EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT (this "Agreement"), is executed on this 30th day of
December, 1997 by ChatCom Inc., a California corporation (the "Company"), on the
one hand and by The High View Fund and The High View Fund, L.P. (individually, a
"Shareholder" and collectively, the "Shareholders") on the other.
RECITALS
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WHEREAS, pursuant to that certain Purchase Agreement, dated as of December
9, 1996 (the "1996 Purchase Agreement"), entered into by the parties hereto,
each of the Shareholders purchased 1,248 shares of the Company's Series D
Convertible Preferred Stock (the "Preferred Shares") and warrants (the "1996
Warrants") to purchase 200,000 shares of the Company's common stock, no par
value per share (the "Common Stock"); and
WHEREAS, on September 25, 1997 the Shareholders and the Company entered
into that certain Stock Exchange Agreement (the "Stock Exchange Agreement")
pursuant to which the Shareholders intended to (i) exchange their Preferred
Shares for a total of 2,000,000 shares (the "Company Shares") of Common Stock,
(ii) return their 1996 Warrants to the Company for cancellation, (iii) convert a
$350,000 cash advance made by the Shareholders in May 1997 to the Company into a
total of 292,138 shares of Common Stock, and (iv) acquire new warrants to
purchase a total of 1,000,000 shares of Common Stock; and
WHEREAS, the consummation of the transactions contemplated by the Stock
Exchange Agreement was subject to certain conditions precedent, which conditions
the Shareholders believe were not satisfied; and
WHEREAS, the Shareholders are willing to provide the Company with
additional financing provided that the dispute between the parties hereto
regarding the satisfactions of the conditions precedent in the Stock Exchange
Agreement is resolved.
NOW, THEREFORE, in consideration of the promises and mutual covenants and
obligations hereinafter set forth, the Company and the Shareholders hereby agree
as follows:
ARTICLE 1
CANCELLATION OF STOCK EXCHANGE AGREEMENT TRANSACTIONS
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1.1 Cancellation of Stock Exchange Agreement and Related Agreements.
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Subject to the satisfaction of all terms and conditions of this Agreement, the
parties hereto agree that
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the Stock Exchange Agreement shall be terminated and cancelled effective as of
September 25, 1997 and that all transactions purported to be effected pursuant
to the Stock Exchange Agreement shall be revoked, rescinded and declared void ab
initio. In addition, upon the closing of the transactions contemplated hereby,
that certain Registration Rights and Lock-Up Agreement, dated as of September
25, 1997 and entered into by the parties hereto, shall be terminated and
cancelled. Notwithstanding anything in this Agreement to the contrary, nothing
in this Agreement or in any other document delivered in connection herewith
shall affect the Stipulation of Settlement entered into by the United Stated
District Court, Southern District of New York, or the Stipulation of Settlement
entered into by the Supreme Court of the State of New York, County of New York.
1.2 Return of Securities. Subject to the satisfaction of all of the terms
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and conditions set forth in this Agreement, at the closing, each party hereto
agrees to return to the other party all stock certificates and warrants
delivered to it under the Stock Exchange Agreement, which deliveries shall
consist of the following:
(a) Each Shareholder shall deliver to the Company the Warrant to
Purchase Common Stock of ChatCom, Inc. (representing the right to purchase
500,000 shares of Common Stock at a price of $1.75 per share), dated September
25, 1997, issued in its name (the "1997 Warrants").
(b) Each Shareholder shall deliver to the Company the stock
certificate representing the 1,224,351 shares of Common Stock received by the
Shareholder on September 25, 1997, which certificates shall be duly endorsed for
cancellation (or accompanied by a duly executed assignment form separate from
certificate) by each such Shareholder.
(c) The Company shall deliver to the Shareholders the warrant
certificate No. D-1 and No. D-2, representing all of the 1996 Warrants.
(d) The Company shall deliver to the Shareholders stock certificate
No. 1 and No. 2, representing all of the Preferred Shares purchased by the
Shareholders on December 13, 1996 under the 1996 Purchase Agreement.
The parties hereto agree to cause each of the securities, documents or
other materials referred to in this Section 1.2 that is in their possession to
be delivered to Brock Fensterstock Silverstein McAuliffe & Wade LLC, One
Citicorp Center 56th Floor, New York, NY 10022 (the "Escrow Agent") by no later
than the first business day after the date of this Agreement.
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1.3 Issuance of Promissory Note. At the Closing, the Company agrees to
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issue to the Shareholders one or more promissory notes, in the form attached
hereto as Exhibit 1.3 (collectively, the "Promissory Notes"), having an
aggregate principal balance of $350,000, which notes shall evidence the $350,000
of advances made in May 1997 by the Shareholders to the Company.
1.4 Reinstatement of Agreement. The parties hereto agree, that subject to
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the satisfaction of the terms and conditions of this Agreement, the 1996
Purchase Agreement and all documents, certificates and other materials delivered
by the parties in connection with the 1996 Purchase Agreement shall continue in
full force and effect and, in the event that the 1996 Purchase Agreement or any
such other document or certificate is deemed to have been cancelled or
superseded by the Stock Exchange Agreement or any document delivered in
connection with the Stock Exchange Agreement, that the 1996 Purchase Agreement
and such other document or certificate is hereby reinstated effective as of the
date the 1996 Purchase Agreement or such other document or certificate was
dated.
ARTICLE 2
CONVERTIBLE NOTE/NEW WARRANTS
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2.1 Sale of Convertible Note/New Warrants. Subject to the terms and
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conditions hereof, the Company agrees to sell to the Shareholders, and the
Shareholders hereby agree to purchase from the Company (i) one or more
convertible notes of the Company having an aggregate principal amount of
$540,000, which convertible notes shall be in the form attached hereto as
Exhibit 2.1 (the "Convertible Note"), and (ii) a warrant to purchase an
aggregate of 150,000 shares of Common Stock (the "New Warrants").
ARTICLE 3
CLOSING
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3.1 Closing. The closing of the transactions contemplated by this
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Agreement shall take place on the first business day following the date on which
all of the documents, securities and other materials referred to in Section 1.2
are in the possession of Escrow Agent, or at such other time as the parties
mutually agree; provided however, that the closing shall occur on or before
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December 31, 1997. The date on which the transactions contemplated hereby are
effected is hereinafter referred to as the "Closing Date." At the closing, the
Escrow Agent shall confirm that $540,000 has been paid to the Company by wire
transfer by the Shareholders and shall thereafter (i) deliver to the
Shareholders the 1996 Warrants, the Convertible Notes, the Promissory Notes, the
New Warrants
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and Preferred Share certificates No. 1 and No. 2, and (ii) deliver to the
Company the stock certificates representing the 1,224,351 shares of Common Stock
held in the name of each of the Shareholders, and each of the 1997 Warrants.
If, on or before December 31, 1997 the closing has not occurred, then the
Escrow Agent, as soon as reasonably practicable thereafter, shall return to
each party hereto all securities, notes and other materials delivered to the
Escrow Agent by such party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES BY THE COMPANY
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The Company represents and warrants to each Shareholder that as of the date
hereof and again as of the Closing Date:
4.1 Organization, Good Standing. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
California, and is duly qualified and authorized to do business and in good
standing in each other jurisdiction in which it is required to be qualified or
where it owns any material property or conducts any material operations. The
Company is not in violation of its Articles of Incorporation or By-Laws as in
effect on the date hereof. The Company has all requisite power, authority and
legal right to conduct its business as now being conducted.
4.2 Preferred Shares. The Certificate of Determination and Decrease of
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ChatCom, Inc. filed with the Office of the Secretary of State of the State of
California on December 6, 1996 with respect to the Preferred Shares remains in
full force and effect and has not been amended since the date of such filing. As
of the date hereof, other than the 2,496 shares of the Preferred Shares
previously issued to the Shareholders, no other shares of the Preferred Shares
have been issued or are currently outstanding. In addition to the Preferred
Shares, there are a total of 1,100 shares of the Company's Series E Convertible
Redeemable Preferred Stock currently issued and outstanding.
4.3 Authority Relative to this Agreement. The execution, delivery and
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performance of, and compliance with, this Agreement have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement is
a valid and binding agreement of the Company enforceable in accordance with its
terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and general principles of equity.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDERS
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Each Shareholder hereby represents and warrants to the Company that as of
the date hereof and again as of the Closing Date:
5.1 Authority Relative to this Agreement. The execution, delivery and
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performance of, and compliance with, this Agreement have been duly authorized by
all necessary action on the part of such Shareholder, and this Agreement is a
valid and binding agreement of such Shareholder enforceable in accordance with
its terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and general principles of equity.
5.2 Investment Intent. The Convertible Notes, the Promissory Notes, the
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New Warrants and the shares of Common Stock issuable upon the conversion of the
Convertible Notes, the New Warrants or the Promissory Notes will be acquired by
such Shareholder hereunder for such Shareholder's own account and not with the
view to, or for resale in connection with, any distribution other than resales
made in compliance with the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the rules
promulgated thereunder. Such Shareholder understands that neither the
Convertible Notes, the Promissory Notes, the New Warrants nor the Common Stock
issuable thereunder have been registered under the Securities Act by reason of
available exemptions from the registration and prospectus delivery requirements
of the Securities Act, that the securities must be held indefinitely unless
such securities are registered under the Securities Act or unless any transfer
is exempt from registration, and that the reliance of the Company upon these
exemptions is predicated in part upon these representations and warranties by
such Shareholder.
5.3 Qualification as an Investor.
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(a) Such Shareholder has reviewed the Company's publicly disclosed
reports and filings, including the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission (the "Commission") on December 26,
1997, and has made such investigation of the Company as it deems necessary for
the purpose of its evaluation of its investment in the Company. Furthermore,
such Shareholder has had a full opportunity to discuss with the Company all
material aspects of an investment in the Convertible Notes, the New Warrants and
the Promissory Notes, including the opportunity to ask, and to receive answers
to his full satisfaction, regarding such questions as it has deemed
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necessary to evaluate this transaction, the Company and its operations and
prospects. The Shareholders are aware that the Company is attempting to convert
certain trade payables owed by it to Vermont Research Products, Inc. (a/k/a
Computer Storage) into the Company's securities. However, no assurance can be
given that the foregoing conversion of the trade payables will be consummated.
(b) Such Shareholder has had full opportunity to seek the advice of
independent counsel respecting this Agreement, the transactions contemplated
hereby and the tax risks and implications thereof.
5.4 Legend. Such Shareholder acknowledges and agrees that the Convertible
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Notes, the Promissory Notes, the New Warrants and the certificates representing
the Common Stock to be issued thereunder shall bear the following (or
substantially equivalent) legend on the face or reverse side thereof:
THIS [NOTE/WARRANT] AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS [NOTE/WARRANT] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY. THIS
[NOTE/WARRANT] AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF ALL OR
ANY PORTION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS (i) A REGISTRATION STATEMENT UNDER SAID ACT SHALL HAVE
BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) IN THE OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, AN EXEMPTION UNDER
SAID ACT AND FROM ANY APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.
Any stock certificate issued at any time in exchange or substitution for any
promissory note, warrant or certificate bearing such legend shall also bear such
(or substantially equivalent) legend unless, in the opinion of counsel for the
Company, the securities represented thereby need no longer be subject to
restrictions pursuant to the Securities Act or applicable state securities laws.
The Company shall not be required to transfer on its books any certificate for
securities in violation of the provisions of such legend.
ARTICLE 6
MUTUAL RELEASES; STATUS OF COMPLAINT
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6.1 Mutual Releases.
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(a) Except with respect to breaches of representations contained in
this Agreement or obligations created by or arising out of this Agreement, which
shall survive the releases contained herein, the Company, on the one hand, does
hereby release, acquit and forever discharge the Shareholders
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and each of their officers, directors, shareholders, employees, agents,
attorneys, representatives, successors and assigns, and any affiliates of each
of the foregoing, and the Shareholders on the other hand, do hereby release,
acquit and forever discharge the Company, and each of its directors, officers,
employees agents, attorneys, heirs, representatives, successors and assigns, in
each case, of and from all debts, demands, actions, causes of action, suits,
accounts, covenants, contracts, promises, agreements (oral or written), damages,
and any and all claims (including without limitation claims for attorneys' fees
and costs), and liabilities whatsoever of every name and nature, which said
parties ever had, now may have, or hereafter can, shall or may have, by reason
of any matter relating to (i) the 1996 Purchase Agreement, or any of the
agreements executed or transactions consummated in connection with the 1996
Purchase Agreement, (ii) the Stock Exchange Agreement, or any of the agreements
executed or transactions consummated in connection with the Stock Exchange
Agreement, or (iii) the $350,000 of advances made by the Shareholders to the
Company in May 1997.
(b) This Agreement and the releases contained herein are not to be
construed as an admission on the part of any party of the validity of any
contention made or position taken by any of the parties of any unlawful or
wrongful conduct, or of any liability, or lack thereof, to any other party, all
of which is expressly denied. The parties intend that this Agreement shall be
effective as a full and final accord and satisfaction of each and every released
matter. In furtherance of this intention, they acknowledge they are familiar
with Section 1542 of the Civil Code of the State of California, which provides
as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release which if known by him must have materially
affected his settlement with the debtor."
The releasing parties respectively waive and relinquish to the fullest extent
possible every right or benefit which they have or may have under Section 1542
and under any similar or analogous law of any other applicable jurisdiction with
regard to the subject matter of this Agreement. The parties acknowledge they
are aware they may hereafter discover facts in addition to or different from
those which they now know or believe to be true with respect to the subject
matter of this Agreement.
6.2 Draft Complaint. The Shareholders have previously prepared a draft
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Complaint, dated December 16, 1997 and identified as "DRAFT 12/17/97", that
makes certain
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allegations against the Company and its directors, which allegations are covered
by this Agreement. The Shareholders hereby agree that the draft Complaint will
not be filed and that the claims and allegations contained therein have been
settled and resolved by the execution of this Agreement and consummation of the
transactions contemplated hereby.
ARTICLE 7
REGISTRATION RIGHTS
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7.1 Required Registration. The Company hereby agrees to use its best
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efforts to prepare and file, on or before January 31, 1998, a Registration
Statement with the Commission in order to register the resale of all of the (i)
shares of Common Stock issuable upon the conversion of the Convertible Note or
the Promissory Notes, and (ii) the shares of Common Stock issuable upon the
exercise of the New Warrants (collectively, the "Shares"). The Company
furthermore agrees to use its best efforts to cause the foregoing Registration
Statement to be declared effective as soon as possible, but in no event later
than March 15, 1998. The Company may, at its option, give written notice to
other holders of the Company's securities that a registration is to be effected
and may, at its option, include in such registration any other shares of the
Company's unregistered capital stock. The Company may, however, only include
such additional shares of capital stock in such registration if, and to the
extent, that such inclusion of additional shares does not adversely affect the
preparation and filing of the Registration Statement.
7.2 Registration Procedures. In connection with the registration of the
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Shares to be effected pursuant to this Agreement, the Company shall:
(a) As expeditiously as possible, furnish to the Shareholders, to
brokers or dealers effecting transactions in the Shares on behalf of the
Shareholders, if any, and to the underwriters, if any, of the securities being
registered such reasonable number of copies of the Registration Statement,
preliminary prospectus, final prospectus and such other documents as the
Shareholders, brokers or dealers and underwriters may reasonably request in
order to facilitate the public offering of such securities;
(b) As expeditiously as possible, use its reasonable best efforts to
register or qualify the Shares covered by such Registration Statement under such
state securities or blue sky laws of such jurisdiction as the Shareholders may
reasonably request and do any and all other things that may be necessary to
enable the Shareholders to consummate the public sale in such states of the
Shares, except that the Company shall not for any purpose be required to execute
a general
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consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(c) Promptly notify the Shareholders of the time when such
Registration Statement has become effective or when a supplement to any
prospectus included in such Registration Statement has been filed;
(d) Notify the Shareholders promptly of any request by the Commission
for the amending or supplementing of such Registration Statement or prospectus
or for additional information;
(e) Promptly advise the Shareholders of the issuance of any stop
order by the Commission suspending the effectiveness of such Registration
Statement or the initiation or threatening of any proceeding for that purpose
and promptly use its best efforts to prevent the issuance of any stop order or
obtain its withdrawal if such stop order should be issued;
(f) Make available for inspection by a representative of the
Shareholders, any underwriter participating in the registration or their
respective attorneys or accountants, all financial and other records of the
Company required to prepare such Registration Statement, and supply all other
information requested by such representative reasonably related to the
preparation and filing of such Registration Statement; and
(g) File all applications necessary to include all Shares registered
by such Registration Statement in The Nasdaq Stock Market or any national
securities exchange on which the shares of the Common Stock are then listed.
7.3 Expenses.
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(a) With respect to each inclusion of Shares in a Registration
Statement pursuant to this Agreement, any and all fees, costs and expenses of or
incidental to, or incurred in connection with such registration, inclusion and
public offering (as specified in Section 7.3(b) below) shall be borne by the
Company; provided, however, that the Shareholders shall bear their pro rata
share of any underwriting discounts and commissions and transfer taxes, and
shall bear all fees and expenses of counsel representing such Shareholders in
such a registration.
(b) The fees, costs and expenses of or incidental to each such
registration to be borne by the Company as provided in Section 7.3(a) above
shall include, without limitation, all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants
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for the Company, and all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified.
(c) Nothing shall obligate the Company to undergo an audit other than
as required under the rules of the Commission applicable to the Company or to
keep any Registration Statement filed hereunder current and effective.
7.4 Indemnification.
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(a) The Company hereby agrees to indemnify, hold harmless and defend
the Shareholders and any underwriter (as defined in the Securities Act) and each
person, if any, who controls any Shareholder or such underwriter within the
meaning of the Securities Act, from and against, and will reimburse each
Shareholder and each such underwriter and controlling person with respect to,
any and all loss, damage, liability, cost and expense (as and when incurred),
including without limitation, the costs of investigation and defense of any
legal action, proceeding or investigation, to which any such Shareholders or any
such underwriter or controlling person may become subject under the Securities
Act, the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by or
arise out of any untrue statement or alleged untrue statement of any material
fact contained in such Registration Statement, any prospectus contained therein,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing by
the Shareholders, such underwriter or such controlling person in writing
specifically for use in the preparation thereof.
(b) Each Shareholder hereby agrees severally, but not jointly, to
indemnify and hold harmless the Company and any controlling person thereof from
and against, and will reimburse the Company and any controlling person with
respect to, any and all loss, damage, liability, cost or expense to which the
Company or any controlling person thereof may become subject under the
Securities Act, the Exchange Act or otherwise, only insofar as such losses,
damages, liabilities, costs or expenses are caused solely any entirely by any
untrue or alleged untrue statement of any material fact contained in such
Registration Statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or are
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based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in strict conformity with written information
furnished by such Shareholder specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of paragraph (a) or (b) of this Section 7.4 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party shall, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said
paragraph (a) or (b), promptly notify the indemnifying party of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, if the defendants in any action include both the
indemnifying party and the indemnified party and if there is a conflict of
interest which, in the reasonable opinion of counsel to the indemnified party,
would prevent counsel for the indemnifying party from also representing the
indemnified party, or any of the indemnified parties have available to them
defenses or counterclaims, in the reasonable opinion of counsel to the
indemnified party, not available to the indemnifying party even though this does
not result in a conflict of interest, the indemnified party or parties shall
have the right to select one separate counsel to participate in the defense of
such action on behalf of all such indemnified party or parties at the expense
of the indemnifying party. Except as otherwise provided in this paragraph (c),
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of said paragraph
(a) or (b) for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless (x) the indemnified party shall have employed
counsel in accordance with the proviso of the preceding sentence, (y) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after the notice of the commencement of the action, or (z) the indemnifying
party has authorized
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the employment of counsel for the indemnified party at the expense of the
indemnifying party.
ARTICLE 8
MISCELLANEOUS PROVISIONS
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8.1 Amendment and Modification. This Agreement may be amended, modified
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or supplemented only by a written agreement executed by the Company and each
Shareholder.
8.2 Waiver of Compliance; Consents. Except as otherwise provided in this
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Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
8.2.
8.3 Notices. All notices, requests, consents and other communications
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hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or by telecopy or sent by nationally-
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth below or at such other address as may hereafter be designated in writing
by such party to the other parties:
(a) if to the Company, to:
ChatCom, Inc.
9600 Topanga Canyon Blvd.
Chatsworth, CA 91311
Attn: Chairman of the Board
Tel: (818) 709-1778
FAX: (818) 882-1424
with a copy to:
Troy & Gould Professional Corporation
1801 Century Park East, 16th Floor
Los Angeles, CA 90067
Attn: Sanford J. Hillsberg, Esq.
Tel: (310) 553-4441
FAX: (310) 201-4746
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(b) if to a Shareholder, to:
The High View Fund
The High View Fund, L.P.
805 Third Avenue
New York, N.Y. 10022
Attn: Peter J. Powers
Tel: (212) 527-7274
FAX: (212) 527-7279
with a copy to:
Brock Fensterstock
Silverstein McAuliffe & Wade LLC
One Citicorp Center
56th Floor
New York, NY 10022-4611
Tel: (212) 371-2000
Fax: (212) 371-5500
Attn: Charles Brock, Esq.
All such notices, requests, consents and other communications shall be
deemed to have been delivered (a) in the case of personal delivery or delivery
by telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.
8.4 Assignment. This Agreement and all of the provisions hereof shall be
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binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided, however, that neither this Agreement
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nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties.
8.5 Governing Law. This Agreement shall be governed by the laws of the
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State of New York.
8.6 Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
8.7 Entire Agreement. This Agreement, together with the documents
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referred to in Article 2 embody the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this Agreement.
There are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein or
therein. Except as provided herein,
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this Agreement supersedes all prior agreements and understandings between the
parties with respect to this transaction.
8.8 Jurisdiction and Forum. The Company and the Shareholders hereby
----------------------
consent to the exclusive jurisdiction of any court of the State of New York or
the United States located in the City of New York over all actions or
proceedings with respect to this Agreement, and agree that all such actions or
proceedings may be instituted and maintained only in such a forum. The Company
hereby agrees that CT Corporation System shall be its authorized agent upon
which process may be served on its behalf by any of the Shareholders in any
action, suit or proceeding arising out of or based upon this Agreement or any
document executed in connection herewith. The parties further agree that
service of legal process in the manner specified herein for the providing of
notice for purposes of this Agreement shall constitute valid service of process
for all purposes with respect to any such action or proceeding.
8.9 Termination. In the event that the Closing does not occur by December
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31, 1997, other than the Escrow Agent's obligation to return all documents as
provided in Article 3, this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein, no party
hereto shall have any liability or further obligation under this Agreement to
any other party hereto.
8.10 Fees and Expenses. All legal and other fees, costs and expenses
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incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such fees, costs or expenses.
Notwithstanding the foregoing, in the event that the transactions contemplated
hereby are consummated, the Company hereby agrees to pay up to a total of
$40,000 of legal fees actually incurred by the Shareholders in the preparation
of this Agreement and the documents related hereto. Such legal fees shall be
promptly paid upon the presentation to the Company of an invoice issued by
Shareholders' counsel.
8.11 Third-Party Beneficiaries. Each party hereto intends that this
-------------------------
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto and their respective
successors and assigns as permitted under Section 8.4.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or have
caused this Agreement to be duly executed on their respective behalf by their
respective officers thereunto duly authorized, as of the day and year first
above written.
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CHATCOM, INC.
By: /s/ A. Charles Lubash
-------------------------------------
THE HIGH VIEW FUND
/s/
-----------------------------------------
Name:
Address:
THE HIGH VIEW FUND, L.P.
/s/
-----------------------------------------
Name:
Address:
The undersigned hereby agrees to act as Escrow Agent herein and agrees to
comply with the provisions of Article 3.
Brock Fensterstock Silverstein McAuliffe
& Wade LLC
_______________________________________
Name: Charles Brock
15