EXHIBIT 2.1
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CONTRACT FOR THE SALE OF GOODS
(Includes Grant of Purchase Money Security Interest)
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THIS CONTRACT FOR THE SALE OF GOODS (the "Agreement") is
made and entered into as of this 10th day of August, 2000
("Effective Date") by and between Chasin of Long Beach,
Inc. dba Colbie Pacific Capital with its principal
offices at 3660 Wilshire Boulevard, Suite 1008, Los
Angeles CA 90010 (the "Seller") and Auxer Telecom, Inc. a
Delaware corporation with principal offices at 12 Andrews
Drive, West Patterson, NJ 07424 (the "Buyer").
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Recitals
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This Agreement is made and entered into with reference to
the following facts, all of which are hereby incorporated
into, and made a material part of this Agreement.
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A. Seller entered into a Loan and Security Agreement
with an entity known as Cyberlight, Inc. (the "Cyberlight
Agreement"). Pursuant to the Cyberlight Agreement,
Colbie was granted a security interest in certain assets
of Cyberlight, Inc.
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B. The Cyberlight Agreement went into default.
Cyberlight, Inc. filed for relief under Chapter 7 of the
Bankruptcy Code, and Seller was granted relief from the
automatic stay in order to foreclose upon its collateral
granted by Cyberlight, Inc. to Seller to secure the
obligations under the Cyberlight Agreement.
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C. Buyer desires to purchase two Magellan Switches and
accessories described as: CDR Format DBF; Fraud
Detection; Software Version 4.33; Two (2) M4000 LNX
Driven NT based platforms, 64 ports each; redundant CPU's
and power supplies.
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D. Seller is willing to sell to Buyer the equipment in a
private foreclosure sale, pursuant to its rights under
the Cyberlight Agreement and applicable provisions of the
California Commercial Code, including but not limited to
Sec 9504.
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NOW, THEREFORE, for and inconsideration of the foregoing
recitals, the mutual covenants, agreements,
representations, and warranties contained in this
Agreement and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
the Parties hereby enter into the following Agreement.
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Paragraph 1. Sales of Goods
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1.01 Seller shall transfer and deliver to Buyer,
and Buyer shall pay for and accept, the Goods, pursuant
to the terms and conditions of this Agreement.
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Paragraph 2 Delivery of Goods
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2.01 The Goods are presently being store at 707
Wilshire Blvd., 8th Floor, Los Angeles, CA 90017. Upon
execution of this Agreement and payment of the first
installment payment as more fully set forth in Par. 7
below, Buyer may take possession of the Goods, moving
them to 611 Wilshire Blvd., Suite 804, Los Angeles, CA
90017.
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2.02 All shipping, storage rental fees and all
other costs of any nature associated with or related to
the Goods shall be the sole and absolute responsibility
of the Buyer.
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Paragraph 3. Identification - Risk of Loss
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3.01 Identification of the Goods under Commercial
Code Section 2501 shall occur on the Effective Date. Upon
identification, the risk of loss shall pass to Buyer.
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Paragraph 4. Title
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4.01 Title to the Goods shall vest with Buyer on
the Effective Date, subject to the terms and conditions
of this Agreement.
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Paragraph 5. Disclaimer of Express Warranties
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5.01 Seller warrants that the Goods are as
described in this Agreement, but no other express
warranty is made with respect to the Goods. Any
description of the Goods contained in the Agreement is
for the sole purpose of identifying them, is not part of
the basis of the bargain, and does not constitute a
warranty that the Goods will conform to that description.
If any model or sample was shown to Buyer, that model or
sample was used merely to illustrate the general type and
quality of the Goods and not to represent that the Goods
would necessarily conform to the model or sample.
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Paragraph 6. Disclaimer of Implied Warranties
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6.01 THE GOODS SOLD UNDER THIS CONTRACT ARE
PURCHASED BY THE BUYER "AS IS' AND THE SELLER DOES NOT
WARRANT THAT THEY ARE OF MERCHANTABLE QUALITY OR THAT
THEY CAN BE USED FOR ANY PARTICULAR PURPOSE. THIS
PROVISION IS NOT INTENDED TO LIMIT, ENHANCE OR OTHERWISE
MODIFY ANY APPLICABLE MANUFACTURE'S WARRANTY IN PLACE
WITH RESPECT TO THE GOODS.
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Paragraph 7. Price and Payment
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7.01 The total price to be paid by Buyer will be
Five Hundred Sixty Eight Thousand Dollars ($568,000) (the
"Purchase Price"). On August 10, 2000, Buyer shall pay
to Seller the sum of $10,000. Commencing October 1,
2000, and continuing on the 1st day of each successive
month thereafter, Buyer shall pay additional monthly
installments of $10,000 for a series of ten (10)
payments. On August 1, 2001, Buyer shall pay to Seller
the sum of $458,000.
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7.02 Payment shall be made by lawful money of the
United States, In the event any installment payment is
not paid when due, or if Buyer defaults to Seller on any
of its Obligations, Seller may, at its option, declare
the entire amount owed under this Agreement, due and
payable.
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Paragraph 8. Grant of Purchase Money Security
Interest
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8.01 In order to secure Buyer's Obligations to
Seller under this Agreement, Buyer grants to Seller a
security interest in the Goods, and all proceeds thereof,
including but not limited to insurance proceeds. The
term "Obligations" as used in this Agreement, shall mean
and include each and all of the following: the
obligations evidenced by the Agreement, the obligation to
pay all installment payments set forth in Paragraph 7
above, and to perform when due all other debts and all
obligations, liabilities, covenants, agreements,
guarantees, warranties and representations of Buyer to
Seller, of any and every kind and nature, whether
heretofore, now or hereafter owing, arising, due and
payable from Buyer to Seller.
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Paragraph 9. Buyer's Covenants With Respect To The
Goods
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9.01 Buyer, at its expense, shall keep and maintain
(i) the Goods insures against loss or damage by fire,
theft, explosion, earthquake, flood, sprinklers, natural
disasters and all other hazards and risks ordinarily
insured against by other owners or users of such
properties and interests in properties in similar
businesses for the full insurable value thereof; (ii)
business interruption insurance and public liability and
property damage insurance relating to Buyer's ownership
and use of its assets. All such policies of insurance
(except those of public liability and property damage)
shall contain an endorsement in a form satisfactory to
Seller showing loss payable to Seller and all proceeds
payable thereunder shall be payable to Seller and upon
receipt by Seller shall be applied on account of Buyer's
Obligations. In the event Seller at any time or times
hereafter shall fail to obtain or maintain any of the
policies of insurance required above or to pay any
premium in whole or in part relating thereto, then
Seller, without waiving or releasing any obligation or
default by Seller hereunder, may at any time or times
hereafter, but shall be under no obligation to do so,
obtain and maintain such policies of insurance and pay
such premiums and take any other action with respect
thereto which Seller in its sole and absolute discretion
deems advisable. All sums so disbursed by Seller,
including reasonable attorneys' fees, court costs,
expenses and other charges relating thereto, shall be a
part of Buyer's Obligations and payable on demand.
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Paragraph 10. Buyer's Negative Covenants
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10.01 Buyer covenants and agrees that it shall not:
(a) grant a security interest in or permit a lien, claim
or encumbrance upon any of the Collateral in favor of any
Person other than Seller, and shall provide written
notice to Seller within ten days of Buyer obtaining any
knowledge of the foregoing; (b) permit any levy,
attachment or restraint to be made affecting any of its
assets; (c) permit any receiver, trustee or assignee for
the benefit of Sellers to be appointed to take possession
of any or all of its assets; (d) other than in the
ordinary course of its business, sell, lease or otherwise
dispose of or transfer, whether by sale, merger,
consolidation or otherwise, any of its assets; (e) merge
or consolidate with any other person or entity; (f)
acquire all or any material interest in any other person
or entity; (g) enter into any transaction not in the
ordinary course of its business; (h) under any
circumstances or in any manner whatsoever, interfere with
any of Seller's rights under this Agreement.
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Paragraph 11. Default
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11.01 Default. Any one or more of the following
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events shall constitute a default (each, a "Default") by
Buyer under this Agreement (a) Buyer shall fail to pay
any of the Obligations when due, upon maturity or by
acceleration; (b) if Buyer fails or neglects to perform,
keep or observe any term, provision, condition or
covenant on its part contained in this Agreement; (c) if
any representation and warranty under this Agreement, or
representation, warranty or other information contained
in any statement, report or certificate made or delivered
by Buyer or any of its officers, employees or agents to
Seller was not true and correct when made or deemed made;
*d) if Seller shall reasonably determine in good faith
that it is insecure with respect to the repayment of all
or any of Buyer's Obligations; (e) an order or decree
appointing a receiver, trustee, custodian or liquidator
shall have been issued with respect to Buyer or its
assets; (f) if all or any of Buyer's assets are attached,
seized, subjected to a writ or warrant, or are levied
upon, by a Seller or come within the possession or any
receiver, trustee, custodian or assignee for the benefit
of Sellers; (g) Buyer shall fail to pay its debts to
Sellers as they com due or shall be insolvent; (h) Buyer
shall seek relief under any bankruptcy, insolvency,
reorganization or similar law, or a proceeding is
commenced against Buyer under any bankruptcy, insolvency,
reorganization or similar law and not dismissed within
sixty day; (i) if Buyer shall make an assignment for the
benefit of Sellers; (j) if any proceeding is filed or
commenced by or against Buyer for its dissolution or
liquidation; (k) if Buyer is enjoined, restrained or in
any way prevented by judicial or administrative order
from conducting al or any part of its business affairs;
(l) if a notice of lien, levy or assessment is filed of
record with respect to all or any of Buyer's assets by
the United States or any department, agency or
instrumentality thereof, or by any state, county,
municipality or other governmental agency or if any taxes
or debts owing at any time or times hereafter to any one
or more of them becomes a lien, whether choate or
otherwise, upon all or any of Buyer's assets; (m) if a
judgment or other claim becomes alien or encumbrance upon
all or any of Buyer's assets; (n) the occurrence of any
event, circumstance, or condition which, after any
applicable cure or notice period or lapse of time, or
both, would constitute a default under any material
agreement, contract, instrument or the like to which
Buyer is a party of which any of Buyer's property is
subject, whether or not a party thereto exercises any of
its rights and remedies with respect to such default, or
upon acceleration of the maturity of any material
indebtedness of Buyer; or (o) the destruction or
occurrence of substantial damage to the Collateral or any
material portion thereof, or which there is no or
substantially no insurance coverage in respect and/or for
which not or substantially no insurance coverage will be
paid in respect thereto.
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Paragraph 12. Remedies
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12.01 If any Default shall be occurred, Buyer may
exercise all the rights and remedies of a secured party
on default under the California Commercial Code and all
of the rights and remedies provided for in the Agreement
and such other rights and remedies as may be provided by
law or otherwise (such rights and remedies to be
cumulative and non-exclusive). Seller also may: (a0
declare Buyer's Obligations immediately due and payable;
(b) enter, with or without process of law, any premises
where the Collateral is or may be located and, without
breach of the peace and without charge or liability to
Seller therefore, until Seller's completion of
enforcement of its security interests in the Collateral
and/or until Sellers' removal of the Collateral therefrom
to such other place or places as Seller deems convenient
and in connection therewith (i) take possession of said
premises and of any of the Collateral located therein;
(ii) place a receiver in exclusive control of said
premises and any of the Collateral located therein; (iii)
remove the Collateral (and any of Buyer's materials,
supplies, books and records) for the purpose of
collecting the Collateral and/or preparing the Collateral
for disposition and/or disposing of the Collateral; (c)
sell or otherwise dispose of the Collateral (in its then
condition or after further manufacturing, processing or
preparation thereof, utilizing in connection therewith,
without charge or liability to Seller therefore, any of
Buyer's assets) at public or private sale, as Seller
deems advisable for cash, or credit, or such other terms
as Seller deems acceptable; provided however, that Buyer
shall be credited with the net proceeds of such sale or
other disposition only when such proceeds are actually
received by Seller and Seller may become the purchaser at
any such sale if permissible under applicable law. Buyer
shall, if Seller requests, assemble the Collateral and
make it available to Seller at a place or places to be
designated by Seller which is reasonably convenient to
Seller and Buyer. Seller shall not be obligated to make
any sale of Collateral regardless of notice of sale
having been given. Seller may adjourn any public or
private sale from time to time by announcement at he time
and place fixed therefore, and such sale may without
further notice, be made at the time and place to which it
was so adjourned. Buyer recognizes that if Buyer fails
to perform, observe or discharge any of its obligations
under this Agreement, not remedy of law will provide
adequate relief to Seller; therefore, Buyer agrees that
Seller shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity
of proving actual damages. Seller may enter the premises
of Buyer and take possession of the Collateral and of the
records pertaining to the Collateral. Buyer grants to
Seller a right of entry to obtain possession of such
Collateral and records and further promises to store such
Collateral and records on the premises of Buyer without
cost to Seller.
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Paragraph 13. Interpretation and Parole Evidence
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13.01 This writing is intended by the Parties as a
final expression of their agreement and understanding
concerning the matters contained herein, and is also
intended as a complete and exclusive statement of the
terms of their agreement and understanding. No course of
prior dealings between the Parties and no usage of the
trade shall be relevant to supplement or explain any term
used in the Agreement. Acceptance or acquiescence in a
course of performance rendered under this contact shall
be relevant to determine the meaning of this Agreement
even though the accepting or acquiescing Party has
knowledge of the nature of performance and opportunity of
objection. Whenever a term defined by the California
Commercial Code is used in the Agreement, the definition
contained in the California Commercial Code shall
control.
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Paragraph 14. Authority of Seller's Agents
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14.01 No agent, employee or representative of
Seller has any authority to bind Seller to any
affirmation, representation, or warranty concerning the
Goods sold under this Agreement, and unless an
affirmation, representation, or warranty made by an
agent, employee or representative is specifically
included within this written contract, is has not
constituted a part of the basis of this bargain and shall
not in any way be enforceable.
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Paragraph 15. Miscellaneous Provisions
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15.01 No supplement, modification or amendment of
this Agreement shall be binding unless executed in
writing by all the Parties. No waiver of any of the
provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or
not similar, not shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in
writing by the Party making the waiver. This Agreement
may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute on and the
same instrument. The Parties shall promptly execute and
deliver such additional documents and instruments as
shall be necessary to effectuate this transaction.
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15.02 This Agreement, and all rights and obligation
of the Parties under this Agreement, shall be construed
in accordance with, and governed by, the Uniform
Commercial Code as enacted and in force in the State of
California of the Effective Date.
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15.03 If any legal action or any arbitration or
other proceeding is brought for the interpretation or
enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in
connection with any of the provisions of the Agreement,
the successful or prevailing Party shall be entitled to
recover from the non-prevailing or unsuccessful Party
reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other
relief to which it or they may be entitled.
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15.04 Any dispute under this Agreement shall only
be litigated in any court having its situs within the
County of Los Angeles, and the parties consent and submit
to the jurisdiction of any state or federal court located
within such venue which has original jurisdiction over
matters which arise within the County of Los Angeles.
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15.05 If any provision of this agreement is held by
a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions will continue in
full force and effect without being impaired or
invalidated in any way.
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15.06 This Agreement shall insure to the benefit
of, and shall be binding upon, each of the Parties, and
each of their respective predecessors, successors,
assigns, representatives, heirs and devises.
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IN WITNESS WHEREOF, the Parties have duly executed
this Agreement as of the Effective Date.
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"SELLER" "BUYER"
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Chasin of Long Beach, Inc. dba Auxer Telecom, Inc.
Colbie Pacific Capital
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By: /s/ Neil Chaslin By: /s/ Ronald Shaver
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Its: Vice President Its: President
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