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Exhibit 10.1
PURCHASE BY
XXXXXX X. XXXXXXX AND XXXXXXX X. XXXXXXX
OF THE INTERESTS OF
XXXXXXX X. XXXXXX AND XXXXXXX X. XXXXXXXX
IN
LONG DISTANCE DIRECT L.P., LONG DISTANCE DIRECT,
INC. AND CERTAIN OTHER ENTITIES
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MAY 31, 1993
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I. DEFINITIONS
CDI Cellular Direct, Inc., a New York corporation and
general partner of CDLP.
CDLP Cellular Direct L.P., a New York limited partnership.
ENTITIES CDI, CDLP, LDDI, LDDLP and PVI.
XXXX XXXX Marketing Services, Inc., a Delaware corporation.
XXXXXXX Xxxxxx X. Xxxxxxx.
LDDI Long Distance Direct, Inc., a New York corporation and
general partner of LDDLP.
LDDLP Long Distance Direct L.P., a New York limited
partnership.
XXXXXX Xxxxxxx X. Xxxxxx.
XXXXXXX Xxxxxxx X. Xxxxxxx.
PVI Private Ventures Inc., a New York corporation.
XXXXXXXX Xxxxxxx X. Xxxxxxxx.
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II. DOCUMENTATION TAB NO.
A. Pre-closing Documents
Standstill Agreement dated April 2, 1993 1
by and among Xxxxxxx, Xxxxxxx, Xxxxxx and
Xxxxxxxx.
Agreement dated as of April 6, 1993 by and 2
among Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxxxx
and the Entities.
Side Letter dated April 6, 1993 from 3
Preston to XXXX re: transfer of leased
automobile obligations.
Side letter dated April 6, 1993 from 4
Xxxxxxx to XXXX re: certain indebtedness.
Undertaking by Xxxxxxx and Xxxxxxx re: 5
payment of legal fees.
B. Closing Documents
Secured Promissory Note dated as of May 31, 6
1993 by LDDLP to Xxxxxx and Xxxxxxxx in
the original aggregate principal amount of
$250,000.
Secured Promissory Note dated as of May 31, 7
1993 by LDDLP to XXXX in the original
aggregate principal amount of $288,333.34.
Guaranty dated as of May 31, 1993 by 8
Xxxxxxx to XXXX.
Guaranty dated as of May 31, 1993 by 9
Preston to XXXX.
Security Agreement dated as of Nay 31, 10
1993 by and between Xxxxxx, Xxxxxxxx and
XXXX, as secured parties, and the Entities.
UCC-1 Financing Statement by the Entities 11
in favor of Xxxxxx, Xxxxxxxx and XXXX, as
filed with the Secretary of State of the
State of New York and in Rockland County.
Release dated as of May 31, 1993 by 12
Xxxxxxx, Xxxxxxx and the Entities in favor
of Xxxxxx and Xxxxxxxx.
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TAB NO.
Release dated as of May 31, 1993 by Xxxxxx 13
in favor of Xxxxxxx, Xxxxxxx and the
Entities.
Release dated as of May 31, 1993 by 14
Xxxxxxxx in favor of Xxxxxxx, Xxxxxxx and
the Entities.
Bring-down Certificate dated as of May 31, 15
1993 by Xxxxxxx.
Bring-down Certificate dated as of May 31, 16
1993 by Xxxxxxx.
Bring-down Certificate dated as of May 31, 17
1993 by the Entities.
Bring-down Certificate dated as of May 31, 18
1993 by Xxxxxx.
Bring-down Certificate dated as of May 31, 19
1993 by Xxxxxxxx.
Resignation dated June 3, 1993 of Xxxxxx 20
as a director and officer of LDDI.
Resignation dated June 3, 1993 of Xxxxxx 21
as a director and officer of CDI.
Resignation dated June 3, 1993 of Xxxxxx 22
as a director and officer of PVI.
Resignation dated June 3, 1993 of Xxxxxxxx 23
as a director and officer of LDDI.
Resignation dated June 3, 1993 of Xxxxxxxx 24
as a director and officer of CDI.
Resignation dated June 3, 1993 of Xxxxxxxx 25
as a director and officer of PVI.
LDDI Share Certificate with attached stock 26
power duly endorsed in blank by Xxxxxx
evidencing the transfer of 23.75 shares of
LDDI.
LDDI Share Certificate with attached stock 27
power duly endorsed in blank by Xxxxxxxx
evidencing the transfer of 23.75 shares of
LDDI.
Stock Power duly endorsed in blank by Xxxxxx 28
evidencing the transfer of all of Xxxxxx'x
interest in CDI.
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TAB NO.
Stock Power duly endorsed in blank by 29
Xxxxxxxx evidencing the transfer of all of
Xxxxxxxx'x interest in CDI.
Stock Power duly endorsed in blank by 30
Xxxxxx evidencing the transfer of all of
Xxxxxx'x interest in PVI.
Stock Power duly endorsed in blank by 31
Xxxxxxxx evidencing the transfer of all of
Xxxxxxxx'x interest in PVI.
Instrument of Transfer dated June 3, 1993 32
of Xxxxxx transferring all of his interest
in LDDLP to Xxxxxxx and Xxxxxxx.
Instrument of Transfer dated June 3, 1993 33
of Xxxxxxxx transferring all of his
interest in LDDLP to Xxxxxxx and Xxxxxxx.
Instrument of Transfer dated June 3, 1993 34
of Xxxxxx transferring all of his interest
in CDLP to Xxxxxxx and Xxxxxxx.
Instrument of Transfer dated June 3, 1993 35
of Xxxxxxxx transferring all of his
interest in CDLP to Xxxxxxx and Xxxxxxx.
Xxxxxx and Consent dated as of May 31, 36
1993 by Xxxxx Xxxx.
Certificate of Amendment of Certificate of 37
Limited Partnership of LDDLP, as filed
with the Secretary of State of the State
of New York.
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"STANDSTILL" AGREEMENT
The undersigned agree to the following:
1. Concurrently herewith, Long Distance Direct, Inc. ("the Company"), the
general partner of Long Distance Direct L.P. (the "Partnership") has delivered
to XXXX Marketing Services, Inc. ("XXXX") a certified check in the amount of
$16,666.66, in partial payment of amounts due by the Company and the Partnership
to XXXX, and Xxxxxx Xxxxxxx has delivered to XXXX a bank check payable to XXXX
in the amount of $33,333.33 in full payment of a like amount advanced by XXXX
for Xxxxxx Xxxxxxx.
2. Each of the undersigned agrees to continue to negotiate in good faith the
terms of the agreement among the undersigned, the Company and the Partnership
regarding the acquisition of the interests of Xxxxxxx Xxxxxxxx ("Xxxxxxxx") and
Xxxxxxx Xxxxxx ("Xxxxxx") in the Company, the Partnership and Cellular Direct,
Inc., Cellular Direct L.P. and Private Ventures, Inc., (hereafter such agreement
is referred to as the "Settlement Agreement"). Xxxxxxxx and Xxxxxx acknowledge
that the memorandum dated April 1, 1993 from Xxxxxxx X. Xxxx to Xxxxxxxx X. Xxxx
RE: LDDI Transaction contains the terms which Xxxxxxx and Xxxxxxx proposed
regarding the Settlement Agreement.
3. While such negotiations continue, the parties agree not to (i) contact, or
instruct or cause their representatives or agents to contact, Allstate Financial
Services Inc. ("Allstate") regarding the factoring agreements between Allstate
and the Company and the disputes among them and the undersigned.
4. Xxxxxxx and Xxxxxxx shall advise Xxxxxxxx and Xxxxxx of the amount and
identity of the payee, and if requested by Xxxxxxxx or Xxxxxx, the purpose, of
any checks or wire transfers in excess of $5,000.00 written prior to the date
hereof on the Company's account at MHT without the signature of Xxxxxxxx or
Xxxxxx, and Xxxxxxxx and Xxxxxx agree to advise Manufacturers Hanover Trust to
honor such check and wire transfers if written in the ordinary course of
business of the Company and the Partnership for valid business purposes
consistent with prior practices of the Company and the Partnership. Xxxxxxxx and
Xxxxxx consent to payment of the checks drawn on such account prior to the date
hereof which are identified or described on a list which may be attached hereto,
which list has been signed by Xxxxxxxx and Xxxxxx of such checks or transfers,
including a transfer of funds to Allstate, shall not be deemed to constitute an
approval by them of the issuance of such checks and wire transfer instructions
without the approval in advance of Xxxxxxxx or xxxxxx or of any arrangements
between the company, the Partnership and Allstate. Subject to the provisions of
Section 5 below, Xxxxxxxx and Xxxxxx agree to review requests for issuance of
checks by the company and the Partnership, and to co-sign checks in payment
thereof if written in the ordinary course of business in the Company and the
Partnership for valid business purposes consistent with prior practices of the
Company and the Partnership.
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5. This agreement is without prejudice to the rights of any of the undersigned.
This agreement shall be of no further force and effect in the event that the
settlement agreement is not and delivered by the undersigned and the entities
referred to in paragraph 2 above by 3:00 PM Tuesday, April 6, 1993. Time shall
be of the essence with respect to this paragraph.
IN WITNESS WHEREOF, each of the undersigned has executed this Memorandum of
Agreement.
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
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Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx
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LONG DISTANCE DIRECT, INC.
SCHEDULE OF CHECKS WRITTEN BUT NOT PRESENTED AS AT 2 APRIL, 1993
PAYEE AMOUNT PURPOSE OF PAYMENT
$
Blue Hill Plaza Ass. 16,940.00 Security deposit
Blue Hill Plaza Ass. 7,186.67 1 month's rent + util.
Blue Hill Plaza Ass. 10,000.00 Redecoration of offices
AT&T/ACUS division 47,924.41 11/92 & 12/92 billing fee
AT&T/ACUS division 23,349.68 1/93 billing fees
WIRE TRANSFERS REQUESTED BUT NOT IMPLEMENTED BY BANK
Allstate Financial
Corporation 34,674.85 Funds received directly
by LDDI in respect of
invoices bought by factor
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AGREEMENT
Agreement, dated as of April 6, 1993, by and among Xxxxxx X.
Xxxxxxx ("Xxxxxxx") and Xxxxxxx X. Xxxxxxx ("Xxxxxxx"; Xxxxxxx and Xxxxxxx,
collectively, the "Buyers"), Xxxxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxxx X.
Xxxxxxxx ("Xxxxxxxx"; Xxxxxx and Xxxxxxxx, collectively, the "Selling
Stockholders") and Long Distance Direct L.P., a New York limited partnership
(the "Partnership"), Long Distance Direct, Inc., a New York corporation (the
"Company"), Cellular Direct, Inc., a New York corporation ("CDI"), Private
Ventures Inc., a New York corporation ("PVI"), and Cellular Direct L.P. , a New
York limited partnership ("CDLP"; the Partnership, the Company, CDI, PVI and
CDLP, each, an "Entity" and collectively, the "Entities").
WHEREAS, Xxxxxx is the beneficial and record owner of (i) the
shares of common stock (the "Common Stock") of each of the Company, PVI and CDI
set forth opposite his name on Schedule A attached hereto (the "Xxxxxx Shares")
and (ii) the Units (the "Units") of each of the Partnership and CDLP, set forth
opposite his name on Schedule A attached hereto (the "Xxxxxx Units") (the Xxxxxx
Shares and the Xxxxxx Units, collectively, the "Xxxxxx Interests"); and
WHEREAS, Xxxxxxxx is the beneficial and record owner of (i) the
shares of Common Stock in each of the Company, PVI and CDI set forth opposite
his name On Schedule A attached hereto (the "Xxxxxxxx Shares") and (ii) the
Units in each of the Partnership and CDLP set forth opposite his name on
Schedule A attached hereto (the "Xxxxxxxx Units") (the Xxxxxxxx Shares and the
Xxxxxxxx Units, collectively, the "Xxxxxxxx Interests"); and
WHEREAS, Xxxxxx wishes to sell and the Buyers wish to purchase
all of the Xxxxxx Interests in accordance with the terms of this Agreement; and
WHEREAS, Xxxxxxxx wishes to sell and the Buyers wish to purchase
all of the Xxxxxxxx Interests in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Terms of the Transaction.
1.1 Sale of the Interests.
(a) Xxxxxx and Xxxxxxxx shall, on the Closing Date (as defined
in Section 5 hereof), sell, transfer and assign to the Buyers all of the Xxxxxx
Interests and the Xxxxxxxx Interests, respectively, by delivering to the Buyers
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certificates representing all the Xxxxxx Shares and the Xxxxxxxx Shares, duly
endorsed in blank or with duly executed stock powers attached and with all
necessary transfer tax stamps and other revenue stamps, if any, acquired at the
expense of the Selling Stockholders, affixed and cancelled, and (ii) all
evidences of ownership of the Xxxxxx Units and the Xxxxxxxx Units, with such
instruments of transfer as the Buyers may reasonably request.
1.2 Purchase Price and Consideration for Restrictive Covenant.
(a) Fixed Consideration.
(1) The aggregate fixed consideration for the Xxxxxx Interests
and the Xxxxxxxx Interests of $500,000 shall be paid by the Buyers one
half to each Selling Stockholder, against the delivery of the Xxxxxx
Interests and the Xxxxxxxx Interests as provided in Section 1.1, by bank
or tellers checks on the Closing Date.
(2) Contingent Consideration. The balance of the purchase price
for the Xxxxxx Interests and the Xxxxxxxx Interests shall be paid as a
Contingent Payment (as defined in Section 1.2(b)(3)) in accordance with
the other provisions of this Agreement.
(3) Partnership Consideration for Restrictive Covenant. In
consideration of each selling Stockholder making the restrictive
covenants contained in Section 3 hereof, the Partnership hereby agrees
to pay to the Selling Stockholders the aggregate sum of Two Hundred
Fifty Thousand Dollars ($250,000) which sum shall constitute part of the
Initial Contingent Payment (as defined in Section 1.2(b)(3)(A)), shall
be paid in accordance with the terms of Section 1.2(b)(3)(A) and only
upon the occurrence of any Contingency Event or pursuant to the terms of
Sections 1-4, 1.5 or 1.9 and shall be evidenced by a promissory note in
the form of the note annexed as Exhibit I-A (the "Partnership Seller
Note").
(b) Contingent Payments. (1) The occurrence of any of the
following events shall be referred to as a "Contingency Event":
(A) the sale directly or indirectly by the Buyers of all or a
majority of the Buyers interests in any or all of the Entities;
(B) the sale directly or indirectly of all or substantially all
of the assets of all or any of the Entities; or
(C) the proposed distribution of earnings or profits or any
other distribution of cash or property by any Entity to the
Buyers, which distributions for the
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purposes of this Section shall not include salary or bonus
payments paid directly or indirectly to Xxxxxxx not exceeding
$187,500 per calendar year or salary or bonus payments paid
directly or indirectly to Preston not exceeding $150,000 per
calendar year or benefits paid to either Buyer related to the
operation of the business of such entities in the aggregate.
(2) The proceeds of the sales described in clauses (A) and (B) of this
Section 1.2(b) shall be referred to as "Sale Proceeds" . The profits described
in clause (C) of this Section 1.2(b) shall be referred to as "Distributable
Profits".
(3) Upon the occurrence of a Contingency Event, the Selling Stockholders
shall be entitled to the following contingent payments (the "Contingent
Payments"), subject to adjustment in accordance with the terms of Sections 1.4
and 1.5:
(A) with respect to the first $500,000 of Sale Proceeds or of
Distributable Profits, or any combination thereof, such amounts
shall be paid (i) first, to the Selling Stockholders in respect
of amounts owed to them pursuant to Section 1.3 hereof, and (ii)
second, to XXXX Marketing Services, Inc. ("XXXX") in respect of
payments owed to XXXX pursuant to Section 1.6(b)(iii) hereof
(the amounts payable pursuant to this Section 1.2(b)(3)(A) are
hereafter referred to as the "Initial Contingent Payment");
(B) with respect to the next $2,000,000 of Sale Proceeds or of
Distributable Profits, or any combination thereof, remaining
after payment of the amounts described in clause (A) above, the
Selling Stockholders shall not be entitled to any of such Sale
Proceeds or Distributable Profits;
(C) with respect to the next $1,500,000 of Sale Proceeds or of
Distributable Profits, or any combination thereof, remaining
after payment of the amounts described in clauses (A) and (B)
above, the Selling Stockholders shall be entitled to receive
$.50 of every $1.00 paid as Sale Proceeds or of Distributable
Profits, as the case may be; and
(D) with respect to any amounts in excess of those described in
clause (3)(C) above of Sale Proceeds or Distributable Profits,
or any combination thereof, the Selling Stockholders shall not
be entitled to any such Sale Proceeds or Distributable Profits.
(4) With respect to amounts owed in respect of Contingent
Payments, (A) Sale Proceeds shall only include Sale Proceeds actually received
by the Buyers (Or their designees) in respect of any sale described in clause
(1)(A) above or by the Partnership in respect of any sale described in clause
(B) above (i.e., exclusive of any deferred or contingent amounts
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until paid, if ever) and (B) Distributable Profits shall only include amounts
actually distributed to the Buyers (or their designees) (i.e., exclusive of
amounts available for distribution until actually distributed, if ever). The
party (or parties) receiving such Sale proceeds or Distributable profits shall
be the party responsible for any payments due under this Section 1.2(b);
provided, however, that the Entities agree that amounts due to the Selling
Stockholders or, as the case may be, XXXX under this Section 1.2(b) shall be
paid to them by the Entity receiving the Sale Proceeds or distributing the
Distributable Profits simultaneously with any distribution by the Entity of Sale
Proceeds received under clause (B) of Section 1.2(b)(1) or the distribution of
Distributable Profits under clause (C) of Section 1.2(b)(1), and such Entity
shall cause the Buyer receiving Sale Proceeds under clause (A) of Section
1.2(b)(1) to make the payment due to XXXX, or as the case may be, to the Selling
Stockholders under this Section 1.2(b) prior to entering upon its books and
records any transfer of interests or issuing new stock certificates or evidence
of ownership of partnership units resulting from any transfer of interests in
such Entity. The Contingent Payment shall be made not later than the third
Business Day following the receipt of Sale Proceeds or, as the case may be,
simultaneously with the distribution of Distributable Profits, and shall be
payable by bank or tellers checks to XXXX, or as the case may be, one-half to
each Selling Stockholder.
With respect to any Sale Proceeds received or Distributable Profits
distributed in forms other than cash, such proceeds or profits shall be valued
by the Partnership's accountants. In the event the Buyers dispute such valuation
rendered by the Partnership's accountants and the Buyers give notice to the
Partnership of such objection within 5 Business Days of receipt thereof, the
Buyers may, at their cost and expense, retain independent certified public
accountants to prepare a second valuation. In connection with the preparation of
such second valuation, the Buyers and their representatives shall be granted by
the Partnership all reasonable and necessary access to the materials reviewed by
the Partnership's accountants in calculating their valuation, subject to the
rendering by the Buyers and their representatives of usual and customary
undertakings concerning confidentiality of certain information. The two firms of
certified public accountants (collectively, the "Accountants") shall thereafter
use their best efforts to reconcile any differences between the two calculations
and shall prepare a joint certificate setting forth the agreed valuation of such
non-cash consideration, which calculation shall be final and binding. In the
event the two firms cannot so reconcile such difference within 90 days after the
rendering of a valuation by the accountants selected by the Buyers, the
Accountants shall mutually select a firm of certified public accountants to
arbitrate the dispute (the "Arbitrator"). The Arbitrator's determination of a
valuation of the non-cash consideration shall be final and binding on the
parties hereto and the cost of such arbitration shall be borne equally between
the parties. In the event the Accountants are unable to agree on the selection
of the Arbitrator either party
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hereto may commence an action in Supreme Court, New York County to resolve the
dispute at any time after 120 days after the rendering of a valuation by the
accountants selected by the Buyers. Upon the date on which the Accountants
deliver their joint certificate referred to in this Section, the Arbitrator
renders its decision or the final judgment is rendered in the action commenced
in the Supreme Court, New York County, as the case may be, the valuation shall
be considered final and any payments to the Selling Stockholders due as a result
thereof shall be made within 10 Business Days.
As used herein, the term "Business Day" means any day other than
a Saturday, a Sunday or a day on which commercial banks in New York City are
required or authorized to be closed. If the due date for any payment described
above is not a Business Day, then the Selling Stockholders or XXXX (as the case
may be) shall not be entitled to payment of the amount due until the next
following Business Day, and shall not be entitled to any interest or other
payment in respect of such delay.
1.3 Repayment of Capital. The credit balances in the capital and current
accounts of each Selling Stockholder with the Partnership as of the date hereof
as stated opposite such Selling Stockholder's name on Schedule B attached hereto
shall be paid to such Selling Stockholder on the second anniversary of the
Closing Date.
1.4 Equalization Payments. To the extent that amounts paid in any month
as salary or bonuses to Xxxxxxx and to Preston exceed in the aggregate
$18,750.00 (the "Cap Amount"), then the Selling Stockholders or XXXX (as the
case may be) shall be entitled to receive from the Partnership in the succeeding
month as a payment of contingent amounts owed to the Selling Stockholders or
XXXX (as the case may be) pursuant to Section 1.2(b)(3)(A), $1.00 for every
$1.00 by which the amounts so paid to Xxxxxxx and Xxxxxxx exceeded the Cap
Amount. Any payments made pursuant to this Section 1.4 shall constitute
Contingent Payments under Section 1.2(b)(3)(A) and shall be credited against the
amounts due on account of the Initial Contingent Payment and shall reduce the
Contingent Payment amounts stated in Section 1.2(b)(3)(A) in a corresponding
amount. Upon payment in full of the Initial Contingent Payment, this Section
shall be of no further force or effect.
1.5 Earnings Ceiling Payments.
(a) To the extent that the Partnership or any other Entity has
Earnings (as defined below) in any fiscal year in excess of $200,000 (the
"Earnings Ceiling"), then (1) with respect to the fiscal year ended December 31,
1993, the Selling Stockholders or XXXX (as the case may be) shall be entitled to
$.50 of every $1.00 of Earnings of the Partnership or other Entity in excess of
the Earnings Ceiling with respect to Earnings up to and including $500,000 and
shall be entitled to all Earnings of the Partnership or other Entity in excess
of
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$500,000 in respect of amounts due to the Selling Stockholders or XXXX (as the
case may be) on account of the Initial Contingent Payment, and (2) with respect
to all fiscal years ending after December 31, 1993, the Selling Stockholders or
XXXX (as the case may be) shall be entitled to all Earnings of the Partnership
or other Entity in excess of the Earnings Ceiling in respect of amounts due to
the Selling Stockholders or XXXX (as the case may be) on account of the Initial
Contingent Payment with such amounts, if any, to be paid within twenty days of
the due date for delivery of the annual financial statements described in
Section 1.5(b)(2). In no event shall payments be made in respect of this Section
1.5(a) in excess of $300,000 (including any prepayments made pursuant to Section
1.5(c)) with respect to the fiscal year of the Partnership ending December 31,
1993; in the event that amounts are owed in excess of $250,000 pursuant to this
Section 1.5(a) based upon the financial statements delivered pursuant to Section
l.5(b)(2) in respect of the fiscal year ended December 31, 1994 (and giving
effect to any prepayments made pursuant to Section 1.5(c)), $250,000 shall be
due and payable within 30 days of the due date for delivery of such annual
financial statements and any amounts in excess thereof shall be paid within 120
days of the due date for delivery of such annual financial statements. Any
amounts paid to the Selling Stockholders or XXXX pursuant to this Section 1.5
shall constitute Contingent Payments and shall reduce the Contingent Payment
amounts stated in Sections 1.2(b)(3)(A)-(D) in a corresponding amount. Upon
payment in full of the Initial Contingent Payment, this Section 1.5 shall be of
no further force or effect. For purposes of this Section, "Earnings" for any
period shall mean the net income of the Partnership for such period as
determined in accordance with generally accepted accounting principles ("GAAP")
consistently applied, but without giving effect to (i) depreciation expenses
other than depreciation in respect of fixed assets taken in lieu of expenses for
lease payments on financing leases; (ii) the payment of income tax; (iii)
interest expense for interest amounts paid other than to a third party; (iv)
amortization in respect of intangibles; (v) payment of any amounts to Xxxxxxx
Xxxx & Xxxxxxxxx in respect of this Agreement and the transactions contemplated
hereby; and (vi) annualized salary payments to Xxxxxxx and Xxxxxxx in excess of
$100,000 and $125,000, respectively.
(b) With respect to the obligations of the Partnership and the other
Entities under this Section 1.5, the Partnership shall furnish to the Selling
Stockholders and XXXX:
(1) as soon as practicable and in any event within 45 days after the
close of each month of each year with respect to the financial statements
referred to herein, a statement of income of the Partnership and the other
Entities for the month and year to date, in reasonable detail and certified by
the President or Chief Financial Officer of the Partnership and the other
Entities to be true and fair in all material respects and to have been prepared
in accordance with GAAP (except for the omission of footnotes), subject to
normal recurring year-end
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audit adjustments; provided that with respect to the Entities other than the
Partnership, a statement that an Entity has not transacted any business in a
given month certified by the President or Chief Financial Officer of such Entity
shall constitute compliance for purposes of this Section 1.5(b)(1); and
(2) as soon as practicable and in any event within 90 days after the end
of the fiscal year of the Partnership commencing with the fiscal year ending
December 31, 1993, a balance sheet of the Partnership and a statement of income
and retained earnings of the Partnership, as at the end of and for the fiscal
year just closed, all in reasonable detail, presented in a manner consistent
with the financial statements of the Partnership for the fiscal year ended
December 31, 1992 certified by an independent certified public accountant; such
audited financial statements shall be provided with respect to any other Entity
with any gross income in excess of $10,000 in any fiscal year with respect to
such fiscal year.
(c) In the event that the product (the "Annualized Earnings") of (1) the
quotient of (A) the year to date income statement figures delivered pursuant to
Section 1.5(b)(1) above for any of March, June or September divided by (B) the
number of months elapsed from the date of the last audited annual financial
statements of the Partnership or other Entity (as the case may be) to the date
of such year to date income statement multiplied by (2) twelve is greater than
the Earnings Ceiling, then the Partnership or other Entity (as the case may be)
shall deliver to the Selling Stockholders or XXXX (as the case may be) within 30
days of the due date for delivery of such income statement a bank or tellers
check in an amount equal to the quotient of (X) the amount by which the
Annualized Earnings exceed the Earnings Ceiling (provided, however, that this
amount shall be halved for Annualized Earnings between $200,000 and $500,000 in
respect of financial statements delivered with respect to the fiscal year ended
December 31, 1993) divided by (Y) the number of months elapsed from the date of
the last audited annual financial statements of the Partnership to the date of
such year to date income statement; provided, however, that such quotient shall
be reduced by the cumulative amount of any such annualized payments previously
paid in respect of such fiscal year.
(d) In the event that any payments made pursuant to Section 1.5(c) above
are shown to exceed those due to the Selling Stockholders or XXXX (as the case
may be) pursuant to Section 1.5(a) upon the delivery of the audited annual
financial statements of the Partnership pursuant to Section 1.5(b)(2), then the
Partnership shall be entitled to a credit in the amount of such excess against
any other Contingent Payment due pursuant to this Agreement and the amounts due
under Sections 1.2(b)(3)(A)-(D) shall be reduced in a corresponding amount.
(e) The Partnership and each Entity will keep proper books of record
and account in which full, true and correct
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entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its business and activities. The Partnership covenants that it
will, upon reasonable advance notice and at a reasonable time, permit any
representative of either any Selling Stockholder or XXXX (other than the Selling
Stockholders), designated in writing by such entity, at the expense of XXXX or
any Selling Stockholder, to examine the financial records of the Company and
make copies thereof or extracts therefrom for the purposes of verification of
accuracy and completeness of the financial statements delivered pursuant to
Sections 1.5(b)(1) and (2), and for no other purpose provided that XXXX and any
Selling Stockholder and their representatives acknowledge that all information
disclosed in any such examination shall remain confidential in accordance with
the terms of Section 3.4.
(f) In the event that the Selling Stockholders or XXXX do not agree with
any item shown on the audited financial statements delivered pursuant to Section
1.5(b)(2), the Selling Stockholders or XXXX shall promptly (but not later than
45 days after the delivery of the financial statements) give written notice to
the Partnership of any exceptions thereto (in reasonable detail describing the
nature of the disagreement asserted; but only one notice may be given by the
Selling Stockholders or XXXX with respect to any single financial statement). If
the Partnership and the Selling Stockholders or XXXX (as the case may be)
reconcile their differences, the financial statement in question shall be
adjusted accordingly and shall thereupon become final and conclusive upon all of
the parties hereto. If the Partnership and the Selling Stockholders or XXXX (as
the case may be) are unable to reconcile their differences in writing within 20
days after written notice of exceptions is received by the Partnership, the
Selling Stockholders or XXXX (as the case may be) may either accept the
financial statements without adjustment or retain at their cost and expense
(except as set forth below) independent certified public accountants to attempt
to reconcile the exceptions with the Partnership's accountants in the manner
described in Section 1.2(b)(4) of this Agreement. In the event the Accountants
cannot reconcile the exceptions within 45 days after the selection of the
Selling Stockholders' or JAMI's Accountant, an Arbitrator shall be selected in
the manner described in Section 1.2(b)(4), and the exceptions shall be resolved
in the manner described in Section 1.2(b)(4), except that the fees and expenses
of the Selling Stockholders' or JAMI's (as the case may be) Accountant and the
Arbitrator shall be paid as follows: by the Buyers and the Company, if the
Arbitrator's determination increases the amount payable to the Selling
Stockholders and XXXX under Section 1.5 with respect to the fiscal year under
examination by ten percent (10%) or more; by the Buyers and the Company on the
one hand and the Selling Stockholders or XXXX (as the case may be depending upon
who delivered the notice of exceptions) on the other equally if the Arbitrator's
determination increases the amount payable to the Selling Stockholders and XXXX
under Section 1.5 with respect to the fiscal year under examination by less than
ten percent (10%) but more than five percent (5%);
-8-
17
and by the Selling Stockholders or XXXX (as the case may be depending upon who
delivered the notice of exceptions) if the Arbitrator's determination does not
increase the amount payable to the Selling Stockholders and XXXX under Section
1.5 with respect to the fiscal year under examination by more than five percent
(5%).
1.6 Settlement with XXXX Marketing Services Inc.
(a) The Partnership and the Buyers acknowledge: (i) that the
Partnership rented office space from XXXX Marketing Services, Inc. ("XXXX"),
that XXXX provided the Partnership with receptionist services, conference room
facilities, office furniture, supplies and equipment, including telephones,
copier machines and access to computers for design work (hereafter the foregoing
is referred to as the "Office Facilities and Equipment"); (ii) an agreement
between the Partnership and XXXX pursuant to which XXXX would provide and the
Partnership would purchase from XXXX the Office Facilities and Equipment as long
as the Partnership continued in business (such agreement is referred to as the
"Office Facilities and Equipment Agreement"); (iii) that XXXX provided marketing
and consulting services to the Partnership to assist the Partnership in
developing marketing techniques and materials. The Partnership and XXXX agree
that in consideration for the Office Facilities and Equipment and the consulting
services provided by XXXX to the Partnership, and in consideration for JAMI's
agreement to terminate the Office Facilities and Equipment Agreement and release
the Partnership from its obligations thereunder, the Partnership shall make the
payments to XXXX described in subparagraph (b) of this Section 1.6. All parties
hereto agree that the total indebtedness to XXXX with respect to the above
matters is $303,333.34, which shall be paid to XXXX in the manner provided in
paragraph (b) below, and which obligation for payments due under Section
1.6(b)(ii) below shall be evidenced by a promissory note in the form of the note
annexed as Exhibit I-B (such note shall be referred to as the "Partnership XXXX
Note").
(b) (i) $15,000 shall be paid to XXXX on the Closing Date and
(ii) $38,333.34 shall be paid in 6 equal monthly installments of $6,388.89 each,
the first such installment to be made 30 days after the Closing Date, and each
of the 5 succeeding installment payments to be made on the monthly anniversary
of the first such installment payment (the aggregate of the amounts referred to
in clauses (i) and (ii) above, the "Guaranteed Amount"); and (iii) $250,000.00
which shall constitute part of the Initial Contingent Amount and shall be paid
to XXXX in accordance with the terms of Section 1.2(b)(3)(A) and only upon the
occurrence of a Contingency Event or pursuant to the terms of Sections 1.4, 1.5
or 1.9.
1.7 Covenant. The Buyers and the Entities agree that none of the
Entities shall directly or indirectly sell, mortgage or otherwise transfer all
or substantially all of the Entities' respective assets other than in an arm's
length transaction for adequate consideration.
-9-
18
1.8 Interest on Initial Contingent Amount. In the event that the Initial
Contingent Amount is not paid prior to the second anniversary of the Closing
Date, then interest shall be owed on any unpaid amounts at a rate equal to the
sum of (a) 2.0% plus (b) the Prime Rate (as defined below) and shall be due and
payable on the first Business Day of each calendar quarter and shall be deemed
to have commenced accruing on the Closing Date in respect of such amount. For
purposes of this Agreement, "Prime Rate" shall mean (i) the annual rate of
interest announced by Citibank, N.A. from time to time as its "prime rate" in
effect at its principal office in the City of New York or (ii) if Citibank, N.A.
does not announce such a rate, then the "prime rate" published in the Wall
Street Journal (New York edition). Interest shall be computed on the basis of a
365-day year for the actual number of days elapsed since payment of such amounts
by the Partnership and shall change when and as the Prime Rate is changed, and
any such change in the Prime Rate shall become effective at the opening of
business on the day on which such change is adopted or published (as the case
may be).
1.9 Current Payment Obligations.
(a) The Partnership hereby agrees to pay the sum of $300 to each
Selling Stockholder on the first Business Day of each week commencing with the
first Business Day of the week following the Closing Date, until all amounts
owed to the Selling Stockholders pursuant to Section 1.2(a)(3) have been paid in
full. Any amounts paid pursuant to this Section 1.9(a) shall be credited against
amounts owed pursuant to Section 1.2(a)(3).
(b) Upon payment in full of all amounts owed to the Selling
Stockholders pursuant to Section 1.2(a)(3), the Partnership shall pay the sum of
$600 to XXXX on the first Business Day of each week commencing with the first
Business Day of the week following the week in which all amounts owed to the
Selling Stockholders pursuant to Section 1.2(a)(3) are paid in full or released.
Any amounts paid pursuant to this Section 1.9(b) shall be credited against
amounts owed pursuant to Section 1.6.
1.10 Acceleration. Any of the following shall constitute an Event of
Default under this Agreement: (a) default in the payment when due of any
payments called for hereunder, and such default is not cured within sixty (60)
days after written notice to the Partnership, or (b) a petition in bankruptcy
shall have been filed by or against the Partnership, or (c) a receiver or
similar entity shall have been appointed for the benefit of the creditors of the
Partnership or (d) a default occurs in the performance by the Buyers, the
Partnership or any of the other Entities of any obligations under this
Agreement, and such default is not cured within sixty (60) days after written
notice to the Partnership. Upon the occurrence of an Event of Default the entire
amount due to the Selling Stockholders under Section 1.2(a)(3) and Section 1.3
and the entire amount due to XXXX under Section 1.6 shall become
- 10 -
19
immediately due and payable. Failure to give notice of a default in payment or
performance shall not constitute a waiver of the right to give such notice at
any other time.
2. Security and Guaranty.
2.1 Security Agreement. As security for the payment as and when due of
the obligations of the Entities described above in Sections 1.2(b), 1.3, 1.4,
1.5, 1.6, 1.8, 1.9 and 1.10, the Entities shall execute and deliver a security
agreement (the "Security Agreement") substantially in the form attached hereto
as Exhibit II, securing the payment of such amounts when due by granting to the
Selling Stockholders a lien on and security interest in the accounts receivable
of the Entities.
2.2 Guaranty. As further security for the payment as and when due of the
Guaranteed Amount, each Buyer shall enter into a guaranty agreement (the "Buyer
Guaranties") substantially in the form attached hereto as Exhibit III,
guarantying such payments, provided that the liability of the Buyers under such
guaranty shall terminate and each Buyer Guaranty shall be of no further force or
effect upon the payment of amounts equal to the Guaranteed Amount under the
Partnership XXXX Note.
3. Representations and Warranties and Covenants of the Selling
Stockholders. Each Selling Stockholder severally represents and warrants to
each of the Buyers and the partnership as follows:
3.1 Title. Each Selling Stockholder owns the interests in the Entities
to be sold hereunder and listed opposite his name on each of Schedule A and
Schedule B attached hereto free and clear of any lien, charge, encumbrance or
other right of third parties, and on the Closing Date the Selling Stockholder
will own such interests free and clear of any lien, charge, encumbrance or other
right of third parties.
3.2 Enforceability; No Violation. This Agreement constitutes a valid and
binding obligation of each Selling Stockholder enforceable in accordance with
its terms and the consummation of the transactions contemplated hereby will not
result in a violation of or constitute a default under any of the terms and
provisions of any agreement to which he may be a party or by which he or any of
his assets may otherwise be subject or bound.
3.3 Authority. Each Selling Stockholder has full legal right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
3.4 Confidentiality. Each Selling Stockholder acknowledges that he has
had and will continue to have (pursuant to Section 1.5(e)) access to
confidential information, including, but not limited to, marketing, financial
and operating plans and strategies (the "Confidential
- 11 -
20
Information") of the Company and the Partnership that is not in the public
domain and that has been acquired, developed or assembled by the Company and the
Partnership at its expense. Each Selling Stockholder agrees, for so long as the
Company or Partnership continues to engage in the active conduct of its business
as defined in Section 13 hereof (whether or not such business shall constitute
the whole of its business) not to disclose the Confidential Information to any
third party.
3.5 Noncompetition. Each Selling Stockholder agrees, for three (3) years
from the Closing Date not to (i) directly or indirectly, endeavor to entice away
from the employ of the Company or Partnership or otherwise interfere with the
relationship of the Company or the Partnership with any individual, partnership,
firm, corporation or other business organization that is employed by the Company
or the Partnership or is otherwise performing services for the Company or the
Partnership, or (ii) acquire a direct or indirect interest in, or act as an
owner, manager, partner, shareholder, joint venturer or consultant to any other
person or entity that competes with the business of the Company or the
Partnership as defined in Section 13 hereof; provided, however, that this shall
not preclude a Selling Stockholder or XXXX or any other affiliate of a Selling
Stockholder (i) from acting as a consultant to any primary provider of telephone
service, but shall preclude such person or entity from engaging in any
consulting activity with any entity whose business is primarily the resale of
telephone service or (ii) from engaging in list rental or list brokerage
activities with or providing data base management services to any entity,
including entities which compete with the Company or the Partnership.
3.6 Blue Penciling. In the event that any provision of Sections 3.4 or
3.5 hereof (the "Relevant Sections") shall be deemed unenforceable, invalid, or
overbroad in whole or in part for any reason, then any tribunal, forum or court
with jurisdiction over these matters is hereby requested and instructed to
reform such provision to provide for the maximum competitive restraints upon a
Selling Stockholder's activities (in time, product, and geographic area) that
may then be legal and valid, and consent to such reformation is hereby granted.
3.7 Injunctive Relief. Each Selling Stockholder agrees that any
violation of the Relevant Sections by a Selling Stockholder is likely to cause
irreparable injury to the Company and the Partnership for which any remedy at
law would be inadequate, and the Company, the Partnership and the Buyers (or
their successors or assigns) shall be entitled to preliminary, permanent, and
other injunctive relief against any breach by a Selling Stockholder of the
provisions of the Relevant Sections. In the event of a violation of any of the
provisions of the Relevant Sections, the period of restriction referred to
therein shall be extended to a period of time equal to that period beginning on
the date when such violation commenced and ending when the activities
constituting that violation shall be finally terminated.
- 12 -
21
4. Representations and Warranties of the Buyers. Each Buyer and the
Partnership severally represents and warrants to the Selling Stockholders as
follows:
4.1 Enforceability; No Violation. This Agreement constitutes a valid and
binding obligation of each Buyer and the Partnership enforceable in accordance
with its terms and the consummation of the transactions contemplated hereby will
not result in a violation of or constitute a default under any of the terms and
provisions of any agreement to which he or it may be a party or by which he or
it or any of his or its assets may otherwise be subject or bound:
4.2 Authority. Each Buyer and the Partnership has full legal right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
5. Closing.
5.1 The closing of the transactions contemplated hereby (the "Closing")
shall take place at the offices of Xxxxx Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx, at
10:00 a.m. on a date (the "Closing Date") not later than 30 days from the date
hereof; provided, however, that the Buyers may postpone the Closing for an
additional 30 days on the giving to the Selling Stockholders of written notice
of their intention to do so not less than two Business Days prior to the date
upon which the Closing is initially scheduled.
5.2 At the Closing, the Selling Stockholders shall deliver to the Buyers
and/or to the Partnership, as indicated;
(a) to the Buyers only, a certificate or certificates representing
the Xxxxxx Shares and the Xxxxxxxx Shares duly endorsed in blank or
with duly executed stock powers attached and with all necessary
transfer tax stamps and other revenue stamps, if any, acquired at
the expense of the Selling Stockholders, affixed and cancelled, and
all evidences of ownership of the Xxxxxx Units and the Xxxxxxxx
Units, with such instruments of transfer as the Buyers may
reasonably request;
(b) to the Buyers only, their resignations as officers and directors
of the Company and any other Entity;
(c) to the Buyers and the Partnership, a certificate of each of them
certifying that the representations and warranties made by them and
contained in this Agreement remain true and correct in all respects
as of the Closing Date with the same force and effect as if made on
the date thereof; and
- 13 -
22
(d) to the Buyers and the Partnership, a release of the Buyers and
each Entity in the form annexed hereto as Exhibit IV, which release
shall exclude the obligations of the Buyers and the Partnership
under this Agreement, the Partnership Note, the Security Agreement
and the Buyer Guaranties; and further provided, however, that such
release shall be void and of no force or effect in the event that
the Buyers or the Partnership default in any payments due hereunder.
5.3 At the Closing, the Buyers shall deliver to the Selling
Stockholders:
(a) a bank or tellers check in the amount of Five Hundred Thousand
Dollars ($500,000); provided, however, that in the event that the
Buyers elect to extend the Closing Date beyond its initially
scheduled date in accordance with Section 5.1 such that the Closing
Date falls on a date not less than 46 nor more than 60 days from the
date hereof, the amount owed by the Buyers pursuant to this Section
5.3(a) shall be Five Hundred Five Thousand Dollars ($505,000);
(b) the Buyer Guaranties, duly executed;
(c) a certificate of each of them certifying that the
representations and warranties made by them and contained in this
Agreement remain true and correct in all respects as of the Closing
Date with the same force and effect as if made on the date thereof;
(d) a release of the Selling Stockholders in the form annexed hereto
as Exhibit V, which release however shall exclude any breach or
violation of the obligations of the Selling Stockholders under this
Agreement; and
(e) a waiver and consent executed by Xxxxx Xxxx ("Xxxx"), whereby
Xxxx shall waive his rights of first refusal granted under (i)
Section 5 of the Stockholders Agreement (the "Stockholders
Agreement") dated as of December 1, 1991 by and among the Selling
Stockholders, the Buyers, Xxxx and the Company and (ii) Section 12
of the Partnership Agreement (the "Partnership Agreement") dated as
of April 17, 1992 by and among the Company, the Selling
Stockholders, the Buyers and Xxxx and under similar provisions of
the Stockholders Agreement regarding CDI and the Partnership
Agreement regarding CDLP and shall consent to the execution of this
Agreement and the consummation of the transactions contemplated
hereby.
5.4 At the Closing, the Partnership and the other Entities
shall execute and deliver to the Selling Stockholders:
(a) the Partnership XXXX Note and the Partnership Seller Note each
executed by the Partnership;
- 14 -
23
(b) the Security Agreement duly executed by the Entities;
(c) a release of the Selling Stockholders in the form annexed hereto
as Exhibit V;
(d) a certificate certifying that the representations and warranties
made by it and contained in this Agreement remain true and correct
in all respects as of the Closing Date with the same force and
effect as if made on the date thereof; and
(e) Uniform Commercial Code financing statements to evidence the
grant of the security interest described in the Security Agreement.
6. Termination. This Agreement may be terminated (a) at any time prior to the
Closing Date by the mutual written consent of the parties hereto or (b) by any
party should any other party fail to deliver the documents and/or consideration
required to be delivered by it at the Closing in accordance with Section 5
hereof.
7. Survival. If this Agreement is terminated pursuant to Section 6(a) hereof,
this Agreement shall be void and of no further force and effect, and none of the
parties hereto shall have further liability.
8. Modification. This Agreement contains the entire agreement among the parties
hereto with respect to the transactions contemplated herein and shall not be
modified or amended except by an instrument in writing signed by or on behalf of
the parties hereto.
9. Further Assurance. All of the parties shall execute such documents and other
papers and take such further action as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
11. Jurisdiction; Service of Process; Venue. Any judicial proceeding brought
against any of the parties hereto with respect to any matter arising under this
Agreement may be brought in the courts of the State of New York and in the
United States District Court for the Southern District of New York, and the
parties hereby accept the jurisdiction of the aforesaid courts, irrevocably
consent to the service of any and all process in any action or proceeding by the
mailing of copies of such process to such party at its address set forth
- 15 -
24
below in Section 16 opposite its name or at such other address as such party may
give notice of to the other parties hereto and irrevocably agree to be bound by
any judgment rendered thereby except nothing herein shall be deemed to waive any
party's right of appeal. The parties irrevocably waive to the fullest extent
permitted by law any objection that such party may have now or hereafter to the
laying of venue of any judicial proceeding brought in such courts and any claim
that any such judicial proceeding has been brought in an inconvenient forum.
Xxxxxxx X. Xxxxxxx hereby appoints Xxxxxxx Xxxx & Xxxxxxxxx, having an address
at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, as his agent for service of process
in the State of New York.
12. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
13. Paragraph Headings. The paragraph headings in this Agreement are for the
convenience of reference only and shall not be deemed to alter or affect any
provision thereof.
14. Business of the Partnership. It is hereby agreed among the parties hereto
that for the purposes of this Agreement and the ancillary documents contemplated
hereby, including but not limited to the release to be delivered by the Buyers,
the business of the Partnership shall be deemed to be the purchase and resale of
local and long distance telephone service to private and business customers in
the United States of America and the business of the Company shall be deemed to
be the management of the Partnership.
15. Waiver of Conflict. The parties hereby agree that nothing shall prevent the
attorneys of the Selling Stockholders, Xxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxx & Xxxxx
("FKIWS"), from representing the Selling Stockholders in this transaction and
with respect to any dispute which may arise under this Agreement or any
ancillary documents contemplated hereby. All parties hereto and each of the
Entities hereby knowingly waive any claims as to conflict with respect to such
legal representation. The Partnership hereby acknowledges its debt of $20,708.10
to FKIWS in respect of legal services rendered to the Partnership to date and
agree to pay such amount in four equal monthly installments, with the first such
payment to be due within 30 days of the Closing Date and with all three
succeeding payments to be made on the monthly anniversary of the making of the
first such installment payment.
16. Notices. All notices and statements shall be in writing and shall together
with any payments be personally delivered or sent postage prepaid to the
intended party at the address set
- 16 -
25
forth below (unless notification of a change of address is given in writing).
The date of mailing of a notice, statement or payment shall be deemed the date
the notice is given, statement rendered or payment made.
The address of each party hereto is:
Xxxxxxx Xxxxxxx 00 Xxxxxxxxxx Xxxx
Xxxxxx XX0 0XX
Xxxxxxx
Xxxxxx Xxxxxxx 0 Xxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Xxxxxxx Xxxxxx 0 Xxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Xxxxxxx Xxxxxxxx 0 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Each Entity Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
- 17 -
26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CELLULAR DIRECT L.P.
By: CELLULAR DIRECT, INC.,
its General Partner
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
LONG DISTANCE DIRECT, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CELLULAR DIRECT, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
PRIVATE VENTURES INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
- 18 -
27
BUYERS
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
SELLING STOCKHOLDERS
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxx
XXXX MARKETING SERVICES, INC.
agrees to the provisions of
Section 1.6 of this Agreement
XXXX MARKETING SERVICES, INC.
By:/s/ Xxxxxxx X. Xxxxxx
----------------------------
- 19 -
28
BUYERS
------------------------------------------
Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxx
SELLING STOCKHOLDERS
------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxx
XXXX MARKETING SERVICES, INC.
agrees to the provisions of
Section 1.6 of this Agreement
XXXX MARKETING SERVICES, INC.
By:/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx, President
- 19 -
29
SCHEDULE A TO AGREEMENT
AMONG XXXXXXX, XXXXXXX, XXXXXXXX AND XXXXXX
AND CERTAIN ENTITIES
XXXXXX INTERESTS
SHARES OF STOCK UNITS
--------------- -----
Long Distance Direct Inc. 23.75 common shares
without par value
Long Distance Direct L.P. 23.5125
Cellular Direct Inc. 23.75 common shares
par value $.01 per
share
Cellular Direct L.P. 23.5125
Private Ventures Inc. 50 common shares,
par value $.01
per share
XXXXXXXX INTERESTS
Long Distance Direct Inc. 23.75 common shares
without par value
Long Distance Direct L.P. 23.5125
Cellular Direct Inc. 23.75 common shares
par value $.01 per
share
Cellular Direct L.P. 23.5125
Private Ventures Inc. 50 common shares
par value $.01
per share
30
SCHEDULE B TO AGREEMENT AMONG
XXXXXXX, XXXXXXX, XXXXXXXX AND XXXXXX
AND CERTAIN ENTITIES
Aggregate Capital and Current Account Credit Balances
Xxxxxx $40,000
Xxxxxxxx $40,000
31
EXHIBIT I-A
See Tab 6
32
EXHIBIT I-B
See Tab 7
33
EXHIBIT II
See Tab 10
34
EXHIBIT III
See Tabs 8 and 9
35
EXHIBIT IV
See Tabs 13 and 14
36
EXHIBIT V
See Tab 12
37
Xxxxxxx X. Xxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxx XX0 0XX
April 6, 1993
XXXX Marketing Services, Inc.
0 Xxxx Xxxx Xxxxx
Xxx Xx. 0000
Xxxxx Xxxxx, X.X.
X.X.X.
Dear Sirs:
I hereby undertake that with effect from 1 April 1993, I will
use my best efforts to procure the transfer to Long Distance Direct Inc., of any
and all obligations with respect to the lease of motor vehicle Mercedes 560 SL,
registration number M9K-135, from XXXX Marketing Services, Inc. In the event
that the leasing company is unwilling to effect such transfer, I agree to
indemnify XXXX Marketing Services, Inc. against all costs relating thereto with
effect from 1 April 1993.
Yours faithfully,
/s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
38
Xxxxxx X. Xxxxxxx
0 Xxxxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S.A.
April 6, 1993
XXXX Marketing Services, Inc.
0 Xxxx Xxxx Xxxxx
Xxx Xx. 0000
Xxxxx Xxxxx, X.X.
X.X.X.
Dear Sirs:
I hereby acknowledge my indebtedness to XXXX Marketing Services, Inc.,
in the sum of $22,000 in respect of losses incurred in relation to my
participation in a joint venture with 900 Direct. In consideration of JAMI's
formal acknowledgement that there are no other sums owing by me to it or its
affiliates or associate companies in respect of any other ventures, I hereby
agree to discharge my obligation to XXXX by six equal monthly installments, the
first such installment to be paid on the Closing Date of the purchase of the
Xxxxxx and Xxxxxxxx interests in Long Distance Direct, Inc. as defined in the
agreement for such purchases. Failure to pay any such installment shall
constitute a default under the said agreement and entitle Xxxxxx, Xxxxxxxx, and
XXXX to the acceleration rights contained in the said agreement.
Yours Faithfully,
/s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
39
We hereby undertake that none of the legal fees payable by ourselves to
Messrs. Xxxxxxx Xxxx & Xxxxxxxxx in connection with the acquisition of the
Xxxxxx and Xxxxxxxx interests in Long Distance Direct, Inc. and Long Distance
Direct L.P. will be paid by Long Distance Direct L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
40
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, Long Distance Direct L.P., a New York limited
partnership having its principal office at 0 Xxxx Xxxx Xxxxx, Xxxxx Xxxxx, Xxx
Xxxx 00000 (the "Partnership"), hereby promises to pay to the order of Xxxxxxx
X. Xxxxxx, residing at 0 Xxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxx"), and
Xxxxxxx X. Xxxxxxxx, residing at 0 Xxxxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000
("Xxxxxxxx"; Xxxxxxxx and Xxxxxx, collectively, the "Payees"), the aggregate
principal sum of Two Hundred Fifty Thousand Dollars ($250,000) with interest as
and only as described herein.
Terms used but not defined herein shall have the meanings ascribed
thereto in the Agreement dated as of April 6, 1993 by and among the Sellers, the
Partnership and certain other entities (collectively the "Other Entities") and
Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx (the "Agreement").
The Partnership hereby agrees to pay the sum of $300 to each Payee on
the first Business Day of each week commencing with the first Business Day of
the week following the Closing Date, until all amounts owed in respect of this
Note have been paid in full.
Any amounts paid by the Partnership pursuant to Sections 1.2, 1.4 or 1.5
of the Agreement shall constitute prepayments of the amounts due under this Note
and shall be credited first against any accrued and unpaid interest hereon and
then against the final payments due hereunder.
This Note may be prepaid in full or in part at any time without premium
or penalty.
All payments of principal of and interest on this Note shall be made in
any coin or currency of the United States of America as, at the respective times
of such payments, shall be legal tender for the payment of public and private
debts. Payments shall be made on a Business Day by bank or tellers check payable
one half to each Payee. As used herein, the term "Business Day" means any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed. If the due date for any payment
described above is not a Business Day, then the Payees shall not be entitled to
payment of the amount due until the next following Business Day, and shall not
be entitled to any interest or other payment in respect of such delay.
Any of the following shall constitute an Event of Default under this
Note: (a) default in payment when due of any payments called for hereunder, and
such default is not cured within sixty (60) days after written notice to the
Partnership, (b) a petition in bankruptcy shall have been filed by or against
the Partnership or any endorser of this Note, (c) a receiver or similar entity
shall have been appointed for the
41
benefit of the creditors of the Partnership or any endorser of this Note or (d)
a default occurs in the performance by the Buyers, the Partnership or any of the
Other Entities of any obligations under the Agreement, and such default is not
cured within sixty (60) days after written notice to the Partnership. Upon the
occurrence of an Event of Default the holder of this Note may, without notice,
declare the remainder of the principal sum immediately due and payable. Failure
to exercise this right shall not constitute a waiver to exercise such right at
any other time.
The rights and remedies of the holder as provided in this Note shall be
cumulative and may be pursued singly, successively or together for payment in
the sole discretion of the holder. The failure to exercise any such right or
remedy shall not be a waiver or release of such rights or remedies or the right
to exercise any of them at another time.
The obligations evidenced by this Note are secured by a Security
Agreement dated of even date herewith between the Partnership, the Other
Entities and the Payees and XXXX. This Note is freely assignable by the holder
hereof and the rights of the Payees under the Security Agreement shall inure to
the benefit of the holder of this Note and the assigns thereof.
In the event that the amounts owed hereunder are not paid prior to the
second anniversary of the Closing Date, then interest shall be owed on any
unpaid amounts at a rate equal to the sum of (a) 2.0% plus (b) the Prime Rate
(as defined below) and shall be due and payable on the first Business Day of
each calendar quarter and shall be deemed to have commenced accruing on the
Closing Date in respect of such amount. For purposes of this Note, "Prime Rate"
shall mean (i) the annual rate of interest announced by Citibank, N.A. from time
to time as its "prime rate" in effect at its principal office in the City of New
York or (ii) if Citibank, N.A. does not announce such a rate, then the "prime
rate" published in the Wall Street Journal (New York edition). Interest shall be
computed on the basis of a 365-day year for the actual number of days elapsed
and shall change when and as the Prime Rate is changed, and any such change in
the Prime Rate shall become effective at the opening of business on the day on
which such change is adopted or published (as the case may be).
In the event that any payment is not made when due hereunder, interest
at the annual rate of the sum of (i) the Prime Rate plus (ii) 4.0 percent shall
be payable monthly on the amount of such overdue payment under this Note from
the date of the occurrence of the default until payment is made in full of such
amount. In the event that the entire principal balance of the Note is declared
immediately due and payable upon the occurrence of any Event of Default,
interest at the annual rate of the sum of (i) the Prime Rate plus (ii) 4.0
percent shall be payable upon the entire principal balance from the date of the
occurrence of the default until payment in full is made of all amounts due under
this Note.
-2-
42
The undersigned agrees to pay, in addition to the principal and
interest, all costs of collection of this Note, including reasonable attorneys'
fees and disbursements.
If a law which applies to this Note and which sets maximum rates of
interest which may be charged, is finally interpreted so that the interest
collected or to be collected pursuant to this Note exceeds the permitted limits,
then: (i) such interest shall be reduced by the amount necessary to reduce the
interest to the permitted limit; and (ii) any sums already collected from the
person or persons as to whom such amount charged is determined to have exceeded
the permitted limits will be refunded to such person or persons. The holder of
this Note may choose to make this refund by reducing the principal amount owed
under this Note or by making a direct payment to such person or persons. If a
refund reduces principal, the reduction will be treated as a partial prepayment.
The Partnership waives presentment, demand for payment, notice of
dishonor and any or all notices or demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note and consents to any
or all delays, extensions of time, renewals, releases of any party to this Note
and any and all waivers or modifications that may be granted or consent to by
the holder with regard to the time of payment or with respect to any other
provisions of this Note and agrees that no such action or failure to act on part
of the holder shall be construed as a waiver by the holder of, or otherwise
affect, its right to avail itself of any remedy with respect thereto.
This Note shall be governed by and construed under the law of the State
of New York as a note made in the State of New York, without regard to the
choice of law principles thereof. Unless applicable law requires a different
method, any notice that must be given to the Partnership under this Note will be
given by delivering it or mailing it by first class mail to the Partnership at
its address set forth at the beginning of this Note or at such other address as
the Partnership may give notice of to the holder of this Note. Any notice to the
holder of this Note will be given by mailing it first class mail to the holder
of this Note at the address for the holder set forth at the beginning of this
Note or at such other address as the holder may give notice of to the person
signing this Note. The party will be deemed to have received the notice 5 days
following the date of mailing.
Any judicial proceeding brought against the Partnership with respect to
any matter arising under this Note may be brought in the courts of the State of
New York and in the United States District Court for the Southern District of
New York, and the Partnership accepts for itself the jurisdiction of the
aforesaid courts, irrevocably consents to the service of any and all process in
any action or proceeding by the mailing of copies of such process to the
Partnership at its address set forth at the beginning of this Note or at such
- 3 -
43
other address as the Partnership may give notice of to the holder of this Note
and irrevocably agrees to be bound by any judgment rendered thereby except
nothing herein shall be deemed to waive the Partnership's right of appeal. The
Partnership irrevocably waives to the fullest extent permitted by law any
objection that it may have now or hereafter to the laying of venue of any
judicial proceeding brought in such courts and any claim that any such judicial
proceeding has been brought in an inconvenient forum.
IN WITNESS WHEREOF, the Partnership has caused this Note to be
executed as of this 31 day of May 1993.
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
- 4 -
44
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the receipt and sufficiency of which are
hereby acknowledged, the undersigned, Long Distance Direct L.P., a New York
limited partnership having its principal office at 0 Xxxx Xxxx Xxxxx, Xxxxx
Xxxxx, Xxx Xxxx 00000 (the "Partnership"), hereby promises to pay to the order
of XXXX Marketing Services, Inc., a Delaware corporation having its principal
office at Two Blue Hill Plaza, Pearl River, New York 10965 (the "Payee"), the
aggregate principal sum of Two Hundred Eighty Eight Thousand, Three Hundred
Thirty Three and 34/100 Dollars ($288,333.34) with interest as and only as
described herein.
Terms used but not defined herein shall have the meanings
ascribed thereto in the Agreement dated as of April 6, 1993 by and among Xxxxxxx
X. Xxxxxx ("Xxxxxx"), Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), the Partnership and
certain other entities (collectively the "Other Entities") and Xxxxxx X. Xxxxxxx
and Xxxxxxx X. Xxxxxxx (the "Agreement").
Payments of the aforementioned principal amount shall be made as
follows:
(1) $38,333.34 shall be paid to the Payees in 6 equal monthly
installments of $6,388.89 each, with the first such installment
payment to be made within 30 days of the Closing Date, and with
all 5 succeeding installment payments to be made on the monthly
anniversary of the making of the first such installment payment.
(2) Upon payment in full of all amounts owed under the
Partnership Seller Note, the Partnership agrees to pay the sum
of $600 to the Payee on the first Business Day of each week
commencing with the first Business Day of the week following the
week in which all amounts owed to the Selling Stockholders under
the Partnership Seller Note are paid in full or released.
Any amounts paid by the Partnership pursuant to Sections 1.2,
1.4 or 1.5 of the Agreement shall constitute prepayments of the amounts due
hereunder and shall be credited first against any accrued and unpaid interest
and then against the final payments due under Clause (2) above.
This Note may be prepaid in full or in part at any time without
premium or penalty.
All payments of principal of and interest on this Note shall be
made in any coin or currency of the United States of America as, at the
respective times of such payments, shall be legal tender for the payment of
public and private debts.
45
Payments shall be made on a Business Day by bank or tellers check payable to the
Payee. As used herein, the term "Business Day" means any day other than a
Saturday, a Sunday or a day on which commercial banks in New York City are
required or authorized to be closed. If the due date for any payment described
above is not a Business Day, then the Payee shall not be entitled to payment of
the amount due until the next following Business Day, and shall not be entitled
to any interest or other payment in respect of such delay.
Any of the following shall constitute an Event of Default under
this Note: (a) default in payment when due of any payments called for hereunder,
and such default is not cured within sixty (60) days after written notice to the
Partnership, (b) a petition in bankruptcy shall have been filed by or against
the Partnership or any endorser of this Note, (c) a receiver or similar entity
shall have been appointed for the benefit of the creditors of the Partnership or
any endorser of this Note or (d) a default occurs in the performance by the
Buyers, the Partnership or any of the Other Entities of any obligations under
the Agreement, and such default is not cured within sixty (60) days after
written notice to the Partnership. Upon the occurrence of an Event of Default
the holder of this Note may, without notice, declare the remainder of the
principal sum immediately due and payable. Failure to exercise this right shall
not constitute a waiver to exercise such right at any other time.
The rights and remedies of the holder as provided in this Note
shall be cumulative and may be pursued singly, successively or together for
payment in the sole discretion of the holder. The failure to exercise any such
right or remedy shall not be a waiver or release of such rights or remedies or
the right to exercise any of them at another time.
The obligations evidenced by this Note are secured by a Security
Agreement dated of even date herewith between the Partnership, the Other
Entities and the Payee and Xxxxxx and Xxxxxxxx. This Note is freely assignable
by the holder hereof and the rights of the Payees under the Security Agreement
shall inure to the benefit of the holder of this Note and the assigns thereof.
In the event that the amounts owed hereunder are not paid prior
to the second anniversary of the Closing Date, then interest shall be owed on
any unpaid amounts at a rate equal to the sum of (a) 2.0% plus (b) the Prime
Rate (as defined below) and shall be due and payable on the first Business Day
of each calendar quarter and shall be deemed to have commenced accruing on the
Closing Date in respect of such amount. For purposes of this Note, "Prime Rate"
shall mean (i) the annual rate of interest announced by Citibank, N.A. from time
to time as its "prime rate" in effect at its principal office in the City of New
York or (ii) if Citibank, N.A. does not announce such a rate, then the "prime
rate" published in the Wall Street Journal (New York edition). Interest shall be
computed on the basis of a 365-day year for the actual number of days elapsed
- 2 -
46
and shall change when and as the Prime Rate is changed, and any such change in
the Prime Rate shall become effective at the opening of business on the day on
which such change is adopted or published (as the case may be).
In the event that any payment is not made when due hereunder,
interest at the annual rate of the sum of (i) the Prime Rate plus (ii) 4.0
percent shall be payable monthly on the amount of such overdue payment under
this Note from the date of the occurrence of the default until payment is made
in full of such amount. In the event that the entire principal balance of the
Note is declared immediately due and payable upon the occurrence of any Event of
Default, interest at the annual rate of the sum of (i) the Prime Rate plus (ii)
4.0 percent shall be payable upon the entire principal balance from the date of
the occurrence of the default until payment in full is made of all amounts due
under this Note.
The undersigned agrees to pay, in addition to the principal and
interest, all costs of collection of this Note, including reasonable attorneys'
fees and disbursements.
If a law which applies to this Note and which sets maximum rates
of interest which may be charged, is finally interpreted so that the interest
collected or to be collected pursuant to this Note exceeds the permitted limits,
then: (i) such interest shall be reduced by the amount necessary to reduce the
interest to the permitted limit; and (ii) any sums already collected from the
person or persons as to whom such amount charged is determined to have exceeded
the permitted limits will be refunded to such person or persons. The holder of
this Note may choose to make this refund by reducing the principal amount owed
under this Note or by making a direct payment to such person or persons. If a
refund reduces principal, the reduction will be treated as a partial prepayment.
The Partnership waives presentment, demand for payment, notice
of dishonor and any or all notices or demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note and consents to any
or all delays, extensions of time, renewals, releases of any party to this Note
and any and all waivers or modifications that may be granted or consent to by
the holder with regard to the time of payment or with respect to any other
provisions of this Note and agrees that no such action or failure to act on part
of the holder shall be construed as a waiver by the holder of, or otherwise
affect, its right to avail itself of any remedy with respect thereto.
This Note shall be governed by and construed under the law of
the State of New York as a note made in the State of New York, without regard to
the choice of law principles thereof. Unless applicable law requires a different
method, any notice that must be given to the Partnership under this Note will be
given by delivering it or mailing it by first class mail to the Partnership at
its address set forth at the beginning of this
- 3 -
47
Note or at such other address as the Partnership may give notice of to the
holder of this Note. Any notice to the holder of this Note will be given by
mailing it first class mail to the holder of this Note at the address for the
holder set forth at the beginning of this Note or at such other address as the
holder may give notice of to the person signing this Note. The party will be
deemed to have received the notice 5 days following the date of mailing.
Any judicial proceeding brought against the Partnership with respect to
any matter arising under this Note may be brought in the courts of the State of
New York and in the United States District Court for the Southern District of
New York, and the Partnership accepts for itself the jurisdiction of the
aforesaid courts, irrevocably consents to the service of any and all process in
any action or proceeding by the mailing of copies of such process to the
Partnership at its address set forth at the beginning of this Note or at such
other address as the Partnership may give notice of to the holder of this Note
and irrevocably agrees to be bound by any judgment rendered thereby except
nothing herein shall be deemed to waive the Partnership's right of appeal. The
Partnership irrevocably waives to the fullest extent permitted by law any
objection that it may have now or hereafter to the laying of venue of any
judicial proceeding brought in such courts and any claim that any such judicial
proceeding has been brought in an inconvenient forum.
IN WITNESS WHEREOF, the Partnership has caused this Note to be executed
as of this 31 day of May 1993.
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
- 4 -
48
GUARANTY
Guaranty, dated as of May 31, 1993, given by Xxxxxx X. Xxxxxxx,
residing at 0 Xxxxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Guarantor"), to XXXX
Marketing Services, Inc., a Delaware organization (the "Guaranteed Party").
The Guarantor hereby guarantees to the Guaranteed Party, including its
successors and assigns, the payment, when due, by stated maturity, acceleration
or otherwise, of all amounts owed to the Guaranteed Party by Long Distance
Direct L.P., a New York limited partnership (the "Partnership"), pursuant to a
Promissory Note (the "Note") dated as of even date herewith made by the
Partnership (the "Guaranteed Obligations"); provided, however, that the
liability of the Guarantor hereunder shall not exceed $38,333.34 (the
"Guaranteed Amount"), and this Guaranty shall terminate and be of no further
force or effect upon the payment under the Note of amounts equal to or greater
than the Guaranteed Amount.
The Guarantor also agrees: that this Guaranty shall not be impaired by
any modification, supplement, extension or amendment of the Note or any other
contract or agreement now existing between the parties or to which the parties
thereto may hereafter agree, nor by any modification, release or other
alteration of any of the Guaranteed Obligations or of any security therefor, nor
by any agreements or arrangements whatever with the Partnership or anyone else;
that the liability of the Guarantor hereunder is direct and unconditional and
may be enforced without requiring the Guaranteed Party first to resort to any
other right, remedy or security; that the Guarantor shall not have any right of
subrogation, reimbursement or indemnity whatsoever; nor any right or recourse to
security for the debts and obligations of the Partnership to the Guaranteed
Party, unless and until all of said debts and obligations have been paid in
full; that if there is more than one Guarantor, the liability of the Guarantors
hereunder shall be joint and several; that if the Partnership or any Guarantor
should at any time become insolvent or make a general assignment for the benefit
of creditors, or if a petition in bankruptcy or any insolvency or reorganization
proceedings shall be filed or commenced by, against or in respect of the
Partnership or any Guarantor, any and all obligations of each Guarantor shall,
at the option of the Guaranteed Party, forthwith become due and payable without
notice; that this Guaranty is, as to each Guarantor, a continuing Guaranty; that
the death of any Guarantor shall not affect the termination of this Guaranty as
to such deceased Guarantor or as to any other Guarantor; and that nothing shall
discharge or satisfy the liability of any Guarantor hereunder except the payment
of the Guaranteed Obligations in an amount equal to or exceeding the Guaranteed
Amount.
49
The Guarantor waives: notice of acceptance hereof, presentment and
protest of any instrument, and notice thereof; notice of default; and all other
notices to which Guarantor might otherwise be entitled.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of New York, shall be binding upon the heirs,
executors, administrators, successors and assigns of each Guarantor and shall
inure to the benefit of your successors and assigns.
Any judicial proceeding brought against the Guarantor with respect to
any matter arising under this Guaranty may be brought in the courts of the State
of New York and in the United States District Court for the Southern District of
New York, and the Guarantor accepts for itself the jurisdiction of the aforesaid
courts, irrevocably consents to the service of any and all process in any action
or proceeding by the mailing of copies of such process to the Guarantor at its
address set forth at the beginning of this Guaranty or at such other address as
the Guarantor may give notice of to the Guaranteed Party and irrevocably agrees
to be bound by any judgment rendered thereby except nothing herein shall be
deemed to waive the Guarantor's right of appeal. The Guarantor irrevocably
waives to the fullest extent permitted by law any objection that it may have now
or hereafter to the laying of venue of any judicial proceeding brought in such
courts and any claim that any such judicial proceeding has been brought in an
inconvenient forum.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed as of the date first above written.
/s/ XXXXXX X. XXXXXXX
----------------------------
XXXXXX X. XXXXXXX
STATE OF NEW YORK )
)ss.:
COUNTY OF ROCKLAND )
On this 1 day of June, 1993, before me personally came Xxxxxx X.
Xxxxxxx, who being by me duly sworn did depose and say he resides at 0 Xxxxxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx 00000, and acknowledged to me that he signed his name
thereto.
/s/ Xxxxxxx X. Xxxxxx
---------------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01HU4967855
QUALIFIED IN ROCKLAND COUNTY
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES JUNE 11, 1994
-2-
50
GUARANTY
Guaranty, dated as of May 31, 1993, given by Xxxxxxx X. Xxxxxxx,
residing at 00 Xxxxxxxxx Xxxx, Xxxxxx XX0 0XX, Xxxxxxx (the "Guarantor"), to
XXXX Marketing Services, Inc., a Delaware organization (the "Guaranteed Party").
The Guarantor hereby guarantees to the Guaranteed Party, including its
successors and assigns, the payment, when due, by stated maturity, acceleration
or otherwise, of all amounts owed to the Guaranteed Party by Long Distance
Direct L.P., a New York limited partnership (the "Partnership"), pursuant to a
Promissory Note (the "Note") dated as of even date herewith made by the
Partnership (the "Guaranteed Obligations"); provided, however, that the
liability of the Guarantor hereunder shall not exceed $38,333.34 (the
"Guaranteed Amount"), and this Guaranty shall terminate and be of no further
force or effect upon the payment under the Note of amounts equal to or greater
than the Guaranteed Amount.
The Guarantor also agrees: that this Guaranty shall not be impaired by
any modification, supplement, extension or amendment of the Note or any other
contract or agreement now existing between the parties or to which the parties
thereto may hereafter agree, nor by any modification, release or other
alteration of any of the Guaranteed Obligations or of any security therefor, nor
by any agreements or arrangements whatever with the Partnership or anyone else;
that the liability of the Guarantor hereunder is direct and unconditional and
may be enforced without requiring the Guaranteed Party first to resort to any
other right, remedy or security; that the Guarantor shall not have any right of
subrogation, reimbursement or indemnity whatsoever; nor any right or recourse to
security for the debts and obligations of the Partnership to the Guaranteed
Party, unless and until all of said debts and obligations have been paid in
full; that if there is more than one Guarantor, the liability of the Guarantors
hereunder shall be joint and several; that if the Partnership or any Guarantor
should at any time become insolvent or make a general assignment for the benefit
of creditors, or if a petition in bankruptcy or any insolvency or reorganization
proceedings shall be filed or commenced by, against or in respect of the
Partnership or any Guarantor, any and all obligations of each Guarantor shall,
at the option of the Guaranteed Party, forthwith become due and payable without
notice; that this Guaranty is, as to each Guarantor, a continuing Guaranty; that
the death of any Guarantor shall not affect the termination of this Guaranty as
to such deceased Guarantor or as to any other Guarantor; and that nothing shall
discharge or satisfy the liability of any Guarantor hereunder except the payment
of the Guaranteed Obligations in an amount equal to or exceeding the Guaranteed
Amount.
51
The Guarantor waives: notice of acceptance hereof, presentment and
protest of any instrument, and notice thereof; notice of default; and all other
notices to which Guarantor might otherwise be entitled.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of New York, shall be binding upon the heirs,
executors, administrators, successors and assigns of each Guarantor and shall
inure to the benefit of your successors and assigns.
Any judicial proceeding brought against the Guarantor with respect to
any matter arising under this Guaranty may be brought in the courts of the State
of New York and in the United States District Court for the Southern District of
New York, and the Guarantor accepts for itself the jurisdiction of the aforesaid
courts, irrevocably consents to the service of any and all process in any action
or proceeding by the mailing of copies of such process to the Guarantor at its
address set forth at the beginning of this Guaranty or at such other address as
the Guarantor may give notice of to the Guaranteed Party and irrevocably agrees
to be bound by any judgment rendered thereby except nothing herein shall be
deemed to waive the Guarantor's right of appeal. The Guarantor irrevocably
waives to the fullest extent permitted by law any objection that it may have now
or hereafter to the laying of venue of any judicial proceeding brought in such
courts and any claim that any such judicial proceeding has been brought in an
inconvenient forum.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed as of the date first above written.
/s/ XXXXXXX X. XXXXXXX
---------------------------------
XXXXXXX X. XXXXXXX
STATE OF NEW YORK )
)ss.:
COUNTY OF ROCKLAND )
On this 1 day of June, 1993, before me personally came Xxxxxxx X.
Xxxxxxx, who being by me duly sworn did depose and say he resides at 00
Xxxxxxxxx Xxxx, Xxxxxx XX0 0XX, Xxxxxxx, and acknowledged to me that he signed
his name thereto.
/s/ XXXXXXX X. XXXXXX
---------------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01HU4967855
QUALIFIED IN ROCKLAND COUNTY
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES JUNE 11, 1994
- 2 -
52
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of May 31, 1993 by and between Xxxxxxx X.
Xxxxxx, residing at 0 Xxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Xxxxxxx X.
Xxxxxxxx, residing at 0 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and XXXX
Marketing Services, Inc. ("XXXX") whose principal place of business is located
at Two Blue Hill Plaza, Pearl River, New York 10965 (collectively, the "Secured
Parties"), and Long Distance Direct L.P., a New York limited partnership
("LDDLP" or the "Partnership"), Long Distance Direct, Inc., a New York
corporation (the "Company"), Cellular Direct, Inc., a New York corporation
("CDI"), Private Ventures Inc., a New York corporation ("PVI"), and Cellular
Direct L.P., a New York limited partnership ("CDLP"; the Partnership, the
Company, CDI, PVI and CDLP, each, an "Entity" and collectively, the "Entities"),
each with an address at One Blue Hill Plaza, Pearl River, New York 10965.
NOW THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Terms defined in the Agreement (the "Agreement")
dated as of April 6, 1993 by and among the Secured Parties, Xxxxxxx X. Xxxxxxx
("Xxxxxxx"), Xxxxxx X. Xxxxxxx ("Xxxxxxx") and the Entities are used herein as
defined therein, unless otherwise indicated. In addition, as used herein:
"Accounts Receivable" shall mean and include any present or future right
to payment for services rendered, or to be rendered, by any Entity, all present
and future accounts, accounts receivable, receivables, any other right of the
Entities to payment under a contract for the sale or lease of goods or the
rendering of services, which right is at the time not yet earned by performance,
books, debts, notes, bills, drafts, acceptances, choses in action, chattel
paper, instruments, documents, and other forms of obligations at any time owing
to or owned by any Entity, and the proceeds of any sale or other disposition
thereof, including all property obtained in foreclosure proceedings with respect
thereto.
"Collateral" has the meaning ascribed thereto in Section 4 hereof.
"Event of Default" has the meaning ascribed thereto in Section 6 hereof.
"Obligations" means the obligations of LDDLP under the Partnership
Seller Note and Partnership XXXX Note.
"Other Assets" shall mean and include any and all personal property,
patents, copyrights, trademarks, good will, and general intangibles and any
other assets of the Entities
53
not specifically identified in the definition of Accounts Receivable or this
definition and the proceeds, whether cash or non-cash, of all of the foregoing,
including all property obtained in foreclosure proceedings with respect thereto.
"Person" means an individual, partnership, corporation, trust,
unincorporated association or other entity of any nature.
"Prime Rate" shall mean (i) the annual rate of interest announced by
Citibank, N.A. from time to time as its "prime rate" in effect at its principal
office in the City of New York or (ii) if Citibank, N.A. does not announce such
a rate, then the "prime rate" published in the Wall Street Journal (New York
edition). Interest shall be computed on the basis of a 365-day year for the
actual number of days elapsed since payment of such amounts by the Partnership
and shall change when and as the Prime Rate is changed, and any such change in
the Prime Rate shall become effective at the opening of business on the day on
which such change is adopted or published (as the case may be).
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State of New York from time to time.
Section 2. Grant of Security Interest. Subject to the provisions hereof,
with respect to the Obligations the Entities hereby jointly pledge, assign and
grant ratably to the Secured Parties a lien on and security interest in all of
the Collateral, subject to the AFC Lien (as defined in Section 9)
on such Collateral.
Section 3. Representations and Warranties. Each Entity represents and
warrants to the Secured Parties that:
(a) this Agreement creates a valid security interest in the Collateral
and, when properly filed (together with the appropriate ancillary
documents) by the Secured Parties, will create a perfected security
interest in the Collateral subject only to the AFC Lien.
(b) The financial books and records relating to the Collateral and the
Collateral are located at 0 Xxxx Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxx 00000
and the Entities will give notice to the Secured Parties of any change
in such location.
(c) The Entity has full power and authority to execute this Security
Agreement and, except to the extent any contract relating to the
Collateral prohibits such action, to subject the Collateral to the
security interest created hereby.
-2-
54
(d) The Entity will execute such financing statements, assignments,
applications or certificates of title, and other instruments and perform
such acts as the Secured Parties may reasonably request to establish,
perfect and maintain an attached perfected security interest in and lien
on the Collateral.
Section 4. Collateral. The Collateral shall consist of all of each
Entity's right, title and interest in its Accounts Receivable and Other Assets,
subject to the AFC Lien. The Collateral constitutes and will constitute security
for the payment as and when due of all indebtedness and the performance of all
obligations under Sections 1.2(b), 1.3, 1.4, 1.5, 1.6, 1.8, 1.9 and 1.10 of the
Agreement (the "Relevant Sections") and this Agreement, and, without limitation
to the foregoing, the Collateral constitutes and will constitute security for
the full and prompt payment of any and all moneys heretofore, now, or hereafter
due or owing to the Secured Parties from the Entities by reason of debts of any
kind, nature, or description at any time incurred or held by the Secured Parties
for the account or benefit of, or against, the Entities arising out of the
Relevant Sections and this Agreement, regardless of any other collateral or
security delivered or held in connection therewith. The Collateral shall be and
remain as continuing security for all costs, fees, charges, and expenses which
may be due or owing in connection therewith, all of which shall be and remain
additional liens on the Collateral until each and all of the same have been
fully paid, satisfied, and discharged. All of the payment and performance
obligations described in this paragraph shall be included in the term
"Obligations".
Section 5. Extent of Agreement. The Secured Parties hereby acknowledge
that this Agreement has been entered into by the Entities for the purposes of
attachment of a security interest only. This Agreement shall be solely for the
benefit of the Entities and the Secured Parties and shall not confer any benefit
on, nor affect the rights of, any other Person.
Section 6. Defaults. Any of the following shall constitute an Event of
Default under this Agreement: (a) default in the payment when due of any
payments called for under any of the Relevant Sections, and such default is not
cured within sixty (60) days after written notice to the Partnership, or (b) a
petition in bankruptcy shall have been filed by or against the Partnership, or
(c) a receiver or similar entity shall have been appointed for the benefit of
the creditors of the Partnership or (d) a default occurs in the performance by
the Buyers, the Partnership or any of the other Entities of any obligations
under the Agreement, and such default is not cured within sixty (60) days after
written notice to the Partnership.
-3-
55
Section 7. Events of Default. During the period in which an Event of
Default shall have occurred and be continuing, the Secured Parties shall,
without demand or notice, have all of the rights and remedies with respect to
the Collateral under the Uniform Commercial Code including, without limitation,
the right to foreclose upon the Collateral pursuant to the terms of the Uniform
Commercial Code (whether or not said Code is in effect in the jurisdiction where
the rights and remedies are asserted), and such additional rights and remedies
to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted.
Section 8. Termination. When the Obligations secured hereby are paid in
full or released in writing by the Secured Parties (or their assignees), this
Agreement shall terminate.
Section 9. Subordination; Standstill; Consent; Reliance by Allstate
Financial Corporation.
(a) Notwithstanding anything to the contrary contained in this Agreement
or otherwise, and irrespective of the time, order or method of attachment or
perfection of the liens or security interests granted by the Partnership to each
of Allstate Financial Corporation ("AFC") and the Secured Parties or the time or
order of filing or recording of financing statements with respect thereto, any
and all liens or security interests which the Secured Parties may now or
hereafter have in, to or on the Collateral shall be, and hereby are made,
subordinate and junior to the liens and security interests of, and remedies
available to, AFC (the "AFC Lien") under the Accounts Receivable Factoring and
Security Agreement (as in effect from time to time, the "Factoring Agreement")
between the Partnership and AFC in, to or on the Accounts Receivable.
(b) Notwithstanding anything to the contrary contained in this Agreement
or otherwise, until all obligations of (or on behalf of) the Partnership to AFC
shall have been indefeasibly paid in full, and the Factoring Agreement shall
have been terminated by AFC, the Secured Parties shall not directly or
indirectly foreclose (or seek to foreclose) or realize (or seek to realize) upon
all or any portion of the Accounts Receivable.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Secured Parties hereby consent to the execution, delivery and
performance by the Partnership and AFC of the Factoring Agreement including,
without limitation, the transactions, liens and remedies contemplated therein
and waive any and all provisions of this Agreement to the extent necessary to
permit such execution, delivery and performance.
-4-
56
(d) AFC is an express intended third party beneficiary of this Section
9. The provisions of this Section 9 are continuing provisions and all financial
accommodations by AFC to the Partnership shall be conclusively presumed to have
been made in reliance hereon. AFC may enforce this Section 9 directly against
the Secured Parties.
Section 10. Further Subordination. The Secured Parties agree to
subordinate their security interest in the Accounts Receivable to any existing,
future or successor institutional lender(s) providing financing to the
partnership in a bona fide financing transaction which is not for the purpose of
financing the obligations in whole or in part of Xxxxxxx or Xxxxxxx under the
Agreement and which does not have the effect of permitting distributions to
either Xxxxxxx or Xxxxxxx (except for distributions effected in the ordinary
course of business) from the Partnership.
Section 11. Covenants and Agreements of Entities. The Entities covenant
that they will perform the obligations contained in each of the following
paragraphs in accordance with the terms and conditions thereof. The rights
granted to the Secured Parties, and the obligations imposed on the Entities, in
this Section are all subject to the provisions of Section 9.
(a) Recording. The Entities shall, at their own cost and expense,
promptly and duly execute, record and file financing statements and this
Agreement and all other security agreements pertaining to the Collateral
and all such instruments and documents of further assurances including,
but not limited to, supplemental security agreements, financing
statements and continuation statements, and take such other action, as
the Secured Parties may require in order that, in the Secured Parties'
reasonable opinion, a valid lien on and security interest in the
Collateral in favor of the Secured Parties will be established,
perfected and continued in effect at all times. The Entities hereby
authorize the Secured Parties to effect such recording and filing as
aforesaid (including the filing of any financing statements or
continuation statements without the signature of the Entities where
permissible).
(b) Further Assurances. The Entities shall execute and deliver to the
Secured Parties from time to time, at the Secured Parties request, such
documents and instruments, and take such action, as the Secured Parties
may deem necessary or proper to perfect or otherwise protect the
security interests created hereby.
(c) Records of Accounts. The Entities will at all times keep accurate
and complete records of Entities'
-5-
57
Accounts Receivable. At any time while any of the Obligations remain
outstanding, the Entities shall, at the request of the Secured Parties,
provide to the Secured Parties a schedule of the Entities' Accounts
Receivable describing each such account, including the name and address
of the account debtor and such other information as the Secured Parties
may request. The Entities will permit the Secured Parties or their
agents or representatives to examine the books and records of the
Entities during normal business hours.
(d) Notification to Account Debtors. The Secured Parties shall have the
right to notify the account debtors obligated on any of the Entities
Accounts Receivable directing them to make payment to the Secured
Parties and to take assume control of all proceeds of the collection of
any Accounts Receivable, which right the Secured Parties may exercise at
any time while any of the Obligations remain outstanding but only upon
the occurrence of an Event of Default hereunder. Until such time as the
Secured Parties elect to exercise such right by mailing notice thereof
to the Entities, the Entities are authorized, as the agent of the
Secured Parties, to collect and enforce said Accounts Receivable. The
costs of such collection and enforcement, including attorney's fees and
out-of-pocket expenses, shall be borne solely by the Entities whether
the same are incurred by the Secured Parties or the Entities and shall
constitute part of the Obligations secured hereby.
(e) Defense of Security Interest. The Entities shall appear in and
defend, without cost to the Secured Parties, any action or proceeding
purporting to affect the security interest hereunder or the rights or
powers of the Secured Parties and, when reasonably requested by the
Secured Parties, to commence and maintain any action or proceeding
necessary to protect such security interest and such rights or powers,
and to pay all the costs and expenses, including without limitation
attorneys fees, which the Secured Parties may incur in the event that
the Secured Parties elect to appear in, defend or commence and maintain
any such action or proceeding.
(f) Payment of Secured Parties' Expenses. The Entities shall pay,
immediately and without demand, all sums expended by the Secured Parties
in the enforcement and protection of the Secured Parties' rights
pursuant to this instrument, including without limitation attorneys'
fees and disbursements, with interest from date of expenditure at an
annual rate equal to the lesser of (i) the sum of (A) the Prime Rate
plus (B) 4.0% or (ii) the highest annual rate permitted by law. All such
sums expended shall be a lien on the Collateral and shall be deemed to
be secured hereby.
-6-
58
(g) Secured Parties' Right to Act For the Entities. If there occurs an
Event of Default or an event which, with the giving of notice or passage
of time, or both, would constitute an Event of Default hereunder, then
the Secured Parties have the right, but not the obligation, without
notice and without in any way releasing the Entities from any of the
Obligations to do any or all of the following:
(i) make the payment or do the act in such manner and to such extent
as the Secured Parties may deem necessary to protect the Collateral;
(ii) appear in and defend any action or proceeding purporting to
affect the Collateral or the rights or powers of the Secured
Parties;
(iii) pay, purchase, contest or compromise any encumbrance, charge,
or lien which in the judgment of the Secured Parties appears to
affect the Collateral;
(iv) incur any liability and expend such amounts as the Secured
Parties, in their absolute discretion, may deem necessary to
accomplish any of the matters described in (i) through (iii) above,
including without limitation paying necessary expenses, employing
counsel, paying counsel's fees, and so forth.
(h) Effect of Prior Recourse to Collateral. The Secured Parties' prior
recourse to any part or all of the Collateral shall not prevent the
Secured Parties from exercising their rights or commencing any
proceedings for payment or performance of the Obligations. The Entities
hereby waive their rights, if any, to require the Secured Parties to
proceed against any or all of the Collateral prior to instituting any
proceeding or action for payment or performance of the Obligations.
(i) Conduct of Sale of Security. In the event that the Secured Parties
elect to sell any part or all of the Collateral, on one or more
occasions, the following shall apply with regard to such sale in
addition to those rights and remedies applicable under the Uniform
Commercial Code:
(i) The sale of any part or all of the Collateral shall have been
made in a commercially reasonable manner as long as it is conducted
in conformity with reasonable commercial practices for the
disposition of similar property; the sale may be conducted at such
place and time, to such person, for such price, and upon such terms
as the Secured Parties deem best, all without demand
-7-
59
for performance or notice or advertisement other than, if
applicable, as may be required under the laws regulating the sale of
securities;
(ii) if applicable law requires reasonable notice of sale or other
disposition, the Entities hereby, agrees that the sending of ten
(10) Business Days notice to the Entities, in the manner as provided
in Section 12 of the place and time of any public sale or of the
time after which any private sale or other intended disposition is
to be made shall be deemed reasonable notice thereof; and
(iii) the Secured Parties may bid for and purchase at any sale the
Collateral offered for sale or any part thereof and thereby become
the owner thereof. The Secured Parties may make payment for any of
the Collateral so purchased by any means.
(j) Application of Proceeds of Sale Deficiencies. The Secured Parties
may apply the cash proceeds from any sale or other disposition of the
Collateral firstly to the reasonable expenses of retaking, holding,
preparing for sale, and selling the Collateral, including without
limitation broker's fees; secondly to reasonable attorney's fees and all
legal expenses, travel and other expenses which may be incurred by the
Secured Parties in attempting to collect the Obligations or enforce this
Agreement or in the prosecution or defense of any action or proceeding
related to the subject matter of this Agreement; and thirdly to all
unpaid Obligations. The Entities shall remain liable for, and will pay
the Secured Parties on demand, any deficiency remaining and the balance
of any expenses unpaid. Any surplus shall be paid to the Entities,
subject to any duty of the Secured Parties imposed by law to the holder
of any subordinate security interest in the Collateral known to the
Secured Parties.
(k) Power of Attorney. To effectuate the terms and provisions hereof,
the Entities hereby designate and appoint each Secured Party and its
assignees, designees or agents as attorneys-in-fact of the Entities
irrevocably and with power of substitution, with authority to do each
and every of the following acts upon an Event of Default hereunder:
(i) to sell, assign, deliver and dispose of any part of all the
Collateral, at public or private sale at the option of Secured
Party; and
(ii) to do all other acts and things necessary and advisable in the
sole discretion of each Secured Party to carry out and enforce this
Agreement.
-8-
60
All acts of said attorney or designee are hereby ratified and approved.
Said attorney or designee shall not be liable for any acts of commission or
omission or for any error of judgment or mistake of act or law except for acts,
errors or mistakes for which such entity is judged grossly negligent by a court
of competent jurisdiction.
This power of attorney, being coupled with an interest, is irrevocable
while any of the Obligations are due or not satisfied or fully performed.
Section 12. Miscellaneous.
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the choice of
law principles thereof. The parties hereto agree that any suit, action or
proceeding arising out of or relating to this Agreement may be instituted and
prosecuted in the United States District Court for the Southern District of New
York or in the New York State Supreme Court located in New York County, and the
parties hereto irrevocably submit to the jurisdiction of said courts and waive
any rights to object to or challenge the appropriateness of said forums. Service
of process shall be effected in accordance with the laws of the State of New
York.
(b) All notices, requests, consents and demands hereunder shall be in
writing and shall together with any payments be personally delivered or sent
postage prepaid to the intended party at the address set forth at the beginning
of this Agreement (unless notification of a change of address is given in
writing). The date of mailing of a notice or other statement shall be deemed the
date the notice is given or statement rendered.
(c) The terms of this Agreement may be waived, altered or amended only
in a writing signed by the parties hereto.
(d) This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto. No party may assign this Agreement
without the express written consent of the other parties.
(e) This Agreement may be executed in counterparts, which together shall
constitute one and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.
(f) No delay or failure by the Secured Parties in the exercise of any
right or remedies shall constitute a waiver thereof, and no single or partial
exercise by the Secured Parties of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy.
(g) The invalidity or unenforceability of any provisions of this
Security Agreement shall not affect any
- 9 -
61
other provision hereof, and this Security Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
(h) All representations and warranties of the Entities and all terms,
provisions, conditions and agreements to be performed by the Entities contained
in this Agreement shall be true and correct, and satisfied, where applicable, at
the time of execution of this Agreement, and shall survive the execution of this
Agreement.
(i) This Agreement contains the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous arrangements or understandings with respect thereto.
- 10 -
62
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed as of the day and year first above written.
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By:/s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
CELLULAR DIRECT L.P.
By: CELLULAR DIRECT INC.,
its General Partner
By:/s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
LONG DISTANCE DIRECT, INC.
By:/s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
CELLULAR DIRECT, INC.
By:/s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
PRIVATE VENTURES INC.
By:/s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
- 11 -
63
SECURED PARTIES
XXXX MARKETING SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
- 12 -
64
This FINANCING STATEMENT is presented to a filing officer for filing pursuant
to the Uniform Commercial Code:
-----------------------------------------------------------------------------
1. Debtor(s) (Last Name First) and address(es)
Long Distance Direct L.P., Long Distance Direct, Inc.,
Cellular Direct L.P., Cellular Direct, Inc.
Private Ventures Inc.
0 Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000
-----------------------------------------------------------------------------
2. Secured Party(ies) and address(es)
Xxxxxxx X. Xxxxxx, 0 Xxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx X. Xxxxxxxx, 0 Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
XXXX Marketing Services, Inc.,
0 Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000
------------------------------------------------------------------------------
3. Maturity date (if any):
For Filing Officer (Date, Time, Number, and Filing Office)
------------------------------------------------------------------------------
4. This financing statement covers the following types (or items) of property:
See attached Security Agreement
------------------------------------------------------------------------------
5. Assignee(s) of Secured Party and Address(es)
------------------------------------------------------------------------------
This statement is filed without the debtor's signature to perfect a security
interest in collateral. (check /x/ if so)
/ / already subject to a security interest in another jurisdiction when it was
brought into this state.
/ / which is proceeds of the original collateral described above in which a
security interest was perfected:
------------------------------------------------------------------------------
Filed with:
1. New York State Secretary of State
2. Rockland County
------------------------------------------------------------------------------
Check /x/ if covered: / / Proceeds of Collateral are also covered.
/ / Products of Collateral are also covered.
No. of additional Sheets presented:
------------------------------------------------------------------------------
/s/ [illegible]
------------------------------------ -------------------------------------
By: /s/ [illegible] By: /s/ [illegible]
------------------------------------ -------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
------------------------------------ -------------------------------------
Title Title
Debtor Copy
ORIGINATOR -- Remove this copy and forward balance of form intact for filing.
=============================================================================
This FINANCING STATEMENT is presented to a filing officer for filing pursuant
to the Uniform Commercial Code:
-----------------------------------------------------------------------------
1. Debtor(s) (Last Name First) and address(es)
Long Distance Direct L.P., Long Distance Direct, Inc.,
Cellular Direct L.P., Cellular Direct, Inc.
Private Ventures Inc.
0 Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000
-----------------------------------------------------------------------------
2. Secured Party(ies) and address(es)
Xxxxxxx X. Xxxxxx, 0 Xxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx X. Xxxxxxxx, 0 Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
XXXX Marketing Services, Inc.,
0 Xxxx Xxxx Xxxxx,
Xxxxx Xxxxx, Xxx Xxxx 00000
------------------------------------------------------------------------------
3. Maturity date (if any):
For Filing Officer (Date, Time, Number, and Filing Office)
------------------------------------------------------------------------------
4. This financing statement covers the following types (or items) of property:
See attached Security Agreement
------------------------------------------------------------------------------
5. Assignee(s) of Secured Party and Address(es)
------------------------------------------------------------------------------
This statement is filed without the debtor's signature to perfect a security
interest in collateral. (check /x/ if so)
/ / already subject to a security interest in another jurisdiction when it was
brought into this state.
/ / which is proceeds of the original collateral described above in which a
security interest was perfected:
------------------------------------------------------------------------------
Filed with:
1. New York State Secretary of State
2. Rockland County
------------------------------------------------------------------------------
Check /x/ if covered: / / Proceeds of Collateral are also covered.
/ / Products of Collateral are also covered.
No. of additional Sheets presented:
------------------------------------------------------------------------------
/s/ [illegible]
------------------------------------ -------------------------------------
By: /s/ [illegible] By: /s/ [illegible]
------------------------------------ -------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
------------------------------------ -------------------------------------
Title Title
Debtor Copy
ORIGINATOR -- Remove this copy and forward balance of form intact for filing.
65
RELEASE
KNOW ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN THAT,
LONG DISTANCE DIRECT INC., a New York corporation ("LDDI"), LONG DISTANCE DIRECT
L.P., a New York limited partnership ("LDDLP"), CELLULAR DIRECT L.P. ("CDLP"),
CELLULAR DIRECT, INC. ("CDI"), PRIVATE VENTURES INC. ("PVI"), Xxxxxx X. Xxxxxxx
("Xxxxxxx") and Xxxxxxx X. Xxxxxxx ("Xxxxxxx") (hereafter LDDI, LDDLP, CDLP,
CDI, PVI, Xxxxxxx and Xxxxxxx are collectively referred to as the "RELEASOR")
for good and valuable consideration, the adequacy of which is hereby
acknowledged, received from
Xxxxxxx X. Xxxxxx, a United States citizen, and Xxxxxxx X. Xxxxxxxx, a United
States citizen (hereafter collectively referred to as the "RELEASEE")
receipt of which is hereby acknowledged, releases and discharges the RELEASEE
and his respective heirs, executors, successors and assigns from all action,
causes of action, suits, debts, sums of money, accounts, bills, covenants,
contracts, agreements, promises, damages, judgments, executions, claims and
demands whatsoever, in law, admiralty or equity (hereafter all of the foregoing
shall be referred to as "Claims"), which against the RELEASEE, the RELEASOR or
the RELEASOR'S successors and assigns ever had, now have or hereafter can, shall
or may, have for, upon, or by reason of any matter, cause of thing whatsoever
from the beginning of the world to the date of this RELEASE, including Claims
arising out of or in connection with the Stockholders Agreement dated as of
December 1, 1991 by and among Xxxxxxx, Lampert, Xxxxxxx X. Xxxxxx ("Xxxxxx"),
Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxx Xxxx ("Xxxx") and the Company and the
Agreement of Limited Partnership dated as of April 17, 1992 by and among the
Company, Preston, Xxxxxxx, Xxxxxx, Xxxxxxxx and Xxxx; provided however, that
this Release shall not be effective as to any obligations or covenants of the
RELEASEE contained in the Agreement dated as of April 6, 1993 by and among
Xxxxxx, Xxxxxxxx and the RELEASOR.
This Release may not be changed orally.
This Release shall be governed by, construed and enforced in accordance with the
laws of the State of New York, United States of America, without reference to
the choice of law principles thereof.
66
IN WITNESS WHEREOF, the Releasor has caused this Release to be duly
executed on May , 1993.
LONG DISTANCE DIRECT INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
CELLULAR DIRECT L.P.
By: CELLULAR DIRECT, INC.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
CELLULAR DIRECT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
PRIVATE VENTURES INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
- 2 -
67
IN PRESENCE OF:
STATE OF NEW YORK )
)ss.:
COUNTY OF ROCKLAND )
On this 1 day of June, 1993, before me personally came Xxxxxx X.
Xxxxxxx, who being by me duly sworn did depose and say he resides at 0 Xxxxxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx 00000, and acknowledged to me that he signed his name
thereto.
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01HU4967855
QUALIFIED IN ROCKLAND COUNTY
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES JUNE 11, 1994
IN PRESENCE OF:
STATE OF NEW YORK )
)ss.:
COUNTY OF ROCKLAND )
On this 1 day of June, 1993, before me personally came Xxxxxx X.
Xxxxxxx, who being by me duly sworn did depose and say he is the duly appointed
President of each of Long Distance Direct, Inc., Cellular Direct, Inc. and
Private Ventures Inc., and acknowledged to me that he signed his name
in such capacity.
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01HU4967855
QUALIFIED IN ROCKLAND COUNTY
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES JUNE 11, 1994
IN PRESENCE OF:
STATE OF NEW YORK )
)ss.:
COUNTY OF ROCKLAND )
On this 1 day of June, 1993, before me personally came Xxxxxxx
X. Xxxxxxx, who being by me duly sworn did depose and say he resides at 00
Xxxxxxxxx Xxxx, Xxxxxx XX0 0XX, Xxxxxxx, and acknowledged to me that he signed
his name thereto.
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01HU4967855
QUALIFIED IN ROCKLAND COUNTY
QUALIFIED IN WESTCHESTER COUNTY
COMMISSION EXPIRES JUNE 11, 1994
-3-
68
RELEASE
KNOW ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN THAT,
XXXXXXX X. XXXXXX, a United States citizen (hereafter referred to as the
"RELEASOR")
for good and valuable consideration, the adequacy of which is hereby
acknowledged, received from
LONG DISTANCE DIRECT INC., a New York corporation ("LDDI"), LONG DISTANCE DIRECT
L.P., a New York limited partnership ("LDDLP"), CELLULAR DIRECT L.P. ("CDLP"),
CELLULAR DIRECT, INC. ("CDI"), PRIVATE VENTURES INC. ("PVI"), Xxxxxx X. Xxxxxxx
("Xxxxxxx") and Xxxxxxx X. Xxxxxxx ("Xxxxxxx") as RELEASEE (hereafter LDDI,
LDDLP, CDLP, CDI, PVI, Xxxxxxx and Xxxxxxx are collectively referred to as the
"RELEASEE")
receipt of which is hereby acknowledged, releases and discharges the RELEASEE
and, where applicable, the RELEASEE'S officers, directors, shareholders, limited
partners and general partners and their respective heirs, executors, successors
and assigns from all action, causes of action, suits, debts, sums of money,
accounts, bills, covenants, contracts, agreements, promises, damages, judgments,
executions, claims and demands whatsoever, in law, admiralty or equity
(hereafter all of the foregoing shall be referred to as "Claims"), which against
the RELEASEE, the RELEASOR or the RELEASOR'S successors and assigns ever had,
now have or hereafter can, shall or may, have for, upon, or by reason of any
matter, cause of thing whatsoever from the beginning of the world to the date of
this RELEASE, including Claims arising out of or in connection with the
Stockholders Agreement dated as of December 1, 1991 by and among Xxxxxxx,
Xxxxxxx, Xxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxx
Xxxx ("Xxxx") and the Company and the Agreement of Limited Partnership dated as
of April 17, 1992 by and among the Company, Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxxxx
and Xxxx; provided however, that this Release shall not be effective as to any
obligations of the RELEASEE contained in the Agreement (the "Agreement") dated
as of April 6, 1993 by and among Xxxxxx, Xxxxxxxx, and the RELEASEE, the
Partnership Seller Note or the Partnership XXXX Note or either Buyers Guaranty
(each as defined in the Agreement); provided, further, that this Release shall
be void and of no further force or effect as it relates to any party during such
period as such party shall have failed to make any payment when due (subject to
a cure period, if any) pursuant to the terms of the Agreement, the Partnership
XXXX Note, the Partnership Seller Note or a Buyer Guaranty, but shall be
reinstated with full force and effect (including retroactive effect) as and when
such payment shall be made in full, together with interest owed thereon, if any.
69
This Release may not be changed orally.
This Release shall be governed by, construed and enforced in accordance with the
laws of the State of New York, United States of America, without reference to
the choice of law principles thereof.
IN WITNESS WHEREOF, the Releasor has caused this Release to be
duly executed on June 3, 1993.
IN PRESENCE OF: XXXXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On this 3rd day of June, 1993, before me personally came Xxxxxxx
X. Xxxxxx, who being by me duly sworn did depose and say he resides at 0 Xxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and acknowledged to me that he signed his name
thereto.
/s/ Xxxxxxxx X. Xxxx
---------------------------------
Notary Public
XXXXXXXX X. XXXX
Notary Public, State of New York
No. 00-0000000
Qualified in Nassau County
Commission Expires June 30, 1994
-2-
70
RELEASE
KNOW ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN THAT,
XXXXXXX X. XXXXXXXX, a United States citizen (hereafter referred to as the
"RELEASOR")
for good and valuable consideration, the adequacy of which is hereby
acknowledged, received from
LONG DISTANCE DIRECT INC., a New York corporation ("LDDI"), LONG DISTANCE DIRECT
L.P., a New York limited partnership ("LDDLP"), CELLULAR DIRECT L.P. ("CDLP"),
CELLULAR DIRECT, INC. ("CDI"), PRIVATE VENTURES INC. ("PVI"), Xxxxxx X. Xxxxxxx
("Xxxxxxx") and Xxxxxxx X. Xxxxxxx ("Xxxxxxx") as RELEASEE (hereafter LDDI,
LDDLP, CDLP, CDI, PVI, Xxxxxxx and Xxxxxxx are collectively referred to as the
"RELEASEE")
receipt of which is hereby acknowledged, releases and discharges the RELEASEE
and, where applicable, the RELEASEE'S officers, directors, shareholders, limited
partners and general partners and their respective heirs, executors, successors
and assigns from all action, causes of action, suits, debts, sums of money,
accounts, bills, covenants, contracts, agreements, promises, damages, judgments,
executions, claims and demands whatsoever, in law, admiralty or equity
(hereafter all of the foregoing shall be referred to as "Claims"), which against
the RELEASEE, the RELEASOR or the RELEASOR'S successors and assigns ever had,
now have or hereafter can, shall or may, have for, upon, or by reason of any
matter, cause of thing whatsoever from the beginning of the world to the date of
this RELEASE, including Claims arising out of or in connection with the
Stockholders Agreement dated as of December 1, 1991 by and among Xxxxxxx,
Xxxxxxx, Xxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxx
Xxxx ("Xxxx") and the Company and the Agreement of Limited Partnership dated as
of April 17, 1992 by and among the Company, Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxxxx
and Xxxx; provided however, that this Release shall not be effective as to any
obligations of the RELEASEE contained in the Agreement (the "Agreement") dated
as of April 6, 1993 by and among Xxxxxx, Xxxxxxxx, and the RELEASEE, the
Partnership Seller Note or the Partnership XXXX Note or either Buyers Guaranty
(each as defined in the Agreement); provided, further, that this Release shall
be void and of no further force or effect as it relates to any party during such
period as such party shall have failed to make any payment when due (subject to
a cure period, if any) pursuant to the terms of the Agreement, the Partnership
XXXX Note, the Partnership Seller Note or a Buyer Guaranty, but shall be
reinstated with full force and effect (including retroactive effect) as and when
such payment shall be made in full, together with interest owed thereon, if any.
71
0419N
This Release may not be changed orally.
This Release shall be governed by, construed and enforced in accordance with the
laws of the State of New York, United States of America, without reference to
the choice of law principles thereof.
IN WITNESS WHEREOF, the Releasor has caused this Release to be
duly executed on June 3, 1993.
IN PRESENCE OF: XXXXXXX X. XXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On this 3rd day of June, 1993, before me personally came Xxxxxxx
X. Xxxxxxxx, who being by me duly sworn did depose and say he resides at 0 Xxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and acknowledged to me that he signed
his name thereto.
/s/ Xxxxxxxx X. Xxxx
---------------------------------
Notary Public
XXXXXXXX X. XXXX
Notary Public, State of New York
No. 00-0000000
Qualified in Nassau County
Commission Expires June 30, 1994
- 2 -
72
CERTIFICATE
The undersigned, Xxxxxx X. Xxxxxxx, hereby certifies that the
representations and warranties made by him and contained in the agreement dated
as of April 6, 1993 by and among Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Long Distance Direct L.P., Long Distance
Direct, Inc., Cellular Direct L.P., Cellular Direct, Inc. and Private Ventures
Inc. are true and correct in all respects as of the date hereof with the same
force and effect as if made on the date hereof.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed as of the 31st day of May 1993.
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
73
CERTIFICATE
The undersigned, Xxxxxxx X. Xxxxxxx, hereby certifies that the
representations and warranties made by him and contained in the agreement dated
as of April 6, 1993 by and among Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx, Long Distance Direct L.P., Long Distance Direct, Inc.,
Cellular Direct L.P., Cellular Direct, Inc. and Private Ventures Inc. are true
and correct in all respects as of the date hereof with the same force and effect
as if made on the date hereof.
IN WITNESS WHEREOF, the undersigned has caused this Certificate
to be executed as of the 31st day of May 1993.
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
74
CERTIFICATE
The undersigned, in his capacity as President of the undersigned
entities (or President of the General Partner of the undersigned entities),
hereby certifies that the representations and warranties made by the undersigned
and contained in the agreement dated as of April 6, 1993 by and among Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Long Distance Direct
L.P., Long Distance Direct, Inc., Cellular Direct L.P., Cellular Direct, Inc.
and Private Ventures Inc. are true and correct in all respects as of the date
hereof with the same force and effect as if made on the date hereof.
IN WITNESS WHEREOF, the undersigned have caused this Certificate
to be executed as of the 31 day of May 1993.
LONG DISTANCE DIRECT L.P.
By: LONG DISTANCE DIRECT INC.,
its General Partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
CELLULAR DIRECT L.P.
By: CELLULAR DIRECT, INC.,
its General Partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
LONG DISTANCE DIRECT, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
CELLULAR DIRECT, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
PRIVATE VENTURES INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
75
CERTIFICATE
The undersigned, Xxxxxxx X. Xxxxxx, hereby certifies that the
representations and warranties made by him and contained in the agreement dated
as of April 6, 1993 by and among Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx, Long Distance Direct L.P., Long Distance Direct, Inc.,
Cellular Direct L.P., Cellular Direct, Inc. and Private Ventures Inc. are true
and correct in all respects as of the date hereof with the same force and effect
as if made on the date hereof.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed as of the 31st day of May 1993.
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
76
CERTIFICATE
The undersigned, Xxxxxxx X. Xxxxxxxx, hereby certifies that the
representations and warranties made by him and contained in the agreement dated
as of April 6, 1993 by and among Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxxxxx, Long Distance Direct L.P., Long Distance Direct, Inc.,
Cellular Direct L.P., Cellular Direct, Inc. and Private Ventures Inc. are true
and correct in all respects as of the date hereof with the same force and effect
as if made on the date hereof.
IN WITNESS WHEREOF, the undersigned has caused this Certificate
to be executed as of the 31st day of May 1993.
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
77
June 3, 1993
TO: THE BOARD OF DIRECTORS
LONG DISTANCE DIRECT INC.
The undersigned xxxxxx resigns as a director and officer of Long
Distance Direct Inc., a New York Corporation.
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
78
June 3, 1993
TO: THE BOARD OF DIRECTORS
CELLULAR DIRECT INC.
The undersigned hereby resigns as a director and officer of Cellular
Direct Inc., a New York corporation.
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
79
June 3, 1993
TO: THE BOARD OF DIRECTORS
PRIVATE VENTURES INC.
The undersigned xxxxxx resigns as a director and officer of Private
Ventures Inc., a New York corporation.
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
80
June 3, 1993
TO: THE BOARD OF DIRECTORS
LONG DISTANCE DIRECT INC.
The undersigned hereby resigns as a director and officer of Long
Distance Direct Inc., a New York corporation.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
81
June 3, 1993
TO: THE BOARD OF DIRECTORS
CELLULAR DIRECT INC.
The undersigned hereby resigns as a director and officer of Cellular
Direct Inc., a New York corporation.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
82
June 3, 1993
TO: THE BOARD OF DIRECTORS
PRIVATE VENTURES INC.
The undersigned xxxxxx resigns as a director and officer of Private
Ventures Inc., a New York corporation.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
83
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Long Distance Direct, Inc. standing in my (our) name(s)
---------------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
In presence of
---------------------------------------
84
See Legend on Reverse Side
NUMBER SHARES
2 **23.75**
[GRAPHIC]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK
LONG DISTANCE DIRECT
THE CORPORATION IS AUTHORIZED TO ISSUE 200 COMMON SHARES--NO PAR VALUE
THIS CERTIFIES THAT XXXXXXX X. XXXXXX is the owner of
******TWENTY THREE AND SEVENTY-FIVE ONE HUNDREDS****** fully paid and
non-assessable Shares of the above Corporation transferable only on the books of
the Corporation by the holder hereof in person or by duly authorized Attorney
upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and to be sealed with the Seal of the
Corporation.
Dated December 1, 1991
------------------
----------------------- ----------------------
SECRETARY-TREASURER PRESIDENT
85
"Any transfer or other disposition of the shares represented by this certificate
is subject to the provisions of a Stockholders Agreement dated as of December 1,
1991, among Xxxxxxx Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxxxx, Xxxxx Xxxx, and Long Distance Direct Inc.
"The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") or any state securities laws and
may not be pledged, sold, assigned or transferred until (i) a registration
statement with respect thereto is effective under the Act and any applicable
state securities law or (ii) the Corporation receives an opinion of counsel that
such registration is not required."
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Additional abbreviations may also
be used though not in the list.
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Minor)
TEN ENT - as tenants by the entireties ----- --------
JT TEN - as joint tenants with right of survivorship under Uniform Gifts to Minors Act (State)
and not as tenants in common ------
PLEASE INSERT SOCIAL SECURITY OR OTHER
For value received, the undersigned hereby sells, assigns and transfers unto IDENTIFYING NUMBER OF ASSIGNEE
[ ]
----------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
-------------------------------------------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------------------------------------
represented by the within Certificate, and hereby irrevocably constitutes and appoints
----------------------------
Attorney to transfer the said
-------------------------------------------------------------------------------------
shares on the books of the within-named Corporation with full power of substitution in the premises.
Dated,
------------------------------
In presence of -----------------------------------
-----------------------------------
86
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Cellular Direct Inc. standing in my (our) name(s)
---------------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
In presence of
---------------------------------------
87
See Legend on Reverse Side
NUMBER SHARES
3 **23.75**
[GRAPHIC]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK
LONG DISTANCE DIRECT
THE CORPORATION IS AUTHORIZED TO ISSUE 200 COMMON SHARES--NO PAR VALUE
THIS CERTIFIES THAT XXXXXXX X. XXXXXXXX is the owner of
******TWENTY THREE AND SEVENTY-FIVE ONE HUNDREDS****** fully paid and
non-assessable Shares of the above Corporation transferable only on the books of
the Corporation by the holder hereof in person or by duly authorized Attorney
upon surrender of this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and to be sealed with the Seal of the
Corporation.
Dated December 1, 1991
------------------
----------------------- ----------------------
SECRETARY-TREASURER PRESIDENT
88
"Any transfer or other disposition of the shares represented by this certificate
is subject to the provisions of a Stockholders Agreement dated as of December 1,
1991, among Xxxxxxx Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxxxx, Xxxxx Xxxx, and Long Distance Direct Inc.
"The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933 (the "Act") or any state securities laws and
may not be pledged, sold, assigned or transferred until (i) a registration
statement with respect thereto is effective under the Act and any applicable
state securities law or (ii) the Corporation receives an opinion of counsel that
such registration is not required."
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Additional abbreviations may also
be used though not in the list.
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Minor)
TEN ENT - as tenants by the entireties ----- --------
JT TEN - as joint tenants with right of survivorship under Uniform Gifts to Minors Act (State)
and not as tenants in common ------
PLEASE INSERT SOCIAL SECURITY OR OTHER
For value received, the undersigned hereby sells, assigns and transfers unto IDENTIFYING NUMBER OF ASSIGNEE
[ ]
----------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
-------------------------------------------------------------------------------------------------------------------
Shares
------------------------------------------------------------------------------------------------------------
represented by the within Certificate, and hereby irrevocably constitutes and appoints
----------------------------
Attorney to transfer the said
-------------------------------------------------------------------------------------
shares on the books of the within-named Corporation with full power of substitution in the premises.
Dated,
------------------------------
In presence of -----------------------------------
-----------------------------------
89
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Cellular Direct Inc. standing in my (our) name(s)
---------------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
In presence of
---------------------------------------
90
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Cellular Direct Inc. standing in my (our) name(s)
---------------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx
In presence of
---------------------------------------
91
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx X. Xxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Private Ventures Inc. standing in my (our) name(s)
---------------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
In presence of
---------------------------------------
92
[BLUMBERG'S LAW PRODUCTS LETTERHEAD]
STOCK POWER
FOR VALUE RECEIVED, Xxxxxxx Xxxxxxxx
-------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
xxxxxx xxxx, assign and transfer unto [ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
( ) Shares of the Capital Stock of
------ ------------------- --------------------
Private Ventures Inc. standing in my (our) name(s)
----------------------------------------------
on the books of said Corporation represented by Certificate(s) No(s).
-----------
herewith, and do hereby irrevocably constitute and appoint
---------------------
attorney to transfer
--------------------------------------------------------
the said stock on the books of said Corporation with full power of substitution
in the premises.
Dated
---------------------------------
/s/ Xxxxxxx Xxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxx
In presence of
---------------------------------------
93
June 3, 1993
The undersigned hereby sells, transfers and assigns all of his interest
in Long Distance Direct L.P., a New York limited partnership, to Xxxxxx X.
Xxxxxxx and Xxxxxxx X. Xxxxxxx.
/s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
94
June 3, 1993
The undersigned hereby sells, transfers and assigns all of his interest
in Long Distance Direct L.P., a New York limited partnership, to Xxxxxx X.
Xxxxxxx and Xxxxxxx X. Xxxxxxx.
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
95
June 3, 1993
The undersigned hereby sells, transfers and assigns all of his interest
in Cellular Direct L.P., a New York limited partnership, to Xxxxxx X. Xxxxxxx
and Xxxxxxx X. Xxxxxxx.
/s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
96
June 3, 1993
The undersigned hereby sells, transfers and assigns all of his interest
in Cellular Direct L.P., a New York limited partnership, to Xxxxxx X. Xxxxxxx
and Xxxxxxx X. Xxxxxxx.
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx
97
WAIVER AND CONSENT
The undersigned, Xxxxx Xxxx, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, pursuant to Section
5.3(e) of the Agreement (the "Agreement") dated as of April 6, 1993 by and among
Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx,
Long Distance Direct L.P., Long Distance Direct, Inc., Cellular Direct, Inc.,
Private Ventures Inc. and Cellular Direct L.P. hereby acknowledges receipt of a
copy of the Agreement, and after review thereof:
(i) waives any and all rights he may have, now or in the future, against
the Buyers, the Selling Stockholders, or any Entity resulting from or
arising out of the execution and delivery of the Agreement, the Buyer
Guarantees, the Security Agreement, the Partnership Note or any other
document, certificate or side letter ancillary to the execution of the
Agreement or the consummation of the transactions contemplated thereby,
including, but not limited to, the rights granted to Xxxx under (a) Section
5 of the Stockholders Agreement, (b) Section 12 of the Partnership Agreement
and (c) any similar rights granted to Xxxx pursuant to the terms of any
stockholder, partnership or like agreement involving Xxxx and any of the
Buyers, the Selling Stockholders or any Entity; and
(ii) consents to the execution of the Agreement, the Buyer Guarantees,
the Security Agreement, the Partnership Note and any other document,
certificate or side letter ancillary to the execution of the Agreement and
the consummation of the transactions contemplated thereby.
This Waiver and Consent shall be governed by and construed in accordance
with the laws of the State of New York, without reference to the choice of law
principles thereof.
All terms used but not defined herein shall have the meanings assigned
thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Waiver and Consent
as of the 31st day of May, 1993.
/s/ Xxxxx Xxxx
-------------------------
Xxxxx Xxxx
98
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF LIMITED PARTNERSHIP
OF
LONG DISTANCE DIRECT L.P.
(Under Section 121-202 of the Revised Limited Partnership Act)
To the Department of State
State of New York
The undersigned, for the purpose of amending the Certificate of Limited
Partnership of a limited partnership previously formed pursuant to the Revised
Limited Partnership Act of the State of New York, hereby certifies:
FIRST: The name of the partnership is LONG DISTANCE DIRECT L.P.
SECOND: The date of filing of the Certificate of Limited Partnership of
the partnership with the Department of State was April 17, 1992.
THIRD: The Certificate of Limited Partnership is hereby amended in the
following respects:
(a) Paragraph THIRD, which sets forth the address to which the Secretary
of State of the State of New York shall mail a copy of any process served, is
hereby amended to read as follows:
"The Secretary of State of the State of New York is designated as the
agent upon whom process against the limited partnership may be served. The
post office address within or without the State of New York to which the
Secretary of State of the State of New York shall mail a copy of any process
against the limited partnership served upon him is One Blue Hill Plaza,
Pearl River, New York 10965."
(b) Paragraph FOURTH, which sets forth the name and business street
address of the general partner of the partnership is xxxxxx amended to read as
follows:
"The name and the business street address of the general partner of the
partnership is:
NAME ADDRESS
---- -------
Long Distance Direct, Inc. One Blue Hill Plaza
Pearl River, New York 10965"
99
IN WITNESS WHEREOF, I have subscribed this document on the date set
forth below and do hereby affirm, under the penalties of perjury, that the
statements contained therein have been examined by me and are true and correct.
Date: 31 May, 1993
LONG DISTANCE DIRECT, INC., General
Partner constituting the sole general
partner of the limited partnership
named in the foregoing Certificate of
Limited Partnership
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Xxxxxxx Xxxxxxx, Vice-President
-2-
