UNITED STATES
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 (Date of earliest event reported) July 28, 1998
AMERICAN DIGITAL COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
WYOMING 0-28506 13-3411167
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
745 Fifth Avenue, Suite 900, New York, New York 10151
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 905-837-9909
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Matters
On July 28, 1998, the Registrant closed its private placement offering of
$350,000 of debt, warrants to purchase 350,000 shares of the Registrant's Common
Stock at an exercise price of $.30 per share, and 350,000 shares of the
Registrant's Common Stock. The $350,000 debt is represented by a global amended
and restated promissory note, which is payable on demand and is secured by
certain shares of common stock of Intek Global Corporation and Ventel Inc.,
owned by the Registrant. Pellinore Securities Corporation acted as placement
agent in connection with the offering and received a fee equal to $30,000, plus
certain warrants and stock of the Registrant together with reimbursement of its
reasonable out-of-pocket expenses.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
1. Placement Agent Agreement between Registrant and Pellinore Securities
Corporation, dated June 26, 1998.
4.1 Form of Warrant issued by Registrant to various investors, dated as of July
28, 1998. Incorporated by reference to Exhibit 4.1 of the Registrant's Report on
Form 8-K dated May 7, 1998.
4.2 Form of stock certificate issued by Registrant to various investors, dated
as of July 28, 1998. Incorporated by reference to Exhibit 4.1 of the
Registrant's Report on Form 8-K dated July 14, 1993.
10.1 Amended and Restated Global Secured Demand Promissory Note, dated as of
July 28, 1998, signed by Registrant in favor of Pellinore Securities
Corporation.
10.2 Amended and Restated Pledge Agreement, dated as of July 28, 1998, between
Registrant and Pellinore Securities Corporation.
10.3 Joinder Agreement, dated as of July 28, 1998, by Registrant and Pellinore
Securities Corporation.
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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.
AMERICAN DIGITAL COMMUNICATIONS,
INC.
By: /s/ Gary Hokkanen
------------------
Name: Gary Hokkanen
Title: Chief Financial Officer
Date: September 10, 1998
EXHIBIT 1
PELLINORE SECURITIES CORPORATION
745 FIFTH AVENUE
NEW YORK, NY 10151
June 26, 1998
PRIVATE AND CONFIDENTIAL
American Digital Communications, Inc.
580 Granite Court
Pickering, Ontario L1W 3Z4
CANADA
Ladies and Gentlemen:
American Digital Communications, Inc. (hereinafter referred to as the
"Company") has informed Pellinore Securities Corporation ("Pellinore") that it
proposes to raise approximately $150,000 to $300,000 via the sale of debt
securities ("Securities") to lenders including individual and institutional
investors. This letter (this "Agreement") confirms our understanding that the
Company has engaged Pellinore to act as its exclusive financial advisor in
connection with the offer and sale of securities during the Engagement Period.
For purposes hereof, the term "Engagement Period" shall mean the period
commencing on the date hereof and continuing through the date of the earlier of
the termination of this Agreement and the final closing of the sale of
Securities (or such other date as shall be agreed upon in writing by the Company
and Pellinore). Each closing of the sale of Securities is hereinafter referred
to as a "Closing."
In addition, during the Engagement Period, Pellinore will act as
exclusive placement agent for the Company on a reasonable best efforts basis in
connection with the private placement of the Securities to be issued by the
Company in one or more transaction(s) (collectively, the "Private Placement")
that are intended to be exempt from registration under the Securities Act of
1933, as amended (the "Securities Act"), and the applicable law and regulations
of any other jurisdictions in which the Securities are offered. Pellinore may
separately engage, at its own expense and with the prior written approval of the
Company, sub-agents as it may deem necessary or appropriate; provided that each
such sub-agent shall agree in writing to be bound by the terms of this
Agreement. Pellinore shall be responsible for any breach hereof by any such
sub-agent.
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1. Services. As we have discussed, our services to the Company shall include
investment banking and financial advice in an attempt to identify, evaluate, and
assist in the negotiation of one or more financings during the term of this
Agreement. Pellinore will endeavor to arrange introductions and meetings with
prospective investors, assist the Company in evaluating investment proposals,
and, to the extent deemed appropriate, assist in negotiations leading to the
conclusion of one or more financings.
2. Compensation for Services. In respect of each financing that is consummated
during the term of this Agreement or the 360 day period immediately following
the termination of this Agreement, the Company shall, in respect of services
hereunder, on the Closing Date with respect to such financing, (i) pay to
Pellinore a cash fee equal to 10.00% of the principal amount of Securities sold,
up to a maximum of $30,000, (ii) issue to Pellinore that number of shares of
common stock in the Company ("Common Stock") as is equal to 10% of the number of
shares of Common Stock issued by the Company to purchasers of Securities and
(iii) issue to Pellinore that number of warrants to purchase shares of Common
Stock as is equal to 10% of the number of warrants issued by the Company to
purchasers of Securities. Notwithstanding the foregoing, in the event Securities
are sold to any purchaser listed on Exhibit A hereto, or any "Affiliate" of such
purchaser (as such term is defined in Rule 144 of the regulations promulgated
under the Securities Act of 1933, as amended), then such percentages shall be 4%
rather than 10%. With respect to all such shares of Common Stock issued to
Pellinore pursuant to the foregoing, Pellinore shall be granted registration
rights identical to those that may at any time be granted to purchasers of
Securities with respect to shares of Common Stock held by such purchasers. In
addition, the Company agrees to reimburse Pellinore monthly for (i) its
out-of-pocket expenses incurred to date, it being understood and agreed that the
amount of such expenses incurred to date is $18,681.47, consisting of $500.00
payable to Pellinore and $18,181.47 payable to Pellinore's affiliate Summit
Capital Associates, Inc., (ii) its reasonable out-of-pocket expenses including,
without limitation, telephone, facsimile, word-processing and travel, incurred
during the term of this Agreement in connection with its engagement hereunder,
including the reasonable fees and disbursements of its legal counsel, if any,
regardless of whether the Private Placement contemplated by this Agreement is
consummated (collectively, "Expenses"); provided that Pellinore agrees to notify
the Company at such time as aggregate Expenses with respect to any given month
(other than the month in which this letter is executed and the immediately
succeeding month) exceed $2,000.00.
3. Shareholder Information; Visitation Rights. At all times during the
effectiveness of this Agreement and for the 360 day period immediately following
the termination of this Agreement, the Company will (and will cause its transfer
agent to) deliver
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to Pellinore current, complete and accurate shareholder lists and copies of its
Depositary Trust Company and/or stock transfer ledgers, promptly upon
Pellinore's request for the same. Additionally, at all times during the
effectiveness of this Agreement and for such 360-day period, Pellinore shall
have the right to designate one individual who shall be entitled to attend,
either telephonically or in person, all meetings of the Board of Directors of
the Company, including all committees thereof, and the Company shall reimburse
Pellinore promptly upon request for the reasonable travel expenses incurred by
or with respect to such individual.
4. Offering Expenses. The Company will bear all reasonable legal, accounting,
printing and other expenses in connection with the offering and sale of the
Securities. It also is understood that Pellinore will not be responsible for any
fees or commissions payable to financial or other advisors, other than
sub-agents retained by Pellinore.
5. Consent Rights. At all times while any Securities are outstanding, the
Company will not, without the prior written consent of Pellinore: (a) incur
funded indebtedness exceeding $50,000 in principal amount, whether or not in
whole or in part subordinated to the Securities; (b) increase the total number
of authorized shares of capital stock of the Company; (c) issue any equity
securities or securities convertible into equity securities of the Company; (d)
liquidate or dissolve the Company; (e) sell, convey or otherwise dispose of all
or substantially all of the property of the Company or any subsidiary of the
Company or merge into or consolidate with any other corporation (other than a
wholly owned subsidiary of the Corporation or to change the Company's state of
incorporation) or effect any transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company is
disposed of; (f) declare or pay any dividend or distribution on the Common
Stock, par value $.0001 per share, of the Company ("Common Stock"), other than
the repurchase of Common Stock held by employees, officers or directors of the
Company pursuant to any restricted stock purchase agreement between the Company
and such employees, officers or directors; (g) redeem any shares of Common
Stock; or (h) amend the Certificate of Incorporation or By-laws of the Company.
6. Collateral. It being understood that a portion of the collateral securing the
Securities will consist of unregistered shares of common stock of Intek Global
Corporation (the "Pledged Intek Stock") to be pledged to Pellinore as agent for
the several purchasers of Securities, the Company will cause to be delivered to
Pellinore an opinion of counsel acceptable to Pellinore, substantially in the
form attached hereto as Exhibit B.
7. Qualification. The Company will promptly from time to time take such action
as Pellinore may reasonably request to qualify the Securities as a private
placement under the securities laws
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of such states as Pellinore may reasonably request and to comply with such laws
so as to permit such offers and sales. The Company and Pellinore will each
reasonably believe at the time of any sale of the Securities as part of the
Private Placement that each purchaser of the Securities is either an "accredited
investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act or an otherwise sophisticated investor satisfactory to the
Company and Pellinore. Neither the Company or any person acting on its behalf,
nor Pellinore or any person acting on its behalf; will offer or sell the
Securities by any form of general solicitation or general advertising, or by any
other means that would be deemed a public offering under the laws of the
applicable jurisdiction or would not otherwise comply with the laws of any such
jurisdiction. Pellinore shall offer the Securities in accordance with any
restrictions reasonably imposed by counsel to the Company with respect to offers
and sales of the Securities by Pellinore in any state or foreign jurisdiction.
The Company will file in a timely manner with the Securities and Exchange
Commission (the "SEC") and/or each state regulatory authority any notices or
other filings with respect to the Securities required by the Rules promulgated
under Regulation D of the Securities Act and/or applicable state laws or
regulations and will furnish to Pellinore promptly a signed copy of each such
notice. The Company shall have the right to reject any proposed purchaser in its
sole discretion.
8. Offering Materials.
(a) The Company will prepare and furnish Pellinore with a private placement
memorandum (which, together with the appendices and exhibits thereto and any
amendments or supplements thereto and including the legal opinion referred to in
paragraph 6 above, is herein referred to as the "Offering Materials") relating
to the Private Placement if, in consultation with Pellinore the Company
determines to utilize any Offering Materials, it being understood and agreed
that nothing herein shall obligate the Company to use any Offering Materials.
The Company authorizes Pellinore to transmit the Offering Materials, in the form
approved by the Company, to prospective purchasers of the Private Placement and
represents and warrants that the Offering Materials, at the time of each
Closing, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made as to
"Pellinore Information", as defined in Schedule I hereto . Pellinore shall not
provide any information orally or in writing to prospective investors unless
such information is expressly authorized for such use by the Company or
Pellinore is advised by counsel that such information is legally required to be
disclosed to investors. Except as contemplated by the preceding sentence or as
required by applicable law or legal process (which shall promptly be
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disclosed to the Company in writing), Pellinore shall keep confidential all
non-public information provided to it by or at the request of the Company and
shall not disclose such information to any third party or to any of its
employees or advisors except to those persons who have a need to know such
information in connection with Pellinore's performance of its responsibilities
hereunder. Pellinore shall be responsible for any breach by such persons of
these confidentiality obligations to the extent such persons are employees,
agents or affiliates of Pellinore to whom Pellinore has provided access to such
information ("Access Parties"), except to the extent any such Access Party
executes his, her or its own confidentiality agreement with the Company.
Pellinore shall provide each investor solicited by it with a copy of the
then-current version of the Offering Materials and keep an accurate record of
all offerees to whom each version of the Offering Materials has been sent by it.
Pellinore shall, upon request by the Company, suspend solicitation of
prospective purchasers of the Securities at any time as a result of a reasonable
determination by the Company that a supplement or amendment to the Offering
Materials (the "Supplement") is required in order that the Offering Materials do
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. In such event, the Company shall provide written notice to Pellinore
detailing the reason for such suspension, and shall use its best efforts to
amend the Offering Materials as soon as practicable and to provide Pellinore
with sufficient copies thereof. The Company shall not transmit the Offering
Materials to prospective purchasers of the Securities unless the Company
promptly provides notice to Pellinore of such transmittal. The Company will also
cause to be furnished to Pellinore at each Closing copies of such agreements,
opinions (addressed to Pellinore if requested), certificates and other documents
delivered at each Closing as Pellinore may reasonably request, including,
without limitation, an opinion of Company counsel to the effect that the
placement of the Securities was exempt from registration under the Securities
Act. Following the final Closing, the Company will provide Pellinore with all
written information sent to investors (including, without limitation, drawdown
notices, investor reports and information regarding portfolio investments in the
Company) other than annual tax information sent to the investors necessary for
the completion of Federal, state and local income tax returns.
(b) If any event shall occur or condition exist as a result of which it is
necessary or advisable, in the reasonable opinion of the Company or Pellinore,
to amend or supplement the Offering Materials in order that the Offering
Materials will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances existing at the time it is
delivered to prospective purchasers, the Company
<PAGE>
will promptly prepare and furnish to Pellinore such number of copies as
Pellinore may reasonably request of an amendment or supplement to the Offering
Materials (in form and substance reasonably satisfactory to Pellinore and its
counsel) that will correct such untrue statement or omission.
(c) The Company will advise Pellinore promptly of: (i) the occurrence of any
event or the existence of any condition known to the Company referred to in the
preceding paragraph; (ii) such other information concerning the business and
financial condition of the Company as Pellinore may from time to time request;
(iii) the receipt by the Company of any communication from the SEC or any state
securities commissioner or regulatory authority in any other jurisdiction; and
(iv) the commencement of any lawsuit or proceeding to which the Company is a
party.
(d) The Company will: (i) make available to each offeree of the Securities upon
written request therefor such information (in addition to that contained in the
Offering Materials) concerning the offering of the Securities, the Company and
any other relevant matters as the Company possesses or can acquire without
unreasonable effort or expense; and (ii) provide each offeree the opportunity to
ask questions of, and receive answers from, the officers and employees of the
Company concerning the terms and conditions of the offering and to obtain any
other additional information about the Company and the Securities, to the extent
the officers and employees of the Company possess the same or can acquire it
without unreasonable effort or expense. The Company will also make available to
Pellinore all financial and other information concerning its business and
operations and the Private Placement which Pellinore reasonably requests and
will provide access to the Company's officers, directors, employees, independent
accountants and legal counsel. Pellinore shall be entitled to rely without
investigation upon all information that is available from public sources as well
as all other information supplied to it by or on behalf of the Company or its
other advisors and shall not in any respect be responsible for the accuracy or
completeness of, or have any obligation to verify, the same or to conduct any
appraisal of assets. Any advice, written or oral, provided by Pellinore pursuant
to this Agreement will be treated by the Company as confidential, will be solely
for the information and assistance of the Company in connection with the Private
Placement and may not be quoted, nor will any such advice or the name of
Pellinore be referred to, in any report, document, release or other
communication, whether written (including, without limitation, the Offering
Materials) or oral, prepared, issued or transmitted by the Company or any
affiliate, director, officer, employee, agent or representative of any thereof,
without, in each instance, Pellinore's prior written consent unless the Company
is advised in writing by counsel that such disclosure is required by applicable
law or regulations. The Company and Pellinore agree that all announcements and
publicity relating to the Private Placement (collectively, "Announcements")
shall comply with applicable law, and copies of
<PAGE>
such Announcements shall be furnished to the Company in advance of publication
to the extent reasonably practicable. Notwithstanding the foregoing, neither the
Company nor Pellinore shall make any "tombstone" or other similar announcement
with respect to the Private Placement prior to the date of the final Closing
without the prior approval of the other party.
(e) Neither the Company nor Pellinore has taken, and neither will take, any
action, directly or indirectly, so as to cause the transactions contemplated by
this Agreement to fail to be entitled to exemption under Section 4(2) of the
Securities Act. The Company agrees that no offers or sales of any securities of
the same or a similar class as the Securities will be made by the Company or on
its behalf during the six-month period after the completion of the offering of
the Securities.
(f) The Company acknowledges and agrees that Pellinore has been retained solely
to provide the advice or services set forth in this Agreement. Pellinore shall
act as an independent contractor, and any duties of Pellinore arising out of its
engagement hereunder shall be owed solely to the Company. As Pellinore will be
acting on your behalf in such capacity, it is our firm practice to be
indemnified in connection with engagements of this type and the Company agrees
to the indemnification and other obligations as set forth in Schedule I hereto,
which Schedule I is an integral part hereof.
9. Termination. Either party hereto may terminate this Agreement and all of its
obligations hereunder for any reason by giving ten days' prior notice thereof to
the other party; provided, however, that in the event either party does not
perform any obligation under this Agreement or any representation and warranty
of such party hereunder is incomplete or inaccurate in any respect, the other
party may immediately terminate this Agreement and all of its obligations
hereunder by notice thereof to the other party. Notwithstanding the immediately
preceding sentence, however, provided that Pellinore is successful in
facilitating the placement of Securities in an aggregate principal amount of not
less than $150,000.00, the Company shall not terminate this Agreement prior to
the first anniversary hereof. This Agreement shall not give rise to any express
or implied commitment by Pellinore to purchase or place any securities of the
Company. In addition, notwithstanding any termination of or under this Agreement
as provided herein, there shall be no liability of any party to any other party,
except as relating to the payment of accrued fees and expenses in accordance
with this Agreement. The indemnity and other provisions contained in Schedule I
hereto and the paragraph pertaining to choice of law will also remain operative
and in full force and effect regardless of any expiration or termination of this
Agreement.
10. Integration. This Agreement incorporates the entire
understanding of the parties with respect to this engagement of
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Pellinore by the Company, and supersedes all previous agreements regarding such
engagement, should they exist, and shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without regard to
conflict of laws principles. No waiver, amendment or other modification of this
Agreement shall be effective unless in writing and signed by each party to be
bound thereby. This Agreement shall be binding upon and inure to the benefit of
the Company, Pellinore, each Indemnified Person (as defined in Schedule I
hereto) and their respective successors and assigns.
11. Consent to Jurisdiction. Each party irrevocably and unconditionally submits
to the exclusive jurisdiction of any state or Federal court sitting in New York
County over any suit, action or proceeding arising out of or relating to this
Agreement (including Schedule I hereto). Each party hereby agrees that service
of any process, summons, notice or document by U.S. registered mail addressed to
such party shall be effective service of process for any action, suit or
proceeding brought in any such court. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
Each party agrees that a final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon such party and
may be enforced in any other courts to whose jurisdiction such party is or may
be subject, by suit upon such judgment.
Please confirm that the foregoing terms correctly set forth our
agreement by signing and returning to Pellinore the duplicate copy of this
Agreement enclosed herewith.
Very truly yours,
/s/ J. Richard Messina
----------------------
J. Richard Messina
President
Accepted and agreed as of
the date first written above:
AMERICAN DIGITAL COMMUNICATIONS, INC.
By:/s/ John Simmonds
-----------------
Name: John Simmonds
Title: Chairman of the Board
<PAGE>
Schedule I
This Schedule I is a part of and is incorporated into that certain letter
agreement (together, the "Agreement") dated as of March 31, 1998 by and between
American Digital Communications, Inc. ( hereinafter referred to as the
"Company"); and Pellinore Securities Corporation ("Pellinore"). The Company will
indemnify and hold harmless Pellinore and its affiliates , and the respective
directors, officers, agents and employees of Pellinore and its affiliates
(Pellinore and each such entity or person being hereinafter referred to as a
"Pellinore Indemnified Person") from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities (collectively,
"Liabilities"), and will reimburse each Pellinore Indemnified Person for all
fees and expenses (including the reasonable fees and expenses of counsel)
(collectively, "Indemnification Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation and whether or not any Pellinore Indemnified Person is a party
(collectively, "Actions"), which Liabilities and Indemnification Expenses are
(i) caused by, or arising out of or in connection with, any untrue statement or
alleged untrue statement of a material fact contained in the Offering Materials
and other information furnished or made available by the Company to any offeree
of the Securities (including any amendments thereof and supplements thereto) or
by any omission or alleged omission to state therein a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading (other than untrue statements or alleged untrue
statements in, or omissions or alleged omissions arising out of or based upon,
information provided in reliance upon and in conformity with information
furnished to the Company by any Pellinore Indemnified Person ("Pellinore
Information") relating to a Pellinore Indemnified Person), or (ii) otherwise
arising out of or in connection with advice or services rendered or to be
rendered by any Pellinore Indemnified Person pursuant to this Agreement, the
transactions contemplated hereby or any Pellinore Indemnified Person's actions
or inactions in connection with any such advice, services or transactions;
provided that, in the case of clause (ii) only, the Company will not be
responsible for any Liabilities or Indemnification Expenses of any Pellinore
Indemnified Person to the extent that such Liabilities or Indemnification
Expenses are determined by the judgment of a court of competent jurisdiction to
have resulted from (x) a material breach of the Agreement by such Pellinore
Indemnified Person or (y) such Pellinore Indemnified Person's gross negligence
or willful misconduct in connection with any of the advice, actions, inactions
or services referred to above. The Company also agrees to reimburse each
Pellinore Indemnified Person for all Indemnification Expenses as they are
incurred in connection with enforcing such Pellinore Indemnified Person's rights
under this Agreement (including, without limitation, its rights under this
Schedule I), subject to the condition that the Company shall have received an
undertaking by such Pellinore
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Indemnified Person to repay such amount if it shall ultimately be determined
that such Pellinore Indemnified Person is not entitled to be indemnified by the
Company pursuant to the terms hereof.
Pellinore shall indemnify and hold harmless the Company, its affiliates
and their respective directors, officers, agents and employees (the Company and
each such entity or person being hereinafter referred to as a "Company
Indemnified Person" and, together with a Pellinore Indemnified Person, an
"Indemnified Person") to the same extent as the foregoing indemnity from the
Company, but only with respect to Liabilities and Indemnification Expenses that
are caused by, or arise out of or in connection with, (a) any untrue statement
of a material fact contained in the Offering Materials (including any amendments
thereof and supplements to) or by any omission of alleged omission to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, to the extent (and
only to the extent) that such untrue statement or omission is contained in any
information furnished to the Company by or on behalf of a Pellinore Indemnified
Person or ; (b) (i) a material breach of the Agreement by a Pellinore
Indemnified Person or (ii) any action or inaction by Pellinore constituting
gross negligence or willful misconduct, in each case as determined by a court of
competent jurisdiction.
Upon receipt by an Indemnified Person of actual notice of an Action against such
Indemnified Person with respect to which indemnity may be sought under this
Agreement such Indemnified Person shall promptly notify the party obligated to
indemnify such Indemnified Person hereunder (the "Indemnifying Party") in
writing; provided that failure so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have on account of this indemnity or otherwise, except to the extent the
Indemnifying Party shall have been materially prejudiced by such failure. The
Indemnifying Party shall have the right and, if requested by an Indemnified
Person, the obligation to assume the defense of any such Action including the
employment of counsel reasonably satisfactory to an Indemnified Person. Any
Indemnified Person shall have the right to employ separate counsel in any such
Action and participate in the defense thereof; but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person, unless: (i) the
Indemnifying Party has failed promptly to assume the defense and employ counsel;
or (ii) the named parties to any such Action (including any impleaded parties)
include such Indemnified Person and the Indemnifying Party, and such Indemnified
Person shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to those
available to the Indemnifying Party; provided that the Indemnifying Party shall
not in such event be responsible hereunder for the fees and expenses of more
than one firm of separate counsel in connection with any Action in the same
jurisdiction, in addition to any local counsel. The Indemnifying Party shall not
be liable for
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any settlement of any Action effected without its written consent (which shall
not be unreasonably withheld). In addition, the Indemnifying Party will not,
without prior written consent of Pellinore (which shall not be unreasonably
withheld), settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened Action in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Person from all Liabilities arising out of such Action.
In the event that the foregoing indemnity is judicially determined to be
unavailable to an Indemnified Person (other than in accordance with the terms
hereof), the Indemnifying Party shall contribute to the Liabilities and
Indemnification Expenses paid or payable by such Indemnified Person in such
proportion as is appropriate to reflect (i) the relative benefits to the Company
and its shareholders on the one hand, and to Pellinore, on the other hand, of
the matters contemplated by this Agreement; or (ii) if the allocation provided
by the immediately preceding clause is not permitted by the applicable law, not
only such relative benefits but also the relative fault of the Company, on the
one hand, and Pellinore, on the other hand, in connection with the matters as to
which such Liabilities or Indemnification Expenses relate, as well as any other
relevant equitable considerations. For purposes of this paragraph, the relative
benefits to the Company and its shareholders, on the one hand, and to Pellinore,
on the other hand, of the matters contemplated by this Agreement shall be deemed
to be in the same proportion as (a) the total value paid or contemplated to be
paid or received or contemplated to be received by the Company or the Company's
shareholders as the case may be, in the transaction or transactions that are
within the scope of this Agreement, whether or not any such transaction is
consummated, bears to (b) the fees paid or to be paid to Pellinore under this
Agreement.
If any term, provision, covenant or restriction contained in this Schedule I is
held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions contained in this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
The reimbursement, indemnity and contribution obligations of the parties set
forth herein shall apply to any modification of the Agreement and shall remain
in full force and effect regardless of any termination of; or the completion of,
any Pellinore Indemnified Person's services under or in connection with, this
Agreement.
<PAGE>
In the event any Indemnified Person is either required to appear as a witness in
any action brought by or against an Indemnifying Party or any participant in a
transaction covered hereby in which an Indemnified Person is not named as a
defendant, or requested by an Indemnifying Party to appear as a witness or to
assist such Indemnifying Party in the preparation of its position in any action
brought by or against such Indemnifying Party or any participant in a
transaction covered hereby in which an Indemnified Person is not named as a
defendant, the Indemnifying Party agrees to reimburse the Indemnified Person for
all reasonable expenses incurred by it in connection with such party preparing
and appearing as a witness or in its assistance to the Indemnifying Party for
the preparation of the Indemnified Party's position and to compensate the
Indemnified Person in an amount to be mutually agreed upon.
AMENDED AND RESTATED GLOBAL
SECURED DEMAND PROMISSORY NOTE
$350,000.00 New York, New York
July 28, 1998
FOR VALUE RECEIVED, the undersigned, AMERICAN DIGITAL
COMMUNICATIONS, INC., a Wyoming corporation having an address at 580 Granite
Court, Pickering Ontario L1W 3Z4 (together with any permitted successors, the
"Borrower"), hereby unconditionally promises to pay on demand to the order of
Pellinore Securities Corporation, for itself and as agent for the Lenders listed
on Exhibit A hereto (together with any successor, the "Agent"), in lawful money
of the United States of America and in immediately available funds, an aggregate
principal amount equal to THREE HUNDRED FIFTY THOUSAND DOLLARS , ($350,000.00),
together with (a) interest at the rate of 12% per annum commencing on the date
hereof to the date of payment, and (b) interest at the rate of 12% per annum on
$500,000 of the principal amount hereof from April 17, 1998 to the date hereof,
which principal and interest shall be paid by the Agent to the Lenders entitled
thereto. All payments hereunder shall be made to the Agent at its offices
located at 745 Fifth Avenue, New York, New York 10151.
This Amended and Restated Global Secured Demand Promissory Note
(this "Note") is the Note referred to in the Amended and Restated Pledge
Agreement, of even date herewith, between the Borrower and the Agent, and is
secured and entitled to such benefits as provided in said Amended and Restated
Pledge Agreement.
The Borrower promises to make on demand by the Agent any and all
payments required by this Note.
The Borrower hereby waives diligence, presentment, protest and
notice of any kind, forbearance or other indulgence, and release, surrender or
substitution of security and agrees to pay all costs of collection when
incurred, including reasonable attorney's fees, and to perform and comply with
each of the covenants, conditions, provisions and agreements contained in every
instrument now evidencing or securing said indebtedness. No extension of the
time for the payment of this Note made by agreement with any person now or
hereafter liable for the payment of this Note shall operate to release,
discharge, modify, change or affect the original liability under this Note,
either in whole or in part, of the undersigned unless the holder of this Note
and the undersigned shall be parties to such agreement.
This Note may not be changed, modified or terminated orally, but
only by an agreement in writing signed by the party to be charged.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT
<PAGE>
REGARD TO PRINCIPLES OF CONFLICT OF LAWS AND SHALL BE BINDING UPON THE
SUCCESSORS AND ASSIGNS OF THE BORROWER AND INURE TO THE BENEFIT OF THE LENDERS
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
If any item or provision of this Note shall be held invalid,
illegal or unenforceable, the validity of all other terms and provisions herein
shall in no way be affected thereby.
IN WITNESS WHEREOF, the Borrower has executed and delivered Note
on the date first above written.
AMERICAN DIGITAL COMMUNICATIONS, INC.
By: /s/ John G. Simmonds
--------------------
John G. Simmonds
President
PELLINORE SECURITIES, CORP.
as agent for the Lenders
By: /s/ J. Richard Messina
----------------------
J. Richard Messina
President
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement") is made
as of July 28, 1998, between American Digital Communications, Inc., a Wyoming
corporation (the "Pledgor"), and Pellinore Securities Corporation (for itself
and as agent, the "Pledgee Agent").
WHEREAS, as of April 17, 1998, the Pledgor and the Pledgee Agent
entered into a Pledge Agreement (the "Old Pledge Agreement"), relating to the
pledge of certain collateral by the Pledgor as security for the repayment of a
certain Secured Demand Note, dated April 17, 1998, in the principal amount of
$500,000 (the "Old Note"; the indebtedness represented by the Old Note is
hereinafter referred to as the "Old Loan");
WHEREAS, the Pledgor intends to borrow certain additional sums,
in an amount not to exceed $350,000 (the "Additional Loan" and, together with
the Old Loan, the "New Loan");
WHEREAS, the investors entitled to the benefit of the Old Pledge
Agreement (the "Old Investors"), have agreed that the collateral subject to the
Old Pledge Agreement may secure the repayment of, in addition to the Old Loan,
the Additional Loan;
WHEREAS, simultaneously with the execution of this Amended and
Restated Pledge Agreement, the Pledgor is issuing to the Pledgee Agent, for
itself and as agent for the other investors listed on Exhibit A hereto
(collectively, including the
<PAGE>
Pledgee Agent and the Old Investors, the "Investors") a new Secured Demand Note
in the aggregate amount of up to $800,000 (the "New Note"), representing the
aggregate amount lent by the Investors to the Pledgor;
WHEREAS, simultaneously with the execution of this Amended and
Restated Pledge Agreement, the Old Note is being delivered to the Pledgor,
marked "cancelled";
NOW THEREFORE, the Old Pledge Agreement is amended and restated
as follows:
1. Pledge. The Pledgor hereby grants a security interest to the
Pledgee Agent in the following (collectively, the "Collateral"): (a) 418,387
common shares of Intek Global Corporation, a Delaware corporation (the "Intek
Issuer"), represented by certificates Nos. 12529 (50,000 shs.); 12530 (50,000
shs.); 12531 (50,000 shs.); 12532 (50,000 shs.); 12533 (50,000 shs.); 12534
(50,000 shs.); 12535 (50,000 shs.); 12536 (50,000 shs.); 12537 (18,387 shs.);
(b) subject to Section 9 hereof, 429,999 shares of Common Stock of Ventel Inc, a
corporation organized under the laws of Canada (the "Ventel Issuer" and,
together with the Intek Issuer, the "Issuers"); (c) cash in the amount of
$6,940; and (d) the proceeds of any of the foregoing. (The shares described in
paragraphs (a) and (b) above, together with any additional securities of the
Issuer subsequently pledged pursuant to paragraph 7 or 8 hereof, are hereinafter
collectively referred to as the "Pledged Shares"). The Pledgee Agent shall hold
the Collateral as security for the
- 2 -
<PAGE>
repayment of the New Loan, and shall not encumber or dispose of the Collateral
except as provided in paragraph 10 herein.
2. Delivery of Instruments. The Pledgor has previously delivered
to the Pledgee Agent all certificates, instruments or other property
representing or constituting any Pledged Shares. All additional certificates,
instruments or other property representing or constituting any Pledged Shares
received by the Pledgor after the date of this Amended and Restated Pledge
Agreement shall be held by the Pledgor in trust for the Pledgee Agent and shall
forthwith be delivered by the Pledgor to the Pledgee Agent as aforesaid. If at
any time the Pledgee Agent notifies the Pledgor that additional endorsements or
other instruments of transfer or assignment with respect to any of the Pledged
Shares held by the Pledgee Agent are required, the Pledgor shall promptly
execute the same in blank and deliver such endorsements or other instruments of
transfer or assignment as the Pledgee Agent may request.
3. Power of Attorney. The Pledgor hereby constitutes and
irrevocably appoints the Pledgee Agent, with full power of substitution and
revocation by the Pledgee Agent, as the Pledgor's true and lawful
attorney-in-fact, for the purpose from time to time of carrying out the
provisions of this Amended and Restated Pledge Agreement and taking any
reasonable action and executing any instrument that the Pledgee Agent reasonably
deems necessary or advisable to accomplish the purposes of this Amended and
Restated Pledge Agreement, including, without limitation, to affix to
certificates representing any Pledged Shares the
- 3 -
<PAGE>
endorsements or other instruments of transfer or assignment delivered with
respect thereto and to transfer or cause the transfer of the Pledged Shares, or
any part thereof, on the books of the Issuers. The power of attorney granted
pursuant to this Amended and Restated Pledge Agreement and all authority hereby
conferred are granted and conferred solely to protect the Pledgee Agent's
interest in the Pledged Shares and shall not impose any duty upon the Pledgee
Agent to exercise any power. This power of attorney shall be irrevocable as one
coupled with an interest.
4. Dividends. During the term of this Pledge Agreement, and so
long as the Pledgor is not in default in the performance of any term of this
Amended and Restated Pledge Agreement or in the payment of the principal or
interest of the New Loan (a "Default"), the Pledgor shall be entitled to receive
all dividends and other amounts paid in respect of the Pledged Shares and any
other property of any kind received, receivable, distributed or distributable on
or by reason of the Pledged Shares pledged hereunder, whether in the form of or
by way of cash distributions, warrants, subscription rights, partial
liquidation, conversion, prepayments or redemptions (in whole or in part),
liquidation, or otherwise that may be made subsequent to the date hereof.
5. Voting rights. During the term of this Amended and Restated
Pledge Agreement, and so long as no Default has occurred and is continuing, the
Pledgor may vote the Pledged Shares on all corporate questions, and the Pledgee
Agent shall
- 4 -
<PAGE>
execute due and timely proxies in favor of the Pledgor to this end.
6. Representations of Pledgor. The Pledgor represents and
warrants to the Pledgee Agent that:
(a) the Pledgor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite power and authority to own, lease and operate
its properties, to carry on its business as currently being conducted, to enter
into this Amended and Restated Pledge Agreement and to perform its obligations
hereunder and thereunder.
(b) the Pledgor has the corporate power and authority and
the legal right to execute, deliver and perform this Amended and Restated Pledge
Agreement and to grant the lien on the Pledged Shares contemplated hereby in
favor of the Pledgee Agent, and all parties whose consent to the pledge made
herein is required have given written consent to such pledge.
(c) The execution, delivery and performance of this Amended
and Restated Pledge Agreement by the Pledgor and the granting of the lien on the
Pledged Shares contemplated hereby have been duly authorized by all necessary
corporate action and do not and will not (i) violate any applicable law, rule or
regulation or any provision of the corporate charter or the by-laws of the
Pledgor, (ii) conflict with, result in a breach of, or constitute a default
under any provision of any indenture, mortgage or other material agreement or
instrument to which the Pledgor is a party or by which it or its respective
properties or
- 5 -
<PAGE>
assets is bound or subject or of any license, judgment, order or decree of any
governmental authority having jurisdiction over the Pledgor or any of its
activities, properties or assets or (iii) result in or require the creation or
imposition of any lien, security interest, charge or other claims or
encumbrances upon or with respect to any properties or assets now or hereafter
owned by the Pledgor (other than the liens created hereunder).
(d) This Amended and Restated Pledge Agreement has been duly
executed and delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable against the Pledgor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(e) No consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority and no consent
of any other persons is required (i) for the execution, delivery and performance
of this Amended and Restated Pledge Agreement by the Pledgor, (ii) for the
pledge by the Pledgor of the Collateral to the Pledgee Agent pursuant to this
Amended and Restated Pledge Agreement or (iii) for the exercise by the Pledgee
Agent of the rights provided for in this Amended and Restated Pledge Agreement
or the remedies in respect of the Pledged Shares pursuant to this Amended and
Restated Pledge Agreement, except such as have been obtained, made or taken and
are in full force and effect or may be required under
- 6 -
<PAGE>
federal or state securities laws in connection with any sale of the Pledged
Shares.
(f) The Pledgor is the sole legal and beneficial owner of,
and has valid and transferrable title to, the Pledged Shares, free and clear of
all liens, security increases, charges or other claims or encumbrances, other
than the lien in favor of the Pledgee Agent created by this Amended and Restated
Pledge Agreement.
(g) There are, (i) as of December 31, 1997, a total of
42,254,930 shares of common stock of the Intek Issuer outstanding (computed
assuming that all outstanding options and warrants and securities convertible
into shares of common stock of the Intek Issuer have been exercised or
converted, as the case may be), and (ii) as of March 31, 1998, 28,648,635 shares
of common stock of the Ventel Issuer outstanding (computed assuming that all
outstanding options and warrants and securities convertible into shares of
common stock of the Ventel Issuer have been exercised or converted, as the case
may be), in each case including the Pledged Shares. No other shares of capital
stock of the Issuers are outstanding as of the date hereof.
(h) The Pledged Shares are not subject to any restrictions
governing their issuance, transfer, ownership or control except as set forth in
the organizational documents of the Issuers, true, correct and complete copies
of which have been provided to the Pledgee Agent, or on the face of the
certificates themselves and the Pledgor has the right to transfer the Pledged
- 7 -
<PAGE>
Shares free of any encumbrances and without obtaining the consents of the other
shareholders of the Issuers.
(i) Each Issuer was duly formed and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation.
(j) All actions required to create and perfect the lien of
the Pledgee Agent in the Collateral have been taken and the liens on the
Collateral in favor of the Pledgee Agent are superior in right to any rights or
claims of any other person.
7. Adjustments. If, during the term of this Amended and Restated
Pledge Agreement any share dividend, reclassification, readjustment, or other
change is declared or made in the capital structure of the Issuers, all new,
substituted, and additional shares, or other securities, issued by reason of any
such change shall be held by the Pledgee Agent under the terms of this Amended
and Restated Pledge Agreement in the same manner as the originally pledged
Pledged Shares.
8. Warrants and rights. If, during the term of this Amended and
Restated Pledge Agreement subscription warrants or any other rights or options
are issued in connection with the Pledged Shares, the Pledgee Agent shall
immediately assign the pledged warrants, rights, or options to the Pledgor. All
new shares or other securities so acquired by the Pledgor shall be immediately
assigned to the Pledgee Agent to be held under the terms of this Pledge
Agreement in the same manner as the originally pledged Pledged Shares.
- 8 -
<PAGE>
9. Payment of loan; Release of Collateral. Upon payment of all
principal and interest owed by the Pledgor pursuant to the New Loan, the
Collateral shall automatically and without further action on the part of any
party hereto be released from the pledge hereunder and Pledgee Agent shall
promptly transfer to the Pledgor all the Collateral and all rights received by
the Pledgee Agent with respect thereto. Notwithstanding the foregoing, effective
the date upon which the principal amount of the New Loan outstanding is less
than $400,000, the Ventel Pledged Shares shall automatically and without further
action on the part of any party hereto be released from the pledge hereunder and
the Pledgee Agent shall promptly transfer to the Pledgor all such Ventel Pledged
Shares and all rights received by the Pledgee Agent as a result of the Pledgee
Agent's record ownership thereof.
10. Default. If the Pledgor defaults in the performance of any
terms of this Amended and Restated Pledge Agreement, or in the payment on demand
of the principal or interest of the New Loan, the Pledgee Agent shall have the
rights and remedies provided in the Uniform Commercial Code in force in the
State of New York at the date of this Amended and Restated Pledge Agreement. In
addition to and in conjunction with such rights and remedies, the Pledgee Agent
may, by giving five Business Days' notice to the Pledgor by registered mail, and
without liability for any diminution in price that may have occurred, sell all
the Pledged Shares in any manner that accords with applicable law. At any bona
fide public sale the Pledgee
- 9 -
<PAGE>
Agent may purchase all or any part of the Pledged Shares. The Pledgee Agent may
retain out of the proceeds of any sale an amount equal to the principal and
interest then due on the loan, plus the expenses of the sale, and shall pay any
balance of the proceeds to the Pledgor. If the sale proceeds, together with any
Collateral consisting of cash, are insufficient to cover the principal and
interest of the New Loan and the sale expenses, the Pledgor shall remain liable
to the Pledgee Agent for the resulting deficiency. As used herein, the term
"Business Day" shall mean a day other than Saturday, Sunday or any other day on
which banks located in the State of New York are authorized or obligated to
close.
11. Obligations of Pledgor. The Pledgor covenants to the Pledgee
Agent that:
(a) The Pledgor will not sell, transfer or convey any
interest in, or suffer or permit any lien, security interest, charge or other
claim or encumbrance to exist on or with respect to, any of the Collateral
except the lien created under this Amended and Restated Pledge Agreement; and
(b) The Pledgor will defend the Pledgee Agent's right, title
and interest in, to and under the Collateral against the claims and demands of
all persons wheresoever.
12. Pledgee Agent as Agent. The Pledgee Agent is acting hereunder
as agent for and on behalf of the Investors. Any action may be taken by the
Pledgee Agent on behalf of the Investors without authorization, vote or other
action on the part of the Investors.
- 10 -
<PAGE>
13. General Provisions.
(a) No failure on the part of the Pledgee Agent to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Pledgee Agent of
any right, power or remedy hereunder preclude any other or future exercise
thereof, or the exercise of any other right, power or remedy. The
representations, covenants and agreements of the Pledgor herein contained shall
survive the date hereof.
(b) This Amended and Restated Pledge Agreement and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally.
(c) Any notice, demand, statement, request or consent made
hereunder shall be in writing and delivered personally or sent to the party to
whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows, and shall be
deemed given when delivered personally or one business day after being deposited
with Federal Express or such other nationally recognized delivery service:
If to the Investors or the Pledgee Agent:
To: Pellinore Securities Corporation
745 Fifth Avenue
New York, NY 10151
Attn: J. Richard Messina
with a copy to:
Duquette & Tipton LLP
405 Lexington Avenue, Ste. 4500
New York, NY 10174
Attn: David J. Duquette, Jr.
- 11 -
<PAGE>
If to the Pledgor:
To: American Digital Communications, Inc.
580 Granite Court
Pickering Ontario L1W 3Z4
CANADA
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, NY 10022
Attn: Scott S. Rosenblum, Esq.
provided that any notice, request or demand to or upon the Pledgee Agent shall
not be effective until actually received. Any notices, requests or demands
received on a day which is not a business day shall be deemed to have been
received on the next following business day.
(d) THIS AMENDED AND RESTATED PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. EACH OF THE PARTIES HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT.
(e) The parties hereto hereby consents to the non-exclusive
jurisdiction of the Supreme Court of the State of New York County and the United
States District Court for the Southern District of New York with respect to any
suit, claim, action or proceeding arising out of or related to this Agreement or
the transaction contemplated hereby and hereby waives any objection which it may
have now or hereafter to the venue of any suit, claim, action or proceeding
arising out of or related to this
- 12 -
<PAGE>
Agreement or the transactions contemplated hereby and brought in the courts
specified above and also hereby waives any claims that any such suit, claim,
action or proceeding has been brought in an inconvenient forum.
(f) Notwithstanding anything to the contrary in this Amended and
Restated Pledge Agreement, the Pledgee Agent's recourse for amounts payable by
the Pledgor under this Amended and Restated Pledge Agreement shall be limited to
the Collateral and any other collateral hereinafter specifically designated by
the Pledgor or any other Person as security for the payment of such amounts;
provided, however, that the foregoing shall not in any manner preclude or limit
Pledgee Agent from (i) proceeding against the Pledgor by appropriate action to
prevent or seek redress for any breach by the Pledgor of its obligations under
this Amended and Restated Pledge Agreement of for any fraud or intentional
misrepresentation by the Pledgor or (ii) exercising any of its rights or
remedies with respect to the Pledged Shares or any other collateral or security
for the New Note or from otherwise seeking enforcement of the New Note.
(g) If any provision of this Amended and Restated Pledge
Agreement is determined by a court of competent jurisdiction to be
unenforceable, such provision shall be automatically reformed and construed so
as to be valid, operative and enforceable to the maximum extent permitted by the
law while most nearly preserving its original intent. The invalidity of any part
of this Amended and Restated Pledge Agreement shall not
- 13 -
<PAGE>
render invalid the remainder of the Amended and Restated Pledge Agreement.
(h) This Amended and Restated Pledge Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts taken together shall constitute one and the
same instrument.
(i) The section headings in this Amended and Restated Pledge
Agreement are for convenience of reference only and shall not affect the
interpretation hereof.
IN WITNESS WHEREOF, the parties have executed this
agreement.
AMERICAN DIGITAL COMMUNICATIONS, INC.
By: /s/ John G. Simmonds
--------------------
John G. Simmonds
President
PELLINORE SECURITIES CORP. FOR ITSELF
AND AS AGENT FOR THE INVESTORS LISTED ON
EXHIBIT A HERETO
By: /s/ J. Richard Messina
----------------------
J. Richard Messina
President
- 14 -
JOINDER AGREEMENT
Reference is made to the Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of April 17, 1998, between American
Digital Communications, Inc., a Wyoming corporation (the "Company"), and
Pellinore Securities Corp. ("Pellinore"), as agent for certain investors listed
on Annex A thereto (the "Old Investors").
WHEREAS, Pellinore is acting as agent for certain new investors listed
on Exhibit A hereto(the "New Investors"), which New Investors are acquiring
certain shares of Common Stock of the Company and certain Warrants to acquire
Common Stock of the Company on the date hereof, in each case as set forth on
Exhibit A hereto (such shares of Common Stock, and the shares of Common Stock
underlying such Warrants, are hereinafter referred to as the "New Securities") ;
WHEREAS, the parties desire to make the New Investors party
to the Registration Rights Agreement;
NOW, THEREFORE,for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company, on the one hand, and
Pellinore, on behalf of each of the New Investors, on the other hand, hereby
agree that, from and after the date hereof, each of the New Investors shall be
deemed to be an "Investor", and the New Securities of such New Investors shall
be deemed to be "Investor Common Stock" and "Investor Warrant Stock", as the
case may be, in each case as such capitalized terms are defined in the
Registration Rights Agreement.
Dated: July 28, 1998
PELLINORE SECURITIES CORP., as
agent for the New Investors listed
on Exhibit A hereto
By: /s/ J. Richard Messina
----------------------
J. Richard Messina, President
AMERICAN DIGITAL COMMUNICATIONS,
INC.
By: /s/ John Simmonds
-----------------
John Simmonds, President
<PAGE>
ACCEPTED AND AGREED TO:
PELLINORE SECURITIES CORP., on
behalf of each of the Old Investors
listed on Annex A to the
Registration Rights Agreement
By: /s/ J. Richard Messina
----------------------
J. Richard Messina, President
