PUT AGREEMENT
Exhibit 99.1
This Put
Agreement (the “Agreement”) is
entered into by and between, Atlas Capital SA (“Holder”), and Xxxxxxx Xxxxx and
Xxxxx Xxxxxxxx (the “Grantors”),
effective this 10th day of
March, 2004 (the “Effective Date”).
WITNESSETH:
WHEREAS,
Holder has agreed to purchase 628,571 shares of common stock (the “Shares”) of
Smart Online, Inc., a Delaware corporation (the “Company”) and
warrants (the “Warrants”) to
purchase 188,571 shares of Common Stock (“Warrant
Shares”) of the
Company; and
WHEREAS,
the Grantors acknowledge that such purchase of the Shares and the Warrants by
Holder is conditioned on the Grantors entering into this Agreement.
NOW
THEREFORE, in consideration of the premises, and the mutual covenants and
agreements set forth below, the parties hereby agree as follows:
1. Put
Option. The
Grantors hereby grant to Holder the absolute and unconditional right to require
the Grantors to repurchase all (but not less than all) of the Company Securities
of Holder (the “Put
Option”). The
amount that the Grantors shall pay to Holder upon exercise of the Put Option
shall be equal to an aggregate of two million two hundred thousand dollars
($2,200,000) (the “Put
Price”).
2. First
Put Option Period. The Put
Option may be exercised by Holder by giving written notice of exercise to the
Grantors (i) at any time on or after March 1, 2005, and before March 31, 2005
(the “First
Put Option Period”) and
(ii) at any time on or after March 1, 2006 and before March 31, 2006 (the
“Second
Put Option Period”),
provided, however, that the Put Option shall terminate and no longer be
exercisable if (x) at any time prior to exercise of the Put Option, the common
stock of the Company is listed or quoted for public trading, or (y) upon the
occurrence of any vote or consent or approval by the stockholders of the Company
with respect to any action reasonably necessary to achieve the foregoing public
trading of the capital stock of the Company, Holder shall fail to vote all
Company Securities of Holder in favor of the proposal, or (z) Holder shall
transfer any of the Company Securities or any rights to any of the Company
securities or cause any option, lien or other encumbrance to exist with respect
to any of the Company Securities of Holder. In the event the Put Option is
exercised, a closing shall be held at a time mutually agreed to by the Grantors
and Holder. The closing shall be held within ninety (90) days from the date of
receipt of notice of exercise. At the closing, the Grantors shall deliver to
Holder the Put Price, and Holder shall deliver to the Grantors a certificate or
certificates representing the Shares, together with reasonable documentation and
representations for transfer of good title.
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3. |
Definitions. |
(a) The term
“Company” shall mean Smart Online, Inc. and any corporation or other entity into
which, or with which, the Company merges or consolidates, or the corporate
parent of such corporation or entity, provided Holder owns securities of such
corporation or other entity or parent company immediately after the
transaction.
(b) The term
“Company Securities” means the Shares, the Warrants, the Warrant Shares and any
and all securities of the Company Holder receives on account of ownership of any
Company Securities, whether in any dividend, split, merger, consolidation,
reorganization, conversion, exercise or other event or transaction.
4. Joint
and several Liability. The
Grantors shall be jointly and severally liable to Holder for the full Put Price
payable upon exercise of the Put Option. If either of the Grantors pays more
than Fifty (50%) Percent of the Put Price, the other Grantor shall pay to such
Grantor within ten days after written request the amount by which payment
exceeded Fifty (50%) Percent of the Put Price.
5. Rights
in Shares. Subject
to the provisions of this Agreement, Holder shall exercise all rights and
privileges of a shareholder of the Company with respect to the Company
Securities subject to this Agreement.
6. Miscellaneous.
6.1 Binding
Effect. This
Agreement shall be binding, not only upon the parties to this Agreement, but
also on their heirs, executors, administrators, personal representatives,
successors and assigns (including any transferee of a party to this Agreement);
and the parties agree, for themselves and their successors, assigns and
representatives to execute any instrument which may be necessary legally to give
effect to the terms and conditions of this Agreement.
6.2 Notices. All
notices, requests and amendments under this Agreement, shall be in writing, and
notices shall be deemed to have been given when personally delivered or mailed
by registered or certified mail, return receipt requested or the next business
day after being sent by overnight courier service addressed as follows:
To
Holder: As
designated on the signature page of this Agreement
To
Grantors: As
designated on the signature page to this Agreement.
6.3 Severability. The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.
6.4 Governing
Law; Jurisdiction. This
Agreement shall be governed by the internal laws of North Carolina. The parties
hereby consent to the exclusive jurisdiction of the courts of Wake County, North
Carolina for purposes of adjudicating any issue hereunder.
6.5 Amendment. Neither
this Agreement nor any of the terms and conditions set forth in this Agreement
may be altered, or amended verbally, and any such alteration or amendment shall
only be effective when reduced to writing and signed by each of the
parties.
6.6 Assignment. Except
as set forth in Section 2, neither Company nor Holder shall assign this
Agreement (whether by actual assignment or operation of law) without the prior
written consent of the other party.
6.7 Entire
Agreement; Rights and Interest. This
Agreement constitutes the entire agreement of the parties with respect to the
matters covered hereby, and supersedes any previous agreements, whether written
or oral. Further, no such understandings, expectations or agreements which may
hereafter arise shall be cognizable or enforceable unless the same shall be
reduced to a writing signed by the parties to be charged.
IN
WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
effective the date and year first above written.
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HOLDER:
/s/ Avy Xxxxxxx
Name:
Atlas Capital SA
Address:
000 Xxx xx Xxxxx
XX-0000
Xxxxxx,
Xxxxxxxxxxx | |
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GRANTORS:
/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx Address:
000-000 Xxxxxx Xxxxxx
Xxxxxx
Xxxx, XX 00000
/s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx Address:
Jan Xxxxxxxxxxx 0
0000
XX Xxxxxxxxxxx
Xxx
Xxxxxxxxxxx |
