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Exhibit 6.20
PURCHASE & SALE AGREEMENT
BY AND BETWEEN
FUTUREONE, INC.
(A NEVADA CORPORATION)
AND
MANDALAY INCORPORATED
(AN ARIZONA CORPORATION)
This agreement entered into this 6th day of December, 1999, by and
between, Mandalay, Incorporated, an Arizona Corporation (hereinafter "Mandalay")
and FutureOne, Inc., a Nevada Corporation (hereinafter "FutureOne").
RECITALS
WHEREAS, FutureOne is a full-service communications company providing Internet
services, computer networking services, special programming services,
underground cable construction and is the developer of NeighborComm(TM).
FutureOne is willing to sell certain assets and all of the subscribers of its
PrimeServ(R) division under the terms and conditions contained herein; and
WHEREAS, Mandalay is a telecommunications company and Mandalay is willing to buy
all of, the subscribers and certain assets of FutureOne consisting of certain
assets of FutureOne's PrimeServ division as further described in Section II
hereof; and
WHEREAS The transactions contemplated under this Agreement were adopted and
ratified on August 11, 1999 at a Special Meeting of the Board of Directors of
FutureOne by a unanimous vote of the Directors; and
WHEREAS The transactions contemplated under this Agreement were adopted and
ratified on December 2, 1999 at a Special Meeting of Board of Directors of
Mandalay by a unanimous vote of the Directors; and
Accordingly, in consideration of the mutual covenants and Agreements
contained herein, it is agreed that the PrimeServ subscribers and certain assets
of FutureOne shall be acquired by Mandalay (the "Acquisition"), and that the
terms and conditions of the Acquisition, the mode of carrying same into effect
and such other provisions as are deemed necessary or desirable to be effected by
the Acquisition.
NOW, THEREFORE, in consideration of the mutual promises, Agreements and
benefits contained herein, it is agreed by and between the parties as follows:
ARTICLE I
TERMS OF ACQUISITION
1.1 ACQUISITION. Mandalay shall pay to FutureOne the sum of Forty Seven
Thousand Eight Hundred Dollars ($47,800) in exchange for the Priority Call
Management Switch, subscribers list, assignment of certain GST telephone numbers
and non-compete agreement as per the terms described below. Such transfer shall
be made by Xxxx of Sale as per Exhibit A attached hereto and the equipment shall
be in good working order and all assets to be transferred shall be free from any
liens or
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encumbrances. FutureOne acknowledges the receipt of Seventeen Thousand
Eight Hundred Dollars ($17,800) from Mandalay. The remaining Thirty Thousand
Dollars ($30,000) shall be payable to FutureOne within ten (10) days of the
signing of this agreement per the attached Promissory Note, Exhibit B.
The subscriber list shall disclose all relevant customer information to allow
Mandalay to continue servicing said customers and all customers listed shall be
valid customers of FutureOne.
1.2 CLOSING. The consummation of the Acquisition by Mandalay (the
"Closing") shall take place at the offices of FutureOne, Inc. at such date, and
time as may be agreed upon by FutureOne and Mandalay.
1.3 EFFECT OF ACQUISITION. Mandalay shall be paid for those customers
that have paid in advance by having FutureOne transfer to Mandalay all Accounts
Receivable associated with those customers that it has billed for services as of
the date of this Agreement, but which it has not yet collected.
Mandalay shall only be liable for payment of expenses incurred after the date of
this Agreement in operating the business and assets of FutureOne acquired herein
and FutureOne shall be liable for payment of all expenses incurred in operating
the business and assets prior to the date of this Agreement. If necessary
certain expenses and bills may be prorated to carry out this provision of the
Agreement. Mandalay shall reimburse FutureOne a prorated portion of any prepaid
expenses pertaining to the assets acquired herein, such payment being due within
ten (10) days of receipt of notice from FutureOne.
FutureOne shall retain the registered PrimeServ trademark and Mandalay shall be
permitted to use the PrimeServ name for a period not to exceed twelve (12)
months from the date of this agreement.
ARTICLE II
DESCRIPTION OF ASSETS BEING TRANSFERRED HEREUNDER
2.1 PRIORITY CALL MANAGEMENT SWITCH. One used Priority Call Management
Switch, Model 12VF96D-DSP, Serial Number pcm80052. The switch is being
transferred as is, where is and FutureOne represents that it is currently
operating in a manner necessary to serve the existing subscribers. Mandalay
hereby acknowledges that FutureOne has advised them that the switch may not be
Y2K complaint and a substantial investment may be required to make it Y2K
compliant.
2.2 SUBSCRIBER LIST. The current subscriber list of FutureOne's
PrimeServ customers consists of approximately 104 paying subscribers.
2.3 TELEPHONE NUMBERS. FutureOne hereby agrees to assign to Mandalay
those GST telephone numbers necessary for them to continue to serve their
subscribers in an uninterrupted manner. Mandalay shall be responsible for
payment of all communications costs after the date of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FUTUREONE
3.1 DUE INCORPORATION, GOOD STANDING, QUALIFICATION. FutureOne is a
corporation duly organized,
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validly existing and in good standing under the laws of its jurisdiction of
incorporation with all requisite corporate power and authority to own, operate,
and lease its properties and to carry on its business as presently conducted.
3.2 AUTHORITY AND COMPLIANCE; NO VIOLATION. FutureOne, to the best of
its knowledge, has full corporate power and lawful authority to execute and
deliver this Agreement, and to consummate and perform the transactions
contemplated hereby.
3.3 OTHER. FutureOne, to the best of its knowledge, has disclosed
relevant financial and corporate information regarding this transaction to
Mandalay.
3.4 VALID TITLE, NO LIENS. FutureOne has valid title to all of the
assets being transferred hereunder and owns all of the assets, free and clear of
any liens or encumbrances. The telephone numbers are not considered a part of
this representation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MANDALAY
4.0 DUE INCORPORATION, GOOD STANDING, QUALIFICATION. Mandalay is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation with all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as presently conducted.
4.1 AUTHORITY AND COMPLIANCE; NO VIOLATION. Mandalay has full corporate
power and lawful authority to execute and deliver this Agreement, and to
consummate and perform the transactions contemplated hereby.
4.3 OTHER. Mandalay has fully disclosed, and shall disclose, all
financial and corporate information regarding this transaction, whether material
or inconsequential, to FutureOne.
ARTICLE V
OTHER AGREEMENTS
5.0 Y2K ANALYSIS. FutureOne shall assist Mandalay in completing a Y2K
compliance test on the Priority Call Management Switch. Such test shall be
designed to determine if the switch, in its present condition, will provide the
necessary functions to continue to serve existing customers with the same
services after December 31, 1999.
5.1 TRANSITION SERVICES. FutureOne shall assist Mandalay to become
familiar with the switch and its operation, setting up and changing subscriber
data and general operation of the business for a period of 60 days. Mandalay
acknowledges that FutureOne employees have limited operating knowledge of the
switch and cannot provide any technical expertise that may be necessary to
repair or modify the switch. FutureOne shall assist Mandalay in providing
billing services for a period up to December 31, 1999.
5.2 LOCATION. FutureOne shall allow Mandalay to leave the switch in its
present location at 0000 X. Xxxxxxxxx Xxxx, Xxxxx X-000, Xxxxxxx, Xxxxxxx for
one year from the date of this Agreement at no charge.
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5.3 COURTESY ACCOUNTS. Mandalay shall provide FutureOne with up to
Fifty (50) accounts at no charge for one year from the date of this Agreement.
Any long distance charges associated with these accounts shall be billed to
FutureOne at Mandalay's actual cost. FutureOne shall provide Mandalay one (1)
Internet hosting account at no charge for one year from the date of this
agreement.
5.4 NON-COMPETE. FutureOne hereby agrees not to compete with Mandalay
in providing virtual telephone services in the state of Arizona and in the
country of Mexico for a period of three years from the date of this Agreement.
ARTICLE VI
GENERAL PROVISIONS
6.1 NOTICES. Any notice hereunder to a party shall be deemed to be
properly served in writing and personally delivered or mailed to:
In the case of Mandalay:
0000 X. Xxxx
Xxxxxxxxxx, XX 00000
(000) 000-0000
Attn: Xxxxx X. Xxxxxx
In the case of FutureOne:
FutureOne, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxx, President
Or to such other address as may have been furnished in writing by such party to
the other parties to this Agreement, and shall be deemed to have been given as
of the time delivered or, if mailed, as of the time acknowledged as received if
mailed registered or certified mail, postage prepaid, it being the intention
that all notices pursuant hereto shall be effective only upon receipt.
6.2 INTERPRETATIONS. To the extent permitted by the context in which
used; (a) words in the singular number shall include the plural, words in the
masculine gender shall include the feminine and neuter, and vice versa; and (b)
references to "persons" or "parties" in this Agreement shall be deemed to refer
to natural persons, corporations, and all other entities. This instrument shall
be construed in accordance with the fair meaning of its language, and shall not
be construed for or against the party drafting it, solely because of such fact.
6.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall constitute one and the same document.
6.4 SECTION HEADINGS AND GENDER. The section headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. The use of the masculine or any
other pronoun herein when referring to any party has been for convenience only
and shall be deemed to refer to the particular party intended regardless of the
actual gender of such party.
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6.5 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties with respect to the transactions contemplated
hereby, and any previous Agreements or understandings between the parties
regarding the subject matter hereof are merged into and superseded by this
Agreement.
6.6 NON-ASSIGNABILITY. The obligations of this Agreement are personal
to each party, and neither the rights nor obligations under this Agreement may
be assigned or transferred by any party in any manner whatsoever, nor are such
rights or obligations subject to involuntary alienation, assignment or transfer,
except as may be approved by the other party in writing.
6.7 EXCLUSIVE GOVERNING LAW. This Agreement shall be exclusively
construed in accordance with the laws of the State of Arizona.
6.8 SEVERABILITY. The unenforceability, invalidity, or illegality of
any provision of this Agreement shall not render the other provisions
unenforceable, invalid, or illegal. If any term, provision, covenant or
condition of this Agreement is invalidated due to its scope or breadth, such
term, provision, covenant, or condition shall be deemed valid to the extent of
the scope or breadth permitted by law in accordance with the intent of the
parties as expressed herein.
6.9 WAIVER OF TERMS. Any of the terms and conditions of this Agreement,
to the extent permitted by law, may be waived in writing at any time by any
party. Such action shall be evidenced by written notice signed by the Party
taking such action.
6.10 COOPERATION. Subject to the terms and conditions herein provided,
each of the parties hereto shall use its best lawful efforts to take, or cause
to be taken, such action, to execute and deliver, or cause to be delivered, such
additional documents and instruments and to do or cause to be done all things
necessary, proper or advisable, under the provisions of this Agreement and under
applicable law to consummate and make effective the transactions contemplated by
this Agreement.
6.11 ARBITRATION; EXCLUSIVE JURISDICTION AND VENUE. The parties hereby
agree to exclusively submit all controversies, claims, and matters of difference
to arbitration in Phoenix, Arizona, according to the rules and practices of the
American Arbitration Association from time to time in force, except to the
extent that such rules and practices are inconsistent with the terms of this
Agreement. This submission and Agreement to arbitrate shall be specifically
enforceable. The arbitrator shall exclusively apply Arizona law as though he or
she were bound by the applicable statutes and precedents in case law. The
arbitrator shall have the power to issue any award, judgment, decree, or order
of relief that a court of law or equity could issue under Arizona law, including
but not limited to money damages, specific performance, or injunctive relief. In
the event that any party refuses to submit to arbitration, the party that has
submitted to arbitration shall be empowered to file the appropriate action in a
court in Maricopa County, Arizona. In all disputes, the non-prevailing party
shall be pay the reasonable attorneys' fees and costs of the prevailing party.
6.12 ENFORCEMENT. The failure of either party to enforce any provision
of this Agreement shall not be construed as a waiver or limitation of that
party's right to subsequently enforce and compel strict compliance with every
provision of this Agreement.
6.13 PROFESSIONAL ADVICE, FEES AND COSTS. Each party has relied on its
own professional legal, accounting and tax advisors in determining the legal,
accounting and income tax effects of this transaction on their corporations, the
stockholders of their corporation and themselves. Except as
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otherwise provided herein, each party hereto shall pay its own expenses incurred
in connection with this Agreement and the transactions incurred in connection
with this Agreement and the transactions contemplated hereby. The Parties agree
that they have not used the services of any broker or other person or entity in
arranging this transaction and no commissions are due any person or entity for
such services.
6.14 AMENDMENT OF AGREEMENT. Notwithstanding anything to the contrary
in this Agreement, to the extent permitted by law, this Agreement may be
amended, supplemented or interpreted at any time by written instrument duly
executed by any of the parties hereto, which shall have been authorized by
appropriate action taken by the board of directors of FutureOne or Mandalay and
in the case of an interpretation, the actions of the FutureOne or Mandalay board
of directors shall be binding.
6.15 INDEMNIFICATION. FutureOne hereby indemnifies and agrees to hold
harmless Mandalay, its officers and Directors from any and all acts, actions,
claims and assessments against FutureOne, or any asset purchased by Mandalay
under this Agreement, resulting from any and all acts or actions, whether
financial or otherwise, of FutureOne prior to the date of this Agreement.
Mandalay hereby indemnifies, holds harmless, and agrees to defend FutureOne, its
officers and Directors, from any and all acts, actions, claims and assessments
against Mandalay, or any asset sold by FutureOne under this Agreement from any
and all acts or actions, whether intentional or otherwise, of Mandalay that may
occur after the date of this Agreement.
IN WITNESS WHEREOF, each of the Parties hereto, pursuant to authority duly
granted to each by their respective board of directors, has caused this
Agreement between Mandalay and FutureOne, to be executed on the date first
written above.
FutureOne Inc. - Seller Mandalay Incorporated - Buyer
(a Nevada corporation) (an Arizona corporation)
/s/ Xxxx X. Xxxx /s/ Xxxxxxx Xxxxxx
-------------------------- --------------------------------
By: Xxxx X. Xxxx By: Xxxxxxx Xxxxxx
Its: President Its: President
/s/ Xxxxx X. Xxxxxx
--------------------------------
By: Xxxxx X. Xxxxxx
Its: Chief Financial Officer
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EXHIBIT A
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That FutureOne, Inc., a Nevada Corporation, hereinafter referred to as "Seller",
for and in the consideration of the sum of Forty Seven Thousand Eight Hundred
and 00/100 Dollar ($47,800.00) paid to them by Mandalay, an Arizona Corporation,
under the terms of a Purchase Agreement executed concurrently with the execution
of this document, hereafter referred to as "Buyer", does hereby sell, assign and
transfer to Buyer, free of any liens or encumbrances, all of the seller's right
title and interest in the following personal property located in Phoenix,
Arizona:
1) Seller's "PrimeServ" customer list and all of the customers on the
attached list; and
2) All of Seller's rights to GST telephone numbers
And does hereby sell, assign and transfer to Buyer, free of any liens or
encumbrances, all of the Seller's right title and interest in the following used
equipment located in Phoenix, Arizona:
1 - Priority Call Management Switch, Model # 12VF96D-DSP, Serial # pcm80052
Buyer acknowledges that the equipment is used and the equipment is being sold
"as is", "where is" and may not be Y2K compliant. Seller represents and warrants
that the equipment described herein is in good working order and capable of
performing the services for which it was intended.
Buyer accepts title at Phoenix, Arizona.
Dated this 6th day of December 1999.
Mandalay Incorporated FutureOne, Inc.
/s/ Xxxxxxx Xxxxxx /s/ Xxxx X. Xxxx
------------------------------- -----------------------------
By: Xxxxxxx Xxxxxx, President By: Xxxx X. Xxxx, President
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EXHIBIT B
PROMISSORY NOTE
$30,000.00 DECEMBER 6, 1999
PHOENIX, ARIZONA
FOR VALUE RECEIVED, the adequacy and sufficiency of which are
hereby expressly acknowledged, the undersigned Mandalay Incorporated, an Arizona
Corporation (the "MAKER"), promises and agrees to pay to the order of FutureOne,
Inc., a Nevada corporation ("HOLDER"), at the offices of FutureOne, the
principal amount of Thirty Thousand and No/100 Dollars ($30,000.00) payable in
full on or before December 16, 1999.
This Note shall evidence a portion of the Purchase Price
payable pursuant to Section 1.1 of that certain Purchase and Sale Agreement
between the Maker and the Holder (as amended from time to time, the "PURCHASE
AGREEMENT"). The Maker shall have the right to prepay this Note in full or in
part at any time without penalty, premium or notice. All payments and
prepayments shall be applied first to any Expenses (as defined below), and then
to principal. Principal shall be payable in lawful money of the United States of
America.
Maker agrees that upon the occurrence of an Event of Default
(as hereinafter defined) hereunder, (a) the Maker will pay all costs and
expenses of collection of this Note, including reasonable attorney's fees
("EXPENSES"); (b) at the option of the Holder, the unpaid principal balance of
this Note along with accrued and unpaid interest shall become due and payable
immediately without notice; and (c) Holder may utilize any available remedies,
including without limitation any remedies available against the Collateral,
under Arizona law and/or under the Uniform Commercial Code, at law or in equity,
in such order and/or combination as Holder may elect in its sole and absolute
discretion. For purposes of this Note, an "EVENT OF DEFAULT" shall mean (a) any
failure by Maker to pay when due the principal under this Note, which failure is
not cured within ten (10) days of written notice thereof by Holder to the Maker,
(b) any general assignment by Maker for the benefit of creditors, (c) any filing
of a voluntary bankruptcy petition by Maker, and (d) any filing of any
involuntary bankruptcy petition against Maker, which filing is not dismissed
within 90 days thereof.
Failure of the Holder to exercise any option hereunder shall
not constitute a waiver of the right to exercise the same in the event of any
subsequent default or breach, or in the event of continuance of any existing
default or breach after demand for performance thereof.
The Maker, sureties, guarantors and endorsers, if any,
severally waive demand, diligence, presentment for payment, protest and notice
of demand, protest, nonpayment and exercise of any option hereunder. The
granting without notice of any extension or extensions of time for payment of
any sum or sums due hereunder, or the taking or release of security shall in no
way release or discharge the liability of Maker or any surety, guarantor or
endorser.
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No provision of this Note is intended to or shall require or
permit Holder, directly or indirectly, to take, collect or receive in money,
goods or in any other form, any interest in excess of that permitted by
applicable law. If any amount due from or paid by Maker shall be determined by a
court of competent jurisdiction to be interest in excess of such maximum rate,
Maker shall not be obligated to pay such excess and, if paid, such excess shall
be applied against the unpaid principal balance of this Note, or if and to the
extent that this Note has been paid in full, such excess shall be remitted to
Maker.
The provisions of this Note shall be binding upon and inure to
the benefit of the heirs, personal representatives, successors and assigns of
the parties hereto.
This Note shall be secured, in the event of default, by the
assets identified on Exhibit A of the Purchase and Sale Agreement executed
between the Maker and Holder on December 6, 1999.
This Note shall be governed by and construed in accordance
with the laws of the State of Arizona without regard to conflicts of law
principles.
IN WITNESS WHEREOF, Maker has executed this Note as of the
date first stated above.
MANDALAY INCORPORATED "MAKER"
/s/ Xxxxxxx Xxxxxx
--------------------------------
By: Xxxxxxx Xxxxxx
Its: President
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