-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KWbM3XwWL5LXS2OWerzV+axS/+Ik2QQTUnLkxuOLhVrkjNp9wTh5mXZiX+nhOyxm R7b/BDni84aY824AX+TEpg== 0000950150-98-001713.txt : 19981109 0000950150-98-001713.hdr.sgml : 19981109 ACCESSION NUMBER: 0000950150-98-001713 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19981106 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INCOMNET INC CENTRAL INDEX KEY: 0000353356 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 952871296 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-34858 FILM NUMBER: 98738933 BUSINESS ADDRESS: STREET 1: 2801 MAIN STREET CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9492518000 MAIL ADDRESS: STREET 1: 2801 MAIN STREET CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: INTELLIGENT COMMUNICATIONS NETWORKS INC DATE OF NAME CHANGE: 19860805 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CASEY JOHN P CENTRAL INDEX KEY: 0001059260 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10220 RIVER RD STREET 2: STE 115 CITY: POTOMAC STATE: MD ZIP: 20854 BUSINESS PHONE: 3019835000 SC 13D/A 1 AMENDMENT NO. 15 TO SCHEDULE 13D 1 --------------------------- OMB APPROVAL --------------------------- OMB Number: 3235-0145 Expires: December 31, 1997 Estimated average burden hours per response....14.90 --------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 15)* INCOMNET, INC. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK - -------------------------------------------------------------------------------- (Title of Class of Securities) 453365207 ---------------------------------------------- (CUSIP Number) John P. Casey, 10220 River Road, Suite 115, Potomac, MD 20854 (301) 983-5000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 5, 1998 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D - --------------------------- ------------------------- CUSIP NO. 453365207 PAGE 2 OF 7 PAGES - --------------------------- ------------------------- - ------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON JOHN P. CASEY - SS# ###-##-#### - ------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 - ------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [ ] - ------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------------------------------- 7 SOLE VOTING POWER 14,495,474* -------------------------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 102,000 (children's trust; 1/3 voting trustee) OWNED BY EACH REPORTING PERSON WITH -------------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 14,495,474* -------------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 102,000 (children's trust; 1/3 voting trustee) - ------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,597,474* - ------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 44.65% (See Item 5)* - ------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------------------------------
*Includes 8,459,970 shares of Incomnet Common Stock issuable on conversion of 725.473 shares of Incomnet Series A Convertible Preferred Stock and 872.738 shares of Incomnet Series B Preferred Stock (collectively, the "Preferred Shares") which Mr. Casey purchased on November 5, 1998 under the Option Agreement dated July 15, 1998 described in Amendment No. 6 to Mr. Casey's Statement. Incomnet does not currently have sufficient authorized but unissued shares of Common Stock to effect the conversion of the Preferred Shares into common stock. Further, Mr. Casey is obligated, pursuant to the terms of the Board Change Agreement dated August 28, 1998 to hold the Preferred Shares until November 4, 1999 (the "Redemption Period") during which time the Company plans to redeem the Preferred Shares if it is financially able to do. If the Company is not able to redeem the Preferred Shares during the Redemption Period, Mr. Casey is obligated to convert the Preferred Shares into Common Stock and offer the Common Stock to all shareholders of Incomnet on a pro-rata basis at an offering price representing no actual profit to Mr. Casey. 3 ----------------- Page 3 of 7 Pages ----------------- This Statement is the fifteenth Amendment to the Statement on Schedule 13D filed on April 7, 1998 (as previously amended, the "Statement") with the Securities and Exchange Commission by Mr. John P. Casey in connection with his beneficial ownership of shares (the "Shares") of common stock of Incomnet, Inc. ("Incomnet" or the "Issuer"). All capitalized terms used and not defined in this Amendment No. 15 have the meanings given to them in the Statement. Item 1. Security and Issuer. This Statement relates to the Common Stock of Incomnet and Series A and Series B Preferred Stock that is convertible into Common Stock. On November 5, 1998 Mr. Casey exercised his Option to purchase 725.473 shares of Series A Convertible Preferred Stock and 872.738 shares of Series B Convertible Preferred Stock. Incomnet's executive offices are located at 2801 Main Street, Irvine, California 92614. Item 3. Source and Amount of Funds or Other Consideration. On November 5, 1998, Mr. Casey purchased an aggregate of 725.473 shares of Incomnet Series A Convertible Preferred Stock and 872.738 shares of Incomnet Series B Preferred Stock pursuant to the Option Agreement first described in Amendment No. 6 to Mr. Casey's Statement (the "Preferred Shares"). Mr. Casey purchased the Preferred Shares using funds borrowed from by Ironwood Telecom LLC evidenced by a Secured Promissory Note. Ironwood Telecom LLC is a Colorado limited liability company ("Ironwood") that currently invests in telecommunications related businesses. The owner of a majority of the equity of Ironwood is Quince Associates, a Maryland investment partnership. 4 ----------------- Page 4 of 7 Pages ----------------- Promissory Note is secured by a Stock Pledge Agreement whereby Mr. Casey has pledged the Preferred Shares as collateral for payment under the Secured Promissory Note. National Telephone & Communications, Inc., Incomnet's wholly-owned subsidiary, has guaranteed payment by Mr. Casey under the Secured Promissory Note. The Secured Promissory Note bears simple interest at 18% and has no prepayment penalties. The Secured Promissory Note is due on the earlier of the redemption of the Preferred Shares by Incomnet or sale of the Common Stock underlying the Preferred Shareholders to Incomnet's shareholders as described in Item 5 below. Item 4. Purpose of Transaction. As previously disclosed in Amendment No. 10 to the Statement, Mr. Casey had agreed, pursuant to the Board Change Agreement, that Incomnet, if it is financially and legally able to do so, will be obligated to purchase the Preferred Shares within one year following the exercise of the option to purchase the Preferred Shares (the "Redemption Period"). If Incomnet is unable to purchase the Preferred Shares during the Redemption Period, Mr. Casey will be obligated to proceed to offer the common stock underlying the Preferred Shares on a pro rata basis to shareholders of record as of a date to be determined in the future. Such common stock will be offered at a per share price representing no actual profit to Mr. Casey. It is Mr. Casey's intent to allow the Preferred Shares to be redeemed during the Redemption Period or offer the Preferred Shares to the shareholders as agreed to in the Board Change Agreement. Item 5. Interest in Securities of the Issuer. (a) Mr. Casey is the beneficial owner of 6,317,503 shares of Incomnet Common Stock and may be deemed to be the beneficial owner of 8,459,970 additional shares of Common Stock issuable on conversion of the Preferred Shares purchased from Sellers on November 5, 1998. Sellers had tendered the Preferred Shares for conversion into Incomnet Common Stock in June, 1998. Incomnet did not have sufficient authorized Common Stock to convert Sellers' Preferred Shares. Upon learning of the Company's inability to convert the Preferred Shares, Sellers rescinded their conversion and reserved all of their rights against Incomnet. As described in Amendment No. 6 to Mr. Casey's Statement, on July 15, 1998, Mr. Casey entered into the Option Agreement to purchase the Preferred Shares from Sellers. As described in Amendment No. 13 to Mr. Casey's Statement, on September 29, 1998, Mr. Casey, the then board of directors of Incomnet and Incomnet completed the Board Change Agreement pursuant to which Mr. Casey agreed to exercise his Option to purchase the Preferred Shares and hold the Preferred Shares for one year to give Incomnet the ability to redeem the Preferred Shares at a price representing no actual profit to Mr. Casey. The Board Change Agreement further provided that if Incomnet were financially unable to redeem the Preferred Shares by the end of such one-year period, Mr. Casey would be required to convert the Preferred Shares into 8,459,970 shares of Common Stock (i.e., the number of shares of Common Stock that Sellers would have received in June, 1998 had Incomnet not run out of authorized Common Stock) and offer such 2 5 ----------------- Page 5 of 7 Pages ----------------- Common Stock on a pro rata basis to all Incomnet shareholders at a price representing no actual profit to Mr. Casey. Incomnet continues to have no authorized but unissued Common Stock. An amendment to Incomnet's Articles of Incorporation approved by a vote of a majority of the outstanding shares of Incomnet is needed to effect an increase in the authorized Common Stock. Mr. Casey has agreed to vote his stock in favor of such an increase. Assuming conversion of all of the Preferred Shares into Common Stock together with the Common Stock beneficially owned by Mr. Casey, Mr. Casey may be deemed to own 14,597,474 shares of Incomnet Common Stock. Those shares represent 44.65% of the outstanding shares of Common Stock assuming: (i) 20 million shares of Incomnet Common Stock currently authorized and outstanding; (ii) 8,459,970 shares that could be issued to Mr. Casey upon conversion of the Preferred Shares once an increase in the number of authorized shares of Common Stock has been approved by shareholders of Incomnet and assuming Incomnet does not redeem the Preferred Shares; (iii) 1,300,000 shares that are issuable upon on conversion of restricted preferred stock to Denis Richard, Incomnet's President and Chief Executive Officer, following approval of an increase in the number of authorized shares of Common Stock; (iv) Preferred Shares convertible into 2,327,836 shares of Common Stock that are owned by Ironwood (as a result of settlements with certain other former preferred stock holders that were not parties to the Option Agreement with Mr. Casey) but are expected to be redeemed by Incomnet if Incomnet is financially able to redeem such shares; and (v) 600,000 shares of Common Stock that are issuable upon conversion of restricted preferred stock to three holders of preferred stock who were not parties to Mr. Casey's Option Agreement. (b) Mr. Casey has sole voting power over 6,035,504 shares of Common Stock and, if he is deemed to own the Common Stock underlying the Preferred Shares, an additional 8,459,970 shares of Common Stock. The Preferred Shares generally are not entitled to vote on any matter. In addition, Mr. Casey has shared voting power over 102,000 shares of Common Stock held in various accounts for the benefit of his minor children. (c) See Items 3 and 5 above. Mr. Casey paid an aggregate of $2,424,790 for the Preferred Shares. Mr. Casey does not know how the purchase price for the Preferred Shares was allocated among the Sellers or the per share price of the Preferred Shares. (d) Not applicable. (e) Not applicable. 3 6 ----------------- Page 6 of 7 Pages ----------------- Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. See Item 5 above. Under the Board Change Agreement and pursuant to letter agreements with the Sellers and with Ellen Cohen and Martin Fabrikant, Mr. Casey has agreed to vote all of his shares of Incomnet stock in favor of an increase in the number of authorized shares of Common Stock. Item 7. Material to be filed as Exhibits. Exhibit 1 Secured Promissory Note by John P. Casey dated November 4, 1998. Exhibit 2 Stock Pledge Agreement between John P. Casey and Ironwood Telecom LLC dated November 4, 1998. Exhibit 3 Guaranty of Stock Pledge Agreement by National Telephone & Communications, Inc. dated November 4, 1998. Exhibit 4 Letter from Mr. Casey to Sellers regarding voting of Mr. Casey's Incomnet shares in favor of an increase in the number of authorized shares of Common Stock. Exhibit 5 Letter from Mr. Casey to Ellen Cohen and Mark Fabrikant regarding voting of Mr. Casey's Incomnet shares in favor of an increase in the number of authorized shares of Common Stock. 4 7 ----------------- Page 7 of 7 Pages ----------------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. /s/ JOHN P. CASEY Date: November 5, 1998 ------------------------------------------ John P. Casey EX-99.1 2 SECURED PROMISSORY NOTE DATED NOVEMBER 4, 1998 1 EXHIBIT 1 SECURED PROMISSORY NOTE $2,124,790.00 November 4, 1998 FOR VALUE RECEIVED, the undersigned, John P. Casey (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of Ironwood Telecom, LLC, a Colorado limited liability company (the "Lender"), the principal sum of TWO MILLION ONE HUNDRED TWENTY FOUR THOUSAND SEVEN HUNDRED NINETY DOLLARS ($2,124,790.00) (the "Principal Amount") plus all accrued and unpaid interest and fees thereon on the Maturity Date (defined below). 1. PURCHASE OF COHEN PREFERRED STOCK. The purpose of the loan evidenced by this Secured Promissory Note (the "Loan") and the sole permitted use of the proceeds of the Loan is to finance the payment by the Borrower of the Option Price (as defined in the Option Agreement) to Robert Cohen, Stefanie Rubin, Allyson Cohen, Jeffery Cohen, Alan Cohen, Lenore Katz, Broadway Partners and Meryl Cohen, individually and as custodian for Gabrielle Cohen, Jaclyn Cohen, Erica Cohen and Nicole Cohen (the "Cohen Group") pursuant to the Option Agreement, dated July 15, 1998, as extended, among the Borrower and the members of the Cohen Group (the "Option Agreement"). Upon Borrower's payment of the Option Price to the Cohen Group, the Cohen Group will transfer to the Borrower all of the Series A and Series B Preferred Stock of Incomnet, Inc., a California corporation ("Incomnet") owned by the Cohen Group (the "Cohen Preferred Stock"), pursuant to the terms and conditions set forth in the Option Agreement. The Series A and Series B Preferred Stock of Incomnet owned by the Cohen Group is set forth on Schedule 1 to this Secured Promissory Note. 2. PAYMENTS (a) As set forth above, the Principal Amount and all accrued and unpaid interest and fees thereon shall be due and payable on the Maturity Date. As used herein, "Maturity Date" means the earlier of (i) date on which Incomnet redeems the Cohen Preferred Stock from the Borrower on the terms and conditions set forth in the Board Change Agreement, dated August 28, 1998, among Incomnet, the Borrower and certain other parties (the "Board Change Agreement") and (ii) the date on which the Borrower completes the rights offering described in Section 3(iii) hereof. (b) In addition to paying the Principal Amount on the Maturity Date, the Borrower further promises to pay to the Lender interest on the Principal Amount outstanding hereunder from time to time at the rate of 18% per annum calculated on the 2 basis of the actual days elapsed in a year of 365 days. Interest shall be payable on the Maturity Date, together with all of the Principal Amount and fees thereon, if any. Upon the occurrence of an Event of Default, the interest rate applicable to the Principal Amount outstanding of the occurrence of the Event of Default shall, at the option of the Lender, be 21%. (c) The Secured Promissory Note is subject to prepayment in whole or in part at any time in increments of $100,000 without premium or penalty. Prepayments shall be applied, first, to all interest then due and payable and, then, to the Principal Amount. Both principal and interest are payable in lawful money of the United States of America and in immediately available funds to the Lender. (d) This Secured Promissory Note is secured by certain collateral more specifically described in the Stock Pledge Agreement executed by the Borrower on the date hereof (the "Stock Pledge Agreement"). 3. REPRESENTATIONS, WARRANTIES AND COVENANTS Borrower makes the following representations and warranties to the Lender: (i) This Secured Promissory Note in is the legal, valid and binding agreement of Borrower, enforceable against Borrower in accordance with its terms, subject as to enforcement, (i) to bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws of general applicability relating to or affecting creditors' rights and (ii) to general principles of equity, whether such enforcement is considered in a proceeding at law or in equity; (ii) This Secured Promissory Note does not conflict with any law, agreement, or obligation which is material to Borrower and by which, Borrower is bound; and (iii) If Incomnet is not legally permitted to redeem the Cohen Preferred Stock prior to the date that is one year after the date that the closing of the purchase of the Cohen Preferred Stock by the Borrower occurs, the Borrower shall undertake a rights offering pursuant to which the Borrower will offer to Incomnet's shareholders the opportunity to purchase the Cohen Preferred Stock from the Borrower for a per share purchase price equal to the per share purchase price (including financing charges and legal fees) paid by Borrower when he purchased the Cohen Preferred Stock from the Cohen Group. The transactions contemplated by this clause (iii) shall be accomplished in accordance with the Board Charge Agreement. 4. DEFAULT (a) Events of Default. 2 3 The occurrence of any one or more of the following events shall constitute an "Event of Default": (i) Borrower fails to make a payment under this Secured Promissory Note when due and such failure continues for 10 consecutive days after notice thereof from the Lender. (ii) Borrower fails to meet the conditions of, or fails to perform any obligation under this Secured Promissory Note or the Stock Pledge and Security Agreement (iii) Any representation or warranty under this Secured Promissory Note or the Stock Pledge and Security Agreement or any instrument or certificate executed pursuant to this Agreement or in connection with any transaction contemplated hereby shall prove to have been false or misleading in any material respect when made or when deemed to have been made. (iv) Borrower files a bankruptcy petition, a bankruptcy petition is filed against Borrower or Borrower makes a general assignment for the benefit of creditors. The default will be deemed cured if any bankruptcy petition filed against Borrower is dismissed within a period of one hundred twenty (120) days after the filing. (b) Remedies. Upon and after the occurrence of an event of Default, the Lender shall have all of the following rights and remedies: (i) All obligations and Indebtedness hereunder may, at the option of Bank and without demand, notice, or legal process of any kind, be declared, and immediately shall become, due and payable; and (ii) All of the rights and remedies of a secured party under the California Commercial Code or other applicable law, all of which rights and remedies shall be cumulative, and not exclusive, to the extent permitted by law, in addition to any other rights and remedies contained in this Agreement and in any of the documents or agreements executed in connection herewith. 5. CONDITIONS The effectiveness of this Secured Promissory Note is conditioned upon receipt by the Lender of (i) a fully executed Stock Pledge and Security Agreement and each item to be delivered pursuant thereto and (ii) a fully executed Guarantee from National Telephone & Communication, Inc. 3 4 6. USE OF PROCEEDS The Borrower agrees that it shall apply all of the proceeds of the loan evidenced by this Secured Promissory Note to purchase the Cohen Preferred. 7. FEES AND EXPENSES The Borrower shall pay to the Lender on demand all costs and expenses that the Lender pays or incurs in connection with the negotiation, preparation, consummation, administration, enforcement, and termination of this Secured Promissory Note, including, without limitation reasonable attorneys' and paralegals' fees and disbursements of counsel to the Lender. 8. MISCELLANEOUS (a) This Agreement is binding on the Borrower's and the Lender's successors and assigns. The Borrower and the Lender each hereby agree that it may not assign this Agreement without the prior written consent of the other. (b) This Secured Promissory Note is the entire agreement of the Borrower with respect to the subject matter of this Secured Promissory Note. THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF COLORADO EXCEPT THAT NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY THE LAWS OF ANY OTHER STATE OR JURISDICTION. /s/ JOHN P. CASEY ------------------------------------ JOHN P. CASEY 4 EX-99.2 3 STOCK PLEDGE AGREEMENT 1 EXHIBIT 2 STOCK PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of November 4, 1998, is made between John P. Casey (the "Borrower") and Ironwood Telecom, LLC, a Colorado limited liability company ("Lender"). BACKGROUND The Borrower has issued to the Lender on the date hereof a Secured Promissory Note in the original principal amount of Two Million One Hundred Twenty Four Thousand Seven Hundred Ninety Dollars ($2,124,790.00) (as amended, modified, renewed or extended from time to time, the "Secured Promissory Note"). The purpose of the loan evidenced by the Secured Promissory Note and the only permitted use of the proceeds of the Secured Promissory Note is to finance the payment of the "Option Price" (as defined in the Option Agreement) to the Cohen Group (as defined in the Secured Promissory Note) pursuant to the terms and conditions set forth in the Option Agreement, dated July 15, 1998 among the Borrower and the members of the Cohen Group (the "Option Agreement"). Upon the Borrower's payment of the Option Price to the Cohen Group, the Cohen Group will transfer to the Borrower all of the Series A and Series B Preferred Stock of Incomnet, Inc., a Delaware corporation ("Incomnet") owned by the Cohen Group pursuant to the terms of the Option Agreement. It is a condition precedent to the loan under the Secured Promissory Note that the Borrower enter into this Agreement and pledge to the Lender the Cohen Preferred Stock owned by the Borrower, to secure the obligations of the Borrower described below. AGREEMENT Accordingly, the parties hereto agree as follows: 1 DEFINITIONS; INTERPRETATION 1.1. Terms Defined in Secured Promissory Note. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Secured Promissory Note. 1 2 1.2. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Cohen Group" has the meaning given such term in the Background section hereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Pledged Collateral" has the meaning set forth in Section 2.1. "Pledged Shares" means all of the Series A and Series B Preferred Stock of Incomnet to be transferred to the Borrower pursuant to the terms and conditions of the Option Agreement upon payment to the Cohen Group of the Option Price, as more specifically described in Schedule 1. "Secured Obligations" means the indebtedness, liabilities and other obligations of the Borrower to the Lender pursuant to the Secured Promissory Note, all interest accrued thereon, all fees due under the Secured Promissory Note and all other amounts payable by the Borrower to the Lender thereunder or in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined. "Securities Act" means the Securities Act of 1933, as amended. "UCC" means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of Colorado; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Colorado, the term "UCC" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. 1.3. Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. 2 3 2 SECURITY INTEREST 2.1. Grant of Security Interest. As security for the payment and performance of the Secured Obligations, the Borrower hereby pledges, assigns, transfers, hypothecates and sets over to the Lender, and hereby grants to the Lender, a security interest in, all of the Borrower's right, title and interest in, to and under (i) the Pledged Shares and any certificates and instruments now or hereafter representing the Pledged Shares, (ii) all proceeds of the Pledged Shares in any form, (iii) all rights, interests and claims with respect to the Pledged Shares, including under the Assignment Agreement between Borrower and the Cohen Group dated as of November 5, 1998, (iv) any and all related agreements, instruments and other documents, and (v) all books, records and other documentation of the Borrower related to the Pledged Shares, in each case whether presently existing or owned or hereafter arising or acquired (collectively, the "Pledged Collateral"). 2.2. Delivery of Pledged Shares. The Borrower hereby agrees that upon receipt thereof by the Borrower, the Borrower will deliver to or for the account of the Lender, at the address and to the Person to be designated by the Lender, the certificates representing the Pledged Shares, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Lender. 2.3. Delivery of UCC-1 Form. The Borrower hereby agrees to deliver to or for the account of the Lender a complete and fully executed UCC-1 form in form and substance satisfactory to the Lender which describes the Pledged Shares as the property with respect to which the Borrower has granted a security interest to the Lender. 2.4. Transfer of Security Interest Other Than by Delivery. If for any reason Pledged Shares cannot be delivered to or for the account of the Lender as provided in Section 2.2, the Borrower shall promptly take such other steps as shall be requested from time to time by the Lender to effect a transfer of a perfected first priority security interest in and pledge of the Pledged Shares to the Lender pursuant to the UCC. To the extent practicable, Borrower shall thereafter deliver the Pledged Collateral to or for the account of the Lender as provided in Section 2.2. 3 4 2.5. Continuing Security Interest. The Borrower agrees that this Agreement shall create a continuing security interest in and pledge of the Pledged Collateral which shall remain in effect until terminated in accordance with Section 17. 3 REPRESENTATIONS AND WARRANTIES In addition to the representations and warranties of the Borrower set forth in the Secured Promissory Note, which are incorporated herein by this reference, the Borrower represents and warrants to the Lender that: 3.1. Valid Issuance of Pledged Shares. All the Pledged Shares have been duly and validly issued, and are and will be fully paid and non-assessable. 3.2. Ownership of Pledged Collateral. The Borrower is the legal record and beneficial owner of the Pledged Collateral, and has and will have good and marketable title thereto, subject to no Lien except for the pledge and security interest created by this Agreement. 3.3. Enforceability; Priority of Security Interest. This Agreement creates an enforceable perfected security interest in and pledge of the Pledged Shares upon delivery thereof pursuant to Section 2.2 (or upon the taking of such other action with respect thereto as may be requested by the Lender pursuant to Section 2.4). 4 COVENANTS In addition to the covenants of the Borrower set forth in the Secured Promissory Note, which are incorporated herein by this reference, so long as any of the Secured Obligations remain unsatisfied, the Borrower agrees that: 4.1. Compliance with Laws, Etc. The Borrower will comply with all laws, regulations and ordinances relating in a material way to the possession, maintenance and control of the Pledged Collateral. 4 5 4.2. Disposition of Pledged Collateral. The Borrower will not surrender or lose possession of (other than to the Lender or, with the prior consent of the Lender, to a depository or financial intermediary), exchange, sell, convey, assign or otherwise dispose of or transfer the Pledged Collateral or any right, title or interest therein. 4.3. Liens. The Borrower will not create, incur or permit to exist any Liens upon or with respect to the Pledged Collateral, other than the security interest of and pledge to the Lender created by this Agreement. 4.4. Shareholders Agreements. The Borrower will not enter into any shareholders agreement, voting trust, proxy agreement or other agreement or understanding which affects or relates to the voting or giving of written consents with respect to any of the Pledged Shares. 4.5. Further Assurances. The Borrower will promptly, upon the written request from time to time of the Lender, execute, acknowledge and deliver, and file and record, all such financing statements and other documents and instruments, and take all such action, as shall be reasonably necessary to carry out the purposes of this Agreement. 5 ADMINISTRATION OF THE PLEDGED COLLATERAL 5.1. Distributions and Voting Prior to an Event of Default. Unless an Event of Default shall have occurred the Borrower shall have the right to vote the Pledged Shares and to retain the power to control the direction, management and policies of the Company to the same extent as the Borrower would if the Pledged Shares were not pledged to the Lender pursuant to this Agreement except to the extent that Borrower is obligated to vote the Pledged Shares in favor of an increase in the authorized number of the Company's Common Shares under the terms of the Option Agreement. Any cash dividend on or other cash distribution, if any, in respect of the Pledged Shares shall be applied to reduce the Secured Obligations. 5 6 5.2. General Authority upon an Event of Default. Upon and after the occurrence of any Event of Default the Lender shall have the right following prior written notice to the Borrower to vote or consent to take any action with respect to the Pledged Shares and exercise all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to the Pledged Collateral as if the Lender were the absolute owner thereof. 5.3. Certain Other Administrative Matters. The Lender shall at all times have the right to exchange uncertificated Pledged Collateral for certificated Pledged Collateral, and to exchange certificated Pledged Collateral for certificates of larger or smaller denominations, for any purpose consistent with this Agreement. 6 LENDER PERFORMANCE OF BORROWER OBLIGATIONS The Lender may perform or pay any obligation which the Borrower has agreed to perform or pay under or in connection with this Agreement if Borrower has failed to perform or pay such obligation, and the Borrower shall reimburse the Lender on demand for any amounts paid by the Lender pursuant to this Section 6. 7 LENDER'S DUTIES Notwithstanding any provision contained in this Agreement, the Lender shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to the Borrower or any other Person for any failure to do so or delay in doing so. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Shares while held hereunder and the accounting for moneys actually received by the Lender hereunder, the Lender shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Pledged Shares. 6 7 8 REMEDIES 8.1. Remedies. Upon the occurrence of any Event of Default, the Lender shall have, in addition to all other rights and remedies granted to it in this Agreement or the Secured Promissory Note, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, the Borrower agrees that any item of the Pledged Collateral may be sold for cash or on credit or for future delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers' board or elsewhere, by public or private sale, and at such times and on such terms, as the Lender shall determine. The Borrower hereby agrees that the sending of notice by ordinary mail, postage prepaid, to the address of the Borrower set forth in the Secured Promissory Note, of the place and time of any public sale or of the time after which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof if such notice is sent ten days prior to the date of such sale or other disposition or the date on or after which such sale or other disposition may occur. The Lender shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Pledged Collateral so sold, free of any right or equity of redemption, which right or equity of redemption the Borrower hereby releases to the extent permitted by law. 8.2. Application of Proceeds. The cash proceeds actually received from the sale or other disposition or collection of Pledged Collateral, and any other amounts of the Pledged Collateral (including any cash contained in the Pledged Collateral) the application of which is not otherwise provided for herein, shall be applied as provided in the Secured Promissory Note. Any surplus thereof which exists after payment and performance in full of the Secured Obligations shall be promptly paid over to the Borrower or otherwise disposed of in accordance with the UCC or other applicable law. The Borrower shall remain liable to the Lender for any deficiency which exists after any sale or other disposition or collection of Pledged Collateral. 7 8 9 NOTICES All notices or other communications hereunder shall be given in the manner and to the addresses designated in writing by each party hereto. 10 BINDING EFFECT This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Borrower, the Lender and their respective successors and assigns. 11 GOVERNING LAW THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF COLORADO, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND TO THE EXTENT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER, OR THE REMEDIES HEREUNDER, IN RESPECT OF ANY PLEDGED COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN COLORADO. 12 ENTIRE AGREEMENT; AMENDMENT This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and shall not be amended except by the written agreement of the parties as provided in the Secured Promissory Note. 13 SEVERABILITY Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, 8 9 however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction. 14 COUNTERPARTS This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. 15 INCORPORATION OF PROVISIONS OF THE SECURED PROMISSORY NOTE To the extent the Secured Promissory Note contains provisions which are applicable to this Stock Pledge Agreement, such provisions are incorporated herein by this reference. 16 NO INCONSISTENT REQUIREMENTS The Borrower acknowledges that this Agreement and the Secured Promissory Note may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. 17 TERMINATION Upon payment and performance in full of all Secured Obligations, this Agreement shall terminate and the Lender shall promptly redeliver to the Borrower any of the Pledged Collateral in the Lender's possession and shall execute and deliver to the Borrower such documents and instruments reasonably requested by the Borrower as shall 9 10 be necessary to evidence termination of all security interests given by the Borrower to the Lender hereunder. 18 FEES AND COSTS The Borrower shall pay to the Lender on demand all costs and expenses that the Lender pays or incurs in connection with the negotiation, preparation, consummation, administration, enforcement, and termination of this Stock Pledge Agreement, including, without limitation reasonable attorneys' and paralegals' fees and disbursements of counsel to the Lender. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. "BORROWER" /s/ JOHN P. CASEY --------------------------------------------- John P. Casey "LENDER" IRONWOOD TELECOM, LLC By /s/ DONALD V. BELANTI ----------------------------------------- Title: Member 10 EX-99.3 4 GUARANTY OF STOCK PLEDGE AGREEMENT 1 EXHIBIT 3 GUARANTY This Guaranty (the "Guaranty") is made and entered into as of November 4, 1998, (the "Effective Date"), by National Telephone & Communications, Inc., a Delaware corporation ("Guarantor"), in favor of Ironwood Telecom LLC, a Colorado limited liability company ("Lender"). This Guaranty is executed and delivered in connection with a Secured Promissory Note in the original principal amount of $2,124,790 also dated as of the Effective Date (the "Secured Promissory Note") and secured by the Stock Pledge Agreement dated as of the Effective Date (the "Loan Agreement") given to Lender by John P. Casey ("Borrower"). The Secured Promissory Note, Guaranty, and Loan Agreement are collectively referred to as the Loan Documents. Guarantor, for the benefit of Lender, agrees as set forth below. 1. Definitions. Any capitalized term not otherwise defined in this Guaranty shall have the meaning given to the term in the Loan Agreement. 2. Guaranty. Guarantor unconditionally guaranties to Lender the timely (whether as scheduled or upon acceleration) payment and performance by Borrower of the following (the "Guarantied Obligations"): 2.1.1. The principal, interest and other charges or amounts due under the Secured Promissory Note and the other Loan Documents (whether by acceleration or otherwise) and all renewals, extensions, modifications and rearrangements of any of the Loan Documents; 2.1.2. The other obligations set forth in or arising out of the Secured Promissory Note and the other Loan Documents; 2.1.3. Any of the forgoing arising out of or in connection with any renewal, extension or other modification of the Secured Promissory Note or any of the other Loan Documents; 2.1.4. Any of the foregoing arising after Borrower has commenced or become subject to any proceeding under the Bankruptcy Code, including any advances 2 made to Borrower, any interest that accrues after the filing of the bankruptcy petition (even if the interest cannot be collected in the proceeding under the Bankruptcy Code), and attorneys fees. If Borrower fails to pay or perform any of the Guarantied Obligations, Guarantor will immediately pay or perform the obligation upon the written request of the Lender. 3. Lender's Direct Rights. 3.1. This is a guaranty of payment and performance and is not a guaranty of collection. 3.2. In the event that Borrower fails timely to pay or perform under the Secured Promissory Note or any of the other Guarantied Obligations, Lender may enforce its rights under this Guaranty without first seeking to obtain payment or performance from: 3.2.1. Borrower; 3.2.2. Any other guarantor; 3.2.3. Any collateral Lender may hold for the Secured Promissory Note or any of the other Loan Documents or any guaranty of the Secured Promissory Note or any of the other Loan Documents, including this one; or 3.2.4. Exercise of any other remedy or right that Lender may have. 3.3. In the event Borrower becomes subject to a voluntary or involuntary proceeding under the Bankruptcy Code, Lender may immediately pursue its rights under this Guaranty, even though Lender may be stayed from accelerating or collecting the Guarantied Obligations as against Borrower. 4. Continuing Guaranty. This is a continuing guaranty of the Guarantied Obligations and may not be terminated. 5. No Notice Required. Lender does not have to notify Guarantor of any of the following events and Guarantor will not be released or exonerated from its obligations under this Guaranty if it is not notified of these events: 2 3 5.1. Borrower's failure to pay timely any amount owed under the Secured Promissory Note or any of the other Loan Documents or to pay or perform any of the other Guarantied Obligations; 5.2. Borrower's failure to perform any other obligation under the Secured Promissory Note, Loan Agreement, or any other Loan Document; 5.3. Any sale or other disposition of any collateral for the Secured Promissory Note, for the other Guarantied Obligations, or for any guaranty of the Secured Promissory Note or any of the Guarantied Obligations; 5.4. Lender's acceptance of this Guaranty; 5.5. Any renewal, extension or other modification of the Secured Promissory Note, any other Loan Document, or any of the other Guarantied Obligations; or 5.6. All other notices to which it might be entitled. 6. Guarantor's Additional Waivers. Guarantor waives any right it may have to any of the following acts: 6.1. Demand; 6.2. Presentment; 6.3. Diligence; 6.4. Protest; 6.5. Notice of dishonor; and 6.6. Any other notice to which it may be entitled. 7. No Release of Guarantor. Lender may do any of the following, by action or inaction, without releasing or exonerating Guarantor from any of its obligations under this Guaranty: 7.1. Renew, extend or otherwise modify or alter the Secured Promissory Note, the Loan Agreement, any other Loan Document or any of the other Guarantied Obligations; 7.2. Release Borrower from any of the Guarantied Obligations; 3 4 7.3. Sell, release, subordinate, impair, waive or otherwise fail to obtain or perfect a security interest in, or realize upon, any collateral for the Secured Promissory Note, any of the other Guarantied Obligations, or any other guaranty of the Secured Promissory Note; 7.4. Advance additional funds in its discretion for purposes related to the purposes set forth in the Loan Agreement; 7.5. From time to time and without first requiring performance on the part of Borrower and without being required to exhaust any or all security held by Lender, to look to and require performance by Guarantor of any obligation on the part of Guarantor to be performed pursuant to the terms hereof, by action at law or in equity or both, and further to collect in any such action its costs and expenses, including reasonable attorneys' fees incurred in enforcing its rights hereunder; 7.6. Foreclose on any collateral for the Secured Promissory Note or a guaranty of the Secured Promissory Note in a manner that diminishes, impairs or precludes the right of Guarantor to enjoy any rights of subrogation against Borrower or any other guarantor, or to obtain reimbursement, performance, or indemnification for payment or performance under this Guaranty; 7.7. Make an election under Bankruptcy Code Section 1111(b)(2); 7.8. Permit or suffer the creation of secured or unsecured credit or debt under Bankruptcy Code Section 364; 7.9. Permit or suffer the disallowance, avoidance or subordination of any of the Guarantied Obligations or collateral for any of the Guarantied Obligations; 7.10. Fail to exercise any right or remedy it may have with respect to the payment or performance of the Secured Promissory Note, any of the other Loan Documents or any of the other Guarantied Obligations; or 7.11. Fail to obtain a guaranty, other assurance of payment, or credit enhancement from any other person; 8. No Subrogation, etc. Guarantor waives and shall not seek to exercise any of the following rights that it may have against Borrower, any other guarantor, or any collateral provided by Borrower or any other guarantor, for any amounts paid by it, or acts performed by it, under this Guaranty: 4 5 8.1. Subrogation; 8.2. Reimbursement; 8.3. Performance; 8.4. Indemnification (including any rights to indemnification set forth in this Guaranty). 9. Subordination of Guarantor. 9.1. Subordination of Claims. All principal and interest on all existing and future indebtedness, liabilities, and obligations of Borrower to Guarantor, whether fixed or contingent, matured or unmatured, and liquidated or unliquidated (the "Subordinated Debt") shall at all times be subordinated in right of payment to the payment and performance of the Secured Promissory Note, the other Loan Documents and the other Guarantied Obligations. 9.2. Payments. Upon the occurrence of any default, event of default or Event of Default under any of the Loan Documents, Guarantor will not accept any payments on any of the Subordinated Debt. If no default, event of default or Event of Default has occurred under any of the Loan Documents and Guarantor receives any payment on the Subordinated Debt, it will hold such payment in trust for the benefit of Lender; if any default, event of default or Event of Default has occurred under any of the Loan Documents and Guarantor receives any payment on the Subordinated Debt, it shall immediately deliver such payment to Lender, but, in either event, without otherwise reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. 9.3. Attorney-in-Fact. Guarantor appoints Lender Guarantor's attorney-in-fact to file claims, and receive payments, on behalf of Guarantor with respect to any of the Subordinated Debt in any proceeding by or against Borrower under the Bankruptcy Code (including Chapters 7 or 11), any assignment for the benefit of Lenders made by Borrower, or in any other reorganization or insolvency proceeding. 5 6 10. Miscellaneous. 10.1. Revival of Debt. Guarantor's obligations under this Guaranty shall again include amount returned by Lender in the event that Lender must return any amount paid by Borrower or any other guarantor of the Secured Promissory Note or of any of the other Guarantied Obligations because of the application of: 10.1.1. the Bankruptcy Code; 10.1.2. any fraudulent transfer law; or 10.1.3. any law respecting preferences. 10.2. No Marshalling. Lender has no obligation to marshall any assets in favor of Guarantor, or against or in payment of: 10.2.1. the Secured Promissory Note, 10.2.2. any of the other Guarantied Obligations, or 10.2.3. any other obligation owed to Lender by Guarantor, Borrower, or any other person. 10.3. Fees and Costs. Guarantor will pay all of Lender's fees and costs incurred in enforcing this Guaranty, including Lender's reasonable attorneys' fees. 10.4. Assignment. Guarantor may not assign his obligations or liabilities under this Guaranty. Subject to the preceding sentence, this Guaranty shall be binding upon the parties hereto and their respective heirs, executors, successors, representatives and assigns and shall inure to the benefit of the parties hereto and their respective successors and assigns. Lender may assign its rights under this Guaranty. 10.5. Applicable Law. The law of the state of Colorado will apply to the interpretation and enforcement of this Guaranty except that no doctrine of choice of law shall be and to apply the laws of any other state or jurisdiction. 6 7 10.6. Indemnification by Borrower. Borrower will indemnify Guarantor against, and hold it harmless from, all payments which Guarantor may at any time be required to make to Lender under this Guaranty. 10.7. Integration. This Guaranty is the entire agreement of Borrower and Guarantor with respect to the subject matter of this Guaranty. 10.8. Rights Cumulative. All of Lender's rights under this Guaranty are cumulative. The exercise of any one right does not exclude the exercise of any other right given in this Guaranty or any other right of Lender not set forth in this Guaranty. 10.9. Rules of Construction. The following rules shall apply in interpreting the meaning of this Guaranty: 10.9.1. "Includes" and "including" are not limiting; 10.9.2. "Or" is not exclusive; and 10.9.3. "All" includes "any" and "any" includes "all." 10.10. Severability. If any provision of this Guaranty is unenforceable, or otherwise invalid, the remaining provisions of this Guaranty shall be enforced to the fullest possible extent. 10.11. Notices. Lender may give any notice to Guarantor at the following address, until changed in writing by notice given by Borrower: National Telephone & Communications, Inc. 2801 Main Street Irvine, California 92614 Telecopy: (949) 251-8085 Attention: Mr. Denis Richard 7 8 10.12. Joint and Several Liability. The obligations hereunder of the persons and/or entities constituting Guarantor under this Guaranty are joint and several. 10.13. Headings; Number; Gender. Section headings used in this Guaranty are for convenience only. They are not a part of this Guaranty and shall not be used in construing it. Wherever appropriate in this Guaranty, the singular shall be deemed to also refer to the plural, and the plural to the singular, and pronouns of certain genders shall be deemed to include either or both of the other genders. 10.14. Review of Documents. Guarantor acknowledges that he has copies of and is fully familiar with each and every Loan Document. 10.15. Counterparts. This Guaranty may be executed in counterparts, each of which shall be deemed an original, but all of which, when taken together, shall be deemed one and the same agreement. 10.16. Acknowledgment of Waivers. Guarantor acknowledges that certain provisions of this Guaranty operate as waivers of rights that Guarantor would otherwise have under applicable law. IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of the date first above written. "Guarantor" NATIONAL TELEPHONE & COMMUNICATIONS, INC. By: /s/ DENIS RICHARD ------------------------------------- Denis Richard President and Chief Executive Officer 8 9 AGREEMENT OF BORROWER John P. Casey hereby agrees to indemnify National Telephone & Communications, Inc. as set forth in Section 10.6 to the foregoing Guaranty. /s/ JOHN P. CASEY ------------------------------------ JOHN P. CASEY 9 EX-99.4 5 LETTER TO MR. CASEY TO SELLERS 1 EXHIBIT 4 JOHN P. CASEY c/o Meridian 10220 River Road, Suite 115 Potomac, Maryland 20854 November 5, 1998 Dr. Robert Cohen Ms. Stefanie Rubin Ms. Allyson Cohen Mr. Jeffrey Cohen Mr. Jeffrey Rubin Dr. Alan Cohen Ms. Meryl Cohen Ms. Gabrielle Cohen Ms. Jaclyn Cohen Ms. Erica Cohen Ms. Nicole Cohen Ms. Lenore Katz Broadway Partners c/o Mr. Jeffrey Cohen c/o Robert S. Matlin, Esq. Camhy Karlinsky & Stein LLP 1740 Broadway, 16th Floor New York, New York 10019-4315 Ladies and Gentlemen: This letter is to confirm that I hereby agree that I will vote all shares of Incomnet, Inc. stock that I own in favor of an increase in the authorized number of shares of Incomnet, Inc. common stock to 50,000,000 shares at the next meeting of shareholders. If shareholder approval is not obtained at the next meeting, I hereby agree to continue to vote all my shares in favor of such a proposal until there is a sufficient increase in the 2 Dr. Robert Cohen, et al. November 5, 1998 Page 2 number of shares of authorized Incomnet common stock to permit issuance of all common stock underlying the warrants owned by each of you and referenced in the Settlement and Release Agreement between you and the Company dated November 5, 1998. Very truly yours, /s/ JOHN P. CASEY ------------------------------ John P. Casey EX-99.5 6 LETTER FROM MR. CASEY TO ELLEN COHEN ETC. 1 EXHIBIT 5 JOHN P. CASEY c/o Meridian 10220 River Road, Suite 115 Potomac, Maryland 20854 November 5, 1998 Ms. Ellen Cohen Mr. Martin Fabrikant c/o Robert S. Matlin, Esq. Camhy Karlinsky & Stein LLP 1740 Broadway, 16th Floor New York, New York 10019-4315 Dear Ms. Cohen and Mr. Fabrikant: This letter is to confirm that I hereby agree that I will vote all shares of Incomnet, Inc. stock that I own in favor of an increase in the authorized number of shares of Incomnet, Inc. common stock to 50,000,000 shares at the next meeting of shareholders. If shareholder approval is not obtained at the next meeting, I hereby agree to continue to vote all my shares in favor of such a proposal until there is a sufficient increase in the number of shares of authorized Incomnet common stock to permit issuance of all common stock underlying the warrants owned by each of you and referenced in the Settlement and Release Agreement between you and the Company dated November 5, 1998. Very truly yours, /s/ JOHN P. CASEY ----------------------------- John P. Casey -----END PRIVACY-ENHANCED MESSAGE-----