<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 7, 1996
ALL-COMM MEDIA CORPORATION
-----------------------------------------------------------
(Exact name of Registrant as specified in charter)
Nevada 0-16730 88-0085608
- --------------- ----------- ---------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
400 Corporate Pointe
Suite 780
Culver City, California 90230
------------------------------------------------
Address of Principal Executive Offices
Registrant's telephone number, including area code: 310/342-2800
<PAGE>
ITEM 5. OTHER EVENTS.
On June 7, 1996, the Company completed the private placements with accredited
investors of 6,200 shares of Series B Convertible Preferred Stock for
$3,100,000 and $1,000,000 of Convertible Notes which mature on June 1, 1998.
The holders of the Convertible Preferred Stock are entitled to receive a
dividend payable only on redemption or credited against conversion, which shall
accrue at the rate of 6% per annum. The Convertible Preferred Stock is
convertible, in whole or in part, at any time and from time to time until the
second anniversary of the date of issuance, into common shares of the Company at
the lesser of the price paid divided by $1.25, or 80% of the average closing
sales price of the Company's Common Stock for the last five days prior to
conversion, and is subject to certain restrictions, including automatic
conversion in certain instances. The Convertible Preferred Stock not
theretofore converted (including automatic conversion) is to be redeemed on the
second anniversary of issuance. The Convertible Notes bear interest at 8% and
are convertible into shares of Common Stock at a per share price equal to $6.00
per share. In addition, the Company issued warrants to preferred shareholders
for 3,100,000 shares of Common Stock exercisable at $2.50 for three years,
starting with and subject to the availability of shares following shareholder
authorization of additional common shares. The Company issued warrants to
purchasers of the Convertible Notes for 3,000,000 shares of Common Stock
exercisable at $3.00 per share for three years, starting with and subject to the
availability of shares following shareholder authorization of additional common
shares.
In connection with the transaction, payment of approximately $2.0 million was
made on long term obligations due to the seller of the Company's operating
subsidiary, Stephen Dunn & Associates, Inc. ("SD&A"). The remaining $2.1
million of long term obligations are payable in 36 monthly principal payments of
$58,333 plus interest at 8%, starting September 19, 1996. $800,000 was used to
reacquire 10,000 shares of Series A Convertible Preferred Stock issued in a
private placement on May 9, 1996. $425,000 of proceeds will be used to prepay
additional consideration to the seller of SD&A which was contingent upon post-
closing SD&A earnings and the remainder will be used for general corporate
purposes.
Exhibits.
10.7 Sample Series B Convertible Preferred Stock subscription agreement
10.8 Sample Private Placement Purchase Agreement for Convertible Notes
10.9 Letter from seller of SD&A agreeing to long term obligation payment
and restructuring
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 hereunto duly authorized.
ALL-COMM MEDIA CORPORATION
Date: June 19, 1996 By: /s/ Scott Anderson
--------------------------
Name: Scott Anderson
Title: Chief Financial Officer
<PAGE>
Exhibit 10.7
June 7, 1996
All-Comm Media Corporation
400 Corporate Pointe
Suite 780
Culver City, California, 90230-7615
Gentlemen;
1. At a closing to occur at the offices of your company (the "Company")
simultaneously herewith, the undersigned ("Subscriber") will for $50,000 per
Unit (as defined below) purchase from you, and you will sell, the number of
Units set forth below opposite Subscriber's name below. Such purchase by
Subscriber is part of an offering in which an aggregate of 62 Units will be sold
simultaneously with such sale to Subscriber. Each Unit consists of 100 shares
of Series B Convertible Preferred Stock having a redemption value of $50,000 per
share (the "Preferred") and warrants to purchase 50,000 shares of common stock
of the Company (the "Warrants").
2. The Certificate of Designation for the Preferred shall be in the form of
Exhibit A. The Preferred shall at the option of the holder be convertible at
any time into common stock at the lesser of $1.25 per share or 80% of the
average closing sales price of the common stock on NASDAQ (or such other
securities exchange where the common stock may then be listed) during the last
five trading days prior to conversion. If not theretofore converted, the
Preferred shall automatically be deemed converted into common stock at such
price on the second anniversary of the date of issuance. However, the Preferred
shall not be redeemed under the preceding sentence, but shall instead be
redeemed at redemption value, together with dividends accruing thereon at 6% per
annum, on the second anniversary of the date of issuance if the Company's common
stock is not then trading on NASDAQ (or another U.S. securities exchange
approved by the Securities and Exchange Commission where the common stock may
then be listed) or if the registration statement referred to below has not
theretofore been declared effective. The Preferred shall also be entitled to
priority over the common stock in liquidation.
3. The Warrants shall be in the form of Exhibit B. The Warrants shall be
exercisable only to the extent that authorized but unissued shares of Common
Stock of the Company are available for such exercise. The Company shall as soon
as practicable call a special stockholders' meeting to approve the amendment of
the Certificate of Incorporation of the Company to authorize 30,000,000
additional shares of Common Stock and the directors of the Company shall
recommend to the stockholders that they vote in favor of such amendment. By
separate agreement, executive officers of the Company who own an aggregate of
11.4% of the Company's outstanding Common Stock have agreed to vote their shares
in favor of such amendment. If at any time thereafter that the Warrants are
exercised there are not a sufficient number of authorized but unissued shares of
Common Stock of the Company available for such exercise, the Company promptly
will take all necessary steps to secure the authorization of sufficient
additional shares of Common Stock to permit such exercise. The Warrants shall
be exercisable at $2.50 per share and shall expire on the third anniversary of
the date on which they are first exercisable or, if earlier, on the first (1st)
date on which both (a) and (b) shall be true, namely (a) the registration
statement referred to below shall be in effect and shall have been effective for
not less than the ninety consecutive days immediately preceding such date and
(b)
<PAGE>
the closing price per share of the Company's common stock on NASDAQ (or such
other securities exchange where the common stock may then be listed) shall not
be less than $8.00 per share and shall have been not less than $8.00 per share
during the twenty consecutive trading days immediately preceding such date. For
example, assume that the closing price per share shall have been $9.00 per share
through October 1, 1996, that the closing price per share shall have been $7.00
per share through March 1, 1997, and that the closing price per share shall have
been $8.00 per share for 20 consecutive trading days thereafter. Assume further
that the Registration Statement shall have been in effect at all times from July
1, 1996. The expiration date of the Warrants shall be the close of business on
the 20th trading day after March 31, 1997. All dates set forth in this
paragraph shall be extended by one day for each day after December 31, 1996 on
which the registration statement referred to in Section 3 is not in effect with
respect to the shares purchasable under the Warrants.
3a. The Company will on or before the 120th day after the date of this
Agreement file a registration statement on Form S-3 or Form S-l (the
"Registration Statement") for the public sale by the holders of the shares which
are issuable on conversion of the Preferred or upon exercise of the Warrants.
The Company shall use its best efforts to cause the Registration Statement to
become effective not later than 90 days after the date of filing, and to remain
effective for two years with respect to Common Stock issued upon conversion of
Preferred Stock and three years with respect to Common Stock issued upon
exercise of Warrants. The registration shall be accompanied by blue sky
clearances in such states as the holders may reasonably request. The Company
shall pay all expenses of the registration hereunder, other than the holders'
underwriting discounts. Registration rights may be assigned to assignees of the
Preferred, the Warrants or the underlying stock.
4. (a) Subscriber represents and warrants that it is purchasing the Units
solely for investment solely for its own account and not with a view to or for
the resale or distribution thereof.
(b) Subscriber understands that it may sell or otherwise transfer the
Units, the Preferred, the Warrants or the shares of Common Stock issuable on
conversion or exercise of the Preferred or the Warrants only if such transaction
is duly registered under the Securities Act of 1933, as amended, under the
Registration Statement or otherwise, or if Subscriber shall have received the
favorable opinion of counsel to the holder, which opinion shall be reasonably
satisfactory to counsel to the Company, to the effect that such sale or other
transfer may be made in the absence of registration under the Securities Act of
1933, as amended, and registration or qualification in every applicable state.
The certificates representing the aforesaid securities will be legended to
reflect these restrictions, and stop transfer instructions will apply.
Subscriber realizes that the Units are not a liquid investment.
5. (a) Subscriber has not relied upon the advice of a "Purchaser
Representative" (as defined in Regulation D of the Securities Act) in evaluating
the risks and merits of this investment. Subscriber has the knowledge and
experience to evaluate the Company and the risks and merits relating thereto.
(b) Subscriber represents and warrants that Subscriber is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated
pursuant to the Securities Act of 1933, as amended, and shall be such on the
date any shares are issued to the holder; Subscriber acknowledges that
Subscriber is able to bear the economic risk of losing Subscriber's entire
investment in the shares and understands that an investment in the Company
involves substantial
<PAGE>
risks; Subscriber has the power and authority to enter into this agreement, and
the execution and delivery of, and performance under this agreement shall not
conflict with any rule, regulation, judgment or agreement applicable to the
Subscriber; and Subscriber has invested in previous transactions involving
restricted securities.
6. This Agreement may not be changed or terminated except by written
agreement. It shall be binding on the parties and on their personal
representatives and permitted assigns. It sets forth all agreements of the
parties. It shall be enforceable by decrees of specific performance (without
posting bond or other security) as well as by other available remedies.
Subscriber: ALL-COMM MEDIA CORPORATION
By:
- ------------------------------- ------------------------------
Title:
Number of Units:
=============
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATION
OF THE
CLASS B CONVERTIBLE PREFERRED STOCK ("PREFERRED STOCK")
OF
ALL-COMM MEDIA CORPORATION (the "Company")
1. The holders of the Preferred Stock in preference to the holders of
Junior Stock (as hereinafter defined) shall be entitled to receive a dividend
payable only upon redemption or credited against conversion which shall accrue
at the rate of $30.00 [6%] per annum per share (pro rated for any portion
thereof) from and after the date of issuance.
2. The Preferred Stock shall be preferred as to assets over the Junior
Stock so that, in the event of the voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holders of Preferred Stock shall
be entitled to have set apart for them or to be paid out of the assets of the
Company, before any distribution is made to or set apart for the holders of
Junior Stock, an amount in cash equal to, and in no event more than, $50,000 per
share of Preferred Stock, plus all accrued and unpaid dividends thereon. If,
upon such liquidation, dissolution or winding-up of the Company, the assets of
the Company available for distribution to the holders of its stock be
insufficient to permit the distribution in full of the amounts receivable as
aforesaid by the holders of Preferred Stock, then all such assets of the Company
shall be distributed ratably among the holders of Preferred Stock in proportion
to the amounts which each would have been entitled to receive if such assets
were sufficient to permit distribution in full as aforesaid. Neither the
consolidation nor merger of the Company nor the sale, lease or transfer by the
Company of all or any part of its assets shall be deemed to be a liquidation,
dissolution or winding-up of the Company for the purposes of this paragraph.
3. The Company shall be obligated to redeem all of the Preferred Stock on
the second anniversary of the date of issuance of the Preferred Stock to the
extent that the Preferred Stock has not theretofore been converted under Section
4. The Preferred Stock shall automatically be deemed converted under Section 4
on such second anniversary unless the registration statement referred to below
has not theretofore been declared effective, or unless the Company's common
stock is not then trading on NASDAQ. The redemption price shall be payable in
cash and shall be equal to $50,000 per share, plus all accrued and unpaid
dividends thereon. The registration statement means the registration statement
which the Company is required by separate agreement to file in respect of the
shares of common stock issuable on conversion of the Preferred Stock.
4. The holder shall have the right at any time prior to maturity, in its
sole discretion, to convert first then outstanding accrued dividends and then
the Preferred Stock, in whole or in part, into a number of shares (the
"Conversion Shares") of the Company's common stock (the "Common Stock") equal to
the amount of dividends and redemption value converted divided by the Conversion
Price. The Conversion Price means a price per share equal to the lesser of (1)
$1.25 or (2) 80% of the average of the closing bid price of a share of Common
Stock of the Company during the five trading days prior to such conversion. In
the event that the holder elects to exercise its conversion rights hereunder, it
shall give to the Company written notice of such election and shall surrender
his Preferred Stock to the Company for cancellation. The Company shall at all
times reserve and keep available out of its authorized and unissued common
<PAGE>
stock, solely for issuance upon the conversion of the Preferred Stock as herein
provided, such number of shares of common stock as shall from time to time be
issuable upon the conversion of the Preferred Stock. The Preferred Stock shall
be convertible only to the extent that authorized but unissued shares of Common
Stock of the Company are available for such conversion.
In case the Company shall issue common stock as a dividend upon common
stock or in payment of a dividend thereon, shall subdivide the number of
outstanding shares of its common stock into a greater number of shares or shall
contract the number of outstanding shares of its common stock into a lesser
number of shares, the number of Conversion Shares to which the holder is
entitled to receive shall be adjusted, effective at the close of business on the
date such shares of common stock are to be issued, so that the Conversion Shares
shall be equal to the product obtained by multiplying the Conversion Shares in
effect immediately prior to the close of business on such date by a fraction,
the denominator of which shall be the number of shares of common stock
outstanding immediately prior to such dividend, subdivision, or contraction, and
the numerator of which shall be the number of shares of common stock outstanding
immediately after such dividend, subdivision or contraction. If any capital
reorganization or reclassification of the common stock, or consolidation, or
merger of the Company with or into another corporation, or the sale or
conveyance of all or substantially all of its assets to another corporation
shall be effected, then, as a condition precedent of such reorganization or
sale, the following provision shall be made: The holder of the Preferred Stock
shall from and after the date of such reorganization or sale have the right to
receive (in lieu of the shares of common stock of the Company immediately
theretofore receivable with respect to such Preferred Stock, upon the exercise
of conversion rights), such shares of stock, securities or assets as would have
been issued or payable with respect to or in exchange for the number of
outstanding shares of such common stock immediately theretofore receivable with
respect to such Preferred Stock. In any such case, appropriate provision shall
be made with respect to the rights and interests of the holders to the end that
such conversion rights (including, without limitation, provisions for
appropriate adjustments) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise thereof.
5. The holders of the Preferred Stock shall have no voting rights except
as expressly provided by law.
6. The term "Junior Stock" shall mean the Common Stock and those series
of Preferred Stock which, by the terms of the Certificate of Incorporation or of
the instrument by which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall designate the special rights
and limitations of each such class and series of stock and series of Preferred
Stock, shall be subordinate to the Preferred Stock in respect of the right of
the holders thereof to receive dividends or to participate in the assets of the
Company distributable to stockholders upon any liquidation, dissolution or
winding-up of the Company.
<PAGE>
Exhibit B
Neither this Warrant nor the shares of Common Stock issuable on exercise of this
Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
ALL-COMM MEDIA CORPORATION
WARRANT
DATED: June , 1996
Number of Shares:
Holder:
Address:
- ------------------------------------------
THIS CERTIFIES THAT the holder of this Warrant (the "Holder") is entitled to
purchase from ALL-COMM MEDIA CORPORATION, a Nevada corporation (hereinafter
called the "Company"), at the exercise price per share set forth below the
number of shares of the Company's common stock set forth above (the "Common
Stock"). The Warrants shall be exercisable only to the extent that authorized
but unissued shares of Common Stock of the Company are available for such
exercise. The Company shall as soon as practicable call a special stockholders'
meeting to approve the amendment of the Certificate of Incorporation of the
Company to authorize 30,000,000 additional shares of Common Stock and the
directors of the Company shall recommend to the stockholders that they vote in
favor of such amendment. By separate agreement, executive officers of the
Company who own an aggregate of 11.4% of the Company's outstanding Common Stock
have agreed to vote their shares in favor of such amendment. If at any time
thereafter that the Warrants are exercised there are not a sufficient number of
authorized but unissued shares of Common Stock of the Company available for such
exercise, the Company promptly will take all necessary steps to secure the
authorization of sufficient additional shares of Common Stock to permit such
exercise. This Warrant shall be exercisable at $2.50 per share until the third
anniversary of the date on which they are first exercisable or, if earlier, on
the first date on which both (a) and (b) shall be true namely (a) the
registration statement referred to below shall be in effect and shall have been
effective for not less than the ninety consecutive days immediately preceding
such date and (b) the closing price per share of the company's common stock on
Nasdaq shall not be less than $8.00 per share and shall have been not less than
$8.00 per share during the twenty consecutive trading days immediately preceding
such date. For example, assume that the closing price per share shall have been
$9.00 per share through October 1, 1996, that the closing price per share shall
have been $7.00 per share through March 1, 1997, and that the closing price per
share shall have been $8.00 per share for 20 consecutive trading days
thereafter. Assume further that the Registration Statement shall have been in
effect at all times from July 1, 1996. The expiration date of the Warrants
shall be the close of business on the 20th trading day after March 31, 1997. All
dates
<PAGE>
set forth in this paragraph shall be extended by one day for each day after
February 1, 1997 on which the registration statement referred to in an agreement
of even date herewith is not in effect with respect to the shares purchasable
under the Warrant.
1. This Warrant and the Common Stock issuable on exercise of this Warrant
(the "Underlying Shares") may be transferred, sold, assigned or hypothecated,
only if registered by the Company under the Securities Act of 1933 (the "Act")
or if the Company has received from counsel to the Company a written opinion to
the effect that registration of the Warrant or the Underlying Shares is not
necessary in connection with such transfer, sale, assignment or hypothecation.
The Warrant and the Underlying Shares shall be appropriately legended to reflect
this restriction and stop transfer instructions shall apply. The Holder shall
through its counsel provide such information as is reasonably necessary in
connection with such opinion.
2. The Holder is entitled to certain registration rights under an
agreement of even date herewith.
3. (a) Any permitted assignment of this Warrant shall be effected by the
Holder by (i) executing the form of assignment at the end hereof, (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of counsel to the Company referred to above; and
(iii) unless in connection with an effective registration statement which covers
the sale of this Warrant and or the shares underlying the Warrant, delivery to
the Company of a statement by the transferee (in a form acceptable to the
Company and its counsel) that such Warrant is being acquired by the Holder for
investment and not with a view to its distribution or resale; whereupon the
Company shall issue, in the name or names specified by the Holder (including the
Holder) new Warrants representing in the aggregate rights to purchase the same
number of Shares as are purchasable under the Warrant surrendered. Such
Warrants shall be exercisable immediately upon any such assignment of the number
of Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this Warrant.
4. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant
5. The Company covenants and agrees that all shares of Common Stock which
may be issued upon exercise hereof will, upon issuance, be duly and validly
issued, fully paid and non-assessable and no personal liability will attach to
the holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
for issuance upon exercise of this Warrant and all other Warrants.
6. This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company.
7. In the event that as a result of reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, the outstanding
shares of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate adjustments
in the
<PAGE>
number and kind of such securities then subject to this Warrant shall be made
effective as of the date of such occurrence so that the position of the Holder
upon exercise will be the same as it would have been had it owned immediately
prior to the occurrence of such events the Common Stock subject to this Warrant.
Such adjustment shall be made successively whenever any event listed above shall
occur and the Company will notify the Holder of the Warrant of each such
adjustment. Any fraction of a share resulting from any adjustment shall be
eliminated and the price per share of the remaining shares subject to this
Warrant adjusted accordingly.
8. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant (with the
purchase form at the end hereof properly executed) at the principal executive
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company); (ii) payment to the Company of the
exercise price for the number of Shares specified in the above-mentioned
purchase form together with applicable stock transfer taxes, if any; and (iii)
unless in connection with an effective registration statement which covers the
sale of the shares underlying the Warrant, the delivery to the Company of a
statement by the Holder (in a form acceptable to the Company and its counsel)
that such Shares are being acquired by the Holder for investment and not with a
view to their distribution or resale.
The certificates for the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding ten (10) business days after
all requisite documentation has been provided, after the rights represented by
this Warrant shall have been so exercised, and shall bear a restrictive legend
with respect to any applicable securities laws.
9. This Warrant shall be governed by and construed in accordance with the
laws of the State of California. The California courts shall have exclusive
jurisdiction over this instrument and the enforcement thereof; Service of
process shall be effective if by certified mail, return receipt requested. All
notices shall be in writing and shall be deemed given upon receipt by the party
to whom addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies.
IN WITNESS WHEREOF, ALL-COMM MEDIA CORPORATION has caused this Warrant to be
signed by its duly authorized officers under Its corporate seal and to be dated
as of the date set forth above.
ALL-COMM MEDIA CORPORATION
By: /s/ Barry Peters
--------------------------------------
Title: Chairman & CEO
In the presence of:
<PAGE>
Exhibit 10.8
PRIVATE PLACEMENT PURCHASE AGREEMENT
-------------------------------------
June 7, 1996
All-Comm Media Corporation
re: Purchase of Notes
Gentlemen:
1. The undersigned ("Subscriber") has reviewed the filings which All-Comm
Media Corporation (the "Company") has made with the Securities Exchange
Commission during the past 12 months. The Company represents and warrants to
the Subscriber that all such filings are correct and accurate in all material
respects and in all material respects state all facts necessary to make such
filings not misleading. Subscriber has had the opportunity to discuss the
Company's affairs with the Company's officers.
2. (a) The Company hereby sells to Subscriber, and Subscriber hereby
purchases from the Company the principal amount of Convertible Notes ("Notes")
set forth opposite its name below. The purchase price for each Note is equal to
the principal amount thereof and is payable in cash concurrently with the
execution and delivery hereof. Each Note is convertible from time to time, in
whole or in parts, each of which shall aggregate not less than $100,000 for all
Purchasers, into shares of common stock of the Company at a per share price
equal to $6.00 per share. For each $100,000 principal amount of notes, the
Company shall also issue to Subscriber a warrant in the form of Exhibit B to
purchase 300,000 shares of Common Stock at $3.00 per share.
(b) The Notes are payable on June 1, 1998 and accrue interest at the
annual rate of 8% per annum, provided that if the registration statement
hereinafter referred to is not effective by the 210th day after the date hereof,
then, in addition to the Subscriber's other remedies:
(i) the interest rate under the Notes shall be increased to 24%
per annum (or, if less, the highest rate permitted by law) until the
registration statement is declared effective, and
(ii) at Subscriber's option, the Notes shall not be repaid by the
Company and shall remain convertible and accrue interest, until such
date as is designated by Subscriber, but not later than 180 days after
the effectiveness of the registration statement.
The Notes are in the form of Exhibit A annexed hereto. The term "Purchasers" as
used herein means subscribers who in the aggregate are on this day purchasing
Notes in the aggregate principal amount of $1,000,000 under agreements of the
same tenor as this Agreement.
<PAGE>
3. (a) The Company will file before the 120th day after the date of this
Agreement, a registration statement on Form S-3 or Form S-1 (the "Registration
Statement") for the public sale by Subscriber of the shares which are issuable
on conversion of the Notes and Warrants. The shares to be covered by the
Registration Statement are collectively referred to as the "registered shares."
(b) The Company shall use its diligent efforts to cause the
Registration Statement to become effective not later than 90 days after the date
of filing, and to remain effective for two years. The registration shall be
accompanied by blue sky clearances in such states as Subscriber may reasonably
request.
(c) The Company shall pay all expenses of the registration hereunder,
other than Subscriber's underwriting discounts.
(d) The Company shall supply to Subscriber a reasonable number of
copies of all registration materials and prospectuses. The Company and
Subscriber shall execute and deliver to each other indemnity agreements which
are conventional in registered offerings of this type. The Subscriber shall
reasonably cooperate with the Company in the preparation and filing of the
Registration Statement and appropriate amendments thereto.
(e) Subscriber may transfer a proportionate part of its registration
rights to transferees of the Notes and Warrants or portions thereof.
4. (a) Subscriber represents and warrants that it is purchasing the
Notes and Warrants solely for investment, solely for its own account and not
with a view to or for the resale or distribution thereof.
(b) Subscriber understands that it may sell or otherwise transfer the
Notes and Warrants or the shares issuable on conversion of the Notes and
Warrants only if such transaction is duly registered under the Securities Act of
1933, as amended, under the Registration Statement or otherwise, or if
Subscriber shall have received the favorable opinion of counsel to the holder,
which opinion shall be reasonably satisfactory to counsel to the Company, to the
effect that such sale or other transfer may be made in the absence of
registration under the Securities Act of 1933, as amended, and registration or
qualification in every applicable state. The certificates representing the
aforesaid securities will be legended to reflect these restrictions, and stop
transfer instructions will apply. Subscriber realizes that the Notes are not a
liquid investment.
(c) The Notes and Warrants shall be exercisable only to the extent
that authorized but unissued shares of Common Stock of the Company are available
for such conversion. The Company shall as soon as practicable call a special
stockholders' meeting to approve the amendment of the Certificate of
Incorporation of the Company to authorize 30,000,000 additional shares of Common
Stock and the directors of the Company shall recommend to the stockholders that
they vote in favor of such amendment. By separate agreement, executive officers
of the Company who own an aggregate of 11.4% of the Company's outstanding Common
Stock have agreed to vote their shares in favor of such amendment.
5. (a) Subscriber has not relied upon the advice of a "Purchaser
Representative" (as defined in Regulation D of the Securities Act) in evaluating
the risks and merits of this invest-
<PAGE>
ment. Subscriber has the knowledge and experience to evaluate the Company and
the risks and merits relating thereto.
(b) Subscriber represents and warrants that Subscriber is an
"accredited investor" as such term is defined in Rule 501 of Regulation D
promulgated pursuant to the Securities Act of 1933, as amended, and shall be
such on the date any shares are issued to the holder; Subscriber acknowledges
that Subscriber is able to bear the economic risk of losing Subscriber's entire
investment in the shares and understands that an investment in the Company
involves substantial risks; Subscriber has the power and authority to enter
into this agreement and the execution and delivery of and performance under this
Agreement shall not conflict with any rule, regulation, judgment or agreement
applicable to the Subscriber; and Subscriber has invested in previous
transactions involving restricted securities.
6. This Agreement may not be changed or terminated except by written
agreement. It shall be binding on the parties and on their personal
representatives and permitted assigns. It sets forth all agreements of the
parties. It shall be enforceable by decrees of specific performance (without
posting bond or other security) as well as by other available remedies.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nevada. The federal and state courts sitting in the
State of Nevada shall have exclusive jurisdiction over all matters relating to
this Agreement. Trial by jury is expressly waived.
8. All notices, requests, service of process, consents and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered (i) on the date personally delivered or (ii) one day after
properly sent by Federal Express, addressed to the respective parties at their
address set forth in this Agreement or (iii) one day after transmitted by
facsimile so long as a confirmation copy is simultaneously forwarded by Federal
Express, in each case addressed to the respective parties at their address set
forth in this Agreement. Either party hereto may designate a different address
by providing written notice of such new address to the other party hereto as
provided above.
9. Each party hereto shall be responsible for its own expenses with
regard to the negotiation and execution of this Agreement
SUBSCRIBER:
signature:
------------------------------
type or print name:
---------------------
Address:
--------------------------------
--------------------------------
Fax No:
--------------------------------
Social Security No:
--------------------
Principal Amount of Notes:
--------------
<PAGE>
AGREED:
ALL-COMM MEDIA CORPORATION
By: /s/ Barry Peters
---------------------------------------------
Title: Chairman/CEO
<PAGE>
EXHIBIT A
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED, DISPOSED OF OR OFFERED FOR SALE, IN
WHOLE OR IN PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THAT ACT COVERING THIS NOTE AND/OR THE COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALL-COMM MEDIA
CORPORATION, THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
$
---------------------
CONVERTIBLE NOTE
(the "Note")
ALL-COMM MEDIA CORPORATION
ALL-COMM MEDIA CORPORATION, a Nevada corporation (hereinafter called the
"Corporation"), for value received, hereby promises to pay to the order of
(hereinafter the "Holder") the principal sum of $ on
June 1, 1998, together with interest accruing at the rate of 8% per annum and
payable at maturity and upon conversion. Principal and interest shall be
payable at the address of the Holder.
1. The Notes.
1.1 This Note is one of a duly authorized issue of Convertible Notes of
the Corporation (designated herein as the "Notes"), and is being issued under
Private Placement Purchase Agreements of similar tenor between the Corporation
and the Holder (the "Subscription Agreement"). The Holders of the Notes are
referred to herein collectively as "Purchasers".
2. Conversion Rights.
2.1 The Holder shall have the right at any time prior to maturity, in its
sole discretion, to convert the principal amount of this Note and/or the accrued
interest thereon, in whole or in parts, aggregating not less than $100,000 for
all Purchasers, into a number of shares (the "Conversion Shares") of the
Corporation's common stock (the "Common Stock") equal to the amount converted
divided by the Conversion Price. The Conversion Price means a price per share
equal to $6.00 per share.
2.2 In the event that the Holder elects to exercise its conversion rights
hereunder, it shall give to the Corporation written notice of such election and
shall surrender this Note to the Corporation for cancellation against payment of
interest accrued through the date of conversion.
2.3 The Corporation shall at all times reserve and keep available out of
its authorized and unissued common shares, solely for issuance upon the
conversion of the Note as herein
<PAGE>
provided, such number of common shares as shall from time to time be issuable
upon the conversion of the Note. The Notes shall be exercisable only to the
extent that authorized but unissued shares of Common Stock of the Company are
available for such conversion. The Company shall as soon as practicable call a
special stockholders' meeting to approve the amendment of the Certificate of
Incorporation of the Company to authorize 30,000,000 additional shares of Common
Stock and the directors of the Company shall recommend to the stockholders that
they vote in favor of such amendment. By separate agreement, executive officers
of the Company who own an aggregate of 11.4% of the Company's outstanding Common
Stock have agreed to vote their shares in favor of such amendment.
3. Adjustments to Conversion Rights.
3.1 In case the Corporation shall issue common stock as a dividend upon
common stock or in payment of a dividend thereon, shall subdivide the number of
outstanding shares of its common stock into a greater number of shares or shall
contract the number of outstanding shares of its common stock into a lesser
number of shares, the number of Conversion Shares to which the Holder is
entitled to receive pursuant to Section 2 shall be adjusted, effective at the
close of business on the date such common shares are to be issued, so that the
Conversion Shares shall be equal to the product obtained by multiplying the
Conversion Shares in effect immediately prior to the close of business on such
date by a fraction, the denominator of which shall be the number of shares of
common stock outstanding immediately prior to such dividend, subdivision, or
contraction, and the numerator of which shall be the number of shares of common
stock outstanding immediately after such dividend, subdivision or contraction.
3.2 If any capital reorganization or reclassification of the common stock,
or consolidation or merger of the Corporation with or into another corporation,
or the sale or conveyance of all or substantially all of its assets to another
corporation shall be effected then, as a condition precedent of such
reorganization or sale, the following provision shall be made: The Holder of
the Note shall from and after the date of such reorganization or sale have the
right to receive (in lieu of the shares of common stock of the Corporation
immediately theretofore receivable with respect to such Note, upon the exercise
of conversion rights), such shares of stock, securities or assets as would have
been issued or payable with respect to, or in exchange for, the number of
outstanding shares of such common stock immediately theretofore receivable with
respect to such Note. In any such case, appropriate provision shall be made
with respect to the rights and interests of the Holders to the end that such
conversion rights (including, without limitation, provisions for appropriate
adjustments) shall thereafter be applicable, as nearly as may be practicable in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise thereof.
4. Registration Rights and Certain Remedies. The Subscription Agreements
provide for the filing by the Company of a registration statement for the sale
of the shares issuable on conversion of this Note. Notwithstanding anything to
the contrary set forth herein: if the registration statement hereinafter
referred to is not effective by the 210th day after the date hereof, then, in
addition to the Subscriber's other remedies:
1. the interest rate under the Notes shall be increased to 24% per annum
(or, if less, the highest rate permitted by law) until the
registration statement is declared effective, and
<PAGE>
2. at Subscriber's option, the Notes shall not be repaid by the Company
and shall remain convertible and accrue interest, until such date as
is designated by Subscriber but not later than 180 days after the
effectiveness of the registration statement.
4A. Purchase for Investment. The Holder, by acceptance hereof, acknowledges
that the Note (and the Common Stock into which the Note is convertible) has not
been registered under the Act, covenants and agrees with the Corporation that
such Holder is taking and holding this Note (and the Common Stock into which the
Note is convertible) for investment purposes and not with a view to, or for sale
in connection with, a distribution thereof and that this Note (and the Common
Stock into which the Note is convertible) may not be assigned, hypothecated or
otherwise disposed of in the absence of an effective registration statement
under the Act or an opinion of counsel for the Holder, which counsel shall be
reasonably satisfactory to the Corporation, to the effect that such disposition
is in compliance with the Act, and represents and warrants that such Holder is
an "accredited investor", that such Holder has, or with his representative has,
such knowledge and experience in financial and business matters to be capable of
evaluating the merits and risks in respect of this Note (and the Common Stock
into which the Note is convertible) and is able to bear the economic risk of
such investment.
5. Events of Default and Acceleration of the Note.
5.1 An "event of default" with respect to this Note shall exist if any of
the following shall occur:
(a) [omitted]
(b) The Corporation shall breach or fail to comply with any
provision of this Note and such breach or failure shall continue for thirty
(30) days after written notice by any Holder of any Note to the
Corporation.
(c) A receiver, liquidator or trustee of the Corporation or of a
substantial part of its properties shall be appointed by court order and
such order shall remain in effect for more than sixty (60) days; or the
Corporation shall be adjudicated bankrupt or insolvent; or a substantial
part of the property of the Corporation shall be sequestered by court order
and such order shall remain in effect for more than sixty (60) days; or a
petition to reorganize the Corporation under any bankruptcy, reorganization
or insolvency law shall he filed against the Corporation and shall not be
dismissed within sixty (60) days after such filing.
(d) The Corporation shall file a petition in voluntary
bankruptcy or request reorganization under any provision of any bankruptcy,
reorganization or insolvency law, or shall consent to the filing of any
petition against it under any such law.
(e) The Corporation shall make an assignment for the benefit of
its creditors, or admit in writing its inability to pay its debts generally
as they become due, or consent to the appointment of a receiver, trustee or
liquidator of the Corporation, or of all or any substantial part of its
properties.
5.2 If an event of default shall occur, the Holder may, in addition to
such Holder's other remedies, by written notice to the Corporation, declare the
principal amount of this Note,
<PAGE>
together with all interest accrued thereon, to be due and payable immediately.
Upon any such declaration, such amount shall become immediately due and payable
and the Holder shall have all such rights and remedies provided for under the
terms of this Note and the Stock Pledge Agreement.
6. Miscellaneous
6.1 All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be given (and shall be deemed to have
been duty given upon receipt) by delivery in person, by telegram, recognized
overnight mail carrier, telex or other standard form of telecommunications, or
by registered or certified mail, postage prepaid, return receipt requested,
addressed as follows: (a) if to the Holder, to such address as such Holder shall
furnish to the Corporation in accordance with this Section, or (b) if to the
Corporation, to it at its headquarters office, or to such other address as the
Corporation shall furnish to the Holder in accordance with this Section.
6.2 THIS NOTE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEVADA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
6.3 The Corporation waives protest, notice of protest, presentment,
dishonor, notice of dishonor and demand.
6.4 If any provision of this Note shall for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Note shall be construed as if such invalid
or unenforceable provision had never been contained herein.
6.3 The waiver of any event of default or the failure of the Holder to
exercise any right or remedy to which it may be entitled shall not be deemed a
waiver of any subsequent event of default or of the Holder's right to exercise
that or any other right or remedy to which the Holder is entitled.
6.6 The Holder of this Note shall be entitled to recover his legal and
other costs of collecting on this Note, and such costs shall be deemed added to
the principal amount of this Note.
6.7 In addition to all other remedies to which the Holder may be entitled
hereunder, Holder shall also be entitled to decrees of specific performance
without posting bond or other security.
IN WITNESS WHEREOF, the Corporation has caused this Note to be duly
executed on the date first written above.
ATTEST: ALL-COMM MEDIA CORPORATION
- ---------------------------- By: /s/ Barry Peters
------------------------------
Name: Name: Barry Peters
------------------------------- -----------------------------
Title: Title: Chairman & CEO
----------------------------- -----------------------------
<PAGE>
Exhibit B
Neither this Warrant nor the shares of Common Stock issuable on exercise of this
Warrant have been registered under the Securities Act of 1933. None of such
securities may be transferred in the absence of registration under such Act or
an opinion of counsel to the effect that such registration is not required.
ALL-COMM MEDIA CORPORATION
WARRANT
DATED: June 10, 1996
Number of Shares:
Holder:
Address:
- ------------------------------
THIS CERTIFIES THAT the holder of this Warrant (the "Holder") is entitled to
purchase from ALL-COMM MEDIA CORPORATION, a Nevada corporation (hereinafter
called the "Company"), at the exercise price per share set forth below the
number of shares of the Company's common stock set forth above ("Common Stock").
This Warrant shall be exercisable at $3.00 per share. The Warrants shall be
exercisable only to the extent that authorized but unissued shares of Common
Stock of the Company are available for such exercise. The Company shall as soon
as practicable call a special stockholders' meeting to approve the amendment of
the Certificate of Incorporation of the Company to authorize 30,000,000
additional shares of Common Stock and the directors of the Company shall
recommend to the stockholders that they vote in favor of such amendment. By
separate agreement, executive officers of the Company who own an aggregate of
11.4% of the Company's outstanding Common Stock have agreed to vote their shares
in favor of such amendment. The Warrant shall expire on the third anniversary
of the date on which they are first exercisable. All dates set forth in this
paragraph shall be extended by one day for each day after February 1, 1997 on
which the registration statement referred to in an agreement of even date
herewith is not in effect with respect to the shares purchasable under the
Warrant.
1. This Warrant and the Common Stock issuable on exercise of this Warrant
(the "Underlying Shares") may be transferred, sold, assigned or hypothecated,
only if registered by the Company under the Securities Act of 1933 (the "Act")
or if the Company has received from counsel to the Company a written opinion to
the effect that registration of the Warrant or the Underlying Shares is not
necessary in connection with such transfer, sale, assignment or hypothecation.
The Warrant and the Underlying Shares shall be appropriately legended to reflect
this restriction and stop transfer instructions shall apply. The Holder shall
through its counsel provide such information as is reasonably necessary in
connection with such opinion.
<PAGE>
2. The Holder is entitled to certain registration rights under an
agreement of even date herewith.
3. (a) Any permitted assignment of this Warrant shall be effected by the
Holder by (i) executing the form of assignment at the end hereof; (ii)
surrendering the Warrant for cancellation at the office of the Company,
accompanied by the opinion of counsel to the Company referred to above; and
(iii) unless in connection with an effective registration statement which covers
the sale of this Warrant and or the shares underlying the Warrant, delivery to
the Company of a statement by the transferee (in a form acceptable to the
Company and its counsel) that such Warrant is being acquired by the Holder for
investment and not with a view to its distribution or resale; whereupon the
Company shall issue, in the name or names specified by the Holder (including the
Holder) new Warrants representing in the aggregate rights to purchase the same
number of Shares as are purchasable under the Warrant surrendered. Such
Warrants shall be exercisable immediately upon any such assignment of the number
of Warrants assigned. The transferor will pay all relevant transfer taxes.
Replacement warrants shall bear the same legend as is borne by this Warrant.
4. The term "Holder" should be deemed to include any permitted record
transferee of this Warrant.
8. The Company covenants and agrees that all shares of Common Stock which
may be issued upon exercise hereof will, upon issuance, be duly and validly
issued, fully paid and non-assessable and no personal liability will attach to
the holder thereof. The Company further covenants and agrees that, during the
periods within which this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
for issuance upon exercise of this Warrant and all other Warrants.
9. This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company.
10. In the event that. as a result of reorganization, merger,
consolidation, liquidation, recapitalization, stock split, combination of shares
or stock dividends payable with respect to such Common Stock, the outstanding
shares of Common Stock of the Company are at any time increased or decreased or
changed into or exchanged for a different number or kind of share or other
security of the Company or of another corporation, then appropriate adjustments
in the number and kind of such securities then subject to this Warrant shall be
made effective as of the date of such occurrence so that the position of the
Holder upon exercise will be the same as it would have been had it owned
immediately prior to the occurrence of such events the Common Stock subject to
this Warrant. Such adjustment shall be made successively whenever any event
listed above shall occur and the Company will notify the Holder of the Warrant
of each such adjustment. Any fraction of a share resulting from any adjustment
shall be eliminated and the price per share of the remaining shares subject to
this Warrant adjusted accordingly.
11. The rights represented by this Warrant may be exercised at any time
within the period above specified by (i) surrender of this Warrant (with the
purchase form at the end hereof properly executed) at the principal executive
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company); (ii) payment to the Company of the
exercise price for the number of Shares specified in the above-mentioned
purchase form together
<PAGE>
with applicable stock transfer taxes, if any; and (iii) unless in connection
with an effective registration statement which covers the sale of the shares
underlying the Warrant, the delivery to the Company of a statement by the Holder
(in a form acceptable to the Company and its counsel) that such Shares are being
acquired by the Holder for investment and not with a view to their distribution
or resale.
The certificates for the Common Stock so purchased shall be delivered to
the Holder within a reasonable time, not exceeding ten (10) business days after
all requisite documentation has been provided, after the rights represented by
this Warrant shall have been so exercised, and shall bear a restrictive legend
with respect to any applicable securities laws.
12. This Warrant shall be governed by and construed in accordance with the
laws of the State of California. The California courts shall have exclusive
jurisdiction over this instrument and the enforcement thereof. Service of
process shall be effective if by certified mail, return receipt requested. All
notices shall be in writing and shall be deemed given upon receipt by the party
to whom addressed. This instrument shall be enforceable by decrees of specific
performances well as other remedies.
IN WITNESS WHEREOF, ALL-COMM MEDIA CORPORATION has caused this Warrant to
be signed by its duly authorized officers under Its corporate seal, and to be
dated as of the date set forth above.
ALL-COMM MEDIA CORPORATION
By:
-------------------------------------------
Title:
In the presence of:
<PAGE>
Exhibit 10.9
STEPHEN DUNN
c/o Stephen Dunn & Associates, Inc.
1728 Abbot Kinney Boulevard
Venice, California 90291
May 31, 1996
VIA FACSIMILE - (310) 342-2801
All-Comm Media Corporation
400 Corporate Pointe, Suite 780
Culver City, CA 90230-7615
Attn: E. William Savage
Gentlemen:
This letter is intended to advise you that I will agree to the termination
of the Operating Covenants Agreement, dated April 25, 1995, between me and All-
Comm Media Corporation ("All-Comm") concurrently, with: (i) payment to me by
All-Comm of the sum of approximately $2,105,000 pursuant to the provisions of
Section 2(a)(ii) of that certain Stock Purchase Agreement, dated January 31,
1995 (the "Purchase Agreement"), between me and All-Comm; and (ii) the
prepayment of the maximum "earnout" of $850,000 in cash and All-Comm common
stock with respect to the first year of the post acquisition operations of
Stephen Dunn & Associates, Inc. ("SDA") pursuant to Section 2(b)(i) of the
Purchase Agreement.
I will further agree that all remaining monies due me pursuant to the
Purchase Agreement (other than the "earnouts" for years two and three of SDA's
post-acquisition operations) will be restructured so they are paid to me in 36
substantially equal consecutive monthly installments of principal, plus interest
at 8% per annum on unpaid principal, commencing three months after the payments
provided for in the first paragraph of this letter are made.
All-Comm will agree to provide adequate working capital for the operations
of SDA at levels commensurate with successful operations and will not restrict
my ability to generate the "earnout" amounts of income and earn the "earnout"
payments provided for in Section 2(b) of the Purchase Agreement. All-Comm will
use its best efforts to cause me to be removed as the guarantor of SDA's term
loans and line of credit with 1st Business Bank within 180 days after the
payments provided for in the first paragraph of this letter.
Except for the termination of the Operating Covenants Agreement and the
other agreements described in this letter, the Stock Purchase Agreement remains
in effect, including the provisions of Section 2(a)(ii) and Exhibit 2(a)(ii)
except with the payments rescheduled according to this letter.
Very truly yours,
/s/ Stephen Dunn
- --------------------
Stephen Dunn
