PURCHASE AGREEMENT
THIS AGREEMENT, effective May 1, 1996, is between Group Long Distance,
Inc., a Florida corporation ("Buyer"), and Xx. Xxxxx X. Xxxxxxxx, a Florida
resident ("Seller").
WITNESSETH:
WHEREAS, in a transaction effective February 1, 1996 Seller purchased all
of the voting stock and assets of Gulf Communications Services, Inc., a Florida
corporation ("the Corporation"), from its then parent company, Gulf Components,
Inc., ("Gulf"); and,
WHEREAS, Seller now owns all of the assets ("the Assets") and all of the
authorized, issued and outstanding shares ("the Stock"), of the Corporation,
and,
WHEREAS, to secure payment for its purchase of the Stock and the Assets
Seller executed the following documents in favor of Gulf.
A. A Stock Pledge Agreement dated February 17, 1996 ("the Stock Pledge
Agreement");
B. A Secured Promissory Note dated February 1, 1996 ("the Note");
C. A Security Agreement dated February 1, 1996; ("the Security
Agreement");
D. An Agreement for Purchase and Sale of Business dated February 1,
1996 (the "Purchase Agreement");
E. A Personal Guaranty of the Note dated February 1, 1996 ("the
Personal Guaranty"); and,
WHEREAS, Buyer now desires to buy the Stock from Seller, and to assume
Seller's liability for payment of the Note; and,
WHEREAS, Seller is willing to sell the Stock to Buyer subject to the terms
and conditions of this Agreement.
NOW, THEREFORE,
In consideration of the mutual promises, representations, warranties,
covenants, conditions and agreements contained herein, the parties, intending to
be legally bound, agree as follow:
ARTICLE I
PURCHASE AND SALE; CONSIDERATION
1.1 Purchase and Sale Seller agrees to sell, assign, convey and transfer
the Stock to Buyer, and Buyer agrees to pay Seller therefor as follows:
A. Cash Payments:
$12,500 on or before June 15, 1996; and
$12,500 on or before July 15, 1996.
B. Assumption of the Note: Buyer hereby assumes the liability of
Seller for payments of principal and interest on the Note.
1.2 The Closing. The Closing will take place on June 4, 1996 at Buyer's
corporate offices at a mutually agreed time, unless postponed or rescheduled by
mutual agreement. At The Closing Seller shall deliver to Buyer appropriate stock
certificate(s) representing the Stock, duly endorsed and assigned, free and
clear of all liens and encumbrances. In addition to such certificate(s), the
parties shall provide to each other such other documents and instruments as are
necessary or advisable to consummate the transaction herein contemplated,
including, without limitation, the following:
A. A release of Seller and the Stock from the Stock Pledge Agreement;
and,
B. An assignment by Seller and an assumption by Buyer of the Note;
and,
C. A release of Seller from the Personal Guaranty and such other
documents as the parties deem appropriate.
ARTICLE II
DUE DILIGENCE
Prior to The Closing, Buyer shall have a full and complete opportunity to
evaluate the Corporation's business and to review its business, financial, and
contractual records and information, and Seller shall cooperate with Buyer for
this purpose.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that, as of The Closing date:
3.1 Status of the Corporation. The Corporation is duly organized, validly
existing and in good standing under the laws of the State of Florida.
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3.2 Authority. Seller has the full right, power and authority to enter into
and carry out the transactions contemplated by this Agreement.
3.3 Enforceability. This Agreement is the valid and binding agreement of
Seller, enforceable in accordance with its terms.
3.4 Title. Seller has good and marketable title to the Stock and the Assets
which shall be transferred to Buyer free and clear of all liens and encumbrances
except as otherwise specifically provided herein. The Stock so transferred to
Buyer constitutes all of the authorized, issued and outstanding stock of the
Corporation.
3.5 Claims/Legal Proceedings/Other Liabilities. To Seller's knowledge,
other than those specifically indicated below, there are no liens, suits,
claims, legal proceedings or other liabilities of any kind, pending or
threatened, against Seller or the Corporation.
A. The Note and Security Agreement; including a UCC-1 Financing
Statement on the Assets;
B. AT&T contract for long distance service, guaranteed by the
Corporation.
3.6 Books and Records. The Corporation's books and records are complete,
accurate and current as of The Closing date.
3.7 Compliance with Laws and Regulations. The operations of the Corporation
have been conducted in accordance with, and the Corporation has obtained and is
in compliance with, all permits, licenses and other authorizations required
under, all applicable laws, regulations and other requirements of all
Governmental Bodies (including without limitation applicable State Public
Service Commissions and the Federal Communications Commission). The Corporation
has not received any notification of any present or past failure by the
Corporation to comply with any such laws, rules or regulations.
3.8 Regulatory Approvals. The Corporation shall obtain, all applicable and
necessary federal, state and local regulatory approvals to consummate the
transaction contemplated herein, including, without limitation, all approvals
required by the State of Florida Public Service Commission and other State
regulatory bodies and the Federal Communications Commission.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer warrants and represents to Seller that, as of The Closing date:
4.1 Status of Buyer. Buyer is a Florida corporation, duly organized,
validly existing and in good standing under the laws of the State of Florida.
4.2 Authority. Buyer has full corporate right, power and authority to enter
into and carry out the transactions contemplated by this Agreement.
4.3 Enforceability. This Agreement is the valid and binding agreement of
Buyer, enforceable in accordance with its terms.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that from and after the date of this Agreement:
5.1 Access to Records. Seller shall give, or cause the Corporation to give,
Buyer and its authorized representatives full access to the Corporation's files,
materials, books and records pertaining to its business.
5.2 Cooperation. Seller and the Corporation will cooperate fully with Buyer
in dealing with matters affecting the transactions contemplated hereby or the
transfer of any Stock hereunder.
5.3 Conduct of the Business. Until The Closing, Seller will cause the
Corporation to maintain its business operations, books, records, and accounts in
a manner consistent with past practice. Neither Seller nor the Corporation will
issue any capital stock or other equity rights in the Corporation, or purchase,
acquire or redeem any Stock, or split any or all Shares of the Stock, or amend
the Articles of Incorporation or the By-Laws of the Corporation, or borrow or
commit any significant sums of money, or grant any salary increases or bonuses,
or materially amend any existing agreements, or otherwise dispose of any assets
of the business.
5.4 Employees of the Corporation. Seller shall make all of the
Corporation's employees available to Buyer for discussion for the purpose of
post-Closing employment.
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ARTICLE VI
CONFIDENTIALITY
Until The Closing, Buyer will treat as confidential all information
obtained from Seller or the Corporation which is not already in the public
domain or otherwise lawfully known to Buyer.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of the parties hereto are subject to the condition that, as
of The Closing, all of the terms and conditions hereof to be performed or
complied with shall have been performed or complied with in all materials
respects, and the representations and warranties made by each party to the
others shall be correct in all material respects.
ARTICLE VIII
LIABILITY; INDEMNIFICATION
The representations, warranties, and covenants set forth in this Agreement
and the liabilities of the parties with respect thereto shall survive The
Closing. The parties acknowledge that that they have relied on the
representations, warranties and disclosures of liabilities or claims made
hereunder by each other and agree to defend, indemnify, and hold each other
harmless from and against all claims, losses, expense, actions, demands or
obligations arising out of or resulting from: (a) any breach of this Agreement
or any covenant made hereunder; or (b) any inaccuracy in any of the
representations or warranties made hereunder.
ARTICLE IX
GENERAL MATTERS
9.1 Binding Agreement. All terms, covenants, representations, warranties
and conditions of this Agreement shall be binding upon, inure to the benefit of,
and be enforceable by, the parties to this Agreement and their respective
successors and assigns.
9.2 Notices. All notices required to be given under this Agreement shall be
in writing and shall be deemed to be duly given if delivered personally or by
facsimile copy as follows:
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If to Seller, to:
Xx. Xxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxxxx Xxxx
Xxxxx Xxxx
Xxxxxxx 00000
If to Buyer, to:
Xx. Xxxxxx X. Xxxxx, Xx.
Group Long Distance, Inc.
0000 X. Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
9.3 Entire Understanding. This Agreement is the entire agreement between
the parties and supersedes all prior agreements and understandings, written or
oral, with respect to the subject matter hereof. Any amendment hereto shall be
in writing and signed by all parties.
9.4 Assignment. Buyer shall have the right to assign its rights hereunder
to any affiliate, subsidiary or successor legal entity, without notice to or
consent of Seller. Seller shall not have any rights of assignment, except
pursuant to Buyer's consent, which shall not be unreasonably withheld.
9.5 Waivers. The failure of any party to require performance of any
provision of this Agreement at any time shall not affect its right later to
require such performance. No waiver in any instance shall be a further or
continuing waiver unless otherwise stated in such waiver.
9.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with Florida law.
9.7 Further Assurances. From and after The Closing, each party will execute
and deliver such other instruments and conveyances and take such other action,
as the other may reasonably require.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SELLER: BUYER:
GROUP LONG DISTANCE, INC.
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------- ------------------------------------
Xxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx, Xx.
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APPLICABLE LAW: The law of the state of Florida will govern this note. Any term
of this note which is contrary to applicable law will not be effective, unless
the law permits you and me to agree to such a variation. If any provision of
this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on the note will first reduce the amount I owe you
for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to a different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary of this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: If I receive the principal in more than one advance, each advance will
start to earn interest only when I receive the advance. The interest rate in
effect on this note at any given time will apply to the entire principal
advanced at that time. Notwithstanding anything to the contrary, I do not agree
to pay and you do not intend to charge any rate of interest that is higher than
the maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after maturity). If
any notice of interest accrual is sent and is in error, we mutually agree to
correct it, and if you actually collect more interest than allowed by law and
this agreement, you agree to refund it to me.
INDEX RATE: The Index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the rate
on this note will be the same rate you charge on any other loans or class of
loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purposes of interest calculation, the accrual method will
determine the number of days in a "year." If no accrual method is stated, then
you may use any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this note
against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owned to me on an item presented to you or in your
possession for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at the
time you set off. This total includes any balance the due date for which you
properly accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree to hold
you harmless from any such claims arising as a result of your exercise of your
right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1)I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without
first notifying you before making such a change; (10) I fail to plant, cultivate
and harvest crops in due season; (11) any loan proceeds are used for a purpose
that will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off the debt against any right I have to the payment of
money from you, subject to the terms of the "Set-off" paragraph
herein.
(3) You may demand security, additional security, or additional parties to
be obligated to pay this note as a condition for not using any other
remedy.
(4) You may refuse to make advances to me or allow purchases on credit by
me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the event as a default if
it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any reasonable
fee you incur with such attorney plus court costs (except where prohibited by
law). I agree that reasonable attorneys' fees shall be construed to mean 10% of
the principal sum named in this note, or such larger fee that the court may
determine to be reasonable and just. To the extent permitted by the United
States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code.
WAIVER: I give up my rights to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
To the extent permitted by law, I also waive my right to a trial by jury in
respect to any litigation arising from this note and any other agreement
executed in conjunction with this credit transaction.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may xxx me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in full.) I
agree that you may at your option extend this note or the debt represented by
this note, or any portion of the note or debt, from time to time without limit
or notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your prior
written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
BORROWER'S INTEREST
DATE OF PRINCIPAL INITIALS PRINCIPAL PRINCIPAL INTEREST INTEREST PAID
TRANSACTION ADVANCE (not required) PAYMENTS BALANCE RATE PAYMENTS THROUGH:
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