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): March 9, 2000
VIZACOM INC.
(Exact name of registrant as specified in its charter)
Delaware 1-14076 22-3270045
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
Glenpointe Center East
300 Frank W. Burr Boulevard
Teaneck, New Jersey 07666
(Address of principal executive offices) (Zip Code)
(201) 928-1001
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On March 9, 2000, we, Vizacom Inc., acquired Junction 15 Limited, a London,
England-based digital communication company focused on designing, implementing
and supporting Internet web sites and digital businesses through the use of new
media. We acquired Junction 15 through our purchase of all of the outstanding
capital stock of Junction 15 from Junction 15's shareholders. We intend to
operate Junction 15 as a wholly-owned subsidiary.
The acquisition was completed pursuant to the terms of a Stock Purchase
Agreement, dated March 9, 2000, between us and the shareholders of Junction 15.
Pursuant to the acquisition agreement, we issued an aggregate of 681,818 shares
of our common stock and paid an aggregate of $250,000 to the Junction 15
shareholders.
The 681,818 shares of our common stock that we issued in this acquisition
transaction were issued in reliance upon an exemption from registration under
the Securities Act of 1933. As a result, these shares are subject to
restrictions on transfer under the applicable provisions of the Securities Act.
In accordance with the acquisition agreement, we entered into a registration
rights agreement in which we granted the parties who received these shares
customary piggy back registration rights in connection with future registration
statements which we may file under the Securities Act.
We also entered into lock-up agreements with each of the former
shareholders of Junction 15 regarding their disposition of the shares of our
common stock that we issued in the acquisition transaction, the extent of the
lock-up being dependent upon the former shareholders' relationships with
Junction 15. For those former shareholders who were directors of Junction 15 at
the time of the acquisition transaction and an affiliate, who received an
aggregate 583,767 shares of our common stock in the transaction, the lock-up
agreements prohibit the disposition of such shares prior to March 9, 2002,
except for (a) 10% of the total shares each received during the period of
September 9, 2000 to March 8, 2001, (b) an additional 10% during the period of
March 9, 2001 to September 8, 2001, and (c) an additional 10% during the period
of September 9, 2001 to March 8, 2002. For those former shareholders who were
not directors of Junction 15 at the time of the acquisition transaction, who
received an aggregate 98,051 shares of our common stock in the transaction, the
lock-up agreements prohibit the disposition of such shares prior to March 9,
2001.
We also have entered into a three-year employment agreement with each of
Ian McCalla, the Managing Director of Junction 15, and Paul Simpson, a Director
of Junction 15 at the time of the transaction. Under his agreement, Mr. McCalla
will serve as Managing Director of Junction 15 and receive a base annual salary
of BP90,000 (BP100,000 after March 9, 2001). Mr. McCalla will also be entitled
to annual bonuses based upon Junction 15's performance during the employment
period. Under his agreement, Mr. Simpson will serve as a Director of Junction 15
and receive a base salary of BP50,000. Mr. Simpson will also be entitled to
annual bonuses based upon the gross profit to Junction 15 from projects
generated through Mr. Simpson's sales efforts. These employment agreements also
contain restrictions on Messrs. McCalla or Simpson engaging in competition with
us for the term of the agreement and for one year thereafter and provisions
protecting our proprietary rights and information.
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In accordance with the acquisition agreement, we also granted options to
purchase an aggregate of 250,000 shares of our common stock under our 1994 Long
Term Incentive Plan to Junction 15 employees.
Item 5. Other Matters.
On March 15, 2000, we reached an agreement with Churchill Consulting to
modify and extend our line of credit facility arrangement with Churchill
Consulting. The line of credit facility has been extended through January 7,
2002. In addition, following our repayment of the original $1 million we
borrowed under the facility, all future borrowings under this line of credit
facility will be due and payable 180 days after funding. We anticipate repaying
such $1,000,000 borrowing, plus all accrued interest, no later than March 21,
2000.
On March 16, 2000, Rand Schulman was named an Executive Vice President of
Vizacom.
Through March 17, 2000, we sold a total of 936,954 shares of our
common stock to 45 accredited investors for gross proceeds of $4,216,293.00. The
issuances of theses shares were private transactions exempt from registration
under Section 4(2) of the Securities Act of 1933.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The required financial statements will be filed by amendment not
later than May 23, 2000.
(b) Pro forma financial information.
The required pro forma financial information will be filed
by amendment not later than May 23, 2000.
(c) Exhibits.
Listed below are all exhibits to this Current Report on Form
8-K.
Exhibit
Number Description
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10.1 Stock Acquisition Agreement, dated March 9, 2000, among Vizacom Inc.
and the former stockholders of Junction 15 Limited.
10.2 Form of Lock-Up Agreement for use by directors of Junction
15 Limited at the time of the acquisition.
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10.3 Form of Lock-Up Agreement for use by non-directors of Junction
15 Limited at the time of the acquisition.
10.4 Registration Rights Agreement, dated as of March 9, 2000, among
Vizacom Inc., and each of the former shareholders of Junction 15
Limited.
10.5 Employment Agreement, dated as of March 9, 2000, by and between
Vizacom Inc. and Ian McCalla.
10.6 Employment Agreement, dated as of March 9, 2000, by and between
Vizacom Inc. and Paul Simpson.
10.7 Letter Agreement, dated March 15, 2000, by and between Vizacom Inc.
and Churchill Consulting.
99.1 Press Release, dated March 10, 2000.
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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 hereunto duly authorized.
Dated: March 20, 2000
VIZACOM INC.
By: /s/ Mark E. Leininger
-------------------------------------
Mark E. Leininger
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Stock Acquisition Agreement, dated March 9, 2000, among Vizacom Inc.
and the former stockholders of Junction 15 Limited.
10.2 Form of Lock-Up Agreement for use by directors of Junction
15 Limited at the time of the acquisition.
10.3 Form of Lock-Up Agreement for use by non-directors of Junction
15 Limited at the time of the acquisition.
10.4 Registration Rights Agreement, dated as of March 9, 2000, among
Vizacom Inc., and each of the former shareholders of Junction 15
Limited.
10.5 Employment Agreement, dated as of March 9, 2000, by and between
Vizacom Inc. and Ian McCalla.
10.6 Employment Agreement, dated as of March 9, 2000, by and between
Vizacom Inc. and Paul Simpson.
10.7 Letter Agreement, dated March 15, 2000, by and between Vizacom Inc.
and Churchill Consulting.
99.1 Press Release, dated March 10, 2000.
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THIS AGREEMENT is made on March 9, 2000
PARTIES
(1) THE PERSONS whose names and addresses are set out in Schedule 1
(2) VIZACOM, INC. A Delaware corporation of Glenpointe Center East, 300 Frank
W Burr Boulevard, Teaneck, NJ 07666
1. INTERPRETATION
In this Agreement :-
1.1 the following expressions have the following meanings unless
inconsistent with the context :-
Expression Meaning
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"the Accounts" the audited accounts of the Company for
the financial period which ended on the
Accounting Date, comprising a balance
sheet, a profit and loss account,
notes and directors and auditors'
reports
"the Accounting Date" 31 December 1999
"the Act" the Companies Act 1985
"Business Day" any day (other than Saturday or Sunday)
on which clearing banks in London are
open for a full range of banking
transactions
"the Company" Junction 15 Limited, registered number
3113286
"Completion" completion of the sale and purchase in
accordance with clause 6
"the Consideration" the consideration for the sale of the
Shares as stated in clause 3.1
"the Consideration Shares" 681,818 shares at $3.300 per share of
the common stock of the Purchaser with a
par value of US $0.001 per share
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"the Disclosure Letter" the letter having the same date as this
Agreement from the Vendors' Solicitors
to the Purchasers' Solicitors qualifying
the Warranties
"the Employment Agreements" the agreements in the agreed terms to be
entered into between the Company and
each of the Managers
"the Lock-Up Agreement" the agreement in the agreed terms
between the Vendors and Purchaser
governing the sale of the Consideration
Shares
"the Managers" Ian McCalla and Paul Simpson
"NASDAQ" The NASDAQ Stock Market, Inc.
"the Property" the property specified in Schedule 3
(and, if more than one, each such
property) and each and every part of
such property
"the Purchaser" Vizacom, Inc., and its successors and
assigns
"the Purchaser's Solicitors" Eking Manning of 44 The Ropewalk,
Nottingham, NG1 5EL
"the Registration Rights
Agreement" the agreement in the agreed terms
between the Purchaser and the Vendors
governing the registration rights in
respect of the Consideration Shares
"the Shares" all the issued shares in the capital of
the Company
"the Trustees" Court Services Limited being the
trustees of the McCalla Settlement
"the Vendors" those persons whose names and addresses
are set out in Schedule 1 together
(where appropriate) with their
respective successors, assigns and
personal representatives (and "Vendor"
shall be construed accordingly)
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"the Vendors' Solicitors" Finers Stephens Innocent of 179 Great
Portland Street, London, W1N 6LS
"the Warranties" the warranties, representations and
undertakings set out or referred to in
clause 4, Schedule 4 and Part III of
Schedule 5
"the Warrantors" the Managers and the Trustees
1.2 reference to any statute or statutory provisions will, unless the
context otherwise requires, be construed as including references to any earlier
statute or the corresponding provisions of any earlier statute, whether repealed
or not, directly or indirectly amended, consolidated, extended or replaced by
such statute or provisions, or re-enacted in such provisions, and to any
subsequent statute or the corresponding provisions of any subsequent statute
directly or indirectly amending, consolidating, extending, replacing or
re-enacting the same, and will include any orders, regulations, instruments or
other subordinate legislation made under the relevant statute or statutory
provisions which are in force prior to Completion
1.3 references to persons will be construed so as to include bodies
corporate, unincorporated associations and partnerships
1.4 references to a document being "in the agreed terms" will be construed
as references to that document in the form agreed and initialled by or on behalf
of the Vendors and the Purchaser
1.5 all covenants, agreements, undertakings, indemnities, representations
and warranties on the part of two or more persons are given or made by such
persons jointly and severally
1.6 references to clauses and Schedules are to clauses of and Schedules to
this Agreement, and references to paragraphs are to paragraphs in the Schedule
in which such references appear, and
1.7 the Schedules form part of this Agreement and will have the same force
and effect as if expressly set out in the body of this Agreement
2. SALE AND PURCHASE
2.1 Each of the Vendors will sell, and the Purchaser will buy, the number
of the Shares specified opposite that Vendor's name in Schedule 1
2.2 Each of the Shares will be sold and bought with full title guarantee
free from any claim, charge, lien, encumbrance, equity or third party right, and
with all rights attached or accruing to it including all rights to any dividends
or other distributions declared, made or paid after the execution of this
Agreement
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2.3 Each of the Vendors waives all rights of pre-emption over any of the
Shares conferred by the articles of association of the Company or otherwise
2.4 The Purchaser will not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed simultaneously
3. CONSIDERATION
3.1 The consideration for the sale by the Vendor of the Shares shall be US
$2,500,000 to be satisfied as follows:-
3.1.1 as to US $250,000 (two hundred and fifty thousand dollars) to be
satisfied by the payment of 156,250 in cash at Completion
3.1.2 as to US $2,250,000 (two million two hundred and fifty thousand
dollars) by the allotment and issue to the Vendors of the Consideration Shares
credited as fully paid and each of the Vendors who would otherwise be entitled
to a fraction of a Consideration Share (after aggregating all fractional shares
of the Consideration Shares to be received by such Vendor) shall receive from
the Purchaser an amount of cash (rounded to the nearest whole cent) equal to the
product of (i) such fraction multiplied by (ii) $3.30
3.2 Each of the Vendors will be entitled to receive the sum and number of
Consideration Shares specified opposite that Vendor 's name in Schedule 1
3.3 The Consideration payable under clause 3.1.1 will be paid in cash on
Completion by way of a CHAPS transfer from a Clearing Bank to the client account
of the Vendors' Solicitors with Royal Bank of Scotland, London Belgravia Branch,
24 Grosvenor Place, London, SW1X 7HP, sort code 16-00-16, account number
10010004 or by such other method as may be agreed between the parties.
3.4 The Vendors' Solicitors are authorised to receive the Consideration
payable under clause 3.1.1 on behalf of the Vendors and payment to them will be
a good and sufficient discharge to the Purchaser and the Purchaser will not be
further concerned as to the application of the moneys so paid
4. WARRANTIES
4.1 The Warrantors severally:-
4.1.1 warrant, represent and undertake to the Purchaser in the terms
of the Warranties, provided however that the Purchaser will not be entitled to
claim that any fact or combination of facts constitutes a breach of any of the
Warranties if and to the extent that such fact
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or combination of facts has been fully and fairly disclosed in the Disclosure
Letter and any matter specifically identified in the Accounts;
4.1.2 agree that the Purchaser is entering into this Agreement in
reliance on each of the Warranties and agree that save as provided in clause
4.1.1 no information of which the Purchaser has knowledge (actual or
constructive) will prejudice any claim made by the Purchaser in respect of the
Warranties or will operate to reduce any amount recoverable in respect of any
breach of any of the Warranties;
4.1.3 will indemnify the Purchaser against any reasonable costs or
expenses (including reasonable legal costs) which it may incur, either before or
after the commencement of any action, directly or indirectly as a result of any
breach of any of the Warranties;
4.1.4 undertake to disclose immediately to the Purchaser anything
which comes to the notice of any of them which is or may be a breach of any of
the Warranties; and
4.1.5 undertake that, in the event of any claim being made against any
of them whether under the Warranties or otherwise in connection with the sale of
the Shares to the Purchaser, they will not make any claim against the Company,
or against any director, officer or employee of the Company, on which or on whom
any of them may have relied for advice or information before agreeing to any
term of this Agreement or authorising any statement in the Disclosure letter,
but so that this undertaking will not preclude any Warrantor from claiming
against any other Warrantor under any right of contribution or indemnity to
which such Warrantor may be entitled
4.2 In the event of any claim being made against the Warrantors under the
Warranties or the Tax Covenant ("Relevant Claim") the Warrantors may each elect
(by giving notice to the Purchaser within 3 months of the Relevant Claim being
notified to the Warrantors pursuant to clause 4.5.3.1 or under the Tax Covenant
as the case may be) to satisfy their liability in respect of the Relevant Claim
by delivery to the Purchaser of a promissory note in the agreed terms ("the
Note") in which event the following provisions shall apply:-
4.2.1 The restrictions in the Lock Up Agreement on such Consideration
Shares shall be lifted with respect to such number of Consideration Shares as
shall have the market value equal to 110% of the value of the Warranty Claim
4.2.2 The principal amount of the Note shall be the value of the
Relevant Claim and the Note shall not carry interest (at the rate otherwise
provided for in clause 11 below) unless or until such time as the Consideration
Shares referred to in clause 4.2.1 above are registered for resale under the
Securities Act of 1933
4.2.3 The relevant Warrantor(s) shall do execute and carry out all
acts documents and things in the power necessary or desirable to satisfy the
Note and in the event that they fail to do so within 7 days of notice given by
the Purchaser, the Purchaser shall be entitled as attorney for
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the relevant Warrantor(s) to do execute or carry out the relevant matter on
their behalf (including without limitation execution of any transfer or sale
document in respect of the Consideration Shares).
4.3 Each of the Warranties will be construed as a separate Warranty
and will not be limited or restricted by reference to, or inference from, the
terms of any other Warranty or any other term of this Agreement, provided that a
disclosure against one warranty shall be deemed to apply to all the Warranties
4.4 In this Agreement, unless otherwise specified, where any Warranty
refers to the knowledge, information, belief or awareness of the Warrantors (or
similar expression), each Warrantor will be deemed to have such knowledge,
information, belief or awareness as such Warrantor would have obtained had such
Warrantor made all due and careful enquiries into the subject matter of that
Warranty and the knowledge, information, belief and awareness of any one of the
Warrantors shall be imputed to the remaining Warrantors
4.5 In this clause 4.5 and clause 4.6 "claim" means any claim which would
(disregarding the provisions of this clause 4.5) be capable of being made
against the Warrantors (or any of them) for breach of the Warranties.
Notwithstanding the foregoing provisions of clause 4 and subject to clauses 11
and 12 below :-
4.5.1 the aggregate liability of the Warrantors in respect of all
claims will be limited to US $ 250,000 plus the lower of the value of the
Consideration Shares on Completion (such value being the average closing price
quoted by NASDAQ over the 20 Business Days prior to such date) and the fair
market value of the Consideration Shares on the first day that the Warrantors
are lawfully and contractually able to sell the same having regard to the effect
that such sale will have on the market price for the Consideration Shares
4.5.2 that part of the cash consideration of $250,000 referred to in
clause 3.1.1 received by him plus the lower of the value of the Consideration
Shares received by him on Completion (determined in accordance with clause
4.5.1) and the fair market value of such Consideration Shares again as
determined in accordance with clause 4.5.1;
4.5.3 subject to the provisions of clause 4.5.2 above the aggregate
liability of the Trustees under the Warranties shall be limited to the net value
from time to time of the assets of the trust subject to which they now hold
those of the Shares registered in their names, such value to be as at the date a
claim is made by the Purchaser under the Warranties, after deduction of sums due
to the Inland Revenue and costs and fees properly chargeable against the capital
of the said trust, and the Trustee hereby undertakes with the Purchaser that
they will not distribute any of the assets of the said trust, other than for
payment of such sums, costs and fees, whilst a claim under the Warranties is
outstanding or prior to the expiration of any time limit for the making of a
claim unless:
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4.5.3.1 an undertaking in favour of the Purchaser is obtained
from a beneficiary, in a form reasonably satisfactory to the Purchaser, whereby
the beneficiary accepts liability to the extent of the value of the
distribution; and
4.5.3.2 the distribution would not be prejudicial to the
Purchaser's rights and ability to recover the amount of any claim.
4.5.4 the Warrantors will be under no liability to make any payment in
respect of any claim unless the amount of the claim exceeds US$5,000 and the
amount of their liability in respect of such claim is (when aggregated with
their liability in respect of any other claim or claims made by the Purchaser or
which would have been made but for the provisions of this clause 4.5.2) in
excess of US $20,000, in which event the Warrantors will (subject to the other
provisions of this clause 4.5) be liable for the whole amount of such liability
and not merely for the excess;
4.5.5 the Warrantors will be under no liability to make any payment
in respect of any claim unless :-
4.5.5.1 written particulars of the claim (giving details of the
specific matter in respect of which such claim is made) are given to the
Warrantors; and
4.5.5.2 such particulars are given within a period of seven years
from the date of this Agreement or (in the case only of any claim not relating
to Taxation (as defined in Schedule 5)) 18 months from the date of this
Agreement; and
4.5.6 The Warrantors will have no liability in respect of any claim:-
4.5.6.1 to the extent that it relates to any loss for which the
Purchaser or the Company is indemnified by insurance; or
4.5.6.2 to the extent that it relates to any matter provided
for, or included as a liability or disclosed, in the Accounts (as defined in
Schedule 4) of the Company
4.6 Notwithstanding any other provision of this Agreement, the provisions
of clause 4.5 or clause 4.8 shall not apply to exclude or limit the liability of
the Warrantors to the extent that any claim arises by reason of any fraud,
dishonesty, or wilful misstatement or omission by or on behalf of the Warrantors
or any of them
4.7 The Purchaser shall take such reasonable steps and give such reasonable
assistance to avoid or mitigate any losses which in the absence of such steps
might give rise to a liability in respect of any claim under this Agreement
other than any claim under the Tax Covenant.
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4.8 The Purchaser acknowledges to the Vendors that it has purchased the
shares on the basis of the Warranties and not on the basis of any other
representation whether oral or in writing by the Vendors or Warrantors
4.9 The Trustees hereby covenant with the Purchaser that if they or any of
them retire or are discharged from any of the Trusts subject to which they now
hold the Shares, they will procure that their successors as trustee of the
Trusts enter into a deed of novation with the Purchaser by which the new trustee
accepts the liability of the retiring Trustee on the same terms as set out in
this clause 11 and thereupon the retiring Trustee shall be discharged from
liability under the Warranties
4.10 Any payment made to the Purchaser under the Warranties shall be
treated as a reduction of the Consideration.
5. TAX COVENANT
With effect from Completion the Warrantors covenant to the Purchaser as set
out in Part II of Schedule 5 and the parties agree to give effect to those
provisions
6. WARRANTIES AND REPRESENTATION OF THE PURCHASER
The Purchaser represents and warrants to each Vendor as follows except to
the extent disclosed in the Purchaser's filings with the US Securities and
Exchange Commission:-
6.1 The Purchaser is a corporation duly incorporated and validly existing
under the laws of the State of Delaware and has full corporate power and
authority to carry on its business as it is now being conducted. The Purchaser
has prior to the execution of this Agreement delivered to the Vendors true and
complete copies of the certificate of incorporation and by-laws of the Purchaser
as in effect on the date hereof.
6.2 The authorised common stock of the Purchaser consists solely of
60,000,000 (sixty million) shares of Stock, par value $0.001 per share of which
approximately 7,900,000 shares are outstanding as at 29 February 2000. All of
the Purchaser's issued and outstanding shares of capital stock are duly
authorised, validly issued, outstanding, fully paid and nonassessable.
6.3 The execution and delivery by the Purchaser of this Agreement and any
other document to which it is a party, and the performance by the Purchaser of
its obligations hereunder and thereunder, have been duly and validly authorised
by the Board of Directors of the Purchaser. This Agreement has been duly and
validly executed and delivered by the Purchaser and constitutes, and upon the
execution and delivery by the Purchaser of any other agreement to which it is a
party, such other Agreement will constitute, legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their terms.
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6.4 The execution and delivery by the Purchaser of this Agreement, the
execution and delivery by the Purchaser of any other agreements to be executed
by it pursuant to or in connection with this Agreement, the performance by the
Purchaser of its obligations under this Agreement and such other agreements do
not:-
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate of incorporation and by-laws
of the Purchaser;
(b) conflict with or result in a violation or breach of any term or
provision of any law or order applicable to the Purchaser or any of its assets
and properties; or
(c) (i) conflict with or result in a violation or breach of;
(ii) constitute (with or without notice or lapse of time or both)
a default under;
(iii) require the Purchaser to obtain any consent, approval or
action of, make any filing with or give any notice to any person as a result or
under the terms of; or
any contract to which the Purchaser is a party;
(d) result in the creation or imposition of any encumbrance upon the
Purchaser or any of is assets or properties.
6.5 So far as the Purchaser is aware, no consent, approval or action of,
filing with or notice to any Government or Regulatory Authority on the part of
the Purchaser is required in connection with the execution, delivery or
performance of this Agreement or the performance of the transactions
contemplated hereby or thereby.
6.6 There are no actions or proceedings pending or, so far as the Purchaser
is aware, threatened against, relating to or affecting the Purchaser or any of
its assets and properties which could reasonably be expected to result in the
issuance of an order restraining, enjoining or otherwise prohibiting or making
illegal the performance of any of the transactions contemplated by this
Agreement or any other agreement executed pursuant to this Agreement.
6.7 The Purchaser is in material compliance with all laws and orders
applicable to it and its properties and assets. The Purchaser has not received
any notification that it is in violation of any such laws or orders and no such
violation exists that would have a material adverse effect on the Purchaser.
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7. RESTRICTIVE COVENANTS
7.1 For the purpose of assuring to the Purchaser the full benefit of the
Company and in consideration for the Purchaser agreeing to buy the Shares on the
terms of this Agreement, each of the Managers undertakes to the Purchaser that
such Manager will not for a period (except in the case of clause 7.1.7) of one
year following termination (for whatever reason) of the Employment Agreement
with such Manager ("the Restricted Period"), without the prior written consent
of the Purchaser, whether directly or indirectly and whether alone or in
conjunction with, or on behalf of, any other person and whether as principal,
shareholder, director, employee, agent, consultant, partner or otherwise (except
in the case of the Managers in the course of their duties for the Purchaser or
the Company pursuant to the Employment Agreements):-
7.1.1 for the Restricted Period canvass, solicit or approach, or cause
to be canvassed, solicited or approached, for orders any person who at any time
during the twelve months immediately preceding the date of Completion is or
was:-
7.1.1.1 negotiating with any the Company for the supply by the
Company of goods or services; or
7.1.1.2 a client or customer of the Company; or
7.1.1.3 in the habit of dealing with the Company,
where the orders relate to goods and/or services which are
competitive with or of the type supplied by the Company at any time during the
twelve months immediately preceding the date of Completion;
7.1.2 for the Restricted Period deal or contract with any person who
at any time during the twelve months immediately preceding the date of
Completion is or was:-
7.1.2.1 negotiating with the Company for the supply by the
Company of goods or services; or
7.1.2.2 a client or customer of the Company; or
7.1.2.3 in the habit of dealing with the Company,
where the dealing or contracting relates to goods and/or services
which are competitive with or of the type supplied by the Company at any time
during the twelve months immediately preceding the date of Completion;
7.1.3 for the Restricted Period interfere, or seek to interfere, with
the continuance of supplies to the Company from any supplier who has been
supplying goods and/or services to the
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Company at any time during the twelve months immediately preceding the date of
Completion if such interference causes or would cause that supplier to cease
supplying or materially reduce its supply of, those goods and/or services to
the Company;
7.1.4 for the Restricted Period solicit or entice, or endeavour to
solicit or entice, away from the Company, or employ, any person employed in a
managerial, supervisory, technical, sales or administrative capacity by, or who
is or was a consultant to, the Company at Completion or at any time during the
period of [one month] immediately preceding the date of Completion;
7.1.5 within the United Kingdom for the Restricted Period of be
engaged, employed by, concerned or interested in, or provide technical,
commercial or professional advice to, any other business which supplies goods
and/or services which are competitive with or of the type supplied by the
Company at Completion; provided that this restriction does not apply to prevent
any of the Managers from holding shares or other securities in any company which
are quoted, listed or otherwise dealt in on a recognised stock exchange or other
securities market and which confer not more than 3% of the votes which could be
cast at a general meeting of such company;
7.1.6 within the United Kingdom for the Restricted Period be engaged,
concerned or interested in any business which has at any time during the twelve
months immediately preceding the date of Completion supplied any goods and/or
services to, or is a client or customer of, the Company if such engagement,
concern or interest causes or would cause the supplier to cease or materially
reduce its supplies to the Company or (as the case may be) the client or
customer to cease or materially reduce its orders or contracts with the Company;
or
7.1.7 at any time after Completion use in connection with any business
any name which includes the name of the Company or any colourable imitation of
it
7.2 The parties agree that each of the undertakings set out in clause 7.1
is separate and severable and enforceable accordingly and if any one or more of
such undertakings or part of an undertaking is held to be against the public
interest or unlawful or in any way an unreasonable restraint of trade, the
remaining undertakings or remaining part of the undertakings will continue in
full force and effect and will bind each of the Vendors
7.3 Each of the Vendors acknowledges that such Vendor has information in
respect of the business and financing of the Company and their dealings,
transactions, affairs, plans and proposals, all of which information is, or may
be, secret or confidential and important to the Company. In this clause 7.3 and
in clause 7.4 such information is called "Confidential Information" and
includes, without limitation, confidential or secret information relating to the
Company's trade secrets, know-how, , business methods, finances, prices,
business plan, marketing plans, development plans, manpower plans, sales
targets, sales statistics, customer lists, customer relationships, computer
systems and computer software. Each of the Vendors further acknowledges that the
disclosure of Confidential Information (whether directly or indirectly) to
actual or potential competitors of the Company would place the Company at a
competitive disadvantage and would do
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<PAGE>
damage (whether financial or otherwise) to its business. Each of the Vendors
accordingly agrees to enter into the restrictions contained in clause 7.4
7.4 Each of the Vendors undertakes that such Vendor will not at any time
after Completion:-
7.4.1 disclose to any person except to those authorised by the
Company to know;
7.4.2 use for the Vendor's own purposes or for any purposes other
than those of the Company; or
7.4.3 through any failure to exercise all due care and diligence
cause or permit any unauthorised disclosure of,
any Confidential Information of the Company, provided that these
restrictions on each Vendor will cease to apply to information which (otherwise
than through the default of such Vendor) becomes available to the public
generally
8. COMPLETION
The sale and purchase of the Shares will be completed at the offices of the
Purchaser's Solicitors immediately after the signing and exchange of this
Agreement when:-
8.1 the Vendors will produce and deliver to the Purchaser:-
8.1.1 duly executed transfers of the Shares in favour of the Purchaser
(or as it will direct)
8.1.2 share certificates in respect of the Shares (or in the case of
any lost certificate an indemnity satisfactory to the Purchaser in relation to
it) and together also with such waivers and consents as the Purchaser may
require to enable the Purchaser and its nominee(s) to be registered as the
holders of the Shares;
8.1.3 written resignations from all directors (other than the
Managers) and the secretary of the Company in the agreed terms;
8.1.4 the written resignation of Messrs Silver Levene as auditors of
the Company accompanied in each case by the statement section 394 of the Act
stating that there are no such circumstances as are mentioned in that section;
8.1.5 the certificate of incorporation, any certificate(s) of
incorporation on change of name, the common seal and the statutory books and
registers (all entered up to date) of the Company;
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8.1.6 the lease of the Property and all other deeds and documents
relating to the title of the Company to the Property held by the Company.;
8.1.7 all cheque books in current use of the Company together with
all unused cheques;
8.1.8 bank statements in respect of each account of the Company as at
the close of business on the last Business Day prior to Completion, together in
each case with a reconciliation statement prepared by the Vendors to show the
position at Completion (listing unpresented cheques drawn or received by the
Company and standing orders payable since the date of such bank statements);
8.1.9 (at the Property) all papers, books, records, keys, credit cards
and other property (if any) of the Company which are in the possession or under
the control of the Vendors, any other person who resigns as an officer of the
Company in accordance with this clause 8 or any person connected with them;
8.1.10 the Lock-Up Agreement and the Registration Rights Agreement
duly executed by the Vendors
7.1.11 duly executed powers of attorney regarding the rights attaching
to the Shares in the agreed terms; and
8.1.12 the Disclosure Letter duly executed by the Vendors' Solicitors
8.2 each Vendor will :-
8.2.1 repay, and will procure that any spouse or child of such Vendor
or any company ("controlled company") of which such Vendor (and/or any such
spouse or child) has control (as defined in section 840 Income and Corporation
Taxes Act 1988) will repay, all amounts owed by him, her or it to the Company,
whether due for payment or not;
8.2.2 deliver to the Purchaser a deed in the agreed terms
acknowledging that neither such Vendor nor any such spouse, child or controlled
company has any claim against the Company and that there is no agreement or
arrangements under which the Company has or could have any actual, contingent or
prospective obligation (including, but not limited to, any obligation under any
guarantee entered into by the Company) to or in respect of any of them; and
8.2.3 in respect of any such agreement or arrangement as is referred
to in clause 8.2.2 which previously existed deliver to the Purchaser evidence of
the release or termination of it in form satisfactory to the Purchaser;
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8.3 the Vendors will procure that duly convened meetings are held at
which:-
8.3.1 the transfers referred to in clause 8 .1 (subject to stamping if
not previously effected) are approved for registration in the books of the
Company;
8.3.2 the resignations variously specified in clause 8.1 are accepted
by the Company;
8.3.3 Mark Leininger, Norman Alexander and Neil Kaufman are appointed
as additional directors of the Company (subject to any maximum number of
directors imposed by the relevant articles of association), and David Southgate
is appointed as secretary of the Company;
8.3.4 Ernst & Young are appointed as auditors of the Company; and
8.4 the Managers will enter into the Employment Agreements with the Company
in the agreed terms;
8.5 the Purchaser will:-
8.5.1 pay the Consideration payable under clause 3.1.1
8.5.2 duly allot and issue the Consideration Shares to the Vendors
8.5.3 deliver to the Vendors' solicitors a certified copy of the
resolution of the board of the Purchaser issuing the Consideration Shares and
the stock certificates for the Consideration Shares
8.5.4 the Lock-Up Agreement and the Registration Rights Agreement
duly executed by the Purchaser, the Employment Agreements duly executed by
the Company
8.5.5 a deed of guarantee duly executed by the Purchaser in respect of
each of the Managers guaranteeing (inter alia) the obligations of the Company
pursuant to the Employment Agreements
[8.5.6 letters concerning the share options to be granted to the
Vendors by the Purchaser]
8.6 a letter shall be produced from HSBC Bank confirming that each of the
Managers shall be released from the terms of their personal guarantees to HSBC
Bank
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<PAGE>
9. ANNOUNCEMENTS
No announcement concerning the transactions contemplated by this Agreement
or any matter ancillary to it and no disclosure of the terms of this Agreement
will (save as required by law or the regulations of NASDAQ) be made by the
Vendors or the Company except with the prior written approval of the Purchaser
10. COSTS
10.1 Each party to this Agreement will bear such party's own costs and
expenses relating to the preparation and completion of this Agreement, except
where otherwise expressly stated
10.2 The Vendors shall procure that no claim or account (for fees brokerage
commission disbursement or otherwise) in respect of the Vendors is submitted to
the Company by any broker or adviser who are or have been advisers to or brokers
for any of them or any Group Member and the Vendors hereby indemnify the
Purchaser accordingly
11. INTEREST
If any Warrantor becomes liable to pay the Purchaser any sum pursuant to
this Agreement, whether a liquidated sum or by way of damages or otherwise such
Warrantor will be liable to pay interest on such sum from the due date for
payment at the annual rate of 2 per cent above the base lending rate from time
to time of National Westminster Bank plc, accruing on a daily basis until
payment is made, whether before or after any judgment
12. NOTICES
12.1 Any demand, notice or other communication to be given or made under or
in connection with this Agreement shall be in writing
12.2 Any such demand, notice or other communication shall be addressed as
provided in this clause 12and if so addressed will be deemed to have been duly
given or made as follows :-
12.2.1 if sent by prepaid first class post, on the second Business Day
after the date of posting; or
12.2.2 if delivered by hand, upon delivery at the address provided for
in this clause 12, unless such delivery occurs on a day which is not a Business
Day or after 4 p.m. on a Business Day, in which case it will be deemed to have
been given or made at 9 a.m. on the next Business Day
12.3 Any such demand, notice or other communication shall be addressed
(subject as provided in this clause 12) to the recipient at the recipient's
address stated in this Agreement or
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<PAGE>
at such other address as may from time to time be notified in writing by
the recipient to the sender as being the recipient's address for service,
provided however that in the case of a company it may instead (at the option of
the sender) be addressed to its registered office for the time being
12.4 Any such demand, notice or other communication, and any service
of process, pleadings or similar documents relating to any proceeding, suit or
action arising out of or in connection with this Agreement, will be validly
given or made to the Vendors if given or made to the Vendors' Solicitors
12.5 Any demand, notice or other communication will be deemed to have
been validly given if given to the personal representatives of a deceased
Vendor, notwithstanding that no grant of representation has been made in respect
of such Vendor's estate, if the notice is addressed either :-
12.5.1 to the deceased Vendor by name or
12.5.2 to the deceased Vendor's personal representatives by title
at the Vendor's address in accordance with clause 12.3 or at such other address
as may have been notified by them in writing to the sender as being their
address for service
and is otherwise served in accordance with the foregoing provisions
13. GENERAL
13.1 This Agreement will be binding on and will enure for the benefit of
each party's successors, assigns and personal representatives (as the case may
be)
13.2 Except insofar as the same have been fully performed at Completion,
each of the agreements, covenants, obligations, warranties, indemnities and
undertakings contained in this Agreement will continue in full force and effect
notwithstanding Completion
13.3 The parties agree that they will do all such acts and things and
execute all such documents as may be required on or subsequent to Completion to
vest in the Purchaser legal and beneficial ownership of the Shares in accordance
with this Agreement and otherwise to give effect to its terms
13.4 Failure or delay by any party in exercising any right or remedy under
this Agreement will not in any circumstances operate as a waiver of it, nor will
any single or partial exercise of any right or remedy in any circumstances
preclude any other or further exercise of it or the exercise of any other right
or remedy
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<PAGE>
13.5 Any waiver of any breach of, or any default under, any of the terms of
this Agreement will not be deemed a waiver of any subsequent breach or default
and will in no way affect the other terms of this Agreement
13.6 The Purchaser may release or compromise the liability of, or grant
time or any other indulgence to, any person who is a party to this Agreement
without in any way prejudicing or affecting the liability (whether joint and
several or otherwise) of any other person who is a party to this Agreement
13.7 In the event of any claim being made against the Warrantors under the
Warranties relating to Taxation (as defined in Schedule 5) or Part II of
Schedule 5, the Warrantors shall not plead against such claim the Statute of
Limitation Act 1980 or any other statute (present or future) directly or
indirectly consolidating, extending, replacing or re-enacting the same, or any
other rule of law relating to limitation of time in which an action can be
brought or claim made; provided that this clause 13.7 is without prejudice to
any express provision of this Agreement regarding time limits for notifying or
making claims
13.8 The headings to the clauses of this Agreement and to the paragraphs of
the Schedules (save for the headings in Schedules 1, 2 and 3) will not affect
its construction
13.9 The rights and remedies expressly provided for by this Agreement will
not exclude any rights or remedies provided by law
13.10 This Agreement may be executed in any number of counterparts, and by
the parties on separate counterparts, each of which so executed and delivered
will be an original, but all the counterparts will together constitute one and
the same agreement
13.11 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement shall be
governed by English law. The English Courts shall have jurisdiction to settle
any disputes which may arise out of or in connection with this Agreement. The
parties agree to submit to the said jurisdiction
13.12 This Agreement contains the entire agreement and understanding
between the Purchaser and the Vendors concerning the transactions contemplated
by this Agreement. The Purchaser irrevocably and unconditionally waives any
right it may have to claim damages for any misrepresentation not contained in
this Agreement or breach of any warranty not contained in this Agreement unless
such representation or warranty was made fraudulently
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<PAGE>
SCHEDULE 1
The Vendors
<TABLE>
<CAPTION>
Name and address Number and class of Amount of Number of
Shares to be sold Consideration Consideration
payable in cash () Shares
<S> <C> <C> <C>
Anthony Robert Simpson 450 'C' Ordinary - 7,305
West Cottage, Best Beech Shares of BP0.10 each
Hill, Wandhurst, East
Sussex, TN5 6JR
Dudley John Langelot
Price 1,120 'C' Ordinary - 18,182
Braemer Shares of BP0.10 each
Windemere Road
Lightwater
Surrey GU18 5TH
David Leonard Street 1,810 'C' Ordinary - 29,383
Windrush, 26 Linksway, Shares of BP0.10 each
Upton, Chester, Cheshire
CH2 1EA
Hugh Montgomery Brown 760'C' Ordinary - 12,338
93 Ravenslea Road, London Shares of BP0.10 each
SW12 8SL
Ian Charles Norris McCalla 620 'A' Ordinary - 10,065
57 Streathbourne Road, Shares of BP0.10 each
London, SW17 8RA
Ian Gilbert Wiper 450 'C' Ordinary - 7,305
Cromer House, Shares of BP0.10 each
Cromer Hyde
Lemsford, Welwyn
Herts AL8 7XD
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<PAGE>
Joseph Laws Harris 450 'C' Ordinary - 7,305
The Conifers, Old Saw Mill, Shares of BP0.10 each
Mitford, Morpeth,
Northumberland, NE61 3QX
Linda Fenlon 450 'C' Ordinary - 7,305
129 Deans Way, Shares of BP0.10 each
Gloucester, GL1 2QB
Paul John Simpson 9140 'B' Ordinary BP39,714 148,377
29Downside Road, Shares of BP0.10 each
Headington, Oxford,
OX3 8HP
Susan Margaret Lloyd 450 'C' Ordinary - 7,305
Cromer House, Shares of BP0.10 each
Cromer Hyde
Lemsford, Welwyn
Herts AL8 7XD
Andrew Darrant 100 'C' Ordinary - 1,623
[41-43 Stoke Nevington Shares of BP0.10 each
Church Road
London N16 0NX
Court Services Limited 26,200 'A' Ordinary BP116,536 425,325
Heritage Court Shares of BP0.10 each
41 Athol Street (being Bearer Shares)
Douglas
Isle of Man IM99 1HN
As trustees of the McCalla Settlement
</TABLE>
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<PAGE>
SCHEDULE 2
Details of the Company
Name of Company : JUNCTION 15 LIMITED
Registered number : 3113286
Registered office : 37 Warren Street
London
W1P 5PD
Date of incorporation : 13 October 1995
Place of incorporation : England
Status of company : private limited company
Authorised share capital : BP1,000,000 divided into 100,000 'A'
Ordinary shares of BP0.10 each, 100,000 'B'
Ordinary shares of BP0.10 each, 100,000 'C'
Ordinary shares of BP0.10 each and 700,000
Ordinary shares of BP0.10 each
Issued share capital : BP4,200 divided into 26820 'A' Ordinary
shares of BP0.10p each, 9140 'B' Ordinary
shares of BP0.10 each and 6040 'C' Ordinary
shares of BP0.10 each
Directors' full names : Ian Charles Norris McCalla Paul John Simpson
Secretary's full name : Harben Registrars Limited
Accounting reference date : 31 December
Auditors : Silver Levene
Bankers : HSBC Bank plc
Description of business : A general commercial company
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<PAGE>
Status : The Company is not and has not been at any
time in the last 10 years a Company to which
the City Code on Takeovers and Mergers
applies
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<PAGE>
SCHEDULE 3
THE PROPERTY
Short particulars of the Property
(stating whether freehold or leasehold;
in the case of leasehold, giving brief
details of the lease; and including short
particulars of any tenancy or licence
affecting the title) Title holder Use
- -------------------- ------------ ---
Leasehold property known as The Company Offices
Unit 4, 53 Oldridge Road, London, SW12
held under a lease dated 11 January 1999
made between Thames Housing Association
Limited (1) the Company (2) for a term of
three years from 4 January 1999 to
3 January 2002
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SCHEDULE 4
NON-TAXATION WARRANTIES
1. INTERPRETATION
In this Schedule 4 the following expressions have the following meanings :-
Expression Meaning
---------- -------
"the Accounting Date" 31 December 1999
"the Accounts" The audited accounts of the Company for
the financial year which ended on the
Accounting Date, comprising a balance
sheet, a profit and loss account, notes
and directors' and auditors' reports
"Contract" Any agreement, arrangement or under-
standing whether legally binding or
not
"the Environmental Legislation" All statutes subordinate legislation
regulations codes of practice guidance
notes and the like from time to time
in force on or before Completion
concerning the protection of human
health or the environment or the
conditions of the work place or the
generation transportation storage
treatment or disposal of Hazardous
Items including in particular EPA
1990, Environment Act 1995, Water
Resources Act 1991 and Health and
Safety at Work etc Act 1974 and all
subordinate legislation regulations
codes of practice and guidance
notes made thereunder
"EPA 1990" Environmental Protection Act 1990
"Hazardous Items" Any waste (as defined in EPA 1990) of
any kind noise vibration smell fumes
smoke soot ash dust grit pollution
chemicals leachate petroleum products
ground water noxious radioactive
inflammable explosive dangerous or
offensive gasses or materials and
any other
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<PAGE>
substances of whatever nature which may
cause harm to the health of living
organisms or to the environment or to
public health or welfare "Intellectual
Property Rights"Patents, trade marks,
registered designs, design rights,
copyright, know how and all other
intellectual property (of whatever
nature) in any jurisdiction and any
applications for the same
"Stock" Stocks (as defined in Statement of
Standard Accounting Practice No.9
adopted by the Accounting Standards
Board) of the Company
2. SCHEDULES 1 & 2; CAPITAL
2.1 The information contained in Schedules 1 and 2 is complete and
accurate in all respects
2.2 The shares of the Company are in issue fully paid and are beneficially
owned and registered as set out in Schedules 1 and 2 free from any third party
right
2.3 No Contract has been entered into which requires or may require the
Company to allot or issue any share or loan capital
2.4 The Company has no interest in the share capital of any body corporate
3. INFORMATION SUPPLIED TO PURCHASER
3.1 The information given in the Disclosure Letter is complete and accurate
in all material respects and is not misleading because of any omission
3.2 All information contained in any document or written communication
supplied to the Purchaser or any of its advisers by or on behalf of the Vendors
or the Company in the course of the negotiations leading to the execution of
this Agreement is complete and accurate in all material respects and is not
misleading because of any omission or ambiguity
4. ACCOUNTS AND RECORDS
4.1 The Accounts :-
4.1.1 comply with the requirements of the Act and have been prepared
in accordance with all applicable accounting standards (as that term is defined
in section 256 of the Act) and (to the extent that no such accounting standards
are applicable) with the accounting
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<PAGE>
principles and practices of UK GAAP 4.1.2 have been prepared on bases and
principles which are consistent with those used in the preparation of the
audited statutory accounts of the Company for the three financial years
immediately preceding that which ended on the Accounting Date
4.1.3 show a true and fair view of the assets and liabilities
(including contingent, unquantified and disputed liabilities) of the Company and
of the state of affairs of the Company as at the Accounting Date and of the
results of the Company for the financial year ended on that date, and
4.1.4 are not affected (except as disclosed in the Accounts) by any
extraordinary or exceptional item
4.2 The accounting records of the Company are up to date and contain
complete and accurate details of all transactions of the Company and comply with
the provisions of sections 221 and 222 of the Act
5. UNENCUMBERED TITLE
Each asset reflected in the Accounts (save for current assets disposed of
by the Company in the ordinary course of its business since the Accounting Date)
and each asset treated as an asset of the Company and/or used by the Company:-
5.1 is in the legal and beneficial ownership of the Company, free from any
third party right and from any Contract to grant the same
5.2 is situated at the Property, and
5.3 is not to any extent surplus to requirements
6. ARRANGEMENTS INVOLVING THIRD PARTIES
No substantial part of the Company's activities are operated under the
agreement or consent of a third party, nor is there any agreement (whether or
not in respect of Intellectual Property Rights) which restricts the manner or
fields in which the activities of the Company have been operated or in which the
Purchaser may operate the Company's activities following Completion
7. DEBT FACTORING
The Company has not factored or discounted any debt or agreed to do so
8. DEBTORS
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<PAGE>
All of the debts which are reflected in the Accounts as owing to the
Company (apart from bad and doubtful debts to the extent to which they have been
provided for in the Accounts) or which have subsequently been recorded in the
books of the Company have realised or will realise in the normal course of
collection and within three months of Completion their full value as included in
the Accounts or in the books of the Company, and no such debt or any part of it
has been outstanding for more than two months from its due date for payment
9. PLANT ETC
The plant and machinery, vehicles, fixtures and fittings, furniture, tools
and other equipment used in connection with the business of the Company are in a
good and safe state of repair and condition and satisfactory working order
10. PROPERTY
10.1 The Company is not in occupation of or entitled to any estate or
interest in any land or premises other than the Property
10.2 The Warrantors are not aware of any adverse matters affecting the
Property which may cause loss or damage to the Company
11. INTELLECTUAL PROPERTY RIGHTS
11.1 Validity
11.1.1 The Disclosure Letter contains true, complete and accurate
lists of all Intellectual Property Rights registered or sought to be registered
in any jurisdiction which are held or beneficially owned by the Company. The
Company is the sole legal owner of such Intellectual Property Rights which are
all Intellectual Property Rights required in the operation of the business of
the Company as carried on at the date hereof.
11.1.2 So far as the Warrantors are aware no act has been done or
omitted to be done and no event has occurred or is likely to occur which may
render any of such Intellectual Property Rights subject to revocation,
compulsory licence, cancellation or amendment or may prevent the grant or
registration of a valid Intellectual Property Right pursuant to a pending
application.
11.2 Charges
The Intellectual Property Rights which are owned or otherwise used by the
Company are not subject to any security interest (of whatever nature).
11.3 Infringement
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<PAGE>
11.3.1 None of the operations of the Company infringe, any rights held
by any third party or involve the unauthorised use of confidential information
disclosed to the Company in circumstances which might entitle a third party to
make a claim against the Company.
11.3.2 No claim has been made by any third party which alleges any
infringing act or process which would fall within sub-clause 11.3.1 above or
which otherwise disputes the right of the Company to use any Intellectual
Property Rights relating to its business and the Warrantors are not aware of any
circumstances (including any act or omission to act) likely to give rise to such
a claim
11.3.3 There exists no actual or threatened infringement by any third
party of any Intellectual Property Rights held or used by the Company (including
misuse of confidential information) or any event likely to constitute such an
infringement nor has the Company acquiesced in the unauthorised use by any third
party of any such Intellectual Property Rights.
11.4 Employee Claims
No claims have been made or threatened by employees or ex-employees to
receive any payment or right in respect of any Intellectual Property Rights used
by the Company.
11.4 Intellectual Property Licences
11.4.1 Details of all licences granted to or by the Company in respect
of Intellectual Property Rights are set out in the Disclosure Letter including
details of any limit as to time or right of termination affecting the use of the
Intellectual Property Right.
11.4.2 The Company is not in default under any licence, sub-licence or
assignment granted to it in respect of any Intellectual Property Rights used by
the Company.
11.6 Loss of Rights
No Intellectual Property Rights owned or used by the Company and no licence
of Intellectual Property Rights of which the Company has the benefit will be
lost, or rendered liable to any right of termination or cessation by any third
party, by virtue of the performance of the terms of this Agreement .
11.7 Confidential Information
Where information of a confidential nature has been developed or acquired
by a Company for the purposes of its business in the two (2) year period prior
to the date of this Agreement, such information (except insofar as it has fallen
into the public domain through no fault of a member of the Company) has been
kept strictly confidential and has not been disclosed otherwise than subject to
an obligation of confidentiality being imposed on the person to whom the
information was
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<PAGE>
disclosed. The Warrantors are not aware of any breach of such
confidentiality obligations by any third party.
11.8 Records and Software
11.8.1 All the accounting records and systems (including but not
limited to computerised accounting systems) of the Company are recorded, stored,
maintained or operated or otherwise held by a Company and are not wholly or
partly dependent on any facilities or systems which are not under the exclusive
ownership or control of the Company.
11.8.2 The Company is licensed to use all software necessary to enable
it to continue to use its computerised records for the foreseeable future in the
same manner in which they have been used prior to the date of this Agreement and
does not share any user rights in respect of such software with any other
person.
11.8.3 All software and hardware used by the Company is covered by a
maintenance agreement which, so far as the Warrantors are aware, is fully
enforceable and the terms of all such maintenance agreements are contained in
the Disclosure Letter;
11.8.4 Neither the hardware nor the software owned and/or used by the
Company has been affected by any defects or faults which have caused any
material interruption to the Company's business at any time during the 12 months
prior to the date of this Agreement;
11.8.5 So far as the Warrantors are aware the software and hardware
used by each Company in the carrying on of its business permits it to do so in a
proper and efficient manner, is fully functional and there is no reason why such
software and hardware should require modification, replacement or enhancement to
permit such Company to carry out its business in a proper and efficient manner
over the next 12 months.
11.9 Data Protection
The Company has not received any notice and has not been engaged in any
correspondence with the Data Protection Registrar relating directly or
indirectly to the activities of the Company or the Company and its compliance
with the Data Protection Act 1984 or the Data Protection Act 1998 (the "DATA
PROTECTION ACTS"). Each Company has taken all necessary steps to comply with and
is in full compliance with the provisions of the Data Protection Acts.
11.10 Year 2000
11.10.1 To the best of the Warrantors' knowledge and belief each item
of equipment and software program used by the Company in the course of its
business (a "COMPANY SYSTEM"):
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<PAGE>
11.10.1.1 has been produced or amended in a manner which ensures that
a change of, reference to or use of a date after 31 December 1999 in the
operation of that Company System, whether alone or in conjunction with each
other Company System, will not have a material adverse effect on, nor give rise
to an increased inconvenience in, the operation of that Company System;
11.10.1.2 which exchanges date information with any item of equipment
and software program under the control of a third party (a "THIRD PARTY SYSTEM")
in the course of such Company member's business so exchanges in a manner which
ensures that the inclusion of a date or dates after 31 December 1999 in the date
consistent, clearly defined and apparent to the user.
12. EMPLOYEES
12.1 Full particulars of the identities, date of birth, date of
commencement of employment (or appointment to office) and terms and conditions
of employment (including remuneration and any bonus, commission, share
incentives or profit sharing arrangement) of all the employees and officers of
the Company are enclosed with the Disclosure Letter
12.2 The terms of the engagements of all directors and employees of the
Company are such that they may be terminated at not more than the minimum period
of notice required by statute and without any liability for payment of
compensation damages or otherwise other than payments provided for by employment
legislation
12.3 No change has been made since the Accounting Date in the terms of
employment of any person currently employed by the Company, and the Company is
not party to any Contract to make any such change
12.4 There are no amounts owing to any present or former officers or
employees of the Company and none of them is entitled to accrued holiday pay
other than in respect of the Company's current holiday year
12.5 No employee has been engaged by the Company since the Accounting Date
and no person employed by the Company at or since the Accounting Date has
ceased, or given or received notice to cease, to be so employed
12.6 No dispute has arisen between the Company and a material number or
category of its employees and so far as the Warrantors are aware there are no
present circumstances known which are likely to give rise to any such dispute
and there is no contract agreement or arrangement between the Company and any
trade union or other body representing employees of the Company
12.7 The Company has maintained adequate and suitable records regarding the
service of each of its employees and complied with all agreements for the time
being relating to them
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13. PENSIONS
13.1 There is not in existence, and no proposal has been announced to
establish, any retirement, death or disability benefit scheme obligation or
arrangement (whether legally enforceable or not) for the benefit of any present
or former officers or employees of the Company or their dependants
13.2 No undertaking or assurance has been given as to the continuance or
introduction, or increase or improvement of any pension rights or entitlements
which the Company would be required to implement in accordance with good
industrial relations practice, whether or not there is any legal obligation to
do so
14. INSURANCE
14.1 So far as the Warrantors are aware all assets of the Company of an
insurable nature are, and have at all material times been, insured in amounts
equal to their full replacement or reinstatement value against fire and other
risks normally insured against by persons carrying on the same classes of
business as the Company. The Company is, and has at all material times been,
adequately covered against employer's liability, public liability, product
liability and professional indemnity liability
14.2 All premiums due in relation to the Company's insurances have been
paid, and nothing has been done or omitted to be done which would make any
policy of insurance of the Company void or voidable or which is likely to result
in an increase in premium or which would release any insurer from any of its
obligations under any policy of insurance of the Company
14.3 There is no insurance claim pending or outstanding by or against the
Company and, as far as the Vendors are aware, there are no circumstances likely
to give rise to any such claim
14.4 All insurances effected by the Company are renewable annually and not
on any longer term contract
14.5 Full particulars of all the Company's insurances are given in the
Disclosure Letter
15. FINANCIAL AND WORKING CAPITAL
15.1 Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company are contained in the
Disclosure Letter, and so far as the Warrantors are aware no person who provides
any such facility has given any indication that it may be withdrawn or its terms
altered
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15.2 The details contained in the Disclosure Letter of the credit or debit
balances on all the bank or deposit accounts of the Company were correct at the
date stated in the Disclosure Letter and since such date there have been no
payments out of any such accounts except for routine payments and the balances
on such accounts are not now substantially different from the balances shown in
the Disclosure Letter
15.3 No person other than the Company has given any guarantee of or
security for any overdraft loan or loan facility granted to the Company
15.4 The Company has, since the Accounting Date, paid its creditors in
accordance with their respective credit terms
15.5 Having regard to existing bank and other facilities the Company has
sufficient working capital to enable it to perform in accordance with their
terms all Contracts which have been entered into by it
16. MATERIAL CONTRACTS
The Company is not, and has not since the Accounting Date been, a party to
or subject to any Contract which:-
16.1 involves agency, distributorship, franchising, marketing rights,
information sharing, manufacturing rights, servicing or maintenance
16.2 involves partnership, joint venture, consortium or similar
arrangements
16.3 involves hire purchase, conditional sale, credit sale, leasing, hiring
or similar arrangements
16.4 commits the Company to capital expenditure
16.5 is incapable of complete performance in accordance with its terms
within six months after the dat e on which it was entered into or at a cost to
the Company in excess of $5,000
16.6 cannot readily be fulfilled or performed by the Company on time and
without undue or unusual expenditure of money or effort
16.7 is for the supply of goods and/or services by or to the Company on
terms under which retrospective or future discounts, price reductions or other
financial incentives are given by or to the Company dependent on the level of
purchases or any other factor
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16.8 involves warranties, indemnities or representations given in
connection with a sale of shares or assets, or is a guarantee or indemnity in
respect of the obligations of a third party, under which any liability or
contingent liability is outstanding
16.9 involves the Company in any residual liability in respect of any
property at any time assigned or otherwise disposed of by it
16.10 is not on arm's length terms or is in any way otherwise than in the
ordinary and proper course of the Company's business
16.11 any other party shall by reason of any change in the beneficial
ownership of the Shares be entitled to terminate earlier than it would otherwise
have been entitled to do so or which restricts the Company's ability to conduct
business
16.12 a connected person (as defined by section 346 of the Act) or an
employee is a party to or has an interest in save for the contracts of
employment disclosed
17. OTHER BUSINESS MATTERS
17.1 During the last 12 months there has been no substantial change in the
basis or terms on which any person is prepared to do business with the Company
(apart from normal price changes), and no substantial customer or supplier of
the Company has ceased or substantially reduced its business with the Company,
and no indication has been received by the Company or any of the Vendors that
there will or may be any such change, cessation or reduction
17.2 Save for any guarantee or warranty implied by law the Company has not
given any guarantee or warranty or made any representation in respect of goods
sold or contracted to be sold by it and has not accepted any liability or
obligation to service repair maintain take back or otherwise do or not do
anything in respect of any goods that would apply after the goods have been
delivered by it
17.3 A copy of the Company's current standard conditions of trading are
enclosed with the Disclosure Letter
17.4 The Company is not a party to any consultancy or management agreement
17.5 The Company does not use on its letterhead books circulars
advertisements or vehicles nor otherwise carry on business under any name other
than its corporate name
18. COMPANY LAW MATTERS AND GENERAL COMPLIANCE
18.1 Compliance has been made with all legal requirements in connection
with the formation of the Company and all issues and grants of shares or other
securities of the Company
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18.2 The copy of the memorandum and articles of association of the Company
enclosed with the Disclosure Letter is true and complete
18.3 All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Registrar of Companies by the Company have
been properly filed, and none has been so filed or delivered within 14 days of
the date of this Agreement
18.4 The statutory books (including all registers and minute books) of the
Company have been properly kept
18.5 The Company has conducted its business in accordance with all relevant
applicable laws and regulations of the United Kingdom and any relevant foreign
country
18.6 So far as the Warrantors are aware, no agreement, practice or
arrangement to which the Company is party is or ought to be or ought to have
been registered under, or infringes, the Treaty of Rome or any employment,
competition, anti-restrictive trade practice or consumer protection legislation
applicable in the United Kingdom or elsewhere
18.7 So far as the Warrantors are aware, there is not pending, or in
existence, any investigation or enquiry by, or on behalf of, any governmental or
other body in respect of the affairs of the Company
18.8 The Company has obtained all licences authorisations and consents
(private or statutory) required for the carrying on of its business or in
respect of any activities processes and substances from time to time carried on
held or stored by it and copies of the same are enclosed with the Disclosure
Letter
18.9 All such licences authorisations and consents are in full force and
effect, there are no circumstances which may give rise to them being modified,
suspended or revoked or not renewed in the ordinary course and all conditions
attached to such licences authorisations and consents have in all material
respects been complied with
19. ENVIRONMENTAL LEGISLATION
The Company has at all times complied with the Environmental Legislation
and there is nothing in on over or under the Property the presence existence or
condition of which constitutes a breach of the Environmental Legislation nor is
any manufacturing storage generation servicing treatment disposal or other
process carried on at the Property in such a way as to amount to a breach of the
same
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20. LITIGATION
20.1 Neither the Company nor any person for whose acts or defaults it may
be liable is engaged in any capacity (whether as claimant or defendant or
otherwise) in any litigation, arbitration, prosecution or other legal
proceedings (whether civil or criminal) or in any proceedings or hearing before
any statutory or Governmental body, tribunal, department, board or agency
20.2 No such proceedings are so far as the Company is aware pending or
threatened and the Company is not aware of any facts or circumstances likely to
give rise to any such proceedings
20.3 There is no unsatisfied judgment or unfulfilled order outstanding
against the Company and the Company is not party to any undertaking or assurance
given to a court, tribunal or any other person in connection with the
determination or settlement of any claim or proceedings
21. DEFAULT
21.1 The Company has not sold, supplied or provided any product or service
which did not, does not or will not comply fully with all applicable laws,
regulations or standards or which was, is or will be faulty, defective or
dangerous or not in accordance with any representation or contractual term,
express or implied, relating to it
21.2 The Company is not in breach of any Contract to which it is a party,
and no other party to any such Contract is in breach of it
22. EVENTS SINCE THE ACCOUNTING DATE
Since the Accounting Date :-
22.1 there has been no reduction in the net asset value of the Company
except in the ordinary course of business determined in accordance with the same
accounting policies as those applied in the Accounts (and valuing no asset at a
figure greater than the value attributed to it in the Accounts or, in the case
of any asset acquired since the Accounting Date, greater than cost)
22.2 the Company has not acquired, or agreed to acquire, any single asset
having a value in excess of 2000 or assets having an aggregate value in excess
of BP5000
22.3 the Company has not disposed of, or agreed to dispose of, any asset or
incurred, or agreed to incur, any debts or liability (including contingent
liabilities) other than in the ordinary course of business
22.4 the trade and business of the Company has been carried on in the
ordinary and normal course
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<PAGE>
22.5 there has been no material adverse change in the financial or trading
position or prospects of the Company
22.6 no dividend or other payment which is, or could be treated as, a
distribution for the purposes of Part VI ICTA or section 418 ICTA has been
declared, paid or made by the Company
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<PAGE>
SCHEDULE 5
TAXATION
PART I - INTERPRETATION
1. Interpretation
In this Schedule 5 :-
"Accounts" and "Accounting shall have the meanings given in Schedule
Date 4
"Actual Liability to Taxation" Any liability of the Company to make an
actual payment of (or of an amount in
respect of) Taxation
"Bearer Shares" The 26,200 "A" Ordinary Shares of BP0.10 each in the
capital of the Company being bearer
shares or bearer share warrants
"Event" Any event whatsoever including (without
limitation) any transaction, action
or omission (whether or not the Company
is party thereto), the earning, accrual
or receipt of any income, profits or
gains, the declaration, payment or
making of any dividend or other
distribution and Completion
"ICTA" Income and Corporation Taxes Act 1988
"Liability to Taxation" (a) Any Actual Liability to Taxation
(and, for the purposes of paragraph
2.1, the amount of such a Liability
to Taxation shall be the amount of
the actual payment of Taxation or the
payment in respect of Taxation which
the Company is liable to make); or
(b) The loss by the Company (in
whole or in part) of any Purchaser's
Relief (and, for the purposes of
paragraph 2.1, if the Purchaser's
Relief lost was a deduction
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<PAGE>
from or a set-off against Taxation,
the amount of such a Liability to
Taxation shall be the amount of the
relief lost, or, if the Purchaser's
Relief lost was a deduction from or
set-off against income profits or
gains, the amount of such a Liability
to Taxation shall be the amount of
Taxation which would have been
saved but for the loss of the
Purchaser's Relief on the basis of
rates of Taxation current at the date
of the loss); or
(c) The set-off of any Purchaser's
Relief against any Actual Liability
to Taxation in respect of which the
Vendors would, but for such set-off,
have been liable under paragraph 2.1,
or against any income, profits or
gains of the Company earned, accrued
or received on or before Completion
or in respect of a period ended on or
before Completion in circumstances
where, but for such set-off, the
Company would have suffered an Actual
Liability to Taxation in respect of
which the Vendors would have been
liable under paragraph 2.1 (and, for
the purposes of paragraph 2.1 the
amount of such a Liability to
Taxation shall be the amount of the
Purchaser's Relief set-off against an
Actual Liability to Taxation or the
amount of Taxation saved as a result
of the set-off of the Purchaser's
Relief against income, profits or
gains, as the case may be); or
"Purchaser's Relief" Any Relief which:-
(a) was treated as an asset of the
Company in the Accounts; or
(b) was taken into account in
computing any provision for deferred
tax which appears in the Accounts or
would have appeared in the Accounts
but for the presumed availability or
such Purchaser's Relief; or
(c) arises wholly or mainly as a
result of any Event which has
occurred or occurs after the
Accounting Date
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<PAGE>
"Relief" Any relief, allowance, exemption,
set-off deduction or credit available
from, against or in relation to
Taxation or in the computation of
income, profits or gains for any
Taxation purpose
"Taxation" Any tax, duty, impost or levy, past
or present, of the United Kingdom or
elsewhere, whether governmental, or
state, provincial, local governmental
or municipal (including without
prejudice to the foregoing
obligations in respect of the Pay As
You Earn system, national insurance
contributions, VAT and stamp duty)
and any fine, penalty, charge or
interest relating to any such tax,
duty impost or levy or to any form
or return required to be submitted
to any competent authority for the
purposes of any such tax duty, impost
or levy
"Taxation Authority" Any taxing or other authority
competent to impose any Liability to
Taxation
"VAT" Value Added Tax
"VATA" Value Added Tax Act 1994
PART II - TAX COVENANT
2. TAX COVENANT
2.1 Subject as hereinafter provided the Vendors covenant with the Purchaser
to pay to the Purchaser an amount equal to:-
2.1.1 any Liability to Taxation which has arisen or may arise wholly
or by reason of or in connection with any Event occurring, or
deemed for any Taxation purpose to have occurred, on or before
Completion, whether or not in any such case the Taxation in
question is primarily chargeable against or attributable
wholly or partly to or recoverable wholly or partly from any
other person,
2.1.2 any Liability to Taxation which the Purchaser or the Company is
or may be or become required to pay after Completion arising
on or with respect to the creation conversion or repatriation
by the Purchaser from the Isle of Man of the Bearer Shares after
Completion other than any stamp duty or stamp duty reserve tax
arising solely from the purchase of the Bearer Shares by the
Purchaser pursuant to this Agreement
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<PAGE>
2.1.3 any costs, fees or expenses incurred by the Company or the
Purchaser in connection with any Liability to Taxation mentioned
in paragraphs 2.1.1 or 2.1.2 or with any claim by any Taxation
Authority relating to any such Liability to Taxation or with
taking or defending any action under this paragraph 2.1
2.2 The covenant contained in paragraph
2.1 shall not apply in respect of a Liability to Taxation to the
extent to which:-
2.2.1 provision, allowance or reserve for such Liability to Taxation
has been made in the Accounts, or
2.2.2 such Liability to Taxation was discharged on or before the
Accounting Date and the discharge of such Liability to
Taxation was recognised in the Accounts, or
2.2.3 such Liability to Taxation would not have arisen but for any
Event which occurred in the ordinary course of business of
the Company after the Accounting Date and on or before
Completion
2.3 The due date for the making of a payment under this paragraph 2 shall
be the date falling five Business Days after the Purchaser has served
notice on the Vendors demanding such payment.
2.4 All payments by the Vendors under this Part II of this Schedule
5 will be treated as repayments by the Vendors of the
consideration paid for the Shares pursuant to this Agreement, provided
that this paragraph 2.4 will not operate in any way to limit the
liability of the Vendors under this Part II of this Schedule 5
2.5 The Vendors shall not be liable to the Purchaser in respect of any
breach of the covenant contained in paragraph 2.1 unless written
notice of such breach shall be served on any of the Vendors within
seven years of the date hereof
PART III - TAX WARRANTIES
3. RETURNS, DISPUTES AND CLEARANCES
3.1 All notices, returns, computations, registrations and payments
which should have been made by the Company for any Taxation
purpose have been made within the requisite periods and are
up-to-date, correct and on a proper basis and none of them is, or is
likely to be, the subject of any dispute with any Taxation Authority
3.2 The Company is not involved in any dispute with any Taxation
Authority concerning any matter likely to affect in any way the
liability of the Company to Taxation and there are no circumstances
which are likely to give rise to any such dispute
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<PAGE>
4. TAXATION CLAIMS, LIABILITIES AND RELIEFS
4.1 The Company has duly and properly made all Taxation claims,
disclaimers, elections and surrenders and given all notices and
consents and done all other things required in respect of Taxation and
all such claims, disclaimers, elections, surrenders, notices, consents
and other things have been accepted as valid by the relevant Taxation
Authorities and none has been revoked or otherwise withdrawn
4.2 The Company is not, and will not become, liable to pay, or
make reimbursement or indemnity in respect of, any Taxation (or
amounts corresponding to any Taxation) payable by or chargeable on or
attributable to any other person, whether in consequence of the
failure by that person to discharge that Taxation within any specified
period or otherwise, where such Taxation relates to a profit, income
or gain, transaction, event, omission or circumstance arising,
occurring or deemed to arise or occur (whether wholly or partly) on or
prior to Completion
5. DISTRIBUTIONS AND PAYMENTS
5.1 The Company has deducted and properly accounted to the
appropriate Taxation Authority for all amounts which it has been
obliged to deduct in respect of Taxation in respect of any dividend or
other distribution, has complied fully with all reporting requirements
relating to all such amounts and has (where required) duly provided
certificates of deduction of tax to the recipients of payments from
which deductions have been made
5.2 The Company has not since the Accounting Date made any
payment to, or provided any benefit for, any present or former
director, employee or officer which is wholly or partially
disallowable as a deduction in computing the profits of the Company
for the purposes of corporation tax, and is under no obligation to
make any such payment or provide such benefit
6. EMPLOYEE BENEFITS
6.1 Without prejudice to the generality of the foregoing the
Company has properly operated the Pay As You Earn system, by making
deductions, as required by the applicable Taxation Statute, from all
payments made, or treated as made, to its directors, employees or
officers or former directors, employees or officers or any persons
required to be treated as such, and accounted to the Inland Revenue
for all Taxation so deducted and for all Taxation chargeable on the
Company on benefits provided for its directors, employees or officers,
or former directors, employees or officers
6.2 The Company has complied fully with all its obligations
relating to Class 1 and Class 1A National Insurance Contributions,
both primary and secondary
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<PAGE>
7. TAX AVOIDANCE
The Company has not entered into or been a party to any scheme,
arrangement or transaction designed partly or wholly or containing steps or
stages designed partly or wholly for the purpose of avoiding or deferring
Taxation or reducing a liability to Taxation and in particular, but without
limitation, has not entered into or been a party to any scheme, arrangement
or transaction to which the provisions of any of sections 34 to 37
(inclusive), 56 and 398, 395, 399, 703 to 709 (inclusive), 713, 714, 729 to
737 (inclusive), 770, 775, 776, 779 to 786 (inclusive), 787 and 798 ICTA
could apply
8. VAT: GENERAL
8.1 The Company:-
8.1.1 is duly registered and is a taxable person for the purposes of
VAT and such registration is not subject to any conditions
imposed by or agreed with the Commissioners of Customs
& Excise;
8.1.2 has complied in all respects with all statutory requirements,
orders, provisions, directions or conditions relating to VAT;
8.1.3 maintains complete, correct and up-to-date records for the
purposes of all legislation relating to VAT;
8.1.4 is not in arrears with any payment or returns under
legislation relating to VAT or excise duties, or liable to any
abnormal or non-routine payment of VAT, or any forfeiture or
penalty, or to the operation of any penal provisions;
8.2 All supplies of goods and services made by the Company are
taxable supplies for the purposes of the VATA and the Company has not
been and will not be denied credit for any input tax by reason of the
operation of section 26 VATA or otherwise
9. POST-ACCOUNTING DATE
Since the Accounting Date:-
9.1 no event has occurred which has given rise or will or may
give rise to a Liability to Taxation on the Company in respect of
deemed (as opposed to actual) income, profits or gains or which has
resulted or will or may result in the Company becoming liable to
Taxation directly or primarily chargeable against or attributable to
another person;
9.3 the Company has not entered into any transaction which has
given rise or may give rise to a Liability to Taxation on a chargeable
gain; and
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<PAGE>
9.4 no event has occurred as a result of which the Company could
be required to bring a disposal value into account or suffer a
balancing charge for the purposes of capital allowances a withdrawal
of first year allowances or a recovery of excess relief in respect of
capital allowances
SIGNED by A R Simpson ) /s/ AR Simpson
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by D J L Price ) /s/ DJL Price
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by D L Street ) /s/ DL Street
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
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<PAGE>
SIGNED by H M Brown ) /s/ HM Brown
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by I C N McCalla ) /s/ ICN McCalla
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
EXECUTED by Court Services Limited ) /s/ GAC Jones
as Trustees of the McCalla Settlement )
acting by:- )
Director
/s/ NG Scott
Director/Secretary
SIGNED by I G Wiper ) /s/ IG Wiper
in the presence of:- )
Witness's signature: /s/
Name:
Address:
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<PAGE>
Occupation:
SIGNED by J L Harris ) /s/ JL Harris
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by L Fenlon ) /s/ L. Fenlon
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by P J Simpson ) /s/ PJ Simpson
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
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<PAGE>
SIGNED by S M Lloyd ) /s/ SM Lloyd
in the presence of:- )
Witness's signature:
Name: /s/
Address:
Occupation:
SIGNED by A Darrant ) /s/ A. Darrant
in the presence of:- )
Witness's signature:
Name:
Address:
Occupation:
SIGNED by )
for and on behalf of Vizacom, Inc. ) /s/ Mark E. Leininger
in the presence of:- )
Witness's signature: /s/
Name:
Address:
-45-
[Form for Directors]
LOCK-UP AGREEMENT
This AGREEMENT (the "Agreement") is made as of the9th day of March, 2000,
between the undersigned former stockholder (the "Undersigned") of Junction 15
Limited, a United Kingdom company ("Junction") and Vizacom Inc., a Delaware
corporation (the "Company").
NOW, THEREFORE, for good and valuable consideration, including the
agreements by certain other former stockholders of Junction to be similarly
bound, the sufficiency and receipt of which consideration are hereby
acknowledged, the Undersigned agrees as follows:
1. Background. The Undersigned acknowledges that the Company has required,
and Junction has agreed to assist the Company in obtaining, agreements from all
former stockholders of Junction, to refrain from selling certain quantities of
securities of the Company for a period of up to twenty-four (24) months
following the completion of the acquisition (the "Acquisition") of all of the
issued and outstanding capital stock of Junction by the Company pursuant to the
Share Purchase Agreement (the "Purchase Agreement"), dated March 9, 2000, among
the Company, Junction and the Junction shareholders set forth therein. To induce
the Company to proceed with the Acquisition and other stockholders of Junction
to make similar agreements and as a condition to the closing of the Acquisition,
the Undersigned has entered into this Agreement.
2. Restriction. The Undersigned hereby agrees that from the closing of the
Acquisition to and including a date 24 months thereafter (the "Restricted
Term"), the Undersigned will not, directly or indirectly, issue, offer to sell,
grant an option for the sale of, assign, transfer, pledge, hypothecate or
otherwise encumber or dispose (collectively, "Transfer") of any shares of common
stock, par value $.001 per share (the "Common Stock") of the Company or
securities convertible into, exercisable or exchangeable for or evidencing any
right to purchase or subscribe for any shares of Common Stock (either pursuant
to Rule 144 under the Securities Act of 1933, as amended, or otherwise) or
dispose of any beneficial interest therein without the prior written consent of
the President of the Company, except that the Undersigned may sell in brokerage
transactions in the aggregate (a) up to ten percent (10%) of the shares of
Common Stock owned beneficially or of record (the "Stock") during the period
from six (6) months after the date hereof (the "Closing Date") until twelve (12)
months thereafter, (b) an additional ten percent (10%) of the Stock during the
period from twelve (12) months after the Closing Date until eighteen (18) months
thereafter, (c) an additional ten percent (10%) of the Stock during the period
from eighteen (18) months after the Closing Date until twenty-four (24) months
thereafter, and (d) any remaining Stock after the second anniversary of the
Closing Date. The Undersigned further agrees that the Company is authorized to
place "stop orders" on its books to prevent any transfer of securities of the
Company by the Undersigned in violation of this Agreement. Notwithstanding the
foregoing, if any Common Stock is released from escrow to the Undersigned during
the Restricted Term in connection with Section 4.2 of the Purchase Agreement,
such shares of Common Stock so released shall not be subject to the foregoing
limitations on the amount of shares of Common Stock which the Undersigned may
Transfer.
<PAGE>
3. Reliance by the Company and Other Stockholders. The Undersigned
acknowledges that the Company is relying upon the agreements of the Undersigned
contained herein, and that the failure of the Undersigned to perform the
agreements contained herein could have a detrimental effect upon any proposed
offering. Accordingly, the Undersigned understands and agrees that the
Undersigned's agreements herein are irrevocable.
4. Miscellaneous.
(a) At any time, and from time to time, after the signing of this
Agreement, the Undersigned will execute such additional instruments and take
such action as may be reasonably requested by the Company to carry out the
intent and purposes of this Agreement.
(b) This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of New York, except to the extent that the
securities laws of the State in which the Undersigned resides and federal
securities laws may apply.
(c) This Agreement contains the entire agreement of the Undersigned
with respect to the subject matter hereof.
(d) This Agreement shall be binding upon the Undersigned, his legal
representatives, successors and assigns.
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<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have executed this Agreement as of the day and year first above written.
----------------------------------------
Name:
VIZACOM INC.
By:
--------------------------------------
Name:
Title:
[Form for Non-Directors]
LOCK-UP AGREEMENT
This AGREEMENT (the "Agreement") is made as of the 9th day of March, 2000,
between the undersigned former stockholder (the "Undersigned") of Junction 15
Limited, a United Kingdom company ("Junction") and Vizacom Inc., a Delaware
corporation (the "Company").
NOW, THEREFORE, for good and valuable consideration, including the
agreements by certain other former stockholders of Junction to be similarly
bound, the sufficiency and receipt of which consideration are hereby
acknowledged, the Undersigned agrees as follows:
1. Background. The Undersigned acknowledges that the Company has required,
and Junction has agreed to assist the Company in obtaining, agreements from all
former stockholders of Junction, to refrain from selling certain quantities of
securities of the Company for a period of up to twelve (12) months following the
completion of the acquisition (the "Acquisition") of all of the issued and
outstanding capital stock of Junction by the Company pursuant to the Share
Purchase Agreement (the "Purchase Agreement"), dated March 9, 2000, among the
Company, Junction and the Junction shareholders set forth therein. To induce the
Company to proceed with the Acquisition and other stockholders of Junction to
make similar agreements and as a condition to the closing of the Acquisition,
the Undersigned has entered into this Agreement.
2. Restriction. The Undersigned hereby agrees that from the closing of the
Acquisition to and including the date that is the earlier of 12 months
thereafter or registration for public resale by the undersigned under the
Securities Act of 1933, as amended (the "Restricted Term"), the Undersigned will
not, directly or indirectly, issue, offer to sell, grant an option for the sale
of, assign, transfer, pledge, hypothecate or otherwise encumber or dispose
(collectively, "Transfer") of any shares of common stock, par value $.001 per
share (the "Common Stock") of the Company or securities convertible into,
exercisable or exchangeable for or evidencing any right to purchase or subscribe
for any shares of Common Stock (either pursuant to Rule 144 under the Securities
Act of 1933, as amended, or otherwise) or dispose of any beneficial interest
therein without the prior written consent of the President of the Company. The
Undersigned further agrees that the Company is authorized to place "stop orders"
on its books to prevent any transfer of securities of the Company by the
Undersigned in violation of this Agreement. Notwithstanding the foregoing, if
any Common Stock is released from escrow to the Undersigned during the
Restricted Term in connection with Section 4.2 of the Purchase Agreement, such
shares of Common Stock so released shall not be subject to the foregoing
limitations on the amount of shares of Common Stock which the Undersigned may
Transfer.
3. Reliance by the Company and Other Stockholders. The Undersigned
acknowledges that the Company is relying upon the agreements of the Undersigned
contained herein, and that the failure of the Undersigned to perform the
agreements contained herein could have a
<PAGE>
detrimental effect upon any proposed offering. Accordingly, the Undersigned
understands and agrees that the Undersigned's agreements herein are irrevocable.
4. Miscellaneous.
(a) At any time, and from time to time, after the signing of this
Agreement, the Undersigned will execute such additional instruments and take
such action as may be reasonably requested by the Company to carry out the
intent and purposes of this Agreement.
(b) This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of New York, except to the extent that the
securities laws of the State in which the Undersigned resides and federal
securities laws may apply.
(c) This Agreement contains the entire agreement of the Undersigned
with respect to the subject matter hereof.
(d) This Agreement shall be binding upon the Undersigned, his legal
representatives, successors and assigns.
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<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have executed this Agreement as of the day and year first above written.
-----------------------------------
Name:
VIZACOM INC.
By:
--------------------------------
Name:
Title:
-3-
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 9, 2000, between Vizacom
Inc., a Delaware corporation (the "Company") and each of the stockholders of the
Company set forth on the signature page hereto (the "Stockholders").
WHEREAS, this Agreement has been entered into in connection with a Share
Purchase Agreement dated as of March 9, 2000 (the "Purchase Agreement"),
among the Company, each of the Selling Stockholders set forth on the signature
page thereto and Junction 15 Limited.
NOW, THEREFORE, it is agreed as follows:
1. Defined Terms. Each of the following terms shall have the following
meanings (such definitions to be applicable to both the plural and singular of
the terms defined):
(a) Registerable Securities. The term "Registerable Securities"
shall mean any of the shares of Capital Stock of the Company, including any
shares of Common Stock or other securities received in connection with any
stock split, stock dividend, merger, reorganization, recapitalization,
reclassification or other distribution payable or issuable upon shares of
Common Stock. For the purposes of this Agreement, securities will cease to
be Registerable Securities when (A) a registration statement under the
Securities Act covering such Registerable Securities has been declared
effective and such registration statement has been effective for nine (9)
months after the expiration of the period specified in section 2 of the
Lock-up Agreements of even date herewith between the Company and each of
Stockholders, (B) such Registerable Securities are distributed to the
public pursuant to the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act, including, but not limited
to, Rules 144 and 144A promulgated under the Securities Act, or (C) such
Registerable Securities have been otherwise transferred and the Company, in
accordance with applicable law and regulations, has delivered new
certificates or other evidences of ownership for such securities which are
not subject to any stop transfer order or other restriction on transfer.
(b) Rightsholders. The term "Rightsholders" shall include the
undersigned, all successors and assigns of the undersigned, and all
transferees of Registerable Securities where such transfer affirmatively
includes the transfer and assignment of the rights of the transferor
Rightsholder under this Agreement with respect to the transferred
Registerable Securities.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and
subsection, paragraph, clause, schedule and exhibit references are to this
Agreement unless otherwise specified.
(d) Capitalized terms used herein but not otherwise defined shall
have the meanings given to them in the Purchase Agreement.
<PAGE>
2. Piggy-Back Registration.
(a) If, at any time on or after the Closing Date and on or prior
to three years from the Closing Date, the Company proposes to file a
registration statement under the Securities Act with respect to an offering
by the Company or any other party of any class of equity security similar
to any Registerable Securities (other than a registration statement in
connection with an underwritten public offering of the Company's common
stock or a registration statement on Form S-4 or S-8 or any successor form
or a registration statement filed solely in connection with an exchange
offer, a business combination transaction or an offering of securities
solely to the existing stockholders or employees of the Company), then the
Company, on each such occasion, shall give written notice (each, a "Company
PiggyBack Notice") of such proposed filing to all of the Rightsholders
owning Registerable Securities at least 20 days before the anticipated
filing date of such registration statement, and such Company Piggy-Back
Notice also shall be required to offer to such Rightsholders the
opportunity to register such aggregate number of Registerable Securities as
each such Rightsholder may request. Each such Rightsholder shall have the
right, exercisable for the 10 days immediately following the giving of the
Company Piggy-Back Notice, to request, by written notice (each, a "Holder
Notice") to the Company, the inclusion of all or any portion of the
Registerable Securities of such Rightsholders in such registration
statement. The Company shall use reasonable efforts to cause the managing
underwriter(s) of a proposed underwritten offering to permit the inclusion
of the Registerable Securities which were the subject of all Holder Notices
in such underwritten offering on the same terms and conditions as any
similar securities of the Company included therein. Notwithstanding
anything to the contrary contained in this Paragraph 2(a), if the managing
underwriter(s) of such underwritten offering or any proposed underwritten
offering delivers a written opinion to the Rightsholders of Registerable
Securities which were the subject of all Holder Notices that the total
amount and kind of securities which they, the Company and any other person
intend to include in such offering is such as to materially and adversely
affect the success of such offering, then the amount of securities to be
offered for the accounts of such Rightsholders and persons other than the
Company shall be eliminated or reduced pro rata (based on the amount of
securities owned by such Rightsholders and other persons which carry
registration rights) to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount recommended by
such managing underwriter(s) in its written opinion.
(b) Demand Registration.
(i) Right to Demand. Subject to Paragraph 2(b)(ii) hereof, at any
time on or after twelve months after the Closing Date (or such earlier date
on which Registerable Securities are release from escrow in connection with
Section 4.2 of the Share Purchase Agreement) and on or prior to three years
from the Closing Date, the Initiating Holders (as defined in paragraph
2(b)(vi) below) may make a written request (each, a "Demand Request") to
the Company for registration under the Securities Act of all or part of
their Registerable Securities (each, a "Demand Registration"). Within ten
days after receipt of a Demand Request, the Company shall deliver a written
notice (the "Notice") of such Demand Request to all other
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<PAGE>
Rightsholders. The Company will include in such Demand Registration all
Registerable Securities with respect to which the Company has been given written
requests (each, "Tag-Along Request") for inclusion therein within twenty days
after the giving of the Notice. Each and every Demand Request shall be required
to specify the aggregate amount of the Registerable Securities to be included in
such Demand Registration, the amount of Registerable Securities to be registered
for each of the Initiating Holders and the intended method(s) of disposition
thereof, including whether or not such Demand Registration or portion thereof is
to relate to an underwritten offering, the name of the managing underwriter(s),
if any, and the terms of any such underwriting. Each and every Tag-Along Request
shall be required to specify the amount of Registerable Securities to be
registered in the Demand Registration and the intended method(s) of disposition
thereof, including whether or not the Registerable Securities subject to such
Tag-Along Request or portion thereof is to relate to an underwritten offering,
the name of the managing underwriter(s), if any, and the terms of any such
underwriting.
(ii) Number of Demand Registrations; Expenses. Subject to the
provisions of Paragraph 2(b)(iii) hereof, the holders of Registerable Securities
shall be entitled, in the aggregate, to one Demand Registration, the
Registration Expenses (as defined in Section 4 hereof) of which, subject to the
provisions of Section 4, shall be borne by the Company, but the Company shall
not be responsible for the payment of any underwriter's discount, commission or
selling concession in connection with any of the Registrable Securities. The
Company shall not be deemed to have effected a Demand Registration unless and
until such Demand Registration is declared effective.
(iii) Priority on Demand Registrations.
(A) Whenever the Company shall effect a Demand Registration in
connection with an underwritten offering by one or more Initiating Holders, no
other securities, including other Registerable Securities shall be included in
such Demand Registration, unless (1) the managing underwriter(s) with respect to
such Demand Registration shall have advised the Company and each Initiating
Holder whose Registerable Securities were included in the Demand Request, in
writing, that the inclusion of such other securities would not adversely affect
such underwritten offering or (2) each of the Initiating Holders shall each have
consented in writing to the inclusion of such other securities. In the event of
such written advice of the managing underwriter(s) or unanimous consent of such
Initiating Holders, the Company will include in such Demand Registration
securities in the following order of priority until the maximum number of
securities included in the written advice of the managing underwriter(s) or
unanimous consent of such Initiating Holders shall be reached: (1) first, pro
rata (based upon the amount of Registerable Securities) among the Registerable
Securities included in the Demand Request which are subject to the underwritten
offering, (2) second, pro rata (based upon the amount of Registerable
Securities) among the Registerable Securities of the other holders (each, a
"Rightsholder") of registration rights granted by the Company in connection with
the sale of the Shares who have given a Tag-Along Request with respect to such
Demand Registration where the method of distribution shall be pursuant to an
underwritten offering, (3) third, pro rata (based
-3-
<PAGE>
upon the amount of Registerable Securities) among all other Registerable
Securities included in the Demand Request and Tag-Along Request(s) and (4)
fourth, pro rata (based upon the amount of securities owned which carry
registration rights) among all other securities to which the Company has granted
registration rights and for which a request for inclusion in the Demand
Registration shall have been made.
(B) Whenever the Company shall effect a Demand Registration in
connection with an offering of Registerable Securities of Initiating Holders for
which the intended method(s) of distribution shall not include an underwritten
offering, and the holders of a majority of the Registerable Securities which
were subject to the Demand Request shall advise the Company in writing that, in
the opinion of such Initiating Holders, the number of securities proposed to be
sold in such Demand Registration would adversely affect such offering and the
Board of Directors of the Company concurs with such conclusion, the Company will
include in such Demand Registration securities in the following order of
priority until the maximum number of securities included in the written advice
of such Initiating Holders shall be reached: (1) first, pro rata (based upon the
amount of Registerable Securities) among the Registerable Securities included in
the Demand Request, (2) second, pro rata (based upon the amount of Registerable
Securities) among the Registerable Securities of the Rightsholders who have
given a Tag-Along Request with respect to such Demand Registration where the
method of distribution shall be pursuant to an underwritten offering, (3) third,
pro rata (based upon the amount of Registerable Securities) among all other
Registerable Securities included in the Demand Request and Tag-Along Request(s)
and (4) fourth, pro rata (based upon the amount of securities owned which carry
registration rights) among all other securities to which the Company has granted
registration rights and for which a request for inclusion in the Demand
Registration shall have been made.
(C) In the event that Initiating Holders and other Rightsholders
who have given a Tag-Along Request are unable to have registered the full amount
of Registerable Securities which they requested to be registered pursuant to a
Demand Request or Tag-Along Request, pursuant to the provisions of this Section
2(b), such Initiating Holders and other Rightsholders shall retain the right to
one Demand Registration with respect to such unregistered Registerable
Securities subject to such Demand Request and Tag-Along Request.
(iv) Delay in Effecting Demand Registration. Notwithstanding anything
in the foregoing to the contrary, the Company shall not be obligated to effect a
Demand Registration at any time when the Company, in the good faith judgment of
its Board of Directors made no later than 30 days after the giving of the Demand
Request with respect to such Demand Registration, reasonably believes that the
filing thereof at the time requested, or the offering of securities pursuant
thereto, would be materially detrimental to the interests of Company or its
stockholders. The effectuation of a Demand Registration cannot be suspended,
pursuant to the provisions of the preceding sentence, on more than one occasion
in any twelve-month period or for more than 120 days after the date of the
Board's determination referenced in the preceding sentence.
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<PAGE>
(v) Approval of Underwriter by the Company and Placement Agent. If
the Demand Registration is to involve an underwritten offering, the managing
underwriter(s) and each selling agent selected by those Rightsholders
participating in each such underwritten offering shall be subject to the written
approval of the Company, which approval may not be unreasonably withheld.
(vi) "Initiating Holders" Defined. For purposes of this Agreement, the
term "Initiating Holders" shall mean, on any given date, those Rightsholders
holding Registerable Securities which would aggregate 50% or more of the total
Registerable Securities that would be outstanding on such date.
(c) Number of Piggy-Back Registrations; Expenses. The obligations of
the Company under this Section 2 shall be unlimited with respect to each
Rightsholder. Subject to the provisions of Section 4 hereof, the Company will
pay all Registration Expenses in connection with any registration of
Registerable Securities effected pursuant to this Section 2, but the Company
shall not be responsible for the payment of any underwriter's discount,
commission or selling concession in connection therewith.
(d) Withdrawal or Suspension of Registration Statement.
Notwithstanding anything contained to the contrary in this Section 2, the
Company shall have the absolute right, whether before or after the giving of a
Company Piggy-Back Notice or Holder Notice, not to be obligated to fulfill the
requirements to file a registration statement to which the Rightsholders shall
have the right to include their Registerable Securities therein pursuant to this
Section 2, to withdraw such registration statement or to delay or suspend
pursuing the effectiveness of such registration statement for up to 180 days, if
the Board of Directors of the Company reasonably determines such action or
inaction to be in the best interests of the Company or required by law. In the
event of such a determination after the giving of a Company Piggy-Back Notice,
the Company shall give notice of such determination to all Rightsholders and,
thereupon, (i) in the case of a determination not to register or to withdraw
such registration statement, the Company shall be relieved of its obligation
under this Section 2 to register any of the Registerable Securities in
connection with such registration and (ii) in the case of a determination to
delay the registration, the Company shall be permitted to delay or suspend the
registration of Registerable Securities pursuant to this Section 2 for the same
period as the delay in the registration of such other securities. No
registration effected under this Section 2 shall relieve the Company of its
obligation to effect any registration upon demand otherwise granted to a
Rightsholder under any other agreement with the Company.
3. Registration Procedures.
(a) Obligations of the Company. The Company will, in connection with
any registration pursuant to Section 2 hereof, as expeditiously as possible:
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<PAGE>
(i) prepare and file with the Commission a registration statement
under the Securities Act on any appropriate form chosen by the Company, in its
sole discretion, which shall be available for the sale of all Registerable
Securities to be included for sale in accordance with the intended method(s) of
distribution thereof set forth in all applicable Holder Notices, and use its
commercially reasonable best efforts to cause such registration statement to
become effective as soon thereafter as reasonably practicable but in no event
more than 100 days after receipt of such notices or requests; provided, that,
(A) after such filing, the Company shall, as diligently as practicable, provide
to each such Rightsholders such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus), all exhibits
thereto and documents incorporated by reference therein and such other documents
as such Rightsholder may reasonably request in order to facilitate the
disposition of the Registerable Securities owned by such Rightsholder and
included in such registration statement; (B) the Company shall modify or amend
the registration statement as it relates to such Rightsholder as reasonably
requested by such Rightsholder on a timely basis, and shall reasonably consider
other changes to the registration statement (but not including any exhibit or
document incorporated therein by reference) reasonably requested by such
Rightsholder on a timely basis, in light of the requirements of the Securities
Act and any other applicable laws and regulations; and (C) that the obligation
of the Company to effect such registration and/or cause such registration
statement to become effective, may be postponed for (x) such period of time when
the financial statements of the Company required to be included in such
registration statement are not available (due solely to the fact that such
financial statements have not been prepared in the regular course of business of
the Company) or (y) any other bona fide corporate purpose, but then only for a
period not to exceed 120 days;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to a registration statement as may be necessary to
keep such registration statement effective for up to nine months; and cause the
related prospectus to be supplemented by any required prospectus supplement, and
as so supplemented to be filed to the extent required pursuant to Rule 424
promulgated under the Securities Act, during such nine-month period; and
otherwise comply with the provisions of the Securities Act with respect to the
disposition of all Registerable Securities covered by such registration
statement during the applicable period in accordance with the intended method(s)
of disposition of such Registerable Securities set forth in such registration
statement, prospectus or supplement to such prospectus;
(iii) notify the Rightsholders whose Registerable Securities are
included in such registration statement and the managing underwriter(s), if any,
of an underwritten offering of any of the Registerable Securities included in
such registration statement, and confirm such advice in writing, (A) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (B) of any request by the
Commission for amendments or supplements to a registration statement or related
prospectus or for additional information, (C) of the issuance by the Commission
of any stop order suspending the
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<PAGE>
effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (D) if at any time the representations and
warranties of the Company contemplated by clause (A) of Paragraph 3(a)(x) hereof
cease to be true and correct, (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any of the
Registerable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (F) of the happening of any
event which makes any statement made in the registration statement, the
prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the registration statement or prospectus
so that such registration statement, prospectus or document incorporated by
reference will not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) make reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement at the
earliest possible moment and to prevent the entry of such an order;
(v) use reasonable efforts to register or qualify the
Registerable Securities included in such registration statement under such other
securities or blue sky laws of such jurisdictions as any Rightsholder whose
Registrable Securities are included in such registration statement reasonably
requests in writing and do any and all other acts and things which may be
necessary or advisable to enable such Rightsholder to consummate the disposition
in such jurisdictions of such Registerable Securities; provided, that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Paragraph 3(a)(v), (B) subject itself to taxation in any such jurisdiction or
(C) take any action which would subject it to general service of process in any
such jurisdiction;
(vi) cooperate with the Rightsholder whose Registerable
Securities are included in such registration statement and the managing
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Registerable Securities to be sold thereunder, not
bearing any restrictive legends, and enable such Registerable Securities to be
in such denominations and registered in such names as such Rightsholder or any
managing underwriter(s) may reasonably request at least two business days prior
to any sale of Registerable Securities;
(vii) comply with all applicable rules and regulations of the
Commission and promptly make generally available to its security holders an
earnings statement covering a period of twelve months commencing, (A) in an
underwritten offering, at the end of any fiscal quarter in which Registerable
Securities are sold to underwriter(s), or (B) in a non-underwritten offering,
with the first month of the Company's first fiscal quarter beginning after the
effective date of such registration statement, which earnings statement in each
case shall satisfy the provisions of Section 11(a) of the Securities Act;
-7-
<PAGE>
(viii) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions
reasonably requested by the Rightsholders holding a majority of the Registerable
Securities included in such registration statement or the managing
underwriter(s) in order to expedite and facilitate the disposition of such
Registerable Securities and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
egistration, (A) make such representations and warranties, if any, to any
underwriter(s) with respect to the registration statement, prospectus and
documents incorporated by reference, if any, in form, substance and scope as
are customarily made by issuers to underwriter(s) in underwritten offerings and
confirm the same if and when requested, (B) obtain opinions of counsel to the
Company and updates thereof addressed to each such underwriter(s), if any, with
respect to the registration statement, prospectus and documents incorporated by
reference, if any, covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Rightsholders and underwriter(s), (C) obtain
a "cold comfort" letter and updates thereof from the Company's independent
certified public accountants addressed to the underwriter(s), if any, which
letters shall be in customary form and cover matters of the type customarily
covered in "cold comfort" letters by accountants in connection with underwritten
offerings, and (D) deliver such documents and certificates as may be reasonably
requested by the managing underwriter(s), if any, to evidence compliance with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company; each such action required by this
Paragraph 3(a)(x) shall be done at each closing under such underwriting or
similar agreement or as and to the extent required thereunder; and
(ix) if requested by the holders of a majority of the
Registerable Securities included in such registration statement, use its best
efforts to cause all Registerable Securities which are included in such
registration statement to be listed, subject to notice of issuance, by the date
of the first sale of such Registerable Securities pursuant to such registration
statement, on each securities exchange, if any, on which securities similar to
the Registered Securities are listed.
(b) Obligations of Rightsholders. In connection with any registration
of Registerable Securities of a Rightsholder pursuant to Section 2 hereof:
(i) The Company may require that each Rightsholder whose
Registerable Securities are included in such registration statement furnish to
the Company such information regarding the distribution of such Registerable
Securities and such Rightsholder as the Company may from time to time reasonably
request in writing; and
(ii) Each Rightsholder, upon receipt of any notice from the
Company of the happening of any event of the kind described in clauses (B), (C),
(E) and (F) of Paragraph 3(a)(iii) hereof, shall forthwith discontinue
disposition of Registerable Securities pursuant to the registration statement
covering such Registerable Securities until such Rightsholder's receipt of the
copies of the supplemented or amended prospectus contemplated by clause (A) of
Paragraph
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<PAGE>
3(a)(iii) hereof, or until such Rightsholder is advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may be
resumed, and until such Rightsholder has received copies of any additional or
supplemental filings which are incorporated by reference in or to be attached to
or included with such prospectus, and, if so directed by the Company, such
Rightsholder will deliver to the Company (at the expense of the Company) all
copies, other than permanent file copies then in the possession of such
Rightsholder, of the current prospectus covering such Registerable Securities at
the time of receipt of such notice; the Company shall have the right to demand
that such Rightsholder or other holder verify its agreement to the provisions of
this Paragraph 3(b)(ii) in any Holder Notice of the Rightsholder or in a
separate document executed by the Rightsholder.
4. Registration Expenses. All expenses incident to the performance of or
compliance with this Agreement by the Company, including, without imitation, all
registration and filing fees of the Commission, National Association of
Securities Dealers, Inc. and other agencies, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registerable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing, if any, of the
Registerable Securities on any securities exchange and fees and disbursements of
counsel for the Company and the Company's independent certified public
accountants (including the expenses of any special audit or "cold comfort"
letters required by or incidental to such performance), Securities Act or other
liability insurance (if the Company elects to obtain such insurance), the fees
and expenses of any special experts retained by the Company in connection with
such registration and the fees and expenses of any other person retained by the
Company (but not including any underwriting discounts or commissions
attributable to the sale of Registerable Securities or other out-of-pocket
expenses of the Rightsholders, or the agents who act on their behalf, unless
reimbursement is specifically approved by the Company) will be borne by the
Company. All such expenses are herein referred to as "Registration Expenses."
5. Indemnification: Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Rightsholder, its
officers and directors and each person who controls such Rightsholder (within
the meaning of the Securities Act), if any, and any agent thereof against all
losses, claims, damages, liabilities and expenses incurred by such party
pursuant to any actual or threatened suit, action, proceeding or investigation
(including reasonable attorney's fees and expenses of investigation) arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, except insofar as the same arise out of or are based upon, any such
untrue statement or omission
-9-
<PAGE>
based upon information with respect to such Rightsholder furnished in
writing to the Company by such Rightsholder expressly for use therein.
(b) Indemnification by Rightsholder. In connection with any
registration statement in which a Rightsholder is participating, each such
Rightsholder will be required to furnish to the Company in writing such
information with respect to such Rightsholder as the Company reasonably requests
for use in connection with any such registration statement or prospectus, and
each Rightsholder agrees to the extent it is such a holder of Registerable
Securities included in such registration statement, and each other such holder
of Registerable Securities included in such Registration Statement will be
required to agree, to indemnify, to the full extent permitted by law, the
Company, the directors and officers of the Company and each person who controls
the Company (within the meaning of the Securities Act) and any agent thereof,
against any losses, claims, damages, liabilities and expenses (including
reasonable attorney's fees and expenses of investigation incurred by such party
pursuant to any actual or threatened suit, action, proceeding or investigation
arising out of or based upon any untrue or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact necessary,
to make the statements therein (in the case of a prospectus, in the light of the
circumstances under which they are made) not misleading, to the extent, but only
to the extent, that such untrue statement or omission is based upon information
relating to such Rightsholder or other holder furnished in writing to the
Company expressly for use therein.
(c) Conduct of Indemnification Proceedings. Promptly after receipt by
an indemnified party under this Section 5 of written notice of the commencement
of any action, proceeding, suit or investigation or threat thereof made in
writing for which such indemnified party may claim indemnification or
contribution pursuant to this Agreement, such indemnified party shall notify in
writing the indemnifying party of such commencement or threat; but the omission
so to notify the indemnifying party shall not relieve the indemnifying party
from any liability which the indemnifying party may have to any indemnified
party (i) hereunder, unless the indemnifying party is actually prejudiced
thereby, or (ii) otherwise than under this Section 5. In case any such action,
suit or proceeding shall be brought against any indemnified party, and the
indemnified party shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and the
indemnifying party shall assume the defense thereof, with counsel reasonably
satisfactory to the indemnified party, and the obligation to pay all expenses
relating thereto. The indemnified party shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party has agreed to pay such
fees and expenses, (ii) the indemnifying party shall have failed to assume the
defense of such action, suit or proceeding or to employ counsel reasonably
satisfactory to the indemnified party therein or to pay all expenses relating
thereto or (iii) the named parties to any such action or proceeding (including
any impleaded parties) include both the indemnified party and the indemnifying
party and the indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to the indemnified party which are
different from or additional to those
-10-
<PAGE>
available to the indemnifying party and which may result in a conflict
between the indemnifying party and such indemnified party (in which case, if the
indemnified party notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action or proceeding on behalf of the indemnified party; it
being understood, however, that the indemnifying party shall not, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys at any time for
the indemnified party, which firm shall be designated in writing by the
indemnified party).
(d) Contribution. If the indemnification provided for in this Section
5 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and indemnified party, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and the
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages. liabilities
and expenses referred to above shall be deemed to include, subject to the
limitation set forth in Section 5(e), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Paragraph 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in clauses (i) and (ii) of the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) Limitation. Anything to the contrary contained in this Section
5(e) or in Section 6 notwithstanding, no holder of Registerable Securities shall
be liable for indemnification and contribution payments aggregating an amount in
excess of the maximum
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<PAGE>
amount received by such holder in connection with any sale of Registerable
Securities as contemplated herein.
6. Participation in Underwritten Registration. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such Rightsholder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and to comply with Regulation M under the Exchange Act and
(ii) completes and executes all questionnaires, appropriate and limited powers
of attorney, escrow agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangement;
provided, that all such documents shall be consistent with the provisions of
Section 4 hereof.
7. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8. Entire Agreement . This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein, (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (b) are not intended to confer upon any other person any rights or
remedies hereunder, except as set forth herein.
9. Severability . In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
10. Governing Law . This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the State of New York, in connection with any
matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by
the laws of the State of New York for such persons and waives and covenants not
to assert or plead any objection which they might otherwise have to such
jurisdiction and such process.
-12-
<PAGE>
11. Rules of Construction . The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
12. Assignment . No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
13. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented
without the written consent of each of the parties hereto. Any of the
Stockholders or the Company may, by written notice to the others, (i) waive any
of the conditions to its obligations hereunder or extend the time for the
performance of any of the obligations or actions of the other, (ii) waive any
inaccuracies in the representations of the other contained in this Agreement or
in any documents delivered pursuant to this Agreement, (iii) waive compliance
with any of the covenants of the other contained in this Agreement and (iv)
waive or modify performance of any of the obligations of the other. No action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action or compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
14. Notices. All notices, demands, requests, demands and other
communications required or otherwise given under this Agreement shall be in
writing and shall be deemed to have been duly given if: (a) delivered by hand
against written receipt therefor, (b) forwarded by a third party company or
governmental entity providing delivery services in the ordinary course of
business which guarantees delivery the following business day, (c) mailed by
registered or certified mail, return receipt requested, postage prepaid, or (d)
transmitted by facsimile transmission electronically confirmed for receipt, in
full, by the other party no later than 5:00 p.m., local time, on the date of
transmission, addressed as follows (i) If to the Company, to Vizacom Inc.,
Glenpointe Center East 300 Frank W. Burr Boulevard, Teaneck, New Jersey 07666;
Attention: President; Facsimile: (201) 928-1003: with a copy to: Kaufman &
Moomjian, LLC; 50 Charles Lindbergh Boulevard - Suite 206; Mitchel Field, New
York 11553; Attention: Neil M. Kaufman, Esq.; Facsimile: (516) 222-5110 and (ii)
if to the Stockholders, to the respective address set forth on the signature
pages hereof, with a copy to Finers Stephens Innocent; Attention: Peter Jay;
Facsimile: 44 (0) 207-323-4000, or (iii) in the case of any of the parties
hereto, at such other address as such party shall have furnished to each of the
other parties hereto in accordance with this Section 14. Each such notice,
demand, request or other communication shall be deemed given (i) on the date of
such delivery by hand, (ii) on the first business day following the date of such
delivery to the overnight delivery service or facsimile transmission or (iii)
three business days following such mailing.
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<PAGE>
15. Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
16. Further Assurances. Each party hereto covenants and agrees with all
other parties hereto to promptly execute, deliver, file and/or record such
agreements, instruments, certificates and other documents and to do and perform
such other and further acts and things as any other party hereto may reasonably
request or as may otherwise be necessary or proper to consummate and perfect the
transactions contemplated hereby.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by themselves or their duly authorized respective officers, all as of the
date first written above.
VIZACOM INC.
By: /s/ Mark E. Leininger
--------------------------------
Mark E. Leininger
President
STOCKHOLDERS
/s/ AR Simpson
------------------------------------
A R Simpson
Address:
/s/ DJL Price
------------------------------------
D J L Price
Address:
/s/ DL Street
------------------------------------
D L Street
Address:
/s/ HM Brown
------------------------------------
H M Brown
Address:
/s/ ICM McCalla
------------------------------------
I C M McCalla
Address:
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<PAGE>
/s/ IG Wiper
------------------------------------
I G Wiper
Address:
/s/ JL Harris
------------------------------------
J L Harris
Address:
/s/ L Fenlon
------------------------------------
L Fenlon
Address:
/s/ PJ Simpson
------------------------------------
P J Simpson
Address:
/s/ SM Lloyd
------------------------------------
S M Lloyd
Address:
COURT SERVICES LIMITED
By: /s/ GAC Jones /s/ NG Scott
--------------------------------
Name:
Title:
-16-
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 9th day of March, 2000 by and between Junction 15
Limited whose registered office is at 37 Warren Street, London, W1P 5PD (the
"Company") and Ian Charles Norris McCalla, an individual residing at 57
Streathbourne Road, London, SW17 8RA (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, this Agreement is intended to supersede and replace all prior
agreements, understandings and arrangements between or among the Company and the
Employee relating to the employment of the Employee.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the services of
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, and further subject to certain provisions hereof which
survive the term hereof, the term of this Agreement shall be comprised of a
three (3) year period of employment commencing on the date hereof.
3. Duties and Extent of Services During Period of Employment.
(a) During the term of employment, Employee shall be employed as
Managing Director of the Company or in such other equivalent executive positions
with the Company and/or its associated companies, which shall mean Vizacom Inc.
("Vizacom") being the Company's holding company and any company which is for the
time being a subsidiary of Vizacom ("Associated Companies" and each an
"Associated Company"), as may be determined by the Board of Directors of Vizacom
("the Board"). In such capacity, Employee agrees that he shall devote his full
time business efforts to serving the Company and Associated Companies under the
direction of the Board shall perform all duties incident to his position on
behalf of the Company to the best of his ability and shall perform such other
duties as may from time to time be assigned to him by the Board.
(b) The Company and Employee agree that Employee shall perform his
basic responsibilities and duties hereunder at the offices for the time being of
the Company in Greater London or elsewhere in the United Kingdom as the Company
and the Employee may agree; subject, however, to the travel requirements of his
position.
4. Remuneration. During the period of employment, Employee shall be
entitled to receive the following compensation for his services:
<PAGE>
(a) The Company shall pay to Employee a salary at an initial rate of
BP90,000 per annum for the first year commencing on the date hereof increasing
to BP100,000 per annum for the second and third years commencing on the first
anniversary of such date, payable in equal bi-weekly installments or in such
other manner as shall be consistent with the Company's payroll practices.
(b) (i) In addition to the salary provided in clause (a) above, not
later than one hundred twenty (120) days after the end of each fiscal year or
part thereof of the Company, the Company shall pay to Employee, as incentive
compensation, with respect to each fiscal year during the Term of this Agreement
the first such year beginning on 1 January 2000, a bonus which shall be payable
so long as the Employee remains employed by the Company.
The amount of the bonus shall be calculated as a proportion of the
Employee's salary for the time being hereunder ("Salary" ) according to the
extent to which the Company achieves the annual targets for Gross Profit of the
Base Business as set out in the business plans to be agreed between the Employee
and the Board (and as reviewed by agreement of the parties on any acquisition or
other addition to the Base Business or otherwise from time to time) on the
following basis:
% of Gross Profit achieved Bonus as % of Salary
-------------------------- --------------------
60 5
75 10
90 15
100 20
over 100 1/2% for each 1% over 100
(ii) For purposes of this Paragraph 4(b),
(A) "Base Business" shall mean the business conducted by
the Company, including any company, entity or other business acquired by or
merged or combined with the Company which carries on effectively the same
business;
(B) "Net Revenues" shall mean the net revenues of the
Base Business, net of returns, discounts and allowances, as computed in
accordance with generally accepted accounting principles in the United States
consistently applied with the accounting principles of the Company ("GAAP"),
but not including any amortization of goodwill;
(C) Gross Profit shall mean Net Revenues less cost of
goods sold or cost of sales computed as follows:
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<PAGE>
(I) The following items shall be included in the cost
of goods sold or cost of sales:
(1) all salaries, consulting fees and other compensation paid to website
development and other employees and consultants which provide the services or
produce the products of the Base Business; and
(2) all direct expenses which are properly considered part of cost of goods
sold or cost of sales under GAAP.
(II) The following items shall be excluded from cost of
goods sold or cost of sales:
(1) any management fee payable by Junction to the Company;
(2) any allocation of corporate overhead of the Company to Junction;
(3) any extraordinary items.
(D) The Company shall have sole authority and control over
the conduct of the Base Business, including without limitation, all decisions
relating to customers and accounts to be solicited, pricing and marketing
programs. In addition, the Company, in its sole discretion, may determine:
(1) to acquire the stock or assets or any other businesses or to otherwise
enter new businesses or to consolidate operations with the Company
or other subsidiaries of the Company in common facilities, or
(2) to terminate or sell the Base Business or any other business of Junction.
(E) The Company shall maintain separate accounting records
for the Base Business sufficient to compute the bonus set forth above.
(iii) The Company agrees to furnish to Employee a copy of
the Base Business' financial statements not later than one hundred twenty (120)
days after the end of each fiscal year of the Company during the term of
this Agreement, together with a notice containing the computation of the
bonus set forth above (the "Bonus Notice"). If the Employee does not agree
in good faith with the calculation of the bonus set forth in the Bonus Notice,
the Employee shall deliver a notice ("the Dispute Notice") to the Company
setting forth in detail the nature and extent of such disagreement within 30
days after the date of the Bonus Notice. If the Company and the Employee fail
to agree with respect thereto within 30 days after receipt by the Company of the
Dispute Notice, the dispute shall be referred to a national firm of
independent chartered accountants to be designated by the Company (which
shall not be the Company's regular
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<PAGE>
chartered accountant), subject to being reasonably acceptable to the
Employee (the "Independent Accountants"), for resolution within 30 days after
the referral of such dispute to the Independent Accountants. Each of the Company
and the Employee shall bear their own expenses with respect to any such dispute,
and each of the Company and the Employee shall bear one-half of the expenses of
the Independent Accountants in connection therewith.
(iv) In the event that any company, entity or business is
acquired by or merged or combined with the Company at any time during the term
of this Agreement, the percentages set forth in paragraph (i) above shall be
reduced by multiplying such percentages by a fraction the numerator of which
shall be the Net Revenues of the Company for the fiscal year immediately
preceding such event, and the denominator of which shall be an amount equal to
the sum of the numerator and the net revenues (computed on the same basis as is
set forth in paragraph (ii) above) for any such company, entity or business that
is acquired by or merged or combined with Junction.
In the event that this Agreement is terminated other than
pursuant to Section 9(a), the Employee shall be entitled to receive the amount
which would be payable under this clause (b) for each fiscal quarter of any
fiscal year prior to the date of such termination.
5. Employee Benefits; Expenses.
(a) During the term of this Agreement, the Company shall provide to
the Employee and his family the right to participate in the Company's then
existing medical and dental insurance and other employee benefit plans and
policies on the same terms as are then generally available to the Company's
executive and managerial employees.
(b) Employee shall be entitled to paid vacation each year during the
term of this Agreement at the rate of twenty (20) days per annum. Vacation shall
be taken each year and, if not taken, shall be carried over for one (1) year
and, if not taken during such carry-over period, shall be forfeited.
(c) The Corporation shall reimburse Employee, in accordance with the
practice followed from time to time for other executive and managerial officers
of the Company, for all reasonable and necessary business and traveling
expenses, and other disbursements incurred by Employee for or on behalf of the
Corporation in the performance of Employee's duties hereunder, upon presentation
by Employee to the Company of an appropriate accounting or documentation of
such.
(d) During the term of this Agreement, the Company shall make
employer contributions to the Company's Group Personal Pension Plan operated by
Scottish Mutual the greater of 10% of salary pursuant to clause 4(a) or on the
same terms as are then generally available to Vizacom's executive and managerial
employees.
-4-
<PAGE>
6. Disability. If Employee, during the period of employment, becomes
unable for any 90 consecutive days in any twelve-month period due to ill
health or other physical or mental incapacity, to perform his services
hereunder, the Company may thereafter, upon at least 60 days' written notice to
Employee, place Employee on disability status. After such action by the Company,
Employee shall no longer be entitled to receive any compensation hereunder
until the Employee returns to full-time status.
7. Confidential Information.
(a) In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important confidential or
proprietary data or information of the Company and its operations. Employee will
not during Employee's employment by the Company or at any time for a period of
five (5) years thereafter divulge or communicate to any person nor shall
Employee direct any employee, representative or agent of the Company or its
affiliates to divulge or communicate to any person or entity (other than to a
person or entity bound by confidentiality obligations similar to those contained
herein and other than as necessary in performing Employee's duties hereunder) or
use to the detriment of the Company or for the benefit of any other person or
entity, including without limitation any competitor, supplier, licensor,
licensee or customer of the Company , any of such confidential or proprietary
data or information or make or remove any copies thereof, whether or not marked
or otherwise identified as "confidential" or "secret." Employee shall take all
reasonable precautions in handling the confidential or proprietary data or
information within the Company to a strict need-to-know basis and shall comply
with any and all security systems and measures adopted from time to time by the
Company to protect the confidentiality of confidential or proprietary data or
information.
(b) The term "confidential or proprietary data or information" as
used in this Agreement shall mean information not generally available to the
public, including, without limitation, all database information, personnel
information, financial information, customer lists, account lists or
other account information, names, telephone numbers or addresses, supplier
lists, trade secrets, patented or proprietary information, forms,
information regarding products, operations, systems, methods, financing,
services, know how, computer and any other processed or collated data, computer
programs, pricing, marketing, media and advertising data.
(c) Employee will at all times promptly disclose to the Company in
such form and manner as the Company may reasonably require, any inventions,
improvements or procedural or methodological innovations, including without
limitation relating to programs, methods, forms, systems, services, designs,
marketing ideas, products or processes (whether or not capable of being
trademarked, copyrighted or patented) conceived or developed or created by
Employee during or in connection with Employee's employment hereunder and which
relate to the business of the Company ("Intellectual Property"). Employee agrees
that all such Intellectual Property shall be the sole property of the Company.
Employee further agrees that Employee will execute such instruments and perform
such acts as may reasonably be requested by the Company
-5-
<PAGE>
to transfer to and perfect in the Company all legally protectable rights in
such Intellectual Property.
(d) All written materials, books, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or considered by the Company or
otherwise concerning the business or affairs of the Company, including without
limitation any files, customer records such as names, telephone numbers and
addresses, lists, firm records, brochures and literature, shall be the sole
property of the Company, shall not be removed from the Company's premises by the
Employee, and upon termination of Employee's employment by the Company, or upon
request of the Company during Employee' s employment by the Company, Employee
shall promptly deliver the same to the Company. In addition, upon termination of
Employee's employment by the Company, Employee will deliver to the Company all
other Company property in Employee's possession or under Employee's control,
including, but not limited to, financial statements, marketing and sales data,
customer and supplier lists, account lists and other account information,
database information and other documents, and any Company credit cards.
(e) The Employee acknowledges that the covenants contained in this
Section 7 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 7 may be inadequate and that the violation of any of the covenants
contained in this Section 7 will cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, without
the necessity of showing any actual damage or irreparable harm or the posting of
any bond or furnishing of other security, and that such injunctive relief shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. The covenants in this Section 7 shall run in favor of
the Company and its successors and assigns. In addition, the Employee agrees to
pay the Company the costs it incurs, including reasonable attorneys' fees and
expenses, in bringing and prosecuting any proceeding to enforce the terms of
this Agreement.
(f) The provisions of this Section 7 shall survive the termination of
this Employment Agreement.
8. Non-Competition.
(a) During the term of this Agreement and for one year thereafter (the
"Restricted Period"), the Employee shall not, without the written consent of the
Company, directly or indirectly,
-6-
<PAGE>
(i) become engaged, concerned or interested in, render services
to, invest in, represent, advise or otherwise participate in as an officer,
employee, director, stockholder, partner, promoter, agent of, consultant for or
otherwise, any business which is conducted in any of the jurisdictions in which
the Company's other business is conducted and which is competitive with the
business conducted by the Company or any business of an Associated Company in
which Employee materially participated, including without limitation the design,
development or implementation of Internet web sites, applications, strategies,
integration, intranets, extranets or customer service; provided, that this
Section 8(a)(i) shall not prohibit the Employee from purchasing or owning as a
passive investment up to three percent (3%) of the outstanding capital stock of
a company which is listed or authorized for trading on any recognised securities
exchange, Nasdaq or the OTC Electronic Bulletin Board as amended;
(ii) for the Employee's own account or for the account of any
other person or entity (A) interfere with the relationship of the Company or any
of the Associated Companies in which the Employee is materially involved with
any of their respective suppliers, customers, accounts, brokers, representatives
or agents or (B) contact, telephone, meet, solicit or transact any business with
any customer, account or supplier of the Company who or which transacts or has
transacted business with the Company at any time during the term of this
Agreement or such customer, account or supplier of an Associated Company with
whom the Employee has had any material contact or dealings; or
(iii) employ or otherwise engage, or solicit, entice or induce on
behalf of the Employee or any other person or entity, the services, retention or
employment of any person who has been an employee, principal, partner,
stockholder, sales representative, trainee, consultant to or agent of the
Company within one year of the date of such offer or solicitation.
(b) Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such violation,
including but not limited to any injunctive or other equitable relief or the
recovery of damages from the Employee.
(c) The Employee acknowledges that the covenants contained in this
Section 8 are fair and reasonable in order to protect the Company's business and
the business of the Associated Companies and were a material and necessary
inducement for the Company to agree to the terms of this Agreement. The Employee
further acknowledges that any remedy at law for any breach or threatened or
attempted breach of the covenants contained in this Section 8 may be inadequate
and that the violation of any of the covenants contained in this Section 8 will
cause irreparable and continuing damage to the Company. Accordingly, the Company
shall be entitled to specific performance or any other mode of injunctive and/or
other equitable relief to enforce its rights hereunder, including without
limitation an order restraining any further violation of such covenants, or any
other relief a court might award, without the necessity of showing any actual
damage or irreparable harm or the posting of any bond or furnishing of other
security, and that such injunctive relief shall be cumulative and in addition to
any other rights or remedies to which the Company may be entitled. The covenants
in this Section 8 shall run in favor of the
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<PAGE>
Company and its successors and assigns. In addition, the Employee agrees to
pay the Company the costs it incurs, including reasonable attorneys' fees and
expenses, in bringing and prosecuting any proceeding to enforce the terms of
this Agreement.
(d) In case any one or more of the terms or provisions contained in
this Section 8 shall for any reason be held invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this
Section 8. In addition, if any one or more of the restrictions contained in this
Section 8 shall for any reason be held to be unreasonable with regard to time,
duration, geographic scope or activity, the parties contemplate and hereby agree
that such restriction shall be modified and shall be enforced to the full extent
compatible with applicable law. The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
(e) The provisions of this Section 8 shall survive the termination of
this Employment Agreement.
9. Termination.
(a) The Company may terminate the Employee's services hereunder "for
cause" by delivering to Employee not less than ten (10) days prior to the date
on which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the cause. For
the purposes of this agreement, "for cause" shall mean; (i) any act of
dishonesty, fraud or embezzlement materially adversely affecting the financial,
market, reputation or other interests of the Company, or any affiliate thereof,
(ii) in the event that the Company places Employee on disability status pursuant
to Section 6 hereof more than once during the term hereof, (iii) in the event of
a conviction of the Employee for any felony or other serious crime materially
adversely affecting the Company, or any knowing violation of any English or
United States federal or state securities law or regulation, (iv) repeated
failure to perform Employee's duties hereunder after notice and thirty (30) days
to cure such failure, (v) any material breach by the Employee of this Agreement
after notice and thirty (30) days to cure such failure, or (vi) the death of the
Employee.
(b) If the Company terminates Employee's employment hereunder for any
reason other than "for cause" as set forth in Section 9(a) hereof, (i) the
Company shall pay to the Employee compensation pursuant to Sections 4(a) and
4(b) (and for these purposes the Net
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<PAGE>
Revenues of the Base Business with respect to each remaining fiscal year
during the term of this Agreement shall be deemed to be equal to 120% of such
Net Revenues for each immediately preceding fiscal year) hereof at the time and
in the manner provided for herein and (ii) the obligations of the Employee
pursuant to Section 8 of this Agreement shall terminate, and no other
compensation payable hereunder shall be payable to the Employee. If the Company
terminates Employee's employment hereunder "for cause" as set forth in Section
9(a) hereof, Employee shall not be entitled to receive any further compensation
hereunder. Employee and the Company acknowledge that the foregoing provisions of
this paragraph 9(b) are reasonable and are based upon the facts and
circumstances of the parties at the time of entering into this Agreement, and
with due regard to future expectations.
(c) The Employee may terminate this Agreement with effect from the
second anniversary of the date hereof subject to giving to the Company not less
than one hundred and eighty (180) days prior to the date on which the
termination is to be effective, a written notice of termination. The provisions
of Sections 4(a) and 4(b) shall continue unaffected up to the date of
termination.
10. Notices. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to it at Glenpointe Center East, 300 Frank W.
Burr Boulevard, Box 18, 7th Floor, Teaneck, New Jersey 07666, Attention:
President, or to such other address as the Company may hereafter designate, and
a copy to Neil M. Kaufman, Esq., Kaufman & Moomjian, LLC, 50 Charles Lindbergh
Boulevard, Suite 206, Mitchel Field, New York 11553. Any notice to be given to
Employee hereunder shall be delivered or mailed by certified or registered mail
to Employee at the address set forth at the head of this Agreement or such other
address as he may hereafter designate.
11. Successors and Assigns; Third Party Beneficiaries. This Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
Company, and unless clearly inapplicable, all references herein to the Company
shall be deemed to include any such successor. In addition, this Agreement shall
be binding upon and inure to the benefit of the Employee and his heirs,
executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company. In the event of any
consolidation or merger of the Company into or with any other corporation during
the term of this Agreement, or the sale of all or substantially all of the
assets of the Company to another corporation, person or entity during the term
of this Agreement, such successor corporation shall assume this Agreement and
become obligated to perform all of the terms and provisions hereof applicable to
the Company, and Employee's obligations hereunder shall continue in favor of
such successor corporation.
12. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.
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<PAGE>
13. Prior Agreements Superseded. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement relating thereto.
14. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the England and Wales, without regard to
conflicts of laws.
15. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
16. Waiver. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent or excuse shall be
in writing and signed by the party claimed to have waived, consented or excused.
A consent, waiver or excuse of any breach shall not constitute a consent to,
waiver or, or excuse of any other or subsequent breach whether or not of the
same kind of the original breach.
17. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.
18. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement, has had an opportunity to consult counsel regarding this Agreement
and hereby represents and warrants to the Company that Employee's entering into
this Agreement, and the obligations and duties undertaken by Employee hereunder,
will not conflict with, constitute a breach of or otherwise violate the terms of
any other agreement to which Employee is a party and that Employee is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.
19. Schedule. The provisions of the Schedule (which form part of this
Agreement) set out certain particulars of employment required to be given for
the purposes of the Employment Rights Act 1996.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SIGNED by ) /s/ Mark E. Leininger
on behalf of JUNCTION 15 LIMITED )
in the presence of: )
Witness signature: /s/
Name:
Address:
Occupation:
SIGNED by the said ) /s/ Ian Charles Norris McCalla
IAN CHARLES NORRIS MCCALLA )
in the presence of: )
Witness signature: /s/-
Name:
Address:
Occupation:
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<PAGE>
THE SCHEDULE
In accordance with the Employment Rights Act 1996, the following terms of the
Employee's employment are hereby stated to apply on the date of execution of
this Agreement:
(a) Commencement of employment
--------------------------
May 1999 . No employment with a previous employer counts
as part of the Employee's continuous period of employment.
(b) Hours of work
-------------
See Section 3. There are no fixed hours of work.
(c) Holidays
--------
See Section 5. If the appointment terminates during the course of the
holiday year the Employee will be entitled in respect of accrued holiday pay to
a sum equal to that proportion of 20 days' remuneration which the number of
complete calendar months he has worked during that year bears to twelve less one
day's salary for each day's holiday taken during that year. If this calculation
produces a negative amount a sum equal to that amount will be deduced from the
Employee's final salary payment.
(d) Pension
-------
A contracting out certificate is not in force in respect of the Employee's
employment.
(e) Disciplinary Procedure
----------------------
1. All disciplinary procedures will take place in a private location and will
be completely confidential.
2. If Employee's conduct or performance does not meet acceptable standards
following informal warnings Employee may be given a formal verbal warning.
3. If the offence is more serious or if there is no improvement following
a verbal warning Employee may be given a written warning.
4. If there is no improvement following a final written warning, Employee may
be dismissed.
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<PAGE>
5. In the event of allegations of gross misconduct Employee may be suspended
on pay so that the Company can investigate the circumstances. Gross misconduct
will normally result in dismissal, although, in exceptional circumstances
Employee may be suspended without pay for up to 5 days and given a final
warning.
6. The sorts of offence that the Company considers to be gross
misconduct include theft, fraud, failure to follow company procedure for
dealing with customers and customer records, being under the influence
of drink or non-prescribed drugs while at work, fighting and physical
assault, refusal to carry out a reasonable instruction from your manager or
supervisor, smoking in no smoking areas, racial or sexual harassment, serious
negligence resulting in unacceptable loss or risk of injury, falsification
or misuse of time cards, non-attendance at work without reasonable excuse.
This list is for Employee's guidance and is not exhaustive.
(f) Appeals Procedure
-----------------
Appeals against disciplinary action should be made within 5 days to the
Board (or controller on his/her absence), in writing. The Board will conduct a
further hearing before giving a decision, which will be final.
(g) Grievance Procedure
-------------------
1. The aim of the grievance procedure is to provide an open and fair way
for Employee to make known Employee's complaints, and to have these
complaints considered fairly and objectively by the Company.
2. Issues should first be raised informally with Employee's supervisor. If
there is no agreement at this stage it should then be raised with Employee's
manager.
3. Employee's manager will arrange a meeting and make a decision within
7 working days, holidays permitting. This decision will be final.
4. At this second stage Employee may be accompanied by a colleague if
Employee wishes.
(h) Collective Agreement
-------------------
There is no collective agreement applicable to the Employee's employment.
13
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 9th day of March, 2000 by and between Junction 15
Limited whose registered office is at 37 Warren Street, London W1P 5PD (the
"Company") and Paul John Simpson, an individual residing at 29 Downside Road,
Headington, Oxford, OX3 8HP (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, this Agreement is intended to supersede and replace all prior
agreements, understandings and arrangements between or among the Company and the
Employee relating to the employment of the Employee.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the services of
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, and further subject to certain provisions hereof which
survive the term hereof, the term of this Agreement shall be comprised of a
three (3) year period of employment commencing on the date hereof.
3. Duties and Extent of Services During Period of Employment.
(a) During the term of employment, Employee shall be employed as a
Director of the Company or in such other equivalent executive positions with the
Company and/or its associated companies, which shall mean Vizacom Inc.
("Vizacom") being the Company's holding company and any company which is for the
time being a subsidiary of Vizacom ("Associated Companies and each an
"Associated Company"), as may be determined by the Board of Directors of Vizacom
("the Board"). In such capacity, Employee agrees that he shall devote his full
time business efforts to serving the Company and Associated Companies under the
direction of the Board shall perform all duties incident to his position on
behalf of the Company to the best of his ability and shall perform such other
duties as may from time to time be assigned to him by the Board.
(b) The Company and Employee agree that Employee shall perform his
basic responsibilities and duties hereunder at the offices for the time being of
the Company in Greater London or elsewhere in the United Kingdom as the Company
and the Employee may agree; subject, however, to the travel requirements of his
position.
4. Remuneration. During the period of employment, Employee shall be
entitled to receive the following compensation for his services:
<PAGE>
(a) The Company shall pay to Employee a salary at an initial rate of
BP50,000 per annum payable in equal bi-weekly installments or in such other
manner as shall be consistent with the Company's payroll practices. Such salary
shall be reviewed (upwards only) on the first and second anniversary of this
Agreement.
(b) (i) In addition to the salary provided in clause (a) above, the
Company shall pay to Employee, sales commission with respect to each financial
quarter or part thereof during the Term of this Agreement equal to 9% of Net
Revenues from new or incremental business generated to the Base Business by
Employee after the date of this Agreement. Such commission shall be payable so
long as the Employee remains employed by the Company. The terms of the
commission entitlement (including the rate thereof) shall be reviewed annually
by the Company as at the end of each fiscal year to reflect changes in actual
and expected Net Revenues but the commission entitlement shall be varied only by
agreement of the Board and the Employee.
(ii) For purposes of this Paragraph 4(b),
(A) "Base Business" shall mean the business conducted by the
Company, including any company, entity or other business acquired by or merged
or combined with Junction which carries on effectively the same business;
(B) "Net Revenues" shall mean the net revenues of the Base
Business, net of returns and/or any value added resale of hardware, discounts
and allowances, as computed in accordance with generally accepted accounting
principles in the United States consistently applied with the accounting
principles of the Company ("GAAP"), but not including any amortization of
goodwill;
(C) The Company shall have sole authority and control over
the conduct of the Base Business, including without limitation, all decisions
relating to customers and accounts to be solicited, pricing and marketing
programs. In addition, the Company, in its sole discretion, may determine:
(1) to acquire the stock or assets or any other businesses
or to otherwise enter new businesses or to consolidate operations with the
Company or other subsidiaries of the Company in common facilities, or
(2) to terminate or sell the Base Business or any other
business of Junction.
(D) The Company shall maintain separate accounting records
for the Base Business sufficient to compute the commission set forth above.
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<PAGE>
(iii) The Company shall pay to Employee within 30 days after the
end of each financial quarter during the term of this Agreement, the commission
due in respect of such quarter accompanied by a notice containing the
computation of the commission set forth above (the "Commission Notice") for such
quarter. If the Employee does not agree in good faith with the calculation of
the commission set forth in the Commission Notice, the Employee shall deliver a
notice ("the Dispute Notice") to the Company setting forth in detail the nature
and extent of such disagreement within 30 days after the date of the Commission
Notice. If the Company and the Employee fail to agree with respect thereto
within 30 days after receipt by the Company of the Dispute Notice, the dispute
shall be referred to a national firm of independent chartered accountants to be
designated by the Company (which shall not be the Company's regular chartered
accountant), subject to being reasonably acceptable to the Employee (the
"Independent Accountants"), for resolution within 30 days after the referral of
such dispute to the Independent Accountants. Each of the Company and the
Employee shall bear their own expenses with respect to any such dispute, and
each of the Company and the Employee shall bear one-half of the expenses of the
Independent Accountants in connection therewith.
(iv) In the event that this Agreement is terminated other than
pursuant to Section 9(a), the Employee shall be entitled to receive the amount
which would be payable under this clause (b) for each financial quarter or part
of financial quarter prior to the date of such termination together with a final
payment of commission to be agreed between the Board and the Employee having
regard to business generated by the Employee but not yet invoiced but taking
into account the cost of work to be done by the Company for that business to be
invoiced (the amount of such final commission to be referred to the Independent
Accountants for resolution under Section 4(b)(iii) if not so agreed).
5. Employee Benefits; Expenses.
(a) During the term of this Agreement, the Company shall provide to
the Employee and his family the right to participate in the Company's then
existing medical and dental insurance and other employee benefit plans and
policies on the same terms as are then generally available to the Company's
executive and managerial employees.
(b) Employee shall be entitled to paid vacation each year during the
term of this Agreement at the rate of twenty (20) days per annum. Vacation shall
be taken each year and, if not taken, shall be carried over for one (1) year
and, if not taken during such carry-over period, shall be forfeited.
(c) The Corporation shall reimburse Employee, in accordance with the
practice followed from time to time for other executive and managerial officers
of the Company, for all reasonable and necessary business and traveling
expenses, and other disbursements incurred by Employee for or on behalf of the
Corporation in the performance of Employee's duties hereunder, upon presenta
tion by Employee to the Company of an appropriate accounting or documentation of
such.
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<PAGE>
(d) During the term of this Agreement, the Company shall make employer
contributions to the Company's Group Pension Plan operated by Scottish Mutual
the greater of 10% of salary pursuant to clause 4(a) or on the same terms as are
then generally available to Vizacom's executive and managerial employees.
6. Disability. If Employee, during the period of employment, becomes
unable for any 90 consecutive days in any twelve-month period due to ill health
or other physical or mental incapacity, to perform his services hereunder, the
Company may thereafter, upon at least 60 days' written notice to Employee, place
Employee on disability status. After such action by the Company, Employee shall
no longer be entitled to receive any compensation hereunder until the Employee
returns to full-time status.
7. Confidential Information.
(a) In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important confidential or
proprietary data or information of the Company and its operations. Employee will
not during Employee's employment by the Company or at any time for a period of
five (5) years thereafter divulge or communicate to any person nor shall
Employee direct any employee, representative or agent of the Company or its
affiliates to divulge or communicate to any person or entity (other than to a
person or entity bound by confidentiality obligations similar to those contained
herein and other than as necessary in performing Employee's duties hereunder) or
use to the detriment of the Company or for the benefit of any other person or
entity, including without limitation any competitor, supplier, licensor,
licensee or customer of the Company , any of such confidential or proprietary
data or information or make or remove any copies thereof, whether or not marked
or otherwise identified as "confidential" or "secret." Employee shall take all
reasonable precautions in handling the confidential or proprietary data or
information within the Company to a strict need-to-know basis and shall comply
with any and all security systems and measures adopted from time to time by the
Company to protect the confidentiality of confidential or proprietary data or
information.
(b) The term "confidential or proprietary data or information" as
used in this Agreement shall mean information not generally available to the
public, including, without limitation, all database information, personnel
information, financial information, customer lists, account lists or other
account information, names, telephone numbers or addresses, supplier lists,
trade secrets, patented or proprietary information, forms, information regarding
products, operations, systems, methods, financing, services, know how, computer
and any other processed or collated data, computer programs, pricing, marketing,
media and advertising data.
(c) Employee will at all times promptly disclose to the Company in
such form and manner as the Company may reasonably require, any inventions,
improvements or procedural or methodological innovations, including without
limitation relating to programs, methods, forms, systems, services, designs,
marketing ideas, products or processes (whether or
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<PAGE>
not capable of being trademarked, copyrighted or patented) conceived or
developed or created by Employee during or in connection with Employee's
employment hereunder and which relate to the business of the Company
("Intellectual Property"). Employee agrees that all such Intellectual Property
shall be the sole property of the Company. Employee further agrees that Employee
will execute such instruments and perform such acts as may reasonably be
requested by the Company to transfer to and perfect in the Company all legally
protectable rights in such Intellectual Property.
(d) All written materials, books, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or considered by the Company or
otherwise concerning the business or affairs of the Company, including without
limitation any files, customer records such as names, telephone numbers and
addresses, lists, firm records, brochures and literature, shall be the sole
property of the Company, shall not be removed from the Company's premises by the
Employee, and upon termination of Employee's employment by the Company, or upon
request of the Company during Employee's employment by the Company, Employee
shall promptly deliver the same to the Company. In addition, upon termination of
Employee's employment by the Company, Employee will deliver to the Company all
other Company property in Employee's possession or under Employee's control,
including, but not limited to, financial statements, marketing and sales data,
customer and supplier lists, account lists and other account information,
database information and other documents, and any Company credit cards.
(e) The Employee acknowledges that the covenants contained in this
Section 7 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 7 may be inadequate and that the violation of any of the covenants
contained in this Section 7 will cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, without
the necessity of showing any actual damage or irreparable harm or the posting of
any bond or furnishing of other security, and that such injunctive relief shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. The covenants in this Section 7 shall run in favor of
the Company and its successors and assigns. In addition, the Employee agrees to
pay the Company the costs it incurs, including reasonable attorneys' fees and
expenses, in bringing and prosecuting any proceeding to enforce the terms of
this Agreement.
(f) The provisions of this Section 7 shall survive the termination of
this Employment Agreement.
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<PAGE>
8. Non-Competition.
(a) During the term of this Agreement and for one year thereafter
(the "Restricted Period"), the Employee shall not, without the written consent
of the Company, directly or indirectly:
(i) become engaged, concerned or interested in, render services
to, invest in, represent, advise or otherwise participate in as an officer,
employee, director, stockholder, partner, promoter, agent of, consultant for or
otherwise, any business which is conducted in any of the jurisdictions in which
the Company's other business is conducted and which is competitive with the
business conducted by the Company or any business of an Associated Company which
Employee materially participated, including without limitation the design,
development or implementation of Internet web sites, applications, strategies,
integration, intranets, extranets or customer service; provided, that this
Section 8(a)(i) shall not prohibit the Employee from purchasing or owning as a
passive investment up to three percent (3%) of the outstanding capital stock of
a company which is listed or authorized for trading on any recognised securities
exchange, Nasdaq or the OTC Electronic Bulletin Board as amended;
(ii) for the Employee's own account or for the account of any
other person or entity (A) interfere with the relationship of the Company or any
of the Associated Companies in which the Employee is materially involved with
any of their respective suppliers, customers, accounts, brokers, representatives
or agents or (B) contact, telephone, meet, solicit or transact any business with
any customer, account or supplier of the Company who or which transacts or has
transacted business with the Company at any time during the term of this
Agreement or any such customer, account or supplier of an Associated Company
with whom the Employee has had any material contact or dealings; or
(iii) employ or otherwise engage, or solicit, entice or
induce on behalf of the Employee or any other person or entity, the services,
retention or employment of any person who has been an employee, principal,
partner, stockholder, sales representative, trainee, consultant to or agent of
the Company or Junction within one year of the date of such offer or
solicitation.
(b) Nothing herein contained shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such violation,
including but not limited to any injunctive or other equitable relief or the
recovery of damages from the Employee.
(c) The Employee acknowledges that the covenants contained in this
Section 8 are fair and reasonable in order to protect the Company's business and
the business of the Associated Companies and were a material and necessary
inducement for the Company to agree to the terms of this Agreement. The Employee
further acknowledges that any remedy at law for any breach or threatened or
attempted breach of the covenants contained in this Section 8 may be inadequate
and that the violation of any of the covenants contained in this Section 8 will
cause
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<PAGE>
irreparable and continuing damage to the Company. Accordingly, the Company
shall be entitled to specific performance or any other mode of injunctive and/or
other equitable relief to enforce its rights hereunder, including without
limitation an order restraining any further violation of such covenants, or any
other relief a court might award, without the necessity of showing any actual
damage or irreparable harm or the posting of any bond or furnishing of other
security, and that such injunctive relief shall be cumulative and in addition to
any other rights or remedies to which the Company may be entitled. The covenants
in this Section 8 shall run in favor of the Company and its successors and
assigns. In addition, the Employee agrees to pay the Company the costs it
incurs, including reasonable attorneys' fees and expenses, in bringing and
prosecuting any proceeding to enforce the terms of this Agreement.
(d) In case any one or more of the terms or provisions contained in
this Section 8 shall for any reason be held invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this
Section 8. In addition, if any one or more of the restrictions contained in this
Section 8 shall for any reason be held to be unreasonable with regard to time,
duration, geographic scope or activity, the parties contemplate and hereby agree
that such restriction shall be modified and shall be enforced to the full extent
compatible with applicable law. The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
(e) The provisions of this Section 8 shall survive the termination of
this Employment Agreement.
9. Termination.
(a) The Company may terminate the Employee's services hereunder "for
cause" by delivering to Employee not less than ten (10) days prior to the date
on which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the cause. For
the purposes of this agreement, "for cause" shall mean; (i) any act of
dishonesty, fraud or embezzlement materially adversely affecting the financial,
market, reputation or other interests of the Company, or any affiliate thereof,
(ii) in the event that the Company places Employee on disability status pursuant
to Section 6 hereof more than once during the term hereof, (iii) in the event of
a conviction of the Employee for any felony or other serious crime materially
adversely affecting the Company, or any knowing violation of any English or
United States federal or state securities law or regulation, (iv) repeated
failure to
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<PAGE>
perform Employee's duties hereunder after notice and thirty (30) days
to cure such failure, (v) any material breach by the Employee of this Agreement
after notice and thirty (30) days to cure such failure, or (vi) the death of
the Employee.
(b) If the Company terminates Employee's employment hereunder for any
reason other than "for cause" as set forth in Section 9(a) hereof, (i) the
Company shall pay to the Employee compensation pursuant to Sections 4(a) and
4(b) (and for these purposes the Net Revenues of the Base Business with respect
to each remaining fiscal year during the terms of this Agreement shall be deemed
to be equal to 120% of such Net Revenues for each immediately preceding fiscal
year) hereof at the time and in the manner provided for herein and (ii) the
obligations of the Employee pursuant to Section 8 of this Agreement shall
terminate, and no other compensation payable hereunder shall be payable to the
Employee. If the Company terminates Employee's employment hereunder "for cause"
as set forth in Section 9(a) hereof, Employee shall not be entitled to receive
any further compensation hereunder. Employee and the Company acknowledge that
the foregoing provisions of this paragraph 9(b) are reasonable and are based
upon the facts and circumstances of the parties at the time of entering into
this Agreement, and with due regard to future expectations.
(c) The Employee may terminate this Agreement with effect from the
second anniversary of the date hereof subject to giving to the Company not less
than one hundred and eighty (180) days prior to the date on which the
termination is to be effective, a written notice of termination. The provisions
of Sections 4(a) and 4(b) shall continue unaffected up to the date of
termination.
10. Notices. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to it at Glenpointe Center East, 300 Frank W.
Burr Boulevard, Box 18, 7th Floor, Teaneck, New Jersey 07666, Attention:
President, or to such other address as the Company may hereafter designate, and
a copy to Neil M. Kaufman, Esq., Kaufman & Moomjian, LLC, 50 Charles Lindbergh
Boulevard, Suite 206, Mitchel Field, New York 11553. Any notice to be given to
Employee hereunder shall be delivered or mailed by certified or registered mail
to Employee at the address set forth at the head of this Agreement or such other
address as he may hereafter designate.
11. Successors and Assigns; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company, and unless clearly inapplicable, all references herein to the
Company shall be deemed to include any such successor. In addition, this
Agreement shall be binding upon and inure to the benefit of the Employee and his
heirs, executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company. In the event of any
consolidation or merger of the Company into or with any other corporation during
the term of this Agreement, or the sale of all or substantially all of the
assets of the Company to another corporation, person or entity during
-8-
<PAGE>
the term of this Agreement, such successor corporation shall assume this
Agreement and becomeobligated to perform all of the terms and provisions hereof
applicable to the Company, and Employee's obligations hereunder shall continue
in favor of such successor corporation.
12. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.
13. Prior Agreements Superseded. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement relating thereto.
14. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the England and Wales, without regard to
conflicts of laws.
15. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
16. Waiver. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent or excuse shall be
in writing and signed by the party claimed to have waived, consented or excused.
A consent, waiver or excuse of any breach shall not constitute a consent to,
waiver or, or excuse of any other or subsequent breach whether or not of the
same kind of the original breach.
17. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.
18. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement, has had an opportunity to consult counsel regarding this Agreement
and hereby represents and warrants to the Company that Employee's entering into
this Agreement, and the obligations and duties undertaken by Employee hereunder,
will not conflict with, constitute a breach of or otherwise violate the terms of
any other agreement to which Employee is a party and that Employee is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.
19. Schedule. The provisions of the Schedule (which form part of this
Agreement) set out certain particulars of employment required to be given for
the purposes of employment Rights Act 1996.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SIGNED by )
on behalf of JUNCTION 15 LIMITED ) /s/ Mark E. Leininger
in the presence of: )
Witness signature: /s/
Name:
Address:
Occupation:
SIGNED by the said )
PAUL JOHN SIMPSON ) /s/ Paul John Simpson
in the presence of: )
Witness signature: /s/
Name:
Address:
Occupation:
-10-
<PAGE>
THE SCHEDULE
In accordance with the Employment Rights Act 1996, the following terms of the
Employee's employment are hereby stated to apply on the date of execution of
this Agreement:
(a) Commencement of employment
--------------------------
November 1998. No employment with a previous employer counts as part of the
Employee's continuous period of employment.
(b) Hours of work
-------------
See Section 3. There are no fixed hours of work.
(c) Holidays
--------
See Section 5. If the appointment terminates during the course of the
holiday year the Employee will be entitled in respect of accrued holiday pay to
a sum equal to that proportion of 20 days' remuneration which the number of
complete calendar months he has worked during that year bears to twelve less one
day's salary for each day's holiday taken during that year. If this calculation
produces a negative amount a sum equal to that amount will be deduced from the
Employee's final salary payment.
(d) Pension
-------
A contracting out certificate is not in force in respect of the Employee's
employment.
(e) Disciplinary Procedure
----------------------
1. All disciplinary procedures will take place in a private location and will
be completely confidential.
2. If Employee's conduct or performance does not meet acceptable standards
following informal warnings Employee may be given a formal verbal warning.
3. If the offence is more serious or if there is no improvement following a
verbal warning Employee may be given a written warning.
4. If there is no improvement following a final written warning, Employee may
be dismissed.
-11-
<PAGE>
5. In the event of allegations of gross misconduct Employee may be suspended
on pay so that the Company can investigate the circumstances. Gross misconduct
will normally result in dismissal, although, in exceptional circumstances
Employee may be suspended without pay for up to 5 days and given a final
warning.
6. The sorts of offence that the Company considers to be gross
misconduct include theft, fraud, failure to follow company procedure
for dealing with customers and customer records, being under the
influence of drink or non-prescribed drugs while at work, fighting and
physical assault, refusal to carry out a reasonable instruction from your
manager or supervisor, smoking in no smoking areas, racial or sexual
harassment, serious negligence resulting in unacceptable loss or risk of
injury, falsification or misuse of time cards, non-attendance at work
without reasonable excuse. This list is for Employee's guidance and is not
exhaustive.
(f) Appeals Procedure
-----------------
Appeals against disciplinary action should be made within 5 days to the
Board Director (or controller on his/her absence), in writing. The Board will
conduct a further hearing before giving a decision, which will be final.
(g) Grievance Procedure
-------------------
1. The aim of the grievance procedure is to provide an open and fair way
for Employee to make known Employee's complaints, and to have these
complaints considered fairly and objectively by the Company.
2. Issues should first be raised informally with Employee's supervisor. If
there is no agreement at this stage it should then be raised with Employee's
manager.
3. Employee's manager will arrange a meeting and make a decision within
7 working days, holidays permitting. This decision will be final.
4. At this second stage Employee may be accompanied by a colleague if
Employee wishes.
(h) Collective Agreement
--------------------
There is no collective agreement applicable to the Employee's employment.
-12-
CHURCHILL CONSULTING
Suite One, Henville Building, Main Street, Charleston
Nevis, West Indies
Telephone: 869-469-0200
Facsimile: 869-469-0201
March 15, 2000
Vizacom Inc.
Glenpointe Centre East
300 Frank W. Burr Boulevard - 7th Floor
Teaneck, New Jersey 07666
Re: Loan Facility
Gentlemen:
This letter will serve to confirm and memorialize our agreement to
modify and extend the $1,000,000 loan facility arrangement (the "Facility")
being provided by Churchill Consulting ("Churchill") to Vizacom Inc. (the
"Company"), as evidenced by that certain letter agreement, dated January 8, 2000
(the "Original Letter Agreement"), between Churchill and the Company, and that
certain Line of Credit Note, dated January 8, 2000 (the "Original Note" and,
collectively with the Original Letter Agreement, the "Original Loan Documents"),
of the Company, payable to Churchill and in the principal amount of $1,000,000.
Our agreement to modify and extend the Facility is as follows:
1. Notwithstanding the terms of the Original Loan Documents,
the Facility will terminate, and Original Note will mature, on January 7,
2002 (the "Extended Termination Date");
2. The $1,000,000 draw down on the Facility, which was made
on February 17, 2000, must be paid in full, together with all accrued and
unpaid interest due Churchill from the Company, on the earlier of (a) April
17, 2000 or (b) three business days following the Company's receipt of
gross proceeds from any offering of equity securities of the Company in an
amount equal to $2,000,000 or more (in either case, the "Original
Repayment").
3. If the Original Repayment is made in accordance with the
terms of clause 2 above, and notwithstanding the terms of the Original Loan
Documents, Churchill will extend the Facility to the Extended Termination
Date and, during the period commencing on the date of the Original
Repayment and through the date 180 days prior to the Extended Termination
Date, the Company may, from time to time and in whole or part, draw down
upon the Facility and repay amounts so drawn down; provided, however, that
at
<PAGE>
no time will the principal amount of loans under the Facility exceed
$1,000,000.
4. After the Original Repayment, each and every drawn down
on the Facility shall be due and payable 180 days after the date of such
draw down.
5. Except as specifically provided in this letter agreement,
all of the terms and conditions of the Original Loan Documents shall remain
in effect.
If the foregoing accurately sets forth our agreement, please sign
where indicated below.
CHURCHILL CONSULTING
By: /s/ Paul Stark
------------------------
Name: Paul Stark
Title: Agent
Accepted and agreed as of the
date first above written:
VIZACOM INC.
By: /s/ Mark E. Leininger
---------------------------------------
Mark E. Leininger
President and Chief Executive Officer
- ---------------------------------------------------------------- VIZACOM
Media and Investor Contact:
Wendy Bost
[email protected]
201-928-1001 x12
IMMEDIATE RELEASE
VIZACOM INC. ACQUIRES U.K.-BASED DIGITAL DESIGN
COMPANY JUNCTION 15
EXPANDS E-COMMERCE SERVICES BUSINESS IN GROWING
EUROPEAN MARKETS
TEANECK, NEW JERSEY - MARCH 10, 2000 - VIZACOM INC. (NASDAQ: VIZY), a
multinational provider of turnkey e-commerce services, today announced that it
has acquired JUNCTION 15 Limited, a privately-held, London-based, digital
design and communications company specializing in Web site development,
business-to-business e-commerce systems, and digital business building. The
acquisition reflects the Company's roll-up strategy to acquire cutting-edge
European and U.S. e-commerce services providers to enhance the range of
e-commerce services solutions it provides to Internet businesses.
"We are enormously pleased to welcome Junction 15 as the latest edition to our
growing network of wholly-owned e-commerce services companies," said Mark E.
Leininger, President and CEO of Vizacom Inc. "Junction 15's progressive
Internet development solutions provide significant competitive advantages that
we believe enhance Vizacom's long-standing presence in the U.K. and extend the
range of quality services we provide on an international scale."
"The European market for B2B and B2C e-commerce services is growing rapidly,"
said Ian McCalla, Managing Director of Junction 15, "and we at Junction 15
believe that Vizacom's value-added e-commerce services strategy will propel it
to a leadership position serving Internet businesses in Europe as well as
abroad. We are very excited to join this unique business, and
<PAGE>
look forward to the opportunities our relationship with Vizacom may provide to
Junction 15's growth initiatives."
Junction 15 Ltd. was acquired in a common stock and cash transaction. Ian
McCalla will continue to act as Managing Director of Junction 15 Ltd. to pursue
both organic and acquisition growth initiatives. Assisting in the transaction
was London-based corporate finance advisors Alberdale & Co., Ltd.
([email protected] ).
ABOUT JUNCTION 15 LIMITED
Founded in June 1996, Junction 15 Limited (www.j15.com) specializes in the
delivery of objective-led Web projects for corporate and non-profit
organizations. The company's design and technology staff strives to create
successful Web businesses for its clients by integrating strategic marketing,
graphic design and Internet technology expertise into a coherent solution. Its
clients span a wide range of industries, and include the Harbour Club, Youngs
Brewery and other well-known European businesses. Recent projects include
developing an interactive e-commerce book, video and CD-ROM store for e-tailer
Books@Once, and creating an interactive database that works in conjunction with
Dun & Bradstreet's online network for Kemps Gold, an online business directory
and advertising service provider. Junction 15 is headquartered in London, with
active sales offices in Oxford and Chester, England.
ABOUT VIZACOM INC.
Vizacom Inc. (NASDAQ: VIZY), www.vizacom.com, is a multinational provider of
turnkey business-to-business and business-to-consumer e-commerce services.
Leveraging its international network of wholly owned subsidiaries and
relationships with leading e-commerce services providers, Vizacom Inc. provides
turnkey and standalone solutions that meet the development, marketing, customer
service, and fulfillment requirements of today's leading-edge Internet
businesses. Key features include multilingual Web-enabled customer service call
centers, award- winning Internet development and digital design services,
e-business building, marketing, and order fulfillment. Vizacom recently
acquired Renaissance Multimedia, a digital design company headquartered in New
York City's Silicon Alley, and has agreed to acquire New York-based interactive
integrator PWR Systems. Additionally, Vizacom Inc. operates Internet commerce
network VisualCities.com, and publishes the award-winning Harvard Graphics and
Serif software products. Founded in 1992, Vizacom Inc. is headquartered in New
Jersey, U.S., and operates through its subsidiaries in the U.S. and Europe.
SAFE HARBOR STATEMENT
Except for historical information, the matters set forth herein which are
forward-looking statements involve certain risks and uncertainties that could
cause actual results to differ. Potential risks and uncertainties include, but
are not limited to, the market acceptance and amount of sales of the Company's
products and services, the extent that the Company's direct marketing
operations achieve satisfactory response rates, the ability of the Company to
obtain sufficient supplies of marketable products and services, the competitive
environment within the Company's industries, the Company's ability to raise
additional capital, the Company's ability to develop, acquire or license
marketable products, services and successful businesses, the success of the
Company's expansion into Internet service offerings and other Internet programs
such as Web site design, Web-enabled customer service, systems integration and
other e-commerce services, the extent that the Company is able to generate
e-commerce revenues from, build membership in, and
2
<PAGE>
implement technological enhancements to, its VisualCities.com Internet commerce
network, and the Company's ability to integrate the operations of its
businesses. Investors are directed to consider other risks and uncertainties as
discussed in documents filed by the Company with the SEC.
3
