Exhibit 99.1
AGREEMENT
This Agreement ("Agreement") dated July 9, 2001 is entered into between
MDI ENTERTAINMENT, INC., a Delaware corporation with its principal office
located in Hartford, Connecticut ("MDI"), and Oxford International, Inc., a
Maryland corporation with its principal office located in Easton, Maryland
("Oxford"). MDI and Oxford are sometimes referred to herein individually as a
"Party" and collectively as the "Parties."
W I T N E S S E TH:
WHEREAS, the Parties are parties to that certain Stock Purchase
Agreement dated as of April 25, 2001 (the "Stock Purchase Agreement"); and
WHEREAS, MDI filed a Certificate of Designations, Preferences and
Rights of Series C Preferred Stock (the "Certificate of Designations") with the
Secretary of State of the State of Delaware and issued 2,100 shares of Series C
Preferred Stock (the "Series C Stock") to Oxford, subject to the terms and
conditions of this Agreement; and
WHEREAS, MDI has accepted 2,000,000 shares of common stock of DataMEG
Corp. (the "Datameg Shares") and 1,656,000 shares of common stock of McClendon
Transportation Group, Inc. (the "McClendon Shares") as payment for the Series C
Stock, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the Parties agree as follows:
1. Oxford hereby agrees that it hereby converts the 2,100 shares of
Series C Stock into 2,100,000 shares (the "Shares") of common stock of MDI,
effective immediately. Oxford hereby waives performance of all terms of the
Stock Purchase Agreement and Certificate of Designations which were to have been
performed prior to the date hereof, including without limitation, any agreement
to pay dividends on the Series C Stock, and agrees that any obligations of MDI
which are to be calculated by reference to the date of the Stock Purchase
Agreement or Certificate of Designations be calculated as if the date of such
document and the closing thereunder were July 9, 2001. The Certificate of
Designations shall be null and void and of no further force or effect, either
retroactively or prospectively. In addition, notwithstanding Section 4 of the
Stock Purchase Agreement, Oxford shall not be entitled to nominate one member of
MDI's Board of Directors.
2. MDI shall release the Series C Stock and the shares of MDI common
stock held in escrow from escrow and cooperate with Oxford to expedite the
issuance to Oxford of a stock certificate representing the Shares. Such
certificate shall bear the standard securities act legend.
3. MDI shall have the right, at any time, at its option to exchange the
Datameg Shares and/or the McClendon Shares for a number of Shares having equal
value, such option may be exercised in whole or in part, from time to time. For
purposes of any such exchange, the value of the Datameg Shares and McClendon
Shares shall be based on the closing price, as reported by the Nasdaq Stock
Market, on July 6, 2001, or $1.48 and $0.75, respectively, subject to adjustment
for
any stock splits, stock dividends or similar events which occur after the date
hereof. The value of the Shares shall be equal to the common share equivalent of
the Series C Stock as indicated in the Stock Purchase Agreement, subject to
adjustment for any stock splits, stock dividends or similar events which occur
after the date hereof. MDI may exercise such option by giving Oxford written
notice of any such exchange in advance of any such exchange, such notice to
include the number of Datameg Shares and/or McClendon Shares to be exchanged and
the number of Shares to be received by MDI in such exchange. The closing of the
transfer shall occur within three business days after such notice by delivery of
duly endorsed stock certificates or instructions to the appropriate parties to
transfer the appropriate shares to the appropriate parties.
4. MDI agrees that Oxford may pledge the Shares or otherwise use them
as collateral, provided that the foregoing is subject to the right of exchange
set forth in Section 3. Oxford agrees that it will not sell or offer to sell the
Shares in a private transaction without the written consent of MDI. Upon the
effectiveness of a registration statement registering the Shares, MDI agrees
that Oxford will be entitled to sell, transfer or assign that number of Shares
calculated on any given day by multiplying the total number of Shares (as
adjusted for any stock splits or stock dividends) by a fraction, the numerator
of which shall be either (i) the net proceeds to MDI from any sale of Datameg
Shares or McClendon Shares or (ii) the proceeds MDI would be eligible to receive
from a permitted sale of Datameg Shares or McClendon Shares under Rule 144
promulgated under the Securities Act of 1933 or an effective registration
statement registering the Datameg Shares or McClendon Shares (based on the
average closing price of the Datameg Shares or McClendon Shares for the ten
trading days prior to such sale or transfer by Oxford) and after giving effect
to any other limitations on MDI's ability to sell the Datameg Shares or the
McClendon Shares, and the denominator of which shall be $3.2 million. In
addition, upon the effectiveness of a registration statement registering the
Shares, Oxford agrees that it will work with MDI to liquidate the Shares in an
orderly manner in order to not materially effect MDI's stock price (i.e.,
transfer no more than 10% of the Shares per week). Oxford and MDI agree that the
net proceeds of the sale of the Datameg Shares and McClendon Shares shall not
exceed $3.2 million. Any net proceeds over $3.2 million shall be returned to
Oxford. Oxford shall not take any action which shall preclude it from observing
the conditions of Sections 3 and 4.
5. Oxford, simultaneously with the execution of this Agreement, shall
execute and deliver to MDI an affidavit in form attached hereto as Appendix A
(the "Affidavit"). Oxford understands and acknowledges that MDI intends to rely
on the Affidavit and use it for the sale of the Datameg Shares and McClendon
Shares. Oxford hereby agrees to indemnify MDI against any and all damages it may
sustain as a result of any inaccuracy in the Affidavit.
6. The Parties agree that all terms and conditions contained in the
letter from Irwin Liptz to Jonathan Betts dated June 28, 2001, attached hereto
as Appendix B (the "Liptz Letter"), remain in full force and effect during the
term of this Agreement, subject to the following sentence. If MDI decides to
liquidate the McClendon Shares and not exchange such shares pursuant to Section
3 of this Agreement, but is not able for any reason to sell all or a portion of
the McClendon Shares, then during the five-day period given to Oxford to
purchase the McClendon Shares pursuant to the Liptz Letter, Oxford, during such
five-day period, shall either purchase the McClendon Shares offered by MDI or
deliver to MDI shares of DataMEG Corp. or other marketable securities acceptable
to MDI having the same value of the McClendon Shares determined in accordance
with Section 3.
7. Miscellaneous
a. Entire Agreement; Amendments. This Agreement contains the
entire agreement among the Parties with respect to the subject matter hereof and
supersedes all prior or contemporaneous negotiations, correspondence,
understandings and agreements among the Parties with respect thereto. This
Agreement may be amended only by an agreement in writing signed by all Parties
hereto.
b. Successors; Benefits of Agreement. The provisions of this
Agreement shall be binding
upon and inure to the benefit of the respective heirs, executors, administrators
and successors and assigns of the Parties hereto.
c. Waiver of Breach. A waiver of any breach of any provision
of this Agreement shall not constitute or operate as a waiver of any other
breach of such provision or of any other provision, and any failure to enforce
any provision hereof shall not operate as a waiver of such provision or of any
other provision.
d. Counterparts; Headings. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument. Headings said herein are for
convenience of reference only and are not to affect the interpretation of this
Agreement.
e. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
f. Severability. In the event that any provision of this
Agreement would be held in any jurisdiction to be invalid, prohibited or
unenforceable for any reason, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
g. Remedies. Each of the Parties acknowledges and understands
that the provisions of this Agreement are of a special and unique nature, the
loss of which cannot be adequately compensated for in damages by an action at
law, and that the breach or threatened breach of the provisions of this
Agreement would cause irreparable harm. In the event of a breach or threatened
breach by a party of the provisions of this Agreement, the other Parties shall
be entitled to seek an injunction restraining it (or its employees or agents)
from such breach with a court of law.
h. Notices. Any notices required by this Agreement shall be in
writing and delivered personally or mailed by overnight or registered mail to
the party entitled to such notice at the address set forth below opposite the
name of such party:
If to MDI, to: MDI Entertainment, Inc., Attn:
Steven M. Saferin, 201 Ann Street,
Hartford, CT 06103
with a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Attn: Kenneth R. Koch, Esq.,
666 Third Avenue, New York, NY 10017
If to Oxford, to: Oxford International, Inc., Attn:
Gregory C. Dutcher, 125 N. West Street,
Easton, MD 21601
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
MDI ENTERTAINMENT, INC.
By: /s/ Steven M. Saferin
---------------------------------------
Steven M. Saferin
President and Chief Executive Officer
OXFORD INTERNATIONAL, INC.
By: /s/ Gregory C. Dutcher
---------------------------------------
Gregory C. Dutcher
President