June 12, 2001
Firstream SAS
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx
Dear Xx. Xxxxx
This letter agreement (the "Letter Agreement")confirms the agreement between
Firstream SAS ("Firstream") and Marketing Services Group, Inc. ("MSGi" or the
"Company") in connection with the strategic alliance and investment entered into
pursuant to a letter agreement dated February 13, 2001.
The initial investment by Firstream consisted of $3 million. $2 million
represented the purchase of 1,500,000 unregistered shares of MSGi common stock
and a warrant to purchase up to 400,000 shares of MSGi common stock at an
exercise price of $3.00 per share for a period of two years. The remaining $1
million was a prepaid amount for future services (the "Credit") to be provided
by MSGi and its subsidiaries to Firstream or any of its directly or indirectly
controlled subsidiaries. Firstream, or any of its directly or indirectly
controlled subsidiaries, and MSGi or any of its subsidiaries will enter into
separate contracts for the services to be provided. Third party expense that
Firstream may desire (for example requiring that MSGi purchase paper or external
data on Firstream's behalf) will remain an obligation of Firstream at all times.
In connection with the services to be provided by any wholly owned subsidiary of
MSGi, MSGi warrants and represents that it maintains, with insurance companies
with a Best's rating of B+ or above, and naming Firstream or any of its directly
or indirectly controlled subsidiaries (as applicable) as an additional insured
(and containing a waiver of subrogation with respect to Client and its
affiliates), the following coverages: (a) Worker's Compensation and Employer's
Liability, with the greater of a $1,000,000 aggregate limit or minimum statutory
limits; (b) Commercial General Liability, with minimum limits of $1,000,000 per
occurrence for bodily injury, death, or property damage; (c) Business Automobile
Liability (including owned, non-owned and hired vehicles), with minimum limits
of $1,000,000 per occurrence for bodily injury, death or property damage; and
(d) Professional Liability Insurance (including broad form contractual coverage)
with minimum limits consistent with industry standards, protecting MSGi and its
subsidiaries from errors and omissions of MSGi and its subsidiaries in
connection with the services during and for a period of at least three (3) years
after the completion of all such services. Upon Firstream's request, or the
reasonable request of any of Firstream's directly or indirectly controlled
subsidiaries, as applicable, MSGi will furnish to the requesting entity original
Certificates of Insurance evidencing the above-described coverages and/or copies
of such policies. The foregoing certificates will also specify date(s) when such
insurance expires and will further provide for thirty (30) days' prior
notification to Firstream of cancellation or material change in coverage. MSGi
will deliver renewal certificates to Firstream prior to the expiration dates of
all policies noted therein. MSGi will maintain all such insurance in full force
and effect at all times during
the term of any contracts between Firstream and MSGi's subsidiaries. MSGi's
insurance coverage required by all the foregoing provisions will at all times be
primary and not contributing or excess.
Firstream or any of its directly or indirectly controlled subsidiaries may
terminate the service contracts referred to above with MSGi and/or its
subsidiary if there is a transfer of a majority of the common capital stock
(51%) of MSGi, in a single transaction or a series of transactions; or if there
is a transfer of the business and/or substantially all of the assets (greater
than 90%) of MSGi; or if MSGi merges with or into any other entity, subject to
the following provisions. If MSGi has reason to believe that such a stock
transfer has occurred, or will occur in the reasonably foreseeable future, or if
MSGi proposes to make a transfer of its business and/or substantially all of its
assets, or to enter into a merger transaction, it shall give written notice
thereof to Firstream. Within twenty (20) business days after receiving such
notice, Firstream shall give MSGi written notice stating whether Firstream
approves or disapproves any such transfer or merger or any such proposed
transfer or proposed merger, and, in the case of disapproval, whether Firstream
exercises its right of termination hereunder if the transfer or merger has
already occurred or will exercise its right of termination if the proposed
transfer or proposed merger is subsequently made.
If the contractual relationship between MSGi and Firstream is terminated for any
reason, before the Credit has been exhausted, then within 45 days of such
termination, MSGi shall pay and reimburse to Firstream any unexhausted portion
of the Credit.
Firstream may assign or otherwise transfer the full ownership and title of all
or part of the Credit to any entity controlled directly or indirectly by
Firstream. The transferee of the Credit shall become automatically party to the
present agreement (i.e., the full contractual relationship between Firstream and
MSGi) and benefit from all the rights and obligations of Firstream.
MSGi warrants to Firstream that MSGi is not presently under, nor will it enter
into in the future, any agreement, commitment, understanding or other
obligation, whether written or oral, which is inconsistent or in conflict with
this Letter Agreement or would in any way or to any extent prevent, limit or
otherwise impair the performance by MSGi of any of its obligations hereunder or
in connection herewith.
MSGi warrants to Firstream that MSGi possesses full power, authority and all
rights necessary to enter into this Letter Agreement and carry out its
obligations hereunder.
If you are in agreement with the terms of this letter, please sign on the space
provided below and return to MSGi.
Sincerely,
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Chairman and CEO
Accepted the __th day of June 2001
By: /s/ Etienne Mouthon
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Name: Etienne Mouthon
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Title: Director
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