxxx Xxxxxx/Releasor/Buyer
---------------------------------------
Xxxxxxxx Ficachi, Releasor/Buyer
---------------------------------------
Xxxxxx Xxxxx for the Rance Family Trust, Releasor
7
---------------------------------------
Xxxxx Xxxxx, Releasor
---------------------------------------
Xxxxxxx Xxxxx, Releasor
---------------------------------------
Xxxxx Xxxxx, Releasor
---------------------------------------
Xxxxx Xxxxx Xxxxxxx, Releasor
---------------------------------------
Xxxx Xxxxxx, Releasor
---------------------------------------
Xxxxxx Xxxxx, Releasor
---------------------------------------
Xxxxxx Xxxxxx, Releasor
---------------------------------------
Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx, Trustees of
the Xxxxx X. Xxxxx & Xxxxxxx X. Xxxxx
Revocable Trust, Releasor
---------------------------------------
Xxxx Xxxxxxxxxx, Trustee of the Holderness
Family Trust, Releasor
XXXXXXX COMMUNICATIONS, INC.
By: ---------------------------------------
Xxxxxx Xxxxx, C.E.O., Seller/Releasor
8
MCC ACQUISITION CORP.
By: ---------------------------------------
Seller/Releasor
Its:---------------------------------------
(Print Title of signatory)
---------------------------------------
(Print Name of signatory)
9
ASSIGNMENT [Exhibit B]
Incomex, Inc. assigns the cancellation penalty, if any, under it's contract with
X.X. Xxxxx Real to Xxxxxxx Communications Corporation. This assignment is made
prior to closing.
--------------------------- ---------------------------
XXXX XXXXX, DATE
Chief Executive Officer
Incomex, Inc.
