AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as
of this ____ day of January, 1998 by and among THRUCOMM, INC., a Florida
corporation whose address is 0000 Xxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx
00000 ("Thrucomm"), BLUE CHIP/DATALINC CORPORATION, a Delaware corporation (a
wholly-owned subsidiary of Blue Chip Capital Fund Limited Partnership, a
Delaware limited partnership) whose address is 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000 (the "Purchaser"), INTEGRATED COMMUNICATION NETWORKS,
INC., a Florida corporation whose address is 0000 Xxxxxxxx Xxxxxx Xxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000 ("ICN"), XXXX X. XXXXXXX, an individual with a mailing
address at 0000 Xxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000
("Xxxxxxx"), XXXX X. XXXXXXXX, an individual with a mailing address at 0000
Xxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000 ("Gianinni", and together
with Xxxxxxx, the "Shareholders"), and DATALINC, LTD., a Florida limited
partnership whose address is 0000 Xxxxxxxx Xxxxxx Xxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000 (the "Partnership").
WHEREAS, an agreement (the "First Agreement") was made and
entered into as of the 30th day of April, 1993 by and among the Purchaser, ICN,
the Shareholders and the Partnership; and
WHEREAS, an agreement (the "Second Agreement") was made and
entered into as of the 1st day of September, 1993 by and among the Purchaser,
ICN, the Shareholders and the Partnership; and
WHEREAS, pursuant and subject to the First Agreement and the
Second Agreement, the Partnership sold to the Purchaser, and the Purchaser
purchased from the Partnership, three hundred eighty (380) Series 300 Limited
Partnership Units of the Partnership (the "Purchaser Units"), and the Purchaser,
the Partnership, ICN and the Shareholders entered into certain agreements in
connection therewith; and
WHEREAS, pursuant to a Reorganization as described in the Form
S-4 Registration Statement filed with the Securities and Exchange Commission
(the "Commission") with respect to Thrucomm on September 3, 1997, as amended
(the "Registration Statement"), the assets of the Partnership were transferred
to Thrucomm, and the Partnership acquired all of the common stock and certain
preferred stock of Thrucomm (the "Reorganization"); and
WHEREAS, an agreement (the "Third Agreement") was made and
entered into as of the 27th day of August, 1997 by and among Thrucomm and the
parties to the First Agreement and the Second Agreement, pursuant to which
Thrucomm and the parties to the First Agreement and the Second Agreement made
certain agreements in connection with the Reorganization; and
WHEREAS, Thrucomm and the parties to the First Agreement, the
Second Agreement and the Third Agreement (collectively, the "Agreements") now
desire to make certain modifications to the Agreements and other agreements, as
more particularly set forth herein.
-1-
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties hereby agree as follows:
1. Certain Definitions. As used herein, the following terms shall have the
following meanings:
"Thrucomm Board" shall mean the Board of Directors of Thrucomm.
"Mandatory Conversion Event" shall have the meaning set forth in the
Registration Statement.
"Determination Date" shall mean the earlier to occur of (a) December 31,
2000 or (b) the date of the occurrence of a Mandatory Conversion Event.
"MRA" shall mean Seven Million Two Hundred Thousand Dollars ($7,200,000),
subject to reduction as follows:
(a) If any Purchaser Units are sold by the Purchaser prior to the
earlier to occur of June 30, 1999 or the Determination Date, the
MRA shall be reduced by the same percentage that the number of
Purchaser Units so sold by the Purchaser bears to the total
number of Purchaser Units owned by the Purchaser on the date of
this Agreement; and
(b) If any Purchaser Units are sold by the Purchaser on or after June
30, 1999 but prior to the Determination Date, the MRA shall be
reduced by an amount equal to the greater of (i) the amount of
proceeds (net of any reasonable expenses incurred in connection
therewith) received by the Purchaser from the sale of such
Purchaser Units or (ii) in the event that ICN and the
Shareholders seek such a determination, an amount equal to the
amount which the Thrucomm Board determines in good faith is the
price which reasonably should be accepted for the sale of such
Purchaser Units at that time, taking into account the facts and
circumstances existing at that time, less the amount of expenses
which the Thrucomm Board determines in good faith might
reasonably be incurred in connection therewith.
"FMV" shall mean:
(a) If a Mandatory Conversion Event has not occurred on or prior to
December 31, 2000, the market value as of December 31, 2000 of
the Purchaser Units then owned by the Purchaser, as determined in
good faith by the Thrucomm Board, assuming sale within a period
of not more than four (4) weeks and net of any expenses that
might reasonably be incurred in connection with such sale as
determined in good faith by the Thrucomm Board; or
(b) If a Mandatory Conversion Event has occurred on or prior to
December 31, 2000, the market value of the shares of common stock
of Thrucomm received by the Purchaser upon conversion of
Thrucomm's Mandatory Convertible Preferred Stock, Series D and
Series E (as described in the Registration Statement) as of the
date of receipt thereof, as determined in good faith by the
Thrucomm Board, assuming sale within a period of not more than
-2-
four (4) weeks and net of any expenses which might reasonably be
incurred in connection with such sale as determined in good faith
by the Thrucomm Board; provided, however, that if the Purchaser
disagrees with the market value determined by the Thrucomm Board
in either such situation (a) or (b) above, the Purchaser shall be
entitled to retain, at the expense of Thrucomm, a nationally
recognized investment banking firm reasonably acceptable to the
Thrucomm Board to provide a determination of such market value,
and in such event the determination of such firm as to such
market value shall be determinative and shall be the FMV.
"Deficiency Amount" shall be determined as of the Determination Date and
shall mean (a) if the FMV is then equal to or greater than the MRA, zero,
or (b) if the MRA is then greater than the FMV, the difference between the
MRA and the FMV, subject to reduction as described in Paragraph 2 below.
"Escrow Agent" shall mean a financial institution reasonably acceptable to
the Purchaser.
"Escrow Agreement" shall mean an Escrow Agreement among the Purchaser, the
Partnership, Thrucomm, ICN, the Shareholders and the Escrow Agent in
substantially the form of Exhibit A attached hereto.
"Escrow Account" shall mean the escrow account established pursuant to the
Escrow Agreement.
"Reasonable Preferred Stock Sale Price" shall mean the price which the
Thrucomm Board in good faith determines is the price which reasonably
should be accepted for the sale of the Escrowed Preferred Stock or the
portion thereof then sold or proposed to be sold, taking into account the
facts and circumstances existing at the time of such sale, less the amount
of expenses which the Thrucomm Board determines in good faith might
reasonably be incurred in connection therewith.
"Reasonable Common Stock Sale Price" shall mean the price which the
Thrucomm Board in good faith determines is the price which reasonably
should be accepted for the sale of the Escrowed Common Stock or the portion
thereof then sold or proposed to be sold, taking into account the facts and
circumstances existing at the time of such sale, less the amount of
expenses which the Thrucomm Board determines in good faith might reasonably
be incurred in connection therewith.
2. Escrow.
(a) Deposit of Escrowed Preferred Stock. Within thirty (30) days after the
date of this Agreement, the Purchaser, the Partnership, Thrucomm, ICN,
the Shareholders and the Escrow Agent shall enter into the Escrow
Agreement and the Partnership shall deposit forty-five percent (45%)
of Thrucomm's Mandatory Convertible Preferred Stock, Series G, as
described in the Registration Statement (the "Escrowed Preferred
Stock"), into the Escrow Account. Simultaneously with depositing the
Escrowed Preferred Stock into the Escrow Account, the Partnership
shall deposit stock powers with respect to the Escrowed Preferred
Stock, duly executed in blank, into the Escrow Account, which shall
only be released from the Escrow Account for the purpose of
effectuating sale of the Escrowed Preferred Stock or any portion
-3-
thereof in accordance with the terms of this Agreement or when the
Escrow Account is closed in accordance with the terms of this
Agreement.
(b) Restrictions on Sale and Release of Escrowed Preferred Stock. No
Escrowed Preferred Stock may be sold or otherwise released from the
Escrow Account, except that (i) the Purchaser may at any time direct
that the Escrowed Preferred Stock or any portion thereof be sold, (ii)
at any time after June 30, 1999, ICN and the Shareholders may direct
that the Escrowed Preferred Stock or any portion thereof be sold, but
only if such Escrowed Preferred Stock is sold at a price no less than
the Reasonable Preferred Stock Sale Price, and (iii) the Escrowed
Preferred Stock shall be released from the Escrow Account (A) in
connection with a Mandatory Conversion Event or (B) if a Mandatory
Conversion Event has not occurred on or prior to December 31, 2000,
but the Deficiency Amount as of that date is zero; in each case
subject to the terms hereinafter set forth.
(c) Sale of Escrowed Preferred Stock Prior to Determination Date. Upon any
sale of Escrowed Preferred Stock as permitted in Paragraph 2(b) above
prior to the Determination Date, all proceeds from such sale shall be
deposited into the Escrow Account, and such proceeds and any interest
or income thereon (the "Escrowed Proceeds") shall remain in the Escrow
Account until the date of determination of the Deficiency Amount as of
the Determination Date or up to ten (10) days thereafter. If as of the
Determination Date the Deficiency Amount is zero, the Escrowed
Proceeds shall be released to ICN, and the Escrow Account shall be
closed. If as of the Determination Date the Deficiency Amount is
greater than zero, the Deficiency Amount shall be reduced by an amount
equal to the greater of (i) the amount of the Escrowed Proceeds or
(ii) with respect to any sale directed by the Purchaser, the amount of
the Reasonable Preferred Stock Sale Price, and the Escrowed Proceeds
shall be released to the Purchaser up to an amount equal to the
Deficiency Amount as so reduced. If as a result of the release of
Escrowed Proceeds to the Purchaser the Deficiency Amount is reduced to
zero, the balance of the Escrowed Proceeds shall be released to ICN,
and the Escrow Account shall be closed.
(d) Release of Escrowed Preferred Stock if Deficiency Amount is Zero. If a
Mandatory Conversion Event has not occurred on or prior to December
31, 2000, but the Deficiency Amount as of that date is zero, all
Escrowed Preferred Stock shall be released to ICN and the Escrow
Account shall be closed.
(e) Sale of Escrowed Preferred Stock After December 31, 2000. Upon any
sale of Escrowed Preferred Stock as permitted in Paragraph 2(b) above
on or after December 31, 2000 but prior to the date of a Mandatory
Conversion Event, the Deficiency Amount shall be reduced by an amount
equal to the greater of (i) the amount of the proceeds of such sale or
(ii) with respect to any sale directed by the Purchaser, the amount of
the Reasonable Preferred Stock Sale Price, and such proceeds shall be
remitted to the Purchaser up to an amount equal to the Deficiency
Amount as so reduced. If as a result of the remittance of such
proceeds to the Purchaser the Deficiency Amount is reduced to zero,
the balance of such proceeds shall be remitted to ICN, and the Escrow
Account shall be closed.
-4-
(f) Release of Escrowed Preferred Stock Upon Mandatory Conversion Event;
Deposit of Escrowed Common Stock. Upon the occurrence of a Mandatory
Conversion Event (i) if the Deficiency Amount is then zero, the
Escrowed Preferred Stock shall be released from the Escrow Account and
the Escrow Account shall be closed, or (ii) if the Deficiency Amount
is then greater than zero, the Escrowed Preferred Stock shall be
exchanged for the common stock of Thrucomm received upon conversion of
the Escrowed Preferred Stock in connection with the Mandatory
Conversion Event (the "Escrowed Common Stock") and the Escrowed Common
Stock shall be deposited into the Escrow Account. Simultaneously with
depositing the Escrowed Common Stock into the Escrow Account, the
owners or holders thereof shall deposit stock powers with respect to
the Escrowed Common Stock, duly executed in blank, into the Escrow
Account, which shall only be released from the Escrow Account for the
purpose of effectuating sale of the Escrowed Common Stock or any
portion thereof in accordance with the terms of this Agreement or when
the Escrow Account is closed in accordance with the terms of this
Agreement.
(g) Restrictions on Sale and Release of Escrowed Common Stock. No Escrowed
Common Stock may be sold or otherwise released from the Escrow
Account, except that (i) ICN and the Shareholders may at any time
direct that the Escrowed Common Stock or any portion thereof be sold,
but only if such Escrowed Common Stock is sold at a price no less than
the Reasonable Common Stock Sale Price, and (ii) the Purchaser may at
any time direct that the Escrowed Common Stock or any portion thereof
be sold.
(h) Sale of Escrowed Common Stock. Upon any sale of Escrowed Common Stock,
the Deficiency Amount shall be reduced by an amount equal to the
greater of (i) the amount of the proceeds of such sale or (ii) with
respect to any sale directed by the Purchaser, the amount of the
Reasonable Common Stock Sale Price, and such proceeds shall be
remitted to the Purchaser up to an amount equal to the Deficiency
Amount as so reduced. If as a result of the remittance of such
proceeds to the Purchaser the Deficiency Amount is reduced to zero,
the balance of such proceeds shall be remitted to ICN, and the Escrow
Account shall be closed.
(i) Close of Escrow Account. In addition to the closing of the Escrow
Account in the circumstances described above in this Paragraph 2, the
Escrow Account shall be closed when all Escrowed Preferred Stock or
Escrowed Common Stock has been sold in a manner permitted under this
Paragraph 2.
(j) Cooperation. The parties hereto agree to execute such documents and
instruments and take such other action as may reasonably be deemed
appropriate by any of the others in order to effectuate the sale or
release of any Escrowed Preferred Stock or Escrowed Common Stock
pursuant to this Paragraph 2 or otherwise to effectuate the matters
contemplated under this Paragraph 2.
(k) Prior Escrow Account. Upon the opening of the Escrow Account, the
Escrow Agreement between the Purchaser, ICN, the Partnership, the
Shareholders and Star Bank, National Association dated as of September
1, 1993 shall be closed.
3. ICN and Thrucomm Board of Directors.
-5-
(a) ICN. The provisions of Paragraph 2(a) of the Third Agreement shall
continue in full force and effect.
(b) Thrucomm Directors Prior to Mandatory Conversion Event. At all times
prior to the occurrence of a Mandatory Conversion Event, the
Partnership shall vote its shares of Thrucomm to elect and shall
continue to maintain a Board of Directors of Thrucomm of not less than
five (5) and not more than nine (9) persons, consisting at least of
(i) an individual nominated by the Purchaser, (ii) an individual
nominated by a majority-in-interest of the Limited Partners of the
Partnership other than the Purchaser, (iii) an individual proposed by
ICN and reasonably acceptable to the Purchaser and to the individual
nominated thereto by the Limited Partners of the Partnership other
than the Purchaser, and (iv) so long as he desires, Xx. Xxxxxxx
Xxxxxxx. In connection therewith, the Partnership and Thrucomm shall:
(A) cause all certificates representing shares of Thrucomm's Mandatory
Convertible Preferred Stock, Series G, to reflect that the Partnership
has agreed to elect members of the Board of Directors as required
under this Paragraph 3(b) and that a copy of this Agreement may be
obtained from Thrucomm; (B) not permit or suffer to exist the Articles
of Incorporation or ByLaws of Thrucomm to contain any provisions which
would contravene or otherwise be inconsistent with the provisions of
this Paragraph 3(b); and (C) provide to the Purchaser such evidence as
the Purchaser may reasonably request from time to time with respect to
compliance by the Partnership with the provisions of this Paragraph
3(b).
(c) Thrucomm Directors After Mandatory Conversion Event. Upon a Mandatory
Conversion Event and thereafter so long as any Escrowed Common Stock
remains in the Escrow Account, ICN and the Shareholders shall vote
their shares of Thrucomm for election to the Board of Directors of
Thrucomm of an individual designated by the Purchaser.
4. Transfer of Interests.
(a) The Partnership and ICN. The provisions of Paragraph 3(a) of the Third
Agreement shall continue in full force and effect.
(b) Thrucomm. Neither ICN nor either of the Shareholders may transfer any
portion of the Escrowed Preferred Stock or the Escrowed Common Stock,
except in accordance with the provisions of Paragraph 2 above.
5. Life Insurance. The provisions of Paragraph 4 of the Third Agreement shall
continue in full force and effect.
6. Registration.
(a) Partnership Registration. The provisions of Paragraph 5(a) of the
Third Agreement shall continue in full force and effect.
(b) Thrucomm Registration. Contemporaneously with the execution of this
Agreement, Thrucomm, the Purchaser and Blue Chip Capital Fund Limited
Partnership shall enter into a Registration Rights Agreement in
substantially the form attached hereto as Exhibit B.
7. Rights of First Refusal. The provisions of Paragraph 6 of the Third
Agreement shall continue in full force and effect.
-6-
8. Legal Fees and Expenses. Except as otherwise provided in Paragraph 5 of the
Third Agreement, the Partnership, Thrucomm and ICN, jointly and severally,
agree to pay all legal fees and expenses incurred by the Purchaser or any
of its affiliates in connection with the consummation of the transactions
contemplated under this Agreement, such fees and expenses to be paid within
thirty (30) days after the date hereof.
9. Representations and Warranties. Thrucomm, the Partnership, ICN and the
Shareholders jointly and severally represent and warrant to the Purchaser
that:
(a) Due Execution. This Agreement has been duly executed and delivered by
Thrucomm, the Partnership, ICN and the Shareholders, as applicable,
and authorized by all requisite partnership action on the part of the
Partnership and all requisite corporate action on the part of ICN and
Thrucomm, and constitutes the legal, valid and binding obligation of
each such party, enforceable against such party in accordance with its
terms.
(b) No Violation. The execution and delivery of this Agreement by
Thrucomm, the Partnership, ICN and the Shareholders, as applicable,
and the performance by them of their obligations hereunder, do not
constitute any violation of any applicable law or any provision of the
Partnership Agreement or the Articles of Incorporation, By-Laws or
other organizational or governing documents of ICN or Thrucomm, or any
other agreement or governmental restriction to which any of them is a
party or by which any of them is bound, or require the consent or
approval of the Limited Partners of the Partnership or any other
person or entity.
10. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
(b) No Broker. Each of the parties hereto represents and warrants that,
except as described in the succeeding sentence, it has dealt with no
broker or finder in connection with any of the transactions
contemplated hereunder, and no broker, finder or other person is or
will be entitled to any commission, finder's fee or other compensation
as a result of consummation of the transactions contemplated
hereunder. The Partnership, ICN and the Shareholders represent to the
Purchaser that CFG Securities Corp. ("CFG") and/or an affiliate of CFG
has acted as a broker for them in connection with the transactions
contemplated hereunder, and covenant with the Purchaser that they
shall pay all commissions and other compensation due to CFG and any
such affiliate on or prior to the date due.
(c) Modification; Waiver. No modification or amendment of this Agreement
shall be binding unless executed in writing by all parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof, nor shall any
waiver constitute a waiver of the same provision on any other
occasion. No waiver of any of the provisions hereof shall be binding
unless executed in writing by the party making such waiver.
-7-
(d) Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
(e) Notices. All notices required under this Agreement shall be in writing
and shall be deemed to have been given on the date of personal
delivery, or of deposit in the United States mail, postage prepaid, by
registered or certified mail, return receipt requested, or of delivery
to a nationally-recognized overnight courier service with arrangements
made by the sender for payment therefor, addressed to the parties at
their addresses set forth above, or such other addresses as any party
has notified the others as provided herein.
(f) Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
(g) Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
(h) Headings. The headings of paragraphs and subparagraphs of this
Agreement are included for convenience of reference only and shall not
be considered in construing any provisions contained therein.
(i) Remedies. The Partnership, ICN, Thrucomm and the Shareholders
acknowledge and agree that in the event of breach of any of the
provisions of Paragraphs 3, 4 and 7 above, the Purchaser would sustain
irreparable injury, and Thrucomm, the Partnership, ICN and the
Shareholders recognize that money damages for such breach would be
difficult or impossible to ascertain. Thrucomm, the Partnership, ICN
and the Shareholders therefore agree that the Purchaser shall be
entitled, in addition to any other remedies and damages available, to
an injunction to restrain the violation of any of such provisions.
(j) Third Party Beneficiaries. Neither the Limited Partners of the
Partnership nor any other person or entity shall be deemed third party
beneficiaries with respect to any provision of this Agreement, except
that the Limited Partners shall be deemed third party beneficiaries
with respect to the provisions of Paragraph 6(b) of the Third
Agreement.
(k) Conflict. In the event of any conflict between the provisions of this
Agreement and any provisions of the Third Agreement, the provisions of
this Agreement shall be controlling. Without limiting the generality
of the foregoing, it is hereby acknowledged by the parties hereto that
Paragraphs 1, 2(b), 2(c), 3(b), 3(c), 5(b), 5(c), 5(d) and 5(e) of the
Third Agreement are deleted and no longer in force and effect.
-8-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
BLUE CHIP/DATALINC CORPORATION
By: _______________________________
Title: ____________________________
INTEGRATED COMMUNICATION NETWORKS, INC.
By: _______________________________
Title: ____________________________
-----------------------------------
XXXX X. XXXXXXX
-----------------------------------
XXXX X. XXXXXXXX
DATALINC, LTD.
By: Integrated Communication
Networks, Inc., its
General Partner
By: __________________________
Title: _______________________
THRUCOMM, INC.
By: __________________________
Title: _______________________
-9-
