<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
Equalnet Communications Corp.
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(Name of the Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
294408109
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(CUSIP Number)
Dean H. Fisher
1250 Wood Branch Park Dr.
Houston, Texas 77079
281/529-4648
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 21, 1999, December 15, 1999 and December 21, 1999
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(Dates of Events which Require Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1 (b)(3) or (4), check the
following box [ ].
Page 1 of 10 Pages
Exhibit Index on Page 10
<PAGE> 2
CUSIP No. 294408109 13D Page 2 of 10 Pages
- ------------------- ------------------
<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Willis Group, LLC (76-0537286)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) [ x ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 22,854,161
BENEFICIALLY ----------------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY -0-
EACH ----------------------------------------------------------------
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 22,854,161
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 22,854,161
shares of Common Stock beneficially owned or underlying currently
exercisable warrants.
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
CUSIP No. 294408109 13D Page Page 3 of 10 Pages
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<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael T. Willis
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 500,000
BENEFICIALLY ----------------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY 22,854,161
EACH ----------------------------------------------------------------
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 500,000
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,854,161
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,354,161 shares of Common Stock beneficially owned or underlying
currently exercisable warrants.
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
52.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
CUSIP No. 294408109 13D Page Page 4 of 10 Pages
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<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Mark Willis
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b) [ x ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF
SHARES 30,747
BENEFICIALLY ----------------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY 22,854,161
EACH ----------------------------------------------------------------
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
30,747
----------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
22,854,161
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,884,908 shares of Common Stock beneficially owned or underlying currently
exercisable warrants.
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
CUSIP No. 294408109 13D PAGE 5 OF 10 PAGES
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James T. Harris
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 22,854,161
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
22,854,161
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,854,161 shares of Common Stock beneficially owned or underlying
currently exercisable warrants.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE> 6
CUSIP No. 294408109 13D Page 6 of 10 Pages
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 6 on Schedule 13D amends Items 1, 3 through 5 and 7
of Amendment No. 5 on Schedule 13D dated March 12, 1999 filed by The Willis
Group, LLC (the "Willis Group"), Michael T. Willis, Mark Willis, and James T.
Harris (the "Reporting Persons"). This Amendment No. 6 relates to the Common
Stock, par value $.01 per share (the "Common Stock") of Equalnet Communications
Corp., a Texas corporation (the "Issuer").
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) On May 21, 1999, The Willis Group agreed to buy 1,250,000 shares of
Common Stock for $750,000 from the Issuer. The $750,000 cash payment was made
from funds obtained from Michael T. Willis. On May 21, 1999, The Willis Group
executed a Promissory Note in favor of Michael T. Willis, pursuant to which The
Willis Group borrowed $750,000 from Michael T. Willis. The note bears interest
at 7% per year and was initially due and payable on December 31, 1999. On
December 31, 1999, the maturity of the note was extended to December 31, 2000.
(b) On December 15, 1999, The Willis Group purchased 3,900,000 shares
of Common Stock and 170,000 Warrants and Options for Common Stock (the "Warrants
and Options") from Mr. James R. Crane for a promissory note dated December 15,
1999 in the original principal amount of $250,000. A security agreement pledging
the Common Stock and the Warrants and Options purchased from Mr. Crane secures
payment of the promissory note to Mr. Crane.
(c) On December 21, 1999, The Willis Group purchased 666,666 shares of
Common Stock and 33,334 Warrants and Options from Mr. Frank J. Hevrdejs for a
promissory note dated December 21, 1999 in the original principal amount of
$150,000. A security agreement pledging the Common Stock and the Warrants and
Options purchased from Mr. Hevrdejs secures the payment of the promissory note
to Mr. Hevrdejs.
(d) On December 21, 1999, The Willis Group purchased 666,667 shares of
Common Stock and 33,333 Warrants and Options from First Sterling Ventures Corp.
("First Sterling") for a promissory note dated December 21, 1999 in the original
principal amount of $150,000. A security agreement pledging the Common Stock and
the Warrants and Options purchased from First Sterling secures the payment of
the promissory note to First Sterling.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons acquired the shares of Common Stock as part of
their ongoing investment strategy regarding the Issuer. The Reporting Persons
currently do not intend to acquire additional shares of the Common Stock
materially above their current ownership; however, the Reporting Persons intend
to review their investment in the Issuer on a continuing basis and, depending
upon the price of the Common Stock, subsequent developments affecting the
Issuer, the Issuer's business and prospects, general stock market and economic
conditions, tax considerations and other factors deemed relevant, may decide to
increase or decrease their investment in the Common Stock of the Issuer.
Except as set forth above in this Item 4, none of the Reporting Persons
nor, to the best of each Reporting Person's knowledge, any of the executive
officers or directors of such Reporting Persons, as applicable, has any plans or
proposal that relate to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 to Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Subsequent to Amendment No. 5, James T. Harris sold 300,000 of
his own shares of Common Stock, thereby eliminating his direct
ownership of Common Stock of the Issurer.
<PAGE> 7
CUSIP No. 294408109 13D Page 7 of 10 Pages
(b) On March 9, 1999, Mark Willis received, in lieu of director's
fees, 30,747 shares of Common Stock in consideration for
service on the Board of Directors of the Issuer.
(c) Subsequent to Amendment No. 5, The Willis Group sold an
aggregate of 2,326,333 shares of Common Stock.
(d) At present, and as a result of the transactions described
herein:
(i) The Willis Group beneficially owns or has
the right to acquire, in the form of
currently exercisable options, warrants and
convertible preferred stock, directly or
indirectly, 22,854,161 shares of Common
Stock of the Issuer, which constitutes 51.5%
of the Common Stock outstanding;
(ii) Michael T. Willis beneficially owns or has
the right to acquire, in the form of
currently exercisable options, warrants and
convertible preferred stock, directly or
indirectly, 23,354,161 shares of Common
Stock of the Issuer, which constitutes 52.0%
of the Common Stock outstanding;
(iii) Mark Willis beneficially owns or has the
right to acquire in the form of currently
exercisable options, warrants and
convertible preferred stock, directly or
indirectly, 22,884,908 shares of Common
Stock of the Issuer, which constitutes 51.5%
of the Common Stock outstanding; and
(iv) James T. Harris beneficially owns or has the
right to acquire in the form of currently
exercisable options, warrants and
convertible preferred stock, directly or
indirectly, 22,854,161 shares of Common
Stock of the Issuer, which constitutes 51.5%
of the Common Stock outstanding,
each based on the total number of shares outstanding
(32,301,192) as of February 8, 1999, as contained in the
Issuer's filing on Form 10-Q for the quarterly period ended
December 31, 1999, filed with the Securities and Exchange
Commission on February 14, 2000, and including as outstanding
the 12,099,195 shares and, in the case of Michael T. Willis,
the additional 500,000 shares, issuable to The Willis Group or
Michael T. Willis, as the case may be, under currently
exercisable options, warrants and convertible preferred stock.
For purposes of this filing, the number of shares issuable to
The Willis Group upon conversion of the convertible preferred
stock has been calculated based on the closing price of Common
Stock of the Issuer on March 22, 2000. Such securities, or the
rights thereto, were acquired (and certain securities were
disposed of) pursuant to the transactions described in Item 3
and 5 hereof and in the initial filing of and Amendment No. 1,
Amendment No. 2, Amendment No. 3, Amendment No. 4 and
Amendment No. 5 to this Schedule 13D.
(d) Of the shares beneficially owned by the Reporting Persons, The
Willis Group has, or will have, sole voting power and power to
dispose of the 22,854,161 shares of Common Stock it owns or
has the right to acquire under currently exercisable options,
warrants and convertible preferred stock, and each of Messrs.
Michael T. Willis, Mark Willis and Harris, as 48.5%, 48.5% and
3% membership interest owners, respectively, of The Willis
Group, have shared voting and dispositive power with respect
to all such shares. Mr. Michael T. Willis will have sole
voting power and dispositive power with respect to the 500,000
shares of Common Stock he has the right to acquire under a
currently exercisable warrant. Mr. Mark Willis has sole voting
power and power to dispose of the 30,747 shares of Common
Stock he acquired as compensation for serving on the Board of
Directors of the Issuer.
<PAGE> 8
CUSIP No. 294408109 13D Page 8 of 10 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Joint Filing Agreement, dated as of March 25, 2000, among The
Willis Group, Michael T. Willis, Mark Willis and James T.
Harris.
2. Promissory Note of The Willis Group dated May 21, 1999 to
Michael T. Willis, as renewed on December 31, 1999.
3. Letter Agreement, dated as of December 15, 1999, between The
Willis Group and James R. Crane.
4. Promissory Note of The Willis Group dated December 15, 1999,
to James R. Crane.
5. Security Agreement, dated December 15, 1999, securing the
Promissory Note to James R. Crane.
6. Letter Agreement, dated as of December 21, 1999, between The
Willis Group and Frank J. Hevrdejs.
7. Promissory Note of The Willis Group, dated December 21, 1999,
to Frank J. Hevrdejs.
8. Security Agreement, dated December 21, 1999, securing the
Promissory Note to Frank J. Hevrdejs.
9. Letter Agreement, dated as of December 21, 1999, between The
Willis Group and First Sterling.
10. Promissory Note of The Willis Group, dated December 21, 1999,
to First Sterling.
11. Security Agreement dated December 21, 1999, securing the
Promissory Note to First Sterling.
<PAGE> 9
CUSIP No. 294408109 13D Page 9 of 10 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
THE WILLIS GROUP, LLC
Dated: March 25, 2000 By: /s/ Mark Willis
----------------------------------
Mark Willis, President
/s/ Mark Willis
--------------------------------------
Mark Willis
/s/ James T. Harris
--------------------------------------
James T. Harris
/s/ Michael T. Willis
--------------------------------------
Michael T. Willis
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Joint Filing Agreement, dated as of March 25, 2000, among The
Willis Group, Michael T. Willis, Mark Willis and James T. Harris.
99.2 Promissory Note of The Willis Group dated May 21, 1999 to Michael
T. Willis, as renewed on December 31, 1999.
99.3 Letter Agreement, dated as of December 15, 1999, between The
Willis Group and James R. Crane.
99.4 Promissory Note of The Willis Group dated December 15, 1999, to
James R. Crane.
99.5 Security Agreement, dated December 15, 1999, securing the
Promissory Note to James R. Crane.
99.6 Letter Agreement, dated as of December 21, 1999, between The
Willis Group and Frank J. Hevrdejs.
99.7 Promissory Note of The Willis Group, dated December 21, 1999, to
Frank J. Hevrdejs.
99.8 Security Agreement, dated December 21, 1999, securing the
Promissory Note to Frank J. Hevrdejs.
99.9 Letter Agreement, dated as of December 21, 1999, between The
Willis Group and First Sterling.
99.10 Promissory Note of The Willis Group, dated December 21, 1999, to
First Sterling.
99.11 Security Agreement dated December 21, 1999, securing the
Promissory Note to First Sterling.
</TABLE>
<PAGE> 1
EXHIBIT 1
JOINT FILING AGREEMENT
The undersigned, and each of them, do hereby agree and consent to the
filing of a single statement on behalf of all of them on this Amendment 6 to
Schedule 13D, in accordance with the provisions of Rule 13d-1(k)(1) of the
Securities Exchange Act of 1934, as amended.
Dated: March 25, 2000
THE WILLIS GROUP, LLC
By: /s/ Mark Willis
----------------------------------
Mark Willis, President
/s/ Mark Willis
--------------------------------------
Mark Willis
/s/ James T. Harris
--------------------------------------
James T. Harris
/s/ Michael T. Willis
--------------------------------------
Michael T. Willis
<PAGE> 1
EXHIBIT 99.2
PROMISSORY NOTE
$750,000.00 Houston, Texas December 31, 1999
Original Principal NOTE RENEWAL
FOR VALUE RECEIVED, after date, without grace, in the manner, on
the dates, and in the amounts so herein stipulated, the undersigned, WILLIS
GROUP, L.L.C., a Texas limited liability company, acting by and through its duly
authorized officers ("Maker"), promises to pay to the order of MICHAEL T. WILLIS
("Payee"), whose address is 4400 Post Oak Parkway, Suite 2575, Houston, Texas,
77027-3413 Harris County, Texas, the sum of SEVEN HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($750,000.00) in lawful money of the United States of America,
which shall be legal tender, in payment of all debts and dues, public and
private, at the time of payment and to pay interest thereon from date of May 21,
1999 until maturity at a rate of seven percent (7%) per annum, payable as
stipulated herein.
This note is due and payable in full on or before December 31, 2000 OR
at such earlier time(at the election of Payee) that any proceeds are received by
Maker from any investment in EqualNet Communications Corp. Where such proceeds
will go toward the reduction of outstanding principal and interest and only the
amount of such proceeds will become due under this note until December 31, 1999,
at which the entire amount becomes due.
This note may be prepaid in whole or in part at any time without
penalty; provided, however, that all payments received by Payee from Maker upon
this note shall first be applied to the payment of accrued but unpaid interest,
with the balance thereof to be applied to the reduction of the outstanding
principal of this note. All prepayments shall be applied to the outstanding
principal balance of this note in the inverse order of maturity.
Whenever any payment to be made under this note shall be stated to be
due on a Saturday, Sunday or legal holiday for commercial banks under the laws
of the State of Texas, then such payment shall be made on the next succeeding
business day and such extension of time shall in such case be included in the
computation of payment of interest hereunder.
In addition to all principal and accrued interest on this note, Maker
agrees to pay (a) all reasonable costs and expenses incurred by all owners and
holders of this note in collecting this note through probate, reorganization,
bankruptcy or any other proceeding, (b) reasonable attorneys' fees when and if
this note is placed in the hands of an attorney for collection after default,
and (c) the reasonable attorneys' fees, costs and expenses incurred by Payee in
connection with the preparation and filing of the agreements and documents
contemplated herein.
Unless otherwise provided by law, Maker and any and all co-makers,
endorsers, guarantors and sureties severally waive notice (including, but not
limited to, notice of protest, notice of dishonor and notice of intent to
accelerate and notice of acceleration), demand, presentment for payment, protest
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any security at any time existing or by any failure to perfect or to maintain
perfection of any lien on or security interest in any such security.
Maker warrants and represents to Payee, and to all other owners and
holders of any indebtedness evidenced hereby, that the loan evidenced by this
Note is and shall be solely for business, commercial or agricultural purposes
and not primarily for personal, family or household use. Maker acknowledges that
the loan evidenced by this Note is specifically exempted under Section 226.3(a)
of Regulation Z issued by the Board of Governors of the Federal Reserve System
and under the Truth-in-Lending Act and that no disclosures are required to be
given under such regulations and federal laws in connection with this Note.
<PAGE> 2
This Note is secured by all assets now owned or to be obtained by Maker.
It is agreed that time is of the essence of this agreement, and that in
the event of default in the payment of any installment of principal or interest
when due the holder hereof may declare the unpaid principal balance plus all
accrued but unpaid interest due thereon immediately due and payable without
notice, and failure to exercise said option shall not constitute a waiver on the
part of the holder of the right to exercise the same at any other time.
In the event of default in the making of any payment herein provided,
either of principal or interest, or in the event the entirety of the
indebtedness evidenced hereby is declared due, interest shall accrue at the
maximum rate allowed by law.
All agreements between the Maker and the Payee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no event, whether by reason of acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid to the Payee for the use,
forbearance or detention of the money to be loaned hereunder or otherwise,
exceed the maximum amount permissible under applicable law. If fulfillment of
any provision hereof or of any mortgage, loan agreement, or other document
evidencing or securing the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if the Payee shall ever
receive anything of value deemed interest under applicable law which would
exceed interest at the highest lawful rate, an amount equal to any excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
the Maker. All sums paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the indebtedness of the Maker to the Payee shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full term of such indebtedness until payment in full
so that the rate of interest on account of such indebtedness is uniform
throughout the term thereof. The provisions of this paragraph shall control all
agreements between the Maker and the Payee.
This note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the United
States of America, except that Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15, as
amended (which regulates certain revolving credit loan accounts and revolving
tri-party accounts), shall not apply hereto. For purposes of any suit relating
to this note, Maker hereof submits itself to the jurisdiction of any court
sitting in the State of Texas and further agrees that venue in any suit arising
out of this note or any venue shall be fixed in Harris County, Texas. Final
judgment in any suit shall be conclusive and may be enforced in any jurisdiction
within or without the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of such
liability.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
"MAKER"
WILLIS GROUP, L.L.C.
By: /s/ MARK WILLIS
----------------------------------------
Mark Willis, President
<PAGE> 1
EXHIBIT 99.3
Willis Group, LLC
December 15, 1999
Page 1
December 15, 1999
Mr. James R. Crane
15350 Vickery Drive
Houston, Texas, 77032
Dear Jim:
This letter will evidence the agreement between you ("Seller") and the
undersigned, WILLIS GROUP, LLC ("Purchaser"), with respect to the sale by the
Seller to the Purchaser of all of Seller's right, title and interest in certain
Common Stock, Warrants and Options of Equalnet Communications Corp(OTC
BB:ENET.OB) or "Securities" currently held in your name.
Upon the terms set forth herein, the Seller hereby sells, transfers and
assigns the Securities to the Purchaser, without recourse or warranty of any
kind except as expressly set forth herein, and the Purchaser hereby purchases
and agrees to accept from the Seller, the Securities.
In consideration for the Securities being sold hereunder, Purchaser
contemporaneously with the execution of this agreement shall execute and deliver
to Seller Purchaser's Promissory Note in the original principal amount of
$250,000.00 dated December 15, 1999, payable as provided therein and shall
execute and deliver a certain Security Agreement pledging the Securiities as
Collateral for Purchaser's Promissory Note.
Seller hereby represents and warrants to the Purchaser that Seller is the
owner of the Securities and has the right to sell, assign and transfer the same.
Each party agrees to execute such other documents as he may be reasonably
requested to execute by the other party after the date of this agreement to
carry out the purposes of this agreement.
<PAGE> 2
Willis Group, LLC
December 15, 1999
Page 2
Purchaser is aware the Securities are restricted and subject to Rule 144 of
the Security Code.
If the foregoing accurately reflects your understanding of our agreements
with respect to the matters to which it relates, please acknowledge your
acceptance and agreement below in the space provided.
Very truly yours,
/s/ MARK A. WILLIS
------------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
ACCEPTED AND AGREED to
the 15th day of December, 1999:
/s/ JAMES R. CRANE
- -----------------------------
James R. Crane
<PAGE> 1
EXHIBIT 99.4
PROMISSORY NOTE
$250,000.00 HOUSTON, TEXAS DECEMBER 15, 1999
FOR VALUE RECEIVED, after date, without grace, in the manner, on the
dates, and in the amounts so herein stipulated, the undersigned, WILLIS GROUP,
LLC ("Maker"), promises to pay to the order of JAMES R. CRANE ("Payee") or
assigns, whose address is 15350 Vickery Drive, Houston, Texas, 77032, Harris
County, Texas, the sum of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($250,000.00)in lawful money of the United States of America, which shall be
legal tender, in payment of all debts and dues, public and private, at the time
of payment and to pay interest thereon from date until maturity at a rate of
seven percent (7%) per annum, payable as stipulated herein.
This note is due and payable in full on demand by Payee, provided that
no such demand shall be made prior to six months from the date hereof.
Security for this note shall include all rights and interests in
certain Common Stock, Warrants and Options(Securities)of Equalnet Communciations
Corp(OTC BB:ENET.OB), and assigned to Maker on the date hereof.
This note may be prepaid in whole or in part at any time without
penalty; provided, however, that all payments received by Payee from Maker upon
this note shall first be applied to the payment of accrued but unpaid interest,
with the balance thereof to be applied to the reduction of the outstanding
principal of this note. All prepayments in excess of accrued interest shall be
applied to the outstanding principal balance of this note in the inverse order
of maturity.
Whenever any payment to be made under this note shall be stated to be
due on a Saturday, Sunday or legal holiday for commercial banks under the laws
of the State of Texas, then such payment shall be made on the next succeeding
business day and such extension of time shall in such case be included in the
computation of payment of interest hereunder.
In addition to all principal and accrued interest on this note, Maker
agrees to pay (a) all reasonable costs and expenses incurred by all owners and
holders of this note in collecting this note through probate, reorganization,
bankruptcy or any other proceeding, (b) the reasonable attorneys' fees when and
if this note is placed in the hands of an attorney for collection after default,
and (c) the reasonable attorneys' fees, costs and expenses incurred by Payee in
connection with the preparation and filing of the agreements and documents
contemplated herein.
Unless as otherwise provided by law, Maker and any and all co-makers,
endorsers, guarantors and sureties severally waive notice (including, but not
limited to, notice of protest, notice of dishonor and notice of intent to
accelerate and notice of acceleration), demand, presentment for payment, protest
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any security at any time existing or by any failure to perfect or to maintain
perfection of any lien on or security interest in any such security.
Maker warrants and represents to Payee, and to all other owners and
holders of any indebtedness evidenced hereby, that the loan evidenced by this
Note is and shall be solely for business, commercial or agricultural purposes
and not primarily for personal, family or household use. Maker acknowledges that
the loan evidenced by this Note is specifically exempted under Section 226.3(a)
of Regulation Z issued by the Board of Governors of the Federal Reserve System
and under the Truth-in-Lending Act and that no
<PAGE> 2
disclosures are required to be given under such regulations and federal laws in
connection with this Note.
It is agreed that time is of the essence of this agreement, and that in
the event of default in the payment of any installment of principal or interest
when due the holder hereof may declare the unpaid principal balance plus all
accrued but unpaid interest due thereon immediately due and payable without
notice, and failure to exercise said option shall not constitute a waiver on the
part of the holder of the right to exercise the same at any other time.
In the event of default in the making of any payment herein provided
when due (either of principal and/or interest), or in the event the entirety of
the unpaid principal balance plus accrued unpaid interest thereon is declared
due, interest on such past-due indebtedness (either principal and/or interest)
shall accrue at the maximum rate allowed by law.
All agreements between the Maker and the Payee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no event, whether by reason of acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the money to be loaned hereunder or otherwise
exceed the maximum amount permissible under applicable law. If fulfillment of
any provision hereof or of any mortgage, loan agreement, or other document
evidencing or securing the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if the Payee shall ever
receive anything of value deemed interest under applicable law which would
exceed interest at the highest lawful rate, an amount equal to any excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
the Maker. All sums paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the indebtedness of the Maker to the Payee shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full term of such indebtedness until payment in full
so that the rate of interest on account of such indebtedness is uniform
throughout the term thereof. The provisions of this paragraph shall control all
agreements between the Maker and the Payee.
This note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the United
States of America, except that Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15, as
amended (which regulates certain revolving credit loan accounts and revolving
tri-party accounts), shall not apply hereto. For purposes of any suit relating
to this note, Maker hereof submits itself to the jurisdiction of any court
sitting in the State of Texas and further agrees that venue in any suit arising
out of this note or any venue shall be fixed in Harris County, Texas. Final
judgment in any suit shall be conclusive and may be enforced in any jurisdiction
within or without the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of such
liability.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
"MAKER"
/s/ MARK A. WILLIS
----------------------------------------------
Mark A. Willis, President of WILLIS GROUP, LLC
<PAGE> 1
EXHIBIT 99.5
SECURITY AGREEMENT
WILLIS GROUP, LLC (hereinafter called "Debtor"), whose address is 1701
S. Shepherd, Suite E, Houston, Texas 77019, for value received and intending to
be legally bound, hereby grants to JAMES R. CRANE (hereinafter called "Secured
Party"), whose address is 15350 Vickery Drive, Houston, Texas, 77032, a
security interest in the following property:
All of Debtor's right, title and interest in certain Common
Stock, Warrants, and Options of Equlanet Communications Corp,(OTC
BB:ENET.OB) in the quantity of 3,900,000 shares, and 170,000 @ 1.00
Warrants and Options assigned to Debtor on the date hereof, as well as
all proceeds or payments received should any of the foregoing be sold,
exchanged, collected or otherwise disposed of (all of which is hereafter
called the"Collateral"); provided, however, no provisions herein shall
be construed as or deemed authority for Debtor to sell, exchange or
otherwise dispose of the Collateral or any portion thereof. Specific
securities are identified on Schedule A attached hereto.
The security interest granted hereby to Secured Party secures the
payment of all indebtedness, liabilities and obligations of Debtor to Secured
Party (hereinafter collectively called the"Obligations"), whether joint or
several, direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and all renewals, extensions and rearrangements
of the Obligations, and any of the same, including under a certain Promissory
Note of even date in the original principal amount of $250,000.00, executed by
Debtor and payable to Secured Party and all costs and expenses and attorneys'
fees and legal expenses payable by Secured Party in connection herewith or
therewith, and also secures the performance by Debtor of the agreements
hereinafter set forth.
<PAGE> 2
Except where the context otherwise requires, words importing the
singular number shall include the plural number and vice versa. Debtor hereby
represents, warrants and agrees that:
1. (a) Debtor is the sole owner and holder of the Collateral free and
clear of all liens and security interests; (b) Debtor has the authority to enter
into and perform this agreement and to grant the security interests created
hereby; and (c) the Collateral is being used or acquired for use primarily for
business purposes.
2. (a) The Collateral will be kept at Debtor's place of business listed
in section 3 of this agreement; Debtor will give Secured Party at least 30 days
prior written notice of any change in the location of the Collateral within the
State of Texas; and (b) Debtor will not remove the Collateral from the State of
Texas without the prior written consent of Secured Party.
3. The principal place of business and chief executive office of Debtor
is the address for Debtor shown in the preamble of this agreement. Debtor will
immediately notify Secured Party in writing of any change in Debtor's place of
business or chief executive office, and of any additional place of business.
4. Debtor will defend the Collateral against any claims and demands of
all persons at any time claiming the same or any interest therein.
5. Except for those in favor of Secured Party, no financing statement or
security agreement covering any Collateral or any proceeds thereof is currently
or will be on file in any public office. Debtor hereby authorizes Secured Party
to file, in jurisdictions where this authorization will be given effect, a
financing statement signed only by Secured Party describing the Collateral in
the same manner as it is described herein; and from time to time, at the request
of Secured Party, Debtor will execute one or more financing statements and such
other documents (and pay the cost of filing or recording the same in all public
offices deemed
<PAGE> 3
necessary or desirable by Secured Party) and do such other acts and things, all
as Secured Party may request, to establish and maintain a valid security
interest in the Collateral (free of all other liens and claims whatsoever except
as otherwise provided herein) to secure the payment of the Obligations. In
connection with the foregoing, it is agreed and understood between the parties
hereto (and Secured Party is hereby authorized to carry out and implement the
following agreements and understandings and Debtor hereby agrees to pay the
costs thereof) that Secured Party may, at any time or times, file as a financing
statement any counterpart, copy or reproduction of this agreement, if Secured
Party shall elect so to file, and it is also agreed and understood that Secured
Party may, if deemed necessary or desirable, file (or sign and file) as a
financing statement any carbon copy of, or photographic or other reproduction
of, this agreement or of any financing statement executed in connection with
this agreement.
6. Debtor will not (a) permit any liens, encumbrances or security
interests (other than Secured Party's Liens) to attach to any of the Collateral;
(b) permit any of the Collateral to be levied upon under any legal process; (c)
sell, transfer, lease or otherwise dispose of any of the Collateral or any
interest therein, or offer to do so, without the prior express written consent
of Secured Party; and (d) permit anything to be done that may impair the value
of any of the Collateral or the security intended to be afforded thereby or
hereby.
7. (a) Debtor will insure the Collateral with companies acceptable to
the Secured Party against such casualties and in such amounts as the Secured
Party shall reasonably require, with a loss payable clause in favor of the
Debtor and Secured Party, as their interests may appear, and the Secured Party
is hereby authorized to collect sums which may become due under any of said
policies and apply the same to the obligations hereby secured.
<PAGE> 4
(b) Debtor will at all times keep the Collateral in good order and
repair and will not waste or destroy the Collateral or any part thereof.
8. Debtor will not use the Collateral or permit the Collateral to be
used in violation of any statute, ordinance or other law which could result in a
material adverse effect upon its business or financial condition or which could
result in loss or forfeiture of the Collateral or which could result in loss or
impairment of (or priority with respect to) Secured Party's interest in the
Collateral; and Debtor will permit Secured Party and its agents, representatives
and employees to examine the Collateral at all reasonable times, and for such
purpose, Secured Party may enter upon or into any premises where the Collateral
may be located without being guilty of a trespass. Debtor will furnish to
Secured Party upon request all pertinent information regarding the Collateral.
9. Debtor will protect the title and possession of the Collateral and
will, at Debtor's own cost and expense, promptly pay when due all taxes,
assessments, maintenance charges and other impositions of every kind and
character charged, levied, assessed or imposed against the Collateral or real
property, if any, to which the Collateral may be affixed or any part thereof, as
the same become payable and before they become delinquent, and upon request of
Secured Party, shall furnish due proof of such payment to Secured Party promptly
after payment.
10. Secured Party may at its option, but without any obligation to do
so, pay for the account of Debtor, any taxes, liens or security interests or
other encumbrances at any time levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, prosecute or defend any suits in
relation to the security interests arising pursuant to this agreement and insure
and keep insured the Collateral in an amount not to exceed the Obligations
hereunder. Any such amounts which may be so paid out by Secured Party and all
sums paid for insurance
<PAGE> 5
premiums, as aforesaid, including, without limitation, the costs, expenses and
attorneys' fees paid in any suit affecting the Collateral when necessary to
protect the security interest hereof shall be a part of the Obligations hereby
secured and recoverable in all respects.
11. Debtor will pay promptly when due all taxes and assessments upon the
Collateral, its use or operation, upon this agreement and upon any note or notes
or other writing evidencing the Obligations, or any of them, including
documentary or other taxes.
12. Until default, Debtor may have possession of the Collateral and use
it in any lawful manner except that Debtor will apply any proceeds or payments
received with respect to the Collateral to the Obligations immediately upon
receipt thereof.
13. The happening of any one or more default under the Obligations shall
constitute a default under this agreement.
14. Upon the occurrence of any default specified in this agreement,
Secured Party may, in addition to any other rights and remedies which it may
have, immediately and without demand, exercise any or all of the rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code as adopted and amended in the State of Texas from time to time (the "UCC")
or any other writing evidencing any of the Obligations secured hereby; and upon
the request or demand of Secured Party, Debtor shall, at Debtor's expense,
assemble the Collateral and make it available to Secured Party at a convenient
place acceptable to Secured Party; and Debtor shall promptly pay to Secured
Party any and all costs and expenses, including legal expenses and attorneys'
fees as specified in any note or any other evidence of the Obligations held by
Secured Party, but in any event, which shall include attorneys' fees of the
suit, out of court, in trial, on appeal, or in bankruptcy proceedings, incurred
or paid by Secured Party in protecting and enforcing the rights of Secured Party
hereunder, including Secured Party's
<PAGE> 6
right to take possession of the Collateral and to hold, prepare for sale, sell
and dispose of such Collateral. Any notice of sale, disposition or other
intended action by Secured Party sent to Debtor at the address specified in the
preamble of this agreement, or to such other address of Debtor as may from time
to time be shown on Secured Party's records, at least ten days prior to such
action, shall constitute reasonable notice to Debtor. Upon disposition by
Secured Party of any property in which Secured Party has a security interest
hereunder, Debtor shall be and remain liable for any deficiency; and Secured
Party shall account to Debtor for any surplus, but Secured Party shall have the
right to apply all or any part of such surplus to or to hold the same as a
reserve against all or any of the Obligations of Debtor to Secured Party,
whether or not they or any of them be then due, and in such order of application
as Secured Party may from time to time elect.
15. The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon and, in this
connection, TO THE EXTENT NOT PROHIBITED BY LAW, DEBTOR EXPRESSLY WAIVES ANY
CONSTITUTIONAL RIGHTS OF DEBTOR WITH REGARD TO NOTICE OR ANY JUDICIAL PROCESS OR
HEARING PRIOR TO THE EXERCISE OF THE RIGHTS OF SECURED PARTY TO TAKE POSSESSION
OR CONTROL OF THE COLLATERAL UPON THE HAPPENING OF ANY OF THE EVENTS OR
CONDITIONS CONSTITUTING A DEFAULT.
16. No waiver by Secured Party of any default shall operate as a waiver
of any other default or of the same default on a future occasion. No delay or
omission on the part of Secured Party in exercising any right or remedy shall
operate as a waiver thereof, and no single or partial
<PAGE> 7
exercise by Secured Party of any right or remedy shall preclude or affect any
other or further exercise thereof or the exercise of any other right or remedy.
The provisions of this agreement are cumulative to the provisions of and any
other writing evidencing or pertaining to any of the Obligations secured by this
agreement, and Secured Party shall have all the benefits, rights and remedies of
and under any writing evidencing any of the Obligations secured hereby. The
singular pronoun, when used herein, shall include the singular and plural, as
applicable, and the use of any gender shall include all genders. All rights of
Secured Party hereunder shall inure to the benefit of its successors and
assigns; and all obligations of Debtor shall bind its successors and assigns.
Debtor waives all rights to the marshalling of its assets including, without
limitation, the Collateral.
17. All recitals in any instrument executed by Secured Party incident to
the sale, transfer, assignment, lease or other disposition or utilization of the
collateral or any part thereof hereunder shall be full proof of the matters
stated therein and no other proof shall be requisite to establish full legal
propriety of the sale or other action taken by Secured Party or of any fact,
condition or thing incident thereto and all prerequisites of such sale or other
action or any fact, condition or thing incident thereto shall be presumed
conclusively to have been performed or to have occurred.
18. If any certificate of title or similar document is, at any time and
pursuant to the laws of any jurisdiction, issued or outstanding with respect to
the Collateral or any part thereof, Debtor will promptly advise Secured Party
thereof, and Debtor will promptly cause the interest of Secured Party to be
properly noted thereon; and Debtor will further promptly deliver to Secured
Party any such certificate of title or similar document issued or outstanding at
any time with respect to such Collateral. If any instruments, chattel paper,
money or monies, or documents are,
<PAGE> 8
at any time or times, included in the Collateral, whether as proceeds or
otherwise, Debtor will promptly deliver the same to Secured Party without demand
therefor by Secured Party.
19. This agreement has been delivered in the State of Texas and shall be
construed in accordance with the laws of such State, including the UCC and
applicable federal law; provided, however, that if additional rights or remedies
are hereafter granted to secured parties by the laws of the State of Texas or by
applicable federal law, Secured Party shall also have and may exercise any such
rights or remedies. Wherever possible, each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this agreement. To the extent permitted by
applicable law, Debtor hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect. TO THE EXTENT
LAWFUL, ANY LITIGATION ARISING HEREUNDER OR RELATED HERETO OR TO THE NOTE
EXECUTED IN CONNECTION HEREWITH SHALL BE TRIED BY THE STATE COURTS FOR THE
COUNTY OR THE FEDERAL COURT OF THE UNITED STATES FEDERAL DISTRICT WHERE THE
PRINCIPAL OFFICE OF SECURED PARTY IS LOCATED, WHICHEVER IS APPLICABLE, AND
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS
AND WAIVES ALL OBJECTIONS TO VENUE THEREIN.
20. Debtor will promptly reimburse Secured Party for all amounts
expended, advanced or incurred by Secured Party to satisfy any obligation of
Debtor under this agreement or any of the other documents securing or pertaining
to the loan evidenced by the note executed
<PAGE> 9
in connection herewith, or to collect the note executed herewith, or to enforce
the rights of Secured Party under this agreement, or any of the other documents
securing or pertaining to the loan evidenced by the note executed in connection
herewith (whether or not any legal or other proceeding is instituted), which
amounts will include all court costs, attorneys' fees, fees of auditors and
accountants, and investigation expenses reasonably incurred by Secured Party to
third parties in connection with any such matters.
21. Debtor represents and warrants to Secured Party that the value of
the consideration received and to be received, directly or indirectly, by Debtor
as a result of the credit or other financial accommodations granted and extended
by Secured Party to Debtor is fair consideration to Debtor and reasonably worth
at least as much as the Obligations, and that the financial accommodations
granted and extended by Secured Party have benefitted and may reasonably be
expected to benefit Debtor, directly or indirectly.
22. All rights to marshalling of assets of Debtor, including any such
right with respect to the Collateral, are hereby waived by Debtor.
23. The execution and delivery of this agreement in no manner shall
impair or affect any other security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this agreement, all such present and future additional security to be
considered as cumulative security. Any of the Collateral may be released from
this agreement without altering, varying or diminishing in any way the force,
effect, lien, security interest or charge of this agreement as to the Collateral
not expressly released, and this agreement shall continue as a first lien
security interest and charge on all of the Collateral not expressly released
until all sums and indebtedness secured hereby have been paid in full. Any
future assignment or
<PAGE> 10
attempted assignment or transfer of the interest of Debtor in and to any of the
Collateral shall not deprive Secured Party of the right to sell or otherwise
dispose of or utilize all of the Collateral as above provided or necessitate the
sale or disposition thereof in parcels or in severalty.
24. This agreement may be executed in one or more counterparts, each of
which shall constitute an original, but when taken together shall constitute but
one and the same agreement. This agreement has been substantially negotiated in,
delivered and accepted at, and the proceeds of the loan will be disbursed in,
Houston, Texas.
IN WITNESS WHEREOF, this agreement is executed the 15th day of December,
1999.
/s/ MARK A. WILLIS
------------------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
<PAGE> 1
Willis Group, LLC
December 21, 1999
Page 1
Exhibit 99.6
December 21, 1999
Mr. Frank J. Heverdejs
Eight Greenway Plaza, Suite 702
Houston, Texas, 77046
Dear Frank:
This letter will evidence the agreement between you ("Seller") and the
undersigned, WILLIS GROUP, LLC ("Purchaser"), with respect to the sale by the
Seller to the Purchaser of all of Seller's right, title and interest in certain
Common Stock, Warrants and Options of Equalnet Communications Corp(OTC
BB:ENET.OB) or "Securities" currently held in your name.
Upon the terms set forth herein, the Seller hereby sells, transfers and
assigns the Securities to the Purchaser, without recourse or warranty of any
kind except as expressly set forth herein, and the Purchaser hereby purchases
and agrees to accept from the Seller, the Securities.
In consideration for the Securities being sold hereunder, Purchaser
contemporaneously with the execution of this agreement shall execute and deliver
to Seller Purchaser's Promissory Note in the original principal amount of
$150,000.00 dated December 21, 1999, payable as provided therein and shall
execute and deliver a certain Security Agreement pledging the Securities as
Collateral for Purchaser's Promissory Note.
Seller hereby represents and warrants to the Purchaser that Seller is
the owner of the Securities and has the right to sell, assign and transfer the
same. Each party agrees to execute such other documents as he may be reasonably
requested to execute by the other party after the date of this agreement to
carry out the purposes of this agreement.
<PAGE> 2
Willis Group, LLC
December 21, 1999
Page 2
Purchaser is aware the Securities are restricted and subject to Rule 144
of the Security Code.
If the foregoing accurately reflects your understanding of our
agreements with respect to the matters to which it relates, please acknowledge
your acceptance and agreement below in the space provided.
Very truly yours,
/s/ MARK A. WILLIS
-----------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
ACCEPTED AND AGREED to
the 21st day of December, 1999:
/s/ FRANK J. HEVRDEJS
- -----------------------------
Frank J. Hevrdejs
<PAGE> 1
EXHIBIT 99.7
PROMISSORY NOTE
$150,000.00 Houston, Texas December 21, 1999
FOR VALUE RECEIVED, after date, without grace, in the manner, on the
dates, and in the amounts so herein stipulated, the undersigned, WILLIS GROUP,
LLC ("Maker"), promises to pay to the order of FRANK J. HEVRDEJS ("Payee") or
assigns, whose address is Eight Greenway Plaza, Suite 702, Houston, Texas,
77046, Harris County, Texas, the sum of ONE HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($150,000.00)in lawful money of the United States of America, which
shall be legal tender, in payment of all debts and dues, public and private, at
the time of payment and to pay interest thereon from date until maturity at a
rate of seven percent (7%) per annum, payable as stipulated herein.
This note is due and payable in full on demand by Payee, provided that
no such demand shall be made prior to six months from the date hereof.
Security for this note shall include all rights and interests in certain
Common Stock, Warrants and Options(Securities)of Equalnet Communciations
Corp(OTC BB:ENET.OB), and assigned to Maker on the date hereof.
This note may be prepaid in whole or in part at any time without
penalty; provided, however, that all payments received by Payee from Maker upon
this note shall first be applied to the payment of accrued but unpaid interest,
with the balance thereof to be applied to the reduction of the outstanding
principal of this note. All prepayments in excess of accrued interest shall be
applied to the outstanding principal balance of this note in the inverse order
of maturity.
Whenever any payment to be made under this note shall be stated to be
due on a Saturday, Sunday or legal holiday for commercial banks under the laws
of the State of Texas, then such payment shall be made on the next succeeding
business day and such extension of time shall in such case be included in the
computation of payment of interest hereunder.
In addition to all principal and accrued interest on this note, Maker
agrees to pay (a) all reasonable costs and expenses incurred by all owners and
holders of this note in collecting this note through probate, reorganization,
bankruptcy or any other proceeding, (b) the reasonable attorneys' fees when and
if this note is placed in the hands of an attorney for collection after default,
and (c) the reasonable attorneys' fees, costs and expenses incurred by Payee in
connection with the preparation and filing of the agreements and documents
contemplated herein.
Unless as otherwise provided by law, Maker and any and all co-makers,
endorsers, guarantors and sureties severally waive notice (including, but not
limited to, notice of protest, notice of dishonor and notice of intent to
accelerate and notice of acceleration), demand, presentment for payment, protest
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any security at any time existing or by any failure to perfect or to maintain
perfection of any lien on or security interest in any such security.
Maker warrants and represents to Payee, and to all other owners and
holders of any indebtedness evidenced hereby, that the loan evidenced by this
Note is and shall be solely for business, commercial or agricultural purposes
and not primarily for personal, family or household use. Maker acknowledges that
the loan evidenced by this Note is specifically exempted under Section 226.3(a)
of Regulation Z issued by the Board of Governors of the Federal Reserve System
and under the Truth-in-Lending Act and that no
<PAGE> 2
disclosures are required to be given under such regulations and federal laws in
connection with this Note.
It is agreed that time is of the essence of this agreement, and that in
the event of default in the payment of any installment of principal or interest
when due the holder hereof may declare the unpaid principal balance plus all
accrued but unpaid interest due thereon immediately due and payable without
notice, and failure to exercise said option shall not constitute a waiver on the
part of the holder of the right to exercise the same at any other time.
In the event of default in the making of any payment herein provided
when due (either of principal and/or interest), or in the event the entirety of
the unpaid principal balance plus accrued unpaid interest thereon is declared
due, interest on such past-due indebtedness (either principal and/or interest)
shall accrue at the maximum rate allowed by law.
All agreements between the Maker and the Payee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no event, whether by reason of acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the money to be loaned hereunder or otherwise
exceed the maximum amount permissible under applicable law. If fulfillment of
any provision hereof or of any mortgage, loan agreement, or other document
evidencing or securing the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if the Payee shall ever
receive anything of value deemed interest under applicable law which would
exceed interest at the highest lawful rate, an amount equal to any excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
the Maker. All sums paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the indebtedness of the Maker to the Payee shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full term of such indebtedness until payment in full
so that the rate of interest on account of such indebtedness is uniform
throughout the term thereof. The provisions of this paragraph shall control all
agreements between the Maker and the Payee.
This note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the United
States of America, except that Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15, as
amended (which regulates certain revolving credit loan accounts and revolving
tri-party accounts), shall not apply hereto. For purposes of any suit relating
to this note, Maker hereof submits itself to the jurisdiction of any court
sitting in the State of Texas and further agrees that venue in any suit arising
out of this note or any venue shall be fixed in Harris County, Texas. Final
judgment in any suit shall be conclusive and may be enforced in any jurisdiction
within or without the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of such
liability.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
"MAKER"
/s/ MARK A. WILLIS
------------------------------------------
Mark A. Willis, President of WILLIS GROUP, LLC
<PAGE> 1
Exhibit 99.8
SECURITY AGREEMENT
WILLIS GROUP, LLC (hereinafter called "Debtor"), whose address is 1701
S. Shepherd, Suite 200, Houston, Texas 77019, for value received and intending
to be legally bound, hereby grants to FRANK J. HEVRDEJS (hereinafter called
"Secured Party"), whose address is Eight Greenway Plaza, Suite 702, Houston,
Texas, 77046, a security interest in the following property:
All of Debtor's right, title and interest in certain Common
Stock, Warrants, and Options of Equlanet Communications Corp,(OTC
BB:ENET.OB) in the quantity of 666,666 shares, and 33,334
Warrants and Options assigned to Debtor on the date hereof, as well as
all proceeds or payments received should any of the foregoing be sold,
exchanged, collected or otherwise disposed of (all of which is
hereafter called the"Collateral"); provided, however, no provisions
herein shall be construed as or deemed authority for Debtor to sell,
exchange or otherwise dispose of the Collateral or any portion thereof.
The security interest granted hereby to Secured Party secures
the payment of all indebtedness, liabilities and obligations of Debtor
to Secured Party (hereinafter collectively called the"Obligations"),
whether joint or several, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and all
renewals, extensions and rearrangements of the Obligations, and any of
the same, including under a certain Promissory Note of even date in the
original principal amount of $150,000.00, executed by Debtor and
payable to Secured Party and all costs and expenses and attorneys' fees
and legal expenses payable by Secured Party in connection herewith or
<PAGE> 2
therewith, and also secures the performance by Debtor of the agreements
hereinafter set forth.
Except where the context otherwise requires, words importing the
singular number shall include the plural number and vice versa. Debtor hereby
represents, warrants and agrees that:
1. (a) Debtor is the sole owner and holder of the Collateral free and
clear of all liens and security interests; (b) Debtor has the authority to enter
into and perform this agreement and to grant the security interests created
hereby; and (c) the Collateral is being used or acquired for use primarily for
business purposes.
2. (a) The Collateral will be kept at Debtor's place of business listed
in section 3 of this agreement; Debtor will give Secured Party at least 30 days
prior written notice of any change in the location of the Collateral within the
State of Texas; and (b) Debtor will not remove the Collateral from the State of
Texas without the prior written consent of Secured Party.
3. The principal place of business and chief executive office of Debtor
is the address for Debtor shown in the preamble of this agreement. Debtor will
immediately notify Secured Party in writing of any change in Debtor's place of
business or chief executive office, and of any additional place of business.
4. Debtor will defend the Collateral against any claims and demands of
all persons at any time claiming the same or any interest therein.
5. Except for those in favor of Secured Party, no financing statement
or security agreement covering any Collateral or any proceeds thereof is
currently or will be on file in any public office. Debtor hereby authorizes
Secured Party to file, in jurisdictions where this authorization will be given
effect, a financing statement signed only by Secured Party describing the
Collateral in the same manner as it is described herein; and from time to time,
at the request
<PAGE> 3
of Secured Party, Debtor will execute one or more financing statements and such
other documents (and pay the cost of filing or recording the same in all public
offices deemed necessary or desirable by Secured Party) and do such other acts
and things, all as Secured Party may request, to establish and maintain a valid
security interest in the Collateral (free of all other liens and claims
whatsoever except as otherwise provided herein) to secure the payment of the
Obligations. In connection with the foregoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry out
and implement the following agreements and understandings and Debtor hereby
agrees to pay the costs thereof) that Secured Party may, at any time or times,
file as a financing statement any counterpart, copy or reproduction of this
agreement, if Secured Party shall elect so to file, and it is also agreed and
understood that Secured Party may, if deemed necessary or desirable, file (or
sign and file) as a financing statement any carbon copy of, or photographic or
other reproduction of, this agreement or of any financing statement executed in
connection with this agreement.
6. Debtor will not (a) permit any liens, encumbrances or security
interests (other than Secured Party's Liens) to attach to any of the Collateral;
(b) permit any of the Collateral to be levied upon under any legal process; (c)
sell, transfer, lease or otherwise dispose of any of the Collateral or any
interest therein, or offer to do so, without the prior express written consent
of Secured Party; and (d) permit anything to be done that may impair the value
of any of the Collateral or the security intended to be afforded thereby or
hereby.
7. (a) Debtor will insure the Collateral with companies acceptable to
the Secured Party against such casualties and in such amounts as the Secured
Party shall reasonably require, with a loss payable clause in favor of the
Debtor and Secured Party, as their interests may appear,
<PAGE> 4
and the Secured Party is hereby authorized to collect sums which may become due
under any of said policies and apply the same to the obligations hereby secured.
(b) Debtor will at all times keep the Collateral in good order
and repair and will not waste or destroy the Collateral or any part thereof.
8. Debtor will not use the Collateral or permit the Collateral to be
used in violation of any statute, ordinance or other law which could result in a
material adverse effect upon its business or financial condition or which could
result in loss or forfeiture of the Collateral or which could result in loss or
impairment of (or priority with respect to) Secured Party's interest in the
Collateral; and Debtor will permit Secured Party and its agents, representatives
and employees to examine the Collateral at all reasonable times, and for such
purpose, Secured Party may enter upon or into any premises where the Collateral
may be located without being guilty of a trespass. Debtor will furnish to
Secured Party upon request all pertinent information regarding the Collateral.
9. Debtor will protect the title and possession of the Collateral and
will, at Debtor's own cost and expense, promptly pay when due all taxes,
assessments, maintenance charges and other impositions of every kind and
character charged, levied, assessed or imposed against the Collateral or real
property, if any, to which the Collateral may be affixed or any part thereof, as
the same become payable and before they become delinquent, and upon request of
Secured Party, shall furnish due proof of such payment to Secured Party promptly
after payment.
10. Secured Party may at its option, but without any obligation to do
so, pay for the account of Debtor, any taxes, liens or security interests or
other encumbrances at any time levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, prosecute or defend any suits in
relation to the security interests arising pursuant to this agreement and
<PAGE> 5
insure and keep insured the Collateral in an amount not to exceed the
Obligations hereunder. Any such amounts which may be so paid out by Secured
Party and all sums paid for insurance premiums, as aforesaid, including, without
limitation, the costs, expenses and attorneys' fees paid in any suit affecting
the Collateral when necessary to protect the security interest hereof shall be a
part of the Obligations hereby secured and recoverable in all respects.
11. Debtor will pay promptly when due all taxes and assessments upon
the Collateral, its use or operation, upon this agreement and upon any note or
notes or other writing evidencing the Obligations, or any of them, including
documentary or other taxes.
12. Until default, Debtor may have possession of the Collateral and use
it in any lawful manner except that Debtor will apply any proceeds or payments
received with respect to the Collateral to the Obligations immediately upon
receipt thereof.
13. The happening of any one or more default under the Obligations
shall constitute a default under this agreement.
14. Upon the occurrence of any default specified in this agreement,
Secured Party may, in addition to any other rights and remedies which it may
have, immediately and without demand, exercise any or all of the rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code as adopted and amended in the State of Texas from time to time (the "UCC")
or any other writing evidencing any of the Obligations secured hereby; and upon
the request or demand of Secured Party, Debtor shall, at Debtor's expense,
assemble the Collateral and make it available to Secured Party at a convenient
place acceptable to Secured Party; and Debtor shall promptly pay to Secured
Party any and all costs and expenses, including legal expenses and attorneys'
fees as specified in any note or any other evidence of the Obligations held by
Secured Party, but in any event, which shall include attorneys' fees of the
<PAGE> 6
suit, out of court, in trial, on appeal, or in bankruptcy proceedings, incurred
or paid by Secured Party in protecting and enforcing the rights of Secured Party
hereunder, including Secured Party's right to take possession of the Collateral
and to hold, prepare for sale, sell and dispose of such Collateral. Any notice
of sale, disposition or other intended action by Secured Party sent to Debtor at
the address specified in the preamble of this agreement, or to such other
address of Debtor as may from time to time be shown on Secured Party's records,
at least ten days prior to such action, shall constitute reasonable notice to
Debtor. Upon disposition by Secured Party of any property in which Secured Party
has a security interest hereunder, Debtor shall be and remain liable for any
deficiency; and Secured Party shall account to Debtor for any surplus, but
Secured Party shall have the right to apply all or any part of such surplus to
or to hold the same as a reserve against all or any of the Obligations of Debtor
to Secured Party, whether or not they or any of them be then due, and in such
order of application as Secured Party may from time to time elect.
15. The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon and, in this
connection, TO THE EXTENT NOT PROHIBITED BY LAW, DEBTOR EXPRESSLY WAIVES ANY
CONSTITUTIONAL RIGHTS OF DEBTOR WITH REGARD TO NOTICE OR ANY JUDICIAL PROCESS OR
HEARING PRIOR TO THE EXERCISE OF THE RIGHTS OF SECURED PARTY TO TAKE POSSESSION
OR CONTROL OF THE COLLATERAL UPON THE HAPPENING OF ANY OF THE EVENTS OR
CONDITIONS CONSTITUTING A DEFAULT.
<PAGE> 7
16. No waiver by Secured Party of any default shall operate as a waiver
of any other default or of the same default on a future occasion. No delay or
omission on the part of Secured Party in exercising any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Secured Party
of any right or remedy shall preclude or affect any other or further exercise
thereof or the exercise of any other right or remedy. The provisions of this
agreement are cumulative to the provisions of and any other writing evidencing
or pertaining to any of the Obligations secured by this agreement, and Secured
Party shall have all the benefits, rights and remedies of and under any writing
evidencing any of the Obligations secured hereby. The singular pronoun, when
used herein, shall include the singular and plural, as applicable, and the use
of any gender shall include all genders. All rights of Secured Party hereunder
shall inure to the benefit of its successors and assigns; and all obligations of
Debtor shall bind its successors and assigns. Debtor waives all rights to the
marshalling of its assets including, without limitation, the Collateral.
17. All recitals in any instrument executed by Secured Party incident
to the sale, transfer, assignment, lease or other disposition or utilization of
the collateral or any part thereof hereunder shall be full proof of the matters
stated therein and no other proof shall be requisite to establish full legal
propriety of the sale or other action taken by Secured Party or of any fact,
condition or thing incident thereto and all prerequisites of such sale or other
action or any fact, condition or thing incident thereto shall be presumed
conclusively to have been performed or to have occurred.
18. If any certificate of title or similar document is, at any time and
pursuant to the laws of any jurisdiction, issued or outstanding with respect to
the Collateral or any part thereof, Debtor will promptly advise Secured Party
thereof, and Debtor will promptly cause the interest of
<PAGE> 8
Secured Party to be properly noted thereon; and Debtor will further promptly
deliver to Secured Party any such certificate of title or similar document
issued or outstanding at any time with respect to such Collateral. If any
instruments, chattel paper, money or monies, or documents are, at any time or
times, included in the Collateral, whether as proceeds or otherwise, Debtor will
promptly deliver the same to Secured Party without demand therefor by Secured
Party.
19. This agreement has been delivered in the State of Texas and shall
be construed in accordance with the laws of such State, including the UCC and
applicable federal law; provided, however, that if additional rights or remedies
are hereafter granted to secured parties by the laws of the State of Texas or by
applicable federal law, Secured Party shall also have and may exercise any such
rights or remedies. Wherever possible, each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this agreement. To the extent permitted by
applicable law, Debtor hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect. TO THE EXTENT
LAWFUL, ANY LITIGATION ARISING HEREUNDER OR RELATED HERETO OR TO THE NOTE
EXECUTED IN CONNECTION HEREWITH SHALL BE TRIED BY THE STATE COURTS FOR THE
COUNTY OR THE FEDERAL COURT OF THE UNITED STATES FEDERAL DISTRICT WHERE THE
PRINCIPAL OFFICE OF SECURED PARTY IS LOCATED, WHICHEVER IS APPLICABLE, AND
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS
AND WAIVES ALL OBJECTIONS TO VENUE THEREIN.
<PAGE> 9
20. Debtor will promptly reimburse Secured Party for all amounts
expended, advanced or incurred by Secured Party to satisfy any obligation of
Debtor under this agreement or any of the other documents securing or pertaining
to the loan evidenced by the note executed in connection herewith, or to collect
the note executed herewith, or to enforce the rights of Secured Party under this
agreement, or any of the other documents securing or pertaining to the loan
evidenced by the note executed in connection herewith (whether or not any legal
or other proceeding is instituted), which amounts will include all court costs,
attorneys' fees, fees of auditors and accountants, and investigation expenses
reasonably incurred by Secured Party to third parties in connection with any
such matters.
21. Debtor represents and warrants to Secured Party that the value of
the consideration received and to be received, directly or indirectly, by Debtor
as a result of the credit or other financial accommodations granted and extended
by Secured Party to Debtor is fair consideration to Debtor and reasonably worth
at least as much as the Obligations, and that the financial accommodations
granted and extended by Secured Party have benefitted and may reasonably be
expected to benefit Debtor, directly or indirectly.
22. All rights to marshalling of assets of Debtor, including any such
right with respect to the Collateral, are hereby waived by Debtor.
23. The execution and delivery of this agreement in no manner shall
impair or affect any other security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this agreement, all such present and future additional security to be
considered as cumulative security. Any of the Collateral may be released from
this agreement without altering, varying or diminishing in any way the force,
effect, lien, security interest or
<PAGE> 10
charge of this agreement as to the Collateral not expressly released, and this
agreement shall continue as a first lien security interest and charge on all of
the Collateral not expressly released until all sums and indebtedness secured
hereby have been paid in full. Any future assignment or attempted assignment or
transfer of the interest of Debtor in and to any of the Collateral shall not
deprive Secured Party of the right to sell or otherwise dispose of or utilize
all of the Collateral as above provided or necessitate the sale or disposition
thereof in parcels or in severalty.
24. This agreement may be executed in one or more counterparts, each of
which shall constitute an original, but when taken together shall constitute but
one and the same agreement. This agreement has been substantially negotiated in,
delivered and accepted at, and the proceeds of the loan will be disbursed in,
Houston, Texas.
IN WITNESS WHEREOF, this agreement is executed the 21th day of December,
1999.
/s/ MARK A. WILLIS
------------------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
<PAGE> 1
Willis Group, LLC
December 21, 1999
Page 1
Exhibit 99.9
December 21, 1999
Mr. Frank J. Heverdejs
First Sterling Venture Corp.
Eight Greenway Plaza, Suite 702
Houston, Texas, 77046
Dear Frank:
This letter will evidence the agreement between you ("Seller") and the
undersigned, WILLIS GROUP, LLC ("Purchaser"), with respect to the sale by the
Seller to the Purchaser of all of Seller's right, title and interest in certain
Common Stock, Warrants and Options of Equalnet Communications Corp(OTC
BB:ENET.OB) or "Securities" currently held in your name.
Upon the terms set forth herein, the Seller hereby sells, transfers and
assigns the Securities to the Purchaser, without recourse or warranty of any
kind except as expressly set forth herein, and the Purchaser hereby purchases
and agrees to accept from the Seller, the Securities.
In consideration for the Securities being sold hereunder, Purchaser
contemporaneously with the execution of this agreement shall execute and deliver
to Seller Purchaser's Promissory Note in the original principal amount of
$150,000.00 dated December 21, 1999, payable as provided therein and shall
execute and deliver a certain Security Agreement pledging the Securities as
Collateral for Purchaser's Promissory Note.
Seller hereby represents and warrants to the Purchaser that Seller is
the owner of the Securities and has the right to sell, assign and transfer the
same. Each party agrees to execute such other documents as he may be reasonably
requested to execute by the other party after the date of this agreement to
carry out the purposes of this agreement.
<PAGE> 2
Willis Group, LLC
December 21, 1999
Page 2
Purchaser is aware the Securities are restricted and subject to Rule
144 of the Security Code.
If the foregoing accurately reflects your understanding of our
agreements with respect to the matters to which it relates, please acknowledge
your acceptance and agreement below in the space provided.
Very truly yours,
/s/ MARK A. WILLIS
--------------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
ACCEPTED AND AGREED to
the 21st day of December, 1999:
/s/ FRANK J. HEVRDEJS
- -----------------------------
Frank J. Hevrdejs
FIRST STERLING VENTURE CORP.
<PAGE> 1
Exhibit 99.10
PROMISSORY NOTE
$150,000.00 Houston, Texas December 21, 1999
FOR VALUE RECEIVED, after date, without grace, in the manner, on the
dates, and in the amounts so herein stipulated, the undersigned, WILLIS GROUP,
LLC ("Maker"), promises to pay to the order of FIRST STERLING VENTURES CORP.
("Payee") or assigns, whose address is Eight Greenway Plaza, Suite 702, Houston,
Texas, 77046, Harris County, Texas, the sum of ONE HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($150,000.00)in lawful money of the United States of America,
which shall be legal tender, in payment of all debts and dues, public and
private, at the time of payment and to pay interest thereon from date until
maturity at a rate of seven percent (7%) per annum, payable as stipulated
herein.
This note is due and payable in full on demand by Payee, provided that
no such demand shall be made prior to six months from the date hereof.
Security for this note shall include all rights and interests in certain
Common Stock, Warrants and Options(Securities)of Equalnet Communciations
Corp(OTC BB:ENET.OB), and assigned to Maker on the date hereof.
This note may be prepaid in whole or in part at any time without
penalty; provided, however, that all payments received by Payee from Maker upon
this note shall first be applied to the payment of accrued but unpaid interest,
with the balance thereof to be applied to the reduction of the outstanding
principal of this note. All prepayments in excess of accrued interest shall be
applied to the outstanding principal balance of this note in the inverse order
of maturity.
Whenever any payment to be made under this note shall be stated to be
due on a Saturday, Sunday or legal holiday for commercial banks under the laws
of the State of Texas, then such payment shall be made on the next succeeding
business day and such extension of time shall in such case be included in the
computation of payment of interest hereunder.
In addition to all principal and accrued interest on this note, Maker
agrees to pay (a) all reasonable costs and expenses incurred by all owners and
holders of this note in collecting this note through probate, reorganization,
bankruptcy or any other proceeding, (b) the reasonable attorneys' fees when and
if this note is placed in the hands of an attorney for collection after default,
and (c) the reasonable attorneys' fees, costs and expenses incurred by Payee in
connection with the preparation and filing of the agreements and documents
contemplated herein.
Unless as otherwise provided by law, Maker and any and all co-makers,
endorsers, guarantors and sureties severally waive notice (including, but not
limited to, notice of protest, notice of dishonor and notice of intent to
accelerate and notice of acceleration), demand, presentment for payment, protest
and the filing of suit for the purpose of fixing liability and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to them or any of them, and each agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any security at any time existing or by any failure to perfect or to maintain
perfection of any lien on or security interest in any such security.
Maker warrants and represents to Payee, and to all other owners and
holders of any indebtedness evidenced hereby, that the loan evidenced by this
Note is and shall be solely for business, commercial or agricultural purposes
and not primarily for personal, family or household use. Maker acknowledges that
the loan evidenced by this Note is specifically exempted under Section 226.3(a)
of Regulation Z issued by the Board of Governors of the
<PAGE> 2
Federal Reserve System and under the Truth-in-Lending Act and that no
disclosures are required to be given under such regulations and federal laws in
connection with this Note.
It is agreed that time is of the essence of this agreement, and that in
the event of default in the payment of any installment of principal or interest
when due the holder hereof may declare the unpaid principal balance plus all
accrued but unpaid interest due thereon immediately due and payable without
notice, and failure to exercise said option shall not constitute a waiver on the
part of the holder of the right to exercise the same at any other time.
In the event of default in the making of any payment herein provided
when due (either of principal and/or interest), or in the event the entirety of
the unpaid principal balance plus accrued unpaid interest thereon is declared
due, interest on such past-due indebtedness (either principal and/or interest)
shall accrue at the maximum rate allowed by law.
All agreements between the Maker and the Payee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no event, whether by reason of acceleration of maturity hereof or
otherwise, shall the amount paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the money to be loaned hereunder or otherwise
exceed the maximum amount permissible under applicable law. If fulfillment of
any provision hereof or of any mortgage, loan agreement, or other document
evidencing or securing the indebtedness evidenced hereby, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if the Payee shall ever
receive anything of value deemed interest under applicable law which would
exceed interest at the highest lawful rate, an amount equal to any excessive
interest shall be applied to the reduction of the principal amount owing
hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal hereof, such excess shall be refunded to
the Maker. All sums paid or agreed to be paid to the Payee for the use,
forbearance, or detention of the indebtedness of the Maker to the Payee shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full term of such indebtedness until payment in full
so that the rate of interest on account of such indebtedness is uniform
throughout the term thereof. The provisions of this paragraph shall control all
agreements between the Maker and the Payee.
This note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of Texas and of the United
States of America, except that Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15, as
amended (which regulates certain revolving credit loan accounts and revolving
tri-party accounts), shall not apply hereto. For purposes of any suit relating
to this note, Maker hereof submits itself to the jurisdiction of any court
sitting in the State of Texas and further agrees that venue in any suit arising
out of this note or any venue shall be fixed in Harris County, Texas. Final
judgment in any suit shall be conclusive and may be enforced in any jurisdiction
within or without the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of such
liability.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
"MAKER"
/s/ MARK A. WILLIS
----------------------------------------------
Mark A. Willis, President of WILLIS GROUP, LLC
<PAGE> 1
EXHIBIT 99.11
SECURITY AGREEMENT
WILLIS GROUP, LLC (hereinafter called "Debtor"), whose address is 1701
S. Shepherd, Suite 200, Houston, Texas 77019, for value received and intending
to be legally bound, hereby grants to FIRST STERLING VENTURE CORP (hereinafter
called "Secured Party"), whose address is Eight Greenway Plaza, Suite 702,
Houston, Texas, 77046, a security interest in the following property:
All of Debtor's right, title and interest in certain Common
Stock, Warrants, and Options of Equalnet Communications Corp, (OTC
BB:ENET.OB) in the quantity of 666,667 shares, and 33,333 Warrants and
Options assigned to Debtor on the date hereof, as well as all proceeds
or payments received should any of the foregoing be sold, exchanged,
collected or otherwise disposed of (all of which is hereafter called
the "Collateral"); provided, however, no provisions herein shall be
construed as or deemed authority for Debtor to sell, exchange or
otherwise dispose of the Collateral or any portion thereof.
The security interest granted hereby to Secured Party secures
the payment of all indebtedness, liabilities and obligations of Debtor
to Secured Party (hereinafter collectively called the "Obligations"),
whether joint or several, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and all
renewals, extensions and rearrangements of the Obligations, and any of
the same, including under a certain Promissory Note of even date in the
original principal amount of $150,000.00, executed by Debtor and
payable to Secured Party and all costs and expenses and attorneys' fees
and legal expenses payable by Secured Party in connection herewith or
<PAGE> 2
therewith, and also secures the performance by Debtor of the agreements
hereinafter set forth.
Except where the context otherwise requires, words importing the
singular number shall include the plural number and vice versa. Debtor hereby
represents, warrants and agrees that:
1. (a) Debtor is the sole owner and holder of the Collateral free and
clear of all liens and security interests; (b) Debtor has the authority to enter
into and perform this agreement and to grant the security interests created
hereby; and (c) the Collateral is being used or acquired for use primarily for
business purposes.
2. (a) The Collateral will be kept at Debtor's place of business listed
in section 3 of this agreement; Debtor will give Secured Party at least 30 days
prior written notice of any change in the location of the Collateral within the
State of Texas; and (b) Debtor will not remove the Collateral from the State of
Texas without the prior written consent of Secured Party.
3. The principal place of business and chief executive office of Debtor
is the address for Debtor shown in the preamble of this agreement. Debtor will
immediately notify Secured Party in writing of any change in Debtor's place of
business or chief executive office, and of any additional place of business.
4. Debtor will defend the Collateral against any claims and demands of
all persons at any time claiming the same or any interest therein.
5. Except for those in favor of Secured Party, no financing statement
or security agreement covering any Collateral or any proceeds thereof is
currently or will be on file in any public office. Debtor hereby authorizes
Secured Party to file, in jurisdictions where this authorization will be given
effect, a financing statement signed only by Secured Party describing the
Collateral in the same manner as it is described herein; and from time to time,
at the request
<PAGE> 3
of Secured Party, Debtor will execute one or more financing statements and such
other documents (and pay the cost of filing or recording the same in all public
offices deemed necessary or desirable by Secured Party) and do such other acts
and things, all as Secured Party may request, to establish and maintain a valid
security interest in the Collateral (free of all other liens and claims
whatsoever except as otherwise provided herein) to secure the payment of the
Obligations. In connection with the foregoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry out
and implement the following agreements and understandings and Debtor hereby
agrees to pay the costs thereof) that Secured Party may, at any time or times,
file as a financing statement any counterpart, copy or reproduction of this
agreement, if Secured Party shall elect so to file, and it is also agreed and
understood that Secured Party may, if deemed necessary or desirable, file (or
sign and file) as a financing statement any carbon copy of, or photographic or
other reproduction of, this agreement or of any financing statement executed in
connection with this agreement.
6. Debtor will not (a) permit any liens, encumbrances or security
interests (other than Secured Party's Liens) to attach to any of the Collateral;
(b) permit any of the Collateral to be levied upon under any legal process; (c)
sell, transfer, lease or otherwise dispose of any of the Collateral or any
interest therein, or offer to do so, without the prior express written consent
of Secured Party; and (d) permit anything to be done that may impair the value
of any of the Collateral or the security intended to be afforded thereby or
hereby.
7. (a) Debtor will insure the Collateral with companies acceptable to
the Secured Party against such casualties and in such amounts as the Secured
Party shall reasonably require, with a loss payable clause in favor of the
Debtor and Secured Party, as their interests may appear,
<PAGE> 4
and the Secured Party is hereby authorized to collect sums which may become due
under any of said policies and apply the same to the obligations hereby secured.
(b) Debtor will at all times keep the Collateral in good order
and repair and will not waste or destroy the Collateral or any part thereof.
8. Debtor will not use the Collateral or permit the Collateral to be
used in violation of any statute, ordinance or other law which could result in a
material adverse effect upon its business or financial condition or which could
result in loss or forfeiture of the Collateral or which could result in loss or
impairment of (or priority with respect to) Secured Party's interest in the
Collateral; and Debtor will permit Secured Party and its agents, representatives
and employees to examine the Collateral at all reasonable times, and for such
purpose, Secured Party may enter upon or into any premises where the Collateral
may be located without being guilty of a trespass. Debtor will furnish to
Secured Party upon request all pertinent information regarding the Collateral.
9. Debtor will protect the title and possession of the Collateral and
will, at Debtor's own cost and expense, promptly pay when due all taxes,
assessments, maintenance charges and other impositions of every kind and
character charged, levied, assessed or imposed against the Collateral or real
property, if any, to which the Collateral may be affixed or any part thereof, as
the same become payable and before they become delinquent, and upon request of
Secured Party, shall furnish due proof of such payment to Secured Party promptly
after payment.
10. Secured Party may at its option, but without any obligation to do
so, pay for the account of Debtor, any taxes, liens or security interests or
other encumbrances at any time levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, prosecute or defend any suits in
relation to the security interests arising pursuant to this agreement and
<PAGE> 5
insure and keep insured the Collateral in an amount not to exceed the
Obligations hereunder. Any such amounts which may be so paid out by Secured
Party and all sums paid for insurance premiums, as aforesaid, including, without
limitation, the costs, expenses and attorneys' fees paid in any suit affecting
the Collateral when necessary to protect the security interest hereof shall be a
part of the Obligations hereby secured and recoverable in all respects.
11. Debtor will pay promptly when due all taxes and assessments upon
the Collateral, its use or operation, upon this agreement and upon any note or
notes or other writing evidencing the Obligations, or any of them, including
documentary or other taxes.
12. Until default, Debtor may have possession of the Collateral and use
it in any lawful manner except that Debtor will apply any proceeds or payments
received with respect to the Collateral to the Obligations immediately upon
receipt thereof.
13. The happening of any one or more default under the Obligations
shall constitute a default under this agreement.
14. Upon the occurrence of any default specified in this agreement,
Secured Party may, in addition to any other rights and remedies which it may
have, immediately and without demand, exercise any or all of the rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code as adopted and amended in the State of Texas from time to time (the "UCC")
or any other writing evidencing any of the Obligations secured hereby; and upon
the request or demand of Secured Party, Debtor shall, at Debtor's expense,
assemble the Collateral and make it available to Secured Party at a convenient
place acceptable to Secured Party; and Debtor shall promptly pay to Secured
Party any and all costs and expenses, including legal expenses and attorneys'
fees as specified in any note or any other evidence of the Obligations held by
Secured Party, but in any event, which shall include attorneys' fees of the
<PAGE> 6
suit, out of court, in trial, on appeal, or in bankruptcy proceedings, incurred
or paid by Secured Party in protecting and enforcing the rights of Secured Party
hereunder, including Secured Party's right to take possession of the Collateral
and to hold, prepare for sale, sell and dispose of such Collateral. Any notice
of sale, disposition or other intended action by Secured Party sent to Debtor at
the address specified in the preamble of this agreement, or to such other
address of Debtor as may from time to time be shown on Secured Party's records,
at least ten days prior to such action, shall constitute reasonable notice to
Debtor. Upon disposition by Secured Party of any property in which Secured Party
has a security interest hereunder, Debtor shall be and remain liable for any
deficiency; and Secured Party shall account to Debtor for any surplus, but
Secured Party shall have the right to apply all or any part of such surplus to
or to hold the same as a reserve against all or any of the Obligations of Debtor
to Secured Party, whether or not they or any of them be then due, and in such
order of application as Secured Party may from time to time elect.
15. The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon and, in this
connection, TO THE EXTENT NOT PROHIBITED BY LAW, DEBTOR EXPRESSLY WAIVES ANY
CONSTITUTIONAL RIGHTS OF DEBTOR WITH REGARD TO NOTICE OR ANY JUDICIAL PROCESS OR
HEARING PRIOR TO THE EXERCISE OF THE RIGHTS OF SECURED PARTY TO TAKE POSSESSION
OR CONTROL OF THE COLLATERAL UPON THE HAPPENING OF ANY OF THE EVENTS OR
CONDITIONS CONSTITUTING A DEFAULT.
<PAGE> 7
16. No waiver by Secured Party of any default shall operate as a waiver
of any other default or of the same default on a future occasion. No delay or
omission on the part of Secured Party in exercising any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Secured Party
of any right or remedy shall preclude or affect any other or further exercise
thereof or the exercise of any other right or remedy. The provisions of this
agreement are cumulative to the provisions of and any other writing evidencing
or pertaining to any of the Obligations secured by this agreement, and Secured
Party shall have all the benefits, rights and remedies of and under any writing
evidencing any of the Obligations secured hereby. The singular pronoun, when
used herein, shall include the singular and plural, as applicable, and the use
of any gender shall include all genders. All rights of Secured Party hereunder
shall inure to the benefit of its successors and assigns; and all obligations of
Debtor shall bind its successors and assigns. Debtor waives all rights to the
marshalling of its assets including, without limitation, the Collateral.
17. All recitals in any instrument executed by Secured Party incident
to the sale, transfer, assignment, lease or other disposition or utilization of
the collateral or any part thereof hereunder shall be full proof of the matters
stated therein and no other proof shall be requisite to establish full legal
propriety of the sale or other action taken by Secured Party or of any fact,
condition or thing incident thereto and all prerequisites of such sale or other
action or any fact, condition or thing incident thereto shall be presumed
conclusively to have been performed or to have occurred.
18. If any certificate of title or similar document is, at any time and
pursuant to the laws of any jurisdiction, issued or outstanding with respect to
the Collateral or any part thereof, Debtor will promptly advise Secured Party
thereof, and Debtor will promptly cause the interest of
<PAGE> 8
Secured Party to be properly noted thereon; and Debtor will further promptly
deliver to Secured Party any such certificate of title or similar document
issued or outstanding at any time with respect to such Collateral. If any
instruments, chattel paper, money or monies, or documents are, at any time or
times, included in the Collateral, whether as proceeds or otherwise, Debtor will
promptly deliver the same to Secured Party without demand therefor by Secured
Party.
19. This agreement has been delivered in the State of Texas and shall
be construed in accordance with the laws of such State, including the UCC and
applicable federal law; provided, however, that if additional rights or remedies
are hereafter granted to secured parties by the laws of the State of Texas or by
applicable federal law, Secured Party shall also have and may exercise any such
rights or remedies. Wherever possible, each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this agreement. To the extent permitted by
applicable law, Debtor hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect. TO THE EXTENT
LAWFUL, ANY LITIGATION ARISING HEREUNDER OR RELATED HERETO OR TO THE NOTE
EXECUTED IN CONNECTION HEREWITH SHALL BE TRIED BY THE STATE COURTS FOR THE
COUNTY OR THE FEDERAL COURT OF THE UNITED STATES FEDERAL DISTRICT WHERE THE
PRINCIPAL OFFICE OF SECURED PARTY IS LOCATED, WHICHEVER IS APPLICABLE, AND
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS
AND WAIVES ALL OBJECTIONS TO VENUE THEREIN.
<PAGE> 9
20. Debtor will promptly reimburse Secured Party for all amounts
expended, advanced or incurred by Secured Party to satisfy any obligation of
Debtor under this agreement or any of the other documents securing or pertaining
to the loan evidenced by the note executed in connection herewith, or to collect
the note executed herewith, or to enforce the rights of Secured Party under this
agreement, or any of the other documents securing or pertaining to the loan
evidenced by the note executed in connection herewith (whether or not any legal
or other proceeding is instituted), which amounts will include all court costs,
attorneys' fees, fees of auditors and accountants, and investigation expenses
reasonably incurred by Secured Party to third parties in connection with any
such matters.
21. Debtor represents and warrants to Secured Party that the value of
the consideration received and to be received, directly or indirectly, by Debtor
as a result of the credit or other financial accommodations granted and extended
by Secured Party to Debtor is fair consideration to Debtor and reasonably worth
at least as much as the Obligations, and that the financial accommodations
granted and extended by Secured Party have benefitted and may reasonably be
expected to benefit Debtor, directly or indirectly.
22. All rights to marshalling of assets of Debtor, including any such
right with respect to the Collateral, are hereby waived by Debtor.
23. The execution and delivery of this agreement in no manner shall
impair or affect any other security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this agreement, all such present and future additional security to be
considered as cumulative security. Any of the Collateral may be released from
this agreement without altering, varying or diminishing in any way the force,
effect, lien, security interest or
<PAGE> 10
charge of this agreement as to the Collateral not expressly released, and this
agreement shall continue as a first lien security interest and charge on all of
the Collateral not expressly released until all sums and indebtedness secured
hereby have been paid in full. Any future assignment or attempted assignment or
transfer of the interest of Debtor in and to any of the Collateral shall not
deprive Secured Party of the right to sell or otherwise dispose of or utilize
all of the Collateral as above provided or necessitate the sale or disposition
thereof in parcels or in severalty.
24. This agreement may be executed in one or more counterparts, each of
which shall constitute an original, but when taken together shall constitute but
one and the same agreement. This agreement has been substantially negotiated in,
delivered and accepted at, and the proceeds of the loan will be disbursed in,
Houston, Texas.
IN WITNESS WHEREOF, this agreement is executed the 21st day of
December, 1999.
/s/ MARK A. WILLIS
-----------------------------------
Mark A. Willis, President
WILLIS GROUP, LLC
