INVESTOR AGREEMENT
This INVESTOR AGREEMENT is dated as of March 31, 1998, by and among
DIGITEC 2000, INC., a Nevada corporation (the "Company"), Frank C. Magliato (the
"Shareholder") and PREMIERE COMMUNICATIONS INC., a Florida corporation (the
"Investor").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Investment Agreement of even date
herewith (the "Investment Agreement") between the parties hereto, the Investor
purchased 61,050 shares of the Company's Series A Preferred Stock, par value
$.001 per share ("Series A Preferred Stock");
WHEREAS, the shares of Series A Preferred Stock are convertible pursuant
to their terms into shares of common stock of the Company, par value $.001 per
share (the "Common Stock") (such shares of Common Stock, along with any shares
of Common Stock or other equity securities of the Company that the Investor may
subsequently acquire, are referred to herein as the "Investor Shares"); and
WHEREAS, the Shareholder owns 1,137,510 shares of the Company's Common
Stock (such shares, along with any shares of Common Stock or other equity
securities of the Company that the Shareholder may subsequently acquire, are
referred to herein as the "Shareholder Shares").
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. RIGHTS OF INCLUSION.
(a) In the event the Shareholder proposes to Transfer (as such term
and other capitalized terms used herein are defined in Section 3 hereof), any
Shareholder Shares (the "Transferor Shares") to any Person (the "Buyer"), as a
condition to such Transfer, the Shareholder shall cause the Buyer to offer (the
"Inclusion Offer") to purchase from the Investor, at the option of the Investor,
up to that number of Investor Shares determined in accordance with Section 1(b)
on the same terms and conditions as are applicable to the Transferor Shares
(including any consideration to be received by the Shareholder in the form of
bonuses, consulting fees, noncompetition payments, pursuant to employment
arrangements or similar arrangements), provided, that the Investor shall not be
required to provide any representation, warranty or other undertaking other than
with respect to its ownership of, and authority to Transfer, such Investor
Shares free of any liens or encumbrances. The Shareholder shall provide prompt
written notice to the Investor (the "Inclusion Notice") setting forth all the
terms and conditions of the Inclusion Offer, and the Investor may accept the
Inclusion Offer in whole or in part by providing a written notice of acceptance
to the Shareholder within ten (10) days of delivery of the Inclusion Notice to
the Investor.
(b) The Investor shall have the right to sell, pursuant to the
Inclusion Offer, Investor Shares representing the same percentage of all
Investor Shares as the Transferor Shares are
of all Shareholder Shares. In the event the number of Investor Shares for which
the Investor elects to exercise such right, along with the Transferor Shares,
exceed the number of shares which the Buyer is willing to purchase, the number
of shares to be Transferred to the Buyer by each transferor shall be reduced so
that each transferor is entitled to Transfer the same percentage of its shares
as each other transferor. If the Investor elects to exercise such right, the
Investor may, in its sole discretion, determine the composition of the Investor
Shares (i.e., the number of shares of the Series A Preferred Stock and Common
Stock to be included in the Investor Shares) to be Transferred to the Buyer
pursuant to the Inclusion Offer. In the event the Investor chooses to include
any Series A Preferred Stock in the Investor Shares to be Transferred to the
Buyer pursuant to the Inclusion Offer, the Investor shall, prior to or
simultaneously with such Transfer, convert such Series A Preferred Stock into
shares of Common Stock so that such Investor will Transfer only Common Stock to
the Buyer.
(c) The Shareholder shall have ninety (90) days, commencing on the
date of the Inclusion Notice, in which to Transfer, on behalf of himself and the
Investor, up to the number of shares covered by the Inclusion Offer (including
the Transferor Shares) to the Buyer. The terms of such Transfer, including,
without limitation, price and form of consideration, shall be as set forth in
the Inclusion Notice. If at the end of such ninety (90) day period the
Shareholder has not completed the Transfer of the Transferor Shares and the
Investor Shares (if any) proposed to be Transferred, the Shareholder may not
proceed with such Transfer or any other Transfer without first giving a new
Inclusion Notice pursuant to the provisions of this Section 1.
(d) If the Shareholder is able to complete the Transfer of the
Transferor Shares and the Investor Shares (if any) proposed to be Transferred
within such ninety (90) day period, at the closing thereof, the Investor shall
deliver to the Buyer a certificate or certificates representing the Investor
Shares to be Transferred pursuant to the Inclusion Offer, free and clear of all
liens and encumbrances, and the Buyer shall pay to the Investor the purchase
price for the Investor Shares so Transferred pursuant to this Section 1 and
shall furnish such other evidence of the completion of such Transfer and the
terms thereof as may be reasonably requested by the Investor.
(e) The provisions of this Section 1 shall not apply to any Transfer
or proposed Transfer by the Shareholder of Shareholder Shares which, together
with all other Transfers by the Shareholder of Shareholder Shares on or prior to
the date of such Transfer represent ten percent (10%) or less of the Shareholder
Shares held by the Shareholder on the date hereof, appropriately adjusted to
reflect any stock split, stock dividend, recapitalization or similar event. If
any Transfer of the Shareholder Shares, either alone or together with all
previous Transfers, exceeds such ten percent (10%) threshold, the exclusion
provided by this Section 1(e) shall apply to the Transfer of that number of
Shareholder Shares needed to reach the ten percent (10%) threshold and the other
provisions of this Section 1 shall apply to the Transfer of all Shareholder
Shares in excess of such ten percent (10%) threshold. The Company shall not
recognize any purported transfer of the Shareholder Shares in violation of this
Section 1.
-2-
2. PREFERRED PROVIDER OF TELECOMMUNICATIONS SERVICES.
At any time from the date of this Agreement through the earlier of
the seventh anniversary of the date of this Agreement or the Company's
redemption or conversion of all of the Series A Preferred Stock held by the
Investor, but in any event for at least three years from the date hereof, if the
Shareholder determines, or if any Person with respect to which the Shareholder
exercises control determines, that it will require telecommunications services
with respect to the offering of any prepaid or other telephone calling card, the
Shareholder agrees that he will or that he will cause such other Person to
notify the Investor of the existence of any other telecommunications services
arrangement he or it proposes to enter into and the terms and conditions thereof
with respect to such offering and grant to the Investor a right of first refusal
with respect to providing such telecommunications services on the same or better
terms and subject to the same conditions contained in such other arrangement,
and upon receipt of such notice (setting forth in detail all relevant terms and
conditions of such alternative arrangement), the Investor will have five (5)
days thereafter in which to agree to provide all of the telecommunications
services on the same terms and conditions.
3. DEFINITIONS.
As used herein, the following terms shall have the respective
meanings set forth below:
"Buyer" shall have the meaning set forth in Section 1(a) hereof.
"Common Stock" shall have the meaning set forth in the WHEREAS
clauses hereof.
"Company" shall have the meaning set forth in the first paragraph
hereof.
"Investor" shall have the meaning set forth in the first paragraph
hereof.
"Investor Shares" means all Series A Preferred Stock and Common
Stock owned by the Investor.
"Inclusion Notice" shall have the meaning set forth in Section 1(a)
hereof.
"Investor Offer" shall have the meaning set forth in Section 1(a)
hereof.
"Person" means an individual corporation, partnership, limited
liability company, firm, association, joint venture, trust, unincorporated
organization, governmental body, agency, political subdivision or other entity.
"Series A Preferred Stock" shall have the meaning set forth in the
WHEREAS clauses
-3-
hereof.
"Shareholder" shall have the meaning set forth in the first
paragraph hereof.
"Shareholder Shares" shall have the meaning set forth in the WHEREAS
clauses hereof.
"Transfer" means, with respect to any security, any direct or
indirect sale, transfer, assignment, hypothecation, pledge or any other
disposition of such security or any interest therein, other than any sale into
any public market for the security where the buyer is not arranged by the
Shareholder or his agent.
"Transferor Shares" shall have the meaning set forth in Section 1(a)
hereof.
4. MISCELLANEOUS.
(a) In the event of a breach by any party to this Agreement of its
obligations under this Agreement, any party injured by such breach, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.
(b) Except as otherwise provided herein, no modification, amendment
or waiver of any provision of this Agreement will be effective against any party
hereto unless such modification, amendment or waiver is approved in writing by
all parties hereto. The failure of any party to enforce any of the provisions of
this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
(c) All covenants and agreements in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
(d) All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or sent by nationally recognized
overnight courier service to the parties at the following addresses or facsimile
numbers:
-4-
(i) If to Investor, to
Premiere Communications, Inc.
3399 Peachtree Road N.E.
The Lenox Building
Suite 600
Atlanta, Georgia 30326
Attn: Patrick G. Jones, Esq.
Facsimile No.: (404) 262-8540
with a copy to:
Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Attn: David A. Stockton, Esq.
Facsimile No.: (404) 815-6555
(ii) If to the Shareholder, to:
Mr. Frank Magliato
8 West 38th Street
New York, New York 10018
with a copy to:
Edward F. Cox, Esq.
Patterson, Belknap, Webb & Tyler, LLP
1133 Avenue of the Americas
New York, New York 10036-6710
All such notices, requests and other communications will (x) if delivered
personally to the address as provided in the Section, be deemed given upon
delivery, (y) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt and (z) if delivered by
nationally recognized overnight courier service in the manner described above to
the address as provided in this Section, be deemed given on the business day
following the day it was sent (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy of
such notice is to be delivered pursuant to this Section. Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other parties hereto.
(e) The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(f) If any provision of this Agreement is held to be illegal,
invalid or
-5-
unenforceable, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom and (iv) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as part of this Agreement a legal, valid and enforceable provision as similar in
terms to such illegal, invalid or unenforceable provision as may be possible.
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of Georgia applicable to a contract executed and
performed in such State without giving effect to the conflicts of laws
principles thereof.
(h) This Amendment may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
-6-
IN WITNESS WHEREOF, the parties have duly executed this
Investor Agreement as of the date first written above.
PREMIERE COMMUNICATIONS, INC.
By:_____________________________________
Title:__________________________________
________________________________________
FRANK MAGLIATO
DIGITEC 2000, INC.
By:_____________________________________
Title:__________________________________
-7-