EXHIBIT E
THIS OPTION AGREEMENT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
ACTS OF ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD, TRANSFERRED, OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SECURITIES UNDER THE ACT OR SUCH STATE SECURITIES ACTS OR AN
OPINION SATISFACTORY TO THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR SUCH STATE SECURITIES ACTS.
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "AGREEMENT"), is made of August 1, 2002 by
and between Alternate Marketing Networks, Inc., a Delaware corporation ("NEW
ALTM"), and Xxxx Xxxx.
RECITALS
WHEREAS, Alternate Marketing Networks, Inc., a Michigan corporation,
New ALTM, ALTM Combination Co., a Delaware corporation, Hencie, Inc., a Delaware
corporation, Xxxx Xxxx, and the Stockholders (as defined below) have entered
into that certain Amended and Restated Agreement and Plan of Reorganization
dated as of May 31, 2002 (the "REORGANIZATION AGREEMENT") (any and all
capitalized terms used and not otherwise defined in this Agreement shall have
the meaning(s) ascribed to such term(s) in the Reorganization Agreement); and
WHEREAS, New ALTM and Xxxx Xxxx have entered into that certain
Employment Agreement, dated as of the date hereof (the "EMPLOYMENT AGREEMENT"),
pursuant to Section 6.1.12 of the Reorganization Agreement; and
WHEREAS, Section 6.1.12 of the Reorganization Agreement and Section
1.4(c) of the Employment Agreement require New ALTM to grant Xxxx Xxxx a stock
option (the "OPTION") to purchase shares of New ALTM Common Stock;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the agreements,
representations, warranties, and covenants contained herein, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. Any and all capitalized terms used and not otherwise
defined in this Agreement shall have the meaning(s) ascribed to such term(s) in
the Reorganization Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"BENEFICIALLY OWNED" and "BENEFICIALLY OWN" shall have the meanings
ascribed to such terms under Rule 13d-3 of the Exchange Act.
"EXERCISE DATE" shall have the meaning ascribed to such term in Section
5.2(a) of this Agreement.
"EXERCISE NOTICE" shall have the meaning ascribed to such term in
Section 5.2(a) of this Agreement.
"EXERCISE PRICE" shall mean an amount equal to (a) the number of Option
Shares being purchased upon any exercise of the Option multiplied by (b) the
market price per share of New ALTM Common Stock as of the Exercise Date.
"OPTION SHARES" shall have the meaning ascribed to such term in Section
2.1 of this Agreement.
"OTHER PROPERTY" shall have the meaning ascribed to such term in
Section 7.3 of this Agreement.
"PARTY" or "PARTIES" shall mean, respectively, each or all of the
signatories to this Agreement and their permitted successors and assigns.
ARTICLE II
OPTION
2.1 Term. Subject to the terms and conditions of this Agreement, New
ALTM hereby grants to Xxxx Xxxx an option to purchase in whole, or in part,
280,593 shares of New ALTM Common Stock (the "OPTION SHARES" which shall be
equal to and represent three percent (3%) of the issued and outstanding shares
of post-First Closing New ALTM Common Stock on a fully-diluted basis determined
immediately following the First Closing as if all of the Option Shares and any
and all other securities, options, warrants, rights, calls, commitments, plans,
contracts, or other agreements of any character granted or issued by ALTM or New
ALTM which are convertible into or exchangeable or exercisable for any share(s)
of New ALTM Common Stock had been converted, exchanged, and exercised) at the
Exercise Price at any time, or from time to time, prior to April 30, 2003.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of New ALTM. New ALTM hereby
represents and warrants to Xxxx Xxxx that:
(a) Corporate Existence and Authority. New ALTM is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware. New ALTM has all requisite
corporate power and authority to own its properties and assets and to
carry on its business as it has been and is being conducted. New ALTM
is qualified to do business as a foreign corporation and is in good
standing in each state, nation, or other jurisdiction wherein the
character of the properties owned or held under lease by it or the
nature of the business transacted by it makes such qualification
necessary, except for any state, nation or other jurisdiction where the
failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect on New ALTM.
(b) Validity and Authorization; Corporate Power and Authority.
New ALTM has full corporate power and authority to execute, deliver,
and perform this Agreement and the other instruments called for by this
Agreement. This Agreement has been duly authorized, executed, and
delivered by New ALTM and constitutes the legal, valid, and binding
obligation of New
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ALTM, enforceable against New ALTM in accordance with its terms, except
as such enforcement may be limited by the Equitable Defenses.
(c) Execution; No Violations. The execution and delivery of
this Agreement by New ALTM does not, and the consummation by New ALTM
of the transactions contemplated hereby shall not (a) violate, conflict
with, modify, result in the incurrence of any prepayment penalties, or
cause any default under or acceleration of (or give any party any right
to declare any default or acceleration upon notice or passage of time
or both), in whole or in part, any articles or certificate of
incorporation, bylaw, Lien, indenture, lease, agreement, instrument,
order, injunction, decree, or judgment to which New ALTM is a party or
by which New ALTM or any of its properties are bound, (b) result in the
creation of any Lien on any property or asset (whether real, personal,
mixed, tangible, or intangible) of New ALTM, (c) violate any law, rule,
or regulation applicable to New ALTM, or (d) permit any federal or
state regulatory agency to impose any restrictions or limitations of
any nature on New ALTM or any of its activities, except in each case as
would not reasonably be expected to have a Material Adverse Effect on
New ALTM.
ARTICLE IV
VESTING
4.1 Vesting. The Option may be exercised only to the extent it has
become vested. The Option shall become immediately and fully vested and
exercisable:
(a) if the Adjusted EBITDA of Hencie for the fiscal year ended
December 31, 2002 exceeds the Adjusted EBITDA of Hencie for the fiscal
year ended December 31, 2001,
(b) if Xxxx Xxxx shall be terminated or constructively
terminated, in each case without Cause, as Chief Executive Officer of
New ALTM,
(c) if Xxxx Xxxx shall become Disabled (as defined in the
Employment Agreement), or
(d) upon a Change of Control (as defined in the Employment
Agreement).
4.2 Calculation of Adjusted EBITDA. In order to determine whether the
Option shall have become vested and exercisable pursuant to and in accordance
with Section 4.1(a) of this Agreement, New ALTM shall use its commercially
reasonable efforts to cause Hencie to calculate, and to deliver notice to Xxxx
Xxxx of, its Adjusted EBITDA for the fiscal year ended December 31, 2002 on or
prior to January 15, 2003.
ARTICLE V
EXERCISE OF OPTION
5.1 Exercise of Option. The Option shall be exercisable in accordance
with the vesting provisions contained in Article IV of this Agreement and this
Article V.
5.2 Manner of Exercise.
(a) Subject to the terms and conditions of this Agreement,
Xxxx Xxxx may at any time, or from time to time, exercise the Option,
on any Business Day, for any or all of the Option Shares exercisable
hereunder. In order to exercise the Option, Xxxx Xxxx shall (i) deliver
to New ALTM, at the address listed in (or, if applicable, provided
pursuant to) Section 9.1 of this
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Agreement, written notice of Xxxx Xxxx'x election to exercise the
Option (each, an "EXERCISE NOTICE") duly executed by Xxxx Xxxx or his
duly authorized agent or attorney, in substantially the form attached
hereto as Exhibit A, which shall be irrevocable and shall specify the
number of Option Shares to be purchased and (ii) pay to New ALTM the
Option Price (the date on which any such delivery and payment shall
have taken place, the "EXERCISE DATE").
(b) Upon receipt by New ALTM of such Exercise Notice and
Option Price, New ALTM shall, as promptly as practicable, and in any
event within two (2) Business Days after the Exercise Date, deliver to
Xxxx Xxxx (or the escrow agent, as applicable,) a certificate or
certificates (the "EXERCISED OPTION SHARE CERTIFICATE(s)") representing
the aggregate number of full shares of New ALTM Common Stock purchased
by Xxxx Xxxx pursuant to the exercise of the Option (the "EXERCISED
OPTION SHARES") together with cash in lieu of any fractional share, as
hereinafter provided. The Exercised Option Share Certificate(s) so
delivered shall be, to the extent possible, (i) issued in the name of
Xxxx Xxxx and (ii) in such denomination(s) as Xxxx Xxxx may reasonably
request in the Exercise Notice. New ALTM shall register the Exercised
Option Shares in its books and records in the name of Xxxx Xxxx. The
Option shall be deemed to have been exercised, such Exercised Option
Share Certificate(s) shall be deemed to have been transferred, and Xxxx
Xxxx shall be deemed to have become a holder of record of such
Exercised Option Shares for all purposes as of the Exercise Date.
(c) Payment of the Exercise Price may be made as follows (or
by any combination of the following):
(i) in United States currency by cash or delivery of
a certified check, bank draft, or postal or express money
order payable to the order of New ALTM,
(ii) by surrender by Xxxx Xxxx of a number of shares
of New ALTM Common Stock, which shares of New ALTM Common
Stock have been owned and held by Xxxx Xxxx for at least one
(1) year prior to the Exercise Date, equal to the quotient
obtained by dividing (A) the Exercise Price payable with
respect to the portion of the Option then being exercised by
(B) the market value per share of New ALTM Common Stock on the
Exercise Date,
(iii) by waiver by Xxxx Xxxx of any compensation owed
to Xxxx Xxxx pursuant to the Employment Agreement equal to the
Exercise Price, or
(iv) by Xxxx Xxxx making and delivering a promissory
note and security agreement to New ALTM in substantially the
forms attached hereto as Exhibit B-1 and Exhibit B-2,
respectively; provided, however, that the principal amount of
the note shall not exceed the maximum amount allowable under
Regulation U promulgated by the Board of Governors of the
Federal Reserve System.
(d) If the Option shall have been exercised in part, New ALTM
shall, at the time of delivery of the Exercised Option Share
Certificate(s) representing the Exercised Option Shares being
transferred, deliver to Xxxx Xxxx a new option evidencing the rights of
Xxxx Xxxx to purchase the unexercised shares of New ALTM Common Stock
under the Option. Such new option shall be identical to the Option in
all other respects.
5.3 Escrow Requirement.
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(a) If, upon exercise of the option, the dispute(s) or
Proceedings regarding the Edge Promissory Note (collectively, the "EDGE
PROCEEDINGS") have not been resolved, then the Exercised Option Shares
shall be placed in escrow pursuant to an escrow agreement in
substantially the form attached hereto as Exhibit C (the "ESCROW
AGREEMENT") until resolution of the Edge Proceedings in order to
provide for indemnification for any Losses in excess of the Threshold
Amount (as defined below) that New ALTM actually incurs or to which New
ALTM becomes subject, that arise, either directly or indirectly, as a
result of any and all amounts owed by Hencie to Edge in connection with
the Edge Promissory Note; provided, however, that this Section 5.3
shall not apply in the event that the Option vests other than as
provided in Section 4.1(a) of this Agreement. As used herein, the term
"THRESHOLD AMOUNT" shall mean the amount determined to be owed by
Hencie to Edge in excess of the sum of (i) $1,400,000, (ii) interest on
such amount, and (iii) reasonable attorneys' fees incurred in
connection with any continuing litigation, negotiations, and/or
settlement of the Edge Proceedings.
(b) During the term of the Escrow Agreement, Xxxx Xxxx shall
have and retain the right to vote the Exercised Option Shares and any
Distributions, as applicable, in the Escrow Fund on any and all matters
on which stockholders of New ALTM shall be entitled to vote and, unless
otherwise provided by this Agreement or the Escrow Agreement, shall
have and enjoy all the rights and benefits incident to ownership of the
Exercised Option Shares.
(c) New ALTM shall delegate to the Board of Directors of
Hencie all control and decision-making authority to resolve and/or
settle any continuing negotiations and settlement of the Edge
Proceedings; provided, however, that, notwithstanding the foregoing, if
any settlement of any Edge Proceedings shall involve any shares of New
ALTM Common Stock or Hencie Common Stock and/or options and/or warrants
to acquire New ALTM Common Stock or Hencie Common Stock, then such
settlement shall be subject to the joint control and decision-making
authority of New ALTM and the Board of Directors of Hencie and shall be
mutually agreeable to New ALTM and the Board of Directors of Hencie.
(d) Subject to the terms and conditions of this Agreement and
Section 6.1.12 of the Reorganization Agreement, any Exercised Option
Shares held in escrow may be released as set forth in the Escrow
Agreement upon settlement of the Edge Proceedings.
5.4 Legend. The following legend shall be placed on all Exercised
Option Share Certificates transferred to Xxxx Xxxx (or the escrow agent, as
applicable, or any successor thereto) hereunder:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR THE SECURITIES ACTS OF ANY STATE. THE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THESE SECURITIES UNDER THE ACT OR
SUCH STATE SECURITIES ACTS OR AN OPINION SATISFACTORY TO THE
COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT OR SUCH STATE SECURITIES ACTS."
5.5 Expenses of Transfer; Payment of Taxes. New ALTM shall pay any and
all transfer Taxes that may be imposed with respect to the transfer and delivery
of the Exercised Option Shares, unless such transfer Taxes are imposed by law
upon Xxxx Xxxx, in which case such transfer Taxes shall
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be paid by Xxxx Xxxx. New ALTM shall pay any and all costs and expenses in
connection with the transfer and delivery to Xxxx Xxxx of the Option and
Exercised Option Shares.
5.6 Fractional Shares. New ALTM shall not be required to transfer any
fractional share(s) of New ALTM Common Stock upon exercise of the Option. As to
any fractional share(s) of New ALTM Common Stock which Xxxx Xxxx shall otherwise
be entitled to purchase upon such exercise, New ALTM shall pay a cash adjustment
in respect of such fractional share(s) in an amount equal to the same fraction
of the Exercise Price, which shall be determined in good faith by the Company.
ARTICLE VI
TRANSFER, DIVISION AND COMBINATION
6.1 Transfer. Xxxx Xxxx may not transfer the Option, in whole or in
part, to any other Person, and any attempted transfer of the Option shall be
null and void ab initio.
ARTICLE VII
ADJUSTMENTS
7.1 General. The number of, and price at which, Option Shares may be
purchased upon exercise of the Option, shall be subject to adjustment from time
to time as set forth in this Article VII.
7.2 Dividends, Subdivisions, and Combinations. If at any time New ALTM
shall (a) pay any dividend or make any distribution with respect to New ALTM
Common Stock that is paid or made in additional shares of New ALTM Common Stock,
(b) subdivide the outstanding shares of New ALTM Common Stock into a greater
number of shares of New ALTM Common Stock, or (c) combine the outstanding shares
of New ALTM Common Stock into a smaller number of shares of New ALTM Common
Stock, then (i) the number of shares of New ALTM Common Stock for which the
Option is exercisable immediately after the occurrence of any such event shall
be adjusted to equal the number of shares of New ALTM Common Stock which a
record holder of the same number of shares of New ALTM Common Stock for which
the Option is exercisable immediately prior to the occurrence of such event
would own or be entitled to receive after the happening of such event and (ii)
the Exercise Price shall be adjusted to equal (A) the Exercise Price immediately
prior to the adjustment, multiplied by the number of shares of New ALTM Common
Stock for which the Option is exercisable immediately prior to the adjustment,
divided by (B) the number of shares for which the Option is exercisable
immediately after such adjustment. An adjustment made pursuant to this Section
7.2 shall become effective immediately after the record date in the case of any
dividend, distribution, subdivision, or combination. An adjustment shall be made
successively whenever any such dividend, distribution, subdivision, or
combination is made.
7.3 Reorganization, Reclassification, Merger, Consolidation, or
Disposition of Assets. If New ALTM shall reorganize its capital, reclassify its
capital stock, merge or consolidate with or into another corporation (where New
ALTM is not the surviving corporation or where there is a change in or
distribution with respect to New ALTM Common Stock), enter into a statutory
share exchange, or sell, transfer or otherwise dispose of all or substantially
all of its property, assets, or business to another entity and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation, exchange,
or disposition of assets, shares of common stock of the successor or acquiring
entity, or any cash, shares of stock, or other securities or property of any
nature whatsoever (including, without limitation, options or other subscription
or purchase rights) (collectively, "OTHER PROPERTY"), are to be received by or
distributed to holders of New ALTM Common Stock, then Xxxx Xxxx shall have the
right thereafter to receive, upon exercise of the Option and in lieu of shares
of New ALTM Common Stock, the number of shares of common stock of the successor
or acquiring entity of New ALTM (if any), and Other Property
6
receivable, upon or as a result of such reorganization, reclassification,
merger, consolidation, or disposition of assets, by a holder of the number of
shares of New ALTM Common Stock for which the Option is exercisable immediately
prior to such event. The foregoing provisions of this Section 7.3 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations, or dispositions of assets.
7.4 Other Provisions Applicable to Adjustments Under this Article VII.
The following provisions shall be applicable to the adjustments provided for
pursuant to this Article VII:
(a) When Adjustments To Be Made. The adjustments required by
this Article VII shall be made whenever and as often as any specified
event requiring such adjustment shall occur. For the purpose of any
such adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence. In computing
the adjustments under this Article VII, fractional interests in New
ALTM Common Stock shall be taken into account to the nearest 1/100th of
a share.
(b) When Adjustment Not Required. If New ALTM shall take a
record of the holders of New ALTM Common Stock for the purpose of
entitling them to receive a dividend or distribution to which the
provisions of Section 7.2 would apply, but shall, thereafter and before
the distribution to stockholders thereof, legally abandon its plan to
pay or deliver such dividend or distribution, then thereafter no
adjustment shall be required by reason of the taking of such record and
any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(c) Notice of Adjustments. Whenever the Exercise Price or
number of shares issuable upon exercise of the Option is adjusted
pursuant to the provisions of this Article VII, New ALTM shall promptly
mail to Xxxx Xxxx, by first class, postage paid, a notice of the
adjustment and a certificate from New ALTM briefly stating the facts
requiring the adjustment and the manner of computing it. New ALTM shall
keep at its principal office copies of all such certificates and cause
the same to be available for inspection at said office during normal
business hours by Xxxx Xxxx or any prospective transferee of the Option
designated by Xxxx Xxxx thereof. Whenever New ALTM is required to make
a determination under this Article VII, such determination shall be
made in good faith and may be challenged in good faith by Xxxx Xxxx and
any dispute shall be resolved, at the prevailing party's expense, by an
investment banking firm of recognized national standing, selected by
Xxxx Xxxx and acceptable to New ALTM.
7.5 Notices of Corporate Action. In the event of (a) any taking by New
ALTM of a record of the holders of New ALTM Common Stock for the purpose of
determining the holders thereof who are entitled to receive any dividend or
distribution, (b) any capital reorganization of New ALTM (including, without
limitation, any transaction specified in Section 7.3), any reclassification or
recapitalization of the capital stock of New ALTM or any consolidation or merger
involving New ALTM and any other Person, or any transfer or other disposition of
all or substantially all of the assets of New ALTM to another Person, or (c) any
voluntary or involuntary dissolution, liquidation, or winding up of New ALTM,
New ALTM shall provide prior written notice of such event described in clauses
(a), (b), and (c) in accordance with Section 9.1 within two (2) days of New ALTM
having knowledge of such event(s).
ARTICLE VIII
ISSUANCE OF SHARES
8.1 Reservation; Validity of Shares. From and after the date hereof,
New ALTM shall at all times reserve, and hold available for issuance, such
number of shares of New ALTM Common Stock as shall be sufficient to permit the
exercise in full of the Option. New ALTM represents, warrants, and
7
covenants that all shares of New ALTM Common Stock issuable upon the exercise of
the Option shall be validly issued, fully paid, and non-assessable, free and
clear of any Liens (other than Liens in favor of Xxxx Xxxx).
ARTICLE IX
MISCELLANEOUS
9.1 Notices. Any notice, request, instruction or other document
required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by prepaid telex or telecopy or delivered or mailed by certified
mail, postage prepaid, with return receipt requested, to the following
addresses:
If to New ALTM: Alternate Marketing Networks, Inc
Xxx Xxxxx, X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
With a copy prior to Xxxxx X. Xxxxxxxxx
First Closing to: Xxxx & Xxxxxxx, PA
4800 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
With a copy after Xxxx X. Xxxxxx, Esq.
First Closing to: Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
If to Xxxx Xxxx: Hencie, Inc.
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
With a copy to: J. Xxxxxxxx Xxxxxx, Esq.
Xxxxxx and Xxxxx, LLP
0000 X. Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
The persons, entities, and addresses set forth above may be changed
from time to time by a notice sent as aforesaid. If notice is given by delivery
in accordance with the provisions of this Section 9.1, said notice shall be
conclusively deemed given at the time of such delivery. If notice is given by
mail in accordance with the provisions of this Section 9.1, such notice shall be
conclusively deemed given upon the second Business Day following deposit thereof
in the United States mail. If notice is given by telex or telecopy in accordance
with the provisions of this Section 9.1, such notice shall be conclusively
deemed given upon receipt.
9.2 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.3 Binding Effect and Assignment. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
executors, administrators, legal representatives and permitted assigns. This
Agreement, and the rights and obligations created hereunder, may not be
transferred or assigned by any party without the prior consent of the other
parties.
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9.4 Integration. This Agreement and the attachments hereto constitute
the entire agreement of the parties hereto pertaining to the subject matter
hereof and supersede all prior agreements and understandings pertaining to that
subject matter, and this Agreement may not be amended, supplemented, or
rescinded, except in writing and signed by the authorized representatives of
each of the parties hereto.
9.5 Survival. Termination of this Agreement for any cause shall not
affect the transactions previously consummated under this Agreement, nor release
any party hereto from any liability, duty, or obligation which at the time of
termination has already accrued to any other party hereto or which thereafter
may accrue in respect of any act or omission prior to such termination, nor
shall any such termination hereof affect in any way the survival of any right,
liability, duty, or obligation of the parties hereto which is intended,
expressly or impliedly, in accordance with the terms of this Agreement to
survive the termination hereof.
9.6 No Third Party Beneficiary, Etc. Except as otherwise expressly
provided for herein, there shall be no third party beneficiary of this Agreement
and this Agreement shall not inure to the benefit of, be enforceable by, or
create any right or cause of action in any Person other than the parties hereto
and their heirs, executors, administrators, legal representatives, successors,
and permitted assigns. Neither the availability of, nor any limit on, any remedy
hereunder shall limit the remedies of any party hereto against third parties.
9.7 Forbearance; Waiver. Forbearance or failure to pursue any legal or
equitable remedy or right available to a party upon default under, or upon a
Breach of, this Agreement shall not constitute waiver of such right, nor shall
any such forbearance, failure or actual waiver imply or constitute waiver of a
subsequent default or Breach.
9.8 Applicable Law. This Agreement is made pursuant to, shall be
construed under, and shall be conclusively deemed for all purposes to have been
executed and delivered under the laws of the State of Delaware without reference
to conflicts of laws.
9.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.10 Reformation. In case any provision hereof shall be invalid,
illegal or unenforceable, such provision shall be reformed to best effectuate
the intent of the parties and permit enforcement thereof, and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
9.11 Time of the Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE TO FOLLOW.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
ALTERNATE MARKETING NETWORKS, INC.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
--------------------------------------------
Xxxx Xxxx
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EXHIBIT A
EXERCISE NOTICE
11
EXERCISE NOTICE
[To be executed only upon exercise of the Option]
The undersigned registered owner of the Option irrevocably exercises
the Option for the purchase of ______ shares of the common stock, par value
$0.01 per share ("NEW ALTM COMMON STOCK"), of Alternate Marketing Networks,
Inc., a Delaware corporation ("NEW ALTM"), which represent ___ percent (___%) of
the issued and outstanding shares of New ALTM Common Stock on a fully-diluted
basis (as if all of the shares under the Option has been exercised), and
herewith [makes payment of $_______ therefor] [and/or] [makes payment therefor
by surrendering, pursuant to Section 5.2(c)(ii) of the Option Agreement, _____
shares of New ALTM Common Stock] [and/or] [makes payment therefor by waiving,
pursuant to Section 5.2(c)(iii) of the Option Agreement, compensation in the
amount of $_______ owed to the undersigned pursuant to the terms of the
Employment Agreement, dated as of July 31, 2002, by and between New ALTM and the
undersigned] [and/or] [makes payment therefor by making and delivering pursuant
to Section 5.2(c)(iv) of the Option Agreement, a promissory note in the amount
of $_______]. The undersigned also requests that certificates for the shares of
New ALTM Common Stock hereby purchased, and any securities or other property
transferable upon such exercise, be transferred and/or, as applicable, duly
registered in the name of, and delivered to, Xxxx Xxxx, and, if such shares of
New ALTM Common Stock shall not include all of the shares of New ALTM Common
Stock transferable as provided in the Option, that a new option with the same
terms and provisions of the Option, except that it shall be exercisable only for
the balance of the percent of issued and outstanding shares of New ALTM Common
Stock transferable hereunder, shall be delivered to the undersigned.
-------------------------------------------
Xxxx Xxxx
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EXHIBIT B-1
PROMISSORY NOTE
13
EXHIBIT B-2
SECURITY AGREEMENT
14
EXHIBIT C
ESCROW AGREEMENT
15
