Exhibit 10-2
AGREEMENT AS TO BOARD MEMBERSHIP
THIS AGREEMENT AS TO BOARD MEMBERSHIP (this "Agreement"), dated as
of August 7, 1997, is entered into by and among Incomnet, Inc. (the
"Company"), Xxxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), Xxxxx Xxxxxxxx ("Xxxxxxxx")
and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx", and together with Xxxxxxxxx, Wilstein
and the Company, the "Parties").
RECITALS
A. On May 5, 1997, Wilstein, Xxxxxxxx and Messrs. Xxxxxxx
Xxxxxxxx and Xxxx Xxxxxxx filed a Schedule 13D with the Securities Exchange
Commission ("SEC") stating that they may be deemed to be a group pursuant to
SEC Rule 13d-5(b)(1) promulgated under Sections 13(d) and 13(g) of the
Securities Exchange Act of 1934 (the "Act").
X. Xxxxxxxxx, Wilstein, Xxxxxxxx have expressed a desire to
serve the Company as members of the Board of Directors of the Company (the
"Board").
C. The Company desires Xxxxxxxxx, Wilstein and Xxxxxxxx to join
the Board as directors.
NOW, THEREFORE, in consideration of the mutual agreements,
covenants, representations and warranties herein contained, the parties
hereby agree as follows:
1. CERTAIN DEFINITIONS.
"FFHSJ MEMORANDUM" shall mean that certain memorandum dated
June 23, 1997 by Xxxxx Xxxxxxx and Xxxxx Xxxx of Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx of Los Angeles, California, with regard to the ambiguity
in the charter documents of the Company as to the appropriate number of
directors to serve on the Company's Board.
"GROUP" shall mean a group as referenced in SEC Rule 13d-5
promulgated pursuant to Sections 13(d) and 13(g) of the Act.
2. BOARD COMPOSITION. As of the date hereof, for so long as
each of the individuals named herein shall agree to serve and until such time
as any successor directors shall be duly elected in accordance with the
Company's Bylaws, the Board of the Company shall consist of Xx. Xxxxxx
Xxxxxxxx, Xx. Xxxxx Xxxxxx, Mr. Xxxxxx Xxxxxxxxx, Xx. Xxxxxx Xxxxxxx, Xx.
Xxxxx Xxxxxxxx, Xx. Xxxxxxx X. Xxxxxxxx and Xx. Xxxxxxx X. Xxxxxxxxx.
3. LACK OF ASSURANCES The Parties acknowledge the issues raised
by the FFHSJ Memorandum. The Parties agree that any issues raised by the
FFHSJ Memorandum are merely of a technical nature and the Parties agree to
clarify the Company's Articles of Incorporation at the next meeting of the
Company's shareholders so as to resolve any existing uncertainty.
Notwithstanding anything in this Paragraph 3 to the contrary,
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the Parties acknowledge and agree that no Party has made any representation
to any other Party with respect to the issues raised in the FFHSJ Memorandum
as the same may relate to the service of any person on the Board, and that
all persons serving on the Board do so at their own risk with respect to any
liability in connection with the issues raised in the FFHSJ Memorandum.
4. INDEMNIFICATION. Notwithstanding anything in this Agreement
to the contrary, the Company agrees to hold harmless and indemnify all of the
persons named as directors in Paragraph 2 hereof, to the maximum extent
permitted by the General Corporation Law of California, against any expenses,
judgments, fines, settlements and other amounts actually and reasonably
incurred in connection with any causes of actions, suits or proceedings
arising by reason of the fact any such person is or was a director of the
Company.
5. D&O INSURANCE. The Company hereby agrees to use best efforts
to raise its Directors and Officers Insurance from $1,000,000 to $5,000,000.
6. DISCLAIM GROUP MEMBERSHIP. Wilstein and Xxxxxxxx hereby
agree that (i) they will not assert that any other director of the Company
should be deemed to be a member of the Group referenced in the Schedule 13D
filed on May 5, 1997 by Wilstein, Xxxxxxxx and the individuals referenced in
Recital A hereof solely by virtue of the execution and performance of this
Agreement by the parties hereto and (ii) the Company shall not be considered
to have endorsed the Group referenced in the Schedule 13D solely by virtue of
the execution and performance of this Agreement by the parties hereto.
7. DERIVATIVE SUITS. The parties agree that it shall be the
policy of the Board that, in view of the current condition of the Company and
the cost and expense of indemnifying officers and directors, the presumption
will be that the Board will not support (after a review of all the then
relevant facts and circumstances) any derivative action unless such action
pleads with particularity facts that give rise to a strong inference that a
director or directors acted in violation of his, her or their duty of loyalty
or duty of care to the Company, which policy is not applicable to the extent
that the exercise of a director's fiduciary duties under applicable law, in
light of the then relevant facts and circumstances, requires a different
standard for evaluating a specific matter then before the Board.
8. SHAREHOLDER MEETING; ARTICLES AMENDMENT The parties hereto
agree (i) to use their best efforts to cause the next annual meeting of the
shareholders of the Company to take place on September 22, 1997; (ii) to
approve, and recommend that the shareholders of the Company approve,
clarifying amendments to the Company's Articles of Incorporation and Bylaws,
as recommended to the Board by the Company's counsel and reasonably approved
by counsel to Wilstein and Xxxxxxxx, stating that the Board shall be
comprised of seven (7) members; and (iii) that each director will either (A)
support the election, at such meeting of shareholders, of a slate of
directors nominated by majority vote of the Board (which slate shall include
Wilstein, Xxxxxxxx and Xxxxxxxxx to the extent each of Wilstein, Xxxxxxxx and
Xxxxxxxxx shall have not resigned from the Board pursuant to Clause (B)
hereof); or (B) resign from the Board and subsequently nominate and support
any slate of directors that such persons may choose, provided, however, that,
in any case, no party shall be entitled (x) to take any action that would
cause the annual meeting to take place subsequent to September 22, 1997
(other than an assertion in an appropriate forum that an party has violated
the California General Corporation Law or the federal securities laws in
connection with such meeting provided, however, that no assertion shall be
made in any forum in opposition to the clarifying amendments described in
clause (ii) above) or (y) to solicit proxies in opposition to clarifying
amendments described in clause (ii) above. In
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the event that a director should resign from the Board pursuant to this
Section or should be unable or unwilling to continue to serve on the Board,
the Board shall then be entitled to fill such vacancy and/or to nominate and
support the election to the Board of such other person as the Board shall,
in its discretion, determine is appropriate.
9. CHOICE OF LAW. The parties agree that this Agreement shall
be governed by and construed in accordance with the laws of the State of
California, excluding any laws which would direct application of another
jurisdiction.
10. MISCELLANEOUS.
(a) This Agreement may not be amended or modified except by
written instrument signed by the Company, Xxxxxxxxx, Xxxxxxxx and Xxxxxxxx.
(b) This Agreement constitutes the entire agreement and
understanding among the Parties and supersedes all other prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof.
(c) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable under any applicable law, then such
contravention or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification shall render it
legal, valid and enforceable, then this Agreement shall be construed as if
not containing the provision held to be invalid, and the rights and
obligations of the Paries shall be construed and enforced accordingly.
(d) This Agreement may not be assigned.
(e) The Headings of the Sections of this Agreement have been
inserted for convenience of reference only and do not constitute a part of
this Agreement.
(f) This Agreement may be executed in any number of counterparts
and by the Parties in separate counterparts, with the same effect as if all
Parties had signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one and the
same instrument.
(g) When the context requires, the gender of all words used
herein shall include the masculine, feminine and neuter and the number of all
words shall include the singular and plural.
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IN WITNESS WHEREOF, the Company, Xxxxxxxxx, Wilstein and Xxxxxxxx
have caused this Agreement to be executed as of the date first written above.
INCOMNET, INC.
/s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx
President and Chief Executive Officer
/s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. Xxxxxxxxx
/s/ XXXXX XXXXXXXX
-------------------------
Xxxxx Xxxxxxxx
/s/ XXXXXXX X. XXXXXXXX
-------------------------
Xxxxxxx X. Xxxxxxxx
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