Exhibit 10.1
AGREEMENT
AMONG
XXXXXX X. XXXXXXXXXX,
BRIGHT TECHNOLOGIES, INC.
AND
ERNST & YOUNG INC., IN ITS
CAPACITY AS COURT-APPOINTED
RECEIVER AND MANAGER FOR
TEE-COMM ELECTRONICS, INC.
DATED AS OF JANUARY 14, 1999
AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into this 14th day of Janaury,
1999, by and among Xxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx"), Xxxxx & Xxxxx Inc.,
in its capacity as court-appointed Receiver and Manager for Tee-Comm
Electronics, Inc. (the "Receiver") and Bright Technologies, Inc. (the
"Company").
WHEREAS, on February 13, 1995, the Company acquired substantially all of the
assets of Tee-Comm Teleservices, Inc. ("Teleservices"), a Georgia Corporation
engaged in the business of manufacturing, selling, leasing and repairing pay
telephones, pursuant to an Asset Purchase Agreement, dated February 13, 1995;
and
WHEREAS, as consideration for the assets of Teleservices, Inc., which
consisted of inventory, equipment and goodwill, the Company duly executed and
delivered the Secured Note and a Security Agreement, dated February 13, 1995
(the "Security Agreement") granting Teleservices a security interest in all
inventory, furniture, fixtures, furnishings, leases, accounts, contract
rights, licenses, supplies, machinery, equipment, goods, tangible and
intangible personal property of every kind and nature (including additions,
replacements, accessions and proceeds) now and hereafter owned and acquired;
and
WHEREAS, as additional assurance of payment, Xxxxxxxxxx executed a Guaranty
dated February 13, 1995 (the "Guaranty") in favor of Teleservices
guaranteeing payment in full of the Secured Note; and
WHEREAS, on or about February 14, 1995, Teleservices assigned all of its
rights and interests in the Secured Note, the Security Agreement, and the
Guaranty to Tee-Comm Inc., and the Company and Xxxxxxxxxx consented to such
assignment; and
WHEREAS, the Company has failed to make all of the scheduled payments of
principal and interest in respect of the Secured Note due, without
acceleration, on the 13th of each of the months since April, 1997, and owes
in excess of $200,000 in past due interest to date, in addition to other sums
due and owing under the Secured Note including, without limitation, interest
on interest, late charges, and fees and expenses, all in addition to the
entire outstanding principal balance of the Secured Note; and
WHEREAS, the Company has no defenses, counterclaims, crossclaims or offsets
to the Receiver's claims in respect of the Secured Note and, accordingly, has
executed a valid and enforceable affidavit of confession of judgment dated
July 16, 1998 (the "Company Affidavit"); and
WHEREAS, Xxxxxxxxxx has no defenses, counterclaims or offsets to the
Receiver's claims in respect of the Guaranty and, accordingly, has executed a
valid and enforceable affidavit of confession of judgment dated November 2,
1998 (the "Xxxxxxxxxx Affidavit" and, together with the Company Affidavit,
the "Affidavits"); and
WHEREAS, pursuant to the Guaranty and the Affidavit, Xxxxxxxxxx is indebted
to the Receiver in an amount substantially in excess of $1.2 million plus
continuing accruals of interest, costs and expenses; and
WHEREAS, Xxxxxxxxxx and the Company each represent for itself that, at this
time, it does not have the financial wherewithal to pay the full amount owing
but proposes providing the Receiver with certain consideration as set forth
below; and
WHEREAS, the parties desire to settle their interests as set forth below.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Xxxxxxxxxx shall pay the Receiver, within 60 days from the date of this
Agreement, $300,000.00 in immediately available U.S. funds.
2. Contemporaneous with execution of this Agreement, Xxxxxxxxxx will deliver
a recordable mortgage (the "Mortgage") of the property located at 7323
and 0000 Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx (the "Premises") in favor of the
Receiver in the amount of $300,000.00. The Mortgage shall be released
contemporaneous with timely receipt by the Receiver of the $300,000.00
payment required pursuant to paragraph 1 hereof.
3. Prior to or contemporaneous with execution of this Agreement, Xxxxxxxxxx
will deliver evidence satisfactory to the Receiver of the release of the
mortgage of the Premises recorded in favor of Citibank (N.Y.S.) and of any
other encumbrances on the premises other than the Mortgage.
4. The Receiver will bear the cost of recordation of the Mortgage.
5. Xxxxxxxxxx and the Company will each provide the Receiver with a letter,
on a monthly basis, advising of any changes to the information contained
in the Affidavits.
6. Xxxxxxxxxx and the Company warrant and represent, as of the date of this
Agreement, and covenant that there will continue to be, no debts of claims
of the Company that are PARI PASSU or senior to the claims of the Receiver.
7. The Company hereby grants the Receiver a valid, first priority security
interest in the technology of the Company and, on or before January 27,
1999, shall deliver to the Receiver such items as the Receiver shall
request to enable the Receiver to perfect such security interest.
8. There will be a monthly meeting or call between Xxxxxxxxxx and the
Receiver to review the status of the transactions described in that
certain Firm Commitment Agreement executed by Lilly Beter Capital Group,
Ltd. on September 8, 1998 and by the Company on September 25, 1998 and of
any transactions related thereto (collectively, the "Lilly Beter
Transactions").
9. The Company hereby grants to the Receiver, and Xxxxxxxxxx and the
Company hereby covenant that, in connection with any equity issuance by
(a) the Company or (b) the Lilly Beter Transactions, the Receiver will
be granted an option commencing on the date of the first public offering
and terminating at the expiration of three (3) years to acquire 5%, on
a fully diluted basis, of the equity of the Company, such option to be
on terms at least as favorable as any terms made available to any other
party including any insider, underwriter, agent or advisor, which the
parties understand to be no more than a ?% discount. The option is and
will vest immediately and the option and the covenants set forth in this
paragraph will not be discharged by any repayment, including, without
limitation, payment in full of the amounts owing by the Company or
Xxxxxxxxxx to the Receiver.
10. Xxxxxxxxxx hereby pledges to the Receiver 50% of his shares in American
Telecommunications Enterprise, Inc. ("American") as additional
security for his obligations to the Receiver, such shares being delivered
to the Receiver contemporaneous with execution hereof. The pledged
shares will not be released until payment in full of the obligations
owing by the Company to the Receiver.
11. On the earlier of (a) the 91st day following perfection of the grant of
the Mortgage, (b) the foreclosure of the Mortgage, and (c) timely receipt
by the Receiver of the $300,000.00 payment required pursuant to paragraph
1 hereof, the Receiver will (i) release the Guarantee and (ii) return to
Xxxxxxxxxx the Xxxxxxxxxx Affidavit.
12. Upon release and return of each of the items referenced in the
immediately prior paragraph, Xxxxxxxxxx and the Receiver will exchange
mutual general releases, provided that the release shall not alter, in
any manner, Xxxxxxxxxx'x obligation to continue to use his best efforts
to cause the Company to meet all of its obligations under the Secured
Note, related documentation and this Agreement, and provided further
that Xxxxxxxxxx'x obligations and pledge pursuant to paragraph 10 hereof
shall not be released.
13. Nothing in this Agreement, the performance of the acts contemplated
herein or otherwise will alter the existing obligations of the Company to
the Receiver except to the extent that the Company has obligated itself
to perform in accordance with the terms hereof.
-3-
14. Nothing in this Agreement alters the rights and entitlements of the
Receiver to take action in connection with the outstanding defaults of
the Company or of Xxxxxxxxxx, including, without limitation, the right
to file either or both of the Affidavits, subject only to (a) the
agreement of the Receiver to forbear from filing the Xxxxxxxxxx
Affidavit until the earlier of (i) any default by Xxxxxxxxxx or the
Company hereunder and (ii) 90 days from the date hereof and (b) the
obligations of the Receiver under paragraphs 11 and 12 hereof.
15. Xxxxxxxxxx and the Company hereby agree to take all such further actions
and provide all such further documents as may be reasonably required by
the Receiver to effectuate the provisions of this Agreement.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT OR ANY FEDERAL COURT SITTING IN
THE STATE OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND EACH IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF SAID COURTS.
17. Any notice demand, or delivery authorized by this Agreement shall be
sufficiently given or made if sent by registered or certified mail, or
by recognized overnight courier service, postage prepaid, addressed to
the intended recipient at the address specified below its name on the
signature page hereof or such other address as shall have been furnished
in writing in accordance with this provision to the party giving or
making such notice, demand or delivery.
18. This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and each of their respective successors and assigns.
Nothing in this Agreement is intended or shall be construed to confer
upon any other person, any right, remedy or claim under or by reason of
this Agreement or any part hereof.
19. This Agreement may be executed in any number of counterparts and each
such counterpart shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.
-4-
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed, as of the date and year first written above.
/s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
XXXXXX X. XXXXXXXXXX
000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
BRIGHT TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXXXXX
----------------------------------------
Its: President
0000 Xxxxxx Xx.
Xxxxxxxxx, XX 00000
ERNST & YOUNG, INC., IN ITS CAPACITY AS
COURT-APPOINTED RECEIVER AND MANAGER
FOR TEE-COMM ELECTRONICS, INC.
By: /s/ XXXXXX XXXXXXX
----------------------------------------
Its: Sr. Vice President
Xxxxx & Xxxxx Xxxxx
X.X. Xxx 000
222 Bay Street, 00xx Xxxxx
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
-5-
