FASTCOMM COMMUNICATIONS CORP
8-K, 1999-04-21
TELEPHONE & TELEGRAPH APPARATUS
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<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                               -------------------


                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)  APRIL 21, 1999
                                                  --------------


                      FASTCOMM COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


<TABLE>
<S>                                              <C>                            <C>
                VIRGINIA                               0-17168                             54-1289115
- ------------------------------------------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF CORPORATION)     (COMMISSION FILE NO.)          ( IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>


               45472 HOLIDAY DRIVE, STERLING, VIRGINIA      20166
- --------------------------------------------------------------------------------
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICERS)   (ZIP CODE)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:   (703) 318-7750


                                      NONE
- --------------------------------------------------------------------------------
             (FORMER NAME AND ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>   2
ITEM 2  ACQUISITION OR DISPOSITION OF ASSETS.

       (a) Effective March 31, 1999, the Registrant acquired the assets of KG
Data, Inc. ("KGD"), a Connecticut corporation engaged in the data communications
business. The acquisition was valued at $845,000.

       In connection with this acquisition, which will be accounted for as a
purchase, the Registrant issued 719,149 of its restricted common shares, $.01
par value to the President and sole stockholder Kenneth A. Bloom ("Bloom") in
exchange for assets and the assumption of certain liabilities.

       In connection with the Acquisition, Bloom (i) was granted certain
registration requests with respect to the restricted shares issued to him, and
(ii) entered into a three-year employment agreement with the Registrant.

       The Registrant intends to operate KGD as a separate subsidiary in
Norwalk, Connecticut. Seven existing full-time employees of KGD are to be
retained at this facility, which will be managed by Bloom.

       Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                            FASTCOMM COMMUNICATIONS CORPORATION
                                            -----------------------------------
                                                       (Registrant)


Date:  April 21, 1999


                                                By: /s/ Mark H. Rafferty
                                                   -----------------------------
                                                Name:  Mark H. Rafferty
                                                Title: Vice President and
                                                       Chief Financial Officer

ITEM 7
    Exhibits:
        Ex 10.1   Acquisition Agreement dated March 31, 1999
        Ex 10.2   Employment Agreement dated March 31, 1999

<PAGE>   1
                                                                    EXHIBIT 10.1

                                    AGREEMENT

                                     BETWEEN

                       FASTCOMM COMMUNICATIONS CORPORATION

                              KG DATA SYSTEMS, INC.

                                       AND

                                  KENNETH BLOOM

                                      DATED

                              AS OF MARCH 31, 1999


<PAGE>   2

                              ACQUISITION AGREEMENT

      This Acquisition Agreement (the "Agreement") is made and entered into as
of March 31, 1999, by and among FASTCOMM COMMUNICATION CORPORATION, a Virginia
corporation ("FastComm" or the "Company"), KGDATA SYSTEMS, INC. , ("KG DATA")
and KENNETH BLOOM KG DATA's sole stockholder ("Stockholder") to be effective as
of March 31, 1999.

                                    RECITALS

      A. Whereas FastComm and KGDATA are parties to a License Agreement dated
May 13, 1998 the ("License Agreement"); and

      B. Whereas the License Agreement provides inter alia, for the sale of
assets and technology of KG Data to FastComm, at the option of KG Data and the
Stockholder; and

      C. Whereas, KG Data has exercised it's option contained in the License
Agreement, and upon such exercise:

         (i) the purchase and sale of assets and employment of Stockholder by
FastComm are to be governed in certain respects, by a certain Agreement dated
February 27, 1998 by and between the parties as amended and supplemented by the
License Agreement; and 

         (ii) except for certain payables due by the Company thereunder and
shown on Schedule 1 attached hereto, the License Agreement is null and void;
and

      D. Whereas, the parties wish, through this Agreement, to provide for 
the sale and acquisition of assets of KG Data in accordance with the foregoing;
and

      E. Whereas, the parties hereto desire to adopt a Plan of Reorganization
within the meaning of Section 368 (a) (1) (C) of the Internal Revenue Code of
1986, as amended (the "Code").

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing premises, and mutual
covenants and agreements hereinafter set forth, the parties to this Agreement
hereby agree as follows:

      1. Definitions. As used in this Agreement, terms defined in the preamble
and recitals hereto shall have the respective meanings specified therein and the
following terms shall have the meanings set forth below:

<PAGE>   3

            a. "Affiliate" means, when used with reference to a specified
Person, any Person that directly or indirectly through one or more
intermediaries controls or is controlled by, or is under common control with,
the specified Person.

            b. "Agreement" shall mean this Acquisition Agreement.

            c. "Balance Sheet Date" shall have the meaning provided in Section
5.4 of this Agreement.

            d. "Bill of Sale" shall mean the General Conveyance, Assignment and
Bill of Sale, in the form attached hereto as Exhibit A.

            e. "Closing" shall have the meaning provided in Section 4 of this
Agreement.

            f. "Closing Date" shall have the meaning provided in Section 3 of 
this Agreement.

            g. "Code" shall mean the Internal Revenue Code of 1986, as amended.

            h. "Control" (including as used in the terms "controlling",
"Controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.

            i. "Fiscal Year" of KG Data shall refer to the twelve month period
on or prior to December 31.

            j. "GAAP" shall mean generally accepted accounting principles.

            k. "Hazardous Substances", "Hazardous Wastes", "Hazardous Materials"
and "Toxic Substances" shall have the meaning provided in Section 5.14 of this
Agreement

            l. "Intellectual Property" shall have the meaning provided in
Section 5.13 of this Agreement.

            m. "License Agreement" means that certain License Agreement dated
May 13, 1998 by and between FastComm and KG Data.

            n. "Material Adverse Effect" means an effect which is materially
adverse to the business, properties, assets, revenues, operations, financial
condition results of operations or prospects of KG Data or FastComm and their
respective Subsidiaries, as the case may be.


                                       3
<PAGE>   4

            o. "FastComm Common Stock" shall mean the unregistered Common Stock,
par value $0.01 per share, of FastComm.

            p. "Person" includes an individual, partnership, trust, corporation,
joint venture, association, government bureau or agency or other entity of
whatsoever kind of nature.

            q. "Remedies Exception" shall have the meaning provided in Section
4.2 of this Agreement.

            r. "Securities Act" means the Securities Act of 1933, as amended.

            s. "SEC" means the Securities and Exchange Commission.

            t. "Stockholder' shall mean Kenneth Bloom.

            u. "Subsidiary" of a corporation means (i) any corporation of which
equity securities possessing a majority of the ordinary voting power in electing
the board of directors are, at the time as of which such determination is being
made, owned by such corporation either directly or indirectly through one or
more Subsidiaries, and (ii) any person (other than a corporation) in which such
corporation or any Subsidiary, directly or indirectly, has more than a 10%
ownership interest or over which it exercises control.

      2. Acquisition of Assets. FastComm agrees to acquire, and KG Data agrees
to sell, all the tangible and intangible assets and intellectual property rights
of KG Data including all rights to the marks "KGData Systems, Inc." and
"ChanLcomm", and existing relationships with vendors and employees, in exchange
for shares of "FastComm" voting common stock and assumption of certain stated
liabilities as listed on Schedule 1. KG Data represents and warrants to FastComm
that it owns such assets free and clear of any liens, claims or adverse rights.
FastComm will not assume any of KG Data's debts or liabilities, other than
warranty repairs and existing extended service contracts, if any; provided
however, that FastComm will assume certain obligations of KG Data as listed on
Schedule 1. It is the intention of the parties that the transaction be a tax
free reorganization under the Internal Revenue Code of 1986, as amended.

      3.    Consideration.

            (a) FastComm will purchase the assets of KG Data as reflected in the
March 31, 1999 financial statements and all software code, licenses, and other
intellectual property and all other assets owned by KG DATA (the "Assets") for
the "base purchase price" of $845,000 plus the assumption of agreed upon
liabilities of KGD. Assets will also include cash after payments to outstanding
vendors, due under the License Agreement, accounts receivable, inventories,
deposits, plant and equipment, and technology related to SNA networks (including
R&D in process). Payment for the Assets by FastComm will be in the 


                                       4
<PAGE>   5

form of unregistered shares of common stock. The total number of FastComm voting
common shares to be issued will be 719,149 shares, (the "Acquisition Shares")
which is based on the 20-day average closing price calculated on March 16, 1999.
Stockholder agrees that the Acquisition Shares are being acquired for
investment, will contain a Securities Act restrictive legend, and will only be
resold pursuant to an effective registration statement or exemption from
registration.

            (b) Trade Accounts: FastComm will not assume any trade payables at
Closing, except those due under the License Agreement and payable by FastComm
and listed on Schedule 1 hereto. Trade receivables as of the date of the Closing
are part of the purchased Assets.

            (c) Taxes: FastComm is not assuming liability for any local, state,
and federal taxes, including but not limited to sales, use, excise, or gains,
taxes, incurred by KG DATA or Stockholder before the closing date or in
connection with this transaction. KGD itself is not being acquired so its tax
liability is not assumed. KGD will prepare short-year returns for the period up
to the Closing Date, in consultation with its tax advisors, at Stockholder's
sole expense.

      4.    Closing.

      4.1 Time and Place. The transactions which are the subject of this
Agreement shall be closed concurrently with the execution hereof or as soon
thereafter as the Parties mutually agree (the "Closing"). The Closing shall take
place at the offices of Thomas G. Amon & Associates, 437 Madison Avenue, 22nd
Floor, New York, NY 10022

      4.2 KG Data. At the closing, KG Data shall deliver, or cause to be
delivered to FastComm or its Nominee(s) the following:

                    (a) the Bill of Sale, duly executed and acknowledged by
KG Data;

                    (b) a certificate of the President of KG Data, dated as of
the Closing Date, restating and certifying to FastComm the representations and
warranties set forth in Section 5;

                    (c) copies of Resolutions of the Board of Directors of KG
Data authorizing the execution and delivery by KG Data of this Agreement and of
the instruments required therein to be so executed and delivered, including the
Bill of Sale, duly certified by the Secretary or an Assistant Secretary of KG
Data.

                    (d) an opinion of counsel for KG Data, dated as of the
Closing Date, in form and substance satisfactory to counsel for FastComm, to the
effect that: (i) KG Data is a corporation duly organized, validly existing and
in good standing under the laws of the State of Connecticut and has the
corporate power and authority to execute, deliver and perform this Agreement and
the transactions contemplated herein; (ii) KG Data has taken all


                                       5
<PAGE>   6

necessary corporate action required by applicable law to authorize the execution
and delivery of this Agreement, the Bill of Sale and the consummation of the
transactions contemplated herein; (iii) the execution and delivery of this
Agreement, the Bill of Sale and the consummation of the transactions
contemplated herein will not result in the breach of, or constitute a default
under or accelerate or permit the acceleration of the performance required by
the terms of any applicable law, rule or regulation of any governmental body
having jurisdiction over KG Data, the Certificate of Incorporation or By-Laws of
KG Data or any indenture, mortgage, deed of trust, or other agreement or
instrument known to such counsel to which KG Data is a party or by which any of
its property is bound, or result in the creation of any claim, lien, or
encumbrance upon the Premises; and (iv) this Agreement and the Bill of Sale have
each been duly executed and delivered by KG Data and each is the valid and
legally binding obligation of KG Data enforceable in accordance with its terms.

      4.3 FastComm. At the Closing, FastComm shall deliver, or cause to be
delivered, to KG Data and the Stockholder, the following:

                    (a) The Acquisition Shares, delivered in the name of
Stockholder.

                    (b) an opinion of counsel for FastComm, dated as of the
Closing Date, in form and substance satisfactory to counsel for KG Data to the
effect that: (i) parent is a corporation, duly organized, validly existing, and
in good standing under the laws of the Commonwealth of Virginia and has the
corporation power and authority to execute, deliver and perform this Agreement
and the transactions contemplated herein; (ii) FastComm has taken all necessary
corporate action required by applicable law to authorize the execution and
deliver of this Agreement and the consummation of the transactions contemplated
herein; (iii) the execution and delivery of this Agreement and the consummation
of the transactions contemplated herein will not result in the breach of, or
constitute a default under, or accelerate or permit the acceleration of the
performance required by the terms of, any applicable law, any rule or regulation
of any governmental body having jurisdiction in the premises, the Certificate of
Incorporation or By-Laws of FastComm, or any indenture, mortgage, deed of trust,
or other agreement or instrument known to such counsel to which FastComm is a
party, or by which it or any of its property is bound.

                    (c) In the event that, after Closing, the acquired business
becomes not commercially feasible to pursue for reasons beyond FastComm's
control, such as patent or intellectual property infringement, no market for
products, etc., and FastComm decides to sell the Assets, or any part thereof, in
an arms length transaction, with or without the services of a broker,
Stockholder shall have the right to match any bona fide offer for such Assets,
or any part thereof within ten days of receipt. Failing such matching, Fastcomm
shall be permitted to sell the Assets, or any part thereof, to such offeror in
accordance with the terms of its offer. If Stockholder exercises his right to
buy the Assets, he shall be responsible for the fees of any broker engaged by
FastComm.


                                       6
<PAGE>   7

      5. Representations and Warranties of KG Data and the Stockholder. KG Data
and the Stockholder represent and warrant to and agree with FastComm as follows:

      5.1. Organization and Standing; Articles and By-Laws. KG Data is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Connecticut. KG Data is qualified, licensed or domesticated as a
foreign corporation and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary. KG Data has all requisite power
and authority and all requisite licenses permits and franchises necessary to
own, lease and operate its properties including the Assets, and to carry on its
business in the manner and in the locations as presently conducted. Copies of
the Articles of Incorporation (as certified by the Connecticut Secretary of
State) and By-Laws of KG Data have been delivered to FastComm and are accurate
and complete as of the date hereof.

      5.2. Authorization. KG Data has the requisite corporate power and
authority to enter into and carry out the terms and conditions of this Agreement
and all the transactions contemplated hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by KG Data's Board of Directors and, all corporate
proceedings have been done and no other corporate proceedings on the part of KG
Data are necessary to authorize the execution, delivery and performance by KG
Data of this Agreement. This Agreement has been duly executed and delivered by
KG Data and constitutes the valid and binding obligations of KG Data,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally from time to
time in effect and except that equitable remedies may not in all cases be
available (regardless of whether enforceability is considered in a proceeding at
law or in equity) (collectively, the "Remedies Exception").

      5.3.  Subsidiaries.  KG Data has no Subsidiaries.

      5.4. Absence of Certain Changes or Events. Except as heretofore disclosed
in writing to FastComm or as otherwise contemplated by this Agreement, since
March 31, 1999, (the "Balance Sheet Date") KG Data has conducted its business
only in the ordinary and usual course consistent with past practice, and there
has not been (a) any material adverse change in the business, properties,
assets, revenues, operations, financial condition, results of operations or
prospects of KG Data, (b) any change in accounting methods, principles and
practices by KG Data materially affecting its assets, liabilities or business,
except as may have been required by a change in GAAP, (c) any damage,
destruction or loss, whether covered by insurance or not, having a Material
Adverse Effect upon KG Data, (d) any entry by KG Data into any commitment or
transaction material to KG Data which is not in the ordinary course of business
consistent with past practice, (e) any declaration, payment or setting aside for
payment of any dividends, or (f) any grant to any officer or director of any
increase in compensation (other than periodic salary increases not in excess of
10% made in the ordinary course of business consistent with past practice or
increases 



                                       7
<PAGE>   8

resulting from job promotions or expansions of employment responsibilities), or
any loan to any officer or director, or any adoption, amendment in any material
respect or termination of any bonus, profit sharing, stock option, employee
stock ownership, pension, retirement, deferred compensation, employment or
consulting or other plan, agreement or arrangement for the benefit of employees
of KG Data.

      5.5. Litigation and Product Liability Matters. KG Data has disclosed, in
writing to FastComm, all information in its possession or custody or under its
control with respect to product liability claims and litigation pending as of
the date hereof. KG Data has no product liability claims or litigation pending
as of the date hereof. To the best of KG Data's knowledge, the ultimate
liability for damages arising from such claims and litigation (based upon
assumptions that KG Data believes in good faith to be reasonable under the
circumstances) is either adequately reserved against in KG Data's Balance Sheet
or will not have a Material Adverse Effect on KG Data. Except as disclosed to
FastComm in writing, there are no actions, suits or proceedings of any nature
pending, or to the knowledge of KG Data, threatened, against or by KG Data or
any of its properties,assets or business subject to any order, judgment, ruling,
or decree of any competent authority, which would have a Material Adverse Effect
on KG Data. KG Data has not received notice of violation of any applicable
statute, regulation, code, ordinance, rule, order, judgment, decree or
requirement relating to its operation or its owned or leased properties and to
KG Data's knowledge, no such violation exists, in each case, other than a
violation which would not have a Material Adverse Effect on KG Data. Without
limiting the generality of the foregoing, the manufacturing and marketing of KG
Data's products have been manufactured to comply in all material respects with
the applicable provisions of the FCC Part 15, UL Safety and the regulations
promulgated thereunder but no formal testing of the products has yet taken
place.

      5.6.Warranty Obligations and Returns. KG Data has no anticipated warranty
liability or obligations and/or for return of KG Data products previously
shipped to customers prior to the Balance Sheet date.

      5.7.Tax Returns. KG Data has accurately prepared and duly and timely filed
all federal and state and all other material income, property, sales and use
other applicable tax reports and returns required to be filed (subject to any
extensions applicable to any such filing), and has paid all taxes and other
charges required to be paid with respect to the periods covered by such returns.
KG Data has not been and is not delinquent in the payment of any tax, assessment
or governmental charge or executed any waiver of any statute of limitations on
the assessment or collection of any tax. KG Data knows of no basis for the
assertion of any deficiencies for any period covered by such tax reports and
returns-or otherwise payable to any taxing authority.

      5.8.Title to Assets, Encumbrances. KG Data has good title to all of the
properties and assets (real, personal and mixed, tangible and intangible) that
are reflected on the Balance Sheet to have been acquired after the date thereof
(except for properties and assets sold or otherwise disposed of since the date
of the Balance Sheet in the ordinary course of 


                                       8
<PAGE>   9

business consistent with past practice) free and clear of all liens except (a)
materialmen's, mechanics', carriers', worker's, repairmen's and other similar
liens arising or incurred in the ordinary course of business, or statutory
landlord's liens under leases to which KG Data is a party, with respect to which
the underlying obligation is not in default or such obligation or lien is being
contested in good faith, (b) the rights of third parties with respect to
inventory or work in progress under orders or contracts entered into by KG Data
in the ordinary course of business, (c) liens that do not materially detract
from or materially interfere with the present use of the properties of assets
subject thereto or affected thereby, or otherwise materially impair present
business operations in which such properties are used or materially interfere
with the sale, or materially detract from the aggregate value, of any properties
held for sale, (d) as reflected in the Balance Sheet or the notes thereto, (e)
liens for taxes not yet delinquent or the validity or amount of which are being
contested in good faith, and (f) claims consisting of leases. The term "lien" as
used in this Section shall include any mortgage, pledge, security, interest,
encumbrance, lien, claim or charge of any kind.

      5.9. No Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any person as the result of any act of KG Data in such manner as to give rise
to any claim against any of the parties hereto for a brokerage commission,
finder's fee, financial advisor fee or investment banking fee or other like
payment except Janney Montgomery & Scott, whose fees shall be the sole
responsibility of FastComm.

      5.10. Employee Plans, Leases and Contracts. Except as previously disclosed
to the Company in writing and listed on Schedule 1 hereto, KG Data is not a
party to (i) any employee plan or contract that provides for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments or profit
sharing, (ii) any collective bargaining or other contract or agreement with any
labor union, (iii) any real property lease, (iv) any employment, management,
severance or consulting contract or other contracts, agreements or arrangement
with any current or former officer, director, employee of consultant or with any
entity in which any of the foregoing is an owner, officer, director, employee or
consultant not terminable in 30 days or less notice without penalty to KG Data,
(v) any sales representation, agency distribution agreement, or supply contract
or arrangement, which is of a duration greater than one year from its effective
date, (vi) any agreement, contract or other arrangement whereby KG Data has
extended warranty protection on any of its products for a duration of more than
12 months, (vii) any noncompetition agreement or contract which restricts KG
Data from doing business anywhere in the world, or (viii) any contract or
agreement pursuant to which any person has the right to receive any
participation or other payment which is based or measured in whole or in part
upon the gross or net receipts of KG Data, (ix) an agreement authorizing others
to distribute, license, or sell products of KG Data, (x) any written or oral
agreement, granting to others rights in KG Data's intellectual or technological
property, or (xi) any other contract or agreement that includes a purchase or
other commitment that is substantially in excess of the normal requirements of
its business or was made at a price or on terms and conditions substantially
more onerous than is usual and 



                                       9
<PAGE>   10

customary in its business and which, either individually or in the aggregate,
constitute a material liability. FastComm will assume those contracts listed on
Schedule 1.

      5.11.Minute Books. The minute books of KG Data copies of which have been
delivered to FastComm, accurately record all actions taken by their stockholders
and directors.

      5.12.Compliance with Applicable Law. Other than disclosed in Section 5.5
hereof, the business of KG Data is not being conducted in violation of any
applicable law, ordinance, regulation, decree or order of any governmental
entity, except for violations which either singly or in the aggregate do not and
are not expected to have a Material Adverse Effect on KG Data. KG Data is not a
party to or subject to any judgment, decree, or order entered in any suit or
proceeding brought by any governmental agency or by any other person, enjoining
KG Data with respect to any business practice, the acquisition of any property,
or the conduct of business in any area.

      5.13. Patents, Trade Names and Other Intellectual Property Rights. KG Data
and/or the Stockholder owns or is validly licensed or otherwise has the right to
use, free and clear of all liens, claims and restrictions of any kind or nature,
any and all patents, trademarks, trade names, service marks, copyrights, trade
secrets, technology, know-how and processes including the trademarks "KG Data
Systems" and "ChanLcomm" (collectively, "Intellectual Property"), used in or
necessary for the conduct of its business as now conducted or as proposed to be
conducted. The operations and products of KG Data do not infringe any
Intellectual Property rights of any other Person. Each contract, license, permit
or other agreement or instrument which grants to KG Data the right, or permits
KG Data, to manufacture or distribute KG Data's products or the products of
others, or which is otherwise material (for the purposes of Regulation S-K of
the SEC) to the business or operations of KG Data as currently conducted or as
proposed to be conducted (a copy of each such material contract, agreement or
instrument has previously been delivered to FastComm by KG Data) is in full
force and effect and valid and binding in accordance with its terms, and KG Data
is not in default under any of the material terms thereof, nor has KG Data
relinquished, forfeited or waived any of its rights or privileges thereunder
which are material to its ongoing business operations or received a notice of
any such default, and, except as set forth in the Disclosure letter, there
exists no event which with notice or the passing of time or both would
constitute such a default or grant to any other party thereto the right to
cancel or terminate the same or withhold or suspend its performance thereunder.
KG Data has not received any communication alleging or stating that KG Data or
any employee has violated or infringed, or by conducting business as proposed,
would violate or infringe any Intellectual Property right of any other person.

      5.14.Environmental Compliance Matters. KG Data has not received any notice
of any claim, proceeding or investigation under federal, state or local law or
any law of any foreign jurisdiction relating to air, soil, subsurface and water
pollution, soil monitoring and the storage, treatment, disposal, removal,
remediation, release, discharge or emission of any 


                                       10
<PAGE>   11
Hazardous Material (as defined below) with respect to the business activity of
KG Data. To the best knowledge of KG Data, neither KG Data, any Subsidiary nor
any predecessor entity operating or controlling the business activity of KG
Data has ever owned, leased or operated or otherwise controlled any real
property at which a claim or proceeding is presently pending or threatened, nor
is aware of the existence of any condition on any such property which would
give rise to any such claim or proceeding under federal, state or local law or
any law of any foreign jurisdiction relating to air, soil, subsurface, water
pollution, soil monitoring and the storage, treatment, disposal, removal,
remediation, release, discharge or emission of any Hazardous Material shall
mean any flammables, asbestos, explosives, radioactive materials, hazardous
wastes, toxic substances or related materials, including without limitation,
any substances defined as or included in the definition of "hazardous
substances", "Hazardous wastes", "hazardous materials", "toxic substances"
under any applicable federal, state, local or foreign laws, rules, regulations
or orders or which federal, state, local or foreign laws, rules, regulations or
orders designate as potentially dangerous to public health and/or safety when
present in the environment.

      5.15. Severance and Employment Agreements. KG Data is not a party to any
agreements, and has no policy of, providing for severance or termination
payments to any officer, director consultant or employee of KG Data.

      5.16. No Change of Control Provision. KG Data is not a party or subject to
any agreement, contract or other obligation which would require the making of
any payment, other than payments as contemplated by this Agreement, to any
employee, officer, director, or shareholder of KG Data or to any other Person as
a result of the consummation of the transactions contemplated herein.

      5.17. Board Approval. The Board of Directors of KG Data has duly approved
this Agreement, has determined that the sale of the Assets is fair to KG Data
and its Stockholder and has resolved to recommend the adoption of this Agreement
by the Stockholder.

      5.18. Information. All written information provided to FastComm, or its
agents, by or on behalf of KG Data and/or the Stockholder or any of its
representatives (including, without limitation, each representation and warranty
of KG Data set forth in this Agreement) is, and KG Data and Stockholder
covenants that any such information provided hereafter shall be, true and
correct in all material respects and does not, or shall not, omit any material
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that no representation or warranty is made by
KG Data as to any financial forecasts or projections previously furnished to
FastComm by KG Data, except that such financial forecast or projection has been
prepared in good faith based on assumptions that are believed by KG Data to have
been reasonable at the time or times made.

      6. Representations and Warranties of FastComm. FastComm represents,
warrants, covenants and agrees with KG Data as follows:




                                       11
<PAGE>   12

      6.1. Organization and Standing; Articles and By-Laws. FastComm is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Virginia. FastComm is qualified, licensed or domesticated
as a foreign corporation and is in good standing in all jurisdictions where the
character of its properties owned or held under lease or the nature of its
activities make such qualification necessary. FastComm has all requisite power
and authority and all requisite licenses, permits and franchises necessary to
own, lease and operate its properties and assets and to carry on its business in
the manner and in the locations as presently conducted.

      6.2. Authorization. FastComm has the requisite corporate power and
authority to enter into and carry out the terms and conditions of this Agreement
and all the transactions contemplated hereunder.

      6.3. Enforceability. This Agreement has been fully executed and delivered
by FastComm and constitutes the legal, valid and binding obligation of FastComm,
enforceable against it in accordance with its respective terms, subject to the
Remedies Exception.

      6.4. Authorization of FastComm Common Stock. The issuance of shares of
FastComm Common Stock at the Closing will have been duly authorized by all
necessary corporate action prior to the Closing Date and, when issued as
contemplated by this Agreement, all such shares of FastComm Common Stock will be
validly issued, fully paid non-assessable and not registered.

      6.5. SEC Reports. FastComm heretofore has delivered to KG Data and
Stockholder its proxy statements with respect to its 1994, 1995 and 1996 annual
meetings of stockholders, Annual Reports on Form 10-K for the years 1995, 1996,
1997 and 1998, all Current Reports, if any, on Form 8-K and its Quarterly
Reports on Form 10-Q for its fiscal quarters up to, and including the quarter
ending January 30, 1999.

      6.6. Litigation. Except as disclosed in FastComm's Annual Report on Form
10-K for the fiscal year ended April 30, 1998 and all subsequent quarterly
reports on Form 10-Q through the quarter ending January 30, 1999, there is no
claim, legal action, suit, arbitration, investigation or proceeding before any
court or governmental or other regulatory agency pending or, to the best
knowledge of FastComm, threatened against or affecting FastComm or its
properties, assets or business (or in which FastComm is a plaintiff or otherwise
party hereto). Stockholder and KG Data acknowledge that they are aware that the
Company has since June 2, 1998 been operating under the protection of Chapter 11
of the U.S. Bankruptcy Code (FastComm Communications Corp. Case No.
98-80044-SSM) E.D. of VA., and is emerging from such Bankruptcy and is presently
operating under a Plan of Reorganization, a copy of which has been provided to
KG Data and Stockholder. FastComm makes no representation as to the short or
long-term effect that such Bankruptcy Reorganization and any other disclosed
legal matters may have on its business, business prospects or financial
condition in the future. Stockholder is fully aware of these factors, has had
access to all 


                                       12
<PAGE>   13

public filings via internet and acknowledges that he has had an opportunity to
discuss these matters fully with FastComm and his personal professional
advisors.

      6.7. No Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on without the intervention
of any person as the result of any act of FastComm or any of its Subsidiaries in
such manner as to give rise to any claim against any of the parties hereto for a
brokerage commission finder's fee, financial advisor's fee or investment banking
fee or other like payment, other than Janney Montgomery & Scott, whose fees
shall be the sole responsibility of FastComm.

      6.8.  Board Approval.  The Board of Directors of FastComm has duly
approved this Agreement.

      7. Conditions to Closing. The respective obligations of each party to
effect the transactions shall be subject to the fulfillment at or prior to the
Effective Date of the following conditions:

      7.1. FastComm Approval. The Board of Directors of FastComm shall have
approved the transaction.

      7.2. No Legal Action. No preliminary or permanent injunction or other
order, decree or ruling issued by any court of competent jurisdiction, or by any
governmental, administrative or regulatory agency or commission, in the United
States preventing the consummation of the sale of assets shall be in effect.

      8. Additional Conditions to Obligations of FastComm. All obligations of
FastComm under this Agreement are subject to the fulfillment at or prior to the
Closing of the following additional conditions, any of which may be waived in
writing in whole or in part by FastComm:

      8.1. Representations, Covenants, Certificate. KG Data and the Stockholder
shall have performed in all material respects their agreements contained in this
Agreement required to be performed on or prior to the Effective Date, and the
representations and warranties of KG Data and the Stockholder herein contained
shall be true as of the date of this Agreement and the Closing Date.

      8.2. Permits and Approvals. All material filings, registrations,
covenants, permits, authorizations, and regulatory approvals of governmental
authorities necessary for the sale and transfer of the Assets shall have been
duly obtained or made and shall be in full force and effect.

      8.3. Certificate. FastComm shall have received a certificate of KG Data
and the Stockholder dated the Effective Date, signed by the President of KG
Data, and by the Stockholder certifying that (i) all representations and
warranties of KG Data and the 


                                       13
<PAGE>   14

Stockholder were true and correct in all material respects when made and are
true and correct in all material respects on the effective date as if made on
the Effective Date, and (ii) KG Data have performed and complied in all material
respects with all covenants and agreements required in this Agreement to be
performed or complied with by and on or prior to the Closing Date.

      8.4. Opinion of counsel for KG Data . FastComm shall have received from
Rivelis Pawa & Blum, counsel for KG Data and the Stockholder herein, an opinion,
dated the Closing Date, in form and substance satisfactory to FastComm and its
counsel, substantially to the effect that:

            a. (A) KG Data is a corporation duly organized, validly existing and
in good standing under the laws of the State of Connecticut; (B) KG Data is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which it owns or leases real property, maintains an office or has employees,
except where the failure so to qualify would not have a Material Adverse Effect
on KG Data and the Subsidiaries taken as a whole; (C) KG Data has full corporate
power and authority to own it's properties and to conduct its business as now
being conducted.

            b. This Agreement has been duly authorized, executed and delivered
by KG Data and the Stockholder and, assuming due authorization, execution,
delivery and performance by FastComm, constitutes the valid and binding
obligations of KG Data enforceable against it in accordance with its terms,
subject to the Remedies Exceptions and except to the extent that rights to
indemnity or contribution under this Agreement may be limited by federal or
state securities laws or the public policies underlying such laws.

            c. Except as disclosed to FastComm in writing, to the knowledge of
such counsel, there is no litigation or governmental or other action, suit,
proceeding or investigation before any court or arbitrator or before or by any
public, regulatory or governmental agency or body pending or threatened against,
or involving the properties of, KG Data or the Stockholder, including any of the
Assets.

            d. To such counsel's knowledge, no consent, approval, authorization
or order of, notice to or registration with, any person (including without
limitation any court or government agency or body) is required under any
statute, regulation or order (known to such counsel) applicable to KG Data in
connection with the consummation of by KG Data of the transactions contemplated
herein.

            e. Upon the execution and delivery of the Bill of Sale, FastComm
shall have vested in it all right title and interest in and to the Assets, free
and clear of any lien.

      9. Additional Conditions to the Obligations of KG Data. All obligations of
KG Data and the Stockholder under this Agreement are subject to the fulfillment
at or prior to 


                                       14
<PAGE>   15

the Closing of the following additional conditions, any of which may be waived
in writing, in whole or in part, by KG Data and the Stockholder.

      9.1. Representations, Covenants, Certificate. FastComm shall have
performed in all material respects it's agreements contained in this Agreement
required to be performed on or prior to the Closing Date, and the
representations and warranties of FastComm herein contained shall be true and
correct in all material respects as of the date of this Agreement as though made
at the Closing.

      9.2. Certificate. KG Data shall have received a certificate of FastComm
dated the Closing Date, signed by a senior officer of FastComm, certifying that
(i) all representations and warranties of FastComm were true and correct in all
material respects when made and are true and correct in all material respect on
the effective date as if made on the effective date, and (ii) FastComm has
performed and complied in all material respects with all covenants and
agreements required in this Agreement to be performed or complied with by and on
or prior to the Closing Date.

      9.3. Opinion of Counsel for FastComm. KG Data shall have received from
Thomas G. Amon & Associates, counsel for FastComm an opinion dated the Closing
Date, in form and substance satisfactory to KG Data, to the effect that:

            a. FastComm is a corporation duly organized, validly existing and in
good standing under the law of the Commonwealth of Virginia, and has the
corporate power to enter into this Agreement, consummate the purchase of assets
and carry out the other transactions contemplated hereby;

            b. This Agreement has been duly authorized, executed and delivered
by FastComm and, assuming due authorization, execution, delivery and performance
by KG Data and the Stockholder, constitutes the valid and binding obligation of
each of them, enforceable in accordance with its terms, subject to the Remedies
Exceptions and except as the enforceability of the indemnification and
contribution provisions may be limited under applicable securities laws;

            c. All corporate action by FastComm required in order to effect the
transactions contemplated hereby has been taken;

            d. The shares of FastComm Common Stock issuable pursuant to this
Agreement have been duly and validly authorized and, upon issuance, such shares
will be fully paid and nonassessable shares;

            e. Except as provided in this Agreement, no order, authorization,
consent or approval of, or registration, declaration or filing with any
governmental authority is required in connection with the consummation by
FastComm of the merger or by FastComm of the other transactions contemplated by
this Agreement;


                                       15
<PAGE>   16

            g. The execution, delivery and performance of this Agreement by
FastComm and the consummation of the transactions contemplated hereby will not
constitute a breach or violation of or default under the Certificate of
Incorporation or By-Laws of FastComm.

      10.   Survival of Representations; Indemnification.

      10.1. Survival of Representations. The respective representations and
warranties of the Stockholder, KG Data, and FastComm contained in this Agreement
or in any Exhibit attached hereto shall survive the purchase and sale of the
Assets pursuant to this Agreement.

      10.2. Indemnification. (a) The Stockholder and KG Data agree jointly and
severally, (i) to indemnify and hold FastComm and its officers, directors and
agents harmless from damages, losses or expenses (including, without limitation,
reasonable attorneys' fees and expenses) in excess of $5,000 in the aggregate,
suffered or paid, directly or indirectly, through application of KG Data's or
FastComm's assets or otherwise, as a result of or arising out of the failure of
any representation or warranty made by the Stockholder or KG Data, including but
not limited to trademark, trade secret, copyright or patent infringement, in
this Agreement or in any Exhibit attached hereto to be true and correct in all
respects as of the date of this Agreement and as of the Closing Date and (ii) to
defend, indemnify and hold FastComm and its officers, directors and agents, any
successors to FastComm's interest in the chain-of-title to the property, its
officers, directors and agents, harmless from damages, losses or expenses
(including, without limitation, reasonable attorneys' and consultants' fees and
expenses) suffered or paid, directly or indirectly as a result of, relating to
or arising out of the actual or alleged presence of Hazardous Materials on any
KG Data Property on or prior to the Closing Date or any Environmental Claim
based on the conduct of KG Data or any of its subsidiaries on or prior to the
Closing Date.

      (b) The obligations to indemnify and hold harmless pursuant to this
Section 10.2 shall survive the consummation of the transactions contemplated by
this Agreement.

      11.   Miscellaneous Provisions.

      11.1. Notices. All notices, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if (i) delivered
in person, on the date actually given, (ii) by United States mail, certified or
registered, with return receipt requested, on the date which is two business
days after the date of mailing, or (iii) if sent by telex or facsimile
transmission, with a copy mailed on the same day in the manner provided in (i)
above, on the date transmitted provided receipt is confirmed by telephone:

            a. if to FastComm to:

            FASTCOMM COMMUNICATIONS CORPORATION
            45472 Holiday Drive
            Sterling, VA  20166


                                       16
<PAGE>   17

            Attention:  Mark Rafferty

            With copies to:

            THOMAS G. AMON & ASSOCIATES
            437 Madison Avenue
            New York, NY  10022
            Attention:  Thomas G. Amon, Esq.

      b.    if to KG Data and Stockholder to:

            Kenneth Bloom
            KG DATA SYSTEMS, INC.
            28 Knight Street
            Norwalk, CT 06851

            With copies to:

            Michael P. Goldsmith, Esq.
            420 Lexington, Avenue
            New York, NY 10170

or at such other address as may have been furnished by such Person in writing to
the other parties.

      12.2. Severability. Should any Section or any part of a Section within
this Agreement be rendered void, invalid or unenforceable by any court of law
for any reason, such invalidity or unenforceability shall not void or render
invalid or unenforceable any other Section or part of a Section in this
Agreement.

      12.3. Exhibits and Schedules. Each Exhibit and Schedule delivered pursuant
to the terms of this Agreement, each document, instrument and certificate
delivered by the parties in connection with the transactions contemplated hereby
and each Other Agreement constitutes an integral part of this Agreement.

      12.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
BOTH AS TO VALIDITY AND PERFORMANCE AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES
THEREOF.

      12.5 No Adverse Construction. The rule that a contract is to be construed
against the party drafting the contract is hereby waived, and shall have no
applicability in construing this Agreement or any provisions hereto.


                                       17
<PAGE>   18

      12.6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

      12.7. Costs and Attorneys' Fees. In the event that any action, suit, or
other proceeding is instituted concerning or arising out of this Agreement, the
prevailing party shall recover all of such party's costs, and reasonable
attorneys' fees incurred in each and every such action, suit, or other
proceeding, including any and all appeals or petitions therefrom.

      12.8. Successors and Assigns. All rights, covenants and agreements of the
parties contained in this Agreement shall, except as otherwise provided herein,
be binding upon and inure to the benefit of their respective successors and
assigns.

      12.9. Amendment.  This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.

      12.10. Entire Agreement. This Agreement, and the attached Exhibits, and
any other schedules referred to in this Agreement, contain the entire
understanding of the parties and there are no further or other agreements or
understandings, written or oral, in effect between the parties relating to the
subject matter hereof unless expressly referred to herein.

      12.11. Further Assurances. From time to time after the Closing, at
FastComm's request and for no additional consideration, KG Data will execute and
deliver such other instruments of conveyance, assignments, agreements and other
documents as FastComm may reasonably request in order more effectively to
convey, transfer to and vest in FastComm the Assets.

      12.12. Bulk Sales Laws. FastComm hereby waives compliance by KG Data with
the provisions of any applicable bulk sales law, Article 6 of the Uniform
Commercial Code and any other law affecting bulk transfers, and KG Data hereby
indemnifies FastComm for any liability, tax, cost and expense resulting from
such non-compliance.

      12.13. Taxes. KG Data agrees to pay all ad valorem taxes which are a lien
against the Assets for any tax year ending prior to the Closing Date. In
addition, KG Data shall pay any applicable state, local or federal transfer
taxes or costs related to the transfer of Assets to FastComm.

      12.14. Registration. FastComm agrees to register all securities to be
issued to Stockholder hereunder, with the United States Securities and Exchange
Commission. The Company can make no guarantee as to when such registration will
become effective but will file a registration statement covering the shares on
or before October 15, 1999 if no other registration statement is filed giving
rise to piggy-back rights or is pending at time of filing.


                                       18
<PAGE>   19

      IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.

                            FASTCOMM COMMUNICATIONS CORPORATION
                            a Virginia corporation

                   By:      /s/ Peter C. Madsen
                            -------------------  
                            Name: Peter C. Madsen
                            Title: President


                            KG DATA SYSTEMS, INC.
                            a Connecticut corporation



                   By:      /s/ Kenneth Bloom
                            -------------------  
                            Name: Kenneth Bloom
                            Title: President


                            SOLE STOCKHOLDER OF
                            KG DATA SYSTEMS, INC.


                            /s/ Kenneth Bloom
                            -------------------  
                            KENNETH BLOOM


                                       19

<PAGE>   1
                                                                    EXHIBIT 10.2

                   EMPLOYMENT AND NON-COMPETITION AGREEMENT

            THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT ("Agreement") made as
of March 31, 1999, by and between Fastcomm Communications Corporation, a
Virginia corporation (the "Company"), and Kenneth Bloom ("Executive").

                                WITNESSETH THAT:

            WHEREAS, Executive is willing to render services to the Company as
set forth herein, and assume certain non-competition obligations on the terms
hereinafter set forth; and

            WHEREAS, Executive acknowledges that the services to be performed by
him under this Agreement are of a special and unique character; the business of
the Company is currently international in scope; and the Company competes with
other persons that are or could be located in any part of the world; and in
order to assure the Company that the Company will retain its value and the
Company's business as a going concern, it is necessary that Executive undertake
not to utilize his special knowledge of the Company, its business and its
relationships with customers and suppliers to compete with the Company if
Executive were to leave the Company; and

            WHEREAS, Executive further acknowledges that during his employment
hereunder, he will occupy a position of trust and confidence with the Company
and during such employment, the Company will be compensated, among other
purposes, to develop and preserve customer relationships and other goodwill
exclusively for the benefit of the Company and that as a result, he will develop
customer relationships and goodwill that are valuable and important to the
Company, and has become familiar with the Company's trade secrets, including
without limitation the Company's profit margins, customer preferences and
requirements, and with other proprietary and confidential information concerning
the Company generally and its business; and

            WHEREAS, Executive further acknowledges that throughout his
employment under this Agreement, he is expected to occupy a position of trust
and confidence with the Company, the Company will compensate him, among other
purposes, to develop and preserve customer relationships and goodwill
exclusively for the Company's benefit, which will be valuable and important to
the Company, and he will likely be familiar with the Company's trade secrets,
including without limitation its profit margins, customer preferences and
requirements, and with other confidential and proprietary information concerning
the Company and its business; and

            WHEREAS, Executive further acknowledges that the use by Executive
for his own benefit or that of others of such goodwill, trade secrets or
proprietary and confidential information or the solicitation of and/or doing
business in substantially the same capacity 


                                       20
<PAGE>   2
with any of the Company's customers and potential customers would have a
material adverse effect on the Company and its business and would place the
Company at a substantial competitive disadvantage; and

            WHEREAS, Executive further acknowledges that the agreements and
covenants contained in this Agreement, and in particular Section 6 (Confidential
Information) and Section 7 (Non-Competition Agreement), are reasonable in light
of the particular business of the Company, his knowledge thereof and the
services he has previously performed and will perform under this Agreement.

            NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, it is covenanted and agreed as
follows:

            (i)  Employment. Executive is hereby employed by the Company for an
employment period commencing on the date of execution of this Agreement by both
parties hereto and delivery by the Company of a fully executed copy of the
Agreement to Executive ("Date of Execution") and ending on the third anniversary
of the Date of Execution (the "Employment Period"). If for any reason the
Company's purchase of certain assets of KG Data Systems, Inc. acquisition is not
consummated, this Agreement shall be without effect and neither party shall have
any liability to the other hereunder.


            (ii) Employment Services. Executive shall be employed in a senior
management capacity with the Company and will devote all of his business time
and attention, his best efforts, and all of his ability and skill thereto. His
title shall initially be Vice President Main-Frame Networking and he will
initially report to the President of the Company. During the term hereof
Executive shall not be required to relocate without his written consent.

            (iii)Compensation. During the Employment Period, in full 
consideration for said services and subject to the due performance thereof:

                    (a) The Company will pay, or cause to be paid, to Executive,
and Executive agrees to accept, a salary at a rate of not less than $3,846.15
biweekly, subject to review on an annual basis. Such salary shall be payable in
accordance with the Company's usual paying practices, but not less frequently
than monthly; and

                    (b) Executive shall receive such customary employee "fringe"
welfare benefits afforded generally by the Company to its senior management;
provided Executive is otherwise eligible to receive the same and in each case in
accordance with the terms and conditions of the plans and programs from time to
time in effect (including any required employee contributions).

                    (c) The Company shall reimburse Executive for all
pre-approved reasonable, direct, out-of-pocket ordinary and necessary business
expenses incurred by 


                                       21
<PAGE>   3
Executive in the performance of his services hereunder and for which Executive
properly accounts in accordance with the Company's regulations and procedures,
including but not limited to, travel expenses between Sterling VA and Norwalk,
CT.

                    (d) FastComm agrees to register all securities to be issued
to Stockholder pursuant to this Agreement with the United States Securities and
Exchange Commission. The Company can make no guarantee as to when such
registration will become effective but will file a Registration Statement
covering the shares on or before October 15, 1999 if no other registration
statement is filed giving rise to piggy-back rights or is pending at time of
filing. Executive shall have "piggy-back" registration rights with respect to
his shares, subject to underwriter approval, if the registration as to which
these piggy-back rights apply, is an underwritten offering.

                    (e) Fastcomm shall grant to Executive options to purchase
120,000 shares of its Common Stock. The exercise price of the options shall be
the closing market price of Fastcomm Common Stock on the Date of Execution. The
options will vest at a rate of 33.33% per year commencing the first anniversary
from date of issuance. The options become exercisable in equal one third
installments on each of the first, second and third anniversaries of the date of
this Grant and expire five years from date of Grant of if Executive ceases to be
an employee of FastComm. These options will be subject to the terms and
conditions of the Fastcomm 1992 Employee Stock Option Plan.

                    (f) Executive will be eligible to participate in employee
stock option program, employee bonus programs and 401(k) plan.

            4. Bonus Shares. FastComm will pay Executive an additional $100,000
in the form of shares of unregistered common stock in FastComm in the event that
KGD Sales as hereafter defined, exceeds $2,500,000 during the period June 1,
1999 through May 31, 2000 ("1999 Sales"); and an additional $200,000 in the form
of unregistered shares of common stock in FastComm in the event that KGD Sales
exceeds $5,000,000 during the period June 1, 2000 through May 31, 2001 ("2000
Sales").

            "KGD Sales" are defined as revenues from products designed by or in
process of design by (and disclosed to FastComm by KGD on the date hereof, or
any channel-attached device, revenue from maintenance agreements and revenue
from installation services less sales returns, credits issued and any other
adjustment to gross revenue).

            Bonus items are subject to recapture. That is, if the 1999 Sales
target is not achieved, the related bonus may be recaptured (will be paid) if
the cumulative 1999 Sales and 2000 Sales target is achieved. The shares of
common stock will be valued at the date the bonus is earned.

            In addition, FastComm will pay Executive in unregistered stock or
cash, at FastComm's option, a non cumulative override of 3% on all "KGD Sales"
above $2,500,000 


                                       22
<PAGE>   4

per FastComm fiscal year for up to four years from date of Closing provided
Executive is still employed by the Company.

            In addition, collected revenue from accounts listed on Attachments A
and B hereto will earn for Executive a 5% override on KGD Sales (as defined in
Section 4) as follows:

                    (a) those accounts listed on Attachment A (as existing
customers) will qualify for override if such customers execute contracts with
the Company on or before April 8, 2000, and InRange will qualify for override if
it executes a contract on or before April 8, 2000; (b) those accounts listed on
Attachment B as "prospects", will qualify for override only if they execute a
contract in excess of $5,000 on or before August 6, 1999.

      Such override shall be payable in cash for the life of the contract and
any extensions, up to four years after the Closing so long as Executive remains
employed by the Company. To the extent that such 5% override applies, the 3%
override provided for above shall not apply.

      IF THIS AGREEMENT IS TERMINATED UNDER SECTION 13(c) ONLY EXECUTIVE'S
RIGHTS TO EARN BONUSES OR RECEIVE AN OVERRIDE SHALL CEASE ON THE DATE OF SUCH
TERMINATION.

            5. Vacation. During the Employment Period, Executive shall be
entitled to three weeks of vacation per calendar year. In addition, Executive
shall be entitled to the normal holidays afforded all senior executives of the
Company.

            6. Confidential Information; Discoveries. Executive, during the
Employment Period and at all times thereafter, will not, directly or indirectly
(without the Company's prior written consent), use for himself or use for, or
disclose to, any party other than the Company or any affiliate of the Company,
any secret or confidential information or data regarding the business of the
Company or its affiliates or any secret or confidential information or data
regarding the costs, uses, methods, applications, customers, trade accounts,
marketing or strategic plans or suppliers (and pertinent information respecting
transactions and prospective transactions therewith) of products made, produced
or sold by the Company or any affiliate, or regarding any secret or confidential
apparatus, process, system or other method at any time used, developed or
investigated by or for the Company or any affiliate, whether or not invented,
developed, acquired, discovered or investigated by Executive unless and to the
extent that the aforementioned secrets, data or information become generally
known to and available for use by the public other than as a result of
Executive's acts or omissions. All documents and tangible items (including all
customer lists, memoranda, books, papers and other data) provided to Executive
by the Company, created by Executive or otherwise coming into Executive's
possession for use in connection with his employment with the Company (whether
provided or created during the term of this Agreement or prior thereto) are the
property of the Company and shall be promptly returned to the Company on demand
at any time or on termination of employment together with all copies,
recordings, abstracts, notes or reproductions of any kind made from or about the
documents and tangible items or the information they contain. Executive
acknowledges and agrees that all of Executive's duties and obligations under
this 


                                       23
<PAGE>   5

Section 6 shall survive the expiration or termination of Executive's employment
with the Company, regardless of the cause therefor.

            Any and all inventions, discoveries, processes, methods and designs,
whether or not patentable or copyrightable, which Executive may conceive or
make, either alone or in conjunction with others, during Executive's term of
employment with the Company or any affiliate (or heretofore shall have conceived
or made, either alone or in conjunction with others, during Executive's prior
employment by Seller) relating to, or in any way pertaining to or connected with
the business of the Company or any affiliate, shall be the sole and exclusive
property of the Company; and Executive, whenever requested to do so by the
Company or any affiliate thereof, and at the Company's expense but without
further compensation or consideration, shall promptly execute any and all
applications, assignments and other instruments which the Company or its counsel
shall reasonably deem necessary or desirable in order to apply for and obtain
letters patent of the United States and of foreign countries for said inventions
and discoveries and in order to assign and convey to the Company the sole and
exclusive right, title and interest in and to said inventions, discoveries,
processes, methods and designs, or any applications or patents thereon.
Executive hereby confirms that he neither holds nor has any interest in any
patent, patent right, patent application, trademark, trademark application or
license agreement.

            7. Non-Competition Agreement. Commencing upon execution of this
Agreement, Executive agrees that until the date two years after any termination
of his employment with the Company or any affiliate of the Company for "cause";
as hereinafter defined, Executive will not, directly or indirectly, assist in,
engage in, have any financial interest in, or participate in any way in, as an
owner, partner, employee, agent, board member or shareholder, any business that
involves, in whole or in part, activities similar to, related to or competitive
with (a) the business heretofore or now carried on by KG Data Systems Inc., (b)
the business of the Company or any subsidiary as carried on during the term of
Executive's employment hereunder or (c) the business of any affiliate of the
Company as carried on during the term of Executive's employment hereunder, but
only to the extent Executive renders services to such affiliate or significantly
participates in its business or operations in the course of his duties
hereunder. Nothing contained herein shall restrict Executive from owning one
percent (1%) or less of the corporate securities of any competitor of the
Company which securities are listed on any national securities exchange or
actively traded over-the-counter, if Executive has no other connection or
relationship, direct or indirect, with the issuer of such securities. Executive
acknowledges and agrees that the purchase by the Company of all the assets of
Seller, as well as the consideration and benefits to be provided to Executive
under this Agreement have been bargained and negotiated in exchange for, and in
consideration of, Executive's agreement to abide by the terms and provisions of
Section 6 and Section 7 hereof. Executive acknowledges and agrees that all of
Executive's duties and obligations under this Section 7 shall survive the
expiration or termination of Executive's employment with the Company, regardless
of the cause therefor.


                                       24
<PAGE>   6

            8. Remedies for Breach. In the event of a breach or threatened
breach of any of Executive's duties and obligations under Section 6 and Section
7 hereof, the Company shall, in addition to other remedies available to it, be
entitled, in addition to any other legal or equitable remedies the Company may
have in that connection (including any right to damages that the Company may
suffer), to a temporary, preliminary and/or permanent injunction restraining
such breach or threatened breach. Executive hereby expressly acknowledges that
the harm that might result to the Company's goodwill or its relationships with
customers, or as a result of the disclosure or use of the confidential
information, could be largely irreparable.

            9. Definitions. The term "affiliate" as used herein shall mean any
person or entity which, directly or indirectly, through one or more
intermediates is controlled by, controls, or is under common control with the
person or entity specified. The term "subsidiary," as used herein, shall mean
any corporation owned or controlled, directly or indirectly, through stock
ownership. All other capitalized terms used herein which are defined in the
Purchase Agreement shall have the meanings herein as are ascribed to such terms
in the Purchase Agreement unless otherwise expressly provided for herein.

           10. Non-Waiver of Rights. The failure to enforce at any time any of
the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.

            11. Invalidity of Provisions. If any provision of this Agreement
shall be determined to be contrary to law and unenforceable by any court of law,
the remaining provisions shall be severable and enforceable in accordance with
their terms. To the extent that any provision of this Agreement is adjudicated
to be contrary to law or unenforceable because it is overbroad, that provision
shall not be void but rather shall be limited only to the extent required by
applicable law and enforced as so limited.

            12. The Company agrees to indemnify and hold Executive harmless from
and against any personal liability associated with claims made against him in
his capacity as an officer of the Company and directly relating to the SEC
investigation. Except as disclosed in FastComm's Annual Report on Form 10-K for
the fiscal year ended April 30, 1998 and all subsequent quarterly reports on
Form 10-Q through the quarter ending January 30, 1999, there is no claim, legal
action, suit, arbitration, investigation or proceeding before any court or
governmental or other regulatory agency pending or, to the best knowledge of
FastComm, threatened against or affecting FastComm or its properties, assets or
business (or in which FastComm is a plaintiff or otherwise party hereto).
Executive acknowledges that he is aware that the Company has since June 2, 1998
been operating under the protection of Chapter 11 of the U.S. Bankruptcy Code
(FastComm Communications Corp. Case No. 98-80044-SSM) E.D. of VA., and is
emerging from such Bankruptcy and is presently operating under a Plan of
Reorganization, a copy of which has been provided to Executive. FastComm makes
no representation as to the short or long-term effect that such Bankruptcy,
Reorganization and any 


                                       25
<PAGE>   7

other disclosed legal matters may have on its business, business prospects or
financial condition in the future. Executive is fully aware of these factors,
has had access to all public filings via internet and acknowledges that he has
had an opportunity to discuss these matters fully with FastComm and his personal
professional advisors.

            13.     Termination.  Executive's employment hereunder may be
terminated prior to the third anniversary of the Closing Date as follows:

                    (a) By Executive's death;

                    (b) By the Company, in the event Executive becomes unable to
perform the services required of Executive hereunder for 120 or more days within
any period of 365 consecutive days by reason of physical or mental disability
(said disability to be determined by a disinterested licensed physician chosen
by the Company in the event of a dispute between the parties as to the existence
of said disability ("Disability")). Executive represents and warrants to the
Company that he has no Disability on the date hereof; or

                    (c) By the Company for "cause" if any of the following
events shall occur during the term hereof:

            (i) NEGLIGENCE. Executive has been grossly negligent in carrying
            out, or willfully failed or refused to serve and carry out his
            duties and responsibilities as required by Section 2 hereof; or

            (ii) BREACH OF AGREEMENT. Executive breaches any material term of
            the Acquisition Agreement or this Agreement and fails to cure such
            breach (where capable of cure) within 30 days after the receipt of
            written notice from the Company to Executive of such breach, which
            notice shall state in reasonable detail the facts and circumstances
            claimed to be a breach and of the intent of the Company to terminate
            the Executive's employment upon the failure of the Executive to
            timely cure; or

            (iii) MISCONDUCT. Executive has willfully and knowingly committed an
            act of fraud, misappropriation, embezzlement, theft, dishonesty,
            breach of fiduciary duty involving personal profit or has willfully
            and knowingly violated any law, rule, or regulation (other than
            traffic violations or similar minor offenses); or

            (iv)  CRIMINAL OFFENSE.  The indictment of Executive for any
            criminal felony offense.

            Upon termination pursuant to Section 13(a), (b) or (c), the Company
shall promptly pay to Executive the full amount of his salary and benefits
accrued through the date of termination and shall have no further obligations to
Executive under this Agreement; provided that in the event of termination
pursuant to Section 13(a) or (b) the foregoing provision shall in 


                                       26
<PAGE>   8

no way be deemed a waiver of any of Executive's rights under life or disability
insurance policies provided pursuant to Section 3 hereof or bonuses earned at
the date of termination under Section 4 hereof. The Company may also direct
Executive to discontinue providing employment services hereunder for any reason
including reasons other than those set forth in Section 13(c); provided that,
after such direction by the Company, the Company shall continue to pay Executive
his salary and benefits under Section 3(a) and (b) for a period of six months
after such notice.

            If any termination by the Company pursuant to Section 13(c) hereof
is ever ultimately determined by any court, agency or other tribunal to have
been for a cause other than described under Section 13(c) hereof, then the
Company's sole liability under this Agreement or otherwise at law or in equity
shall be to pay Executive those amounts that would have otherwise been paid to
Executive under Section 3(a) and (b) hereof until the expiration of the
Employment Period.

               (d) By Executive anytime after the one year anniversary date
hereof for any reason. Upon termination pursuant to Section 13(d), the Company
shall promptly pay to Executive the full amount of his salary and benefits
accrued through the date of termination and shall have no further obligations to
Executive under this Agreement.

            14. Assignments. This Agreement shall be freely assignable by the
Company to, and shall inure to the benefit of, and be binding upon any other
corporate entity which shall succeed to the business presently being operated by
the Company, but, being a contract for personal services, neither this Agreement
nor any rights hereunder shall be assigned by Executive. If any successor
company to the Company refuses to honor this Agreement, then Executive's rights
to compensation hereunder shall immediately accelerate and be payable.
Notwithstanding the foregoing, any assignment of this Agreement will not relieve
the Company of its obligations hereunder and the Company will remain primarily
liable hereunder. Executive's options issued in accordance with this Agreement
shall vest in full upon any such assignment or in connection with a sale of the
Company.

            15. Governing Law. This Agreement shall be interpreted in accordance
with and governed by the laws of the State of New York without regard to the
conflict of laws rules of such state.

            16. Amendments. This Agreement constitutes the entire agreement
between the parties. No modification, amendment or waiver of any of the
provisions of this Agreement or such letter shall be effective unless in writing
specifically referring hereto, and signed by the parties hereto.

            17. Right to Recover Costs. Executive undertakes and agrees that if
Executive breaches any provision of this Agreement, Executive shall be liable
for any attorneys' fees and costs incurred by the Company in enforcing its
rights under this Agreement. The Company undertakes and agrees that if the
Company breaches any provision of this Agreement, 


                                       27
<PAGE>   9

the Company shall be liable for any attorneys' fees and costs incurred by
Executive in enforcing his rights under this Agreement.

            18. Rule of Construction. The Company and Executive have
participated substantially in the negotiation and drafting of this Agreement and
each party hereby disclaims any defense or assertion in any litigation or
arbitration that any ambiguity herein should be construed against the draftsman.

            19. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered (i) personally, (ii) by registered or certified
mail, postage prepaid, (iii) by facsimile transmission or (iv) by overnight
delivery service and addressed as set forth below:

                    If to the Company:

                    Fastcomm Communications Corporation
                    45472 Holiday Drive
                    Sterling, VA  20166
                    Att: Mark H. Rafferty

                    Copy to:

                    Thomas G. Amon & Associates
                    437 Madison Avenue
                    New York, NY  10022
                    Attention:  Thomas G. Amon


                    If to Executive:

                    Kenneth Bloom - President
                    KG DATA SYSTEMS, INC.
                    28 Knight Street
                    Norwalk Conn. 06857

                    Copy to:

                    Michael P. Goldsmith, Esq.
                    420 Lexington Avenue
                    Suite 2310
                    New York, NY  10170


                                       28
<PAGE>   10

      Any such notice shall be effective upon receipt. Any party may change the
address to which notices are to be addressed by giving the other parties notice
in the manner herein set forth.

            PLEASE NOTE: BY SIGNING THIS AGREEMENT, EXECUTIVE IS HEREBY
CERTIFYING THAT EXECUTIVE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND
STUDY BEFORE EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT;
(C) HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING THIS AGREEMENT TO ASK ANY
QUESTIONS EXECUTIVE HAD ABOUT THIS AGREEMENT AND RECEIVED SATISFACTORY ANSWERS
TO ALL SUCH QUESTIONS; AND (D) UNDERSTANDS EXECUTIVE'S RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT.

            IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed the day and year first above written.

                              FASTCOMM COMMUNICATIONS CORPORATION
                              ("FASTCOMM")

                              By:   /s/ Peter C. Madsen
                                   ---------------------
                                   Name: Peter C. Madsen
                                   Title: President & CEO

                              EXECUTIVE:

                                    /s/ Kenneth Bloom
                                   ------------------
                                   Kenneth Bloom


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