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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 11, 1996
ALL-COMM MEDIA CORPORATION
400 Corporate Pointe, Suite 780
Culver City, California 90230
(310) 342-2800
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Nevada 0-16730 88-0085608
(State of Incorporation) (Commission File No.) (IRS Id. No.)
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Exhibit Index on Page 3
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 10, 1996, Metro Merger Corp., a wholly-owned subsidiary
("Merging Subsidiary") of All-Comm Media Corporation ("All-Comm") merged with
and into Metro Services Group, Inc. ("Metro") pursuant to an Agreement and Plan
of Merger, dated as of October 1, 1996 (the "Merger Agreement"), among Merging
Subsidiary, All-Comm, Metro, J. Jeremy Barbera, Janet Sautkulis and Robert M.
Budlow. At the effective time of such merger (the "Merger"), among other things,
(i) each then-outstanding share of common stock, no par value, of Metro ("Metro
Common Stock") was converted into the right to receive (x) 18,140 shares of
common stock, par value $.01 per share, of All-Comm ("All-Comm Common Stock")
and (y) a negotiable promissory note (a "Note") in a face amount of $10,000;
(ii) each share of Metro Common Stock held in Metro's treasury or owned by Metro
or Merging Subsidiary was canceled without payment of any consideration
therefor; and (iii) each then-outstanding share of common stock, par value $.01
per share, of Merging Subsidiary was converted into one share of Metro Common
Stock (as the surviving corporation in the Merger), registered in the name of
All-Comm. The Notes shall be due and payable, together with interest thereon at
a rate of 6% per annum, on June 30, 1998, subject to earlier repayment, at the
option of the holder thereof, upon completion by the Company of a public
offering of its equity securities. The Notes are convertible on or before
maturity, at the option of the holder thereof, into shares of All-Comm Common
Stock at an exchange rate equal to $5.38 per share.
Immediately following the Merger, All-Comm owns all
outstanding shares of the common stock of Metro, which shares
represents 100% of the total voting power of the outstanding
capital stock of Metro. Prior to the Merger, each of Mr. Barbera,
Mr. Budlow and Ms. Sautkulis owned 60, 30 and 10 outstanding
shares of Metro Common Stock, respectively, which represented
in the aggregate 100% of the total voting power of Metro's
outstanding capital stock. Pursuant to the Merger Agreement,
the Board of Directors of Metro was reconstituted upon the
consummation of the Merger to consist of Messrs. J. Jeremy
Barbera, Robert M. Budlow and E. William Savage, each of whom is
an employee and, in the case of Mr. Barbera and Mr. Savage, a
director of All-Comm.
Metro provides database management and other direct marketing services
to diverse group of approximately 500 clients located throughout the United
States. These services include customer and market data analysis, database
creation and analysis, data warehousing, predictive behavioral modeling, list
processing, brokerage and management, data processing, data enhancement and
development of information systems. Metro assists its clients in defining target
markets and uses sophisticated data analysis to support clients' direct
marketing campaigns to increase the productivity of its clients' marketing
expenditures.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.*
(b) Pro Forma Financial Information.*
(c) The following exhibits are filed herewith:
2.1 Agreement and Plan of Merger dated October 1,
1996 among All-Comm Media Corporation, Metro
Merger Corp., Metro Services Group, Inc., J.
Jeremy Barbera, Janet Sautkulis and Robert M.
Budlow
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* It is impracticable for All-Comm to provide the required financial
statements and pro forma financial information as of the date hereof.
All-Comm will file the required financial statements and pro forma
financial information no later than 60 days after the date hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALL-COMM MEDIA CORPORATION
(Registrant)
Date: October 11, 1996 By: /s/Scott Anderson
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Scott Anderson
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description Page
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2.1 Agreement and Plan of Merger dated October
1, 1996 among All-Comm Media Corporation,
Metro Merger Corp., Metro Services Group,
Inc., J. Jeremy Barbera, Janet Sautkulis and
Robert M. Budlow 6
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TABLE OF CONTENTS
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1. THE MERGER......................................................................... 2
1.1 The Merger.................................................................. 2
1.2 Effective Time.............................................................. 3
1.4 Certificate of Incorporation and Bylaws of the Surviving Corporation........ 3
1.5 Directors of the Surviving Corporation...................................... 4
1.6 Effects of the Merger....................................................... 4
2. STATUS AND CONVERSION OF SECURITIES................................................ 5
2.3 Employment Agreements....................................................... 7
2.4 Other Transactions at Closing............................................... 8
3. REPRESENTATIONS AND WARRANTIES OF METRO AND THE SHAREHOLDERS....................... 8
3.1 Organization and Qualification.............................................. 9
3.2 Capitalization.............................................................. 9
3.3 Financial Condition......................................................... 10
3.4 Tax and Other Liabilities................................................... 11
3.5 Litigation and Claims....................................................... 14
3.6 Properties.................................................................. 14
3.7 Contracts and Other Instruments............................................. 16
3.8 Employees................................................................... 16
3.9 Patents, Trademarks, Et Cetera.............................................. 17
3.10 Questionable Payments....................................................... 18
3.11 Authority to Merge.......................................................... 18
3.12 Nondistributive Intent...................................................... 20
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................................... 20
4.1 Organization................................................................ 20
4.2 Validity of Shares.......................................................... 21
4.3 Authority to Merge.......................................................... 21
5. CONDITIONS TO OBLIGATIONS OF THE PURCHASER......................................... 22
5.1 Accuracy of Representations and Compliance With Conditions.................. 22
5.2 Opinion of Counsel.......................................................... 23
5.3 Other Closing Documents..................................................... 24
5.4 Legal Action................................................................ 24
5.5 No Governmental Action...................................................... 24
5.6 Contractual Consents Needed................................................. 25
5.7 Material Adverse Change..................................................... 25
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6. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS...................... 26
6.1 Accuracy of Representations and Compliance With Conditions.................. 26
6.2 Legal Action................................................................ 26
6.5 Contractual Consents........................................................ 27
6.6 Opinion of Counsel.......................................................... 28
7. COVENANTS OF THE COMPANY AND THE SHAREHOLDERS...................................... 29
7.1 Access...................................................................... 29
7.2 Conduct of Business......................................................... 29
7.3 Advice of Changes........................................................... 30
7.4 Public Statements........................................................... 30
7.5 Other Proposals............................................................. 31
7.6 Voting by Shareholders...................................................... 32
8. COVENANTS OF THE PURCHASER......................................................... 32
8.1 Confidentiality............................................................. 32
8.2 SEC Filings................................................................. 33
8.3 NASDAQ Listing.............................................................. 33
8.4 Election of Officers. ..................................................... 33
8.5 Voting of Securities........................................................ 34
8.6 Registration Rights......................................................... 34
8.7 Tax Matters................................................................. 34
9. INDEMNIFICATION; SURVIVAL; LIMITATIONS ON LIABILITY................................ 34
9.1 Indemnification............................................................. 34
9.2 Survival.................................................................... 36
10. MISCELLANEOUS...................................................................... 37
10.1 Brokerage Fees.............................................................. 37
10.2 Further Actions............................................................. 37
10.3 Submission to Jurisdiction.................................................. 37
10.4 Merger; Modification........................................................ 38
10.5 Notices..................................................................... 38
10.6 Waiver...................................................................... 39
10.7 Guaranty.................................................................... 39
10.8 Binding Effect.............................................................. 39
10.9 No Third-Party Beneficiaries................................................ 40
10.10 Separability................................................................ 40
10.11 Headings.................................................................... 40
10.12 Counterparts; Governing Law................................................. 40
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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") made and
entered into as of the 1st day of October 1996, by and among ALL-COMM MEDIA
CORPORATION, a Nevada corporation ("All-Comm" or the "Purchaser"); METRO MERGER
CORP., a New York corporation and a wholly-owned subsidiary of All-Comm
("Merging Subsidiary"); METRO SERVICES GROUP, INC., a New York corporation
("Metro" or "the Company"); J. JEREMY BARBERA an individual ("Barbera"); JANET
SAUTKULIS, an individual; ("Sautkulis"); and ROBERT M. BUDLOW, an individual
("Budlow"; together with Barbera and Sautkulis, the "Shareholders").
W I T N E S S E T H:
WHEREAS, All-Comm, Merging Subsidiary, Metro and the Shareholders
deem it to be desirable and in the best interests of each corporation that
All-Comm acquire Metro such that all of the issued and outstanding shares of
capital stock of Metro be acquired by All-Comm pursuant to a merger as described
herein;
WHEREAS, All-Comm has formed Metro Merger Corp. as a wholly-owned
subsidiary ("Merging Subsidiary") under the Business Corporation Law of the
State of New York (the "BCL") for the purpose of merging it with Metro pursuant
to the applicable provisions of the BCL and the terms of this Merger Agreement;
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WHEREAS, subject to the terms and conditions of this Merger
Agreement, All-Comm and Metro desire to cause Merging Subsidiary to be merged
with and into Metro, Metro and Merging Subsidiary shall be referred to herein as
the "Constituent Corporations"; and
WHEREAS, it is the express intention of All-Comm, Merging
Subsidiary and Metro that this Merger Agreement constitute a plan of
reorganization intended to qualify for federal income tax purposes as a
"reorganization" within the meaning of IRC Sections 368(a)(1)(A) and
368(a)(2)(E):
NOW, THEREFORE, in consideration of the premises, representations,
warranties and covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. THE MERGER.
1.1 THE MERGER.
At the Effective Time (as defined in Section 1.2), upon the
terms and subject to the conditions of this Agreement, Merging Subsidiary shall
be merged with and into Metro (the "Merger") in accordance with the BCL. Metro
shall be the surviving corporation (the "Surviving Corporation") in the Merger.
As a result of the Merger, the outstanding shares of capital stock of the
Constituent Corporations shall be converted or cancelled in the manner provided
in Article 2.
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1.2 EFFECTIVE TIME.
At the Closing (as defined in Section 1.3), a certificate of
merger (the "Certificate of Merger") shall be duly prepared and executed by
Metro and Merging Subsidiary and thereafter delivered to the Secretary of State
of the State of New York (the "Secretary") on, or as soon as practicable after,
the Closing Date (as defined in Section 1.3). The Merger shall become effective
at the time of the filing of the Certificate of Merger with the Secretary (the
date and time of such filing being referred to herein as the "Effective Time").
1.3 CLOSING.
The closing of the Merger (the "Closing") will take place at
the offices of Camhy Karlinsky & Stein, 1740 Broadway, New York, New York
10019-4315, on October 9, 1996 or at such other place as the parties hereto
mutually agree, on a date and at a time to be specified by the parties, which
shall in no event be later than 10:00 a.m., local time, provided that the
closing conditions set forth in Article 5 have been satisfied or, if
permissible, waived in accordance with this Merger Agreement, or on such other
date as the parties hereto mutually agree (the "Closing Date").
1.4 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION.
At the Effective Time, (i) the Certificate of Incorporation
of Metro as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation, and (ii) the
Bylaws of Metro as in effect immediately prior to the Effective Time
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shall be the Bylaws of the Surviving Corporation until thereafter amended as
provided by law, the Certificate of Incorporation of the Surviving Corporation,
and such Bylaws.
1.5 DIRECTORS OF THE SURVIVING CORPORATION.
From and after the Effective Time, the directors of the
Surviving Corporation shall be Barbera, Budlow and William Savage. The directors
of the Surviving Corporation shall serve until their successors shall have been
duly elected or appointed and qualified or until their earlier death,
resignation, or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws. All-Comm covenants and agrees that for
a period of seven years from the Effective Time the Board of Directors of Metro
shall consist of three persons one of whom shall be designated by each of
Barbera, Budlow and All-Comm, provided that such covenant shall terminate once
the Shareholders collectively own less than 1,000,000 shares of common stock of
All-Comm stock (which threshold amount shall be adjusted to reflect any stock
split, stock dividend or other recapitalization event). In addition, within the
first sixty days of each fiscal year commencing July 1, 1997 the Board of
Directors of Metro shall adopt a budget for Metro for such fiscal year, which
budget must be approved by the Board of Directors of All-Comm, which approval
may not be unreasonably withheld. The parties hereto agree that the covenant
described in the preceding section shall terminate in the event that the actual
revenue and the actual net income for such fiscal year are less than 90% of the
budgeted amounts.
1.6 EFFECTS OF THE MERGER.
Subject to the foregoing, the effects of the Merger shall be
as provided in the applicable provisions of the BCL.
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2. STATUS AND CONVERSION OF SECURITIES.
2.1 STOCK OF METRO.
(a) METRO. Each share of common stock, without par value, of
Metro ("Metro Common Stock") issued and outstanding at the Effective Time shall,
by virtue of the Merger and without any action on the part of the holders
thereof, be converted into the right to receive (i) the number of shares of
common stock, par value $0.01 per share, of All-Comm ("All-Comm Common Stock")
determined pursuant to this paragraph (the "Stock Consideration"), except that
any shares of Metro Common Stock held in Metro's treasury or owned by Metro or
Merging Subsidiary at the Effective Time shall be cancelled without payment of
any consideration thereof (ii) and a negotiable promissory note in the form
attached hereto as Exhibit A (the "Note") in the aggregate principal amount of
$10,000. The Notes shall be due and payable in full together with interest
thereon at the annual rate of 6% on June 30, 1998 subject to earlier repayment,
at the option of the holder upon the completion by the Company of a public
offering of its equity securities. The parties acknowledge that the Stock
Consideration of 18,140 shares was determined by dividing Seven Million Two
Hundred and Fifty Sixty Thousand Dollars by four dollars $4.00 (the agreed upon
valuation of the share of All-Comm Common Stock) and by dividing the result by
One Hundred (100). The Note shall be convertible on or before maturity at the
option of the holder thereof into shares of All-Comm Stock at an exchange rate
of $5.38 per share. All-Comm shall deposit Five Hundred Thousand Dollars
($500,000) in cash into an escrow account as security for the Note, pursuant to
the terms of an escrow agreement to be agreed upon between the Shareholders and
All-Comm. Such escrow agreement shall
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provide that upon conversion or repayment of one or more of the Notes a pro-rata
portion of the amount held in escrow will be returned to All-Comm.
(b) EXCHANGE OF METRO COMMON STOCK.
At the Effective Time, All-Comm shall deliver to its
transfer agent instructions to forthwith issue from its authorized but unissued
shares and distribute to holders of certificates representing shares of Metro
Common Stock, upon surrender to All-Comm of such certificates for cancellation,
together with a duly-executed stock power, if applicable, one or more
certificates representing the number of whole shares of All-Comm Common Stock
into which the shares represented by the certificate(s) shall have been
converted pursuant to Sections 2.1(a) and the certificate(s) so surrendered
shall be cancelled. Such instructions shall be accompanied by an opinion of
All-Comm's counsel, sufficient in form and scope to cause the transfer agent to
comply with All-Comm's instructions. Upon surrender of his or her Metro shares,
each shareholder of Metro prior to the Effective Time shall be deemed the owner
of the number of All-Comm shares and the principal amount of Notes into which
such Metro shares are to be converted pursuant hereto.
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(c) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Metro Common Stock that were outstanding
immediately prior to the Effective Time. As of the Effective Time, the holders
of certificates representing shares of Metro Common Stock shall cease to have
any rights as shareholders of Metro, except such rights, if any, as they may
have pursuant to New York law. Except as provided above, until such certificates
are surrendered for exchange, each such certificate shall, after the Effective
Time, represent for all purposes only the right to receive the number of whole
shares of All-Comm Common Stock into which the shares of Metro Common Stock have
been converted by the Merger as provided in Sections 2.1(a) hereof.
(d) DISSENTERS' RIGHTS. All of the Shareholders hereby waive
any dissenters' rights under New York Law.
2.2 STOCK OF MERGING SUBSIDIARY.
Each share of common stock, par value $.01 per share of
Merging Subsidiary shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into one share of Metro Common Stock,
which will be registered in the name of All-Comm.
2.3 EMPLOYMENT AGREEMENTS.
At the Closing and as a condition to the Closing, the
Company shall have entered into employment agreements with each of Barbera,
Sautkulis and Budlow (the "Employment Agreements"), substantially in the form of
Exhibit B hereto. The Employment
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Agreements shall be for a period of three (3) years and shall be renewable as
provided therein for an additional three (3) year period. The Employment
Agreements will contain non-competition provisions.
2.4 OTHER TRANSACTIONS AT CLOSING.
In addition to the transactions referred to in this Article
1 above, at the Closing, Metro shall deliver to the Purchaser the following:
(a) The minute books, stock certificate books, stock transfer
ledgers, and corporate seals of the Company;
(b) Resignations of all officers and directors of the Company,
except as otherwise contemplated by Sections 1.5 and 8.4;
(c) Certificates of Good Standing, with "bring down" telegrams or
similar documentation, as to the Company issued by the appropriate governmental
authorities of the State of New York and each state in which the Company is
qualified to do business;
(d) Certified copy of the Certificate of Incorporation of the
Company, and all amendments thereto, certified by the Secretary of State of the
State of New York; and
(e) A copy of Bylaws of the Company, certified by the secretary
or assistant secretary thereof as being true, complete, and correct.
3. REPRESENTATIONS AND WARRANTIES OF METRO AND THE
SHAREHOLDERS.
Metro and each of the Shareholders, jointly and severally,
represent and warrant to the Purchaser as follows:
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3.1 ORGANIZATION AND QUALIFICATION.
The Company does not own any capital stock of any
corporation or any interest in any joint venture, partnership, association,
trust, or other entity. The business and operations of the Company are conducted
solely by and through the Company. Schedule 3.1 correctly sets forth the
Company's place of incorporation, principal place of business, and jurisdictions
in which it is qualified to do business. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with all requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities, and all courts and other tribunals,
to own, lease, license, and use its properties and assets and to carry on the
business in which it is now engaged and the business in which it contemplates
engaging. The Company is duly qualified to transact the business in which it is
now engaged and is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its business makes such qualification necessary.
3.2 CAPITALIZATION.
The authorized capital stock of the Company consists of 200
shares of Metro Common Stock, of which 100 shares are outstanding. Each of such
outstanding shares of Metro Common Stock is validly authorized, validly issued,
fully paid, and nonassessable, has not been issued and is not owned or held in
violation of any preemptive right of stockholders, and is owned of record and
beneficially by the Shareholders as set forth on Schedule 3.2 attached hereto.
The Metro Common Stock is owned by the Shareholders free and clear of all liens,
security
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interests, pledges, charges, encumbrances, stockholders' agreements, and voting
trusts. There is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of, any
share of capital stock of the Company or any security or other instrument
convertible into, exercisable for, or exchangeable for capital stock of the
Company. There is no outstanding security or other instrument convertible into
or exchangeable for capital stock of the Company.
3.3 FINANCIAL CONDITION.
Metro has delivered to the Purchaser true and correct copies
of the following: the audited balance sheets of the Company as of December 31,
1994, and 1995 and the unaudited balance sheet of the Company as of June 30,
1996, the audited statements of income, statements of retained earnings, and
statements of cash flows of the Company for the years ended December 31, 1994
and 1995, and the unaudited statements of income, statements of retained
earnings and statements of cash flow of the Company for the six months ended
June 30, 1996. Each such balance sheet presents fairly the financial condition,
assets, liabilities, and stockholders' equity of the Company as of its date;
each such statement of income and statement of retained earnings presents fairly
the results of operations of the Company for the period indicated and their
retained earnings as of the date indicated; and each such statement of cash
flows presents fairly the information purported to be shown therein. The Company
understands that the financial statements referred to in this Section 3.3 have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved and are in accordance with
the books and records of the Company. Since June 30, 1996:
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(a) There has at no time been a material adverse change in
the financial condition, results of operations, business, properties, assets,
liabilities, or, to the Shareholder's knowledge, the future prospects of the
Company.
(b) The Company has not authorized, declared, paid, or
effected any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of the Company.
(c) The operations and business of the Company have been
conducted in all material respects only in the ordinary course.
(d) The Company has not suffered an extraordinary loss
(whether or not covered by insurance) or waived any right of substantial value.
There is no fact known to the Shareholders, which materially and adversely
affects or in the future (as far as the Shareholders can reasonably foresee) may
materially and adversely affect the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company;
provided, however, that the Shareholders express no opinion as to political or
economic matters of general applicability.
3.4 TAX AND OTHER LIABILITIES.
(a) The Company has no known liability of any nature,
accrued or contingent, including without limitation liabilities for Taxes (as
defined in Section 2.4(f) and liabilities to customers or suppliers, other than
the following:
(i) Liabilities for which full provision has been
made on the balance sheet (the "Last Balance
Sheet") as of June 30, 1996 (the "Last Balance
Sheet Date"); and
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(ii) Other liabilities arising since the Last
Balance Sheet Date and prior to the Closing in
the ordinary course of business which are not
materially inconsistent with the
representations and warranties of any
Shareholder or any other provision of this
Merger Agreement.
(b) Without limiting the generality of Section 3.4(a):
(i) The Company and any combined, consolidated,
unitary or affiliated group of which the
Company is or has been a member prior to the
Closing Date: (i) has paid all Taxes required
to be paid on or prior to the Closing Date
(including, without limitation, payments of
estimated Taxes) for which the Company could be
held liable, except for Taxes which are being
contested in good faith and by appropriate
proceedings; and (ii) has accurately and timely
filed (or filed an extension for), all federal,
state, local, and foreign tax returns, reports,
and forms with respect to such taxes required
to be filed by them on or before the Closing
Date.
(ii) The amount set up as provisions for Taxes on
the Last Balance Sheet are sufficient for all
accrued and unpaid Taxes of the Company,
whether or not due and payable and whether or
not in dispute, under tax laws as in effect on
the Last Balance
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Sheet Date or now in effect, for the period
ended on such date and for all periods prior
thereto.
(c) There is no material dispute or claim concerning any
liability for Taxes of the Company either (i) claimed or raised by any authority
in writing, or (ii) as to which the Company has knowledge based upon personal
contact with any agent of such authority.
(d) Schedule 3.4 sets forth all federal, state, local and
foreign income tax returns filed with respect to the Company for taxable periods
on or after January 1, 1993 ("Tax Returns"), indicates those Tax Returns that
currently are subject to audit. The Company has delivered or made available to
Purchaser complete and correct copies of all Tax Returns, examination reports,
and statements of deficiencies assessed against, or agreed to by the Company
since January 1, 1993. The Company has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to any Tax
assessment or deficiency.
(e) The Company has not filed a consent under Section 341(f)
of the Internal Revenue Code of 1986, as amended (the "Code"). The Company has
not made any payments, nor is it obligated to make any payments, nor is a party
to any agreement that under certain circumstances could obligate it to make any
payment that will not be deductible under Section 280G of the Code. The Company
will not have any liability on or after the Closing Date pursuant to any tax
sharing or tax allocation agreement. The Company has no liability for the Taxes
of any other person under Treasury Regulation 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract, or
otherwise.
(f) For purposes of this Merger Agreement, "Taxes" shall
mean all federal, state, local or foreign taxes, assessments, duties which are
payable or remittable by the Company
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or levied upon the Company or any property of the Company, or levied with
respect to its assets, franchises, income, receipts, including, without
limitation, import duties, excise, franchise, gross receipts, utility, real
property, capital, personal property, withholding, FICA, unemployment
compensation, sales or use, withholding, governmental charges (whether or not
requiring the filing of a return), and all additions to tax, penalties and
interest relating thereto.
3.5 LITIGATION AND CLAIMS.
There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or
in prospect (or any basis therefor known to the Shareholders) with respect to
the Company, or any of its respective businesses, properties, or assets. The
Company is not affected by any present or threatened strike or other labor
disturbance nor to the knowledge of the Shareholders is any union attempting to
represent any employee of the Company as collective bargaining agent. The
Company is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree; nor is the Company required to take any
action in order to avoid such violation or default.
3.6 PROPERTIES.
(a) The Company owns no real property. Set forth on Schedule
3.6(a) is a list of all real property leased by the Company.
(b) Set forth in Schedule 3.6(b) is a true and complete list of
all personal properties and assets (other than real property) owned by the
Company or leased or licensed by the Company from or to a third party. All such
properties and assets owned by the Company are reflected on the Last Balance
Sheet (except for acquisitions subsequent to the Last Balance
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Sheet Date which are noted on Schedule 3.6(b)). All such properties and assets
owned, leased, or licensed by the Company are in good and usable condition
(reasonable wear and tear which is not such as to affect adversely the operation
of the business of the Company excepted).
(c) All accounts and notes receivable reflected on the Last
Balance Sheet, or arising since the Last Balance Sheet Date, have been
collected, or are believed to be collectible in the ordinary course subject to
adjustment consistent with industry standards.
(d) No real property owned, leased, or licensed by the Company
lies in an area which is, or to the knowledge of Sellers will be, subject to
zoning, use, or building code restrictions that would prohibit the continued
effective ownership, leasing, licensing, or use of such real property in the
business which the Company is now engaged.
(e) The Company has not caused or permitted its respective
businesses, properties, or assets to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, or process any
Hazardous Substance (as such term is defined in this Section 3.6(e)) except in
compliance with all applicable laws, rules, regulations, orders, judgments, and
decrees, and has not caused or permitted the Release (as such term is defined in
this Section 3.6(e)) of any Hazardous Substance on or off the site of any
property of the Company. The term "Hazardous Substance" shall mean any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance, as defined
by 42 U.S.C. ss.9601(14), any pollutant or contaminant, as defined by 42 U.S.C.
ss.9601(33), and all toxic substances, hazardous materials, or other chemical
substances regulated by any other law, rule, or regulation. The term "Release"
shall have the meaning set forth in 42 U.S.C. ss.9601(22).
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3.7 CONTRACTS AND OTHER INSTRUMENTS.
Schedule 3.7 accurately and completely sets forth a list of
all material contracts, agreements, loan agreements, instruments, leases,
licenses, arrangements, or understandings with respect to the Company not
otherwise identified in this Agreement or on any other Schedule hereto. Each
such contract, agreement, loan agreement, instrument, lease, or license is in
full force and is the legal, valid, and binding obligation of the Company and
(subject to applicable bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable as to it in
accordance with its terms. The Company is not in violation, in breach of, or in
default with respect to any material terms of any such contract, agreement, loan
agreement, instrument, lease, or license. Except for employment agreements and
as disclosed in Schedule 3.7, the Company is not a party to any contract,
agreement, loan agreement, instrument, lease, license, arrangement, or
understanding with, any Shareholder or any director, officer, or employee of the
Company, or any relative or affiliate of any Shareholder or of any such
director, officer, or employee. The stock ledgers and stock transfer books and
the minute book records of the Company relating to all issuances and transfers
of the stockholders of the Board of Directors and committees thereof of the
Company since its incorporation made available to the Purchaser are the original
stock ledgers and stock transfer books and minute book records of the Company or
exact copies thereof.
3.8 EMPLOYEES.
(a) The Company does not have and it does not contribute to, any
pension, profitsharing, option, other incentive plan, or any other type of
Employee Benefit Plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended
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("ERISA"), and does not have any obligation to or non-customary arrangement with
employees for bonuses, incentive compensation, vacations, severance pay,
insurance, or other benefits, other than a 401(k) plan as described on Schedule
3.8(a) hereof.
(b) Schedule 3.8(b) contains a true and correct statement of the
names, relationship with the Company, present rates of compensation (whether in
the form of salary, bonuses, commissions, or other supplemental compensation now
or hereafter payable), and aggregate compensation for the twelve month period
ending February 28, 1997 of each director, officer, or other employee of the
Company whose aggregate compensation for the fiscal year ended December 31, 1995
exceeded $40,000 per annum or whose aggregate compensation presently exceeds the
rate of $40,000 per annum. Since February 28, 1996, the Company has not changed
the rate of compensation of any of its directors, officers, employees, agents,
dealers, or distributors, nor has any Employee Benefit Plan or program been
instituted or amended to increase benefits thereunder.
3.9 PATENTS, TRADEMARKS, ET CETERA.
Except as disclosed on Schedule 3.9, the Company does not
own or have pending, or is licensed under, any patent, patent application,
trademark, trademark application, trade name, service mark, copyright,
franchise, or other intangible property or asset (all of the foregoing being
herein called "Intangibles"). Those Intangibles listed on Schedule 3.9 are in
good standing and uncontested. Neither any Shareholder, any director, officer,
or employee of the Company, nor any relative or affiliate of any Shareholder or
of any such director, officer, or employee, possesses any Intangible which
relates to the business of the Company. There is no right under any Intangible
necessary to the business of the Company as presently conducted,
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except such as are so designated in Schedule 3.9. The Company has not infringed,
is infringing, or has received notice of infringement with asserted Intangibles
of others. To the knowledge of the Shareholders, there is no infringement by
others of Intangibles of the Company.
3.10 QUESTIONABLE PAYMENTS.
None of the Company, any director, officer, agent, employee,
or other person associated with or acting on behalf of the Company has,
directly, or indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; made any false or fictitious entry on the
books or records of the Company; or made any bribe, kickback, or other payment
of a similar or comparable nature, whether lawful or not, to any person or
entity, private or public, regardless of form, whether in money, property, or
services, to obtain favorable treatment in securing business or to obtain
special concessions, or to pay for favorable treatment for business secured or
for special concessions already obtained.
3.11 AUTHORITY TO MERGE.
(a) The Company and each of the Shareholders have the capacity to
execute, deliver, and perform this Merger Agreement. This Merger Agreement has
been duly executed and delivered by the Company and each of the Shareholders, is
the legal, valid, and binding obligation of each of the Shareholders, and is
enforceable as to each of them in accordance with its terms. None of the Company
nor any of the Shareholders is under any contractual restriction
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or obligation which is inconsistent with the execution and performance of this
Merger Agreement. Neither the Company nor any of the Shareholders have any
knowledge of any consent, authorization, approval, order, license, certificate,
or permit of or from, or declaration or filing with, any federal, state, local,
or other governmental authority or any court or other tribunal that is required
by the Company, or any Shareholder for the execution, delivery, or performance
of this Merger Agreement by the Company and the Shareholders.
(b) No consent of any party to any material lease, license,
distribution, agency, consulting, employment, financing, lending, installment
sale or conditional sale, security, pledge, guarantee, or other agreement,
arrangement, or understanding to which the Company or any Shareholder is a
party, or to which any of its or his properties or assets are subject, is
required for the execution, delivery, or performance of this Merger Agreement,
except as disclosed in Schedule 3.11. Neither the Company nor any Shareholder
has made any agreement or understanding not approved in writing by the Purchaser
as a condition for obtaining any consent, authorization, approval, order,
license, certificate, or permit required for the consummation of the
transactions contemplated by this Merger Agreement. The execution, delivery, and
performance of this Merger Agreement by the Company and the Shareholders will
not violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under such lease, license, distribution, agency, consulting,
employment, financing, lending, installment sale or conditional sale, security,
pledge, guarantee, or other agreement, or understanding, or violate or result in
a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of the Company or, to the Shareholders' knowledge, violate,
result in a breach of, or conflict with any law, rule,
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regulation, order, judgment, or decree binding on the Company, or to which any
of its operations, business, properties, or assets are subject.
3.12 NONDISTRIBUTIVE INTENT.
Each Shareholder is acquiring the shares of All-Comm Stock
to be issued hereunder to him for his own account (and not for the account of
others) for investment and not with a view to the distribution thereof. No
Shareholder will sell or otherwise dispose of such shares without registration
under the Securities Act of 1933, as amended (the "Securities Act"), or an
exemption therefrom, and the certificate or certificates representing such
shares may contain a legend to the foregoing effect. Each Shareholder
understands that he may not sell or otherwise dispose of such shares in the
absence of either a registration statement under the Securities Act or an
exemption from the registration provisions of the Securities Act.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to Metro and the
Shareholders as follows:
4.1 ORGANIZATION.
All-Comm is a corporation duly organized, validly existing
and in good standing under the laws of Nevada. Merging Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of New York. All-Comm and Merging Subsidiary have all requisite power and
authority, corporate or otherwise, to carry on and conduct its business as it is
now being conducted and to own or lease its properties and assets, and is duly
qualified and in good standing in every state of the United States in which the
conduct of the
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business of All-Comm or Merging Subsidiary, as the case may be, or the ownership
of such properties and assets requires it to be so qualified, except where the
failure to be so qualified would not have a material adverse effect on the
business, assets or financial condition of All-Comm and its subsidiaries taken
as a whole.
4.2 VALIDITY OF SHARES.
The Shares of All-Comm Stock to be delivered to the
Shareholders pursuant to this Merger Agreement, when issued in accordance with
the terms and provisions of this Merger Agreement, will be validly authorized,
validly issued, fully paid, and nonassessable.
4.3 AUTHORITY TO MERGE.
The Purchaser and Merging Subsidiary have all requisite
power and authority to execute, deliver, and perform this Merger Agreement. All
necessary corporate proceedings of the Purchaser and Merging Subsidiary have
been duly taken to authorize the execution, delivery, and performance of this
Merger Agreement by the Purchaser. This Merger Agreement has been duly
authorized, executed and delivered by the Purchaser and Merging Subsidiary, is
the legal, valid, and binding obligation of the Purchaser and Merging
Subsidiary, and is enforceable as to them in accordance with its terms.
4.4 SEC REPORTS.
Since April 25, 1995 All-Comm has filed all reports,
registrations, proxy or information statements and all other material documents,
together with any amendments or supplements required to be made thereto ("SEC
Reports"), required to be filed with the Securities and Exchange Commission (the
"SEC") under the Securities Act or the Securities Exchange Act
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of 1934, as amended (the "Exchange Act"), and All-Comm has heretofore made
available to the Shareholders true copies of all such reports. As of their
respective dates, such reports referred to herein complied, as of their
respective dates, in all material respects with all rules and regulations
promulgated by the SEC and did not, or will not, as the case may be, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or omit to state any fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading. With respect to the SEC Reports filed by All-Comm
with the SEC prior to April 25, 1995, All-Comm has no knowledge that such
reports contained any material misstatements or omissions.
5. CONDITIONS TO OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser under this Merger Agreement
are subject, at the option of the Purchaser, to the following conditions:
5.1 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH
CONDITIONS.
All representations and warranties of the Company and the
Shareholders contained in this Merger Agreement shall be accurate as of the
Closing as though such representations and warranties were then made in exactly
the same language by the Company and the Shareholders and regardless of
knowledge or lack thereof on the part of the Company and the Shareholders or
changes beyond its or their control; as of the Closing, the Company and the
Shareholders shall have performed and complied with all covenants and agreements
and satisfied all conditions required to be performed and complied with by any
of them at or before
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such time by this Merger Agreement; and the Purchaser shall have received a
certificate executed by the Company and each of the Shareholders, dated the date
of the Closing, to that effect.
5.2 OPINION OF COUNSEL.
The Company and the Shareholders shall have delivered to the
Purchaser on the date of the Closing the opinion of counsel to the Company and
the Shareholders, dated as of the Closing Date, in form and substance
satisfactory to counsel for the Purchaser, substantially to the effect that:
(a) The Company is a corporation validly existing and in
good standing under the laws of the State of New York, with all
requisite corporate power and authority to own, lease, license,
and use its properties and assets and to carry on the business in
which it is now engaged.
(b) The Company is duly qualified to transact the business
in which it is now engaged and is in good standing as a foreign
corporation in the state of California.
(c) The authorized and outstanding capital stock of the
Company is as set forth in Section 3.2 of this Merger Agreement,
and all the outstanding shares of capital stock of the Company
are validly authorized, validly issued, fully paid, and
nonassessable.
(d) This Merger Agreement has been duly authorized,
executed, and delivered by the Company and the Shareholders,
constitutes the legal, valid, and binding obligation of the
Shareholders, and (subject to applicable bankruptcy, insolvency,
and other laws affecting the enforceability of creditors' rights
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generally) is enforceable as to the Company and the Shareholders
in accordance with its terms.
5.3 OTHER CLOSING DOCUMENTS.
The Company and the Shareholders shall have delivered to the
Purchaser at or prior to the Closing such other documents as the Purchaser may
reasonably request in order to enable the Purchaser to determine whether the
conditions to its obligations under this Merger Agreement have been met and
otherwise to carry out the provisions of this Merger Agreement.
5.4 LEGAL ACTION.
There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Merger Agreement, or to
obtain substantial damages with respect thereto.
5.5 NO GOVERNMENTAL ACTION.
There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Merger Agreement by any federal, state, local, or other governmental authority
or by any court or other tribunal, including the entry of a preliminary or
permanent injunction, which, in the sole judgment of the Purchaser, (a) makes
any of the transactions contemplated by this Merger Agreement, illegal, (b)
results in a delay in the ability of the Purchaser to consummate any of the
transactions contemplated by this Merger Agreement, (c) requires the divestiture
by the Purchaser of any of the shares of the Company to be acquired pursuant to
this Merger Agreement or of a material portion of the business of
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either the Purchaser and its subsidiaries taken as a whole, or of the Company
(d) imposes material limitations on the ability of the Purchaser effectively to
exercise full rights of ownership of such shares including the right to vote
such shares on all matters properly presented to the stockholders of the
Company, or (e) otherwise prohibits, restricts, or delays consummation of any of
the transactions contemplated by this Merger Agreement or impairs the
contemplated benefits to the Purchaser of any of the transactions contemplated
by this Merger Agreement.
5.6 CONTRACTUAL CONSENTS NEEDED.
The parties to this Merger Agreement shall have obtained at
or prior to the Closing all consents required for the consummation of the
transactions contemplated by this Merger Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of them or any of their
respective businesses, properties, or assets are subject.
5.7 MATERIAL ADVERSE CHANGE.
Since June 30, 1996 there has been no event or development
or combinations of changes or developments, individually or in the aggregate,
that could be reasonably expected to have a material adverse effect on the
business, operations, or future prospects of the Company.
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6. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE
SHAREHOLDERS.
The obligations of the Company and the Shareholders under the
Merger Agreement are subject, at the option of the Company and the Shareholders,
to the following conditions.
6.1 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH
CONDITIONS.
All representations and warranties of the Purchaser
contained in this Merger Agreement shall be accurate when made and, in addition,
shall be accurate as of the Closing as though such representations and
warranties were then made in exactly the same language by the Purchaser and
regardless of the knowledge or lack thereof on the part of the Purchaser or
changes beyond its control; as of the Closing, the Purchaser shall have
performed and complied with all conditions required to be performed and complied
with by it at or before such time by this Merger Agreement, and the Company and
the Shareholders shall have received a certificate executed by an executive
officer of the Purchaser, dated the date of the Closing, to that effect.
6.2 LEGAL ACTION.
There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Merger Agreement, or to
obtain substantial damages with respect thereto.
6.3 OTHER CLOSING DOCUMENTS.
The Purchaser and Merging Subsidiary shall have delivered to
the Company and the Shareholders at or prior to the Closing such other documents
as the Shareholders may reasonably request in order to enable the Shareholders
to determine whether the conditions to
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their obligations under this Merger Agreement have been met and otherwise to
carry out the provisions of this Merger Agreement.
6.4 NO GOVERNMENTAL ACTION.
There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Merger Agreement by any federal, state, local or other governmental authority or
by any court or other tribunal, including the entry of a preliminary or
permanent injunction, which, in the sole judgment of the Shareholders, (a) makes
any of the transactions contemplated by this Merger Agreement, illegal, (b)
results in a delay in the ability of the Shareholders to consummate any of the
transactions contemplated by this Merger Agreement, or (c) otherwise prohibits,
restricts, or delays consummation of any of the transactions contemplated by
this Merger Agreement or impairs the contemplated benefits to the Shareholders
of any of the transactions contemplated by this Merger Agreement.
6.5 CONTRACTUAL CONSENTS.
The parties to this Merger Agreement shall have obtained at
or prior to the Closing all consents required for the consummation of the
transactions contemplated by this Merger Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of them or any of their
respective businesses, properties, or assets are subject.
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6.6 OPINION OF COUNSEL.
The Purchaser shall have delivered to Metro and the
Shareholders on the date of the Closing the opinion of counsel to the Purchaser
and Merging Subsidiary, dated as of the Closing Date, in form and substance
satisfactory to counsel for Metro and the Shareholders, substantially to the
effect that:
(a) All-Comm and Merging Subsidiary are corporations validly
existing and in good standing under the laws of their states of
incorporation, with all requisite corporate power and authority
to own, lease, license, and use their properties and assets and
to carry on their business in which they are now engaged.
(b) This Merger Agreement has been duly authorized,
executed, and delivered by the Purchaser and Merging Subsidiary,
constitutes the legal, valid, and binding obligation of the
Purchaser and Merging Subsidiary, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable as
to Purchaser and Merging Subsidiary in accordance with its terms.
(c) The shares of All-Comm Common Stock to be delivered to
the Shareholders pursuant to this Merger Agreement when issued in
accordance with the terms and provisions of this Merger
Agreement, will be validly authorized, validly issued, fully paid
and nonassessable.
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7. COVENANTS OF THE COMPANY AND THE SHAREHOLDERS.
The Company and the Shareholders covenant and agree as
follows:
7.1 ACCESS.
Until the earlier of the Closing or November 30, 1996 (the
"Release Time"), the Company will afford the officers, employees, counsel,
agents, investment bankers, accountants, and other representatives of the
Purchaser free and full access to the plants, properties, books, and records of
the Company, will permit them to make extracts from the copies of such books and
records, and will from time to time furnish the Purchaser with such additional
financial and operating data and other information as to the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of the Company as the Purchaser from time to time may
reasonably request; provided that such access does not materially interfere with
the then business operations of the Company.
7.2 CONDUCT OF BUSINESS.
Until the Release Time, the Company will conduct its affairs
so that at the Closing no representation or warranty of the Shareholders will be
materially inaccurate, no material covenant or agreement of the Shareholders
will be breached, and no material condition in this Merger Agreement will remain
unfulfilled by reason of the actions or omissions of the Company. Except as
otherwise requested by the Purchaser in writing, until the Release Time, the
Shareholders will cause the Company to use its best efforts to preserve the
business operations of the Company intact, to keep available the services of
their present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and
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understandings of the Company, and to preserve the good will of their customers,
and others having business relations with any of them. Until the Release Time,
the Shareholders will cause the Company to conduct its business and operations
in all material respects only in the ordinary course.
7.3 ADVICE OF CHANGES.
Until the Release Time, the Company and the Shareholders
will immediately advise the Purchaser in a detailed written notice of any
material fact or occurrence or any pending or threatened occurrence of which any
of them obtains knowledge and which (if existing and known at the date of the
execution of this Merger Agreement) would have been required to be set forth or
disclosed in this Merger Agreement or a Schedule hereto, which (if existing and
known at any time prior to or at the Closing) would make the performance by any
party of a material covenant contained in this Merger Agreement impossible or
make such performance materially more difficult than in the absence of such fact
or occurrence, or which (if existing and known at the time of the Closing) would
cause a material condition to any party's obligations under this Merger
Agreement not to be fully satisfied.
7.4 PUBLIC STATEMENTS.
Neither the Company nor any of the Shareholders shall
disseminate any information to the public regarding this Merger Agreement or the
transactions contemplated hereby, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, nothing contained herein shall prevent
the Company or any Shareholder from releasing any information to any
governmental authority if required to do so by law.
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7.5 OTHER PROPOSALS.
Until the Release Time, neither of the Company nor any of
the Shareholders shall authorize nor permit any officer, director, employee,
counsel, agent, investment banker, accountant, or other representative of any of
them directly or indirectly, to: (i) initiate contact with any person or entity
in an effort to solicit any Takeover Proposal (as such term is defined in this
Section 7.5); (ii) cooperate with, or furnish or cause to be furnished any
non-public information relating to the financial conditions, results of
operations, business, properties, assets, liabilities, or future prospects of
the Company to, any person or entity in connection with any Takeover Proposal;
(iii) negotiate with any person or entity with respect to any Takeover Proposal;
or (iv) enter into any agreement or understanding with the intent to effect a
Takeover Proposal of which any of them becomes aware. As used in this Section
7.5, "Takeover Proposal" shall mean any proposal, other than as contemplated by
this Merger Agreement, (x) for a merger, consolidation, reorganization, other
business combination, or recapitalization involving the Company, for the
acquisition of a five (5%) percent or greater interest in the equity or in any
class or series of capital stock of the Company, for the acquisition of the
right to cast five (5%) percent or more of the votes on any matter with respect
to the Company, or for the acquisition of a substantial portion of any of its
assets other than in the ordinary course of its businesses or (y) the effect of
which prohibits, restricts, or significantly delays the consummation of any of
the transactions contemplated by this Merger Agreement or impairs the
contemplated benefits to the Purchaser or of any of the transactions
contemplated by this Merger Agreement.
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7.6 VOTING BY SHAREHOLDERS.
The Shareholders agree that until the Release Time, they
will vote all securities of the Company which they are entitled to vote against
(a) any merger, consolidation, reorganization, other business combination, or
capitalization involving the Company, (b) any sale of assets of the Company, (c)
any stock split, stock dividend, or reverse stock split relating to any class or
services of the Company's stock, (d) any issuance of any shares of capital stock
of the company, any option, warrant, or other right calling for the issuance of
any such share of capital stock, or any security convertible into or
exchangeable for any such share of capital stock, (e) any authorization of any
other class or series of stock of the Company, (f) the amendment of the
certificate of incorporation (or other charter document) or the by-laws of the
Company, or (g) any other proposition the effect of which may be to prohibits,
restricts, or significantly delays the consummation of any of the transactions
contemplated by this Merger Agreement or impairs materially the contemplated
benefits to the Purchaser of the transactions contemplated by this Merger
Agreement.
8. COVENANTS OF THE PURCHASER.
The Purchaser covenants and agrees as follows:
8.1 CONFIDENTIALITY.
The Purchaser shall insure that all confidential information
which the Purchaser, any of its respective officers, directors, employees,
counsel, agents, investment bankers, or accountants, may now possess or may
hereafter create or obtain relating to the financial condition, results of
operations, business, properties, assets, liabilities, or future
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prospects of the Company shall not be published, disclosed, or made accessible
by any of them to any other person or entity at any time or used by any of them
without the prior written consent of the Company; provided, however, that the
restrictions of this sentence shall not apply (a) to the extent required to
enforce this Merger Agreement or (b) to the extent the information shall have
otherwise become publicly available.
8.2 SEC FILINGS.
For a period of five years from the Effective Time the Purchaser
shall use its best efforts to timely file all reports required to be filed by it
under the Exchange Act.
8.3 NASDAQ LISTING.
For a period of five years from the Effective Time the Purchaser
shall use its best efforts to maintain the listing of the All-Comm Stock on the
NASDAQ SmallCap Market or on another inter-dealer quotation system or stock
exchange.
8.4 ELECTION OF OFFICERS.
For a period of three years from the Effective Time, All-Comm
shall cause (a) Barbera to be nominated as a director of All-Comm at any annual
or special meeting of shareholders, (b) Barbera and Budlow, or their designees
to be elected, as two of the three directors of Metro, and (c) Barbera and
Budlow to be elected Vice Presidents of All-Comm with such duties and
responsibilities as shall be determined by the Board of Directors of All-Comm.
The foregoing are in addition to any officerships provided for in employment
agreement between the Company on the one hand and Barbera and Budlow on the
other hand.
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8.5 VOTING OF SECURITIES.
All-Comm covenants and agrees to vote its securities of the
Company which they are entitled to vote so as to effectuate the provisions and
intent of this Merger Agreement.
8.6 REGISTRATION RIGHTS.
All-Comm shall grant the Shareholders certain registration rights
with respect to the All-Comm Common Stock received by them pursuant to the terms
of an agreement in the form attached hereto as Exhibit C. The Shareholders agree
to execute and deliver to All-Comm agreements with respect to limiting their
ability to sell their shares of All-Comm Stock upon the same terms and
conditions as agreements being executed by other executive officers and
directors of All-Comm in connection with a potential public offering of
securities of All-Comm.
8.7 TAX MATTERS.
The Purchaser shall pay to the Shareholders an amount equal to
each of the respective Shareholders income tax liability with respect to their
ownership of the Metro Common Stock for the period from January 1, 1996 through
the Closing Date.
9. INDEMNIFICATION; SURVIVAL; LIMITATIONS ON LIABILITY.
9.1 INDEMNIFICATION.
(a) Subject to the terms and conditions set forth in Section 9.2,
the Shareholders jointly and severally agree to indemnify and hold harmless the
Purchaser, its officers, directors, employees, counsel, and agents,
(collectively, the "Indemnitees"), against and in respect of any and all claims,
suits, actions, proceedings (formal or informal), investigations, judgments,
deficiencies, damages, settlements, liabilities, and reasonable legal and other
expenses related
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thereto (collectively, "Claims"), as and when incurred, arising out of or based
upon any breach of any representation, warranty, covenant, or agreement of any
Shareholder contained in this Merger Agreement or any document or instrument
delivered in connection with this Merger Agreement.
(b) Each Indemnitee shall give the Shareholders prompt notice of
any claim asserted or threatened against such Indemnitee on the basis of which
such Indemnitee intends to seek indemnification (but the obligations of the
Shareholders shall not be conditioned upon receipt of such notice, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice). The Shareholders shall promptly assume the defense of any
Indemnitee, with counsel reasonably satisfactory to such Indemnitee, and the
fees and expenses of such counsel shall be at the sole cost and expense of the
Shareholders. Notwithstanding the foregoing, any Indemnitee shall be entitled,
at his or its expense, to employ counsel separate from counsel for the
Shareholders and from any other party in such action, proceeding, or
investigation. No Indemnitee may agree to a settlement of a claim without the
prior written approval of the Shareholders, which approval shall not be
unreasonably withheld. Notwithstanding the above, if the claim for
indemnification arises out of a breach of the representations set forth in
Section 3.4, the Purchaser, at its option, shall have the sole right to
represent the Company in any federal, state, local or foreign tax matter,
including any audit or administrative or judicial proceeding or the filing of an
amended return. The Shareholders agree that they will cooperate fully with
Purchaser and its counsel in the defense or compromise of any such tax matter.
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9.2 SURVIVAL.
(a) Subject to the provisions of Section 9.2(b), the covenants,
agreements, representations, and warranties contained in or made pursuant to
this Merger Agreement shall survive the Closing and the delivery of the purchase
price by the Purchaser, irrespective of any investigation made by or on behalf
of any party.
(b) The liabilities and obligations of the Shareholders under
this Merger Agreement shall be subject to the following limitations:
(i) The Shareholders shall have no liability or
obligation with respect to any claim for a
breach of a representation or warranty under
this Merger Agreement made after one (1) year
from the Closing Date except for claims arising
out of a breach of the representations as to
tax liabilities under Section 2.4, with respect
to which the Shareholders shall remain liable
until ninety (90) days after the expiration of
the applicable statute of limitations relating
to such tax liabilities; and
(ii) The Shareholders shall not be responsible for
any claims until the cumulative aggregate
amount thereof shall exceed Two Hundred and
Fifty Thousand ($250,000.00) Dollars (the
"Minimum Amount") in which case the
Shareholders shall then be jointly and
severally liable for all amounts in excess of
the Minimum Amount; provided however, that no
Shareholder
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shall be responsible for more than his or her
proportionate ownership of Metro Common Stock
as of the Closing Date.
10. MISCELLANEOUS.
10.1 BROKERAGE FEES.
Each of the parties hereto represent and warrant to each
other that no person has been engaged as a broker or finder in connection with
this Merger Agreement. If any person shall assert a claim to a fee, commission,
or other compensation on account of alleged employment as a broker or finder, in
connection with or as a result of any of the transactions contemplated by this
Merger Agreement, the person who is purported to have engaged such broker or
finder shall indemnify and hold harmless the other party against any and all
Claims as and when incurred, arising out of, based upon, or in connection with
such Claim by such person, except to the extent that it is determined in any
suit, action, or proceeding that the other party had engaged such broker or
finder.
10.2 FURTHER ACTIONS.
At any time and from time to time, each party agrees, as its
or his expense, to take such actions and to execute and deliver such documents
as may be reasonably necessary to effectuate the purposes of this Merger
Agreement.
10.3 SUBMISSION TO JURISDICTION.
Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the County and State of New York, and of
any federal court located in the County and State of New York, in connection
with any action or proceeding arising out of or
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relating to, or a breach of, this Merger Agreement, or of any document or
instrument delivered pursuant to, in connection with, or simultaneously with
this Merger Agreement. Each of the parties hereto agrees that such court may
award reasonable legal fees and expenses to the prevailing party.
10.4 MERGER; MODIFICATION.
This Merger Agreement and the Schedules and Exhibits
attached hereto set forth the entire understanding of the parties with respect
to the subject matter hereof, supersede all existing agreements among them
concerning such subject matter, and may be modified only by a written instrument
duly executed by each party to be charged.
10.5 NOTICES.
Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested by Federal Express, or Express Mail or delivered (in
person or by telecopy, or similar telecommunications equipment) against receipt
to the party to whom it is to be given at the address set forth in this Section
10.5 (or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 10.5). Any notice given to the
Purchaser or Merging Subsidiary shall be addressed to All-Comm Media
Corporation, 400 Corporate Pointe, Suite 780, Culver City, California 90230,
attention of the President and a copy of such notice (which copy shall not
constitute notice) shall also be sent to Camhy Karlinsky & Stein LLP, 1740
Broadway, 16th Floor, New York, New York 10019-4315, Attention: Alan I. Annex,
Esq. Any notice given to the Company shall be addressed to Metro Services Group,
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Inc., 333 7th Avenue, New York, New York 10001, Attn: Mr. Jeremy Barbera. Any
notice given to Barbera shall be addressed to him at 24 West 70th Street, New
York, New York 10023. Any notice given to Sautkulis shall be addressed to her at
4 Pulaski Place, Point Westington, New York 11050. Any notification to Budlow
shall be addressed to him at 29 Mitchell Avenue, Chatham, N.J. 07928. A copy of
any notice given to the Company or the Shareholders (which copy shall not
constitute notice) shall also be sent to Saviano Tobias & Weinberger P.C., 3 New
York Plaza, New York, New York 10004, Attention: David G. Tobias, Esq. Notice to
the estate of any party shall be sufficient if addressed to the party as
provided in this Section 10.5.
10.6 WAIVER.
Any waiver by any party of a breach of any terms of this
Merger Agreement shall not operate as or be construed to be a waiver of any
other breach of that term or of any breach of any other term of this Merger
Agreement. The failure of a party to insist upon strict adherence to any term of
this Merger Agreement on one or more occasions will not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Merger Agreement. Any waiver must be in
writing.
10.7 GUARANTY.
All-Comm hereby unconditionally and irrevocably guarantees
the obligations of Merging Subsidiary under this Agreement.
10.8 BINDING EFFECT.
The provisions of this Merger Agreement shall be binding
upon and inure to the benefit of the Purchaser, and its successors and assigns
Metro, and its successors and
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assigns, and each Shareholder and his respective assigns, heirs, and personal
representatives, and shall inure to the benefit of each Indemnitee and its
successors and assigns (if not a natural person) and his assigns, heirs, and
personal representatives (if a natural person).
10.9 NO THIRD-PARTY BENEFICIARIES.
This Merger Agreement does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Merger Agreement (except as provided in 10.8).
10.10 SEPARABILITY.
If any provision of this Merger Agreement is invalid,
illegal, or unenforceable, the balance of this Merger Agreement shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.
10.11 HEADINGS.
The headings in this Merger Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Merger Agreement.
10.12 COUNTERPARTS; GOVERNING LAW.
This Merger Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the
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same instrument. It shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to the rules governing the
conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this
Merger Agreement as of the date first written above.
ALL-COMM MEDIA CORPORATION
By:_________________________________
Name: Barry Peters
Title: Chairman
METRO MERGER CORP.
By:_________________________________
Name: Barry Peters
Title: President
METRO SERVICES GROUP, INC.
By:_________________________________
Name:
Title:
____________________________________
J. JEREMY BARBERA
____________________________________
JANET SAUTKULIS
____________________________________
ROBERT M. BUDLOW
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EXHIBIT A
FORM OF PROMISSORY NOTE
$_______________ New York, New York
October __, 1996
FOR VALUE RECEIVED, the undersigned, All-Comm Media Corporation,
a Nevada corporation having an address at 400 Corporate Pointe, Suite 780,
Culver City, California 90230 ("Maker"), promises to pay to the order
of_________________________________________________________________ ("Payee") at
______________________________________________________________________, or at
such other place as Payee may from time to time designate by written notice to
Maker, in lawful money of the United States of America, the sum of
____________________________ Dollars ($____________), plus interest from the
date of this Note on the unpaid balance. All principal and interest is to be
paid as set forth below. Maker further agrees as follows:
SECTION 1. INTEREST RATE.
(a) Interest shall accrue at a rate equal to six percent (6%) per
annum.
(b) Interest shall be computed on the basis of a year of 360 days
for the actual number of days elapsed. After maturity (whether by acceleration
or otherwise, and before as well as after judgment), all unpaid principal and
interest shall bear interest until it is paid at six percent (6%) in excess of
the rate otherwise applicable to the unpaid balance under this Note.
(c) All agreements between Maker and Payee are expressly limited
so that in no contingency or event whatsoever shall the amount paid or agreed to
be paid to Payee for the use, forbearance, or detention of the indebtedness
evidenced by this Note exceed the maximum amount permissible under applicable
law. If from any circumstance Payee should ever receive as interest an amount
which would exceed the highest lawful rate, such amount as would be
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excessive interest shall be applied to the reduction of the principal amount
owing under this Note and not to the payment of interest.
SECTION 2. PAYMENTS.
1. Principal and all accrued interest shall be due and payable
on June 30, 1998 ("Maturity") unless Maker makes demand as set forth pursuant to
Section 2(b) below or exercises the conversion right set forth in Section 4
below.
(a) If Maker completes a public offering of its securities (a
"Public Offering") Payee may upon ten (10) days notice demand that the principal
and all accrued interest under this Note shall be due and payable.
(b) Maker does not have the right to prepay this Note in full or
in part at any time.
SECTION 3. SECURITY.
At any time after the earlier of January 1, 1997 or the effective
date of a Public Offering, Payee may require Maker to deposit an aggregate of
$500,000 into an escrow account maintained by Camhy Karlinsky & Stein LLP as
security for this Note and the two other Notes issued by Maker on the date
hereof in connection with the Agreement and Plan of Merger dated as of October
1, 1996 (the "Merger Agreement") among the Maker, Metro Merger Corp., Metro
Services Group, Inc., Jeremy Barbera, Janet Sautkulis, and Robert M. Budlow.
Such escrow agreement shall be pursuant to the terms of an escrow agreement to
be agreed upon between Maker and Payee. Such escrow agreement shall provide that
upon conversion or repayment of one or more of the Notes issued in connection
with the Merger Agreement, a pro-rata portion of the amount held in escrow will
be returned to Maker.
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SECTION 4. CONVERSION.
This Note may be converted, at the option of the Payee at any
time on or before maturity into a number of shares of common stock, par value
$0.10 of Maker ("All-Comm Common Stock") at the exchange price (the "Exchange
Price") of $5.38 per share. The Exchange Price is subject to adjustment as
provided in this Section 4. In case Maker shall at any time change as a whole,
by subdivision or combination in any manner or by the making of a stock
dividend, the number of outstanding shares of Common Stock into a different
number of shares, the Exchange Price per share (but not the aggregate purchase
price) in effect immediately prior to such change shall be increased or
decreased in inverse proportion to such increase or decrease of shares, as the
case may be. In case of any capital reorganization or any reclassification of
the capital stock of the Maker or in case of the consolidation or merger of the
Maker with another corporation (or in the case of any sale, transfer, or other
disposition to another corporation of all or substantially all the property,
assets, business, and goodwill of the Maker), the holder of this Warrant shall
thereafter be entitled to purchase the kind and amount of shares of capital
stock which this Note entitled the holder to purchase immediately prior to such
capital reorganization, reclassification of capital stock, consolidation,
merger, sale, transfer, or other disposition; and in any such case appropriate
adjustments shall be made in the application of the provisions of this Section 4
with respect to rights and interests thereafter of the holder of this Note to
the end that the provisions of this Section 4 shall thereafter be applicable, as
near as reasonably may be, in relation to any shares or other property
thereafter purchasable upon the conversion of this Note.
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SECTION 5. DEFAULT.
It shall be an event of default ("Event of Default"), and the
entire unpaid principal of this Note, together with accrued interest, shall
become immediately due and payable, at the election of Payee, upon the
occurrence of any of the following events:
(a) any failure on the part of Maker to make any payment when
due, whether by acceleration or otherwise, and the continuation of such failure
for a period of ten (10) days after written notice thereof from Payee;
(b) any failure on the part of Maker to keep or perform any of
the terms or provisions (other than payment) of this Note or any amendment
thereof, which failure is not cured within ten (10) days and the continuation of
such failure for more than ten (10) days after written notice thereof from
Payee. Notwithstanding the foregoing, if the breach cannot be cured within sixty
(60) days, Maker shall not be in default so long as Maker commences cure and
thereafter proceeds to completion;
(c) any failure on the part of Maker to pay any debt within sixty
(60) days of its due date (except where contested in good faith);
(d) Maker shall commence (or take any action for the purpose of
commencing) any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, moratorium or similar law or statute;
(e) a proceeding shall be commenced against Maker under any
bankruptcy, reorganization, arrangement, readjustment of debt, moratorium or
similar law or statute and
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relief is ordered against it, or the proceeding is controverted but is not
dismissed within sixty (60) days after the commencement thereof;
(f) Maker consents to or suffers the appointment of a receiver,
trustee or custodian to any substantial part of its assets that is not vacated
within thirty (30) days;
(g) Maker consents to or suffers an attachment, garnishment,
execution or other legal process against any of its assets that is not released
within thirty (30) days;
SECTION 6. SUBORDINATION.
This Note shall be a general obligation of Maker and is
subordinated to any and all obligations of Maker to any bank or other financial
institution, regardless of whether such obligations are presently existing or
are subsequently incurred.
SECTION 7. JURISDICTION.
Maker irrevocably submits to the exclusive jurisdiction of the
courts of the County and State of New York, and of any federal court located in
the County and State of New York, in connection with any action or proceeding
arising out of or relating to, or a breach of, this Note. Maker agrees that such
court may award reasonable legal fees and expenses to the prevailing party.
SECTION 8. WAIVERS.
1. Maker waives demand, presentment, protest, notice of protest,
notice of dishonor, and all other notices or demands of any kind or nature with
respect to this Note.
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(a) Maker agrees that a waiver of rights under this Note shall
not be deemed to be made by Payee unless such waiver shall be in writing, duly
signed by Payee, and each such waiver, if any, shall apply only with respect to
the specific instance involved and shall in no way impair the rights of Payee or
the obligations of Maker in any other respect at any other time.
(b) Maker agrees that in the event Payee demands or accepts
partial payment of this Note, such demand or acceptance shall not be deemed to
constitute a waiver of any right to demand the entire unpaid balance of this
Note at any time in accordance with the terms of this Note.
(c) Maker agrees and acknowledges that Payee may disclose to any
other Obligor confidential information relating to this Note, and waives, to the
full extent permitted by law, any right to privacy or similar right under
federal or state laws which Maker may have with respect to such disclosures.
(d) In any action or proceeding arising out of or relating to
this Note, Maker waives (to the full extent permitted by law) all right to a
trial by jury or to plead as a defense any statute of limitations or any other
similar law or equitable doctrine.
SECTION 9. COLLECTION COSTS.
Maker will upon demand pay to Payee the amount of any and all
reasonable costs and expenses, including, without limitation, the reasonable
fees and disbursements of its counsel (whether or not suit is instituted) and of
any experts and agents, which Payee may incur in
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connection with the following: (i) the enforcement of this Note; and (ii) the
enforcement of payment of all obligations of Maker by any action or
participation in, or in connection with, a case or proceeding under Chapters 7,
11, or 13 of the Bankruptcy Code, or any successor statute thereto.
SECTION 10. ASSIGNMENT OF NOTE.
Maker may not assign or transfer this Note or any of its
obligations under this Note in any manner whatsoever (including, without
limitation, by the consolidation or merger of Maker, if a corporation, with or
into another corporation) without the prior written consent of Payee. The Note
may be assigned at any time by Payee. Maker agrees not to assert against any
assignee of this Note any claim or defense which Maker may have against any
assignor of this Note.
SECTION 11. MISCELLANEOUS.
1. This Note may be altered only by prior written agreement
signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought. This Note may not be modified by an oral
agreement, even if supported by new consideration.
(a) This Note shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to such state's
principles of conflict of laws.
(b) Subject to Section 10, the covenants, terms, and conditions
contained in this Note apply to and bind the heirs, successors, executors,
administrators and assigns of the parties.
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(c) This Note constitute a final written expression of all the
terms of the agreement between the parties regarding the subject matter hereof,
are a complete and exclusive statement of those terms, and supersede all prior
and contemporaneous agreements, understandings, and representations between the
parties. If any provision or any word, term, clause, or other part of any
provision of this Note shall be invalid for any reason, the same shall be
ineffective, but the remainder of this Note shall not be affected and shall
remain in full force and effect.
(d) The singular includes the plural. If more than one Maker
executes this Note, the term "Maker" shall be deemed to refer to each of the
undersigned Makers as well as to all of them, and their obligations and
agreements under this Note shall be joint and several. If any of the undersigned
is a married person, recourse may be had against his or her separate property
for all of his or her obligations under this Note. The term "Obligor" shall be
deemed to refer to each Maker, endorser, guarantor, or surety of this Note as
well as to all of them. The term "Payee" shall include the initial party to whom
payment is designated to be made and, in the event of an assignment of this
Note, the successor assignee or assignees, and, as to each successive additional
assignment, such successor assignee or assignees.
(e) All notices, consents, or other communications provided for
in this Note or otherwise required by law shall be in writing and may be given
to or made upon the respective parties at the addresses set forth in the
preamble hereof. Such addresses may be changed by notice given as provided in
this subsection. Notices shall be effective upon the date of receipt; provided,
however, that a notice (other than a notice of a changed address) sent by
certified or
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registered U.S. mail, with postage prepaid, shall be presumed received not later
than three (3) business days following the date of sending.
(f) Time is of the essence under this Note.
IN WITNESS WHEREOF, Maker has executed this Note effective as of
the date first set forth above.
ALL-COMM MEDIA CORPORATION
By:______________________
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EXHIBIT B
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is being made as of the 1st day
of October, 1996 between Metro Services Group, Inc., a New York corporation (the
"Company"), having its principal offices at 333 Seventh Avenue, New York, New
York 10001, and J. Jeremy Barbera ("Employee"), an individual residing at 24
West 70th Street, New York, New York 10023.
W I T N E S S E T H:
WHEREAS, the Company has, or contemporaneously herewith will
become, a wholly-owned subsidiary of All-Comm Media Corporation, a Nevada
corporation ("All-Comm") and the Company desires to continue to employ Employee
and Employee desires to be employed by the Company as its President and Chief
Executive Officer, upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company hereby
employs Employee and Employee agrees to serve the Company as its President and
Chief Executive Officer, upon the terms and conditions contained herein, for a
term commencing as of the date hereof and continuing until September 30, 1999
(the "Employment Term"); provided, that this Agreement (including this Section
1) shall automatically be renewed for one (1) additional three (3) year period
upon terms no less favorable than the terms existing in the third year of the
Employment Term, unless the Company or Employee gives written notice to the
other party of
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its intention not to renew this Agreement with sixty (60) days prior to the
expiration of the Employment Term.
2. Duties and Powers as Employee. During the Employment Term,
Employee agrees to devote all of his full working time, energy, and efforts to
the business of the Company. In performance of his duties, Employee shall be
subject to the reasonable direction of the Board of Directors of the Company.
Employee shall be available to travel as the needs of the business reasonably
require. Employee agrees that the Company or All-Comm may obtain a life
insurance policy on the life of Employee naming the Company or All-Comm as the
beneficiary thereof.
3. Compensation.
(a) As compensation for his services hereunder, the
Company shall pay Employee, a salary (a "Base Salary"), payable in equal
semi-monthly installments, at the annual rate of $150,000 for the first year of
the Employment Term; $200,000 for the second year of the Employment Term and
$250,000 for the third year of the Employment Term. Additionally, Employee shall
participate in all present or future employee benefit and plans of the Company
and All-Comm, provided that he meets the eligibility requirements therefor.
(b) Employee shall be eligible to receive raises
and bonuses each year of the Employment Term if and as determined by the
Compensation Committee of the Board of Directors of All-Comm. Such bonuses, if
any, shall be based upon the achievement of earnings and other targeted
criteria. It is also contemplated that Employee will receive
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incentive stock options to acquire common stock of All-Comm to be determined by
the Stock Option Committee of the Board of Directors of All-Comm.
4. Expenses; Vacations. Employee shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses reasonably
incurred in the performance of his duties hereunder, upon submission and
approval of written statements and bills in accordance with the then regular
procedures of the Company. Employee shall be entitled to thirty (30) days paid
vacation time in accordance with then regular procedures of the Company
governing executives as determined from time to time by the Company's Board of
Directors and communicated, in writing to Employee.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder, or the other rights of
the Company hereunder; and (b) Employee knows of no physical or mental
disability that would hinder his performance of duties under this Agreement.
6. Non-Competition.
(a) Employee agrees that during the Employment Term
he will not engage in, or otherwise directly or indirectly be employed by, or
act as a consultant, or be a director, officer, employee, owner, agent, member
or partner of, any other business or organization that is or shall then be
competing with the Company., except that in each case the provisions of this
Section 6 will not be deemed breached merely because Employee owns not more than
five percent (5.0%) of the outstanding common stock of a corporation, if, at the
time
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of its acquisition by Employee, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange. The Company understands
that Employee is a Vice President, a director and a shareholder of Pegasus
Internet, Inc. ("Pegasus") and the Company is a customer of Pegasus. The Company
acknoweldeges that Employee may ingage in such activities to the extent they do
not compete with the business of the Company and that such engegement will not
violate this Agreement or the Merger Agreement.
(b) If this Agreement is terminated, Employee, for
a period of three (3) years from the date of termination, shall not, directly or
indirectly, solicit or encourage any person who was a customer of the Company
during the three years prior to the date of such termination to cease doing
business with the Company or to do business with any other enterprise that is
engaged in the same or similar business to that of the Company.
7. Inventions; Patents; Copyrights. Any interest in patents,
patent applications, inventions, copyrights, developments, and processes ("Such
Inventions") which Employee now or hereafter during the period he is employed by
the Company under this Agreement may, directly or indirectly, own or develop
relating to the fields in which the Company may then be engaged shall belong to
the Company; and forthwith upon request of the Company, Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all of his right,
title, and interest in and to Such Inventions, free and clear of all liens,
charges, and encumbrances.
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8. Confidential Information. All confidential information which
Employee may now possess, may obtain during the Employment Term, or may create
prior to the end of the period he is employed by the Company under this
Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or made accessible by
him to any other person, firm, or corporation during the Employment Term or any
time thereafter without the prior written consent of the Company. Employee shall
return all tangible evidence of such confidential information to the Company
prior to or at the termination of his employment.
9. Termination.
(a) Notwithstanding anything herein contained, if
on or after the date hereof and prior to the end of the Employment Term,
Employee is terminated "For Cause" (as defined below) then the Company shall
have the right to give notice of termination of Employee's services hereunder as
of a date to be specified in such notice, and this Agreement shall terminate on
the date so specified. Termination "For Cause" shall mean Employee shall (i) be
convicted of a felony crime, (ii) commit any act or omit to take any action in
bad faith and to the detriment of the Company, (iii) commit an act of moral
turpitude to the detriment of the Company, (iv) commit an act of fraud against
the Company, or (v) materially breach any term of this Agreement and fail to
correct such breach within ten (10) days after written notice thereof; provided
that in the case of a termination pursuant to (ii), (iii) or (iv) such
determination must be made by the Board of Directors of All-Comm after a meeting
at which Employee was given an opportunity to explain such actions. In the event
this Agreement is terminated "For Cause" pursuant to Section 9(a), then Employee
shall be entitled to receive only his salary at the
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rate provided in Section 3 to the date on which termination shall take effect
plus any compensation which is accrued but unpaid on the date of termination.
(b) In the event that Employee shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge
his/her duties hereunder for a period of six (6) months, then this Agreement
shall terminate upon ninety (90) days' written notice to Employee, and no
further compensation (other than accrued but unpaid salary or bonus through the
date of termination) shall be payable to Employee, except as may otherwise be
provided under any disability insurance policy.
(c) In the event that Employee shall die, then this
Agreement shall terminate on the date of Employee's death, and no further
compensation (other than accrued but unpaid salary or bonus through the date of
death) shall be payable to Employee, except as may otherwise be provided under
any insurance policy or similar instrument.
(d) In the event this Agreement is terminated
without Cause, Employee shall receive severance pay consisting of a single lump
sum distribution (with no present value adjustment) equal to the Base Salary as
provided in Section 3 for a period of (i) one (1) year, notwithstanding that
such one-year period might extend beyond the Employment Term.
10. Merger, Etc. In the event of a future
disposition of the properties and business of the Company, substantially as an
entirety, by merger, consolidation, sale of assets, sale of stock, or otherwise,
then the Company may elect to assign this Agreement and all of its rights and
obligations hereunder to the acquiring or surviving corporation. In the event
the
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<PAGE>
Company does not assign this Agreement or that this Agreement is not so assumed
then Employee shall have the right to terminate this Agreement by written notice
given within six (6) months of the date of such acquisition. Upon such
termination, Employee shall receive severance pay consisting of a single lump
sum distribution (with no present value adjustment) equal to the Base Salary as
provided in Section 3 for a period of one (1) year, notwithstanding that such
one-year period might extend beyond the Employment Term.
11. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 13). In
the case of a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Camhy Karlinsky & Stein LLP, 1740
Broadway, 16th Floor, New York, New York 10019, Attn. Alan I. Annex, Esq. In the
case of a notice to Employee, a copy of such
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<PAGE>
notice (which copy shall not constitute notice) shall be delivered to Saviano
Tobias & Weinberger P.C., 3 New York Plaza, New York, New York 10004, Attention:
David G. Tobias, Esq. Notice to the estate of Employee shall be sufficient if
addressed to Employee as provided in this Section 13. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
14. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing and
signed by the party against whose waiver is asserted.
15. Binding Effect. Subject to the terms and conditions described
in Section 10, above, Employee's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such rights shall not be
subject to encumbrance or the claims of Employee's creditors, and any attempt to
do any of the foregoing shall be void. The provisions of this Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors and those who are its assigns under Section 10.
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<PAGE>
16. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
17. Counterparts; Governing Law. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. It shall be
governed by, and construed in accordance with, the laws of the State of New
York, without given effect to the rules governing the conflicts of laws. Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the County and State of New York, and of any federal court located in
the County and State of New York, in connection with any action or proceeding
arising out of or relating to, or a breach of, this Agreement. Each of the
parties hereto agrees that such court may award reasonable legal fees and
expenses to the prevailing party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
METRO SERVICES GROUP, INC.
By:_______________________
_______________________
J. Jeremy Barbera
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<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is being made as of the 1st day
of October, 1996 between Metro Services Group, Inc., a New York corporation (the
"Company"), having its principal offices at 333 Seventh Avenue, New York, New
York 10001, and Janet Sautkulis ("Employee"), an individual residing at 4
Paulaski Place, Port Washington, New York 11050.
W I T N E S S E T H:
WHEREAS, the Company has, or contemporaneously herewith will
become, a wholly-owned subsidiary of All-Comm Media Corporation, a Nevada
corporation ("All-Comm") and the Company desires to continue to employ Employee
and Employee desires to be employed by the Company as its Executive Vice
President and General Manager, upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company hereby
employs Employee and Employee agrees to serve the Company as its Executive Vice
President and General Manager, upon the terms and conditions contained herein,
for a term commencing as of the date hereof and continuing until September 30,
1999 (the "Employment Term"); provided, that this Agreement (including this
Section 1) shall automatically be renewed for one (1) additional three (3) year
period upon terms no less favorable than the terms existing in the third year of
the Employment Term, unless the Company or Employee gives written notice to the
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<PAGE>
other party of its intention not to renew this Agreement with sixty (60) days
prior to the expiration of the Employment Term.
2. Duties and Powers as Employee. During the Employment Term,
Employee agrees to devote all of her full working time, energy, and efforts to
the business of the Company. In performance of her duties, Employee shall be
subject to the reasonable direction of the Board of Directors of the Company.
Employee shall be available to travel as the needs of the business reasonably
require. Employee agrees that the Company or All-Comm may obtain a life
insurance policy on the life of Employee naming the Company or All-Comm as the
beneficiary thereof.
3. Compensation.
(a) As compensation for her services hereunder, the
Company shall pay Employee, a salary (a "Base Salary"), payable in equal
semi-monthly installments, at the annual rate of $125,000 for the first year of
the Employment Term; $165,000 for the second year of the Employment Term and
$200,000 for the third year of the Employment Term. Additionally, Employee shall
participate in all present or future employee benefit and plans of the Company
and All-Comm, provided that she meets the eligibility requirements therefor.
(b) Employee shall be eligible to receive raises
and bonuses each year of the Employment Term if and as determined by the
Compensation Committee of the Board of Directors of All-Comm. Such bonuses, if
any, shall be based upon the achievement of earnings and other targeted
criteria. It is also contemplated that Employee will receive
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<PAGE>
incentive stock options to acquire common stock of All-Comm to be determined by
the Stock Option Committee of the Board of Directors of All-Comm.
4. Expenses; Vacations. Employee shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses reasonably
incurred in the performance of her duties hereunder, upon submission and
approval of written statements and bills in accordance with the then regular
procedures of the Company. Employee shall be entitled to thirty (30) days paid
vacation time in accordance with then regular procedures of the Company
governing executives as determined from time to time by the Company's Board of
Directors and communicated, in writing to Employee.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of her duties hereunder, or the other rights of
the Company hereunder; and (b) Employee knows of no physical or mental
disability that would hinder her performance of duties under this Agreement.
6. Non-Competition.
(a) Employee agrees that during the Employment Term
she will not engage in, or otherwise directly or indirectly be employed by, or
act as a consultant, or be a director, officer, employee, owner, agent, member
or partner of, any other business or organization that is or shall then be
competing with the Company., except that in each case the provisions of this
Section 6 will not be deemed breached merely because Employee owns not more than
five percent (5.0%) of the outstanding common stock of a corporation, if, at the
time
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<PAGE>
of its acquisition by Employee, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange.
(b) If this Agreement is terminated, Employee, for
a period of three (3) years from the date of termination, shall not, directly or
indirectly, solicit or encourage any person who was a customer of the Company
during the three years prior to the date of such termination to cease doing
business with the Company or to do business with any other enterprise that is
engaged in the same or similar business to that of the Company.
7. Inventions; Patents; Copyrights. Any interest in patents,
patent applications, inventions, copyrights, developments, and processes ("Such
Inventions") which Employee now or hereafter during the period she is employed
by the Company under this Agreement may, directly or indirectly, own or develop
relating to the fields in which the Company may then be engaged shall belong to
the Company; and forthwith upon request of the Company, Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all of her right,
title, and interest in and to Such Inventions, free and clear of all liens,
charges, and encumbrances.
8. Confidential Information. All confidential information which
Employee may now possess, may obtain during the Employment Term, or may create
prior to the end of the period she is employed by the Company under this
Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or made accessible by
her to any other person, firm, or corporation during the Employment Term
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<PAGE>
or any time thereafter without the prior written consent of the Company.
Employee shall return all tangible evidence of such confidential information to
the Company prior to or at the termination of her employment.
9. Termination.
(a) Notwithstanding anything herein contained, if
on or after the date hereof and prior to the end of the Employment Term,
Employee is terminated "For Cause" (as defined below) then the Company shall
have the right to give notice of termination of Employee's services hereunder as
of a date to be specified in such notice, and this Agreement shall terminate on
the date so specified. Termination "For Cause" shall mean Employee shall (i) be
convicted of a felony crime, (ii) commit any act or omit to take any action in
bad faith and to the detriment of the Company, (iii) commit an act of moral
turpitude to the detriment of the Company, (iv) commit an act of fraud against
the Company, or (v) materially breach any term of this Agreement and fail to
correct such breach within ten (10) days after written notice thereof; provided
that in the case of a termination pursuant to (ii), (iii) or (iv) such
determination must be made by the Board of Directors of All-Comm after a meeting
at which Employee was given an opportunity to explain such actions. In the event
this Agreement is terminated "For Cause" pursuant to Section 9(a), then Employee
shall be entitled to receive only her salary at the rate provided in Section 3
to the date on which termination shall take effect plus any compensation which
is accrued but unpaid on the date of termination.
(b) In the event that Employee shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge
his/her duties hereunder for a period of six (6) months, then this Agreement
shall terminate upon ninety (90) days' written
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<PAGE>
<PAGE>
notice to Employee, and no further compensation (other than accrued but unpaid
salary or bonus through the date of termination) shall be payable to Employee,
except as may otherwise be provided under any disability insurance policy.
(c) In the event that Employee shall die, then this
Agreement shall terminate on the date of Employee's death, and no further
compensation (other than accrued but unpaid salary or bonus through the date of
death) shall be payable to Employee, except as may otherwise be provided under
any insurance policy or similar instrument.
(d) In the event this Agreement is terminated
without Cause, Employee shall receive severance pay consisting of a single lump
sum distribution (with no present value adjustment) equal to the Base Salary as
provided in Section 3 for a period of (i) one (1) year, notwithstanding that
such one-year period might extend beyond the Employment Term.
10. Merger, Etc. In the event of a future disposition of the
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, sale of stock, or otherwise, then the Company may
elect to assign this Agreement and all of its rights and obligations hereunder
to the acquiring or surviving corporation. In the event the Company does not
assign this Agreement or that this Agreement is not so assumed then Employee
shall have the right to terminate this Agreement by written notice given within
six (6) months of the date of such acquisition. Upon such termination, Employee
shall receive severance pay consisting of a single lump sum distribution (with
no present value adjustment)
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<PAGE>
equal to the Base Salary as provided in Section 3 for a period of one (1) year,
notwithstanding that such one-year period might extend beyond the Employment
Term.
11. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 13). In
the case of a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Camhy Karlinsky & Stein LLP, 1740
Broadway, 16th Floor, New York, New York 10019, Attn. Alan I. Annex, Esq. In the
case of a notice to Employee, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Saviano Tobias & Weinberger P.C., 3 New
York Plaza, New York, New York 10004, Attention: David G. Tobias, Esq. Notice to
the estate of Employee shall be sufficient if addressed to Employee as provided
in this Section 13. Any notice or other communication given by certified mail
shall
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<PAGE>
be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof.
14. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing and
signed by the party against whose waiver is asserted.
15. Binding Effect. Subject to the terms and conditions described
in Section 10, above, Employee's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such rights shall not be
subject to encumbrance or the claims of Employee's creditors, and any attempt to
do any of the foregoing shall be void. The provisions of this Agreement shall be
binding upon and inure to the benefit of Employee and her heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors and those who are its assigns under Section 10.
16. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
17. Counterparts; Governing Law. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together
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<PAGE>
shall constitute one and the same instrument. It shall be governed by, and
construed in accordance with, the laws of the State of New York, without given
effect to the rules governing the conflicts of laws. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the County
and State of New York, and of any federal court located in the County and State
of New York, in connection with any action or proceeding arising out of or
relating to, or a breach of, this Agreement. Each of the parties hereto agrees
that such court may award reasonable legal fees and expenses to the prevailing
party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
METRO SERVICES GROUP, INC.
By:_______________________
_______________________
Janet Sautkulis
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<PAGE>
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is being made as of the 1st day
of October, 1996 between Metro Services Group, Inc., a New York corporation (the
"Company"), having its principal offices at 333 Seventh Avenue, New York, New
York 10001, and Robert Budlow ("Employee"), an individual residing at 29
Mitchell Avenue, Chatham, New Jersey 07928.
W I T N E S S E T H:
WHEREAS, the Company has, or contemporaneously herewith will
become, a wholly-owned subsidiary of All-Comm Media Corporation, a Nevada
corporation ("All-Comm") and the Company desires to continue to employ Employee
and Employee desires to be employed by the Company as its Executive Vice
President and Chief Operating Officer, upon the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company hereby
employs Employee and Employee agrees to serve the Company as its Executive Vice
President and Chief Operating Officer, upon the terms and conditions contained
herein, for a term commencing as of the date hereof and continuing until
September 30, 1999 (the "Employment Term"); provided, that this Agreement
(including this Section 1) shall automatically be renewed for one (1) additional
three (3) year period upon terms no less favorable than the terms existing in
the third year of the Employment Term, unless the Company or Employee gives
written notice to the
<PAGE>
<PAGE>
other party of its intention not to renew this Agreement with sixty (60) days
prior to the expiration of the Employment Term.
2. Duties and Powers as Employee. During the Employment Term,
Employee agrees to devote all of his full working time, energy, and efforts to
the business of the Company. In performance of his duties, Employee shall be
subject to the reasonable direction of the Board of Directors of the Company.
Employee shall be available to travel as the needs of the business reasonably
require. Employee agrees that the Company or All-Comm may obtain a life
insurance policy on the life of Employee naming the Company or All-Comm as the
beneficiary thereof.
3. Compensation.
(a) As compensation for his services hereunder, the
Company shall pay Employee, a salary (a "Base Salary"), payable in equal
semi-monthly installments, at the annual rate of $125,000 for the first year of
the Employment Term; $165,000 for the second year of the Employment Term and
$200,000 for the third year of the Employment Term. Additionally, Employee shall
participate in all present or future employee benefit and plans of the Company
and All-Comm, provided that he meets the eligibility requirements therefor.
(b) Employee shall be eligible to receive raises
and bonuses each year of the Employment Term if and as determined by the
Compensation Committee of the Board of Directors of All-Comm. Such bonuses, if
any, shall be based upon the achievement of earnings and other targeted
criteria. It is also contemplated that Employee will receive
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<PAGE>
incentive stock options to acquire common stock of All-Comm to be determined by
the Stock Option Committee of the Board of Directors of All-Comm.
4. Expenses; Vacations. Employee shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses reasonably
incurred in the performance of his duties hereunder, upon submission and
approval of written statements and bills in accordance with the then regular
procedures of the Company. Employee shall be entitled to thirty (30) days paid
vacation time in accordance with then regular procedures of the Company
governing executives as determined from time to time by the Company's Board of
Directors and communicated, in writing to Employee.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder, or the other rights of
the Company hereunder; and (b) Employee knows of no physical or mental
disability that would hinder his performance of duties under this Agreement.
6. Non-Competition.
(a) Employee agrees that during the Employment Term
he will not engage in, or otherwise directly or indirectly be employed by, or
act as a consultant, or be a director, officer, employee, owner, agent, member
or partner of, any other business or organization that is or shall then be
competing with the Company., except that in each case the provisions of this
Section 6 will not be deemed breached merely because Employee owns not more than
five percent (5.0%) of the outstanding common stock of a corporation, if, at the
time
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<PAGE>
of its acquisition by Employee, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange.
(b) If this Agreement is terminated, Employee, for
a period of three (3) years from the date of termination, shall not, directly or
indirectly, solicit or encourage any person who was a customer of the Company
during the three years prior to the date of such termination to cease doing
business with the Company or to do business with any other enterprise that is
engaged in the same or similar business to that of the Company.
7. Inventions; Patents; Copyrights. Any interest in patents,
patent applications, inventions, copyrights, developments, and processes ("Such
Inventions") which Employee now or hereafter during the period he is employed by
the Company under this Agreement may, directly or indirectly, own or develop
relating to the fields in which the Company may then be engaged shall belong to
the Company; and forthwith upon request of the Company, Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all of his right,
title, and interest in and to Such Inventions, free and clear of all liens,
charges, and encumbrances.
8. Confidential Information. All confidential information which
Employee may now possess, may obtain during the Employment Term, or may create
prior to the end of the period he is employed by the Company under this
Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or made accessible by
him to any other person, firm, or corporation during the Employment Term
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<PAGE>
<PAGE>
or any time thereafter without the prior written consent of the Company.
Employee shall return all tangible evidence of such confidential information to
the Company prior to or at the termination of his employment.
9. Termination.
(a) Notwithstanding anything herein contained, if
on or after the date hereof and prior to the end of the Employment Term,
Employee is terminated "For Cause" (as defined below) then the Company shall
have the right to give notice of termination of Employee's services hereunder as
of a date to be specified in such notice, and this Agreement shall terminate on
the date so specified. Termination "For Cause" shall mean Employee shall (i) be
convicted of a felony crime, (ii) commit any act or omit to take any action in
bad faith and to the detriment of the Company, (iii) commit an act of moral
turpitude to the detriment of the Company, (iv) commit an act of fraud against
the Company, or (v) materially breach any term of this Agreement and fail to
correct such breach within ten (10) days after written notice thereof; provided
that in the case of a termination pursuant to (ii), (iii) or (iv) such
determination must be made by the Board of Directors of All-Comm after a meeting
at which Employee was given an opportunity to explain such actions. In the event
this Agreement is terminated "For Cause" pursuant to Section 9(a), then Employee
shall be entitled to receive only his salary at the rate provided in Section 3
to the date on which termination shall take effect plus any compensation which
is accrued but unpaid on the date of termination.
(b) In the event that Employee shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge
his/her duties hereunder for a period of six (6) months, then this Agreement
shall terminate upon ninety (90) days' written
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<PAGE>
notice to Employee, and no further compensation (other than accrued but unpaid
salary or bonus through the date of termination) shall be payable to Employee,
except as may otherwise be provided under any disability insurance policy.
(c) In the event that Employee shall die, then this
Agreement shall terminate on the date of Employee's death, and no further
compensation (other than accrued but unpaid salary or bonus through the date of
death) shall be payable to Employee, except as may otherwise be provided under
any insurance policy or similar instrument.
(d) In the event this Agreement is terminated
without Cause, Employee shall receive severance pay consisting of a single lump
sum distribution (with no present value adjustment) equal to the Base Salary as
provided in Section 3 for a period of (i) one (1) year, notwithstanding that
such one-year period might extend beyond the Employment Term.
10. Merger, Etc. In the event of a future disposition of the
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, sale of stock, or otherwise, then the Company may
elect to assign this Agreement and all of its rights and obligations hereunder
to the acquiring or surviving corporation. In the event the Company does not
assign this Agreement or that this Agreement is not so assumed then Employee
shall have the right to terminate this Agreement by written notice given within
six (6) months of the date of such acquisition. Upon such termination, Employee
shall receive severance pay consisting of a single lump sum distribution (with
no present value adjustment)
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<PAGE>
equal to the Base Salary as provided in Section 3 for a period of one (1) year,
notwithstanding that such one-year period might extend beyond the Employment
Term.
11. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 13). In
the case of a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Camhy Karlinsky & Stein LLP, 1740
Broadway, 16th Floor, New York, New York 10019, Attn. Alan I. Annex, Esq. In the
case of a notice to Employee, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Saviano Tobias & Weinberger P.C., 3 New
York Plaza, New York, New York 10004, Attention: David G. Tobias, Esq. Notice to
the estate of Employee shall be sufficient if addressed to Employee as provided
in this Section 13. Any notice or other communication given by certified mail
shall
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<PAGE>
be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof.
14. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing and
signed by the party against whose waiver is asserted.
15. Binding Effect. Subject to the terms and conditions described
in Section 10, above, Employee's rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such rights shall not be
subject to encumbrance or the claims of Employee's creditors, and any attempt to
do any of the foregoing shall be void. The provisions of this Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors and those who are its assigns under Section 10.
16. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
17. Counterparts; Governing Law. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together
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shall constitute one and the same instrument. It shall be governed by, and
construed in accordance with, the laws of the State of New York, without given
effect to the rules governing the conflicts of laws. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the County
and State of New York, and of any federal court located in the County and State
of New York, in connection with any action or proceeding arising out of or
relating to, or a breach of, this Agreement. Each of the parties hereto agrees
that such court may award reasonable legal fees and expenses to the prevailing
party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
METRO SERVICES GROUP, INC.
By:_______________________
_______________________
Robert Budlow
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of the ___ day of October, 1996, by and between ALL-COMM MEDIA
CORPORATION, a Nevada corporation (the "Company"), and J. Jeremy Barbera, Janet
Sautkulis and Robert M. Budlow (the "Shareholders").
R E C I T A L S
WHEREAS, the Shareholders are acquiring shares of the common
stock, par value $.01 per share, of the Company (the "Shares"), pursuant to an
agreement and Plan of Merger by and among the Company, Metro Merger Corp., Metro
Services Group, Inc. and the Shareholders, dated as of October 1, 1996 (the
"Merger Agreement"); and
WHEREAS, the Company desires to grant to the Shareholders certain
registration rights relating to the Shares and the Shareholders desire to obtain
such registration rights, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions and References. For purposes of this Agreement, in
addition to the definitions set forth above and elsewhere herein, the following
terms shall have the following meanings:
(a) The term "Commission" shall mean the Securities and
Exchange Commission and any successor agency.
(b) The terms "register", "registered" and "registration"
shall refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the
1933 Act (as herein defined) and the declaration or ordering of
effectiveness of such registration statement or document.
(c) For purposes of this Agreement, the term "Registrable
Stock" shall mean (i) the Shares, (ii) any shares of the common
stock of the Company, par value $.01 per share (the "Common
Stock") issued as (or issuable upon the
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conversion or exercise of any warrant, right, option or other
convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in
replacement of, the Shares, and (iii) any Common Stock issued by
way of a stock split of the Shares. For purposes of this
Agreement, any Registrable Stock shall cease to be Registrable
Stock when (w) a registration statement covering such Registrable
Stock has been declared effective and such Registrable Stock has
been disposed of pursuant to such effective registration
statement, (x) such Registrable Stock is sold pursuant to Rule
144 (or any similar provision then in force) under the 1933 Act,
(y) such Registrable Stock has been otherwise transferred, no
stop transfer order affecting such stock is in effect and the
Company has delivered new certificates or other evidences of
ownership for such Registrable Stock not bearing any legend
indicating that such shares have not been registered under the
1933 Act, or (z) such Registrable Stock is sold by a person in a
transaction in which the rights under the provisions of this
Agreement are not assigned.
(d) The term "Holder" shall mean the Shareholders or any
transferee or assignee thereof to whom the rights under this
Agreement are assigned in accordance with Section 10 hereof,
provided that the Shareholders or such transferee or assignee
shall then own the Registrable Stock.
(e) The term "1933 Act" shall mean the Securities Act of
1933, as amended.
(f) An "affiliate of such Holder" shall mean a person who
controls, is controlled by or is under common control with such
Holder, or the spouse or children (or a trust exclusively for the
benefit of the spouse and/or children) of such Holder, or, in the
case of a Holder that is a partnership, its partners.
(g) The term "Person" shall mean an individual, corporation,
partnership, trust, limited liability company, unincorporated
organization or association or other entity, including any
governmental entity.
(h) The term "Requesting Holders" shall mean a Holder or
Holders of in the aggregate of at least a majority of the
Registrable Stock.
(i) References in this Agreement to any rules, regulations
or forms promulgated by the Commission shall include rules,
regulations and forms succeeding to the functions thereof,
whether or not bearing the same designation.
2. Demand Registration.
(a) In the event the Holders are not notified of the filing
of a registration statement as provided in Section 4 of this
Agreement within sixteen (16) months after the completion of an
underwritten public offering by the Company of its securities
("Public Offering") (or commencing nine (9) months after the date
of the closing of the Purchase Agreement if the Company does not
effect a Public Offering prior to March 31, 1997), any Requesting
Holders may make a written
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request to the Company (specifying that it is being made pursuant
to this Section 2) that the Company file a registration statement
under the 1933 Act (or a similar document pursuant to any other
statute then in effect corresponding to the 1933 Act) covering
the registration of Registrable Stock. In such event, the Company
shall (x) within ten (10) days thereafter notify in writing all
other Holders of Registrable Stock of such request, and (y) use
its best efforts to cause to be registered under the 1933 Act all
Registrable Stock that the Requesting Holders and such other
Holders have, within thirty (30) days after the Company has given
such notice, requested be registered. Unless a majority in
interest of the Holders requesting to participate in such
registration shall consent in writing, no other party, including
the Company (but excluding another Holder), shall be permitted to
offer securities in connection with such registration.
(b) If the Requesting Holders intend to distribute the
Registrable Stock covered by their request by means of an
underwritten offering, they shall so advise the Company as a part
of their request pursuant to Section 2(a) above, and the Company
shall include such information in the written notice referred to
in clause (x) of Section 2(a) above. In such event, the Holder's
right to include its Registrable Stock in such registration shall
be conditioned upon such Holder's participation in such
underwritten offering and the inclusion of such Holder's
Registrable Stock in the underwritten offering to the extent
provided in this Section 2. All Holders proposing to distribute
Registrable Stock through such underwritten offering shall enter
into an underwriting agreement in customary form with the
underwriter or underwriters. Such underwriter or underwriters
shall be selected by a majority in interest of the Requesting
Holders and shall be approved by the Company, which approval
shall not be unreasonably withheld; provided, that all of the
representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such
Holders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting
agreement shall be conditions precedent to the obligations of
such Holders; and provided further, that no Holder shall be
required to make any representations or warranties to or
agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder,
the Registrable Stock of such Holder and such Holder's intended
method of distribution and any other representation required by
law or reasonably required by the underwriter.
(c) Notwithstanding any other provision of this Section 2 to
the contrary, if the managing underwriter of an underwritten
offering of the Registrable Stock requested to be registered
pursuant to this Section 2 advises the Requesting Holders in
writing that in its opinion marketing factors require a
limitation of the number of shares to be underwritten, the
Requesting Holders shall so advise all Holders of Registrable
Stock that would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Stock that may be included in
such
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underwritten offering shall be allocated among all such Holders,
including the Requesting Holders, in proportion (as nearly as
practicable) to the amount of Registrable Stock requested to be
included in such registration by each Holder at the time of
filing the registration statement; provided, that in the event of
such limitation of the number of shares of Registrable Stock to
be underwritten, the Holders shall be entitled to an additional
demand registration pursuant to this Section 2. If any Holder of
Registrable Stock disapproves of the terms of the underwriting,
such Holder may elect to withdraw by written notice to the
Company, the managing underwriter and the Requesting Holders. The
securities so withdrawn shall also be withdrawn from
registration.
(d) Notwithstanding any provision of this Agreement to the
contrary, the Company shall not be required to effect a
registration pursuant to this Section 2 during the period
starting with the fourteenth (14th) day immediately preceding the
date of an anticipated filing by the Company of, and ending on a
date ninety (90) days following the effective date of, a
registration statement pertaining to a public offering of
securities for the account of the Company; provided, that the
Company shall actively employ in good faith all reasonable
efforts to cause such registration statement to become effective;
and provided further, that the Company's estimate of the date of
filing such registration statement shall be made in good faith.
(e) The Company shall be obligated to effect and pay for a
total of only one (1) registration pursuant to this Section 2,
unless increased pursuant to Section 2(c) hereof; provided, that
a registration requested pursuant to this Section 2 shall not be
deemed to have been effected for purposes of this Section 2(e),
unless (i) it has been declared effective by the Commission, (ii)
if it is a shelf registration, it has remained effective for the
period set forth in Section 3(b), (iii) the offering of
Registrable Stock pursuant to such registration is not subject to
any stop order, injunction or other order or requirement of the
Commission (other than any such action prompted by any act or
omission of the Holders), and (iv) no limitation of the number of
shares of Registrable Stock to be underwritten has been required
pursuant to Section 2(c) hereof.
3. Obligations of the Company. Whenever required under Section 2
to use its best efforts to effect the registration of any Registrable Stock, the
Company shall, as expeditiously as possible:
(a) prepare and file with the Commission, not later than
ninety (90) days after receipt of a request to file a
registration statement with respect to such Registrable Stock, a
registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate
and which form shall be available for the sale of such issue of
Registrable Stock in accordance with the intended method of
distribution thereof, and use its best
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efforts to cause such registration statement to become effective
as promptly as practicable thereafter; provided that before
filing a registration statement or prospectus or any amendments
or supplements thereto, the Company will (i) furnish to one
counsel selected by the Requesting Holders copies of all such
documents proposed to be filed, and (ii) notify each such Holder
of any stop order issued or threatened by the Commission and take
all reasonable actions required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than
one hundred twenty (120) days or such shorter period which will
terminate when all Registrable Stock covered by such registration
statement has been sold (but not before the expiration of the
forty (40) or ninety (90) day period referred to in Section 4(3)
of the 1933 Act and Rule 174 thereunder, if applicable), and
comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such
registration statement;
(c) furnish to each Holder and any underwriter of
Registrable Stock to be included in a registration statement
copies of such registration statement as filed and each amendment
and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents
as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Stock owned by such Holder;
(d) use its best efforts to register or qualify such
Registrable Stock under such other securities or blue sky laws of
such jurisdictions as any selling Holder or any underwriter of
Registrable Stock reasonably requests, and do any and all other
acts which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in such jurisdictions
of the Registrable Stock owned by such Holder; provided that the
Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) hereof, (ii)
subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction;
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(e) use its best efforts to cause the Registrable Stock
covered by such registration statement to be registered with or
approved by such other governmental agencies or other authorities
as may be necessary by virtue of the business and operations of
the Company to enable the selling Holders thereof to consummate
the disposition of such Registrable Stock;
(f) notify each selling Holder of such Registrable Stock and
any underwriter thereof, at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act (even if
such time is after the period referred to in Section 3(b)), of
the happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein in light of the circumstances being made not misleading,
and prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Registrable
Stock, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in
light of the circumstances being made not misleading;
(g) make available for inspection by any selling Holder, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively,
the "Records"), and cause the Company's officers, directors and
employees to supply all information reasonably requested by any
such Inspector, as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, in connection
with such registration statement. Records or other information
which the Company determines, in good faith, to be confidential
and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such
Records or other information is necessary to avoid or correct a
misstatement or omission in the registration statement, or (ii)
the release of such Records or other information is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each selling Holder shall, upon learning that
disclosure of such Records or other information is sought in a
court of competent jurisdiction, give notice to the Company and
allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records or other
information deemed confidential;
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(h) furnish, at the request of any Requesting Holder, on the
date that such shares of Registrable Stock are delivered to the
underwriters for sale pursuant to such registration or, if such
Registrable Stock is not being sold through underwriters, on the
date that the registration statement with respect to such shares
of Registrable Stock becomes effective, (1) a signed opinion,
dated such date, of the legal counsel representing the Company
for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Stock is not being
sold through underwriters, then to the Requesting Holders as to
such matters as such underwriters or the Requesting Holders, as
the case may be, may reasonably request and as would be customary
in such a transaction; and (2) a letter dated such date, from the
independent certified public accountants of the Company,
addressed to the underwriters, if any, and if such Registrable
Stock is not being sold through underwriters, then to the
Requesting Holders and, if such accountants refuse to deliver
such letter to such Holder, then to the Company (i) stating that
they are independent certified public accountants within the
meaning of the 1933 Act and that, in the opinion of such
accountants, the financial statements and other financial data of
the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act, and (ii) covering such other
financial matters (including information as to the period ending
not more than five (5) business days prior to the date of such
letter) with respect to the registration in respect of which such
letter is being given as the Requesting Holders may reasonably
request and as would be customary in such a transaction;
(i) enter into customary agreements (including if the method
of distribution is by means of an underwriting, an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the
disposition of the Registrable Stock to be so included in the
registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, but not later than eighteen (18) months after the
effective date of the registration statement, an earnings
statement covering the period of at least twelve (12) months
beginning with the first full month after the effective date of
such registration statement, which earnings statements shall
satisfy the provisions of Section 11(a) of the 1933 Act; and
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(k) use its best efforts to cause all such Registrable Stock
to be listed on the New York Stock Exchange and/or any other
securities exchange on which similar securities issued by the
Company are then listed, or traded on the National Association of
Securities Dealers Automated Quotations System, if such listing
or trading is then permitted under the rules of such exchange or
system, respectively.
The Company may require each selling Holder of Registrable Stock
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Stock as the Company
may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f)
hereof, such Holder will forthwith discontinue disposition of Registrable Stock
pursuant to the registration statement covering such Registrable Stock until
such Holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(f) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Stock current at the time of receipt of such notice.
In the event the Company shall give any such notice, the Company shall extend
the period during which such registration statement shall be maintained
effective pursuant to this Agreement (including the period referred to in
Section 3(b)) by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 3(f) hereof to and
including the date when each selling Holder of Registrable Stock covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 3(f) hereof.
4. Incidental Registration. Commencing twelve (12) months after
the completion of a Public Offering (on March 31, 1997 if the Company does not
effect a Public Offering prior to March 31, 1997), if the Company determines
that it shall file a registration statement under the 1933 Act (other than a
registration statement on a Form S-4 or S-8 or filed in connection with an
exchange offer or an offering of securities solely to the Company's existing
stockholders) on any form that would also permit the registration of the
Registrable Stock and such filing is to be on its behalf and/or on behalf of
selling holders of its securities for the general registration of its common
stock to be sold for cash, at each such time the Company shall promptly give
each Holder written notice of such determination setting forth the date on which
the Company proposes to file such registration statement, which date shall be no
earlier than forty (40) days from the date of such notice, and advising each
Holder of its right to have Registrable Stock included in such registration.
Upon the written request of any Holder received by the Company no later than
twenty (20) days after the date of the Company's notice, the Company shall use
its best efforts to cause to be registered under the 1933 Act all of the
Registrable Stock that each such Holder has so requested to be registered. If,
in the written opinion of the managing underwriter or underwriters (or, in the
case of a non-underwritten offering, in the written opinion of the placement
agent, or if there is none, the Company), the total amount of such securities to
be so
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registered, including such Registrable Stock, will exceed the maximum amount of
the Company's securities which can be marketed (i) at a price reasonably related
to the then current market value of such securities, or (ii) without otherwise
materially and adversely affecting the entire offering, then the amount of
Registrable Stock to be offered for the accounts of Holders shall be reduced pro
rata to the extent necessary to reduce the total amount of securities to be
included in such offering to the recommended amount; provided, that if
securities are being offered for the account of other Persons as well as the
Company, such reduction shall not represent a greater fraction of the number of
securities intended to be offered by Holders than the fraction of similar
reductions imposed on such other Persons other than the Company over the amount
of securities they intended to offer.
5. Holdback Agreement - Restrictions on Public Sale by Holder.
(a) To the extent not inconsistent with applicable law, each
Holder whose Registrable Stock is included in a registration
statement agrees not to effect any public sale or distribution of
the issue being registered or a similar security of the Company,
or any securities convertible into or exchangeable or exercisable
for such securities, including a sale pursuant to Rule 144 under
the 1933 Act, during the fourteen (14) days prior to, and during
the ninety (90) day period beginning on, the effective date of
such registration statement (except as part of the registration),
if and to the extent requested by the Company in the case of a
non-underwritten public offering or if and to the extent
requested by the managing underwriter or underwriters in the case
of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and Others.
The Company agrees (i) not to effect any public sale or
distribution of any securities similar to those being registered,
or any securities convertible into or exchangeable or exercisable
for such securities, during the fourteen (14) days prior to, and
during the ninety (90) day period beginning on, the effective
date of any registration statement in which Holders are
participating (except as part of such registration), if and to
the extent requested by the Holders in the case of a
non-underwritten public offering or if and to the extent
requested by the managing underwriter or underwriters in the case
of an underwritten public offering; and (ii) that any agreement
entered into after the date of this Agreement pursuant to which
the Company issues or agrees to issue any securities convertible
into or exchangeable or exercisable for such securities (other
than pursuant to an effective registration statement) shall
contain a provision under which holders of such securities agree
not to effect any public sale or distribution of any such
securities during the periods described in (i) above, in each
case including a sale pursuant to Rule 144 under the 1933 Act.
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6. Expenses of Registration. All expenses incurred in connection
with each registration pursuant to Sections 2 and 4 of this Agreement, excluding
underwriters' discounts and commissions, but including, without limitation, all
registration, filing and qualification fees, word processing, duplicating,
printers' and accounting fees (including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance), exchange listing fees or National Association of Securities Dealers
fees, messenger and delivery expenses, all fees and expenses of complying with
securities or blue sky laws, fees and disbursements of counsel for the Company,
and the reasonable fees and disbursements of one (1) counsel for the selling
Holders shall be paid by the Company. The selling Holders shall bear and pay the
underwriting commissions and discounts applicable to the Registrable Stock
offered for their account in connection with any registrations, filings and
qualifications made pursuant to this Agreement.
7. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify, to the full extent permitted by law, each Holder, its
officers, directors and agents and each Person who controls such
Holder (within the meaning of the 1933 Act) against all losses,
claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
therein (in case of a prospectus or preliminary prospectus, in
the light of the circumstances under which they were made) not
misleading. The Company will also indemnify any underwriters of
the Registrable Stock, their officers and directors and each
Person who controls such underwriters (within the meaning of the
1933 Act) to the same extent as provided above with respect to
the indemnification of the selling Holders.
(b) Indemnification by Holders. In connection with any
registration statement in which a Holder is participating, each
such Holder will furnish to the Company in writing such
information with respect to such Holder as the Company reasonably
requests for use in connection with any such registration
statement or prospectus and agrees to indemnify, to the extent
permitted by law, the Company, its directors and officers and
each Person who controls the Company (within the meaning of the
1933 Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of
material fact or any omission or alleged omission of a material
fact required to be stated in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein
(in the case of a prospectus or preliminary prospectus, in the
light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such
untrue statement or omission is contained in any information with
respect to such Holder so furnished in writing by such Holder.
Notwithstanding the
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foregoing, the liability of each such Holder under this Section
7(b) shall be limited to an amount equal to the initial public
offering price of the Registrable Stock sold by such Holder,
unless such liability arises out of or is based on willful
misconduct of such Holder.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such Person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof made
in writing for which such Person will claim indemnification or
contribution pursuant to this Agreement and, unless in the
reasonable judgment of such indemnified party, a conflict of
interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the
indemnifying party to assume the defense of such claims with
counsel reasonably satisfactory to such indemnified party.
Whether or not such defense is assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for
any settlement made without its consent (but such consent will
not be unreasonably withheld). Failure by such Person to provide
said notice to the indemnifying party shall itself not create
liability except to the extent of any injury caused thereby. No
indemnifying party will consent to entry of any judgment or enter
into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of
such claim or litigation. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than
one (1) counsel with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other
such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels.
(d) Contribution. If for any reason the indemnity provided
for in this Section 7 is unavailable to, or is insufficient to
hold harmless, an indemnified party, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by
the indemnifying party on the one hand and the indemnified party
on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant
equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference
to, among other things, whether any action in question,
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including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact,
has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties; and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 7(c), any legal
or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7 (d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 7(a) and (b) without regard
to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for in this
Section 7.
8. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holders entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the 1933 Act and the Securities Exchange Act of
1934, as amended, and the rules and regulations adopted by the Commission
thereunder; and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Stock without registration under the 1933 Act within the
limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
10. Transfer of Registration Rights. The registration rights of
any Holder under this Agreement with respect to any Registerable Stock may be
transferred to any transferee of such Registrable Stock; provided that such
transfer may otherwise be effected in accordance with
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applicable securities laws; provided further, that the transferring Holder shall
give the Company written notice at or prior to the time of such transfer stating
the name and address of the transferee and identifying the securities with
respect to which the rights under this Agreement are being transferred; provided
further, that such transferee shall agree in writing, in form and substance
satisfactory to the Company, to be bound as a Holder by the provisions of this
Agreement; and provided further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by such transferee is restricted under the 1933 Act. Except as set forth in this
Section 10, no transfer of Registrable Stock shall cause such Registrable Stock
to lose such status.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders in
this Agreement.
(b) Remedies. Each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive (to the extent permitted by law) the
defense in any action for specific performance that a remedy of
law would be adequate.
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the
Holders of at least a majority of the Registrable Stock then
outstanding affected by such amendment, modification, supplement,
waiver or departure.
(d) Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any
Person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
New York applicable to contracts made and to be performed wholly
within that state, without regard to the conflict of law rules
thereof.
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(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
(g) Headings. The headings in this Agreement are used for
convenience of reference only and are not to be considered in
construing or interpreting this Agreement.
(h) Notices. Any notice required or permitted under this
Agreement shall be given in writing and shall be delivered in
person or by telecopy or by overnight courier guaranteeing no
later than second business day delivery, directed to (i) the
Company at the address set forth below its signature hereof or
(ii) to a Holder at the address therefor as set forth in the
Company's records. Any party may change its address for notice by
giving ten (10) days advance written notice to the other parties.
Every notice or other communication hereunder shall be deemed to
have been duly given or served on the date on which personally
delivered, or on the date actually received, if sent by telecopy
or overnight courier service, with receipt acknowledged.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability
of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges
of the Holders shall be enforceable to the fullest extent
permitted by law.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises,
warranties or undertakings other than those set forth or referred
to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
(k) Enforceability. This Agreement shall remain in full
force and effect notwithstanding any breach or purported breach
of, or relating to, the Purchase Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ALL-COMM MEDIA CORPORATION
By:_______________________
Name:
Title:
400 CORPORATE POINTE
SUITE 780
CULVER CITY, CA 90230
_______________________
J. Jeremy Barbera
_______________________
Janet Sautkulis
_______________________
Robert M. Budlow
STATEMENT OF DIFFERENCES
------------------------
The section mark shall be expressed as ........................ ss.
