EXHIBIT 10.13 -- STOCK PURCHASE AND RELEASE AGREEMENT AMONG XXXX XXXXXXXXX,
XXXX XXXXXXXXX, S&R HOLDINGS, IRONWOOD TELECOM LLC AND
XXXX X. XXXXX
INCOMNET, INC.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
November 4, 1998
BY FACSIMILE
Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
S&R Holdings
Ironwood Telecom LLC
Xxxx X. Xxxxx
Re: STOCK PURCHASE AND RELEASE AGREEMENT
Gentlemen:
As you know, Xxxx Xxxxxxxxx ("Xxxxxxxxx"), Xxxx Xxxxxxxxx ("Xxxxxxxxx")
and S&R Holdings ("S&R Holdings" and with Xxxxxxxxx and Xxxxxxxxx, the
"Preferred Holders") acquired a certain number of Series B Preferred Stock
("Preferred Stock") of Incomnet, Inc. ("Company") on or about July 29, 1997.
The Preferred Stock is convertible into shares of the Company's Common Stock.
On June 10, 1998, the Preferred Holders notified the Company of their election
to convert all of the Preferred Stock then owned by them which, based on the
conversion price on the date of the notice, would have entitled them to receive
an aggregate of 1,568,571 shares of Common Stock (for Xxxxxxxxx - 81.390 shares
of Preferred Stock convertible into 632,044 shares of Common Stock; for
Xxxxxxxxx - 81.390 shares of Preferred Stock convertible into 632,044 shares of
Common Stock; for S&R - 39.243 shares of Preferred Stock convertible into
304,483 shares of Common Stock). Shortly after receiving the notices of
election to convert by the Preferred Holders on June 10, 1998, the Company
informed the Preferred Holders that the Company had insufficient authorized
Common Stock to effect the conversion of the Preferred Holders' Stock.
Except for 77.277 shares of Preferred Stock and the rights relating
thereto to be issued 600,000 shares of Common Stock when a sufficient authorized
number of shares become available (which the Preferred Holders will retain, the
"Retained Shares"), the Preferred Holders will sell and transfer all of their
Preferred Stock and all rights relating thereto (an aggregate of 124.746 shares
of Preferred Stock convertible into 968,571 shares of Common Stock, the
"Ironwood Shares") to Ironwood Telecom LLC ("Ironwood") for $600,000 in cash.
In connection with the prior conversion of the Retained Shares, the
Company agrees to issue 600,000 shares of Common Stock to the Preferred Holders
upon tender of the stock certificates representing the Retained Shares, within
five business days following the approval of its shareholders to amend the
Company's Articles of Incorporation to increase the authorized Common Stock of
the Company (the "Amendment Proposal"). Since these shares were privately
placed without registration under the Securities Act of 1933 (the "Securities
Act"), the certificates issued to the Preferred Holders evidencing the Retained
Shares will contain a restrictive legend that they may be sold only if
registered or pursuant to an exemption from registration under the Securities
Act. The Company will consider the Retained Shares as being issued on July 29,
1997. Therefore, the one-year holding period under Rule 144 of the Securities
Act will have been met and the Preferred Holders may sell the Retained Shares in
accordance with the exemption from the Securities Act registration requirements
provided under Rule 144. Upon delivery of a broker's certification or other
documents reasonably requested by the Company or its counsel, the Company shall
cause to be delivered to its transfer agent a Rule 144 legal opinion
satisfactory to the transfer agent.
Approval by shareholders of the Amendment Proposal is anticipated to be
obtained at the Company's annual meeting scheduled for March or April 1999. The
Company is aware of agreements between shareholders
November 4, 1998
Page 2
who own approximately 35% of the outstanding voting stock of the Company and
third parties which require those shareholders to vote in favor of a proposal
to increase the authorized number of shares of Common Stock at the next
annual meeting. The Preferred Holders agree to vote in favor of the
Amendment Proposal, if legally permitted, and that Ironwood is the intended
beneficiary of the Preferred Holders' agreement to vote in favor of that
proposal.
To effect the sale and transfer of the Ironwood Shares by the Preferred
Holders to Ironwood, the Preferred Holders agree to execute a general assignment
and an assignment separate from certificate relating to the Ironwood Shares, to
be delivered and effective upon receipt of the $600,000.
The Company shall deliver to the Preferred Holders within 10 business
days of this letter a copy of the unanimous written consent of the Company's
Board of Directors signed by each director approving of the transactions
contemplated in this letter.
In addition, the Preferred Holders, the Company, Ironwood and Xxxx X.
Xxxxx (a shareholder of the Company, "Xxxxx"), agree to enter into mutual
releases relating to claims they may have against each other in connection with
the Preferred Stock. The terms of the mutual releases will be set forth in
another document.
If the Preferred Holders, Ironwood and Xxxxx agree with the terms and
conditions set forth in this letter, please so signify by signing below and
returning the countersigned copy to the Company, after which this letter will
constitute a binding agreement enforceable against the Company, the Preferred
Holders, Ironwood and Xxxxx, in accordance with its terms and conditions. This
letter may be countersigned in counterparts by the parties but will constitute
one agreement among all parties
Very truly yours,
/s/ XXXXX XXXXXXX
--------------------------------------
Xxxxx Xxxxxxx
President and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
/s/ XXXX XXXXXXXXX IRONWOOD TELECOM LLC
----------------------------
XXXX XXXXXXXXX
/s/ XXXX XXXXXXXXX By: /s/ XXXXXX X. XXXXXXXX
---------------------------- ---------------------------------
XXXX XXXXXXXXX Xxxxxx X. Xxxxxxxx
Member
S&R HOLDINGS LLC
By: /s/ XXXXXX XXXXXXX /s/ XXXX X. XXXXX
---------------------- ---------------------------------
Xxxxxx X. Xxxxxxx XXXX X. XXXXX
Managing Partner
2
