EXHIBIT 10.3
INTRATEL ACQUISITION COMPANY, INC.
The Oaks
000 Xxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
March 12, 1997
Xx. Xxxxx X. Xxxxxxxxxx
Xx. Xxxxx Xxxxxx
00000 X.X. 00 Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Re: Stock Purchase Transaction (the "Transaction") between IntraTe1
Acquisition Company, Inc., a Delaware corporation ("IntraTel"),
and Xxxxx Xxxxxxxxxx ("Kanstoroom") and Xxxxx Xxxxxx ("Spezza")
(together, the "Selling Stockholders")
Gentlemen:
This letter is being delivered as a material inducement to you to
enter into that certain Stock Purchase Agreement of even date herewith (the
"Stock Purchase Agreement") between IntraTel and the Selling Stockholders
and the related documents comprising the "Purchase Consideration" (as
defined in the Stock Purchase Agreement). [The Stock Purchase Agreement
and such other documents are collectively referred to herein as the "Stock
Purchase Documents".] Reference is also made to that certain Letter of
Intent, dated January 23, 1997 (the "Letter of Intent"), between IntraTel,
the Selling Stockholders, Telcom Venture & Acquisition Corp., a Delaware
corporation ("TVAC"), and Intelicom Corporation, a Delaware corporation
("Intelicom").
IntraTel hereby covenants and agrees as follows:
1. The obligations of the Selling Stockholders under the Stock
Purchase Documents shall be subject to the following conditions precedent
(the "Conditions Precedent"):
a. Prior to the action of the Intelicom stockholders described
in paragraph 1b below, the "Outside Shareholders" (as defined in the Letter
of Intent) shall have been provided with complete copies of (i) the Stock
Purchase Documents, (ii) the Letter of Intent,
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(iii) that certain Agreement of Merger between Intelicom and IntraTel,
dated March __, 1997 (the "Merger Agreement"), (iv) the Employment
Agreements to be entered into between each of Kanstoroom and Spezza, on the
one hand, and Intelicom, on the other hand, and (v) any other material
documents and instruments contemplated to be executed in connection with
the foregoing (collectively, the "Transaction Documents").
b. The transactions contemplated by the Merger Agreement shall
have been approved (either at a duly held meeting of the stockholders of
Intelicom or by written consent) by all (and not less than all) of the
record owners of the issued and outstanding capital stock of Intelicom,
without exception, after satisfaction of the condition precedent described
in paragraph 1a above.
c. In the event that the condition stated in paragraph 1b above
is not fully and completely satisfied, a nationally-recognized investment
banking firm shall deliver a "fairness opinion", in form and content
reasonably satisfactory to the Selling Stockholders, as to the adequacy of
consideration to all parties affected by the transactions contemplated
under the Merger Agreement.
d. IntraTel pays to Kanstoroom and Spezza the sum of Fifty
Thousand Dollars ($50,000) each by wire transfer or certified funds, in
accordance with Section I.A.1 of the Stock Purchase Agreement.
2. Unless and until the Conditions Precedent are fully and
completely satisfied, the executed originals of the Stock Purchase
Documents and the other Transaction Documents shall be held in escrow by
Nowalsky & Xxxxxxxx, LLP (the "Escrow Agent") and shall be of no force or
effect. If the Conditions Precedent are not fully and completely satisfied
on or before June 30, 1997, then, at any time thereafter, Kanstoroom and
Spezza may require Escrow Agent to return the Shares (as defined in the
Stock Purchase Agreement) to them, in which case the Escrow Agent shall
promptly distribute the Certificates representing the Shares to Kanstoroom
and Spezza and the transactions contemplated by the Stock Purchase
Documents shall automatically terminate and be of no force or effect. All
representations, warranties and covenants of or by IntraTel under this
letter or any of the Transaction Documents shall be deemed restated as of
the date, if any, that Escrow Agent releases the Transaction Documents
pursuant to this paragraph 2.
3. Notwithstanding any termination of Kanstoroom's and/or Spezza's
employment with Intelicom, each of them will, in any and all events, be
retained by Intelicom as unpaid consultants in order to ensure their
eligibility to receive the contingent consideration provided
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for in Section I.A.3 of the Stock Purchase Agreement and Section II.A.2 of
the Letter of Intent.
4. Kanstoroom and Spezza shall each receive, with respect to their
shares of stock of Intelicom and any stock options, warrants or other
rights that they may receive in connection with their employment with
Intelicom, such registration rights and other rights and benefits as the
other senior executives of Intelicom, IntraTel, PVCI (as defined in the
Letter of Intent), IntraSoft (as defined in the Letter of Intent) and any
other of the Combined Companies (as defined in the Letter of Intent), on a
PRO RATA and PARI PASSU basis. In addition, in no event shall Kanstoroom's
and/or Spezza's Intelicom stock be subject to lockup or other restrictions
of any greater duration or upon more disadvantageous terms than are
applicable to other stockholders of Intelicom (except for the Outside
Shareholders), whether before or after Closing (as defined in the Letter of
Intent).
5. Promptly following the date hereof but, in any event, before
Closing under the Merger Agreement, IntraTel shall issue to each of
Kanstoroom and Spezza 93 shares of IntraTel common stock (each representing
4.65% of the total issued and outstanding shares of IntraTel), which, upon
closing under the Merger Agreement, shall be converted into shares of
Intelicom common stock.
6. For purposes of its acquisition of shares of Intelicom common
stock under the Stock Purchase Agreement and under the Merger Agreement
(collectively, the "Intelicom Shares"), IntraTel hereby represents and
warrants as follows:
a. IntraTel and its representative(s), if any, understand and
have evaluated the merits and risks of an investment in the Intelicom
Shares and have been given the opportunity to obtain information and to
examine all documents relating to Intelicom, and have been given the
opportunity to obtain information and to examine all documents relating to
Intelicom and Intelicom's business and to ask questions of, and to receive
answers from, Intelicom or any person acting on its behalf concerning
Intelicom and the terms and conditions of this investment, and to obtain
any additional information, to the extent Intelicom possesses such
information or could acquire it without unreasonable effort or expense, to
verify the accuracy of any information previously furnished. All such
questions have been answered to IntraTel's full satisfaction and all books
and records pertaining to this investment that IntraTel has requested have
been made available to IntraTel.
b. IntraTel confirms that neither Intelicom nor any of its
affiliates or agents have made any representations or warranties concerning
the profitability resulting
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from an investment in Intelicom, including, without limitation, any
representations or warranties concerning the anticipated financial results
of the operations of Intelicom.
c. IntraTel is acquiring the Intelicom Shares solely for its
own account, as principal, for investment and not for the interest of any
other person and not with a view to, or in connection with, any resale,
distribution, subdivision or fractionalization. IntraTel has no agreement
or other arrangement with any person to sell, transfer or pledge any part
of the Intelicom Shares subscribed for or which would guarantee IntraTel
any profit or against any loss with respect to such the Intelicom Shares,
and IntraTel has no plan to enter into any such agreement or arrangement.
d. IntraTel is an "accredited investor", as such term is
defined in Rule 501(a) of Regulation D, promulgated under the Securities
Act of 1933, as amended (the "Act").
e. IntraTel understands that no Federal or state agency has
passed on or made any recommendations or endorsements of an investment in
the Intelicom Shares, nor has it been reviewed by the Attorney General of
any state or jurisdiction, because of Intelicom's representations that this
is intended to be a non-public offering pursuant to Section 4(2) of the Act
or Rule 506 of Regulation D promulgated thereunder. IntraTel understands
that any offering literature used in connection with this offering has not
been prefiled with, or reviewed by, any Federal or state agency.
f. IntraTel covenants and agrees that the Intelicom Shares
shall not be sold, assigned, transferred or otherwise disposed of unless
(i) such sale, assignment, transfer or other disposition is exempt from
registration under the Act and the applicable state securities or
registration under the Act and the applicable state securities or "Blue
Sky" law or laws and, if Intelicom so requests, an opinion satisfactory to
the Intelicom to such effect has been rendered by counsel satisfactory to
Intelicom or (ii) a registration statement covering the Intelicom Shares is
effective under the Act.
7. To the extent that the terms of the Letter of Intent, on the one
hand, and the other Transaction Documents, on the other hand, are
inconsistent or in conflict with each other, such terms shall be construed
and enforced in order to provide Kanstoroom and Spezza with the maximum
rights and benefits available thereunder.
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8. At Closing under the Merger Agreement, Intelicom shall enter into
those certain Employment Agreements with each of Kanstoroom and Spezza in
the forms attached hereto as Exhibit A.
This letter is legally binding upon IntraTel and its successors and
assigns and shall be construed and enforced in accordance with the laws of
the State of Florida.
Please indicate your agreement to the foregoing by executing the
enclosed copy of this letter in the space provided below.
Very truly yours,
INTRATEL ACQUISITION COMPANY,
INC.
By: /s/ XXXXXX X. XXX
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Xxxxxx X. Xxx, XX,
Chairman
ACCEPTED AND AGREED:
/s/ XXXXX XXXXXXXXXX
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Xxxxx Xxxxxxxxxx
Date:-----------------------
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
Date:-----------------------
