Memorandum of Understanding
The following Memorandum of Understanding (the "Memorandum") made by and
between Hovey Aiken III of New Bern, NC, ("Aiken") acting as a shareholder in an
effort to facilitate an orderly change in the management of Internet Cable
Corporation ("ICC") for the benefit of all ICC shareholders and executive
management of ICC composed of Michael F. Mulholland, William F. Walsh and Robert
F. Bronner with offices located in West Chester, PA (individually and together
as "Management"), sets forth the following understanding by and between the
parties to be closed on or before May 24, 2001:
WHEREAS, Management is currently employed by ICC as the executive officers
for ICC; and
WHEREAS, Management represents to Aiken that the ICC Board, composed of
Thomas N. Buttermore, Mark A. Kearney, John T. Losier, Christopher R. McCleary
and Mr. Mulholland, ("Old Board") is fully aware of the terms and conditions
contained in this Memorandum and is agreeable to resigning upon their election
of their replacements (the "New Board");
WHEREAS, Management is willing to resign their respective officer
positions; and
WHEREAS, Aiken represents to Management that the individuals comprising the
New Board, as identified below, have had discussions with Joseph Melanson,
former director of ICC, and among themselves, each of whom are fully aware of
the terms and conditions contained in this Memorandum and is willing to serve as
a member of the New Board; and, Aiken is not aware of any circumstances which
would make the terms of this Memorandum unenforceable.
NOW THEREFORE, the parties hereto agree as follows:
1. Management represents to Aiken that the following amounts are represented
by secured notes and are debts of ICC and the proceeds therefrom have been
used for working capital of ICC and are due and payable immediately:
Note Holder Amount Due
----------- ----------
Progress Bank $ 600,000
M.F. Mulholland 53,759
Aiken accepts such representation and shall cause the New Board to have the
above amounts duly satisfied, together with any earned but unpaid interest,
within two calendar weeks following the election of the New Board, provided
that payment to Mr. Mulholland is subject to Progress Bank's prior approval
so long as it shall be a secured creditor of ICC.
2. Management represents to Aiken that the following employees are owed the
(i) Accrued Payroll for past salaries and allowances; and (ii) earned,
accrued but not taken vacation; and (iii) unreimbursed expenses through May
18, 2001 in the following amounts, plus any earned but unpaid salaries and
expenses through the date of this Memorandum.
Accrued Accrued Unreimbursed
Employee Payroll Vacation Expenses Total
-------- ------- -------- -------- -----
Bronner, R.F. $106,408 $28,269 - $134,677
Flounders, W.J. 39,784 4,846 - 44,630
Mulholland, M.F. 312,946 40,385 $7,600 360,931
Steele, R.H 1,615 9,000 - 10,615
Walsh, W.F. 59,277 26,923 7,600 93,800
Aiken accepts such representation and shall cause the New Board
to have the above total amounts due to each employee satisfied in
full within thirty days following the election of the New Board.
Management represents to Aiken that Management holds options as
and for part of the consideration under their employment
contracts, and that all original options will become void June
11, 2001 with the signed options cancellation documents returned
upon execution of this Memorandum. Management represents to Aiken
that the Old Board issued additional five-year options to
Management and others in December 2000 to acquire shares in ICC
which will be reduced to the following amounts upon execution of
this Memorandum:
Michael F. Mulhollan 375,000 @ $1.125
William F. Walsh 175,000 @ $1.125
Robert F. Bronner 175,000 @ $1.125
William J. Flounders 65,000 @ $1.125
Richard H. Steele 62,500 @ $1.125
Aiken accepts such representation and shall cause the New Board
to (i) ratify the issuance of these additional options; and (ii)
immediately vest 100% of the total such options issued to each
member of Management; and (iii) cause all of the terms and
conditions of such options, other than the Termination section
being waived herein, to remain in full force until the
termination date of December 4, 2005, waiving the required
exercise period of three (3) months as contained in paragraph 2.5 of the
Option Agreements dated December 5, 2000; and (iv) cause a
registration statement to be filed with, and declared effective
by, the SEC for the shares covered by the above options by June
30, 2002.
4. The Old Board shall authorize the purchase of so-called "tail
coverage" from BG Balmer & Company, agent for the St. Paul
Insurance Company and Aiken shall cause the New Board to ratify
such purchase. Further, Aiken shall cause the New Board to
warrant that ICC will not alter or amend any Bylaws of ICC as it
relates to indemnification or advancement of expenses for ICC's
officers and directors. Upon receipt of the paid tail coverage
certificate and execution of this Memorandum, the Old Board will
elect the New Board in a resolution including the simultaneous,
unconditional resignation of the Old Board. The New Board shall
be composed of the following individuals:
Timothy R. Karnes Andrew Schecter Robert Modansky
Lisa B. Safford J. Robert Jones
Upon the seating of the New Board, Aiken shall cause the New
Board to ratify this Memorandum.
5. Management agrees that upon ratification of this Memorandum by
the New Board, they shall resign their positions as officers with
the New Board's consent, effective immediately. Management and
Aiken agree that Blaine Burnie shall be appointed as interim
Chief Executive Officer.
6. The New Board shall be solely responsible for all operations of
ICC going forward. Further, Aiken and the New Board acknowledge
that 2000 Form 10KSB, the annual report to the shareholders,
could not be filed while the statements contained in Joseph
Melanson's resignation from the Board dated February 12, 2001
remained unretracted in the public domain. Aiken represents that
Melanson is willing to retract the statements made in that
resignation letter to the satisfaction of ICC's SEC counsel,
provided the Old Board and Management resign as provided in this
Memorandum. Walsh hereby agrees that he will assist the New
Board in the filing of ICC's Form 10KSB for the 2000 calendar
year. ICC will continue to pay Walsh, in accordance with the
normal biweekly payroll practices of ICC, his current salary and
benefits for the period he is required to provide such assistance.
AGREED AND ACCEPTED this 24th day of May, 2001.
/s/ Hovey Aiken III /s/ Michael F. Mulholland
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Hovey Aiken III Michael F. Mulholland
/s/ William F. Walsh
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William F. Walsh
/s/ Robert F. Bronner
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Robert F. Bronner