<PAGE>
Exhibit 2.1
SHARE EXCHANGE AGREEMENT
MADE EFFECTIVE AS OF 5 May 2000 (the "EFFECTIVE DATE"),
AMONG: ATLAS TRUST COMPANY (JERSEY) LIMITED ("ATLAS") a Jersey
corporation having its principal place of business at P.O. Box
246, Suite 1, 17 Queen Street, St. Helier, Jersey, JE4 5PP,
Channel Islands, as trustee of the Internet Investments Inc.
Employee Benefits and Shares Trust ("EBT");
AND: TAVENDISH ENTERPRISES LTD. ("TAVENDISH") a British
Virgin Islands corporation having an office at P.O. Box 3161,
Road Town, Tortola, British Virgin Islands,
DAVID JOHN SHORTLAND ("MR. SHORTLAND") of 2 Marshfield Drive,
Gibbett Hill, Coventry, U.K., CV4 7ER,
PAULA LORAINE SHORTLAND ("MRS. SHORTLAND") of 2 Marshfield
Drive, Gibbett Hill, Coventry, U.K., CV4 7ER,
RYLEY HILL LTD. ("RYLEY") an English corporation having its
registered office c/o Crompton & Co., 42 Queens Road,
Coventry U.K.
DAVID JOHN SHORTLAND, CHRISTINE ELIZABETH CATHERALL, BRUCE
CARLESS and BETTY MAY SHORTLAND (the "SHORTLAND TRUSTEES"),
as trustees of the SHORTLAND NO. 1 TRUST (the "SHORTLAND
TRUST") of 2 Marshfield Drive, Gibbett Hill, Coventry, U.K.
CV4 7ER (collectively, the "MINORITY SHAREHOLDERS" and
individually, a "MINORITY SHAREHOLDER");
AND: INTERNET INVESTMENTS INC. a Bahamian corporation
having its registered office at 50 Shirley Street, P.O. Box
CB1 3937, Nassau, the Commonwealth of the Bahamas
("III")
AND: UDATE.COM LTD. (formerly ICEBREAKER PERSONAL
NETWORK LTD.) an English corporation having its registered
office at 11 St. James Court, Friar Gate, Derby DE1 1BT
("UDATE");
AND: MELVYN MORRIS ("MR. MORRIS") of Redmire Gap, Intakes Lane,
Turnditch, Derbyshire, U.K., DE56 2LU
HOWARD THACKER ("MR. THACKER") of Trent Fish Farm, Mercaston,
Derbyshire, U.K., DE6 3BL
(collectively, the "EXECUTIVE DIRECTORS" and individually, an
"EXECUTIVE DIRECTOR")
AND: ANTHEM RECORDING WEST INC. a California corporation
having its registered office at Suite #100 - 11423 W. Bernardo
Court, San Diego, California, U.S.A. 92127
("ANTHEM");
WHEREAS:
A. The authorized share capital of UDATE consists of L1,000
divided into 100,000 ordinary shares of L0.01 each, of which 10,199 ordinary
shares (THE "UDATE SHARES") are issued and outstanding;
B. The legal and beneficial owners of the UDATE Shares are as
follows:
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<TABLE>
<CAPTION>
SHAREHOLDER NUMBER OF UDATE SHARES HELD PERCENTAGE
<S> <C> <C>
III 10,000 98.0488%
Tavendish 70 0.6863%
Mr. Shortland 39 0.3824%
Mrs. Shortland 13 0.1275%
Ryley 64 0.6275%
The Shortland Trustees legally for the
beneficiaries of the Shortland Trust 13 0.1275%
------ ---------
TOTAL: 10,199 100.0000%
</TABLE>
C. The Executive Directors are the directors of UDATE;
D. The authorized share capital of III consists of US$5,000
divided into 5,000 ordinary shares of US$1 par value each, of which 2
ordinary shares (the "III SHARES") are issued and outstanding;
E. The sole legal owner of the III Shares is Atlas and the sole
beneficial owner of the III Shares is EBT;
F. Atlas and Anthem have agreed to exchange the III Shares for
voting common shares of Anthem and the Minority Shareholders and Anthem
have agreed to exchange the UDATE Shares held by the Minority Shareholders
(the "MINORITY UDATE SHARES") for voting common shares of Anthem, on the
terms and conditions described in this Agreement; and
G. For United States federal income tax purposes, it is
intended that the exchange of the UDATE Shares and the III Shares for
voting common shares of Anthem constitute a tax free reorganization under
the provisions of Section 368 of the United States Internal Revenue Code of
1986 as amended (the "REVENUE CODE"), and that this Agreement shall
constitute a plan of reorganization for the purposes of Section 368 of the
Revenue Code;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
covenants and agreements herein contained, the parties hereto do covenant
and agree (the "AGREEMENT") as follows:
1. SHARE EXCHANGE
1.1 Subject to the terms and conditions of this Agreement,
Atlas shall transfer all of the III Shares to Anthem and the Minority
Shareholders shall transfer all of the Minority UDATE Shares to Anthem at an
aggregate agreed value of US$10,925,000 in exchange for 10,925,000 voting
common shares of Anthem (the "ANTHEM SHARES") to be issued at an agreed
price of US$1.00 per Anthem Share. The Anthem Shares will be issued to:
<TABLE>
<CAPTION>
RECIPIENT NUMBER OF ANTHEM SHARES TO BE ISSUED PERCENTAGE
<S> <C> <C>
Atlas, as trustee of EBT 10,711,831 98.0488%
Tavendish 74,978 0.6863%
Mr. Shortland 41,777 0.3824%
Mrs. Shortland 13,930 0.1275%
Ryley 68,554 0.6275%
The Shortland Trustees as trustees
of the Shortland Trust 13,930 0.1275%
---------- ---------
TOTAL: 10,925,000 100.0000%
</TABLE>
1.2 Except as expressly noted otherwise, the transactions
contemplated under this Agreement shall be completed (the "COMPLETION") at
the offices of Anthem's solicitors, Messrs. Watson, Farley & Williams, 15
Appold Street, London, England, or at such other place as may be agreed
between the parties, at 4:00 o'clock p.m. local time in London, England, or
at such other time as may be agreed between the parties, (the "TIME OF
CLOSING") on 23 May 2000, or on such other date as may be agreed between the
parties, (the "CLOSING DATE").
1.3 On the Closing Date, immediately prior to the transfer of
the III Shares and the Minority UDATE Shares, Anthem shall complete a
financing (the "FINANCING") to raise at least US$7,500,000 for working
capital purposes, by issuing not more than 1,000,000 units (the "FINANCING
UNITS") at a price of not less than US$7.50 per share. Each Financing Unit
will consist of one common voting share of Anthem and a one-half share
purchase warrant. Each full warrant will entitle the holder to purchase one
additional common voting share of Anthem within two years after the Closing
Date at a price of:
(a) US$7.50, if exercised on or before the first anniversary of
the Closing Date; or
(b) US$10.00, if exercised after the first anniversary of the
Closing Date.
1.4 UDATE has borrowed US$1,050,000 (the "DEBT") from
Innovative Finance Limited ("INNOVATIVE") on terms to be set out in a
written loan agreement between Innovative and UDATE. As part of the
Financing, the Debt owing by UDATE will be assigned by Innovative to Anthem
on account of 140,000 Financing Units in full and final satisfaction of
Innovative's obligations to Anthem in respect of those Financing Units.
2. CONDITIONS PRECEDENT
2.1 Anthem's obligations to carry out the terms of this Agreement
and to complete its transactions contemplated under this
Agreement are subject to the fulfilment to the reasonable
satisfaction of Anthem of each of the following conditions
that:
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(a) on or before 18 May 2000 (the "SUBJECT REMOVAL
DATE"), Anthem shall have been able to complete Anthem's
Investigation (defined below) with results to its reasonable
satisfaction;
(b) on or before the Subject Removal Date, the directors
and the shareholders of Anthem shall have approved this
Agreement and all the transactions of Anthem contemplated
hereunder;
(c) on or before the Subject Removal Date, the
shareholders of Anthem shall have approved a stock option plan
substantially in the form of SCHEDULE A to this Agreement (the
"STOCK OPTION PLAN"), stock option agreements between Anthem
and each of the Executive Directors substantially in the form
of SCHEDULE B and SCHEDULE C to this Agreement (the "STOCK
OPTIONS"), and a registration rights agreement substantially
in the form of SCHEDULE D to this Agreement (the "REGISTRATION
RIGHTS AGREEMENT"), all to be effective upon Completion;
(d) at the Time of Closing, the solicitors for each of
UDATE, III, Atlas, Tavendish, Ryley and the Shortland Trustees
shall provide opinions dated as of the Closing Date,
substantially in the form indicated in SCHEDULE E to this
Agreement (collectively the "UDATE SOLICITOR OPINIONS");
(e) as of the Time of Closing, Atlas, EBT, the Minority
Shareholders, UDATE, III and the Executive Directors
(collectively, the "UDATE GROUP") shall not be in material
default of any of their respective covenants and agreements
contained in this Agreement;
(f) as of the Time of Closing, the representations and
warranties of each of the UDATE Group contained in this
Agreement or contained in any certificates or documents
delivered by any of them pursuant to this Agreement shall be
true and accurate in all material respects as if such
representations and warranties had been made as of the Time of
Closing;
(g) as of the Time of Closing, no material adverse change
in the financial or trading position or prospects (including,
without limitation, any adverse change in respect of turnover,
profits, liabilities or expenses of UDATE) shall have occurred
in relation to UDATE since the Effective Date; and
(h) as of the Time of Closing, Anthem shall have
completed the Financing.
The conditions set forth above are for the exclusive benefit of Anthem and may
be waived by Anthem in whole or in part at any time at or before the Time of
Closing.
2.2 The obligations of Atlas and the Minority Shareholders
(together the "VENDORS" and individually a "VENDOR") to carry
out the terms of this Agreement and to complete the
transactions contemplated under this Agreement are subject to
the fulfilment to their reasonable satisfaction of each of the
following conditions that:
(a) on or before the Subject Removal Date, the Vendors
shall have been able to complete the Vendors' Investigation
(defined below) with results to their reasonable satisfaction;
(b) on or before the Subject Removal Date, the directors
and the shareholders of Anthem shall have approved this
Agreement and all the transactions of Anthem contemplated
hereunder;
(c) on or before the Subject Removal Date, the directors
and shareholders of Anthem shall have approved the Stock
Option Plan, the Stock Options and the Registration Rights
Agreement, all to be effective upon Completion;
(d) immediately prior to the Time of Closing and after
the Financing, Anthem's issued share capital will be not more
than 7,330,000 common shares;
(e) at the Time of Closing, the solicitors for Anthem
shall provide an opinion dated as of the Closing Date,
substantially in the form of SCHEDULE F to this Agreement (the
"ANTHEM SOLICITOR OPINION");
(f) at the Time of Closing, the common shares of Anthem
will be quoted on the NASD Over the Counter Bulletin Board
(the "OTC BOARD");
(g) by the Time of Closing, Anthem shall have received
sufficient executed subscriptions and subscription funds to
complete the Financing on the Closing Date and shall provide
copies of the relevant documentation to the Vendors as soon as
practicable before the Closing Date;
(h) as of the Time of Closing, Anthem shall not be in
material default of any of its covenants and agreements
contained in this Agreement;
(i) as of the Time of Closing, the representations and
warranties of Anthem contained in this Agreement or contained
in any certificates or documents delivered by it pursuant to
this Agreement shall be true and accurate in all material
respects as if such representations and warranties had been
made as of the Time of Closing;
(j) as of the Time of Closing, no material adverse change
in the financial or trading position or prospects (including,
without limitation, any adverse change in respect of turnover,
profits, liabilities or expenses of Anthem) shall have
occurred in relation to Anthem since the Effective Date;
(k) as of the Time of Closing, Anthem shall have
completed the Financing;
(l) Atlas and the Minority Shareholders will own the
Anthem Shares on Completion, free and clear, as duly
authorized, legally issued and fully paid and non-assessable
shares of common stock of Anthem; and
(m) on Completion, the total issued share capital of
Anthem shall not exceed 18,255,000 voting common shares, and
other than the warrants issued in respect of the Financing and
the Stock Options
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awarded on Completion as provided for in this Agreement, there
shall be no outstanding warrants, options, convertible
securities or other rights calling for the issuance of any
further shares of Anthem, or any commitments, plans or
arrangements of any kind whatsoever to issue any further
shares of Anthem.
The conditions set forth above are for the exclusive benefit of the Vendors and
may be waived by the Vendors in whole or in part at or before the Time of
Closing.
2.3 The parties acknowledge and agree each with the other that
this Agreement and all of the transactions contemplated under
this Agreement are subject to receipt of any regulatory
approvals that may be required under applicable laws. If any
such approvals are required but are not obtained by the
Subject Removal Date, then this Agreement shall terminate and
be of no further force or effect.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS
3.1 Each of the Executive Directors, UDATE and III severally
covenants and agrees with Anthem that each of the Executive
Directors, UDATE and III shall:
(a) from and including the Effective Date through to and
including the Time of Closing, permit Anthem, through its
directors, officers, employees and authorized agents and
representatives, at Anthem's own cost, full access to the
books, records and property of III and UDATE including,
without limitation, all of the assets, contracts,
correspondence, accounts and minute books of III and UDATE, so
as to permit Anthem to make such investigation ("ANTHEM'S
INVESTIGATION") of III and UDATE as Anthem (acting reasonably)
considers advisable;
(b) use his or its reasonable efforts to obtain any UK
regulatory approvals for this Agreement and the transactions
contemplated hereunder required by applicable laws on or
before the Subject Removal Date;
(c) provide to Anthem all such further documents,
instruments and materials about the Executive Directors, UDATE
or III (as the case may be) and do all such acts and things
within his or its control as may be reasonably required by
Anthem to obtain any regulatory approvals that may be required
under applicable laws;
(d) from and including the Effective Date through to and
including the Time of Closing, do all such acts and things
that may be reasonably necessary to ensure that all of the
representations and warranties of each of the UDATE Group
contained in this Agreement or any certificates or documents
delivered by any of them pursuant to this Agreement remain
true and correct and do not become untrue or incorrect in any
material respect;
(e) from and including the Effective Date through to and
including the Time of Closing, preserve and protect all of the
goodwill, assets, business and undertaking of UDATE and III
and, without limiting the generality of the foregoing, carry
on the businesses of UDATE and III in a reasonable and prudent
manner; and
(f) from and including the Effective Date through to and
including the Time of Closing, subject to its legal reporting
obligations, keep confidential all discussions and
communications (including all information communicated
therein) between the parties, and all written and printed
materials of any kind whatsoever exchanged by the parties,
except only any information or material that:
(i) was in the public domain at the time of disclosure
to a party (the "RECIPIENT");
(ii) was already in the possession of the Recipient prior
to disclosure, as demonstrated by the Recipient
through tangible evidence;
(iii) subsequently enters the public domain through no
fault of the Recipient or any officer, director,
employee or agent of the Recipient; or
(iv) is required to be disclosed by law or by a court or
regulatory authority of competent jurisdiction;
and, if so requested by Anthem, UDATE shall arrange for any
director, officer, employee, authorized agent or
representative of UDATE to enter into, and each of the UDATE
Group themselves shall enter into, a non-disclosure agreement
with Anthem in a form acceptable to Anthem acting reasonably.
3.2 Each of the UDATE Group severally covenants and agrees with
Anthem that, from and including the Effective Date through to
and including the Time of Closing, each of the UDATE Group
shall:
(a) not do any act or thing that would hinder or prevent
the transactions contemplated herein from completing or render
any representation or warranty of any of the UDATE Group
contained in this Agreement or any certificates or documents
delivered by any of them pursuant to this Agreement untrue or
incorrect; and
(b) not sell, encumber or dispose of, or negotiate with
any other person in respect of a sale, encumbrance or
disposition of, the III Shares, any of the UDATE Shares or any
other shares, goodwill, assets, business or undertaking of
UDATE or III other than in the ordinary course of business.
3.3 Each of the UDATE Group severally acknowledges to and agrees
with Anthem that Anthem's Investigation shall in no way
limit or otherwise adversely affect the rights of Anthem as
provided for hereunder in respect
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of the representations and warranties of each of the UDATE
Group contained in this Agreement or in any certificates or
documents delivered by any of them pursuant to this Agreement.
3.4 Anthem covenants and agrees with the UDATE Group and each of
them severally that Anthem shall:
(a) from and including the Effective Date through to and
including the Time of Closing, permit the Vendors, through
their authorized agents and representatives, at the Vendors
own cost, full access to the books, records and property of
Anthem including, without limitation, all of the assets,
contracts, correspondence, accounts and minute books of
Anthem, so as to permit the Vendors to make such investigation
(the "VENDORS' INVESTIGATION") of Anthem as the Vendors
(acting reasonably) consider advisable;
(b) use its reasonable efforts to obtain any U.S.
regulatory approvals and other consents for this Agreement and
the transactions contemplated hereunder required by applicable
laws on or before the Subject Removal Date;
(c) provide to the Vendors all such further documents,
instruments and materials and do all such acts and things as
may be reasonably required by the Vendors to obtain any
regulatory approvals that may be required under applicable
laws;
(d) from and including the Effective Date through to and
including the Time of Closing, do all such acts and things
that may be necessary to ensure that all of the
representations and warranties of Anthem contained in this
Agreement or in any certificates or documents delivered by it
pursuant to this Agreement remain true and correct and do not
become untrue or incorrect in any material respect;
(e) from and including the Effective Date through to and
including the Time of Closing, preserve and protect all of the
goodwill, assets, business and undertaking of Anthem and,
without limiting the generality of the foregoing, carry on the
business of Anthem in a reasonable and prudent manner;
(f) from and including the Effective Date through to and
including the Time of Closing, subject to its legal reporting
obligations, keep confidential all discussions and
communications (including all information communicated
therein) between the parties, and all written and printed
materials of any kind whatsoever exchanged by the parties,
except only any information or material that:
(i) was in the public domain at the time of disclosure
to a Recipient;
(ii) was already in the possession of the Recipient prior
to disclosure, as demonstrated by the Recipient
through tangible evidence;
(iii) subsequently enters the public domain through no
fault of the Recipient or any officer, director,
employee or agent of the Recipient; or
(iv) is required to be disclosed by law or by a court or
regulatory authority of competent jurisdiction;
and, if so requested by UDATE, Anthem shall arrange for any
director, officer, employee, authorized agent or
representative of Anthem to enter into, and Anthem itself
shall enter into, a non-disclosure agreement with UDATE in a
form acceptable to UDATE acting reasonably; and
(g) complete the Financing on the Closing Date.
3.5 Anthem covenants and agrees with each of the UDATE Group
separately that, from and including the Effective Date through
to and including the Time of Closing, Anthem shall:
(a) carry on business in the ordinary course;
(b) not do anything out of the ordinary course except in
respect of or as may be contemplated in this Agreement or as
may be approved in writing in advance by one of the Executive
Directors, and the following or any agreement to do any of the
following shall, without limitation, be deemed to be out of
the ordinary course of business:
(i) incurring any expenditure or entering into any
commitment to do so;
(ii) disposing of any part of its assets;
(iii) borrowing any money or making any payments out of or
drawings on its bank account other than routine
payments;
(iv) entering into any guarantee or indemnity;
(v) entering into any unusual or abnormal contract or
commitment;
(vi) making any loan;
(vii) entering into any leasing, hire purchase or other
agreement or arrangement for payment on deferred
terms;
(viii) declaring, making or paying any dividend or other
distribution;
(ix) granting any security;
(x) appointing any additional director;
(xi) taking on any new employees or terminating the
employment of any employees or making any change in
the terms or conditions of employment or pension
benefits of any employees;
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(xii) permitting any insurance to lapse or doing anything
which would make any policy of insurance void or
voidable; and
(xiii) creating or issuing any class of share or loan
capital; and
(c) not do any act or thing that would render any
representation or warranty of Anthem contained in this
Agreement or any certificates or documents delivered by it
pursuant to this Agreement untrue or incorrect.
3.6 At the time of Closing, Anthem will take all necessary
corporate actions so that as soon as practicable after Closing
the officers and directors of Anthem will be:
Directors: Mr. Morris (Chairman)
Mr. Thacker
Geoff Shingles
Ken Olisa
Officers: President: Mr. Morris
Secretary: Mr. Thacker
3.7 Each of the Executive Directors shall enter into a formal
employment agreement with Anthem on Completion as set out in SCHEDULE G hereto
(the "EMPLOYMENT AGREEMENTS").
4. REPRESENTATIONS AND WARRANTIES
4.1 In order to induce Anthem to enter into this Agreement and
complete its transactions contemplated hereunder, each of the
Executive Directors jointly and severally represents and
warrants to Anthem that, except as stated in a disclosure
letter dated as of the Effective Date from the Executive
Directors to Anthem:
(a) UDATE was duly incorporated under the laws of England
and has been duly constituted and remains validly existing
under the laws of England, and:
(i) is a "private company limited by shares" as defined
by the COMPANIES ACT 1985 of England and Wales, and
is not subject to any statutory registration or
filing requirements applicable to public companies;
(ii) has the power, authority and capacity to enter into
this Agreement and carry out its terms; and
(iii) is in good standing with respect to the filing of all
annual returns required under the laws of England;
(b) the Directors and Officers of UDATE are as follows:
(i) Mr. Morris - Director and Chief Executive Officer
and company secretary;
(ii) Mr. Thacker - Director and Chief Operating Officer;
(c) the authorized and issued share capital of UDATE is
as set forth in Recital A of this Agreement;
(d) the UDATE Shares are and will on the Closing Date
immediately prior to Completion be validly issued and
registered in the name of, and legally and beneficially owned
by III and the Minority Shareholders, free and clear of all
voting restrictions, trade restrictions, liens, claims,
charges or encumbrances of any kind whatsoever;
(e) except for the UDATE Shares, there are no documents,
instruments or other writings of any kind whatsoever which
constitute a "security" of UDATE as that term is defined in
the FINANCIAL SERVICES ACT of England and Wales and there are
no options, agreements or rights of any kind whatsoever to
acquire directly or indirectly any other shares of UDATE;
(f) the memorandum and articles of association of UDATE
have not been altered since the incorporation of UDATE, except
to effect the change of its name to its present name;
(g) all of the material transactions of UDATE have been
promptly and properly recorded or filed in or with the books
or records of UDATE and the minute books of UDATE contain all
records of the meetings and proceedings of the shareholders
and directors of UDATE since its incorporation;
(h) so far as the Executive Directors are actually aware,
UDATE holds all material licences and permits in the UK that
are required for carrying on its business in the manner in
which such business has been carried on;
(i) UDATE is the beneficial and, except for the domain
name "Udate.com" (the "DOMAIN NAME") which is registered in
the name of III, the registered owner of each of the
properties and assets used by UDATE and which is necessary or
useful in the conduct of its business (collectively the
"ASSETS") including, without limitation the assets listed on
SCHEDULE H to this Agreement, which are owned or licensed as
indicated therein;
(j) UDATE has the corporate power to own the Assets and
to carry on the business carried on by it and so far as the
Executive Directors are actually aware, UDATE is duly
qualified to carry on business in all
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jurisdictions in which it carries on business;
(k) UDATE has good and marketable exclusive title to each
of the Assets free and clear of all liens, charges and
encumbrances of any kind whatsoever save and except those
specified as "Permitted Encumbrances" on SCHEDULE H to this
Agreement, and in particular:
(i) UDATE is the sole and exclusive legal and beneficial
owner of the Domain Name, free and clear of all
encumbrances whatsoever, and is not a party to or
bound by any contract or any other obligation
whatsoever that limits or impairs its ability to
sell, transfer, assign or convey, or that otherwise
affects, the Domain Name;
(ii) UDATE is the registered owner of the Domain Name, and
all fees or other costs associated with maintaining
the registration of the Domain Name have been paid
for the 2000 calendar year and the registration of
the Domain Name is in good standing with Network
Solutions Inc.; and
(iii) no other person has been granted any interest in or
right to use all or any portion of the Domain Name;
(l) each item of machinery and equipment of any kind
whatsoever comprised in the Assets is in reasonable operating
condition and in a state of reasonable maintenance and repair
taking into account its age and use;
(m) all of the bank accounts and safety deposit boxes of
UDATE are listed on SCHEDULE H to this Agreement;
(n) the net current liabilities of UDATE, other than the
Debt, do not exceed US$500,000;
(o) except as disclosed in writing to Anthem prior to
Anthem's execution of this Agreement:
(i) no dividends or other distributions of any kind
whatsoever on any shares in the capital of UDATE have
been made, declared or authorized;
(ii) no new machinery or equipment of a material kind has
been ordered by, or installed or assembled on the
premises of, UDATE, other than general office
equipment;
(iii) UDATE is not indebted to III or any of the Vendors;
(iv) none of III, the Vendors or any other officer,
director or employee of UDATE is indebted or under
obligation to UDATE on any account whatsoever; and
(v) UDATE has not guaranteed or agreed to guarantee any
material debt, liability or other obligation of any
kind whatsoever of any person, firm or corporation of
any kind whatsoever;
(p) since the date of UDATE's last balance sheet
delivered to Anthem before the Effective Date:
(i) there has been no material adverse change of any kind
whatsoever in the financial position or condition of
UDATE, or any damage, loss or other change of any
kind whatsoever in circumstances materially affecting
the business or Assets of UDATE or the right or
capacity of UDATE to carry on its business;
(ii) UDATE has not waived or surrendered any right of any
kind whatsoever of material value; and
(iii) except as may be expressly permitted under this
Agreement, UDATE has not discharged, satisfied or
paid any lien, charge or encumbrance of any kind
whatsoever or obligation or liability of any kind
whatsoever other than current liabilities in the
ordinary course of its business;
(q) the directors, officers, key employees and
independent contractors and consultants of UDATE, and all of
their compensation arrangements with UDATE, whether as
directors, officers, employees, independent contractors or
consultants, are as listed on SCHEDULE I to this Agreement;
(r) no material payments of any kind whatsoever have been
made or authorized by UDATE directly or indirectly to or on
behalf of any of the Vendors or any of the directors,
officers, key employees, independent contractors or
consultants of UDATE except in accordance with those
compensation arrangements specified on SCHEDULE I to this
Agreement;
(s) there are no pensions, profit sharing, group
insurance or similar plans or other deferred compensation
plans of any kind whatsoever affecting UDATE other than
those, if any, specified ON SCHEDULE I to this Agreement;
(t) UDATE is not now, and has never been, a party to any
collective agreement with any labour union or other
association of employees of any kind whatsoever, no collective
bargaining agent has been certified in respect of UDATE, and
there is no application pending for certification of a
collective bargaining agent in respect of UDATE;
(u) the contracts and agreements included on SCHEDULE I
to this Agreement and those additional
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contracts and agreements specified on SCHEDULE J to this
Agreement (collectively the "UDATE MATERIAL CONTRACTS")
constitute all of the material contracts and agreements of
UDATE;
(v) except as may be noted on the appropriate Schedule to
this Agreement, the UDATE Material Contracts are in good
standing in all respects and not in default in any respect;
(w) UDATE has not licensed, leased, transferred, disposed
of or encumbered any of the Assets in any way, or permitted
any third party access to any of the Assets the value of which
may be compromised by such access, including in particular the
source code to any computer software, any subscriber lists or
any trade secret information included in the Assets, except
only in accordance with the terms of the UDATE Material
Contracts;
(x) no third party privacy or intellectual property
rights, including without limitation, copyright, trade secret
or patent rights, were violated in any material manner in the
creation, compilation or acquisition of, or are violated by
the use of, any of the Assets by UDATE or by any party through
whom UDATE acquired title or a license or to whom UDATE has
granted a license in respect of the Assets, and in particular
the use of the Domain Name by UDATE does not in any material
manner infringe upon or induce or contribute to the
infringement of any intellectual property rights of any other
person in the U.S., the U.K. or in any other country of the
European Community;
(y) so far as each of the Executive Directors is actually
aware, UDATE is not in material breach of any applicable law,
ordinance, statute, regulation, by-law, order or decree of any
kind whatsoever including, without limitation, any applicable
securities laws;
(z) all tax returns and reports of UDATE required by law
of the United Kingdom to have been filed have been filed and
are substantially true, complete and correct and all taxes and
other government charges of any kind whatsoever of UDATE have
been paid or disclosed in writing to Anthem before Anthem
entered into this Agreement;
(aa) UDATE has not:
(i) made any election under any applicable tax
legislation with respect to the acquisition or
disposition of any property at other than fair market
value;
(ii) acquired any property for proceeds greater than the
fair market value thereof; or
(iii) disposed of anything for proceeds less than the fair
market value thereof;
(bb) UDATE has made all elections required to have been
made under any applicable tax legislation in connection with
any distributions made by it and all such elections were true
and correct and filed in the prescribed form and within the
prescribed time period;
(cc) adequate provision has been made for taxes payable by
UDATE for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers or
other arrangements of any kind whatsoever providing for an
extension of time with respect to the filing of any tax return
by, or payment of, any tax or governmental charge of any kind
whatsoever by UDATE;
(dd) UDATE has no contingent tax liabilities of any kind
whatsoever, and there are no grounds which would prompt a
reassessment of UDATE, including for aggressive treatment of
income or expenses in earlier tax returns filed;
(ee) there are no amounts outstanding and unpaid for which
UDATE has previously claimed a deduction under any applicable
tax legislation;
(ff) UDATE has made all collections, deductions,
remittances and payments of any kind whatsoever and filed all
reports and returns required by it to be made or filed under
the provisions of all applicable statutes requiring the making
of collections, deductions, remittances or payments of any
kind whatsoever;
(gg) there are no actions, suits, judgements,
investigations or proceedings of any kind whatsoever
outstanding, pending or threatened against or affecting UDATE
at law or in equity or before or by any federal, provincial,
state, municipal or other governmental department, commission,
board, bureau or agency of any kind whatsoever and there is no
basis therefor;
(hh) UDATE has good and sufficient power, authority and
capacity to enter into this Agreement and complete its
respective transactions contemplated under this Agreement on
the terms and conditions set forth herein;
(ii) the execution and delivery of this Agreement, the
performance of obligations under this Agreement and the
Completion will not:
(i) conflict with the acceleration of any
indebtedness under, or constitute default under, any
of the constitutional documents of any corporate
member of the UDATE Group, or any of the terms of any
trust deed, debenture, mortgage, agreement, lease,
licence or other instrument of any kind whatsoever to
which UDATE or, so far as each of the Executive
Directors is actually aware, any other member of the
UDATE Group, is a party or by which UDATE or, so far
as each of the
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<PAGE>
Executive Directors is actually aware, any other
member of the UDATE Group, is bound, or any
judgement or order of any kind whatsoever of any
court or administrative body of any kind whatsoever
by which UDATE or, so far as each of the Executive
Directors is actually aware, any other member of
the UDATE Group, is bound; nor
(ii) so far as each of the Executive Directors is
actually aware, result in the violation of any law or
regulation of any kind whatsoever by any of the UDATE
Group;
(jj) III was duly incorporated under the laws of the Bahamas and
has been duly continued and remains validly existing under the
laws of the Bahamas, and:
(i) is a "private company limited by shares" as defined
by the INTERNATIONAL BUSINESS COMPANIES ACT1989 of
the Commonwealth of the Bahamas, and is not subject
to any statutory registration or filing requirements
applicable to public companies;
(ii) has the power, authority and capacity to enter into
this Agreement and carry out its terms; and
(iii) is in good standing with respect to the filing of all
annual reports required under the laws of the
Commonwealth of the Bahamas;
(kk) the Directors and Officers of III are as follows:
Mr. Morris - Director and Chief Executive Officer;
Mr. Thacker - Director and Chief Operating Officer;
(ll) the authorized and issued share capital of III is as set forth
in Recital D of this Agreement;
(mm) the III Shares are and will on the Closing Date immediately
prior to Completion be validly issued and outstanding fully
paid and non-assessable common shares of III registered in
the name of, and legally owned by Atlas and beneficially
owned by, EBT, free and clear of all voting restrictions,
trade restrictions, liens, claims, charges or encumbrances
of any kind whatsoever;
(nn) except for the III Shares, there are no documents, instruments
or other writings of any kind whatsoever which constitute a
"security" of III as that term is defined in the SECURITIES
INDUSTRY ACT 1999 of the Commonwealth of the Bahamas and there
are no options, agreements or rights of any kind whatsoever to
acquire directly or indirectly any other shares of III;
(oo) the constitutional documents of III have not been altered
since the incorporation of III;
(pp) all of the material transactions of III have been promptly
and properly recorded or filed in or with the books or
records of III and the minute books of III contain all
records of the meetings and proceedings of the shareholders
and directors of III since its incorporation;
(qq) III holds all material licences and permits that are required
for carrying on its business in the manner in which such
business has been carried on;
(rr) III has no assets except for the UDATE Shares as shown in
Recital B;
(ss) III has the corporate power to own UDATE Shares and to carry
on the business carried on by it and, so far as each of the
Executive Directors is aware, III is duly qualified to carry
on business in all jurisdictions in which it carries on
business;
(tt) III has good and marketable exclusive title to each of its
UDATE Shares free and clear of all liens, charges and
encumbrances of any kind whatsoever;
(uu) all of the bank accounts and safety deposit boxes of III are
listed on SCHEDULE H to this Agreement;
(vv) III has no outstanding liabilities;
(ww) except as disclosed in writing to Anthem prior to Anthem's
execution of this Agreement:
(i) no dividends or other distributions of any kind
whatsoever on any shares in the capital of III have
been made, declared or authorized;
(ii) III is not indebted to any of EBT or the Executive
Directors ;
(iii) none of EBT and the Executive Directors or any other
officer, director or employee of III is indebted or
under obligation to III on any account whatsoever;
and
(iv) III has not guaranteed or agreed to guarantee any
material debt, liability or other obligation of any
kind whatsoever of any person, firm or corporation of
any kind whatsoever;
(xx) since III's incorporation:
(i) there has been no material adverse change of any kind
whatsoever in the financial position or condition of
III, or any damage, loss or other change of any kind
whatsoever in circumstances materially affecting the
business or Assets of III or the right or capacity of
III to carry on their respective businesses;
(ii) III has not waived or surrendered any right of any
kind whatsoever of material value; and
(iii) except as may be expressly permitted under this
Agreement, III has not discharged, satisfied or
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<PAGE>
paid any lien, charge or encumbrance of any kind
whatsoever or obligation or liability of any kind
whatsoever other than current liabilities in the
ordinary course of its business;
(yy) the directors, officers, key employees and independent
contractors and consultants of III, and all of their
compensation arrangements with III, whether as directors,
officers, employees, independent contractors or consultants,
are as listed on SCHEDULE I to this Agreement;
(zz) no payments of any kind whatsoever have been made or
authorized by III directly or indirectly to or on behalf of
Atlas, EBT or any of the directors, officers, key employees,
independent contractors or consultants of III except in
accordance with those compensation arrangements specified on
SCHEDULE I to this Agreement;
(aaa) there are no pensions, profit sharing, group insurance or
similar plans or other deferred compensation plans of any kind
whatsoever affecting III other than those, if any, specified
on SCHEDULE I to this Agreement;
(bbb) III is not now, and has ever been, a party to any collective
agreement with any labour union or other association of
employees of any kind whatsoever, no collective bargaining
agent has been certified in respect of III, and there is no
application pending for certification of a collective
bargaining agent in respect of III;
(ccc) the contracts and agreements included on SCHEDULE I to this
Agreement and those additional contracts and agreements
specified on SCHEDULE J to this Agreement (collectively the
"III MATERIAL CONTRACTS") constitute all of the material
contracts and agreements of III;
(ddd) except as may be noted on the appropriate Schedule to this
Agreement, the III Material Contracts are in good standing in
all respects and not in default in any respect;
(eee) so far as each of the Executive Directors is actually aware,
III is not in material breach of any applicable law,
ordinance, statute, regulation, by-law, order or decree of any
kind whatsoever including, without limitation, any applicable
securities laws;
(fff) all tax returns and reports of III required by law to have
been filed have been filed and are substantially true,
complete and correct and all taxes and other government
charges of any kind whatsoever of III have been paid or
disclosed in writing to Anthem before Anthem entered into this
Agreement;
(ggg) III has not:
(i) made any election under any applicable tax
legislation with respect to the acquisition or
disposition of any property at other than fair market
value;
(ii) acquired any property for proceeds greater than the
fair market value thereof; or
(iii) disposed of anything for proceeds less than the fair
market value thereof;
(hhh) III has made all elections required to have been made under
any applicable tax legislation in connection with any
distributions made by either of them and all such elections
were true and correct and filed in the prescribed form and
within the prescribed time period;
(iii) adequate provision has been made for taxes payable by III for
the current period for which tax returns are not yet required
to be filed and there are no agreements, waivers or other
arrangements of any kind whatsoever providing for an extension
of time with respect to the filing of any tax return by, or
payment of, any tax or governmental charge of any kind
whatsoever by III;
(jjj) III has no contingent tax liabilities of any kind whatsoever,
and there are no grounds which would prompt a reassessment of
III, including for aggressive treatment of income or expenses
in earlier tax returns filed;
(kkk) there are no amounts outstanding and unpaid for which III
has previously claimed a deduction under any applicable tax
legislation;
(lll) III has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all reports and
returns required by it to be made or filed under the
provisions of all applicable statutes requiring the making of
collections, deductions, remittances or payments of any kind
whatsoever;
(mmm) there are no actions, suits, judgements, investigations or
proceedings of any kind whatsoever outstanding, pending or
threatened against or affecting III at law or in equity or
before or by any federal, provincial, state, municipal or
other governmental department, commission, board, bureau or
agency of any kind whatsoever and there is no basis therefor;
(nnn) III has good and sufficient power, authority and capacity to
enter into this Agreement and complete its respective
transactions contemplated under this Agreement on the terms
and conditions set forth herein;
(ooo) neither of the Executive Directors has incurred any liability
for agency, brokerage, referral or finder's fees, commissions
or compensation of any kind whatsoever with respect to this
Agreement or any transaction contemplated under this
Agreement;
(ppp) the representations and warranties of the Executive Directors
contained in this Agreement disclose all material facts known
to each of them specifically relating to the transactions
contemplated under this Agreement which materially and
adversely affect, or in the future may materially and
adversely affect, their respective abilities to perform their
respective obligations under this Agreement or the value of
the III Shares, the UDATE Shares or the Assets;
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<PAGE>
(qqq) neither of the Executive Directors is negotiating with any
person other than the Purchaser for the sale or other
disposition of the III Shares, the UDATE Shares or the Assets
whether by sale or otherwise; and
(rrr) so far as each of the Executive Directors is actually aware,
all representations and warranties contained in paragraphs 4.2
and 4.3 are true and correct.
4.2 In order to induce Anthem to enter into this Agreement and
complete its transactions contemplated hereunder, each of the Minority
Shareholders severally represents and warrants to Anthem that, in respect of
that Minority Shareholder:
(a) the Minority Shareholder has good and sufficient power,
authority and capacity to enter into this Agreement and
complete the transactions contemplated under this Agreement on
the terms and conditions set forth herein;
(b) the Minority UDATE Shares, indicated in Recital D of this
Agreement, held by the Minority Shareholder are and will on
the Closing Date immediately prior to Completion be validly
issued and outstanding fully paid and common shares of UDATE
registered in the name of, and legally and beneficially owned
by the Minority Shareholder free and clear of all voting
restrictions, trade restrictions, liens, claims, charges or
encumbrances of any kind whatsoever;
(c) the Minority Shareholder has such knowledge and experience in
financial and business matters as to be capable of evaluating
the merits and risks of an investment in the Anthem Shares and
is able to bear the economic risk of loss of the Minority
Shareholder's entire investment;
(d) Anthem has provided to the Minority Shareholder the
opportunity to ask questions and receive answers concerning
the terms and conditions of the issuance of the Anthem Shares
and the Minority Shareholder has had access to such
information concerning Anthem as the Minority Shareholder has
considered necessary or appropriate in connection with the
investment decision to acquire the Anthem Shares;
(e) the Minority Shareholder is acquiring the Anthem Shares for
the Minority Shareholder's own account, for investment
purposes only and not with a view to any resale, distribution
or other disposition of the Anthem Shares in violation of
applicable United States securities laws;
(f) the Minority Shareholder has not agreed to acquire the Anthem
Shares as a result of any form of general solicitation or
general advertising, including advertisements, articles,
notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or
television, or any seminar or meeting whose attendees have
been invited by general solicitation or general advertising;
(g) the Minority Shareholder is not a "U.S. Person", the
definition of which includes, but is not limited to, an
individual resident in the United States and an estate or
trust of which any executor or administrator or trustee,
respectively, is a U.S. Person, any partnership or corporation
organized or incorporated under the laws of the United States,
and any partnership or corporation organized or incorporated
under the laws of any foreign jurisdiction by a U.S. Person
principally for the purposes of investing in securities not
registered under the United States Securities Act of 1933 (the
"1933 ACT");
(h) the Minority Shareholder was outside the United States at the
time of execution and delivery of this Agreement;
(i) no offers to sell the Anthem Shares were made by any person to
the Minority Shareholder while the Minority Shareholder was in
the United States;
(j) the Anthem Shares are not being acquired, directly or
indirectly, for the account or benefit of a U.S. Person or a
person in the United States;
(k) the Minority Shareholder has not incurred any liability for
agency, brokerage, referral or finder's fees, commissions or
compensation of any kind whatsoever with respect to this
Agreement or any transaction contemplated under this
Agreement; and
(l) the Minority Shareholder is not negotiating with any person
other than Anthem for the sale or other disposition of the
UDATE Shares or the Assets whether by sale or otherwise.
4.3 In order to induce Anthem to enter into this Agreement and complete its
transactions contemplated hereunder, Atlas represents and warrants to Anthem
that:
(a) Atlas, as trustee of EBT, has good and sufficient power,
authority and capacity to enter into this Agreement and
complete the transactions contemplated under this Agreement on
the terms and conditions set forth herein;
(b) the III Shares are and will on the Closing Date immediately
prior to Completion be validly issued and outstanding fully
paid shares of III registered in the name of and legally owned
by Atlas and beneficially owned by EBT, free and clear of all
voting restrictions, trade restrictions, liens, claims,
charges or encumbrances of any kind whatsoever;
(c) Atlas has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment in the Anthem Shares and is able to
bear the economic risk of loss of the entire investment;
(d) Anthem has provided to Atlas the opportunity to ask questions
and receive answers concerning the terms and conditions of the
issuance of the Anthem Shares and Atlas has had access to such
information concerning
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<PAGE>
Anthem as Atlas has considered necessary or appropriate in
connection with the investment decision to acquire the Anthem
Shares;
(e) Atlas is acquiring the Anthem Shares for EBT's own account,
for investment purposes only and not with a view to any
resale, distribution or other disposition of the Anthem Shares
in violation of applicable United States securities laws;
(f) Atlas has not agreed to acquire the Anthem Shares as a result
of Atlas, EBT or any other party receiving or being made aware
of any form of general solicitation or general advertising,
including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar
media or broadcast over radio, or television, or any seminar
or meeting whose attendees have been invited by general
solicitation or general advertising;
(g) neither Atlas nor EBT is a "U.S. Person", the definition of
which includes, but is not limited to, an individual resident
in the United States and an estate or trust of which any
executor or administrator or trustee, respectively, is a U.S.
Person, any partnership or corporation organized or
incorporated under the laws of the United States, and any
partnership or corporation organized or incorporated under the
laws of any foreign jurisdiction by a U.S. Person principally
for the purposes of investing in securities not registered
under the 1933 Act;
(h) Atlas and EBT were outside the United States at the time of
execution and delivery of this Agreement;
(i) no offers to sell the Anthem Shares were made by any person to
Atlas or EBT while Atlas or EBT was in the United States;
(j) the Anthem Shares are not being acquired, directly or
indirectly, for the account or benefit of a U.S. Person or a
person in the United States;
(k) neither Atlas nor EBT has incurred any liability for agency,
brokerage, referral or finder's fees, commissions or
compensation of any kind whatsoever with respect to this
Agreement or any transaction contemplated under this
Agreement; and
(l) neither Atlas nor EBT is negotiating with any person other
than Anthem for the disposition of the III Shares whether by
sale or otherwise.
4.4 The representations and warranties of each of the UDATE Group
contained in this Agreement shall be true at the Time of Closing as though they
were made at the Time of Closing, and they shall survive the Completion and
remain in full force and effect thereafter for the benefit of Anthem.
4.5 Each of the UDATE Group acknowledges and agrees that:
(a) the Anthem Shares have not been and will not be registered
under the 1933 Act or the securities laws of any state of the
United States or other jurisdiction and that the exchange
contemplated hereby is being made in reliance on the Vendors'
representations and warranties regarding the circumstances
required for an exemption from such registration requirements
other than as set out in the Registration Rights Agreement;
(b) Anthem is registered under the United States Securities
Exchange Act of 1934 (the "EXCHANGE ACT"), but the issuance of
the Anthem Shares has not been approved or disapproved by the
United States Securities and Exchange Commission, any state
securities agency, or any foreign securities agency; and
(c) the certificates representing the Anthem Shares will bear a
legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES OR EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT THAT IS THEN APPLICABLE TO THE
SHARES, AS TO WHICH A PRIOR OPINION OF COUNSEL MAY BE REQUIRED BY THE ISSUER OR
THE TRANSFER AGENT. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH REGULATION S OF THE 1933 ACT"
4.6 Each of the Vendors acknowledges and agrees that:
(a) if the Vendor decides to offer, sell or otherwise transfer any
of the Anthem Shares, the Vendor will not offer, sell or
otherwise transfer any of the Anthem Shares directly or
indirectly, unless:
(i) the sale is to Anthem;
(ii) the sale is made pursuant to the exemption from the
registration requirements under the 1933 Act provided
by Rule 144 thereunder and in accordance with any
applicable state securities or "Blue Sky" laws; or
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<PAGE>
(iii) the Anthem Shares are sold in a transaction that does
not require registration under the 1933 Act or any
applicable state laws and regulations governing the
offer and sale of securities, and prior to such sale
the Vendor has furnished to Anthem an opinion of
counsel reasonably satisfactory to Anthem;
(b) the Vendor will not engage in hedging transactions involving
the Anthem Shares unless in compliance with the 1933 Act and
all applicable laws, rules and regulations;
(b) there may be material tax consequences to a Vendor in respect
of the disposition of the III Shares or the Minority UDATE
Shares, as the case may be, and that Anthem gives no opinion
and makes no representation with respect to the tax
consequences to the Vendor under United Kingdom, European,
United States, state, local or foreign tax law in respect of
the Vendor's disposition of the III Shares or the Minority
UDATE Shares; and
(c) there may be material tax consequences to a Vendor in respect
of an acquisition or disposition of the Anthem Shares, and
that Anthem gives no opinion and makes no representation with
respect to the tax consequences to the Vendor under United
States, state, local or foreign tax law in respect of the
Vendor's acquisition or disposition of the Anthem Shares.
4.7 Each of the Vendors consents to Anthem making a notation on
its records or giving instructions to any transfer agent of Anthem to implement
the restrictions on transfer set forth and described herein.
4.8 In order to induce the Vendors to enter into this Agreement
and complete the transactions contemplated hereunder, Anthem represents and
warrants to each of the Vendors that:
(a) Anthem was and remains duly
incorporated and validly existing under the laws of the State
of California, and Anthem is in good standing with respect to
all filings required by the California Secretary of State and
any other regulatory authority to which it is subject;
(b) As of the Effective Date the
Directors and Officers of Anthem are: Eric Boehnke Director,
President and Chairman John A. Meyer Director, Secretary
and Treasurer
(c) the authorized capital of Anthem
consisted of 50,000,000 shares with a par value of $0.001
per share, of which 30,000,000 shares (the "OUTSTANDING
SHARES") were issued and outstanding as of the Effective Date;
(d) the Outstanding Shares were duly
authorized, validly issued, fully paid and non-assessable;
(e) other than as contemplated in this
Agreement, no further shares of Anthem will be issued after
the Effective Date, and there are no commitments, plans or
arrangements of any kind whatsoever to issue any further
shares of Anthem, nor are there any outstanding options,
warrants, convertible securities, pre-emptive rights or other
rights of any kind whatsoever calling for the issuance of any
of the unissued shares of Anthem;
(f) other than the Registration Rights
Agreement, there are no agreements or arrangements under which
Anthem is obligated to register the sale of any of its
securities under the 1933 Act and there are no anti-dilution
or price adjustment provisions contained in any security
issued by Anthem or in any agreement providing rights to
security holders that will be triggered by the issuance of the
Anthem Shares;
(g) the Anthem Shares to be issued on
Completion will be, when issued, duly authorized and legally
issued as fully paid and non-assessable;
(h) Anthem has good and sufficient
power, authority and capacity to enter into this Agreement and
complete its transactions contemplated under this Agreement on
the terms and conditions set forth herein;
(i) as of the Effective Date, the
common shares of Anthem are quoted on the OTC Board;
(j) all of the material transactions
of Anthem have been promptly and properly recorded or filed
in or with the books or records of Anthem and the minute books
of Anthem contain all records of the meetings and proceedings
of the shareholders and directors of Anthem since its
incorporation;
(k) all of the financial statements of
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<PAGE>
Anthem delivered to UDATE (the "Anthem Accounts"):
(i) have been prepared in accordance with all applicable
accounting standards and with accounting principles
and practices generally accepted in the United States
of America;
(ii) show a true and fair view of the assets and
liabilities (including contingent unquantified and
disputed liabilities) of Anthem and of the state of
affairs of Anthem as at the date to which they were
prepared; and
(iii) are not affected by any extraordinary or exceptional
item;
(l) since the date to which the Anthem Accounts were prepared,
except as disclosed or contemplated in this Agreement:
(i) there has been no material adverse change of any kind
whatsoever in the financial position or condition of
Anthem or any damage, loss or other change of any
kind whatsoever which is or may be material to
Anthem; and
(ii) Anthem has not incurred any liabilities;
(m) all of the bank accounts and safety deposit boxes of Anthem
are listed on SCHEDULE K to this Agreement;
(n) the net current liabilities of Anthem do not exceed
US$150,000;
(o) except as disclosed in writing to UDATE above prior to the
execution of this Agreement:
(i) no dividends or other distributions of any kind
whatsoever on any shares in the capital of Anthem
have been made, declared or authorized;
(ii) none of its officers or shareholders is indebted or
obligated to Anthem;
(iii) Anthem has no employees; and
(iv) Anthem has not guaranteed or agreed to guarantee any
debt liability or other obligation of kind whatsoever
of any person, firm or corporation of any kind
whatsoever;
(p) so far as Anthem is actually aware, Anthem holds all material
licences and permits that are required for carrying on its
business in the manner in which such business has been carried
on;
(q) Anthem is the registered and beneficial owner of each of the
copyright interests listed in SCHEDULE K to this Agreement;
(r) Anthem has the corporate power to own its assets and to carry
on the business carried on by it and so far as Anthem is
actually aware, Anthem is duly qualified to carry on business
in all jurisdictions in which it carries on business;
(s) as of the Closing Date, Anthem will have no material contracts
other than this Agreement, the agreements disclosed or
contemplated herein and agreements with Anthem's stock
transfer agent in standard form;
(t) no third party privacy or intellectual property rights,
including without limitation, copyright, trade secret or
patent rights, were violated in any material manner in the
creation, compilation or acquisition of, or are violated by
the use of, any of Anthem's assets by Anthem or by any party
through whom Anthem acquired title or a license, or to whom
Anthem has granted a license in respect of any of Anthem's
assets;
(u) so far as Anthem is actually aware, Anthem is not in material
breach of any applicable laws, ordinance, statute, regulation,
by-law, order or decree of any kind whatsoever including,
without limitation, all applicable U.S. and applicable state
securities laws;
(v) all tax returns and reports of Anthem required by law to have
been filed have been filed and are substantially true,
complete and correct and all taxes and other government
charges of a material nature of Anthem have been paid or
disclosed in writing to the UDATE Group before the UDATE Group
entered into this Agreement;
(w) Anthem has not:
(i) made any election under any applicable tax
legislation with respect to the acquisition or
disposition of any property at other than fair market
value;
(ii) acquired any property for proceeds greater than fair
market value; or
(iii) disposed of anything for proceeds less
than the fair market value thereof;
(x) Anthem has made all elections required to have been made under
any applicable tax legislation in connection with any
distributions made by it and all such elections were true and
correct and filed in the prescribed form and within the
prescribed time period;
(y) adequate provision has been made for taxes payable by Anthem
for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers or
other arrangements of any kind whatsoever providing for an
extension of time with respect to the filing of any tax return
by, or payment of, any tax or governmental charge of any kind
whatsoever;
(z) Anthem has no contingent tax liabilities of any kind
whatsoever, and there are no grounds which would prompt a
reassessment of Anthem, including for aggressive treatment of
income or expenses in earlier tax returns filed;
(aa) there are no amounts outstanding and unpaid for which Anthem
has previously claimed a deduction under any applicable tax
legislation;
(bb) Anthem has made all collections, deductions, remittances and
payments of any kind whatsoever and filed all
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reports and returns required by it to be made or filed under
the provisions of all applicable statutes requiring the making
of collections, deductions, remittances or payments of any
kind whatsoever;
(cc) there are no actions, suits, judgements, investigations or
proceedings of any kind whatsoever outstanding, pending or
threatened against or affecting Anthem at law or in equity or
before or by any federal, provincial, state, municipal or
other governmental department, commission, board, bureau or
agency of any kind whatsoever and there is no basis therefor;
(dd) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of
Anthem, its shareholders and its board of directors, and this
Agreement constitutes the legal, valid and binding obligation
of Anthem enforceable against Anthem in accordance with its
terms, subject to the application of general principles of
equity and the effect of any applicable bankruptcy,
insolvency, reorganization or moratorium or similar laws
affecting the rights of creditors generally;
(ee) the execution and delivery of this Agreement, the performance
of Anthem's obligations under this Agreement and the
Completion will not:
(i) conflict with, or result in the breach of or the
acceleration of any indebtedness under, or constitute
default under the Articles or Certificate of
Incorporation (as amended) and bylaws of Anthem, or
any of the terms of any trust deed, debenture,
mortgage, agreement, lease, licence or other
instrument of any kind whatsoever to which Anthem is
a party or by which Anthem is bound, or any judgement
or order of any kind whatsoever of any court or
administrative body of any kind whatsoever by which
Anthem is bound; nor
(ii) so far as Anthem is aware, result in the violation of
any law or regulation of any kind whatsoever by
Anthem; and
(ff) except in respect of the transactions disclosed or
contemplated herein, there has been no material adverse change
to the financial position of Anthem since the Anthem Accounts.
4.9 The representations and warranties of Anthem contained in this
Agreement shall be true at the Time of Closing as though they were made at the
Time of Closing, and they shall survive the Completion and remain in full force
and effect thereafter for the benefit of each of the Vendors.
4.10 In clause 4.11 of this Agreement, "Anthem Claim" means any
claim which would (but for the provisions of clause 4.11) be capable of being
made against the Vendors or the Executive Directors (as the case may be) in
respect of any liability for breach of the representations, warranties and
covenants given by the Executive Directors and the Vendors under clauses 3 and 4
of this Agreement.
4.11 Notwithstanding any other provisions of this Agreement:
(a) the aggregate liability of the Executive Directors
and the Vendors in respect of all Anthem Claims will
be limited to the value of the Anthem Shares at the
Time of Closing;
(b) the Executive Directors and the Vendors will be under
no liability in respect of any Anthem Claim where the
amount for which the Executive Director or the Vendor
would be liable under such Anthem Claim is less than
US$50,000; and
(c) the Executive Directors and the Vendors will not be
under any liability in respect of any Anthem Claim
unless written particulars of the Anthem Claim
(giving full details of the specific matter in
respect of which such Anthem claim is made) have been
given to the Executive Directors and the Vendors
within a period of two years after the Closing Date
and unless legal proceedings in respect of such
Anthem Claim are commenced and served upon the
Executive Directors and the Vendors within three
months after such written particulars have been so
given.
5. INDEMNITIES
5.1 Notwithstanding the Completion of the transactions
contemplated under this Agreement or Anthem's Investigation, the
representations, warranties and acknowledgements of any of the UDATE Group
contained in this Agreement or any certificates or documents delivered by any of
them pursuant to this Agreement shall survive the Completion and shall continue
in full force and effect thereafter for the benefit of Anthem. If any of the
representations, warranties or acknowledgements given by any of the UDATE Group
is found to be untrue or there is a breach of any covenant or agreement in this
Agreement on the part of any of the UDATE Group, then the party or parties
responsible shall jointly and severally indemnify and save harmless Anthem from
and against any and all liability, claims, debts, demands, suits, actions,
penalties, fines, losses, costs (including legal fees, disbursements and taxes
as charged on a lawyer and own client basis), damages and expenses of any kind
whatsoever which may be brought or made against Anthem by any person, firm or
corporation of any kind whatsoever or which may be suffered or incurred by
Anthem, directly or indirectly, arising out of or as a consequence of any
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such misrepresentation or breach of warranty, acknowledgement, covenant or
agreement. Without in any way limiting the generality of the foregoing, this
shall include any loss of any kind whatsoever which may be suffered or incurred
by Anthem, directly or indirectly, arising out of any material assessment or
reassessment levied upon UDATE or III for tax, interest and/or penalties
relating to any period of business operations up to and including the Closing
Date and all claims, demands, costs (including legal fees, disbursements and
taxes as charged on a lawyer and own client basis) and expenses of any kind
whatsoever in respect of the foregoing.
5.2 Notwithstanding the Completion of the transactions
contemplated under this Agreement or the Vendors' Investigation, the
representations, warranties and acknowledgements of Anthem contained in this
Agreement or any certificates or documents delivered by Anthem pursuant to this
Agreement shall survive the Completion and shall continue in full force and
effect thereafter for the benefit of the UDATE Group. If any of the
representations, warranties or acknowledgements given by Anthem is found to be
untrue or there is a breach of any covenant or agreement in this Agreement on
the part of Anthem, then Anthem shall indemnify and save harmless the UDATE
Group from and against any and all liability, claims, debts, demands, suits,
actions, penalties, fines, losses, costs (including legal fees, disbursements
and taxes as charged on a lawyer and own client basis), damages and expenses of
any kind whatsoever which may be brought or made against the UDATE Group by any
person, firm or corporation of any kind whatsoever or which may be suffered or
incurred by the UDATE Group, directly or indirectly, arising out of or as a
consequence of any such misrepresentation or breach of warranty,
acknowledgement, covenant or agreement. Without in any way limiting the
generality of the foregoing, this shall include any loss of any kind whatsoever
which may be suffered or incurred by the UDATE Group, directly or indirectly,
arising out of any material assessment or reassessment levied upon Anthem for
tax, interest and/or penalties relating to any period of business operations up
to and including the Closing Date and all claims, demands, costs (including
legal fees, disbursements and taxes as charged on a lawyer and own client basis)
and expenses of any kind whatsoever in respect of the foregoing.
6. CLOSING
6.1 At the Time of Closing, the UDATE Group shall deliver to the
solicitors for Anthem:
(a) certified true copies of the resolutions of the
directors of UDATE, III, Tavendish and Ryley and of the
trustees of EBT and the Shortland Trust evidencing that the
directors of UDATE, III, Tavendish and Ryley and the trustees
of EBT and the Shortland Trust have approved this Agreement
and all of the transactions of UDATE, III, Tavendish, Ryley,
EBT and the Shortland Trust contemplated hereunder,
specifically referring to:
(i) the exchange and transfer of the Minority
UDATE Shares from the Minority Shareholders to Anthem
as provided for in this Agreement;
(ii) the cancellation of the share certificates
(the "OLD UDATE SHARE CERTIFICATES") representing the
Minority UDATE Shares held as set forth in Recital B
of this Agreement; and
(iii) the issuance of a new share certificate (the
"NEW UDATE SHARE CERTIFICATE") representing the
Minority UDATE Shares registered in the name of
Anthem;
(iv) the exchange and transfer of the III Shares
from EBT to Anthem as provided for in this Agreement;
(v) the cancellation of the share certificates
(the "OLD III SHARE CERTIFICATE") representing the
III Shares held by EBT; and
(vi) the issuance of a new share certificate (the
"NEW III SHARE CERTIFICATE") representing the III
Shares registered in the name of Anthem;
(b) the Old UDATE Share Certificates;
(c) the New UDATE Share Certificate;
(d) the Old III Share Certificate;
(e) the New III Share Certificate;
(f) an original partial release of the charge granted by
Ryley in respect of Ryley's assets, duly executed in
registrable form by the charge holder, sufficient to permit
Ryley to transfer its Minority UDATE Shares to Anthem free and
clear of that charge;
(g) written confirmation of the current location and
UDATE representative contact information for periodic
inspection and testing by Anthem of source and object code for
all software included in the Assets;
(h) releases in the form of SCHEDULE L to this Agreement
(the "RELEASES") from:
(i) each of the Vendors, III and the Executive
Directors of all claims against UDATE for outstanding
amounts owing by UDATE on account of any loans,
bonuses, reimbursements, compensation, fees,
royalties, dividends or other consideration
whatsoever; and
(ii) each of the Vendors, UDATE and the Executive
Directors of all claims against III for outstanding
amounts owing by III on account of any loans,
bonuses, reimbursements, compensation, fees,
royalties, dividends or other consideration
whatsoever;
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(i) the UDATE Solicitor Opinions;
(j) the Employment Agreements, duly executed by each
party other than Anthem;
(k) the Stock Options, duly executed by each party other
than Anthem;
(l) the Registration Rights Agreement, duly executed by
each party other than Anthem;
(m) certificates of confirmation from each of the
Executive Directors, Atlas, the Minority Shareholders, UDATE
and III substantially in the form of SCHEDULE M to this
Agreement;
(n) the consents of Mr. Morris to become the President
and a Director of Anthem, the consent of Mr. Thacker to become
the Secretary and a Director of Anthem, and the consents of
Geoff Shingles and Ken Olisa to become Directors of Anthem;
and
(o) any other materials that are, in the opinion of the
solicitors for Anthem, reasonably required to complete the
transactions contemplated under this Agreement.
6.2 At the Time of Closing, Anthem shall deliver to the solicitors
for the Vendors:
(a) certified true copies of the resolutions of the
directors and, if shareholder approval is required, of the
shareholders of Anthem, evidencing that the directors and, as
applicable, the shareholders, of Anthem have approved this
Agreement and all of the transactions of Anthem contemplated
hereunder, including issuance of the Anthem Shares in exchange
for the III Shares and the Minority UDATE Shares, adoption of
the Stock Option Plan, issuance of the Stock Options,
execution of the Registration Rights Agreement, setting the
number of Directors of Anthem at four (4), appointment of Mr.
Morris as President and a Director of Anthem, appointment of
Mr. Thacker as Secretary and a Director of Anthem, and
appointment of Jeff Shingles and Ken Olisa as Directors of
Anthem;
(b) share certificates representing the Anthem Shares,
or written confirmation that Anthem's stock transfer agent has
been instructed to issue and deliver to the Vendors share
certificates representing the Anthem Shares, registered in the
names of the Vendors as set out in paragraph 1.1 of this
Agreement or as otherwise jointly directed by the Vendors in
writing;
(c) the Employment Agreements, duly executed by Anthem;
(d) the Stock Options, duly executed by Anthem;
(e) the Registration Rights Agreement, duly executed by
Anthem;
(f) the resignation of the current President, Secretary
and Director of Anthem, effective on Completion;
(g) the Anthem Solicitor Opinion;
(h) a certificate of confirmation signed by a director or
officer of Anthem substantially in the form of SCHEDULE N to
this Agreement; and
(i) copies of completed documentation relating to the
Financing.
6.3 Anthem will immediately after the Completion deliver to the
California Corporations Commissioner the notice or notices required under the
California Corporations Code.
7. GENERAL
7.1 Time and each of the terms and conditions of this Agreement
shall be of the essence of this Agreement and any waiver by the parties of this
paragraph 7.1 or any failure by them to exercise any of their rights under this
Agreement shall be limited to the particular instance and shall not extend to
any other instance or matter in this Agreement or otherwise affect any of their
rights or remedies under this Agreement.
7.2 The Schedules to this Agreement incorporated by reference and
the recitals to this Agreement constitute a part of this Agreement.
7.3 This Agreement constitutes the entire Agreement between the
parties hereto in respect of the matters referred to herein and there are no
representations, warranties, covenants or agreements, expressed or implied,
collateral hereto other than as expressly set forth or referred to herein.
7.4 The headings in this Agreement are for reference only and do
not constitute terms of the Agreement.
7.5 The provisions contained in this Agreement which, by their
terms, require performance by a party to this Agreement subsequent to the
Closing Date of this Agreement, shall survive the Closing Date of this
Agreement.
7.6 No alteration, amendment, modification or interpretation of
this Agreement or any provision of this Agreement shall be valid and binding
upon the parties hereto unless such alteration, amendment, modification or
interpretation is in written form executed by the parties directly affected by
such alteration, amendment, modification or interpretation.
7.7 Whenever the singular or masculine is used in this Agreement
the same shall be deemed to include the plural or the feminine or the body
corporate as the context may require.
7.8 The parties hereto shall execute and deliver all such further
documents and instruments and do all such acts and things as any party may,
either before or after the Closing Date, reasonably require in order to carry
out the full intent and meaning of this Agreement.
7.9 Any notice, request, demand and other communication to be
given under this Agreement shall be in writing and shall be delivered by hand or
by courier or by first class pre-paid mail or by telecopy to the appropriate
party at the address as first set out above or to such other addresses or by
such other means as may be designated in writing by the parties hereto in the
manner provided for in this paragraph, and shall be deemed to have been received
on the date of delivery by hand or by
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courier, or if delivered by first class pre-paid mail then on the fifth working
day after posting (postal service interruptions excepted), or if delivered by
telecopy, then on the later of the date transmission completes or the date that
a copy is sent by first class pre-paid mail.
7.10 This Agreement shall be subject to, governed by, and construed
in accordance with the laws of the State of California, without reference to the
principles of conflicts of law, and the laws of the United States applicable
therein.
7.11 This Agreement may be signed by the parties in as many
counterparts as may be deemed necessary, each of which so signed shall be deemed
to be an original, and all such counterparts together shall constitute one and
the same instrument.
7.12 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) but will not be assignable by any of the parties without the
express written consent of the other parties hereto, which may be withheld.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals as of the
Effective Date:
<TABLE>
<S> <C> <C>
EXECUTED AND DELIVERED on behalf of )
UDATE.COM LTD. by its duly authorized signatories: )
)
___________________________________________ )
Name: ____________________________________ )
Title: ____________________________________ )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
THE CORPORATE SEAL of )
INTERNET INVESTMENTS INC. was hereunto affixed in the )
presence of its authorized signatory: )
)
___________________________________________ ) c/s
Name: _____________________________________ )
Title: ____________________________________ )
)
THE CORPORATE SEAL of ATLAS TRUST COMPANY (JERSEY) )
LIMITED, was hereunto affixed in the presence of its )
authorized signatories: )
)
___________________________________________ ) c/s
Name: _____________________________________ )
Title: ____________________________________ )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
)
EXECUTED AND DELIVERED on behalf of )
TAVENDISH ENTERPRISES LIMITED by its authorized )
signatories: )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
SIGNED, SEALED & DELIVERED by )
DAVID JOHN SHORTLAND in the presence of: )
)
___________________________________________ )
Signature of Witness ) _________________________________
) DAVID JOHN SHORTLAND
Name: _____________________________________ )
Address: __________________________________ )
___________________________________________ )
Occupation: _______________________________ )
)
SIGNED, SEALED & DELIVERED )
by PAULA LORAINE SHORTLAND in the presence of: )
)
___________________________________________ ) _________________________________
Signature of Witness ) PAULA LORAINE SHORTLAND
)
Name: _____________________________________ )
Address: __________________________________ )
___________________________________________ )
Occupation: _______________________________ )
)
EXECUTED AND DELIVERED on behalf of )
RYLEY HILL LTD. by its authorized signatories: )
)
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
)
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SIGNED, SEALED & DELIVERED ) ____________________________________
by DAVID JOHN SHORTLAND, CHRISTINE ELIZABETH CATHERALL, ) DAVID JOHN SHORTLAND
BRUCE CARLESS and BETTY MAY SHORTLAND as trustees of the )
SHORTLAND NO. 1 TRUST in the presence of: ) ____________________________________
) CHRISTINE ELIZABETH CATHERALL
___________________________________________ )
Signature of Witness )) ____________________________________
) BRUCE CARLESS
Name: _____________________________________ )
Address: __________________________________ ) ____________________________________
___________________________________________ ) BETTY MAY SHORTLAND
Occupation: _______________________________ )
SIGNED, SEALED & DELIVERED )
by MELVYN MORRIS in the presence of: )
)
___________________________________________ )
Signature of Witness ) ____________________________________
) MELVYN MORRIS
Name: _____________________________________ )
Address: __________________________________ )
___________________________________________ )
Occupation: _______________________________ )
SIGNED, SEALED & DELIVERED )
by HOWARD THACKER in the presence of: )
)
___________________________________________ )
Signature of Witness ) ____________________________________
) HOWARD THACKER
Name: _____________________________________ )
Address: __________________________________ )
___________________________________________ )
Occupation: _______________________________ )
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
)
THE CORPORATE SEAL of ANTHEM RECORDING WEST INC. was )
hereunto affixed )
in the presence of its authorized signatories: )
) c/s
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
)
___________________________________________ )
Name: _____________________________________ )
Title: ____________________________________ )
</TABLE>
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<PAGE>
SCHEDULE A
UDATE.COM, INC.
2000 STOCK INCENTIVE PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Incentive Plan are to
attract and retain the best available personnel, to provide additional incentive
to Employees, Directors and Consultants and to promote the success of the
Company's business.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" means the Board or any of the Committees
appointed to administer the Plan.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act.
(c) "APPLICABLE LAWS" means the legal requirements relating to the
administration of stock incentive plans, if any, under
applicable provisions of federal and state securities laws,
the corporate laws of California and, to the extent other than
California, the corporate law of the state of the Company's
incorporation, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any
foreign jurisdiction applicable to Awards granted to residents
therein.
(d) "AWARD" means the grant of an Option, Restricted Stock, SAR,
Dividend Equivalent Right, Performance Unit, Performance
Share, or other right or benefit under the Plan.
(e) "AWARD AGREEMENT" means the written agreement evidencing the
grant of an Award executed by the Company and the Grantee,
including any amendments thereto.
(f) "BOARD" means the Board of Directors of the Company.
(g) "CAUSE" means, with respect to the termination by the Company
or a Related Entity of the Grantee's Continuous Service, that
such termination is for "Cause" as such term is expressly
defined in a then-effective written agreement between the
Grantee and the Company or such Related Entity, or in the
absence of such then-effective written agreement and
definition, is based on, in the determination of the
Administrator, the Grantee's: (i) refusal or failure to act in
accordance with any specific, lawful direction or order of the
Company or a Related Entity; (ii) unfitness or unavailability
for service or unsatisfactory performance (other than as a
result of Disability); (iii) performance of any act or failure
to perform any act in bad faith and to the detriment of the
Company or a Related Entity; (iv) dishonesty, intentional
misconduct or material breach of any agreement with the
Company or a Related Entity; or (v) commission of any felony
or commission of any crime
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<PAGE>
involving dishonesty or breach of trust. At least 30 days
prior to the termination of the Grantee's Continuous Service
pursuant to (i) or (ii) above, the Administrator shall
provide the Grantee with notice of the Company's or such
Related Entity's intent to terminate, the reason therefor,
and an opportunity for the Grantee to cure such defects in
his or her service to the Company's or such Related Entity's
satisfaction. During this 30 day (or longer) period, no Award
issued to the Grantee under the Plan may be exercised or
purchased.
(h) "CHANGE IN CONTROL" means a change in ownership or control of
the Company effected through either of the following
transactions:
(i) the direct or indirect acquisition by any person or
related group of persons (other than an acquisition
from or by the Company or by a Company-sponsored
employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial
ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting
power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly
to the Company's stockholders which a majority of the
Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such
stockholders accept, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) months or less such that a
majority of the Board members (rounded up to the next
whole number) ceases, by reason of one or more
contested elections for Board membership, to be
comprised of individuals who are Continuing
Directors.
(i) "CODE" means the Internal Revenue Code of 1986, as amended or
superseded.
(j) "COMMITTEE" means any committee appointed by the Board to
administer the Plan.
(k) "COMMON STOCK" means the common stock of the Company.
(l) "COMPANY" means uDate.com, Inc., a California corporation.
(m) "CONSULTANT" means any person (other than an Employee or a
Director, solely with respect to rendering services in such
person's capacity as a Director) who is engaged by the Company
or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.
(n) "CONTINUING DIRECTORS" means members of the Board who either
(i) have been Board members continuously for a period of at
least thirty-six (36) months or (ii) have been Board members
for less than thirty-six (36) months and were elected or
nominated for election as Board members by at least a majority
of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by
the Board.
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<PAGE>
(o) "CONTINUOUS SERVICE" means that the provision of services to
the Company or a Related Entity in any capacity of Employee,
Director or Consultant, is not interrupted or terminated.
Continuous Service shall not be considered interrupted in the
case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor, in
any capacity of Employee, Director or Consultant, or (iii) any
change in status as long as the individual remains in the
service of the Company or a Related Entity in any capacity of
Employee, Director or Consultant (except as otherwise provided
in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized
personal leave. For purposes of each Incentive Stock Option
granted under the Plan, if such leave exceeds ninety (90)
days, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock
Option shall be treated as a Non-Qualified Stock Option on the
day three (3) months and one (1) day following the expiration
of such ninety (90) day period.
(p) "CORPORATE TRANSACTION" means any of the following
transactions:
(i) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the
principal purpose of which is to change the state in
which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company
(including the capital stock of the Company's
subsidiary corporations);
(iii) approval by the shareholders of the Company of any
plan or proposal for the complete liquidation or
dissolution of the Company;
(iv) any reverse merger in which the Company is the
surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities
are transferred to a person or persons different from
those who held such securities immediately prior to
such merger; or
(v) acquisition by any person or related group of persons
(other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the
Company's outstanding securities (whether or not in a
transaction also constituting a Change in Control),
but excluding any such transaction that the
Administrator determines shall not be a Corporate
Transaction.
(q) "COVERED EMPLOYEE" means an Employee who is a "covered
employee" under Section 162(m)(3) of the Code.
(r) "DIRECTOR" means a member of the Board or the board of
directors of any Related Entity.
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<PAGE>
(s) "DISABILITY" means that a Grantee would qualify for benefit
payments under the long-term disability policy of the Company
or the Related Entity to which the Grantee provides services
regardless of whether the Grantee is covered by such policy
or, if no such policy is maintained by the Company or the
Related Entity to which the Grantee provides service, that a
Grantee is permanently unable to carry out the
responsibilities and functions of the position held by the
Grantee by reason of any medically determinable physical or
mental impairment. A Grantee will not be considered to have
incurred a Disability unless he or she furnishes proof of such
impairment sufficient to satisfy the Administrator in its
discretion.
(t) "DIVIDEND EQUIVALENT RIGHT" means a right entitling a Grantee
to compensation measured by dividends paid with respect to
Common Stock.
(u) "EMPLOYEE" means any person, including an Officer or Director,
who is an employee of the Company or any Related Entity. The
payment of a director's fee by the Company or a Related Entity
shall not be sufficient to constitute "employment" by the
Company.
(v) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(w) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) Where there exists a public market for the Common
Stock, the Fair Market Value shall be (A) the closing
price for a Share for the last market trading day
prior to the time of the determination (or, if no
closing price was reported on that date, on the last
trading date on which a closing price was reported)
on the stock exchange determined by the Administrator
to be the primary market for the Common Stock or the
Nasdaq National Market, whichever is applicable or
(B) if the Common Stock is not traded on any such
exchange or national market system, the average of
the closing bid and asked prices of a Share on the
Nasdaq Small Cap Market for the day prior to the time
of the determination (or, if no such prices were
reported on that date, on the last date on which such
prices were reported), in each case, as reported in
THE WALL STREET JOURNAL or such other source as the
Administrator deems reliable; or
(ii) In the absence of an established market for the
Common Stock of the type described in (i), above, the
Fair Market Value thereof shall be determined by the
Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the
California Code of Regulations (as amended or
superseded).
(x) "GRANTEE" means an Employee, Director or Consultant who
receives an Award under the Plan.
(y) "INCENTIVE STOCK OPTION" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422
of the Code.
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(z) "NON-QUALIFIED STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.
(aa) "OFFICER" means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder.
(bb) "OPTION" means an option to purchase Shares pursuant to an
Award Agreement granted under the Plan.
(cc) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(dd) "PERFORMANCE - BASED COMPENSATION" means compensation
qualifying as "performance-based compensation" under Section
162(m) of the Code.
(ee) "PERFORMANCE SHARES" means Shares or an Award denominated in
Shares which may be earned in whole or in part upon attainment
of performance criteria established by the Administrator.
(ff) "PERFORMANCE UNITS" means an Award which may be earned in
whole or in part upon attainment of performance criteria
established by the Administrator and which may be settled for
cash, Shares or other securities or a combination of cash,
Shares or other securities as established by the
Administrator.
(gg) "PLAN" means this 2000 Stock Incentive Plan.
(hh) "POST-TERMINATION EXERCISE PERIOD" means the period specified
in the Award Agreement of not less than three (3) months
commencing on the date of termination (other than termination
by the Company or any Related Entity for Cause) of the
Grantee's Continuous Service, or such longer period as may be
applicable upon death or Disability.
(ii) "REGISTRATION DATE" means the first to occur of (i) the
closing of the first sale to the general public of (A) the
Common Stock or (B) the same class of securities of a
successor corporation (or its Parent) issued pursuant to a
Corporate Transaction in exchange for or in substitution of
the Common Stock, pursuant to a registration statement filed
with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended; and
(ii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of
securities of the successor corporation (or its Parent)
issuable in such Corporate Transaction shall have been sold to
the general public pursuant to a registration statement filed
with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended, on or
prior to the date of consummation of such Corporate
Transaction.
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(jj) "RELATED ENTITY" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company
or other entity in which the Company, a Parent or a Subsidiary
holds a substantial ownership interest, directly or
indirectly.
(kk) "RELATED ENTITY DISPOSITION" means the sale, distribution or
other disposition by the Company, a Parent or a Subsidiary of
all or substantially all of the interests of the Company, a
Parent or a Subsidiary in any Related Entity effected by a
sale, merger or consolidation or other transaction involving
that Related Entity or the sale of all or substantially all of
the assets of that Related Entity, other than any Related
Entity Disposition to the Company, a Parent or a Subsidiary.
(ll) "RESTRICTED STOCK" means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of first refusal, repurchase
provisions, forfeiture provisions, and other terms and
conditions as established by the Administrator.
(mm) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange
Act or any successor thereto.
(nn) "SAR" means a stock appreciation right entitling the Grantee
to Shares or cash compensation, as established by the
Administrator, measured by appreciation in the value of Common
Stock.
(oo) "SHARE" means a share of the Common Stock.
(pp) "SUBSIDIARY" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 10 below, the maximum
aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Stock Options) is Three Million
(3,000,000) Shares of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which
is forfeited or canceled, expires or is settled in cash, shall
be deemed not to have been issued for purposes of determining
the maximum aggregate number of Shares which may be issued
under the Plan. Shares that actually have been issued under
the Plan pursuant to an Award shall not be returned to the
Plan and shall not become available for future issuance under
the Plan, except that if unvested Shares are forfeited, or
repurchased by the Company at their original purchase price,
such Shares shall become available for future grant under the
Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PLAN ADMINISTRATOR.
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(i) ADMINISTRATION WITH RESPECT TO DIRECTORS AND
OFFICERS. With respect to grants of Awards to
Directors or Employees who are also Officers or
Directors of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the
Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section
16(b) of the Exchange Act in accordance with Rule
16b-3. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise
directed by the Board.
(ii) ADMINISTRATION WITH RESPECT TO CONSULTANTS AND OTHER
EMPLOYEES. With respect to grants of Awards to
Employees or Consultants who are neither Directors
nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee
designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the
Applicable Laws. Once appointed, such Committee shall
continue to serve in its designated capacity until
otherwise directed by the Board. The Board may
authorize one or more Officers to grant such Awards
and may limit such authority as the Board determines
from time to time.
(iii) ADMINISTRATION WITH RESPECT TO COVERED EMPLOYEES.
Notwithstanding the foregoing, grants of Awards to
any Covered Employee intended to qualify as
Performance-Based Compensation shall be made only by
a Committee (or subcommittee of a Committee) which is
comprised solely of two or more Directors eligible to
serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such
Awards granted to Covered Employees, references to
the "Administrator" or to a "Committee" shall be
deemed to be references to such Committee or
subcommittee.
(iv) ADMINISTRATION ERRORS. In the event an Award is
granted in a manner inconsistent with the provisions
of this subsection (a), such Award shall be
presumptively valid as of its grant date to the
extent permitted by the Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to Applicable Laws and
the provisions of the Plan (including any other powers given
to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the
authority, in its discretion:
(i) to select the Employees, Directors and Consultants to
whom Awards may be granted from time to time
hereunder;
(ii) to determine whether and to what extent Awards are
granted hereunder;
(iii) to determine the number of Shares or the amount of
other consideration to be covered by each Award
granted hereunder;
(iv) to approve forms of Award Agreements for use under
the Plan;
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(v) to determine the terms and conditions of any Award
granted hereunder;
(vi) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of
applicable foreign jurisdictions and to afford
Grantees favorable treatment under such rules or
laws; provided, however, that no Award shall be
granted under any such additional terms, conditions,
rules or procedures with terms or conditions which
are inconsistent with the provisions of the Plan;
(vii) to amend the terms of any outstanding Award granted
under the Plan, provided that any amendment that
would adversely affect the Grantee's rights under an
outstanding Award shall not be made without the
Grantee's written consent;
(viii) to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan, including
without limitation, any notice of award or Award
Agreement, granted pursuant to the Plan; and
(ix) to take such other action, not inconsistent with the
terms of the Plan, as the Administrator deems
appropriate.
5. ELIGIBILITY. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.
6. TERMS AND CONDITIONS OF AWARDS.
(a) TYPE OF AWARDS. The Administrator is authorized under the Plan
to award any type of arrangement to an Employee, Director or
Consultant that is not inconsistent with the provisions of the
Plan and that by its terms involves or might involve the
issuance of (i) Shares, (ii) an Option, a SAR or similar right
with a fixed or variable price related to the Fair Market
Value of the Shares and with an exercise or conversion
privilege related to the passage of time, the occurrence of
one or more events, or the satisfaction of performance
criteria or other conditions, or (iii) any other security with
the value derived from the value of the Shares. Such awards
may include, without limitation, Options, sales or bonuses of
Restricted Stock, SARs, Dividend Equivalent Rights,
Performance Units or Performance Shares, and an Award may
consist of one such security or benefit, or two (2) or more of
them in any combination or alternative.
(b) DESIGNATION OF AWARD. Each Award shall be designated in the
Award Agreement. In the case of an Option, the Option shall be
designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the
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first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options, to the extent of the Shares
covered thereby in excess of the foregoing limitation, shall
be treated as Non-Qualified Stock Options. For this purpose,
Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value
of the Shares shall be determined as of the date the Option
with respect to such Shares is granted.
(c) CONDITIONS OF AWARD. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and
conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first
refusal, forfeiture provisions, form of payment (cash, Shares,
or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria.
The performance criteria established by the Administrator may
be based on any one of, or combination of, increase in share
price, earnings per share, total shareholder return, return on
equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal
management objectives, or other measure of performance
selected by the Administrator. Partial achievement of the
specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the
Award Agreement.
(d) ACQUISITIONS AND OTHER TRANSACTIONS. The Administrator may
issue Awards under the Plan in settlement, assumption or
substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related
Entity acquiring another entity, an interest in another entity
or an additional interest in a Related Entity whether by
merger, stock purchase, asset purchase or other form of
transaction.
(e) DEFERRAL OF AWARD PAYMENT. The Administrator may establish one
or more programs under the Plan to permit selected Grantees
the opportunity to elect to defer receipt of consideration
upon exercise of an Award, satisfaction of performance
criteria, or other event that absent the election would
entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish
the election procedures, the timing of such elections, the
mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so
deferred, and such other terms, conditions, rules and
procedures that the Administrator deems advisable for the
administration of any such deferral program.
(f) AWARD EXCHANGE PROGRAMS. The Administrator may establish one
or more programs under the Plan to permit selected Grantees to
exchange an Award under the Plan for one or more other types
of Awards under the Plan on such terms and conditions as
determined by the Administrator from time to time.
(g) SEPARATE PROGRAMS. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing
particular forms of Awards to
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one or more classes of Grantees on such terms and conditions
as determined by the Administrator from time to time.
(h) INDIVIDUAL OPTION AND SAR LIMIT. The maximum number of Shares
with respect to which Options and SARs may be granted to any
Grantee in any fiscal year of the Company shall be One Million
(1,000,000) Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent
required by Section 162(m) of the Code or the regulations
thereunder, in applying the foregoing limitation with respect
to a Grantee, if any Option or SAR is canceled, the canceled
Option or SAR shall continue to count against the maximum
number of Shares with respect to which Options and SARs may be
granted to the Grantee. For this purpose, the repricing of an
Option (or in the case of a SAR, the base amount on which the
stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall
be treated as the cancellation of the existing Option or SAR
and the grant of a new Option or SAR.
(i) EARLY EXERCISE. The Award Agreement may, but need not, include
a provision whereby the Grantee may elect at any time while an
Employee, Director or Consultant to exercise any part or all
of the Award prior to full vesting of the Award. Any unvested
Shares received pursuant to such exercise may be subject to a
repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be
appropriate.
(j) TERM OF AWARD. The term of each Award shall be the term stated
in the Award Agreement, provided, however, that the term shall
be no more than ten (10) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a
Grantee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be
five (5) years from the date of grant thereof or such shorter
term as may be provided in the Award Agreement.
(k) TRANSFERABILITY OF AWARDS. Non-Qualified Stock Options shall
be transferable (i) to the extent provided in the Award
Agreement and in a manner consistent with Section 260.140.41
of Title 10 of the California Code of Regulations and (ii) by
Will or by the laws of descent and distribution. Incentive
Stock Options and other Awards may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any
manner other than by Will or by the laws of descent or
distribution and may be exercised, during the lifetime of the
Grantee, only by the Grantee; provided however that the
Grantee may designate a beneficiary of his or her Incentive
Stock Option in the event of the Grantee's death on a
beneficiary designation form provided by the Administrator.
(l) TIME OF GRANTING AWARDS. The date of grant of an Award shall
for all purposes be the date on which the Administrator makes
the determination to grant such Award, or such other date as
is determined by the Administrator. Notice of the grant
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determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable
time after the date of such grant.
7. AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION AND TAXES.
(a) EXERCISE OR PURCHASE PRICE. The exercise or purchase price, if
any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
A. granted to an Employee who, at the time of
the grant of such Incentive Stock Option
owns stock representing more than ten
percent (10%) of the voting power of all
classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise
price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per
Share on the date of grant; or
B. granted to any Employee other than an
Employee described in the preceding
paragraph, the per Share exercise price
shall be not less than one hundred percent
(100%) of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Non-Qualified Stock Option:
A. granted to a person who, at the time of the
grant of such Option, owns stock
representing more than ten percent (10%) of
the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the
per Share exercise price shall be not less
than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of
grant; or
B. granted to any person other than a person
described in the preceding paragraph, the
per Share exercise price shall be not less
than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant.
(iii) In the case of Awards intended to qualify as
Performance-Based Compensation, the exercise or
purchase price, if any, shall be not less than one
hundred percent (100%) of the Fair Market Value per
Share on the date of grant.
(iv) In the case of the sale of Shares:
A. granted to a person who, at the time of the
grant of such Award, or at the time the
purchase is consummated, owns stock
representing more than ten percent (10%) of
the voting power of all classes of stock of
the Company or any Parent or Subsidiary, the
per Share
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purchase price shall be not less than one
hundred percent (100%) of the Fair Market
Value per Share on the date of grant; or
B. granted to any person other than a person
described in the preceding paragraph, the
per Share purchase price shall be not less
than eighty-five percent (85%) of the Fair
Market Value per Share on the date of grant.
(v) In the case of other Awards, such price as is
determined by the Administrator.
(vi) Notwithstanding the foregoing provisions of this
Section 7(a), in the case of an Award issued pursuant
to Section 6(d), above, the exercise or purchase
price for the Award shall be determined in accordance
with the principles of Section 424(a) of the Code.
(b) CONSIDERATION. Subject to Applicable Laws, the consideration
to be paid for the Shares to be issued upon exercise or
purchase of an Award including the method of payment, shall be
determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of
grant). In addition to any other types of consideration the
Administrator may determine, the Administrator is authorized
to accept as consideration for Shares issued under the Plan
the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such
recourse, interest, security, and redemption
provisions as the Administrator determines as
appropriate;
(iv) if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares or delivery of
a properly executed form of attestation of ownership
of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon
exercise of the Award) which have a Fair Market Value
on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which
said Award shall be exercised (but only to the extent
that such exercise of the Award would not result in
an accounting compensation charge with respect to the
Shares used to pay the exercise price unless
otherwise determined by the Administrator);
(v) with respect to Options, if the exercise occurs on or
after the Registration Date, payment through a
broker-dealer sale and remittance procedure pursuant
to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm
to effect the immediate sale of some or all of the
purchased Shares and remit to the Company, out of the
sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise
price payable for the purchased Shares and (B) shall
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provide written directives to the Company to deliver
the certificates for the purchased Shares directly to
such brokerage firm in order to complete the sale
transaction; or
(vi) any combination of the foregoing methods of payment.
(c) TAXES. No Shares shall be delivered under the Plan to any
Grantee or other person until such Grantee or other person has
made arrangements acceptable to the Administrator for the
satisfaction of any foreign, federal, state, or local income
and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares or
the disqualifying disposition of Shares received on exercise
of an Incentive Stock Option. Upon exercise of an Award the
Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations.
8. EXERCISE OF AWARD.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER.
(i) Any Award granted hereunder shall be exercisable at
such times and under such conditions as determined by
the Administrator under the terms of the Plan and
specified in the Award Agreement but in the case of
an Option, in no case at a rate of less than twenty
percent (20%) per year over five (5) years from the
date the Option is granted, subject to reasonable
conditions such as continued employment.
Notwithstanding the foregoing, in the case of an
Option granted to an Officer, Director or Consultant,
the Award Agreement may provide that the Option may
become exercisable, subject to reasonable conditions
such as such Officer's, Director's or Consultant's
Continuous Service, at any time or during any period
established in the Award Agreement.
(ii) An Award shall be deemed to be exercised when written
notice of such exercise has been given to the Company
in accordance with the terms of the Award by the
person entitled to exercise the Award and full
payment for the Shares with respect to which the
Award is exercised, including, to the extent
selected, use of the broker-dealer sale and
remittance procedure to pay the purchase price as
provided in Section 7(b)(v). Until the issuance (as
evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of
the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with
respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other
Award. No adjustment will be made for a dividend or
other right for which the record date is prior to the
date the stock certificate is issued, except as
provided in the Award Agreement or Section 10 below.
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(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF CONTINUOUS SERVICE.
(i) An Award may not be exercised after the termination
date of such Award set forth in the Award Agreement
and may be exercised following the termination of a
Grantee's Continuous Service only to the extent
provided in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to
exercise an Award following the termination of the
Grantee's Continuous Service for a specified period,
the Award shall terminate to the extent not exercised
on the last day of the specified period or the last
day of the original term of the Award, whichever
occurs first.
(iii) Any Award designated as an Incentive Stock Option to
the extent not exercised within the time permitted by
law for the exercise of Incentive Stock Options
following the termination of a Grantee's Continuous
Service shall convert automatically to a
Non-Qualified Stock Option and thereafter shall be
exercisable as such to the extent exercisable by its
terms for the period specified in the Award
Agreement.
9. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and
delivery of such Shares pursuant thereto shall comply with all
Applicable Laws, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and
warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present
intention to sell or distribute such Shares, and to make such
other representations and warranties as counsel for the
Company may reasonably require, if in the opinion of counsel
for the Company such representations or warranties are
required by any Applicable Laws.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE TRANSACTION. Subject
to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan, the exercise or purchase price
of each such outstanding Award, the maximum number of Shares with respect to
which Options and SARs may be granted to any Grantee in any fiscal year of the
Company, as well as any other terms that the Administrator determines require
adjustment shall be proportionately adjusted for (i) any increase or decrease in
the number of issued Shares resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Shares, or similar event
affecting the Shares, (ii) any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Company, or
(iii) as the Administrator may determine in its discretion, any other
transaction with respect to Common Stock
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to which Section 424(a) of the Code applies or any similar transaction;
provided, however that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator and its
determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.
11. CORPORATE TRANSACTION - CHANGES IN CONTROL - RELATED PARTY DISPOSITIONS.
Except as may be provided in an Award Agreement:
(a) Effective upon the consummation of a Corporate Transaction,
each outstanding Award under the Plan will terminate, unless
such Award is assumed by the successor corporation or Parent
thereof in connection with the Corporate Transaction.
(b) Effective upon the consummation of a Related Entity
Disposition, for purposes of the Plan and all Awards, the
Continuous Service of each Grantee who is at the time engaged
primarily in service to the Related Entity involved in such
Related Entity Disposition shall be deemed to terminate and
each Award of such Grantee which is at the time outstanding
under the Plan shall be exercisable in accordance with the
terms of the Award Agreement evidencing such Award. However,
such Continuous Service shall be not to deemed to terminate if
such Award is, in connection with the Related Entity
Disposition, assumed by the successor entity or its parent.
12. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 17, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
13. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board may at any time amend, suspend or terminate the
Plan. To the extent necessary to comply with Applicable Laws
or to continue any qualification of any option as an Incentive
Stock Option, the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as
required.
(b) No Award may be granted during any suspension of the Plan or
after termination of the Plan.
(c) Any amendment, suspension or termination of the Plan
(including termination of the Plan under Section 12, above)
shall not affect Awards already granted, and such Awards shall
remain in full force and effect as if the Plan had not been
amended, suspended or terminated, unless mutually agreed
otherwise between the Grantee and the Administrator, which
agreement must be in writing and signed by the Grantee and the
Company.
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14. RESERVATION OF SHARES.
(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
(b) The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed
by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall
not have been obtained.
15. NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP. The Plan shall not
confer upon any Grantee any right with respect to the Grantee's Continuous
Service, nor shall it interfere in any way with his or her right or the
Company's right to terminate the Grantee's Continuous Service at any time, with
or without Cause, and with or without notice. The Company's ability to terminate
the employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee's Continuous Service has been terminated for
Cause for the purposes of this Plan.
16. NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS. Except as specifically
provided in a retirement or other benefit plan of the Company or a Related
Entity, Awards shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any
kind or any benefit plan subsequently instituted under which the availability or
amount of benefits is related to level of compensation. The Plan is not a
"Retirement Plan" or "Welfare Plan" under the Employee Retirement Income
Security Act of 1974, as amended.
17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to approval
by the shareholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such shareholder approval shall be obtained in the
degree and manner required under Applicable Laws. Any Award exercised before
shareholder approval is obtained shall be rescinded if shareholder approval is
not obtained within the time prescribed, and Shares issued on the exercise of
any such Award shall not be counted in determining whether shareholder approval
is obtained.
18. INFORMATION TO GRANTEES. The Company shall provide to each Grantee, during
the period for which such Grantee has one or more Awards outstanding, copies of
financial statements at least annually.
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SCHEDULE B
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Grantee's Name and Address: MELVYN MORRIS
Redmire Gap Farm
Mercaston Lane, Turnditch
Derbyshire, UK DE65 6NX
You have been granted an option to purchase shares of Common Stock of
uDate.com, Inc., subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice"), the uDate.com, Inc. 2000 Stock Incentive Plan, as
amended from time to time (the "Plan") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.
Award Number No. 1
Date of Award May ________, 2000
Vesting Commencement Date May ________, 2000
Exercise Price per Share $7.50
Total Number of Shares Subject
to the Option (the "Shares") 525,000
Total Exercise Price $3,937,500
Type of Option: Incentive Stock Option
Expiration Date: May _______, 2010
Post-Termination Exercise Period: Three (3) Months
VESTING SCHEDULE:
Subject to Grantee's Continuous Service and other limitations set forth
in this Notice, the Plan and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:
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Fifty Percent (50%) of the Shares subject to the Option shall vest
twelve months after the Vesting Commencement Date, and 1/24th of the
Shares subject to the Option shall vest on each monthly anniversary of
the Vesting Commencement Date thereafter.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease. Vesting of the Option shall resume upon
the Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity.
In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate concurrently
with the termination of the Grantee's Continuous Service, except as otherwise
determined by the Administrator.
In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more
per week to an Employee whose customary employment is fewer than 20 hours per
week, vesting of the Option shall continue only to the extent determined by the
Administrator as of such change in status consistent with any minimum vesting
requirements set forth in the Plan.
IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Option Agreement.
UDate.com, Inc.,
a California corporation
By: _________________________________________
Title: ______________________________________
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE, SUBJECT TO ANY WRITTEN EMPLOYMENT
AGREEMENT WITH THE GRANTEE.
The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts the Option subject to all of the terms and
provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan,
and the Option Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Notice, and fully understands all
provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby
agrees that all disputes arising out of or relating to
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this Notice, the Plan and the Option Agreement shall be resolved in
accordance with Section 19 of the Option Agreement. The Grantee further
agrees to notify the Company upon any change in the residence address
indicated in this Notice.
Dated: ______________________ Signed: ______________________________
Melvyn Morris
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AWARD NUMBER: 1
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
1. GRANT OF OPTION. UDATE.COM, INC., A CALIFORNIA CORPORATION (THE
"COMPANY"), HEREBY GRANTS TO THE GRANTEE (THE "GRANTEE") NAMED IN THE NOTICE OF
STOCK OPTION AWARD (THE "NOTICE"), AN OPTION (THE "OPTION") TO PURCHASE THE
TOTAL NUMBER OF SHARES OF COMMON STOCK SUBJECT TO THE OPTION (THE "SHARES") SET
FORTH IN THE NOTICE, AT THE EXERCISE PRICE PER SHARE SET FORTH IN THE NOTICE
(THE "EXERCISE PRICE") SUBJECT TO THE TERMS AND PROVISIONS OF THE NOTICE, THIS
STOCK OPTION AWARD AGREEMENT (THE "OPTION AGREEMENT") AND THE COMPANY'S 2000
STOCK INCENTIVE PLAN, AS AMENDED FROM TIME TO TIME (THE "PLAN"), WHICH ARE
INCORPORATED HEREIN BY REFERENCE. UNLESS OTHERWISE DEFINED HEREIN, THE TERMS
DEFINED IN THE PLAN SHALL HAVE THE SAME DEFINED MEANINGS IN THIS OPTION
AGREEMENT.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.
2. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. THE OPTION SHALL BE EXERCISABLE DURING ITS
TERM IN ACCORDANCE WITH THE VESTING SCHEDULE SET OUT IN THE
NOTICE AND WITH THE APPLICABLE PROVISIONS OF THE PLAN AND THIS
OPTION AGREEMENT. NO PARTIAL EXERCISE OF THE OPTION MAY BE FOR
LESS THAN THE LESSER OF FIVE PERCENT (5%) OF THE TOTAL NUMBER
OF SHARES SUBJECT TO THE OPTION OR THE REMAINING NUMBER OF
SHARES SUBJECT TO THE OPTION. IN NO EVENT SHALL THE COMPANY
ISSUE FRACTIONAL SHARES.
(b) ACCELERATION IN THE EVENT OF CORPORATE TRANSACTION.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN THE EVENT OF A
CORPORATE TRANSACTION, THIS OPTION SHALL AUTOMATICALLY SHALL
BECOME FULLY VESTED AND EXERCISABLE AND BE RELEASED FROM ANY
FORFEITURE RIGHTS, IMMEDIATELY PRIOR TO THE SPECIFIED
EFFECTIVE DATE OF SUCH CORPORATE TRANSACTION, FOR ALL OF THE
SHARES AT THE TIME REPRESENTED BY THIS OPTION. EFFECTIVE UPON
THE CONSUMMATION OF THE CORPORATE TRANSACTION, THIS OPTION
UNDER THE
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PLAN SHALL TERMINATE; PROVIDED HOWEVER THAT THIS OPTION SHALL
NOT TERMINATE IF IT IS ASSUMED BY THE SUCCESSOR CORPORATION
OR PARENT THEREOF IN CONNECTION WITH THE CORPORATE
TRANSACTION.
(c) ACCELERATION IN THE EVENT OF CHANGE IN CONTROL.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN THE EVENT OF A
CHANGE IN CONTROL (OTHER THAN A CHANGE IN CONTROL WHICH ALSO
IS A CORPORATE TRANSACTION), THIS OPTION AUTOMATICALLY SHALL
BECOME FULLY VESTED AND EXERCISABLE AND BE RELEASED FROM ANY
FORFEITURE RIGHTS, IMMEDIATELY PRIOR TO THE SPECIFIED
EFFECTIVE DATE OF SUCH CHANGE IN CONTROL, FOR ALL OF THE
SHARES AT THE TIME REPRESENTED BY THIS OPTION.
(d) METHOD OF EXERCISE. THE OPTION SHALL BE EXERCISABLE ONLY BY
DELIVERY OF AN EXERCISE NOTICE (ATTACHED AS EXHIBIT A) WHICH
SHALL STATE THE ELECTION TO EXERCISE THE OPTION, THE WHOLE
NUMBER OF SHARES IN RESPECT OF WHICH THE OPTION IS BEING
EXERCISED, AND SUCH OTHER PROVISIONS AS MAY BE REQUIRED BY THE
ADMINISTRATOR. THE EXERCISE NOTICE SHALL BE SIGNED BY THE
GRANTEE AND SHALL BE DELIVERED IN PERSON, BY CERTIFIED MAIL,
OR BY SUCH OTHER METHOD AS DETERMINED FROM TIME TO TIME BY THE
ADMINISTRATOR TO THE COMPANY ACCOMPANIED BY PAYMENT OF THE
EXERCISE PRICE. THE OPTION SHALL BE DEEMED TO BE EXERCISED
UPON RECEIPT BY THE COMPANY OF SUCH WRITTEN NOTICE ACCOMPANIED
BY THE EXERCISE PRICE, WHICH, TO THE EXTENT SELECTED, SHALL BE
DEEMED TO BE SATISFIED BY USE OF THE BROKER-DEALER SALE AND
REMITTANCE PROCEDURE TO PAY THE EXERCISE PRICE PROVIDED IN
SECTION 4(d), BELOW.
(e) TAXES. NO SHARES WILL BE DELIVERED TO THE GRANTEE OR OTHER
PERSON PURSUANT TO THE EXERCISE OF THE OPTION UNTIL THE
GRANTEE OR OTHER PERSON HAS MADE ARRANGEMENTS ACCEPTABLE TO
THE ADMINISTRATOR FOR THE SATISFACTION OF APPLICABLE INCOME
TAX, EMPLOYMENT TAX, AND SOCIAL SECURITY TAX WITHHOLDING
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, OBLIGATIONS
INCIDENT TO THE RECEIPT OF SHARES OR THE DISQUALIFYING
DISPOSITION OF SHARES RECEIVED ON EXERCISE OF AN INCENTIVE
STOCK OPTION. UPON EXERCISE OF THE OPTION, THE COMPANY OR THE
GRANTEE'S EMPLOYER MAY OFFSET OR WITHHOLD (FROM ANY AMOUNT
OWED BY THE COMPANY OR THE GRANTEE'S EMPLOYER TO THE GRANTEE)
OR COLLECT FROM THE GRANTEE OR OTHER PERSON AN AMOUNT
SUFFICIENT TO SATISFY SUCH TAX OBLIGATIONS AND/OR THE
EMPLOYER'S WITHHOLDING OBLIGATIONS.
3. GRANTEE'S REPRESENTATIONS. THE GRANTEE UNDERSTANDS THAT NEITHER THE OPTION
NOR THE SHARES EXERCISABLE PURSUANT TO THE OPTION HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY UNITED STATES SECURITIES LAWS. IN THE
EVENT THE SHARES PURCHASABLE PURSUANT TO THE EXERCISE OF THE OPTION HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AT THE TIME THE
OPTION IS EXERCISED, THE GRANTEE SHALL, IF REQUESTED BY THE COMPANY,
CONCURRENTLY WITH THE EXERCISE OF ALL OR ANY PORTION OF THE OPTION, DELIVER TO
THE COMPANY HIS INVESTMENT REPRESENTATION STATEMENT IN THE FORM ATTACHED HERETO
AS EXHIBIT B AND SUCH OTHER REPRESENTATIONS, WARRANTIES
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AND COVENANTS REASONABLY REQUESTED BY COUNSEL FOR THE COMPANY .
4. METHOD OF PAYMENT. PAYMENT OF THE EXERCISE PRICE SHALL BE MADE BY ANY OF THE
FOLLOWING, OR A COMBINATION THEREOF, AT THE ELECTION OF THE GRANTEE; PROVIDED,
HOWEVER, THAT SUCH EXERCISE METHOD DOES NOT THEN VIOLATE ANY APPLICABLE LAW:
(a) CASH;
(b) CHECK;
(c) IF THE EXERCISE OCCURS ON OR AFTER THE REGISTRATION DATE (AS
DEFINED BY THE PLAN), SURRENDER OF SHARES OR DELIVERY OF A
PROPERLY EXECUTED FORM OF ATTESTATION OF OWNERSHIP OF SHARES
AS THE ADMINISTRATOR MAY REQUIRE (INCLUDING WITHHOLDING OF
SHARES OTHERWISE DELIVERABLE UPON EXERCISE OF THE OPTION)
WHICH HAVE A FAIR MARKET VALUE ON THE DATE OF SURRENDER OR
ATTESTATION EQUAL TO THE AGGREGATE EXERCISE PRICE OF THE
SHARES AS TO WHICH THE OPTION IS BEING EXERCISED (BUT ONLY TO
THE EXTENT THAT SUCH EXERCISE OF THE OPTION WOULD NOT RESULT
IN AN ACCOUNTING COMPENSATION CHARGE WITH RESPECT TO THE
SHARES USED TO PAY THE EXERCISE PRICE);
(d) IF THE EXERCISE OCCURS ON OR AFTER THE REGISTRATION DATE,
PAYMENT THROUGH A BROKER-DEALER SALE AND REMITTANCE PROCEDURE
PURSUANT TO WHICH THE GRANTEE (i) SHALL PROVIDE WRITTEN
INSTRUCTIONS TO A COMPANY DESIGNATED BROKERAGE FIRM TO EFFECT
THE IMMEDIATE SALE OF SOME OR ALL OF THE PURCHASED SHARES AND
REMIT TO THE COMPANY, OUT OF THE SALE PROCEEDS AVAILABLE ON
THE SETTLEMENT DATE, SUFFICIENT FUNDS TO COVER THE AGGREGATE
EXERCISE PRICE PAYABLE FOR THE PURCHASED SHARES AND (ii) SHALL
PROVIDE WRITTEN DIRECTIVES TO THE COMPANY TO DELIVER THE
CERTIFICATES FOR THE PURCHASED SHARES DIRECTLY TO SUCH
BROKERAGE FIRM IN ORDER TO COMPLETE THE SALE TRANSACTION; OR
(e) PROVIDED THAT THE AGGREGATE EXERCISE PRICE FOR THE NUMBER OF
SHARES BEING PURCHASED EXCEEDS ___________________________
DOLLARS ($____,000), PAYMENT PURSUANT TO A PROMISSORY NOTE AS
DESCRIBED BELOW.
(i) The promissory note shall have a term of _____ (__)
years with principal and interest payable in _______
(__) equal annual installments;
(ii) The promissory note shall bear interest at the
minimum rate required by the federal tax laws to
avoid the imputation of interest income to the
Company and compensation income to the Grantee;
(iii) The Grantee shall be personally liable for payment of
the promissory note and the promissory note shall be
secured by the Shares purchased upon delivery of the
promissory note, or such other collateral of equal or
greater value, in a manner satisfactory to the
Administrator with such documentation as the
Administrator may request; and
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The promissory note shall become due and payable upon the occurrence of any or
all of the following events: (A) the sale or transfer of the Shares purchased
with the promissory note; (B) termination of the Grantee's Continuous Service
for any reason other than death or Disability; or (C) the first anniversary of
the termination of the Grantee's Continuous Service due to death or Disability.
5. RESTRICTIONS ON EXERCISE. THE OPTION MAY NOT BE EXERCISED IF THE ISSUANCE OF
THE SHARES SUBJECT TO THE OPTION UPON SUCH EXERCISE WOULD CONSTITUTE A VIOLATION
OF ANY APPLICABLE LAWS. IN ADDITION, THE OPTION MAY BE EXERCISED PRIOR TO THE
TIME THAT THE PLAN HAS BEEN APPROVED BY THE SHAREHOLDERS OF THE COMPANY;
PROVIDED HOWEVER THAT ALL SHARES ISSUED UPON ANY SUCH EXERCISE SHALL BE
RESCINDED IF SHAREHOLDER APPROVAL IS NOT OBTAINED WITHIN THE TIME PRESCRIBED,
AND SHARES ISSUED ON ANY SUCH EXERCISE SHALL NOT BE COUNTED IN DETERMINING
WHETHER SHAREHOLDER APPROVAL IS OBTAINED.
6. TERMINATION OR CHANGE OF CONTINUOUS SERVICE. IN THE EVENT THE GRANTEE'S
CONTINUOUS SERVICE TERMINATES, OTHER THAN FOR CAUSE, THE GRANTEE MAY, TO THE
EXTENT OTHERWISE SO ENTITLED AT THE DATE OF SUCH TERMINATION (THE
"TERMINATION DATE"), EXERCISE THE OPTION DURING THE POST-TERMINATION EXERCISE
PERIOD. IN THE EVENT OF TERMINATION OF THE GRANTEE'S CONTINUOUS SERVICE FOR
CAUSE, THE GRANTEE'S RIGHT TO EXERCISE THE OPTION SHALL, EXCEPT AS OTHERWISE
DETERMINED BY THE ADMINISTRATOR, TERMINATE CONCURRENTLY WITH THE TERMINATION
OF THE GRANTEE'S CONTINUOUS SERVICE. IN NO EVENT SHALL THE OPTION BE
EXERCISED LATER THAN THE EXPIRATION DATE SET FORTH IN THE NOTICE. IN THE
EVENT OF THE GRANTEE'S CHANGE IN STATUS FROM EMPLOYEE, DIRECTOR OR CONSULTANT
TO ANY OTHER STATUS OF EMPLOYEE, DIRECTOR OR CONSULTANT, THE OPTION SHALL
REMAIN IN EFFECT AND, EXCEPT TO THE EXTENT OTHERWISE DETERMINED BY THE
ADMINISTRATOR, CONTINUE TO VEST; PROVIDED, HOWEVER, WITH RESPECT TO ANY
INCENTIVE STOCK OPTION THAT SHALL REMAIN IN EFFECT AFTER A CHANGE IN STATUS
FROM EMPLOYEE TO DIRECTOR OR CONSULTANT, SUCH INCENTIVE STOCK OPTION SHALL
CEASE TO BE TREATED AS AN INCENTIVE STOCK OPTION AND SHALL BE TREATED AS A
NON-QUALIFIED STOCK OPTION ON THE DAY THREE (3) MONTHS AND ONE (1) DAY
FOLLOWING SUCH CHANGE IN STATUS. EXCEPT AS PROVIDED IN SECTIONS 8 AND 9
BELOW, TO THE EXTENT THAT THE GRANTEE IS NOT ENTITLED TO EXERCISE THE OPTION
ON THE TERMINATION DATE, OR IF THE GRANTEE DOES NOT EXERCISE THE OPTION TO
THE EXTENT SO ENTITLED WITHIN THE POST-TERMINATION EXERCISE PERIOD, THE
OPTION SHALL TERMINATE.
7. DEFINITION OF "CAUSE". FOR PURPOSES OF THIS AGREEMENT, "CAUSE" MEANS THE
GRANTEE'S (I) PERFORMANCE OF ANY MATERIAL ACT OR FAILURE TO PERFORM ANY
MATERIAL ACT IN BAD FAITH AND TO THE MATERIAL DETRIMENT OF THE COMPANY OR A
RELATED ENTITY; (II) PERFORMANCE OF DISHONEST ACTS OR INTENTIONAL MISCONDUCT
TO THE
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MATERIAL DETRIMENT OF THE COMPANY OR A RELATED ENTITY; (III) MATERIAL BREACH
OF ANY AGREEMENT WITH THE COMPANY OR A RELATED ENTITY; OR (IV) COMMISSION OF
ANY FELONY (EXCLUDING DWI AND SIMILAR TRAFFIC OFFENSES). AT LEAST 30 DAYS
PRIOR TO THE TERMINATION OF THE GRANTEE'S CONTINUOUS SERVICE PURSUANT TO ANY
OF THE FOREGOING, THE ADMINISTRATOR SHALL PROVIDE THE GRANTEE WITH NOTICE OF
THE COMPANY'S OR SUCH RELATED ENTITY'S INTENT TO TERMINATE, THE REASON
THEREFOR, AND AN OPPORTUNITY FOR THE GRANTEE TO CURE SUCH DEFECTS IN HIS
SERVICE TO THE COMPANY'S OR SUCH RELATED ENTITY'S REASONABLE SATISFACTION.
DURING THIS 30 DAY (OR LONGER) PERIOD, NO AWARD ISSUED TO THE GRANTEE UNDER
THE PLAN MAY BE EXERCISED OR PURCHASED.
8. DISABILITY OF GRANTEE. IN THE EVENT THE GRANTEE'S CONTINUOUS SERVICE
TERMINATES AS A RESULT OF HIS DISABILITY, THE GRANTEE MAY, BUT ONLY WITHIN
TWELVE (12) MONTHS FROM THE TERMINATION DATE (AND IN NO EVENT LATER THAN THE
EXPIRATION DATE), EXERCISE THE OPTION TO THE EXTENT HE WAS OTHERWISE ENTITLED
TO EXERCISE IT ON THE TERMINATION DATE; PROVIDED, HOWEVER, THAT IF SUCH
DISABILITY IS NOT A "DISABILITY" AS SUCH TERM IS DEFINED IN SECTION 22(E)(3)
OF THE CODE AND THE OPTION IS AN INCENTIVE STOCK OPTION, SUCH INCENTIVE STOCK
OPTION SHALL CEASE TO BE TREATED AS AN INCENTIVE STOCK OPTION AND SHALL BE
TREATED AS A NON-QUALIFIED STOCK OPTION ON THE DAY THREE (3) MONTHS AND ONE
(1) DAY FOLLOWING THE TERMINATION DATE. TO THE EXTENT THAT THE GRANTEE IS NOT
ENTITLED TO EXERCISE THE OPTION ON THE TERMINATION DATE, OR IF THE GRANTEE
DOES NOT EXERCISE THE OPTION TO THE EXTENT SO ENTITLED WITHIN THE TIME
SPECIFIED HEREIN, THE OPTION SHALL TERMINATE.
9. DEATH OF GRANTEE. IN THE EVENT OF THE TERMINATION OF THE GRANTEE'S
CONTINUOUS SERVICE AS A RESULT OF HIS DEATH, OR IN THE EVENT OF THE GRANTEE'S
DEATH DURING THE POST-TERMINATION EXERCISE PERIOD OR DURING THE TWELVE (12)
MONTH PERIOD FOLLOWING THE GRANTEE'S TERMINATION OF CONTINUOUS SERVICE AS A
RESULT OF HIS DISABILITY, THE GRANTEE'S ESTATE, OR A PERSON WHO ACQUIRED THE
RIGHT TO EXERCISE THE OPTION BY BEQUEST OR INHERITANCE, MAY EXERCISE THE
OPTION, BUT ONLY TO THE EXTENT THE GRANTEE COULD EXERCISE THE OPTION AT THE
DATE OF TERMINATION, WITHIN TWELVE (12) MONTHS FROM THE DATE OF DEATH (BUT IN
NO EVENT LATER THAN THE EXPIRATION DATE). TO THE EXTENT THAT THE GRANTEE IS
NOT ENTITLED TO EXERCISE THE OPTION ON THE DATE OF DEATH, OR IF THE OPTION IS
NOT EXERCISED TO THE EXTENT SO ENTITLED WITHIN THE TIME SPECIFIED HEREIN, THE
OPTION SHALL TERMINATE.
10. TRANSFERABILITY OF OPTION. THE OPTION, IF AN INCENTIVE STOCK OPTION, MAY
NOT BE TRANSFERRED IN ANY MANNER OTHER THAN BY WILL OR BY THE LAWS OF DESCENT
AND DISTRIBUTION AND MAY BE EXERCISED DURING THE LIFETIME OF THE GRANTEE ONLY
BY THE GRANTEE. THE OPTION, IF A NON-QUALIFIED STOCK OPTION MAY BE
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TRANSFERRED BY WILL, BY THE LAWS OF DESCENT AND DISTRIBUTION, AND TO THE
EXTENT AND IN THE MANNER AUTHORIZED BY THE ADMINISTRATOR, TO MEMBERS OF THE
GRANTEE'S IMMEDIATE FAMILY (AS DETERMINED BY THE ADMINISTRATOR) OR PURSUANT
TO A DOMESTIC RELATIONS ORDER. THE TERMS OF THE OPTION SHALL BE BINDING UPON
THE EXECUTORS, ADMINISTRATORS, HEIRS AND SUCCESSORS OF THE GRANTEE.
11. TERM OF OPTION. THE OPTION MAY BE EXERCISED NO LATER THAN THE EXPIRATION
DATE SET FORTH IN THE NOTICE OR SUCH EARLIER DATE AS OTHERWISE PROVIDED
HEREIN.
12. STOP-TRANSFER NOTICES. IN ORDER TO ENSURE COMPLIANCE WITH THE
RESTRICTIONS ON TRANSFER SET FORTH IN THIS OPTION AGREEMENT, THE NOTICE OR
THE PLAN, THE COMPANY MAY ISSUE APPROPRIATE "STOP TRANSFER" INSTRUCTIONS TO
ITS TRANSFER AGENT, IF ANY, AND, IF THE COMPANY TRANSFERS ITS OWN SECURITIES,
IT MAY MAKE APPROPRIATE NOTATIONS TO THE SAME EFFECT IN ITS OWN RECORDS.
13. REFUSAL TO TRANSFER. THE COMPANY SHALL NOT BE REQUIRED (I) TO TRANSFER ON
ITS BOOKS ANY SHARES THAT HAVE BEEN SOLD OR OTHERWISE TRANSFERRED IN
VIOLATION OF ANY OF THE PROVISIONS OF THIS OPTION AGREEMENT OR (II) TO TREAT
AS OWNER OF SUCH SHARES OR TO ACCORD THE RIGHT TO VOTE OR PAY DIVIDENDS OR
OTHER SHAREHOLDERS RIGHTS TO ANY PURCHASER OR OTHER TRANSFEREE TO WHOM SUCH
SHARES SHALL HAVE BEEN SO TRANSFERRED.
14. TAX CONSEQUENCES. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE OF
THIS OPTION AGREEMENT OF SOME OF THE FEDERAL TAX CONSEQUENCES OF EXERCISE OF
THE OPTION AND DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE
COMPANY SHALL HAVE NO OBLIGATION TO NOTIFY GRANTEE OF ANY SUCH CHANGES. THE
GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES. WITHOUT LIMITING THE FOREGOING, THIS SUMMARY DOES
NOT DISCUSS THE TAX CONSEQUENCES OF THE EXERCISE OF THE OPTION AND THE
DISPOSITION OF THE SHARES UNDER THE LAWS OF THE UNITED KINGDOM.
(a) EXERCISE OF INCENTIVE STOCK OPTION. IF THE OPTION QUALIFIES AS
AN INCENTIVE STOCK OPTION, THERE WILL BE NO REGULAR FEDERAL
INCOME TAX LIABILITY UPON THE EXERCISE OF THE OPTION, ALTHOUGH
THE EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE SHARES ON
THE DATE OF EXERCISE OVER THE EXERCISE PRICE WILL BE TREATED
AS INCOME FOR PURPOSES OF THE ALTERNATIVE MINIMUM TAX FOR
FEDERAL TAX PURPOSES AND MAY SUBJECT THE GRANTEE TO THE
ALTERNATIVE MINIMUM TAX IN THE YEAR OF EXERCISE.
(b) EXERCISE OF INCENTIVE STOCK OPTION FOLLOWING DISABILITY. IF
THE GRANTEE'S CONTINUOUS SERVICE TERMINATES AS A RESULT OF
DISABILITY THAT IS NOT TOTAL AND PERMANENT DISABILITY AS
DEFINED IN SECTION 22(e)(3) OF THE CODE, TO THE EXTENT
PERMITTED ON THE DATE OF TERMINATION, THE GRANTEE MUST
EXERCISE AN INCENTIVE STOCK OPTION WITHIN THREE (3) MONTHS OF
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SUCH TERMINATION FOR THE INCENTIVE STOCK OPTION TO BE
QUALIFIED AS AN INCENTIVE STOCK OPTION.
(c) EXERCISE OF NON-QUALIFIED STOCK OPTION. ON EXERCISE OF A
NON-QUALIFIED STOCK OPTION, THE GRANTEE WILL BE TREATED AS
HAVING RECEIVED COMPENSATION INCOME (TAXABLE AT ORDINARY
INCOME TAX RATES) EQUAL TO THE EXCESS, IF ANY, OF THE FAIR
MARKET VALUE OF THE SHARES ON THE DATE OF EXERCISE OVER THE
EXERCISE PRICE. IF THE GRANTEE IS AN EMPLOYEE OR A FORMER
EMPLOYEE, THE COMPANY WILL BE REQUIRED TO WITHHOLD FROM THE
GRANTEE'S COMPENSATION OR COLLECT FROM THE GRANTEE AND PAY TO
THE APPLICABLE TAXING AUTHORITIES AN AMOUNT IN CASH EQUAL TO A
PERCENTAGE OF THIS COMPENSATION INCOME AT THE TIME OF
EXERCISE, AND MAY REFUSE TO HONOR THE EXERCISE AND REFUSE TO
DELIVER SHARES IF SUCH WITHHOLDING AMOUNTS ARE NOT DELIVERED
AT THE TIME OF EXERCISE.
(d) DISPOSITION OF SHARES. IN THE CASE OF A NON-QUALIFIED STOCK
OPTION, IF SHARES ARE HELD FOR MORE THAN ONE YEAR, ANY GAIN
REALIZED ON DISPOSITION OF THE SHARES WILL BE TREATED AS
LONG-TERM CAPITAL GAIN FOR FEDERAL INCOME TAX PURPOSES AND
SUBJECT TO TAX AT A MAXIMUM RATE OF 20%. IN THE CASE OF AN
INCENTIVE STOCK OPTION, IF SHARES TRANSFERRED PURSUANT TO THE
OPTION ARE HELD FOR MORE THAN ONE YEAR AFTER RECEIPT OF THE
SHARES AND ARE DISPOSED MORE THAN TWO YEARS AFTER THE DATE OF
AWARD, ANY GAIN REALIZED ON DISPOSITION OF THE SHARES ALSO
WILL BE TREATED AS CAPITAL GAIN FOR FEDERAL INCOME TAX
PURPOSES AND SUBJECT TO THE SAME TAX RATES AND HOLDING PERIODS
THAT APPLY TO SHARES ACQUIRED UPON EXERCISE OF A NON-QUALIFIED
STOCK OPTION. IF SHARES PURCHASED UNDER AN INCENTIVE STOCK
OPTION ARE DISPOSED OF PRIOR TO THE EXPIRATION OF SUCH
ONE-YEAR OR TWO-YEAR PERIODS, ANY GAIN REALIZED ON SUCH
DISPOSITION WILL BE TREATED AS COMPENSATION INCOME (TAXABLE AT
ORDINARY INCOME RATES) TO THE EXTENT OF THE DIFFERENCE BETWEEN
THE EXERCISE PRICE AND THE LESSER OF (i) THE FAIR MARKET VALUE
OF THE SHARES ON THE DATE OF EXERCISE, OR (ii) THE SALE PRICE
OF THE SHARES.
15. LOCK-UP AGREEMENT.
(a) AGREEMENT. THE GRANTEE, IF REQUESTED BY THE COMPANY AND THE
LEAD UNDERWRITER OF ANY PUBLIC OFFERING OF THE COMMON STOCK OR
OTHER SECURITIES OF THE COMPANY (THE "LEAD UNDERWRITER"),
HEREBY IRREVOCABLY AGREES NOT TO SELL, CONTRACT TO SELL, GRANT
ANY OPTION TO PURCHASE, TRANSFER THE ECONOMIC RISK OF
OWNERSHIP IN, MAKE ANY SHORT SALE OF, PLEDGE OR OTHERWISE
TRANSFER OR DISPOSE OF ANY INTEREST IN ANY COMMON STOCK OR ANY
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE OR EXERCISABLE FOR
OR ANY OTHER RIGHTS TO PURCHASE OR ACQUIRE COMMON STOCK
(EXCEPT COMMON STOCK INCLUDED IN SUCH PUBLIC OFFERING OR
ACQUIRED ON THE PUBLIC MARKET AFTER SUCH OFFERING) DURING THE
180-DAY PERIOD FOLLOWING THE REGISTRATION DATE OR SUCH SHORTER
PERIOD OF TIME AS THE LEAD UNDERWRITER SHALL SPECIFY. THE
GRANTEE FURTHER AGREES TO SIGN SUCH DOCUMENTS AS MAY BE
REQUESTED BY THE LEAD UNDERWRITER TO EFFECT THE FOREGOING AND
AGREES THAT THE COMPANY MAY IMPOSE STOP-TRANSFER INSTRUCTIONS
WITH RESPECT TO SUCH COMMON STOCK SUBJECT UNTIL THE END OF
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SUCH PERIOD. THE COMPANY AND THE GRANTEE ACKNOWLEDGE THAT EACH
LEAD UNDERWRITER OF A PUBLIC OFFERING OF THE COMPANY'S STOCK,
DURING THE PERIOD OF SUCH OFFERING AND FOR THE 180-DAY PERIOD
THEREAFTER, IS AN INTENDED BENEFICIARY OF THIS SECTION 16.
(b) NO AMENDMENT WITHOUT CONSENT OF UNDERWRITER. DURING THE PERIOD
FROM IDENTIFICATION AS A LEAD UNDERWRITER IN CONNECTION WITH
ANY PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK UNTIL THE
EARLIER OF (i) THE EXPIRATION OF THE LOCK-UP PERIOD SPECIFIED
IN SECTION 16(a) IN CONNECTION WITH SUCH OFFERING OR (ii) THE
ABANDONMENT OF SUCH OFFERING BY THE COMPANY AND THE LEAD
UNDERWRITER, THE PROVISIONS OF THIS SECTION 16 MAY NOT BE
AMENDED OR WAIVED EXCEPT WITH THE CONSENT OF THE LEAD
UNDERWRITER.
16. ENTIRE AGREEMENT: GOVERNING LAW. THE NOTICE, THE PLAN AND THIS OPTION
AGREEMENT CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE IN THEIR ENTIRETY ALL PRIOR UNDERTAKINGS AND
AGREEMENTS OF THE COMPANY AND THE GRANTEE WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE MODIFIED ADVERSELY TO THE GRANTEE'S INTEREST EXCEPT BY
MEANS OF A WRITING SIGNED BY THE COMPANY AND THE GRANTEE. NOTHING IN THE NOTICE,
THE PLAN AND THIS OPTION AGREEMENT (EXCEPT AS EXPRESSLY PROVIDED THEREIN) IS
INTENDED TO CONFER ANY RIGHTS OR REMEDIES ON ANY PERSONS OTHER THAN THE PARTIES.
THE NOTICE, THE PLAN AND THIS OPTION AGREEMENT ARE TO BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (AS PERMITTED
BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR SUCCESSOR
PROVISION) WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA TO THE RIGHTS AND DUTIES OF THE PARTIES. SHOULD ANY
PROVISION OF THE NOTICE, THE PLAN OR THIS OPTION AGREEMENT BE DETERMINED BY A
COURT OF LAW TO BE ILLEGAL OR UNENFORCEABLE, SUCH PROVISION SHALL BE ENFORCED TO
THE FULLEST EXTENT ALLOWED BY LAW AND THE OTHER PROVISIONS SHALL NEVERTHELESS
REMAIN EFFECTIVE AND SHALL REMAIN ENFORCEABLE.
17. HEADINGS. THE CAPTIONS USED IN THE NOTICE AND THIS OPTION AGREEMENT ARE
INSERTED FOR CONVENIENCE AND SHALL NOT BE DEEMED A PART OF THE OPTION FOR
CONSTRUCTION OR INTERPRETATION. 18. NOTICES. ANY NOTICE REQUIRED OR PERMITTED
HEREUNDER SHALL BE GIVEN IN WRITING AND BY PERSONAL DELIVERY OR BY AN
INTERNATIONALLY RECOGNIZED COMMERCIAL COURIER SERVICE OR BY DEPOSIT IN THE
UNITED STATES MAIL BY CERTIFIED MAIL (IF THE PARTIES ARE WITHIN THE UNITED
STATES) OR UPON DEPOSIT FOR DELIVERY BY AN INTERNATIONALLY RECOGNIZED EXPRESS
MAIL COURIER SERVICE (FOR INTERNATIONAL DELIVERY OF NOTICE), WITH POSTAGE AND
FEES PREPAID, ADDRESSED TO THE OTHER PARTY AT ITS ADDRESS AS SHOWN BENEATH
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ITS SIGNATURE IN THE NOTICE, OR TO SUCH OTHER ADDRESS AS SUCH PARTY MAY
DESIGNATE IN WRITING FROM TIME TO TIME TO THE OTHER PARTY; AND SHALL BE
DEEMED EFFECTIVE ON THE DATE OF DELIVERY IN PERSON OR BY COURIER OR FIVE (5)
DAYS AFTER THE DATE MAILED.
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EXHIBIT A
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
EXERCISE NOTICE
UDate.com, Inc.
_____________________________
_____________________________
Attention: Secretary
1. EFFECTIVE AS OF TODAY, ______________, ___ THE UNDERSIGNED (THE "GRANTEE")
HEREBY ELECTS TO EXERCISE THE GRANTEE'S OPTION TO PURCHASE ___________ SHARES
OF THE COMMON STOCK (THE "SHARES") OF UDATE.COM, INC. (THE "COMPANY") UNDER
AND PURSUANT TO THE COMPANY'S 2000 STOCK INCENTIVE PLAN, AS AMENDED FROM TIME
TO TIME (THE "PLAN") AND THE [ ] INCENTIVE [ ] NON-QUALIFIED STOCK OPTION
AWARD AGREEMENT (THE "OPTION AGREEMENT") AND NOTICE OF STOCK OPTION AWARD
(THE "NOTICE") DATED ______________, ________. UNLESS OTHERWISE DEFINED
HEREIN, THE TERMS DEFINED IN THE PLAN SHALL HAVE THE SAME DEFINED MEANINGS IN
THIS EXERCISE NOTICE.
2. REPRESENTATIONS OF THE GRANTEE. THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE
HAS RECEIVED, READ AND UNDERSTOOD THE NOTICE, THE PLAN AND THE OPTION
AGREEMENT AND AGREES TO ABIDE BY AND BE BOUND BY THEIR TERMS AND CONDITIONS.
3. RIGHTS AS SHAREHOLDER. UNTIL THE STOCK CERTIFICATE EVIDENCING SUCH SHARES
IS ISSUED (AS EVIDENCED BY THE APPROPRIATE ENTRY ON THE BOOKS OF THE COMPANY
OR OF A DULY AUTHORIZED TRANSFER AGENT OF THE COMPANY), NO RIGHT TO VOTE OR
RECEIVE DIVIDENDS OR ANY OTHER RIGHTS AS A SHAREHOLDER SHALL EXIST WITH
RESPECT TO THE SHARES, NOTWITHSTANDING THE EXERCISE OF THE OPTION. THE
COMPANY SHALL ISSUE (OR CAUSE TO BE ISSUED) SUCH STOCK CERTIFICATE PROMPTLY
AFTER THE OPTION IS EXERCISED, SUBJECT TO THE PLAN AND APPLICABLE LAW. NO
ADJUSTMENT WILL BE MADE FOR A DIVIDEND OR OTHER RIGHT FOR WHICH THE RECORD
DATE IS PRIOR TO THE DATE THE STOCK CERTIFICATE IS ISSUED, EXCEPT AS PROVIDED
IN SECTION 11 OF THE PLAN.
4. DELIVERY OF PAYMENT. THE GRANTEE HEREWITH DELIVERS TO THE COMPANY THE FULL
EXERCISE PRICE FOR THE SHARES, WHICH, TO THE EXTENT SELECTED, SHALL BE DEEMED
TO BE SATISFIED BY USE OF THE BROKER-DEALER SALE AND REMITTANCE PROCEDURE TO
PAY THE EXERCISE PRICE PROVIDED IN SECTION 4(D) OF THE OPTION AGREEMENT.
5. TAX CONSULTATION. THE GRANTEE UNDERSTANDS THAT THE GRANTEE MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF THE
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GRANTEE'S PURCHASE OR DISPOSITION OF THE SHARES. THE GRANTEE REPRESENTS THAT
THE GRANTEE HAS CONSULTED WITH ANY TAX CONSULTANTS THE GRANTEE DEEMS
ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND
THAT THE GRANTEE IS NOT RELYING ON THE COMPANY OR ITS REPRESENTATIVES FOR ANY
TAX ADVICE.
6. TAXES. THE GRANTEE AGREES TO SATISFY ALL APPLICABLE FEDERAL, STATE AND
LOCAL INCOME AND EMPLOYMENT TAX WITHHOLDING OBLIGATIONS AND HEREWITH DELIVERS
TO THE COMPANY THE FULL AMOUNT OF SUCH OBLIGATIONS OR HAS MADE ARRANGEMENTS
ACCEPTABLE TO THE COMPANY TO SATISFY SUCH OBLIGATIONS. IN THE CASE OF AN
INCENTIVE STOCK OPTION, THE GRANTEE ALSO AGREES, AS PARTIAL CONSIDERATION FOR
THE DESIGNATION OF THE OPTION AS AN INCENTIVE STOCK OPTION, TO NOTIFY THE
COMPANY IN WRITING WITHIN THIRTY (30) DAYS OF ANY DISPOSITION OF ANY SHARES
ACQUIRED BY EXERCISE OF THE OPTION IF SUCH DISPOSITION OCCURS WITHIN TWO
(2) YEARS FROM THE AWARD DATE OR WITHIN ONE (1) YEAR FROM THE DATE THE SHARES
WERE TRANSFERRED TO THE GRANTEE. IF THE COMPANY IS REQUIRED TO SATISFY ANY
FEDERAL, STATE OR LOCAL INCOME OR EMPLOYMENT TAX WITHHOLDING OBLIGATIONS AS A
RESULT OF SUCH AN EARLY DISPOSITION, THE GRANTEE AGREES TO SATISFY THE AMOUNT
OF SUCH WITHHOLDING IN A MANNER THAT THE ADMINISTRATOR PRESCRIBES.
7. RESTRICTIVE LEGENDS. THE GRANTEE UNDERSTANDS AND AGREES THAT THE COMPANY
SHALL CAUSE THE LEGENDS SET FORTH BELOW OR LEGENDS SUBSTANTIALLY EQUIVALENT
THERETO, TO BE PLACED UPON ANY CERTIFICATE(S) EVIDENCING OWNERSHIP OF THE
SHARES TOGETHER WITH ANY OTHER LEGENDS THAT MAY BE REQUIRED BY THE COMPANY OR
BY STATE OR FEDERAL SECURITIES LAWS:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS ARE
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BINDING ON TRANSFEREES OF THESE SHARES.
8. SUCCESSORS AND ASSIGNS. THE COMPANY MAY ASSIGN ANY OF ITS RIGHTS UNDER THIS
EXERCISE NOTICE TO SINGLE OR MULTIPLE ASSIGNEES, AND THIS AGREEMENT SHALL INURE
TO THE BENEFIT OF THE SUCCESSORS AND ASSIGNS OF THE COMPANY. SUBJECT TO THE
RESTRICTIONS ON TRANSFER HEREIN SET FORTH, THIS EXERCISE NOTICE SHALL BE BINDING
UPON THE GRANTEE AND HIS HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND
ASSIGNS.
9. HEADINGS. THE CAPTIONS USED IN THIS EXERCISE NOTICE ARE INSERTED FOR
CONVENIENCE AND SHALL NOT BE DEEMED A PART OF THIS AGREEMENT FOR CONSTRUCTION OR
INTERPRETATION.
10. GOVERNING LAW; SEVERABILITY. THIS EXERCISE NOTICE IS TO BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
(AS PERMITTED BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
SUCCESSOR PROVISION) WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA TO THE RIGHTS AND DUTIES OF THE
PARTIES. SHOULD ANY PROVISION OF THIS EXERCISE NOTICE BE DETERMINED BY A
COURT OF LAW TO BE ILLEGAL OR UNENFORCEABLE, SUCH PROVISION SHALL BE ENFORCED
TO THE FULLEST EXTENT ALLOWED BY LAW AND THE OTHER PROVISIONS SHALL
NEVERTHELESS REMAIN EFFECTIVE AND SHALL REMAIN ENFORCEABLE.
11. NOTICES. ANY NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE GIVEN IN
WRITING AND BY PERSONAL DELIVERY OR BY AN INTERNATIONALLY RECOGNIZED
COMMERCIAL COURIER SERVICE OR BY DEPOSIT IN THE UNITED STATES MAIL BY
CERTIFIED MAIL (IF THE PARTIES ARE WITHIN THE UNITED STATES) OR UPON DEPOSIT
FOR DELIVERY BY AN INTERNATIONALLY RECOGNIZED EXPRESS MAIL COURIER SERVICE
(FOR INTERNATIONAL DELIVERY OF NOTICE), WITH POSTAGE AND FEES PREPAID,
ADDRESSED TO THE OTHER PARTY AT ITS ADDRESS AS SHOWN BENEATH ITS SIGNATURE IN
THE NOTICE, OR TO SUCH OTHER ADDRESS AS SUCH PARTY MAY DESIGNATE IN WRITING
FROM TIME TO TIME TO THE OTHER PARTY; AND SHALL BE DEEMED EFFECTIVE ON THE
DATE OF DELIVERY IN PERSON OR BY COURIER OR FIVE (5) DAYS AFTER THE DATE
MAILED.
12. FURTHER INSTRUMENTS. THE PARTIES AGREE TO EXECUTE SUCH FURTHER
INSTRUMENTS AND TO TAKE SUCH FURTHER ACTION AS MAY BE REASONABLY NECESSARY TO
CARRY OUT THE PURPOSES AND INTENT OF THIS AGREEMENT.
13. ENTIRE AGREEMENT. THE NOTICE, THE PLAN AND THE OPTION AGREEMENT ARE
INCORPORATED HEREIN BY REFERENCE AND TOGETHER WITH THIS EXERCISE NOTICE
CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE IN THEIR ENTIRETY ALL PRIOR UNDERTAKINGS AND
AGREEMENTS OF THE COMPANY AND THE GRANTEE WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE MODIFIED ADVERSELY TO THE GRANTEE'S
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INTEREST EXCEPT BY MEANS OF A WRITING SIGNED BY THE COMPANY AND THE GRANTEE.
NOTHING IN THE NOTICE, THE PLAN, THE OPTION AGREEMENT AND THIS EXERCISE
NOTICE (EXCEPT AS EXPRESSLY PROVIDED THEREIN) IS INTENDED TO CONFER ANY
RIGHTS OR REMEDIES ON ANY PERSONS OTHER THAN THE PARTIES.
<TABLE>
<S> <C>
Submitted by: Accepted by:
GRANTEE: UDATE.COM, INC.
By: ___________________________________
___________________________________
(Signature) Title: ________________________________
ADDRESS: ADDRESS:
___________________________________
___________________________________
</TABLE>
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EXHIBIT B
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
INVESTMENT REPRESENTATION STATEMENT
GRANTEE: MELVYN MORRIS
COMPANY: UDATE.COM, INC.
SECURITY: COMMON STOCK
AMOUNT: ____________________________________
DATE: ____________________________________
IN CONNECTION WITH THE PURCHASE OF THE ABOVE-LISTED SECURITIES, THE UNDERSIGNED
GRANTEE REPRESENTS TO THE COMPANY THE FOLLOWING:
(a) GRANTEE IS AWARE OF THE COMPANY'S BUSINESS AFFAIRS AND
FINANCIAL CONDITION AND HAS ACQUIRED SUFFICIENT INFORMATION ABOUT THE COMPANY TO
REACH AN INFORMED AND KNOWLEDGEABLE DECISION TO ACQUIRE THE SECURITIES. GRANTEE
IS ACQUIRING THESE SECURITIES FOR INVESTMENT FOR GRANTEE'S OWN ACCOUNT ONLY AND
NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY "DISTRIBUTION" THEREOF
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT").
(b) GRANTEE ACKNOWLEDGES AND UNDERSTANDS THAT THE SECURITIES
CONSTITUTE "RESTRICTED SECURITIES" UNDER THE SECURITIES ACT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT IN RELIANCE UPON A SPECIFIC EXEMPTION
THEREFROM, WHICH EXEMPTION DEPENDS UPON AMONG OTHER THINGS, THE BONA FIDE NATURE
OF GRANTEE'S INVESTMENT INTENT AS EXPRESSED HEREIN. GRANTEE FURTHER UNDERSTANDS
THAT THE SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. GRANTEE FURTHER ACKNOWLEDGES AND UNDERSTANDS THAT THE COMPANY IS
UNDER NO OBLIGATION TO REGISTER THE SECURITIES. GRANTEE UNDERSTANDS THAT THE
CERTIFICATE EVIDENCING THE SECURITIES WILL BE IMPRINTED WITH A LEGEND WHICH
PROHIBITS THE TRANSFER OF THE SECURITIES UNLESS THEY ARE REGISTERED OR SUCH
REGISTRATION IS NOT REQUIRED IN THE OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY.
(c) GRANTEE IS FAMILIAR WITH THE PROVISIONS OF RULE 701 AND RULE
144, EACH PROMULGATED UNDER THE SECURITIES ACT, WHICH, IN SUBSTANCE, PERMIT
LIMITED PUBLIC RESALE OF "RESTRICTED SECURITIES" ACQUIRED, DIRECTLY OR
INDIRECTLY FROM THE ISSUER THEREOF, IN A NON-PUBLIC OFFERING SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS. RULE 701 PROVIDES THAT IF THE ISSUER
QUALIFIES UNDER RULE 701 AT THE TIME OF THE GRANT OF THE OPTION TO THE GRANTEE,
THE EXERCISE WILL BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. IN THE
EVENT THE COMPANY BECOMES SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, NINETY (90) DAYS THEREAFTER (OR
SUCH LONGER PERIOD AS ANY MARKET STAND-OFF AGREEMENT MAY REQUIRE) THE SECURITIES
EXEMPT UNDER RULE 701 MAY BE RESOLD, SUBJECT TO THE
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SATISFACTION OF CERTAIN OF THE CONDITIONS SPECIFIED BY RULE 144, INCLUDING:
(1) THE RESALE BEING MADE THROUGH A BROKER IN AN UNSOLICITED "BROKER'S
TRANSACTION" OR IN TRANSACTIONS DIRECTLY WITH A MARKET MAKER (AS SAID TERM IS
DEFINED UNDER THE SECURITIES EXCHANGE ACT OF 1934); AND, IN THE CASE OF AN
AFFILIATE, (2) THE AVAILABILITY OF CERTAIN PUBLIC INFORMATION ABOUT THE
COMPANY, (3) THE AMOUNT OF SECURITIES BEING SOLD DURING ANY THREE MONTH
PERIOD NOT EXCEEDING THE LIMITATIONS SPECIFIED IN RULE 144(e), AND (4) THE
TIMELY FILING OF A FORM 144, IF APPLICABLE.
IN THE EVENT THAT THE COMPANY DOES NOT QUALIFY UNDER RULE 701 AT THE
TIME OF GRANT OF THE OPTION, THEN THE SECURITIES MAY BE RESOLD IN CERTAIN
LIMITED CIRCUMSTANCES SUBJECT TO THE PROVISIONS OF RULE 144, WHICH REQUIRES THE
RESALE TO OCCUR NOT LESS THAN ONE YEAR AFTER THE LATER OF THE DATE THE
SECURITIES WERE SOLD BY THE COMPANY OR THE DATE THE SECURITIES WERE SOLD BY AN
AFFILIATE OF THE COMPANY, WITHIN THE MEANING OF RULE 144; AND, IN THE CASE OF
ACQUISITION OF THE SECURITIES BY AN AFFILIATE, OR BY A NON-AFFILIATE WHO
SUBSEQUENTLY HOLDS THE SECURITIES LESS THAN TWO YEARS, THE SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTIONS (1), (2), (3) AND (4) OF THE PARAGRAPH
IMMEDIATELY ABOVE.
(d) GRANTEE FURTHER UNDERSTANDS THAT IN THE EVENT ALL OF THE
APPLICABLE REQUIREMENTS OF RULE 701 OR 144 ARE NOT SATISFIED, REGISTRATION UNDER
THE SECURITIES ACT, COMPLIANCE WITH REGULATION A, OR SOME OTHER REGISTRATION
EXEMPTION WILL BE REQUIRED; AND THAT, NOTWITHSTANDING THE FACT THAT RULES 144
AND 701 ARE NOT EXCLUSIVE, THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION
HAS EXPRESSED ITS OPINION THAT PERSONS PROPOSING TO SELL PRIVATE PLACEMENT
SECURITIES OTHER THAN IN A REGISTERED OFFERING AND OTHERWISE THAN PURSUANT TO
RULES 144 OR 701 WILL HAVE A SUBSTANTIAL BURDEN OF PROOF IN ESTABLISHING THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE FOR SUCH OFFERS OR SALES, AND THAT SUCH
PERSONS AND THEIR RESPECTIVE BROKERS WHO PARTICIPATE IN SUCH TRANSACTIONS DO SO
AT THEIR OWN RISK. GRANTEE UNDERSTANDS THAT NO ASSURANCES CAN BE GIVEN THAT ANY
SUCH OTHER REGISTRATION EXEMPTION WILL BE AVAILABLE IN SUCH EVENT.
(e) GRANTEE REPRESENTS THAT HE IS A RESIDENT OF
_____________________________.
Signature of Grantee:
________________________________________
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Date: ___________________________,______
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SCHEDULE C
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
<TABLE>
<S> <C>
Grantee's Name and Address: HOWARD THACKER
Trent Fish Farm
Mercaston
Derbyshire, UK DE65 3BL
</TABLE>
You have been granted an option to purchase shares of Common Stock of
uDate.com, Inc., subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice"), the uDate.com, Inc. 2000 Stock Incentive Plan, as
amended from time to time (the "Plan") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.
<TABLE>
<S> <C>
Award Number No. 2
Date of Award May ________, 2000
Vesting Commencement Date May ________, 2000
Exercise Price per Share $7.50
Total Number of Shares Subject
to the Option (the "Shares") 475,000
Total Exercise Price $3,562,500
Type of Option: Incentive Stock Option
Expiration Date: May _______, 2010
Post-Termination Exercise Period: Three (3) Months
</TABLE>
VESTING SCHEDULE:
Subject to Grantee's Continuous Service and other limitations set forth
in this Notice, the Plan and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:
Fifty Percent (50%) of the Shares subject to the Option shall vest
twelve months after the Vesting Commencement Date, and 1/24th of the
Shares subject to the Option shall vest on each monthly anniversary of
the Vesting Commencement Date thereafter.
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<PAGE>
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease. Vesting of the Option shall resume upon
the Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity.
In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate concurrently
with the termination of the Grantee's Continuous Service, except as otherwise
determined by the Administrator.
In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more
per week to an Employee whose customary employment is fewer than 20 hours per
week, vesting of the Option shall continue only to the extent determined by the
Administrator as of such change in status consistent with any minimum vesting
requirements set forth in the Plan.
IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice, the Plan, and the Option Agreement.
<TABLE>
<S> <C>
UDate.com, Inc.,
a California corporation
By: _____________________________________________
Title: __________________________________________
</TABLE>
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE, SUBJECT TO ANY WRITTEN EMPLOYMENT
AGREEMENT WITH THE GRANTEE.
The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts the Option subject to all of the terms and
provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan,
and the Option Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Notice, and fully understands all
provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby
agrees that all disputes arising out of or relating to this Notice, the Plan and
the Option Agreement shall be resolved in accordance with Section 19 of the
Option Agreement. The Grantee further agrees to notify the Company upon any
change in the
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residence address indicated in this Notice.
Dated: ______________________ Signed: _______________________________
Howard Thacker
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AWARD NUMBER: 2
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
GRANT OF OPTION. UDATE.COM, INC., A CALIFORNIA CORPORATION (THE
"COMPANY"), HEREBY GRANTS TO THE GRANTEE (THE "GRANTEE") NAMED IN THE NOTICE OF
STOCK OPTION AWARD (THE "NOTICE"), AN OPTION (THE "OPTION") TO PURCHASE THE
TOTAL NUMBER OF SHARES OF COMMON STOCK SUBJECT TO THE OPTION (THE "SHARES") SET
FORTH IN THE NOTICE, AT THE EXERCISE PRICE PER SHARE SET FORTH IN THE NOTICE
(THE "EXERCISE PRICE") SUBJECT TO THE TERMS AND PROVISIONS OF THE NOTICE, THIS
STOCK OPTION AWARD AGREEMENT (THE "OPTION AGREEMENT") AND THE COMPANY'S 2000
STOCK INCENTIVE PLAN, AS AMENDED FROM TIME TO TIME (THE "PLAN"), WHICH ARE
INCORPORATED HEREIN BY REFERENCE. UNLESS OTHERWISE DEFINED HEREIN, THE TERMS
DEFINED IN THE PLAN SHALL HAVE THE SAME DEFINED MEANINGS IN THIS OPTION
AGREEMENT.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.
Exercise of Option.
(a) RIGHT TO EXERCISE. THE OPTION SHALL BE EXERCISABLE DURING ITS
TERM IN ACCORDANCE WITH THE VESTING SCHEDULE SET OUT IN THE
NOTICE AND WITH THE APPLICABLE PROVISIONS OF THE PLAN AND THIS
OPTION AGREEMENT. NO PARTIAL EXERCISE OF THE OPTION MAY BE FOR
LESS THAN THE LESSER OF FIVE PERCENT (5%) OF THE TOTAL NUMBER
OF SHARES SUBJECT TO THE OPTION OR THE REMAINING NUMBER OF
SHARES SUBJECT TO THE OPTION. IN NO EVENT SHALL THE COMPANY
ISSUE FRACTIONAL SHARES.
(b) ACCELERATION IN THE EVENT OF CORPORATE TRANSACTION.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN THE EVENT OF A
CORPORATE TRANSACTION, THIS OPTION SHALL AUTOMATICALLY SHALL
BECOME FULLY VESTED AND EXERCISABLE AND BE RELEASED FROM ANY
FORFEITURE RIGHTS, IMMEDIATELY PRIOR TO THE SPECIFIED
EFFECTIVE DATE OF SUCH CORPORATE TRANSACTION, FOR ALL OF THE
SHARES AT THE TIME REPRESENTED BY THIS OPTION. EFFECTIVE UPON
THE CONSUMMATION OF THE CORPORATE TRANSACTION, THIS OPTION
UNDER THE
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PLAN SHALL TERMINATE; PROVIDED HOWEVER THAT THIS OPTION SHALL
NOT TERMINATE IF IT IS ASSUMED BY THE SUCCESSOR CORPORATION
OR PARENT THEREOF IN CONNECTION WITH THE CORPORATE
TRANSACTION.
(c) ACCELERATION IN THE EVENT OF CHANGE IN CONTROL.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN THE EVENT OF A
CHANGE IN CONTROL (OTHER THAN A CHANGE IN CONTROL WHICH ALSO
IS A CORPORATE TRANSACTION), THIS OPTION AUTOMATICALLY SHALL
BECOME FULLY VESTED AND EXERCISABLE AND BE RELEASED FROM ANY
FORFEITURE RIGHTS, IMMEDIATELY PRIOR TO THE SPECIFIED
EFFECTIVE DATE OF SUCH CHANGE IN CONTROL, FOR ALL OF THE
SHARES AT THE TIME REPRESENTED BY THIS OPTION.
(d) METHOD OF EXERCISE. THE OPTION SHALL BE EXERCISABLE ONLY BY
DELIVERY OF AN EXERCISE NOTICE (ATTACHED AS EXHIBIT A) WHICH
SHALL STATE THE ELECTION TO EXERCISE THE OPTION, THE WHOLE
NUMBER OF SHARES IN RESPECT OF WHICH THE OPTION IS BEING
EXERCISED, AND SUCH OTHER PROVISIONS AS MAY BE REQUIRED BY THE
ADMINISTRATOR. THE EXERCISE NOTICE SHALL BE SIGNED BY THE
GRANTEE AND SHALL BE DELIVERED IN PERSON, BY CERTIFIED MAIL,
OR BY SUCH OTHER METHOD AS DETERMINED FROM TIME TO TIME BY THE
ADMINISTRATOR TO THE COMPANY ACCOMPANIED BY PAYMENT OF THE
EXERCISE PRICE. THE OPTION SHALL BE DEEMED TO BE EXERCISED
UPON RECEIPT BY THE COMPANY OF SUCH WRITTEN NOTICE ACCOMPANIED
BY THE EXERCISE PRICE, WHICH, TO THE EXTENT SELECTED, SHALL BE
DEEMED TO BE SATISFIED BY USE OF THE BROKER-DEALER SALE AND
REMITTANCE PROCEDURE TO PAY THE EXERCISE PRICE PROVIDED IN
SECTION 4(d), BELOW.
(e) TAXES. NO SHARES WILL BE DELIVERED TO THE GRANTEE OR OTHER
PERSON PURSUANT TO THE EXERCISE OF THE OPTION UNTIL THE
GRANTEE OR OTHER PERSON HAS MADE ARRANGEMENTS ACCEPTABLE TO
THE ADMINISTRATOR FOR THE SATISFACTION OF APPLICABLE INCOME
TAX, EMPLOYMENT TAX, AND SOCIAL SECURITY TAX WITHHOLDING
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, OBLIGATIONS
INCIDENT TO THE RECEIPT OF SHARES OR THE DISQUALIFYING
DISPOSITION OF SHARES RECEIVED ON EXERCISE OF AN INCENTIVE
STOCK OPTION. UPON EXERCISE OF THE OPTION, THE COMPANY OR THE
GRANTEE'S EMPLOYER MAY OFFSET OR WITHHOLD (FROM ANY AMOUNT
OWED BY THE COMPANY OR THE GRANTEE'S EMPLOYER TO THE GRANTEE)
OR COLLECT FROM THE GRANTEE OR OTHER PERSON AN AMOUNT
SUFFICIENT TO SATISFY SUCH TAX OBLIGATIONS AND/OR THE
EMPLOYER'S WITHHOLDING OBLIGATIONS.
3. GRANTEE'S REPRESENTATIONS. THE GRANTEE UNDERSTANDS THAT NEITHER THE OPTION
NOR THE SHARES EXERCISABLE PURSUANT TO THE OPTION HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY UNITED STATES SECURITIES LAWS. IN THE
EVENT THE SHARES PURCHASABLE PURSUANT TO THE EXERCISE OF THE OPTION HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AT THE TIME THE
OPTION IS EXERCISED, THE GRANTEE SHALL, IF REQUESTED BY THE COMPANY,
CONCURRENTLY WITH THE EXERCISE OF ALL OR ANY PORTION OF THE OPTION, DELIVER TO
THE COMPANY HIS INVESTMENT REPRESENTATION STATEMENT IN THE FORM ATTACHED HERETO
AS EXHIBIT B AND SUCH OTHER REPRESENTATIONS, WARRANTIES
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AND COVENANTS REASONABLY REQUESTED BY COUNSEL FOR THE COMPANY.
4. METHOD OF PAYMENT. PAYMENT OF THE EXERCISE PRICE SHALL BE MADE BY ANY OF
THE FOLLOWING, OR A COMBINATION THEREOF, AT THE ELECTION OF THE GRANTEE;
PROVIDED, HOWEVER, THAT SUCH EXERCISE METHOD DOES NOT THEN VIOLATE ANY
APPLICABLE LAW:
(a) CASH;
(b) CHECK;
(c) IF THE EXERCISE OCCURS ON OR AFTER THE REGISTRATION DATE (AS
DEFINED BY THE PLAN), SURRENDER OF SHARES OR DELIVERY OF A
PROPERLY EXECUTED FORM OF ATTESTATION OF OWNERSHIP OF SHARES
AS THE ADMINISTRATOR MAY REQUIRE (INCLUDING WITHHOLDING OF
SHARES OTHERWISE DELIVERABLE UPON EXERCISE OF THE OPTION)
WHICH HAVE A FAIR MARKET VALUE ON THE DATE OF SURRENDER OR
ATTESTATION EQUAL TO THE AGGREGATE EXERCISE PRICE OF THE
SHARES AS TO WHICH THE OPTION IS BEING EXERCISED (BUT ONLY TO
THE EXTENT THAT SUCH EXERCISE OF THE OPTION WOULD NOT RESULT
IN AN ACCOUNTING COMPENSATION CHARGE WITH RESPECT TO THE
SHARES USED TO PAY THE EXERCISE PRICE);
(d) IF THE EXERCISE OCCURS ON OR AFTER THE REGISTRATION DATE,
PAYMENT THROUGH A BROKER-DEALER SALE AND REMITTANCE PROCEDURE
PURSUANT TO WHICH THE GRANTEE (i) SHALL PROVIDE WRITTEN
INSTRUCTIONS TO A COMPANY DESIGNATED BROKERAGE FIRM TO EFFECT
THE IMMEDIATE SALE OF SOME OR ALL OF THE PURCHASED SHARES AND
REMIT TO THE COMPANY, OUT OF THE SALE PROCEEDS AVAILABLE ON
THE SETTLEMENT DATE, SUFFICIENT FUNDS TO COVER THE AGGREGATE
EXERCISE PRICE PAYABLE FOR THE PURCHASED SHARES AND (ii) SHALL
PROVIDE WRITTEN DIRECTIVES TO THE COMPANY TO DELIVER THE
CERTIFICATES FOR THE PURCHASED SHARES DIRECTLY TO SUCH
BROKERAGE FIRM IN ORDER TO COMPLETE THE SALE TRANSACTION; OR
(e) PROVIDED THAT THE AGGREGATE EXERCISE PRICE FOR THE NUMBER OF
SHARES BEING PURCHASED EXCEEDS ___________________________
DOLLARS ($____,000), PAYMENT PURSUANT TO A PROMISSORY NOTE AS
DESCRIBED BELOW.
(i) The promissory note shall have a term of _____ (__)
years with principal and interest payable in _______
(__) equal annual installments;
(ii) The promissory note shall bear interest at the
minimum rate required by the federal tax laws to
avoid the imputation of interest income to the
Company and compensation income to the Grantee;
(iii) The Grantee shall be personally liable for payment of
the promissory note and the promissory note shall be
secured by the Shares purchased upon delivery of the
promissory note, or such other collateral of equal or
greater value, in a manner satisfactory to the
Administrator with such documentation as the
Administrator may request; and
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The promissory note shall become due and payable upon the occurrence of any or
all of the following events: (A) the sale or transfer of the Shares purchased
with the promissory note; (B) termination of the Grantee's Continuous Service
for any reason other than death or Disability; or (C) the first anniversary of
the termination of the Grantee's Continuous Service due to death or Disability.
5. RESTRICTIONS ON EXERCISE. THE OPTION MAY NOT BE EXERCISED IF THE ISSUANCE OF
THE SHARES SUBJECT TO THE OPTION UPON SUCH EXERCISE WOULD CONSTITUTE A VIOLATION
OF ANY APPLICABLE LAWS. IN ADDITION, THE OPTION MAY BE EXERCISED PRIOR TO THE
TIME THAT THE PLAN HAS BEEN APPROVED BY THE SHAREHOLDERS OF THE COMPANY;
PROVIDED HOWEVER THAT ALL SHARES ISSUED UPON ANY SUCH EXERCISE SHALL BE
RESCINDED IF SHAREHOLDER APPROVAL IS NOT OBTAINED WITHIN THE TIME PRESCRIBED,
AND SHARES ISSUED ON ANY SUCH EXERCISE SHALL NOT BE COUNTED IN DETERMINING
WHETHER SHAREHOLDER APPROVAL IS OBTAINED.
6. TERMINATION OR CHANGE OF CONTINUOUS SERVICE. IN THE EVENT THE GRANTEE'S
CONTINUOUS SERVICE TERMINATES, OTHER THAN FOR CAUSE, THE GRANTEE MAY, TO THE
EXTENT OTHERWISE SO ENTITLED AT THE DATE OF SUCH TERMINATION (THE "TERMINATION
DATE"), EXERCISE THE OPTION DURING THE POST-TERMINATION EXERCISE PERIOD. IN THE
EVENT OF TERMINATION OF THE GRANTEE'S CONTINUOUS SERVICE FOR CAUSE, THE
GRANTEE'S RIGHT TO EXERCISE THE OPTION SHALL, EXCEPT AS OTHERWISE DETERMINED BY
THE ADMINISTRATOR, TERMINATE CONCURRENTLY WITH THE TERMINATION OF THE GRANTEE'S
CONTINUOUS SERVICE. IN NO EVENT SHALL THE OPTION BE EXERCISED LATER THAN THE
EXPIRATION DATE SET FORTH IN THE NOTICE. IN THE EVENT OF THE GRANTEE'S CHANGE IN
STATUS FROM EMPLOYEE, DIRECTOR OR CONSULTANT TO ANY OTHER STATUS OF EMPLOYEE,
DIRECTOR OR CONSULTANT, THE OPTION SHALL REMAIN IN EFFECT AND, EXCEPT TO THE
EXTENT OTHERWISE DETERMINED BY THE ADMINISTRATOR, CONTINUE TO VEST; PROVIDED,
HOWEVER, WITH RESPECT TO ANY INCENTIVE STOCK OPTION THAT SHALL REMAIN IN EFFECT
AFTER A CHANGE IN STATUS FROM EMPLOYEE TO DIRECTOR OR CONSULTANT, SUCH INCENTIVE
STOCK OPTION SHALL CEASE TO BE TREATED AS AN INCENTIVE STOCK OPTION AND SHALL BE
TREATED AS A NON-QUALIFIED STOCK OPTION ON THE DAY THREE (3) MONTHS AND ONE (1)
DAY FOLLOWING SUCH CHANGE IN STATUS. EXCEPT AS PROVIDED IN SECTIONS 8 AND 9
BELOW, TO THE EXTENT THAT THE GRANTEE IS NOT ENTITLED TO EXERCISE THE OPTION ON
THE TERMINATION DATE, OR IF THE GRANTEE DOES NOT EXERCISE THE OPTION TO THE
EXTENT SO ENTITLED WITHIN THE POST-TERMINATION EXERCISE PERIOD, THE OPTION SHALL
TERMINATE.
7. DEFINITION OF "CAUSE". FOR PURPOSES OF THIS AGREEMENT, "CAUSE" MEANS THE
GRANTEE'S (I) PERFORMANCE OF ANY MATERIAL ACT OR FAILURE TO PERFORM ANY MATERIAL
ACT IN BAD FAITH AND TO THE MATERIAL DETRIMENT OF THE COMPANY OR A RELATED
ENTITY; (II) PERFORMANCE OF DISHONEST ACTS OR INTENTIONAL MISCONDUCT TO THE
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MATERIAL DETRIMENT OF THE COMPANY OR A RELATED ENTITY; (III) MATERIAL BREACH OF
ANY AGREEMENT WITH THE COMPANY OR A RELATED ENTITY; OR (IV) COMMISSION OF ANY
FELONY (EXCLUDING DWI AND SIMILAR TRAFFIC OFFENSES). AT LEAST 30 DAYS PRIOR TO
THE TERMINATION OF THE GRANTEE'S CONTINUOUS SERVICE PURSUANT TO ANY OF THE
FOREGOING, THE ADMINISTRATOR SHALL PROVIDE THE GRANTEE WITH NOTICE OF THE
COMPANY'S OR SUCH RELATED ENTITY'S INTENT TO TERMINATE, THE REASON THEREFOR, AND
AN OPPORTUNITY FOR THE GRANTEE TO CURE SUCH DEFECTS IN HIS SERVICE TO THE
COMPANY'S OR SUCH RELATED ENTITY'S REASONABLE SATISFACTION. DURING THIS 30 DAY
(OR LONGER) PERIOD, NO AWARD ISSUED TO THE GRANTEE UNDER THE PLAN MAY BE
EXERCISED OR PURCHASED.
8. DISABILITY OF GRANTEE. IN THE EVENT THE GRANTEE'S CONTINUOUS SERVICE
TERMINATES AS A RESULT OF HIS DISABILITY, THE GRANTEE MAY, BUT ONLY WITHIN
TWELVE (12) MONTHS FROM THE TERMINATION DATE (AND IN NO EVENT LATER THAN THE
EXPIRATION DATE), EXERCISE THE OPTION TO THE EXTENT HE WAS OTHERWISE ENTITLED TO
EXERCISE IT ON THE TERMINATION DATE; PROVIDED, HOWEVER, THAT IF SUCH DISABILITY
IS NOT A "DISABILITY" AS SUCH TERM IS DEFINED IN SECTION 22(E)(3) OF THE CODE
AND THE OPTION IS AN INCENTIVE STOCK OPTION, SUCH INCENTIVE STOCK OPTION SHALL
CEASE TO BE TREATED AS AN INCENTIVE STOCK OPTION AND SHALL BE TREATED AS A
NON-QUALIFIED STOCK OPTION ON THE DAY THREE (3) MONTHS AND ONE (1) DAY FOLLOWING
THE TERMINATION DATE. TO THE EXTENT THAT THE GRANTEE IS NOT ENTITLED TO EXERCISE
THE OPTION ON THE TERMINATION DATE, OR IF THE GRANTEE DOES NOT EXERCISE THE
OPTION TO THE EXTENT SO ENTITLED WITHIN THE TIME SPECIFIED HEREIN, THE OPTION
SHALL TERMINATE.
9. DEATH OF GRANTEE. IN THE EVENT OF THE TERMINATION OF THE GRANTEE'S CONTINUOUS
SERVICE AS A RESULT OF HIS DEATH, OR IN THE EVENT OF THE GRANTEE'S DEATH DURING
THE POST-TERMINATION EXERCISE PERIOD OR DURING THE TWELVE (12) MONTH PERIOD
FOLLOWING THE GRANTEE'S TERMINATION OF CONTINUOUS SERVICE AS A RESULT OF HIS
DISABILITY, THE GRANTEE'S ESTATE, OR A PERSON WHO ACQUIRED THE RIGHT TO EXERCISE
THE OPTION BY BEQUEST OR INHERITANCE, MAY EXERCISE THE OPTION, BUT ONLY TO THE
EXTENT THE GRANTEE COULD EXERCISE THE OPTION AT THE DATE OF TERMINATION, WITHIN
TWELVE (12) MONTHS FROM THE DATE OF DEATH (BUT IN NO EVENT LATER THAN THE
EXPIRATION DATE). TO THE EXTENT THAT THE GRANTEE IS NOT ENTITLED TO EXERCISE THE
OPTION ON THE DATE OF DEATH, OR IF THE OPTION IS NOT EXERCISED TO THE EXTENT SO
ENTITLED WITHIN THE TIME SPECIFIED HEREIN, THE OPTION SHALL TERMINATE.
10. TRANSFERABILITY OF OPTION. THE OPTION, IF AN INCENTIVE STOCK OPTION, MAY NOT
BE TRANSFERRED IN ANY MANNER OTHER THAN BY WILL OR BY THE LAWS OF DESCENT AND
DISTRIBUTION AND MAY BE EXERCISED DURING THE LIFETIME OF THE GRANTEE ONLY BY THE
GRANTEE. THE OPTION, IF A NON-QUALIFIED STOCK OPTION MAY BE
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TRANSFERRED BY WILL, BY THE LAWS OF DESCENT AND DISTRIBUTION, AND TO THE
EXTENT AND IN THE MANNER AUTHORIZED BY THE ADMINISTRATOR, TO MEMBERS OF THE
GRANTEE'S IMMEDIATE FAMILY (AS DETERMINED BY THE ADMINISTRATOR) OR PURSUANT
TO A DOMESTIC RELATIONS ORDER. THE TERMS OF THE OPTION SHALL BE BINDING UPON
THE EXECUTORS, ADMINISTRATORS, HEIRS AND SUCCESSORS OF THE GRANTEE.
11. TERM OF OPTION. THE OPTION MAY BE EXERCISED NO LATER THAN THE EXPIRATION
DATE SET FORTH IN THE NOTICE OR SUCH EARLIER DATE AS OTHERWISE PROVIDED HEREIN.
12. STOP-TRANSFER NOTICES. IN ORDER TO ENSURE COMPLIANCE WITH THE RESTRICTIONS
ON TRANSFER SET FORTH IN THIS OPTION AGREEMENT, THE NOTICE OR THE PLAN, THE
COMPANY MAY ISSUE APPROPRIATE "STOP TRANSFER" INSTRUCTIONS TO ITS TRANSFER
AGENT, IF ANY, AND, IF THE COMPANY TRANSFERS ITS OWN SECURITIES, IT MAY MAKE
APPROPRIATE NOTATIONS TO THE SAME EFFECT IN ITS OWN RECORDS.
13. REFUSAL TO TRANSFER. THE COMPANY SHALL NOT BE REQUIRED (I) TO TRANSFER ON
ITS BOOKS ANY SHARES THAT HAVE BEEN SOLD OR OTHERWISE TRANSFERRED IN VIOLATION
OF ANY OF THE PROVISIONS OF THIS OPTION AGREEMENT OR (II) TO TREAT AS OWNER OF
SUCH SHARES OR TO ACCORD THE RIGHT TO VOTE OR PAY DIVIDENDS OR OTHER
SHAREHOLDERS RIGHTS TO ANY PURCHASER OR OTHER TRANSFEREE TO WHOM SUCH SHARES
SHALL HAVE BEEN SO TRANSFERRED.
14. TAX CONSEQUENCES. SET FORTH BELOW IS A BRIEF SUMMARY AS OF THE DATE OF THIS
OPTION AGREEMENT OF SOME OF THE FEDERAL TAX CONSEQUENCES OF EXERCISE OF THE
OPTION AND DISPOSITION OF THE SHARES. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE COMPANY SHALL HAVE
NO OBLIGATION TO NOTIFY GRANTEE OF ANY SUCH CHANGES. THE GRANTEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. WITHOUT
LIMITING THE FOREGOING, THIS SUMMARY DOES NOT DISCUSS THE TAX CONSEQUENCES OF
THE EXERCISE OF THE OPTION AND THE DISPOSITION OF THE SHARES UNDER THE LAWS OF
THE UNITED KINGDOM.
(a) EXERCISE OF INCENTIVE STOCK OPTION. IF THE OPTION QUALIFIES AS
AN INCENTIVE STOCK OPTION, THERE WILL BE NO REGULAR FEDERAL
INCOME TAX LIABILITY UPON THE EXERCISE OF THE OPTION, ALTHOUGH
THE EXCESS, IF ANY, OF THE FAIR MARKET VALUE OF THE SHARES ON
THE DATE OF EXERCISE OVER THE EXERCISE PRICE WILL BE TREATED
AS INCOME FOR PURPOSES OF THE ALTERNATIVE MINIMUM TAX FOR
FEDERAL TAX PURPOSES AND MAY SUBJECT THE GRANTEE TO THE
ALTERNATIVE MINIMUM TAX IN THE YEAR OF EXERCISE.
(b) EXERCISE OF INCENTIVE STOCK OPTION FOLLOWING DISABILITY. IF
THE GRANTEE'S CONTINUOUS SERVICE TERMINATES AS A RESULT OF
DISABILITY THAT IS NOT TOTAL AND PERMANENT DISABILITY AS
DEFINED IN SECTION 22(e)(3) OF THE CODE, TO THE EXTENT
PERMITTED ON THE DATE OF TERMINATION, THE GRANTEE MUST
EXERCISE AN INCENTIVE STOCK OPTION WITHIN THREE (3) MONTHS OF
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SUCH TERMINATION FOR THE INCENTIVE STOCK OPTION TO BE
QUALIFIED AS AN INCENTIVE STOCK OPTION.
(c) EXERCISE OF NON-QUALIFIED STOCK OPTION. ON EXERCISE OF A
NON-QUALIFIED STOCK OPTION, THE GRANTEE WILL BE TREATED AS
HAVING RECEIVED COMPENSATION INCOME (TAXABLE AT ORDINARY
INCOME TAX RATES) EQUAL TO THE EXCESS, IF ANY, OF THE FAIR
MARKET VALUE OF THE SHARES ON THE DATE OF EXERCISE OVER THE
EXERCISE PRICE. IF THE GRANTEE IS AN EMPLOYEE OR A FORMER
EMPLOYEE, THE COMPANY WILL BE REQUIRED TO WITHHOLD FROM THE
GRANTEE'S COMPENSATION OR COLLECT FROM THE GRANTEE AND PAY TO
THE APPLICABLE TAXING AUTHORITIES AN AMOUNT IN CASH EQUAL TO A
PERCENTAGE OF THIS COMPENSATION INCOME AT THE TIME OF
EXERCISE, AND MAY REFUSE TO HONOR THE EXERCISE AND REFUSE TO
DELIVER SHARES IF SUCH WITHHOLDING AMOUNTS ARE NOT DELIVERED
AT THE TIME OF EXERCISE.
(d) DISPOSITION OF SHARES. IN THE CASE OF A NON-QUALIFIED STOCK
OPTION, IF SHARES ARE HELD FOR MORE THAN ONE YEAR, ANY GAIN
REALIZED ON DISPOSITION OF THE SHARES WILL BE TREATED AS
LONG-TERM CAPITAL GAIN FOR FEDERAL INCOME TAX PURPOSES AND
SUBJECT TO TAX AT A MAXIMUM RATE OF 20%. IN THE CASE OF AN
INCENTIVE STOCK OPTION, IF SHARES TRANSFERRED PURSUANT TO THE
OPTION ARE HELD FOR MORE THAN ONE YEAR AFTER RECEIPT OF THE
SHARES AND ARE DISPOSED MORE THAN TWO YEARS AFTER THE DATE OF
AWARD, ANY GAIN REALIZED ON DISPOSITION OF THE SHARES ALSO
WILL BE TREATED AS CAPITAL GAIN FOR FEDERAL INCOME TAX
PURPOSES AND SUBJECT TO THE SAME TAX RATES AND HOLDING PERIODS
THAT APPLY TO SHARES ACQUIRED UPON EXERCISE OF A NON-QUALIFIED
STOCK OPTION. IF SHARES PURCHASED UNDER AN INCENTIVE STOCK
OPTION ARE DISPOSED OF PRIOR TO THE EXPIRATION OF SUCH
ONE-YEAR OR TWO-YEAR PERIODS, ANY GAIN REALIZED ON SUCH
DISPOSITION WILL BE TREATED AS COMPENSATION INCOME (TAXABLE AT
ORDINARY INCOME RATES) TO THE EXTENT OF THE DIFFERENCE BETWEEN
THE EXERCISE PRICE AND THE LESSER OF (i) THE FAIR MARKET VALUE
OF THE SHARES ON THE DATE OF EXERCISE, OR (ii) THE SALE PRICE
OF THE SHARES.
15. LOCK-UP AGREEMENT.
(a) AGREEMENT. THE GRANTEE, IF REQUESTED BY THE COMPANY AND THE
LEAD UNDERWRITER OF ANY PUBLIC OFFERING OF THE COMMON STOCK OR
OTHER SECURITIES OF THE COMPANY (THE "LEAD UNDERWRITER"),
HEREBY IRREVOCABLY AGREES NOT TO SELL, CONTRACT TO SELL, GRANT
ANY OPTION TO PURCHASE, TRANSFER THE ECONOMIC RISK OF
OWNERSHIP IN, MAKE ANY SHORT SALE OF, PLEDGE OR OTHERWISE
TRANSFER OR DISPOSE OF ANY INTEREST IN ANY COMMON STOCK OR ANY
SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE OR EXERCISABLE FOR
OR ANY OTHER RIGHTS TO PURCHASE OR ACQUIRE COMMON STOCK
(EXCEPT COMMON STOCK INCLUDED IN SUCH PUBLIC OFFERING OR
ACQUIRED ON THE PUBLIC MARKET AFTER SUCH OFFERING) DURING THE
180-DAY PERIOD FOLLOWING THE REGISTRATION DATE OR SUCH SHORTER
PERIOD OF TIME AS THE LEAD UNDERWRITER SHALL SPECIFY. THE
GRANTEE FURTHER AGREES TO SIGN SUCH DOCUMENTS AS MAY BE
REQUESTED BY THE LEAD UNDERWRITER TO EFFECT THE FOREGOING AND
AGREES THAT THE COMPANY MAY IMPOSE STOP-TRANSFER INSTRUCTIONS
WITH RESPECT TO SUCH COMMON STOCK SUBJECT UNTIL THE END OF
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SUCH PERIOD. THE COMPANY AND THE GRANTEE ACKNOWLEDGE THAT EACH
LEAD UNDERWRITER OF A PUBLIC OFFERING OF THE COMPANY'S STOCK,
DURING THE PERIOD OF SUCH OFFERING AND FOR THE 180-DAY PERIOD
THEREAFTER, IS AN INTENDED BENEFICIARY OF THIS SECTION 16.
(b) NO AMENDMENT WITHOUT CONSENT OF UNDERWRITER. DURING THE PERIOD
FROM IDENTIFICATION AS A LEAD UNDERWRITER IN CONNECTION WITH
ANY PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK UNTIL THE
EARLIER OF (i) THE EXPIRATION OF THE LOCK-UP PERIOD SPECIFIED
IN SECTION 16(a) IN CONNECTION WITH SUCH OFFERING OR (ii) THE
ABANDONMENT OF SUCH OFFERING BY THE COMPANY AND THE LEAD
UNDERWRITER, THE PROVISIONS OF THIS SECTION 16 MAY NOT BE
AMENDED OR WAIVED EXCEPT WITH THE CONSENT OF THE LEAD
UNDERWRITER.
16. ENTIRE AGREEMENT: GOVERNING LAW. THE NOTICE, THE PLAN AND THIS OPTION
AGREEMENT CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE IN THEIR ENTIRETY ALL PRIOR UNDERTAKINGS AND
AGREEMENTS OF THE COMPANY AND THE GRANTEE WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE MODIFIED ADVERSELY TO THE GRANTEE'S INTEREST EXCEPT BY
MEANS OF A WRITING SIGNED BY THE COMPANY AND THE GRANTEE. NOTHING IN THE NOTICE,
THE PLAN AND THIS OPTION AGREEMENT (EXCEPT AS EXPRESSLY PROVIDED THEREIN) IS
INTENDED TO CONFER ANY RIGHTS OR REMEDIES ON ANY PERSONS OTHER THAN THE PARTIES.
THE NOTICE, THE PLAN AND THIS OPTION AGREEMENT ARE TO BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (AS PERMITTED
BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR SUCCESSOR
PROVISION) WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA TO THE RIGHTS AND DUTIES OF THE PARTIES. SHOULD ANY
PROVISION OF THE NOTICE, THE PLAN OR THIS OPTION AGREEMENT BE DETERMINED BY A
COURT OF LAW TO BE ILLEGAL OR UNENFORCEABLE, SUCH PROVISION SHALL BE ENFORCED TO
THE FULLEST EXTENT ALLOWED BY LAW AND THE OTHER PROVISIONS SHALL NEVERTHELESS
REMAIN EFFECTIVE AND SHALL REMAIN ENFORCEABLE.
17. HEADINGS. THE CAPTIONS USED IN THE NOTICE AND THIS OPTION AGREEMENT ARE
INSERTED FOR CONVENIENCE AND SHALL NOT BE DEEMED A PART OF THE OPTION FOR
CONSTRUCTION OR INTERPRETATION.
18. NOTICES. ANY NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE GIVEN IN
WRITING AND BY PERSONAL DELIVERY OR BY AN INTERNATIONALLY RECOGNIZED
COMMERCIAL COURIER SERVICE OR BY DEPOSIT IN THE UNITED STATES MAIL BY
CERTIFIED MAIL (IF THE PARTIES ARE WITHIN THE UNITED STATES) OR UPON DEPOSIT
FOR DELIVERY BY AN INTERNATIONALLY RECOGNIZED EXPRESS MAIL COURIER SERVICE
(FOR INTERNATIONAL DELIVERY OF NOTICE), WITH POSTAGE AND FEES PREPAID,
ADDRESSED TO THE OTHER PARTY AT ITS ADDRESS AS SHOWN BENEATH
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ITS SIGNATURE IN THE NOTICE, OR TO SUCH OTHER ADDRESS AS SUCH PARTY MAY
DESIGNATE IN WRITING FROM TIME TO TIME TO THE OTHER PARTY; AND SHALL BE
DEEMED EFFECTIVE ON THE DATE OF DELIVERY IN PERSON OR BY COURIER OR FIVE (5)
DAYS AFTER THE DATE MAILED.
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EXHIBIT A
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
EXERCISE NOTICE
UDate.com, Inc.
_____________________________
_____________________________
Attention: Secretary
1. EFFECTIVE AS OF TODAY, ______________, ___ THE UNDERSIGNED (THE "GRANTEE")
HEREBY ELECTS TO EXERCISE THE GRANTEE'S OPTION TO PURCHASE ___________ SHARES OF
THE COMMON STOCK (THE "SHARES") OF UDATE.COM, INC. (THE "COMPANY") UNDER AND
PURSUANT TO THE COMPANY'S 2000 STOCK INCENTIVE PLAN, AS AMENDED FROM TIME TO
TIME (THE "PLAN") AND THE [ ] INCENTIVE [ ] NON-QUALIFIED STOCK OPTION AWARD
AGREEMENT (THE "OPTION AGREEMENT") AND NOTICE OF STOCK OPTION AWARD (THE
"NOTICE") DATED ______________, ________. UNLESS OTHERWISE DEFINED HEREIN, THE
TERMS DEFINED IN THE PLAN SHALL HAVE THE SAME DEFINED MEANINGS IN THIS EXERCISE
NOTICE.
2. REPRESENTATIONS OF THE GRANTEE. THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS
RECEIVED, READ AND UNDERSTOOD THE NOTICE, THE PLAN AND THE OPTION AGREEMENT AND
AGREES TO ABIDE BY AND BE BOUND BY THEIR TERMS AND CONDITIONS.
3. RIGHTS AS SHAREHOLDER. UNTIL THE STOCK CERTIFICATE EVIDENCING SUCH SHARES IS
ISSUED (AS EVIDENCED BY THE APPROPRIATE ENTRY ON THE BOOKS OF THE COMPANY OR OF
A DULY AUTHORIZED TRANSFER AGENT OF THE COMPANY), NO RIGHT TO VOTE OR RECEIVE
DIVIDENDS OR ANY OTHER RIGHTS AS A SHAREHOLDER SHALL EXIST WITH RESPECT TO THE
SHARES, NOTWITHSTANDING THE EXERCISE OF THE OPTION. THE COMPANY SHALL ISSUE (OR
CAUSE TO BE ISSUED) SUCH STOCK CERTIFICATE PROMPTLY AFTER THE OPTION IS
EXERCISED, SUBJECT TO THE PLAN AND APPLICABLE LAW. NO ADJUSTMENT WILL BE MADE
FOR A DIVIDEND OR OTHER RIGHT FOR WHICH THE RECORD DATE IS PRIOR TO THE DATE THE
STOCK CERTIFICATE IS ISSUED, EXCEPT AS PROVIDED IN SECTION 11 OF THE PLAN.
4. DELIVERY OF PAYMENT. THE GRANTEE HEREWITH DELIVERS TO THE COMPANY THE FULL
EXERCISE PRICE FOR THE SHARES, WHICH, TO THE EXTENT SELECTED, SHALL BE DEEMED TO
BE SATISFIED BY USE OF THE BROKER-DEALER SALE AND REMITTANCE PROCEDURE TO PAY
THE EXERCISE PRICE PROVIDED IN SECTION 4(D) OF THE OPTION AGREEMENT.
5. TAX CONSULTATION. THE GRANTEE UNDERSTANDS THAT THE GRANTEE MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF THE
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GRANTEE'S PURCHASE OR DISPOSITION OF THE SHARES. THE GRANTEE REPRESENTS THAT
THE GRANTEE HAS CONSULTED WITH ANY TAX CONSULTANTS THE GRANTEE DEEMS
ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND
THAT THE GRANTEE IS NOT RELYING ON THE COMPANY OR ITS REPRESENTATIVES FOR ANY
TAX ADVICE.
6. TAXES. THE GRANTEE AGREES TO SATISFY ALL APPLICABLE FEDERAL, STATE AND LOCAL
INCOME AND EMPLOYMENT TAX WITHHOLDING OBLIGATIONS AND HEREWITH DELIVERS TO THE
COMPANY THE FULL AMOUNT OF SUCH OBLIGATIONS OR HAS MADE ARRANGEMENTS ACCEPTABLE
TO THE COMPANY TO SATISFY SUCH OBLIGATIONS. IN THE CASE OF AN INCENTIVE STOCK
OPTION, THE GRANTEE ALSO AGREES, AS PARTIAL CONSIDERATION FOR THE DESIGNATION OF
THE OPTION AS AN INCENTIVE STOCK OPTION, TO NOTIFY THE COMPANY IN WRITING WITHIN
THIRTY (30) DAYS OF ANY DISPOSITION OF ANY SHARES ACQUIRED BY EXERCISE OF THE
OPTION IF SUCH DISPOSITION OCCURS WITHIN TWO (2) YEARS FROM THE AWARD DATE OR
WITHIN ONE (1) YEAR FROM THE DATE THE SHARES WERE TRANSFERRED TO THE GRANTEE. IF
THE COMPANY IS REQUIRED TO SATISFY ANY FEDERAL, STATE OR LOCAL INCOME OR
EMPLOYMENT TAX WITHHOLDING OBLIGATIONS AS A RESULT OF SUCH AN EARLY DISPOSITION,
THE GRANTEE AGREES TO SATISFY THE AMOUNT OF SUCH WITHHOLDING IN A MANNER THAT
THE ADMINISTRATOR PRESCRIBES.
7. RESTRICTIVE LEGENDS. THE GRANTEE UNDERSTANDS AND AGREES THAT THE COMPANY
SHALL CAUSE THE LEGENDS SET FORTH BELOW OR LEGENDS SUBSTANTIALLY EQUIVALENT
THERETO, TO BE PLACED UPON ANY CERTIFICATE(S) EVIDENCING OWNERSHIP OF THE SHARES
TOGETHER WITH ANY OTHER LEGENDS THAT MAY BE REQUIRED BY THE COMPANY OR BY STATE
OR FEDERAL SECURITIES LAWS:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS ARE
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BINDING ON TRANSFEREES OF THESE SHARES.
8. SUCCESSORS AND ASSIGNS. THE COMPANY MAY ASSIGN ANY OF ITS RIGHTS UNDER THIS
EXERCISE NOTICE TO SINGLE OR MULTIPLE ASSIGNEES, AND THIS AGREEMENT SHALL INURE
TO THE BENEFIT OF THE SUCCESSORS AND ASSIGNS OF THE COMPANY. SUBJECT TO THE
RESTRICTIONS ON TRANSFER HEREIN SET FORTH, THIS EXERCISE NOTICE SHALL BE BINDING
UPON THE GRANTEE AND HIS HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND
ASSIGNS.
9. HEADINGS. THE CAPTIONS USED IN THIS EXERCISE NOTICE ARE INSERTED FOR
CONVENIENCE AND SHALL NOT BE DEEMED A PART OF THIS AGREEMENT FOR CONSTRUCTION OR
INTERPRETATION. .
10. GOVERNING LAW; SEVERABILITY. THIS EXERCISE NOTICE IS TO BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (AS
PERMITTED BY SECTION 1646.5 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
SUCCESSOR PROVISION) WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE INTERNAL
LAWS OF THE STATE OF CALIFORNIA TO THE RIGHTS AND DUTIES OF THE PARTIES. SHOULD
ANY PROVISION OF THIS EXERCISE NOTICE BE DETERMINED BY A COURT OF LAW TO BE
ILLEGAL OR UNENFORCEABLE, SUCH PROVISION SHALL BE ENFORCED TO THE FULLEST EXTENT
ALLOWED BY LAW AND THE OTHER PROVISIONS SHALL NEVERTHELESS REMAIN EFFECTIVE AND
SHALL REMAIN ENFORCEABLE.
11. NOTICES. ANY NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE GIVEN IN
WRITING AND BY PERSONAL DELIVERY OR BY AN INTERNATIONALLY RECOGNIZED COMMERCIAL
COURIER SERVICE OR BY DEPOSIT IN THE UNITED STATES MAIL BY CERTIFIED MAIL (IF
THE PARTIES ARE WITHIN THE UNITED STATES) OR UPON DEPOSIT FOR DELIVERY BY AN
INTERNATIONALLY RECOGNIZED EXPRESS MAIL COURIER SERVICE (FOR INTERNATIONAL
DELIVERY OF NOTICE), WITH POSTAGE AND FEES PREPAID, ADDRESSED TO THE OTHER PARTY
AT ITS ADDRESS AS SHOWN BENEATH ITS SIGNATURE IN THE NOTICE, OR TO SUCH OTHER
ADDRESS AS SUCH PARTY MAY DESIGNATE IN WRITING FROM TIME TO TIME TO THE OTHER
PARTY; AND SHALL BE DEEMED EFFECTIVE ON THE DATE OF DELIVERY IN PERSON OR BY
COURIER OR FIVE (5) DAYS AFTER THE DATE MAILED.
12. FURTHER INSTRUMENTS. THE PARTIES AGREE TO EXECUTE SUCH FURTHER INSTRUMENTS
AND TO TAKE SUCH FURTHER ACTION AS MAY BE REASONABLY NECESSARY TO CARRY OUT THE
PURPOSES AND INTENT OF THIS AGREEMENT.
13. ENTIRE AGREEMENT. THE NOTICE, THE PLAN AND THE OPTION AGREEMENT ARE
INCORPORATED HEREIN BY REFERENCE AND TOGETHER WITH THIS EXERCISE NOTICE
CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE IN THEIR ENTIRETY ALL PRIOR UNDERTAKINGS AND
AGREEMENTS OF THE COMPANY AND THE GRANTEE WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND MAY NOT BE MODIFIED ADVERSELY TO THE GRANTEE'S
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<PAGE>
INTEREST EXCEPT BY MEANS OF A WRITING SIGNED BY THE COMPANY AND THE GRANTEE.
NOTHING IN THE NOTICE, THE PLAN, THE OPTION AGREEMENT AND THIS EXERCISE
NOTICE (EXCEPT AS EXPRESSLY PROVIDED THEREIN) IS INTENDED TO CONFER ANY
RIGHTS OR REMEDIES ON ANY PERSONS OTHER THAN THE PARTIES.
Submitted by: Accepted by:
GRANTEE: UDATE.COM, INC.
By: _______________________________
_______________________________ Title: ____________________________
(Signature)
ADDRESS: ADDRESS:
_______________________________
_______________________________
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EXHIBIT B
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
INVESTMENT REPRESENTATION STATEMENT
GRANTEE: HOWARD THACKER
COMPANY: UDATE.COM, INC.
SECURITY: COMMON STOCK
AMOUNT: _______________________________
DATE: _______________________________
IN CONNECTION WITH THE PURCHASE OF THE ABOVE-LISTED SECURITIES, THE UNDERSIGNED
GRANTEE REPRESENTS TO THE COMPANY THE FOLLOWING:
(a) GRANTEE IS AWARE OF THE COMPANY'S BUSINESS AFFAIRS AND
FINANCIAL CONDITION AND HAS ACQUIRED SUFFICIENT INFORMATION ABOUT THE COMPANY TO
REACH AN INFORMED AND KNOWLEDGEABLE DECISION TO ACQUIRE THE SECURITIES. GRANTEE
IS ACQUIRING THESE SECURITIES FOR INVESTMENT FOR GRANTEE'S OWN ACCOUNT ONLY AND
NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY "DISTRIBUTION" THEREOF
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT").
(b) GRANTEE ACKNOWLEDGES AND UNDERSTANDS THAT THE SECURITIES
CONSTITUTE "RESTRICTED SECURITIES" UNDER THE SECURITIES ACT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT IN RELIANCE UPON A SPECIFIC EXEMPTION
THEREFROM, WHICH EXEMPTION DEPENDS UPON AMONG OTHER THINGS, THE BONA FIDE NATURE
OF GRANTEE'S INVESTMENT INTENT AS EXPRESSED HEREIN. GRANTEE FURTHER UNDERSTANDS
THAT THE SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. GRANTEE FURTHER ACKNOWLEDGES AND UNDERSTANDS THAT THE COMPANY IS
UNDER NO OBLIGATION TO REGISTER THE SECURITIES. GRANTEE UNDERSTANDS THAT THE
CERTIFICATE EVIDENCING THE SECURITIES WILL BE IMPRINTED WITH A LEGEND WHICH
PROHIBITS THE TRANSFER OF THE SECURITIES UNLESS THEY ARE REGISTERED OR SUCH
REGISTRATION IS NOT REQUIRED IN THE OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY.
(c) GRANTEE IS FAMILIAR WITH THE PROVISIONS OF RULE 701 AND RULE
144, EACH PROMULGATED UNDER THE SECURITIES ACT, WHICH, IN SUBSTANCE, PERMIT
LIMITED PUBLIC RESALE OF "RESTRICTED SECURITIES" ACQUIRED, DIRECTLY OR
INDIRECTLY FROM THE ISSUER THEREOF, IN A NON-PUBLIC OFFERING SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS. RULE 701 PROVIDES THAT IF THE ISSUER
QUALIFIES UNDER RULE 701 AT THE TIME OF THE GRANT OF THE OPTION TO THE GRANTEE,
THE EXERCISE WILL BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. IN THE
EVENT THE COMPANY BECOMES SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, NINETY (90) DAYS THEREAFTER (OR
SUCH LONGER PERIOD AS ANY MARKET STAND-OFF AGREEMENT MAY REQUIRE) THE SECURITIES
EXEMPT UNDER RULE 701 MAY BE RESOLD, SUBJECT TO THE
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SATISFACTION OF CERTAIN OF THE CONDITIONS SPECIFIED BY RULE 144, INCLUDING:
(1) THE RESALE BEING MADE THROUGH A BROKER IN AN UNSOLICITED "BROKER'S
TRANSACTION" OR IN TRANSACTIONS DIRECTLY WITH A MARKET MAKER (AS SAID TERM IS
DEFINED UNDER THE SECURITIES EXCHANGE ACT OF 1934); AND, IN THE CASE OF AN
AFFILIATE, (2) THE AVAILABILITY OF CERTAIN PUBLIC INFORMATION ABOUT THE
COMPANY, (3) THE AMOUNT OF SECURITIES BEING SOLD DURING ANY THREE MONTH
PERIOD NOT EXCEEDING THE LIMITATIONS SPECIFIED IN RULE 144(e), AND (4) THE
TIMELY FILING OF A FORM 144, IF APPLICABLE.
IN THE EVENT THAT THE COMPANY DOES NOT QUALIFY UNDER RULE 701 AT THE
TIME OF GRANT OF THE OPTION, THEN THE SECURITIES MAY BE RESOLD IN CERTAIN
LIMITED CIRCUMSTANCES SUBJECT TO THE PROVISIONS OF RULE 144, WHICH REQUIRES THE
RESALE TO OCCUR NOT LESS THAN ONE YEAR AFTER THE LATER OF THE DATE THE
SECURITIES WERE SOLD BY THE COMPANY OR THE DATE THE SECURITIES WERE SOLD BY AN
AFFILIATE OF THE COMPANY, WITHIN THE MEANING OF RULE 144; AND, IN THE CASE OF
ACQUISITION OF THE SECURITIES BY AN AFFILIATE, OR BY A NON-AFFILIATE WHO
SUBSEQUENTLY HOLDS THE SECURITIES LESS THAN TWO YEARS, THE SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTIONS (1), (2), (3) AND (4) OF THE PARAGRAPH
IMMEDIATELY ABOVE.
(d) GRANTEE FURTHER UNDERSTANDS THAT IN THE EVENT ALL OF THE
APPLICABLE REQUIREMENTS OF RULE 701 OR 144 ARE NOT SATISFIED, REGISTRATION UNDER
THE SECURITIES ACT, COMPLIANCE WITH REGULATION A, OR SOME OTHER REGISTRATION
EXEMPTION WILL BE REQUIRED; AND THAT, NOTWITHSTANDING THE FACT THAT RULES 144
AND 701 ARE NOT EXCLUSIVE, THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION
HAS EXPRESSED ITS OPINION THAT PERSONS PROPOSING TO SELL PRIVATE PLACEMENT
SECURITIES OTHER THAN IN A REGISTERED OFFERING AND OTHERWISE THAN PURSUANT TO
RULES 144 OR 701 WILL HAVE A SUBSTANTIAL BURDEN OF PROOF IN ESTABLISHING THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE FOR SUCH OFFERS OR SALES, AND THAT SUCH
PERSONS AND THEIR RESPECTIVE BROKERS WHO PARTICIPATE IN SUCH TRANSACTIONS DO SO
AT THEIR OWN RISK. GRANTEE UNDERSTANDS THAT NO ASSURANCES CAN BE GIVEN THAT ANY
SUCH OTHER REGISTRATION EXEMPTION WILL BE AVAILABLE IN SUCH EVENT.
(e) GRANTEE REPRESENTS THAT HE IS A RESIDENT OF
_______________________________
_______________________________.
Signature of Grantee:
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<PAGE>
_______________________________
Date: _________________,_______
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<PAGE>
SCHEDULE D
ANTHEM RECORDING WEST INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the day
of 2000 by and among ANTHEM RECORDING WEST INC., a California corporation
(the "Company"), and the purchasers of the Company's common stock listed on
the signature pages hereto (the "Investors").
RECITALS
WHEREAS:
A. The Investors are parties to the share exchange agreement of even date
herewith among the Company, the Investors and others (the "Share
Exchange Agreement"), which provides that as a condition to the closing
of the transactions contemplated therein, this Agreement must be
executed and delivered by the Investors and the Company;
B. The Company desires to grant, and the Investors desire to be granted,
the rights created herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
1.1 Definitions
For purposes of this CLAUSE 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in effect
on the date hereof or any registration form under the Act
subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(c) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in
accordance with CLAUSE 1.11 hereof.
<PAGE>
(d) The term "Initial Offering" means the Company's first firm
commitment underwritten public offering of its common stock
under the Act.
(e) The term "1934 Act" means the Securities Exchange Act of 1934,
as amended.
(f) The term "register," "registered," and "registration" refer to
a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such
registration statement or document.
(g) The term "Registrable Securities" means (i) the common stock
issuable or issued pursuant to the Share Exchange Agreement,
and (ii) any common stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right
or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) above, excluding
in all cases, however, any Registrable Securities sold by a
person (x) in a transaction in which his rights under this
clause 1 are not assigned, (y) pursuant to a registration
statement that has been declared effective and such
Registrable Securities have been disposed of pursuant to such
effective registration statement, or (z) in a transaction in
which such Registrable Securities are sold pursuant to Rule
144 (or any similar provision then in force) under the Act.
(h) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of
common stock outstanding that are, and the number of shares of
common stock issuable pursuant to then exercisable or
convertible securities that are, Registrable Securities.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
Subject to the conditions of this CLAUSE 1.2, if the Company shall
receive at any time after the Closing Date (as defined in the Share
Exchange Agreement) a written request from the Holders of fifty percent
(50%) or more of the Registrable Securities then outstanding (the
"Initiating Holders") that the Company file a registration statement
under the Act covering the registration of Registrable Securities, then
the Company shall, within twenty (20) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the
limitations of this CLAUSE 1.2, use best efforts to effect, as soon as
practicable, the registration under the Act of all Registrable
Securities that the Holders request to be registered in a written
request received by the Company within twenty (20) days of the mailing
of the Company's notice pursuant to this CLAUSE 1.2(a).
(a) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of
their request made pursuant to this CLAUSE 1.2 and the Company
shall include such information in the written notice referred
to in this CLAUSE1.2(a). In such event the right of any Holder
to include its Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and
such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected
for such underwriting by a
<PAGE>
majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable
to the Company). Notwithstanding any other provision of
this CLAUSE1.2, if the underwriter advises the Company
that marketing factors require a limitation of the number
of securities underwritten (including Registrable
Securities), then the Company shall so advise all Holders
of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of shares
that may be included in the underwriting shall be
allocated to the Holders of such Registrable Securities on
a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the
Initiating Holders), provided that no Registrable
Securities shall be excluded unless and until all other
securities of the Company have been excluded. Any
Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(b) The Company shall not be required to effect a registration
pursuant to this CLAUSE 1.2:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to
service of process in effecting such registration,
unless the Company is already subject to service in
such jurisdiction and except as may be required under
the Act; or
(ii) after the Company has effected two (2) registrations
pursuant to this CLAUSE 1.2, and such registrations
have been declared or ordered effective; or
(iii) during the period starting with the date sixty (60)
days prior to the Company's good faith estimate of
the date of the filing of, and ending on a date one
hundred eighty (180) days following the effective
date of, a Company-initiated registration subject to
CLAUSE 1.3 below, provided that the Company is
actively employing in good faith all reasonable
efforts to cause such registration statement to
become effective; or
(iv) if the Initiating Holders propose to dispose of
Registrable Securities that may be registered on Form
S-3 pursuant to CLAUSE 1.4 hereof; or
(v) if the Company shall furnish to Holders requesting a
registration pursuant to this CLAUSE 1.2, a
certificate signed by the Company's Chief Executive
Officer or Chairman of the Board stating that in the
good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the
Company and its stockholders for such registration to
be effected at such time, in which event the Company
shall have the right to defer such filing for a
period of not more than ninety (90) days after
receipt of the request of the Initiating Holders,
provided that such right to delay a request shall be
exercised by the Company not more than once in any
twelve (12)-month period and provided further, that
the Company shall not register any other of its
shares during such ninety (90) day period.
1.3 Company Registration
If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or
other securities under the Act in connection with the public offering
of such securities (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, a
registration relating to a corporate reorganization or other
transaction under Rule 145 of the Act, a registration on any form that
does not include substantially the same information as would be
required to be included in a registration statement covering the
<PAGE>
sale of the Registrable Securities, or a registration in which the only
common stock being registered is common stock issuable upon conversion
of debt securities that are also being registered), the Company shall,
at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within
twenty (20) days after mailing of such notice by the Company, the
Company shall, subject to the provisions of CLAUSE 1.3(c), use its best
efforts to cause a registration statement to become effective, which
includes all of the Registrable Securities that each such Holder has
requested to be registered.
(a) Right to Terminate Registration.
The Company shall have the right to terminate or withdraw any
registration initiated by it under this CLAUSE 1.3 prior to
the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
The expenses of such withdrawn registration shall be borne by
the Company in accordance with CLAUSE 1.7 hereof.
(b) Underwriting Requirements.
In connection with any offering involving an underwriting of
shares of the Company's capital stock, the Company shall not
be required under this CLAUSE 1.3 to include any of the
Holders' securities in such underwriting unless they accept
the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other
persons entitled to select the underwriters) and enter into an
underwriting agreement in customary form with an underwriter
or underwriters selected by the Company. If the total amount
of securities, including Registrable Securities, requested by
stockholders to be included in such offering exceeds the
amount of securities sold other than by the Company that the
underwriters determine in their sole discretion is compatible
with the success of the offering, then the Company shall be
required to include in the offering only that number of such
securities, including Registrable Securities, that the
underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling Holders
according to the total amount of securities entitled to be
included therein owned by each selling Holder or in such other
proportions as shall mutually be agreed to by such selling
Holders, except that no Registrable Securities shall be
excluded until all common stock held by other shareholders,
directors, officers and employees of the Company have been
excluded), but in no event shall the amount of securities of
the selling Holders included in the offering be reduced below
twenty-five percent (25%) of the total amount of securities
included in such offering, unless such offering is the Initial
Offering of the Company's securities, in which case the
selling Holders may be excluded if the underwriters make the
determination described above and no other stockholder's
securities are included. For purposes of the preceding
parenthetical concerning apportionment, for any selling
stockholder that is a Holder of Registrable Securities and
that is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and
family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons
shall be deemed to be a single "selling Holder," and any pro
rata reduction with respect to such "selling Holder" shall be
based upon the aggregate amount of Registrable Securities
owned by all such related entities and individuals.
1.4 Form S-3 Registration
<PAGE>
In case the Company shall receive from the Holders of the Registrable
Securities then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification
or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders;
and
(b) use best efforts to effect, as soon as practicable, such
registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holders'
Registrable Securities as are specified in such request,
together with all or such portion of the Registrable
Securities of any other Holders joining in such request as are
specified in a written request given within fifteen (15) days
after receipt of such written notice from the Company,
provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance,
pursuant to this section 1.4:
(i) if Form S-3 is not available for such offering by the
Holders;
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion
in such registration, propose to sell Registrable
Securities and such other securities (if any) at an
aggregate price to the public (net of any
underwriters' discounts or commissions) of less than
$500,000;
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chief Executive Officer or
Chairman of the Board of the Company stating that in
the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3
registration to be effected at such time, in which
event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under
this CLAUSE 1.4; provided, however, that the Company
shall not utilize this right more than once in any
twelve (12) month period; and provided further, that
the Company shall not register any other of its
shares during such 90 day period;
(iv) if the Company has, within the six (6) month period
preceding the date of such request, already effected
one registration on Form S-3 for the Holders pursuant
to this CLAUSE 1.4; or
(v) in any particular jurisdiction in which the Company
would be required to qualify to do business, where
not otherwise required, or to execute a general
consent to service of process in effecting such
registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and
other securities so requested to be registered as soon as
practicable after receipt of the request or requests of the
Holders. Registrations effected pursuant to this CLAUSE 1.4
shall not be counted as requests for registration effected
pursuant to CLAUSE 1.2.
1.5 Obligations of the Company
Whenever required under this CLAUSE 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as
reasonably possible:
<PAGE>
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use best efforts to
cause such registration statement to become effective, and,
upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to one
hundred twenty (120) days or, if earlier, until the
distribution contemplated in the Registration Statement has
been completed;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in
connection with such registration statement as may be
necessary to comply with the provisions of the Act with
respect to the disposition of all securities covered by such
registration statement;
(c) furnish to the Holders (i) a draft copy of the registration
statement, and (ii) such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
(d) use best efforts to register and qualify the securities
covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that the Company
shall not be required in connection therewith or as a
condition thereto to qualify to do business, where not
otherwise required, or to file a general consent to service of
process in any such states or jurisdictions;
(e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter of
such offering;
(f) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act, of (i) the
issuance of any stop order by the SEC in respect of such
registration statement, or (ii) the happening of any event as
a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then
existing;
(g) if the Registrable Securities are being sold through
underwriters, furnish, upon the request of the Holders of a
majority of the Registrable Securities requesting
registration, on the date that such Registrable Securities are
delivered to the underwriters for sale, (i) an opinion, dated
as of such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest
of the Holders requesting registration, addressed to the
underwriters and to the Holders requesting registration of
Registrable Securities, and (ii) a "comfort" letter dated as
of such date, from the independent certified public
accountants of the Company, in form and substance as is
customarily given by independent certified public accountant
to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters
and to the Holders requesting registration of Registrable
Securities;
(h) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
provided that in the case of a registration effected pursuant
to CLAUSE 1.2 above, which registration constitutes the
Initial Offering, the Registrable Securities shall be listed
on a national securities exchange or the NASDAQ National
Market System; and
(i) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number
for all such Registrable Securities, in each case not later
than the effective date of such registration.
<PAGE>
1.6 Information from Holder
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this CLAUSE 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall
furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of
disposition of such securities as shall be reasonably required to
effect the registration of such Holder's Registrable Securities.
1.7 Expenses of Registration
All expenses other than underwriting discounts and commissions incurred
in connection with registrations, filings or qualifications pursuant to
CLAUSES 1.2, 1.3 and 1.4, including (without limitation) all
registration, filing and qualification fees (including Blue Sky fees),
printers' and accounting fees, fees and disbursements of counsel for
the Company and the reasonable fees and disbursements of one counsel
for the selling Holders shall be borne by the Company. Notwithstanding
the foregoing, the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to CLAUSE 1.2 or
CLAUSE 1.4 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to
be registered (in which case all participating Holders shall bear such
expenses pro rata based upon the number of Registrable Securities that
were to be requested in the withdrawn registration), unless, in the
case of a registration requested under CLAUSE 1.2, the Holders of a
majority of the Registrable Securities agree to forfeit their right to
one demand registration pursuant to CLAUSE 1.2, provided, however, that
if at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business or prospects of the
Company from that known to the Holders at the time of their request and
have withdrawn the request with reasonable promptness following
disclosure by the Company of such material adverse change, then the
Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to CLAUSE 1.2 or 1.4.
1.8 Delay of Registration
No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation
or implementation of this CLAUSE 1.
1.9 Indemnification
<PAGE>
In the event any Registrable Securities are included in a registration
statement under this CLAUSE 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners or officers, directors
and stockholders of each Holder, legal counsel and accountants
for each Holder, any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder
or underwriter, within the meaning of the Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Act, the
1934 Act or any state securities laws, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following
statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities laws or any rule or
regulation promulgated under the Act, the 1934 Act or any
state securities laws; and the Company will reimburse each
such Holder, partner, officer, director, stockholder, counsel,
accountant, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that the indemnity agreement contained in this
SUBCLAUSE 1.9(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall
the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information
furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling
person; provided further, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Holder or underwriter,
or any person controlling such Holder or underwriter, from
whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering, if a copy of the
prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of such Holder or
underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale
of the shares to such person, and if the prospectus (as so
amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) To the extent permitted by law, each selling Holder, on a
several and not joint basis, will indemnify and hold harmless
the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any,
who controls the Company within the meaning of the Act, legal
counsel and accountants for the Company, any underwriter, any
other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or
are based upon any Violation (but excluding clause (iii) of
the definition thereof), in each case to the extent (and only
to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such
Holder expressly for use in connection with such registration;
and each such Holder will reimburse any person intended to be
indemnified pursuant to this SUBCLAUSE 1.9(b) for any legal or
other expenses reasonably incurred by such person in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that
the indemnity agreement contained in this SUBCLAUSE1.9(b)
shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder (which consent
shall not be unreasonably withheld), provided
<PAGE>
that in no event shall any indemnity under this SUBCLAUSE
1.9(b) exceed the net proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this
CLAUSE 1.9 of actual knowledge of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made
against any indemnifying party under this CLAUSE 1.9, deliver
to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties
that may be represented without conflict by one counsel) shall
have the right to retain one separate counsel, with the fees
and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such
indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this
CLAUSE 1.9 to the extent of such prejudice, but the omission
to so deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any
indemnified party otherwise than under this CLAUSE 1.9.
(d) If the indemnification provided for in this CLAUSE 1.9 is held
by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate
to reflect the relative fault of and the relative benefits
received by the indemnifying party on the one hand and of the
indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability,
claim, damage or expense, as well as any other relevant
equitable considerations, provided that no person guilty of
fraud shall be entitled to contribution. The relative fault of
the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such
statement or omission. The relative benefits received by the
indemnifying party and the indemnified party shall be
determined by reference to the net proceeds and underwriting
discounts and commissions from the offering received by each
such party. In no event shall any contribution under this
SUBCLAUSE 1.9(d) exceed the net proceeds from the offering
received by such Holder, less any amounts paid under SUBCLAUSE
1.9(b).
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this CLAUSE
1.9 shall survive the completion of any offering of
Registrable Securities in a registration statement under this
CLAUSE 1, and otherwise.
1.10 Reports Under Securities Exchange Act of 1934.
<PAGE>
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company
to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after the
effective date of the Initial Offering;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934
Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the
reporting requirements of SEC Rule 144 (at any time after
ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the
1934 Act (at any time after it has become subject to such
reporting requirements), or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any
time after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing
any Holder of any rule or regulation of the SEC that permits
the selling of any such securities without registration or
pursuant to such form.
1.11 Assignment of Registration Rights
The rights to cause the Company to register Registrable Securities
pursuant to this clause 1 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities
that (i) is a subsidiary, affiliate, parent, partner, limited partner,
retired partner or stockholder of a Holder, (ii) is a Holder's
immediate family member (spouse or child) or trust for the benefit of
an individual Holder, or (iii) after such assignment or transfer, holds
at least [ ] shares of Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement, including without
limitation the provisions of CLAUSE 1.13 below; and (c) such assignment
shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
1.12 Limitations on Subsequent Registration Rights
<PAGE>
From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders of fifty percent (50%)
of the Registrable Securities, enter into any agreement with any holder
or prospective holder of any securities of the Company that would allow
such holder or prospective holder (a) to include such securities in any
registration filed under CLAUSE 1.3 hereof, unless under the terms of
such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the
inclusion of such securities will not reduce the amount of the
Registrable Securities of the Holders that are included or (b) to
demand registration of their securities.
1.13 "Market Stand-Off" Agreement
Each Holder hereby agrees that it will not, without the prior written
consent of the Company and the managing underwriter, during the period
commencing on the date of the final prospectus relating to the
Company's initial public offering and ending on the date specified by
the Company and the managing underwriter (such period not to exceed one
hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
common stock or any securities convertible into or exercisable or
exchangeable for common stock (whether such shares or any such
securities are then owned by the Holder or are thereafter acquired), or
(ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the common stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of common
stock or such other securities, in cash or otherwise. The foregoing
provisions of this CLAUSE 1.13 shall apply only to the Company's
initial public offering of equity securities, shall not apply to the
sale of any shares to an underwriter pursuant to an underwriting
agreement, and shall only be applicable to the Holders if all officers
and directors and greater than five percent (5%) stockholders of the
Company enter into similar agreements. The underwriters in connection
with the Company's initial public offering are intended third party
beneficiaries of this CLAUSE 1.13 and shall have the right, power and
authority to enforce the provisions hereof as though they were a party
hereto. Notwithstanding the foregoing, nothing in this CLAUSE 1.13
shall prevent the undersigned from making a transfer of any common
stock that was listed on a national stock exchange, any NMF security or
traded on Nasdaq at the time it was acquired by
<PAGE>
the Holder or was acquired by the undersigned pursuant to Rule 144A of
the Act, including any shares acquired in the Company's initial public
offering.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities
of each Holder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
1.14 Termination of Registration Rights
No Holder shall be entitled to exercise any right provided for in this
CLAUSE 1 after five (5) years following the Closing Date or, as to any
Holder, such earlier time at which all Registrable Securities held by
such Holder (and any affiliate of the Holder with whom such Holder must
aggregate its sales under Rule 144) can be sold in any three (3)-month
period without registration in compliance with Rule 144 of the Act.
2. MISCELLANEOUS
2.1 Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties (including transferees
of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
2.2 Governing Law
This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents
entered into and to be performed entirely within California.
2.3 Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.4 Titles and Subtitles.
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
<PAGE>
2.5 Notices.
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission, nationally recognized
overnight courier service, or upon deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed
to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may
designate by ten (10) days' advance written notice to the other
parties.
2.6 Expenses
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Entire Agreement; Amendments and Waivers
This Agreement (including the Exhibits hereto, if any) constitutes the
full and entire understanding and agreement among the parties with
regard to the subjects hereof and thereof. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the
Company and the holders of no less than a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities, each future holder of all such Registrable
Securities and the Company. Notwithstanding the foregoing, any
amendment of CLAUSE 1.13 shall require the consent of each Holder which
is a registered investment company.
2.8 Severability
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
2.9 Aggregation of Stock.
<PAGE>
All shares of Registrable Securities held or acquired by entities
advised by the same investment adviser and affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
SIGNED by [ ] )
for and on behalf of )
ANTHEM RECORDING WEST INC. )
President:
Address:
<PAGE>
SIGNED by [ ] )
for and on behalf of )
ATLAS TRUST COMPANY (JERSEY) )
LIMITED )
Name:
Address:
SIGNED by [ ] )
for and on behalf of )
TAVENDISH ENTERPRISES LIMITED )
Name:
Address:
SIGNED by [ ] )
for and on behalf of )
RYLEY HILL LIMITED )
Name:
Address:
SIGNED by )
DAVID JOHN SHORTLAND )
in the presence of: )
Name:
Address:
Occupation:
SIGNED by PAULA LORAINE )
SHORTLAND in the )
presence of: )
Name:
Address:
Occupation:
<PAGE>
SIGNED by )
DAVID JOHN SHORTLAND, )
CHRISTINE ELIZABETH )
CATHERALL, BRUCE CARLESS and )
BETTY MAY SHORTLAND )
as trustees of the SHORTLAND NO.1 )
TRUST )
in the presence of: )
Name:
Address:
Occupation
<PAGE>
SCHEDULE E
UDATE SOLICITOR OPINIONS
(letterhead of solicitors for UDATE)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement") made effective as of the ___
day of ___, 2000, among Atlas Trust Company (Jersey) Limited as trustee
of the Internet Investments Inc. Employee Benefits and Shares Trust
John Tavendish Enterprises Ltd., David John Shortland, Paula Loraine
Shortland, Ryley Hill Ltd. and David John Shortland, Christine
Elizabeth Catherall, Bruce Carless and Betty May Shortland as trustees
of Shortland No. 1 Trust (the "Minority Shareholders")
Udate.com Ltd. ("UDATE"),
Internet Investments Inc.
Melvyn Morris and Howard Thacker
Anthem Recording West Inc. ("Anthem ")
-------------------------------------------------------------------------------
We are the solicitors for UDATE. We provide this opinion pursuant to
subparagraphs 2.1(d) and 6.1(i) of the Agreement. Words defined in the Agreement
have the same meanings in this letter. We have also acted as solicitors for
UDATE in connection with the negotiation, execution and completion of the
Agreement. We have considered such questions of law and examined such statutes
and regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have considered
necessary for the purpose of the opinion hereinafter expressed. In such
examination, we have assumed:-
1. the genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or as photocopies;
2. that each party to the Agreement, save for UDATE, has the power,
authority, and legal right and ability to enter into the Agreement and
to perform, observe and comply with all its obligations thereunder and
that the execution of the Agreement has been duly authorised, executed
and delivered by it;
3. the binding and enforceable nature of the obligations of all parties to
the Agreement under all applicable laws (other than the laws of the
United Kingdom with respect to UDATE);
4. that the Agreement is legal, valid, binding and enforceable under the
laws of California, USA to which it is subject;
5. that the parties to the Agreement which are companies, save for UDATE,
are duly organised and validly existing corporations in good standing
under the laws of the respective jurisdictions in which such parties
are incorporated;
6. that the execution of the Agreement by each of the parties thereto
(except UDATE) constitutes legal, valid, enforceable and binding
obligations of each of the said parties under the law by which the
Agreement is expressed to be governed;
7. that by accepting the terms of the Agreement the directors of UDATE are
acting bona fide and in the best interests of UDATE;
<PAGE>
8. that the information disclosed by our company search at Companies House
is accurate and complete and that such information has not since then
been materially altered and that such searches did not fail to disclose
any material information which had been delivered for filing but did
not appear on the public file as at April 2000; and
9. that all factual statements made in the Agreement, the resolutions of the
directors of UDATE dated [ ], and the Certificate of a Director of
UDATE dated [ ] are correct and not misleading due to the omission,
whether wilful or otherwise, of any material fact (as to which we
express no opinion).
Based on and subject to the foregoing, we are of the opinion that:-
1. UDATE is a company duly incorporated under the laws of England, in good
standing with respect to the filing of all required annual reports.
To the best of our knowledge, UDATE has all requisite corporate power and
authority to conduct the business now carried on by it, and to own its
property and assets as described in the Agreement, and all requisite
corporate power and authority to enter into and to perform its
obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been
taken to authorize the execution and delivery of the Agreement by
UDATE.
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by UDATE
will conflict with or constitute a breach or default under the
constating documents of UDATE, or any commitment, agreement or other
instrument to which UDATE is a party or by which either of them is
bound.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against UDATE which might materially affect any business,
properties, assets, prospects or conditions, financial or otherwise, of
UDATE or which could result in any material liability to UDATE.
6. The authorized share capital of UDATE consists of (pound)1,000 divided
into 100,000 shares of (pound)0.01 each, of which 10,199 shares (the
"UDATE Shares") are issued, and those shares are validly authorized,
created, allotted, issued and outstanding, and, to the best of our
knowledge, fully paid for and non-assessable, as at the date hereof.
7. Immediately prior to closing of the transactions contemplated under the
Agreement, III and the Minority Shareholders were the registered owners
of all the UDATE Shares on the books and records of UDATE.
8. All necessary steps and corporate action and proceedings have been
taken to effect the valid transfer of the Minority UDATE Shares to
Anthem as contemplated under the Agreement. Anthem is the registered
owner of the Minority UDATE Shares on the books and records of UDATE.
The opinion expressed is subject to the following qualifications:-
(a) enforceability of the Agreement may be limited by
applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally;
(b) equitable remedies such as the remedies of specific
performance or injunction are in the discretion of the
court from which they are sought;
(c) claims may become barred under Limitation Acts or may
become subject to defences of set off or counterclaim;
(d) provisions in the Agreement as to severability may not be
binding and the question of whether or not any invalid
provision may be severed from other provisions in order to
save such other provisions would be determined by the
English court in its absolute discretion;
(e) we express no opinion as to any law other than English law
in force and interpreted as at the date of this opinion; we
assume no obligation to advise you of any changes in law or
fact that may subsequently come to our attention, or their
effect on our opinion;
(f) a term of a written agreement may be varied by oral
agreement of the parties notwithstanding that such written
agreement requires variations to be made only in writing;
(g) in respect of jurisdiction an English court may stay
proceedings if it is deemed that some other forum is more
appropriate for
<PAGE>
trial of the action;
(h) where any obligation is to be performed in any jurisdiction
outside England such obligation may not be enforceable
under English law to the extent that such performance would
be illegal or contrary to public policy under the laws of
such jurisdiction;
(i) we express no opinion as to the availability of any
specific remedy (including without limitation an order for
specific performance or injunction) other than monetary
damages for relief in respect of any breach of obligations
on the part of UDATE;
(j) whilst an English court has the power to give judgement
expressed as an order to pay a currency other than pounds
sterling it may decline to do so in its absolute
discretion;
(k) the enforcement of the rights and obligations of the
parties to the Agreement may be limited by the provisions
of English law applicable to contracts held to have been
frustrated by events happening after their execution;
(l) we express no opinion as to the taxation consequences of
any of the matters to which this opinion relates;
(m) any provision in the Agreement providing that any
calculation or certification is to be conclusive and
binding will not be effective if such calculation or
certification is fraudulent and will not necessarily
prevent judicial enquiry into the merits of any claim by
any party;
(n) the undertaking and indemnity contained in clause [5] of
the Agreement may be void in respect of stamp duties
payable in the United Kingdom;
(o) our search of the registers at Companies House is not
capable of revealing whether or not a winding up petition
or administration order has been presented in respect of
UDATE. Notice of a winding up or administration order made
or winding up resolution are not required to be filed
immediately but only within a specified period;
(p) we express no opinion as to the existence of equities,
rights of set-off, counterclaims, liens, charges and
encumbrances which are not registrable under the Companies
Act 1985 and which may have been executed but not
registered; and
(q) the effectiveness of contract terms seeking to exclude or
limit one party's remedies of the liability of a party for
negligence or breaches of duty is limited by the Unfair
Contract Terms Act 1977.
This opinion is being furnished only to the addressees and is solely for their
benefit and the benefit of the participants and assigns in connection with the
above transaction. This opinion may not be relied upon for any other purpose or
relied upon by any other person, firm or corporation without our prior written
consent.
Yours faithfully,
Eversheds, Solicitors
<PAGE>
(letterhead of solicitors for III)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of -, 2000, among
Atlas Trust Company (Jersey) Limited ("Atlas") as trustee of the
Internet Investments Inc. Employee Benefits and Shares Trust ("EBT")
John Tavendish Enterprises Ltd., David John Shortland, Paula Loraine
Shortland, Ryley Hill Ltd. and David John Shortland, Christine
Elizabeth Catherall, Bruce Carless and Betty May Shortland as trustees
of Shortland No. 1 Trust
Udate.com Ltd.
Internet Investments Inc. ("III")
Melvyn Morris and Howard Thacker
Anthem Recording West Inc. ("Anthem")
-------------------------------------------------------------------------------
We are the solicitors for III. We have been requested to provide this opinion
pursuant to subparagraphs 2.1(d) and 6.1(i) of the Agreement. Words defined in
the Agreement have the same meanings in this letter.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have
considered necessary for the purpose of the opinion hereinafter expressed. In
such examination, we have assumed:-
1. the genuineness of all signatures and the conformity to original and copies
of all documents submitted to us and the authenticity of the originals
of such copies;
2. that each party to the Agreement, save for III, has the power, authority,
and legal right and ability to enter into the Agreement and to
perform, observe and comply with all its obligations thereunder and
that the execution of the Agreement has been duly authorised, executed
and delivered by it;
3. the binding and enforceable nature of the obligations of all parties to
the Agreement under all applicable laws (other than the laws of The
Bahamas with respect to III);
4. that the Agreement is legal, valid, binding and enforceable under the laws
of California, USA to which it is subject;
5. that the parties to the Agreement which are companies, save for III,
are duly organised and validly existing corporations in good standing
under the laws of the respective jurisdictions in which such parties
are incorporated;
6. that the execution of the Agreement by each of the parties thereto
(except III) constitutes legal, valid, enforceable and binding
obligations of each of the said parties under the law by which the
Agreement is expressed to be governed;
7. that by accepting the terms of the Agreement the directors of III are
acting bona fide and in the best interests of III;
8. that the information disclosed by our company search at the Companies
Registry is true and complete and that such information has not since
then been materially altered and that such searches did not fail to
disclose any material information which had been delivered for filing
but did not appear on the public file as at April 2000; and
9. that all factual statements made in the Agreement, the resolutions of
the directors of III dated [ ], the Certificate of a
Director of III dated [ ] and the Certificate of a Director
of Atlas as trustee of EBT are
<PAGE>
correct and not misleading due to the omission, whether wilful or
otherwise, of any material fact (as to which we express no opinion).
Based on and subject to the foregoing, we are of the opinion that:-
1. III is a company duly incorporated under the laws of The Bahamas, in
good standing with respect to the filing of all required annual
reports.
To the best of our knowledge, III has all requisite corporate power and
authority
(a) to carry on its business as it is now conducted insofar as
it is not carrying on business with persons resident in The
Bahamas or is not carrying on banking, trust, insurance or
reinsurance business companies of is not carrying on the
business of providing the registered office for companies;
(b) to own its property and assets as described in the
Agreement; and
(c) to enter into and to perform its obligations under the
Agreement.
3. All necessary steps and corporate action and proceedings have been
taken to authorize the execution and delivery of the Agreement by III.
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by III will
conflict with or constitute a breach or default under the Memorandum
and Articles of Association of III, or any commitment, agreement or
other instrument to which III is a party or by which it is bound.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against III in The Bahamas which might materially affect any
business, properties, assets, prospects or conditions, financial or
otherwise, of III or which could result in any material liability to
III.
The authorized share capital of III consists of US $5,000 divided
into 5,000 shares of US $1 each, of which 2 shares (the
"III Shares") are issued, and those shares are validly
authorized, created, allotted, issued and outstanding,
and, to the best of our knowledge, fully paid for and
non-assessable, as at the date hereof.
Immediately prior to closing of the transactions contemplated under the
Agreement, Atlas was the registered owner of all the III
Shares on the books and records of III in its capacity as
trustee for EBT.
EBT is a trust duly organized under the laws of the
Commonwealth of the Bahamas, in good standing with resepct
ot the filing of all required annual reports and Atlas is
the trustee of EBT.
To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement
by Atlas will conflict with or constitute a breach or
default under the constating documents of EBT, or any
commitment, agreement or other instrument to which EBT is a
party or by which it is bound.
To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual,
pending or threatened against EBT which might materially
affect any business, properties, assets, prospects or
conditions, financial or otherwise, of EBT or which could
result in any material liability to EBT.
All necessary steps and corporate action and proceedings have been
taken to effect the valid transfer of the III Shares to
Anthem as contemplated under the Agreement. Anthem is the
registered owner of the III Shares on the books and records
of III.
The opinion is given upon and is subject to the following
qualifications:-
(a) enforceability of the Agreement may be limited by
applicable bankruptcy, insolvency or other laws affecting
creditors' rights generally;
(b) equitable remedies such as the remedies of specific
performance or injunction are in the discretion of the
court from which they are sought;
(c) a Bahamian Court may refuse to give effect to a porported
contractual obligation to pay costs imposed upon another
party in respect of the costs of any successful litigation
brought against that party and such a court may not award
by way of costs all of the expenditure incurred by a
successful litigant in proceedings brought before that
Court.
(d) the courts of The Bahamas will not enforce provisions of
the Agreement to the extent that the same may be illegal or
contrary to public policy in The Bahamas or if obligations
are to be performed in a jurisdiction outside The Bahamas
to the extent that such performance would be illegal or
contrary to public policy under the laws of that
jurisdiction. There is however nothing contained in the
Agreement that would lead us to suppose that a court in The
Bahamas would hold enforcement of the same to be contrary
to public policy in The Bahamas.
(e) insofar as the parties resort to the Bahamian Courts,
claims may be or may become subject to defences of set-off
or counterclaim.
(f) if any provision of the Agreement is held to be illegal,
invalid or unenforceable, the severance of such provision
from the remaining provisions of such document will be
subject to the exercise of the discretion of a Bahamian
Court.
This opinion is confined to and given on the basis of the laws of The
Bahamas. We have not investigated nor are we qualified in and do not
express or imply any opinion on the laws of any other jurisdiction.
This opinion is addressed to you and for your benefit in connection
with the above transaction and is not transmitted to any other person
or for any other purpose without our written consent.
Yours faithfully,
Higgs & Johnson
<PAGE>
(letterhead of solicitors for Atlas and EBT)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of -, 2000, among
Atlas Trust Company (Jersey) Limited ("Atlas") as trustee of the
Internet Investments Inc. Employee Benefits and Shares Trust ("EBT")
John Tavendish Enterprises Ltd., David John Shortland, Paula Loraine
Shortland, Ryley Hill Ltd. and David John Shortland, Christine
Elizabeth Catherall, Bruce Carless and Betty May Shortland as trustees
of Shortland No. 1 Trust (the "Minority Shareholders")
Udate.com Ltd.
Internet Investments Inc. ("III")
Melvyn Morris and Howard Thacker
Anthem Recording West Inc. ("Anthem ")
-------------------------------------------------------------------------------
We are the solicitors for Atlas as trustee of the EBT. We provide this opinion
pursuant to subparagraphs 2.1(d) and 6.1(i) of the Agreement. Words defined in
the Agreement have the same meanings in this letter. We have also acted as
solicitors for Atlas as trustee of the EBT in connection with the negotiation,
execution and completion of the Agreement.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have
considered necessary for the purpose of the opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to the original documents of all documents submitted to us as certified or as
photocopies. Our opinion herein so far as it relates to Atlas is limited to
the capacity of Atlas as trustee of the EBT.
1. Atlas is a company duly incorporated under the laws of Jersey in good
standing with respect to the filing of all required annual reports.
2. To the best of our knowledge, Atlas has all requisite power and
authority to conduct the business now carried on by EBT, and to own
property and assets as described in the Agreement, and all requisite
corporate power and authority to enter into and to perform its
obligations under the Agreement.
3. All necessary steps and action and proceedings have been taken to
authorize the execution and delivery of the Agreement by Atlas.
4. To the best of our knowledge, neither the execution and delivery of, nor
the performance of its obligations under Agreement by Atlas will
conflict with or constitute a breach or default under any instrument to
which Atlas is a party.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against Atlas as trustee of the EBT which might materially
affect any business, properties, assets, prospects or conditions,
financial or otherwise, of Atlas in that capacity or which could result
in any material liability to Atlas in that capacity.
6. Immediately prior to closing of the transactions contemplated under the
Agreement, Atlas was the registered owner of all the III Shares on the
books and records of III in its capacity as trustee for EBT.
7. EBT is a trust duly organized under the laws of the United Kingdom, in
good standing with respect to the filing of all required annual reports
and Atlas is the trustee of EBT.
<PAGE>
8. To the best of our knowledge, Atlas has all requisite corporate power
and authority to conduct the business now carried on by EBT, and to own
property and assets as described in the Agreement, and all requisite
corporate power and authority to enter into and to perform its
obligations under the Agreement.
9. All necessary steps and corporate action and proceedings have been taken
to authorize the execution and delivery of the Agreement by Atlas.
10. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against EBT which might materially affect any business,
properties, assets, prospects or conditions, financial or otherwise, of
EBT or which could result in any material liability to EBT.
The opinion expressed is subject to the qualification that enforceability of the
Agreement may be limited by applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally, and that equitable remedies such as the
remedies of specific performance or injunction are in the discretion of the
court from which they are sought.
Yours faithfully,
Baxendale & Walker, Solicitors
<PAGE>
(letterhead of solicitors for Tavendish)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of -, 2000, among
Atlas Trust Company (Jersey) Limited , as trustee of the Internet
Investments Inc. Employee Benefits and Shares Trust Tavendish
Enterprises Ltd. ("Tavendish") , David John Shortland, Paula Loraine
Shortland, Ryley Hill Ltd. and David John Shortland, Christine
Elizabeth Catherall, Bruce Carless and Betty May Shortland, as trustees
of Shortland No. 1 Trust
Udate.com Ltd.
Internet Investments Inc.
Melvyn Morris and Howard Thacker
Anthem Recording West Inc
-------------------------------------------------------------------------------
We are the solicitors for Tavendish . We provide this opinion pursuant to
subparagraphs 2.1(d) and 6.1(i) of the Agreement. Words defined in the Agreement
have the same meanings in this letter.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have
considered necessary for the purpose of the opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as certified or as
photocopies.
Based on and subject to the foregoing, we are of the opinion that:
1. Tavendish is a company duly incorporated under the laws of the British
Virgin Islands, in good standing with respect to the filing of all
required annual reports.
2. To the best of our knowledge, Tavendish has all requisite corporate
power and authority to conduct the business now carried on by it, and
to own its property and assets as described in the Agreement, and all
requisite corporate power and authority to enter into and to perform
its obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been
taken to authorize the execution and delivery of the Agreement by
Tavendish.
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by Tavendish
will conflict with or constitute a breach or default under any
instrument to which Tavendish is a party or by which it is bound.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against Tavendish which might materially affect any
business, properties, assets, prospects or conditions, financial or
otherwise, of Tavendish or which could result in any material liability
to Tavendish.
The opinion expressed is subject to the qualification that enforceability of the
Agreement may be limited by applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally, and that equitable remedies such as the
remedies of specific performance or injunction are in the discretion of the
court from which they are sought. Yours faithfully,
Baxendale-Walker, Solicitors
<PAGE>
(letterhead of solicitors for Ryley)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of -, 2000, among
Atlas Trust Company (Jersey) Limited , as trustee of the Internet
Investments Inc. Employee Benefits and Shares Trust Tavendish
Enterprises Ltd., David John Shortland, Paula Loraine Shortland, Ryley
Hill Ltd. ("Ryley") and David John Shortland, Christine Elizabeth
Catherall, Bruce Carless and Betty May Shortland, as trustees of
Shortland No. 1 Trust
Udate.com Ltd.
Internet Investments Inc.
Melvyn Morris and Howard Thacker
Anthem Recording West Inc
We are the solicitors for Ryley. We provide this opinion pursuant to
subparagraphs 2.1(d) and 6.1(i) of the Agreement. Words defined in the Agreement
have the same meanings in this letter.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have
considered necessary for the purpose of the opinion hereinafter expressed. In
such examination, we have assumed:-
1. the genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or as photocopies;
2. that each party to the Agreement, save for Ryley, has the power, authority,
and legal right and ability to enter into the Agreement and to perform,
observe and comply with all its obligations thereunder and that the
execution of the Agreement has been duly authorised, executed and
delivered by it;
3. the binding and enforceable nature of the obligations of all parties to
the Agreement under all applicable laws (other than the laws of the
United Kingdom with respect to Ryley);
4. that the Agreement is legal, valid, binding and enforceable under the laws
of California, USA to which it is subject;
5. that the parties to the Agreement which are companies, save for Ryley, are
duly organised and validly existing corporations in good standing under
the laws of the respective jurisdictions in which such parties are
incorporated;
6. that the execution of the Agreement by each of the parties thereto
(except Ryley) constitutes legal, valid, enforceable and binding
obligations of each of the said parties under the law by which the
Agreement is expressed to be governed;
7. that by accepting the terms of the Agreement the directors of Ryley are
acting bona fide and in the best interests of Ryley;
8. that the information disclosed by our company search at Companies House is
accurate and complete and that such information has not since then been
materially altered and that such searches did not fail to disclose any
material information which had been delivered for filing but did not
appear on the public file as at April 2000; and
9. that all factual statements made in the Agreement, the resolutions of the
directors of Ryley dated [ ] and the Certificate of a Director of
Ryley dated [ ] are correct and not misleading due to the omission,
whether wilful or otherwise, of any material fact (as to which we
express no opinion).
Based on and subject to the foregoing, we are of the opinion that:
<PAGE>
1. Ryley is a company duly incorporated under the laws of England, in good
standing with respect to the filing of all required annual reports.
2. To the best of our knowledge, Ryley has all requisite corporate power
and authority to conduct the business now carried on by it, and to own
its property and assets as described in the Agreement, and all
requisite corporate power and authority to enter into and to perform
its obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been
taken to authorize the execution and delivery of the Agreement by
Ryley.
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by Ryley
will conflict with or constitute a breach or default under the
constating documents of Ryley, or any commitment, agreement or other
instrument to which Ryley is a party or by which it is bound.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against Ryley which might materially affect any business,
properties, assets, prospects or conditions, financial or otherwise, of
Ryley or which could result in any material liability to Ryley.
The opinion is subject to the following qualifications:
(a) enforceability of the Agreement may be limited by applicable
bankruptcy, insolvency or other laws affecting creditors'
rights generally;
(b) equitable remedies such as the remedies of specific
performance or injunction are in the discretion of the court
from which they are sought;
(c) claims may become barred under Limitation Acts or may become
subject to defences of set off or counterclaim;
(d) provisions in the Agreement as to severability may not be
binding and the question of whether or not any invalid
provision may be severed from other provisions in order to
save such other provisions would be determined by the English
court in its absolute discretion;
(e) we express no opinion as to any law other than English law in
force and interpreted as at the date of this opinion; we
assume no obligation to advise you of any changes in law or
fact that may subsequently come to our attention, or their
effect on our opinion;
(f) a term of a written agreement may be varied by oral agreement
of the parties notwithstanding that such written agreement
requires variations to be made only in writing;
(g) in respect of jurisdiction an English court may stay
proceedings if it is deemed that some other forum is more
appropriate for trial of the action;
(h) where any obligation is to be performed in any jurisdiction
outside England such obligation may not be enforceable under
English law to the extent that such performance would be
illegal or contrary to public policy under the laws of such
jurisdiction;
(i) we express no opinion as to the availability of any specific
remedy (including without limitation an order for specific
performance or injunction) other than monetary damages for
relief in respect of any breach of obligations on the part of
Ryley;
(j) whilst an English court has the power to give judgement
expressed as an order to pay a currency other than pounds
sterling it may decline to do so in its absolute discretion;
(k) the enforcement of the rights and obligations of the parties
to the Agreement may be limited by the provisions of English
law applicable to contracts held to have been frustrated by
events happening after their execution;
(l) we express no opinion as to the taxation consequences of any
of the matters to which this opinion relates;
<PAGE>
(m) any provision in the Agreement providing that any calculation
or certification is to be conclusive and binding will not be
effective if such calculation or certification is fraudulent
and will not necessarily prevent judicial enquiry into the
merits of any claim by any party;
(n) the undertaking and indemnity contained in clause [5] of the
Agreement may be void in respect of stamp duties payable in
the United Kingdom;
(o) our search of the registers at Companies House is not capable
of revealing whether or not a winding up petition or
administration order has been presented in respect of Ryley.
Notice of a winding up or administration order made or winding
up resolution are not required to be filed immediately but
only within a specified period;
(p) we express no opinion as to the existence of equities, rights
of set-off, counterclaims, liens, charges and encumbrances
which are not registrable under the Companies Act 1985 and
which may have been executed but not registered; and
(q) the effectiveness of contract terms seeking to exclude or
limit one party's remedies of the liability of a party for
negligence or breaches of duty is limited by the Unfair
Contract Terms Act 1977.
This opinion is being furnished only to the addressees and is solely for their
benefit and the benefit of the participants and assigns in connection with the
above transaction. This opinion may not be relied upon for any other purpose or
relied upon by any other person, firm or corporation without our prior written
consent.
Yours faithfully,
John Penn & Co., Solicitors
<PAGE>
(letterhead of solicitors for Shortland Trustees)
_______________ , 2000
Anthem Recording West Inc.
c/o Campney & Murphy
Barristers and Solicitors
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver, B.C. V7X 1K9
ATTENTION: C.K. HAINES
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of -, 2000, among
Atlas Trust Company (Jersey) Limited , as trustee of the Internet
Investments Inc. Employee Benefits and Shares Trust Tavendish
Enterprises Ltd., David John Shortland, Paula Loraine Shortland, Ryley
Hill Ltd. and David John Shortland, Christine Elizabeth Catherall,
Bruce Carless and Betty May Shortland (the "Shortland Trustees") as
trustees of Shortland No. 1 Trust (the "Shortland Trust)
Udate.com Ltd.
Internet Investments Inc.
Melvyn Morris and Howard Thacker
Anthem Recording West Inc
--------------------------------------------------------------------------------
We are the solicitors for the Shortland Trustees and the Shortland Trust. We
provide this opinion pursuant to subparagraphs 2.1(d) and 6.1(i) of the
Agreement. Words defined in the Agreement have the same meanings in this letter.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have made
such other examinations, searches and investigations as we have considered
necessary for the purpose of the opinion hereinafter expressed. In such
examination, we have assumed:-
the genuineness of all signatures and the authenticity of all documents
submitted to us as originals and the conformity to original documents
of all documents submitted to us as certified or as photocopies;
that each party to the Agreement, save for Shortland Trust, has the power,
authority, and legal right and ability to enter into the Agreement and
to perform, observe and comply with all its obligations thereunder and
that the execution of the Agreement has been duly authorised, executed
and delivered by it;
the binding and enforceable nature of the obligations of all parties to the
Agreement under all applicable laws (other than the laws of the United
Kingdom with respect to Shortland Trust);
that the Agreement is legal, valid, binding and enforceable under the laws of
California, USA to which it is subject;
that the parties to the Agreement which are companies are duly organised and
validly existing corporations in good standing under the laws of the
respective jurisdictions in which such parties are incorporated;
that the execution of the Agreement by each of the parties thereto (except
Shortland Trust) constitutes legal, valid, enforceable and binding
obligations of each of the said parties under the law by which the
Agreement is expressed to be governed; and
that all factual statements made in the Agreement, the resolutions of the
Shortland Trustees dated [ ], and the Certificates of Shortland
Trustees dated [ ] are correct and not misleading due to the omission,
whether wilful or otherwise, of any material fact (as to which we
express no opinion).
Based on and subject to the foregoing, we are of the opinion that:
1. The Shortland Trust is a trust duly organized under the laws of
England, in good standing with respect to the filing of all required
annual reports and the Shortland Trustees are the trustees of the
Shortland Trust.
2. To the best of our knowledge, the trustee of the Shortland Trustees has
all requisite power and authority to conduct the business now carried
on by the Shortland Trust, and to own property and assets as described
in the Agreement, and all requisite corporate power and authority to
enter into and to perform its obligations under the Agreement.
3. All necessary steps and action and proceedings have been taken to
authorize the execution and delivery of the Agreement by the Shortland
Trustees.
<PAGE>
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by the
Shortland Trustees will conflict with or constitute a breach or default
under the constating documents of the Shortland Trust, or any
commitment, agreement or other instrument to which the Shortland Trust
is a party or by which it is bound.
5. To the best of our knowledge, there are no claims, judgement, actions,
suits, litigation, proceedings or investigations, actual, pending or
threatened against the Shortland Trust which might materially affect
any business, properties, assets, prospects or conditions, financial or
otherwise, of the Shortland Trust or which could result in any material
liability to the Shortland Trust.
The opinion is given upon and is subject to the following qualifications:-
(a) enforceability of the Agreement may be limited by applicable
bankruptcy, insolvency or other laws affecting creditors'
rights generally;
(b) equitable remedies such as the remedies of specific
performance or injunction are in the discretion of the court
from which they are sought;
(c) claims may become barred under Limitation Acts or may become
subject to defences of set off or counterclaim;
(d) provisions in the Agreement as to severability may not be
binding and the question of whether or not any invalid
provision may be severed from other provisions in order to
save such other provisions would be determined by the English
court in its absolute discretion;
(e) we express no opinion as to any law other than English law in
force and interpreted as at the date of this opinion; we
assume no obligation to advise you of any changes in law or
fact that may subsequently come to our attention, or their
effect on our opinion;
(f) a term of a written agreement may be varied by oral agreement
of the parties notwithstanding that such written agreement
requires variations to be made only in writing;
(g) in respect of jurisdiction an English court may stay
proceedings if it is deemed that some other forum is more
appropriate for trial of the action;
(h) where any obligation is to be performed in any jurisdiction
outside England such obligation may not be enforceable under
English law to the extent that such performance would be
illegal or contrary to public policy under the laws of such
jurisdiction;
(i) we express no opinion as to the availability of any specific
remedy (including without limitation an order for specific
performance or injunction) other than monetary damages for
relief in respect of any breach of obligations on the part of
Shortland Trust;
(j) whilst an English court has the power to give judgement
expressed as an order to pay a currency other than pounds
sterling it may decline to do so in its absolute discretion;
(k) the enforcement of the rights and obligations of the parties
to the Agreement may be limited by the provisions of English
law applicable to contracts held to have been frustrated by
events happening after their execution;
(l) we express no opinion as to the taxation consequences of any
of the matters to which this opinion relates;
(m) any provision in the Agreement providing that any calculation
or certification is to be conclusive and binding will not be
effective if such calculation or certification is fraudulent
and will not necessarily prevent judicial enquiry into the
merits of any claim by any party;
(n) the undertaking and indemnity contained in clause [5] of the
Agreement may be void in respect of stamp duties payable in
the United Kingdom; and
<PAGE>
(o) the effectiveness of contract terms seeking to exclude or
limit one party's remedies of the liability of a party for
negligence or breaches of duty is limited by the Unfair
Contract Terms Act 1977.
This opinion is being furnished only to the addressees and is solely for their
benefit and the benefit of the participants and assigns in connection with the
above transaction. This opinion may not be relied upon for any other purpose or
relied upon by any other person, firm or corporation without our prior written
consent.
Yours faithfully,
John Penn & Co., Solicitors
<PAGE>
SCHEDULE F
ANTHEM SOLICITOR OPINION
(letterhead of solicitors for Anthem)
_____________, 2000
___________________
c/o _______________
Attorneys at Law
___________________
ATTENTION:______________________
Dear Sirs:
Re: Share Exchange Agreement (the "Agreement")
made effective as of the - day of - , 2000, among
Atlas Trust Company (Jersey) Limited , as trustee of the Internet
Investments Inc. Employee Benefits and Shares Trust Tavendish
Enterprises Ltd., David John Shortland, Paula Loraine Shortland, Ryley
Hill Ltd. and David John Shortland, Christine Elizabeth Catherall,
Bruce Carless and Betty May Shortland, as trustees of Shortland No. 1
Trust
Udate.com Ltd.
Internet Investments Inc.
Melvyn Morris and Howard Thacker
Anthem Recording West Inc ("Anthem").
--------------------------------------------------------------------------------
We are the solicitors for Anthem and the Anthem Shareholders. We provide this
opinion pursuant to subparagraphs 2.2(e) and 6.2(g) of the Agreement. We have
acted as counsel for Anthem and the Anthem Shareholders in connection with the
negotiation, execution and completion of the Agreement.
We have considered such questions of law and examined such statutes and
regulations, corporate records, certificates and other documents and have
made such other examinations, searches and investigations as we have
considered necessary for the purpose of the opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as certified or as
photocopies. Based on and subject to the foregoing, we are of the opinion
that:
1. Anthem is a company duly incorporated and validly existing under the
laws of the State of California. Anthem is in good standing with
respect to all filings required by the California Secretary of State.
2. Anthem has all requisite corporate power and authority to enter into
and to perform its obligations under the Agreement.
3. All necessary steps and corporate action and proceedings have been
taken to authorize the execution and delivery of the Agreement by
Anthem.
4. To the best of our knowledge, neither the execution and delivery of,
nor the performance of its obligations under the Agreement by Anthem
will conflict with or constitute a breach of or default under the
constating documents of Anthem or any commitment, agreement or other
instrument to which Anthem is a party or by which it is bound.
5. As at the Effective Date of the Agreement, the authorized capital of
Anthem consisted of 50,000,000 common shares with a par value of
$0.001, of which 30,000,000 were validly authorized, created, allotted,
issued and outstanding, and, to the best of our knowledge, fully paid
for and non-assessable.
6. All necessary steps and corporate action and proceedings have been
taken to effect the valid issuance of the Anthem Shares to the Vendors
as contemplated under the Agreement.
The opinion expressed is subject to the qualification that enforceability of the
Agreement may be limited by applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally, and that equitable remedies such as the
remedies of specific performance or injunction are in the discretion of the
court from which they are sought.
Yours truly,
___________________
Per:
_______________
<PAGE>
SCHEDULE G
THIS AGREEMENT is made on 2000
BETWEEN
(1)
whose registered office is at New Enterprise House, St Helens Street, Derby,
DE1 3GY ("the Company"); and
(2) [NAME AND ADDRESS] ("the Executive").
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 In this Agreement the following expressions have the following
meanings:
"Board" the Board of Directors of the
Company from time to time
"Group Company" any holding company for the
time being of the Company or
any subsidiary for the time
being of the Company or of
any such holding company (for
which purpose "holding
company" and "subsidiary"
have the meanings ascribed to
them by section 736 of the
Companies Act 1985 (as
amended by the Companies
Act 1989))
"Group" the Company and all Group
Companies wherever registered
or incorporated
"Commencement Date" [DATE]
"the 1996 Act" The Employment Rights Act
1996
"the London Stock Exchange" London Stock Exchange
Limited;
"PAYE deductions" deductions made to comply
with regulations made under
section 203 Income and
Corporation Taxes Act 1988
and with any obligations to
deduct national insurance
contributions
"Recognised Investment Exchange" has the meaning in section
207 of the Financial Services
Act 1986.
1.2 References in this Agreement to clauses are to clauses and
sub-clauses of this Agreement unless otherwise specified.
1.3 Unless otherwise required words denoting the singular include
the plural and vice versa.
1.4 References in this Agreement to statutory provisions include
all modifications and re-enactments of them and all
subordinate legislation made under them.
1.5 Clause headings are included in this Agreement for convenience
only and do not affect its construction.
2. PREVIOUS AGREEMENTS
2.1 This Agreement contains the entire and only agreement and will govern
the relationship between the Company and the Executive from the
Commencement Date in substitution for all previous agreements and
arrangements whether written, oral or implied between the Company or
any Group Company and the Executive relating to the services of the
Executive all of which will be deemed to have terminated by consent
with effect from the Commencement Date. The Executive and the Company
acknowledge that in entering into this Agreement neither has relied on
any representation or undertaking by the other whether oral or in
writing except as expressly incorporated in this Agreement.
2.2 The Executive hereby acknowledges that he has no outstanding claim of
any kind against any Group Company.
2.3 The Executive warrants and represents to the Company that he will not
be in breach of any existing or any former terms of employment
<PAGE>
applicable to him whether express or implied or of any other obligation
binding on him by reason of him entering into this Agreement or
performing all or any of his duties and obligations under it.
3. APPOINTMENT, TERM AND NOTICE
3.1 The Company will employ the Executive and the Executive will serve the
Company as [Title].
3.2 The appointment will be deemed to have commenced on the Commencement
Date and will continue subject as follows unless and until the
employment is terminated either by the Company giving to the Executive
not less than twelve calendar months' written notice or by the
Executive giving to the Company not less than five calendar months'
written notice to expire at any time.
3.3 The Executive agrees that at its absolute discretion the Company may
terminate the Executive's employment under this Agreement with
immediate effect by paying to the Executive in full and final
settlement of all claims which he has or may have against the Company
or any director, employee or agent of the Company or any Group Company
under or arising out of his employment with the Company or any such
Group Company, the termination of his employment or otherwise salary
(less PAYE deductions) in lieu of the balance of the notice period or
remainder of the notice period if at the Company's request the
Executive has worked during part of the notice period.
3.4 Notwithstanding the provisions of clause 3.2, the Executive's
employment under this Agreement will automatically terminate on his
65th birthday.
3.5 The Executive's continuous employment with the Company for the purposes
of the 1996 Act commenced on 1 April 1998. Employment with Icebreakers
Personal Network Limited counts for the purposes of the 1996 Act as
part of the Executive's period of continuous employment.
4. DUTIES
4.1 The Executive will carry out such duties and functions, exercise such
powers and comply with such instructions in connection with the
business of the Company and the Group Companies as the Board determines
from time to time. Except when prevented by illness, accident or
holiday as provided below the Executive will devote substantially the
whole of his time, attention and skill to the affairs of the Company
and where appropriate the Group Companies and use his best endeavours
to promote their interests.
4.2 The Executive will if and so long as he is so required by the Company
carry out duties for and/or act as director, officer or employee of any
other Group Company. The duties attendant on any such appointment will
be carried out by the Executive as if they were duties to be performed
by him on behalf of the Company under this Agreement.
4.3 The Executive will at all times promptly give to the Board (in writing
if requested) all information, explanations and assistance that the
Board may require in connection with the business or affairs of the
Company and the Group and his employment under this Agreement.
5. PLACE OF WORK
5.1 The Executive will perform his duties principally at New Enterprise
House, St Helen's Street, Derby of the Company or such other place of
business of the Company or of any Group Company as the Company requires
whether inside or outside the United Kingdom but the Company will not
require him without his prior consent to go to or reside anywhere
outside the United Kingdom except for occasional visits in the ordinary
course of his duties.
6. HOURS OF WORK
6.1 The Company's normal office hours are from 9.00 am to 5.00 pm Monday to
Friday but the Executive will be required to work outside these hours
without additional remuneration in order to meet the requirements of
the business and for the proper performance of his duties.
7. REMUNERATION
7.1 The Company will pay the Executive a salary at the rate of [Thacker -
L159,375.00, Morris - L203,125.00] per annum with effect from the
Commencement Date (or at such higher rate as may from time to time
be notified to him by the Board) which salary will accrue from day
to day and be payable in arrears by equal monthly instalments on the
last Friday of each month.
7.2 The Executive's salary will be subject to reviews by the Board which
will be effective on and from the anniversary of the commencement date
in each year during the Executive's employment under this Agreement
provided that the increase (if any) of such salary will be a matter to
be decided at the Board's absolute discretion.
7.3 The salary referred to in clause 7.1 will be inclusive of any
director's fees to which the Executive may be entitled as a director of
the Company or of any Group Company.
<PAGE>
7.4 The Executive will be entitled to be paid a performance related bonus,
calculated at 76% against target achievement and paid quarterly. The
first such bonus payment to be made 3 months after the commencement
date.
8. EXPENSES
The Executive will be reimbursed all out of pocket expenses reasonably
and properly incurred by him in the performance of his duties under this
Agreement on hotel, travelling, entertainment and other similar items provided
that he produces to the Company all relevant vouchers in respect of such
expenses.
9. MOTOR CAR ALLOWANCE
9.1 During the Executive's employment under this Agreement he will not be
provided with a Motor Car. The Executive will receive a payment of
[Thacker - L32,000, Morris - L40,000] per annum representing an
allowance for him to purchase or lease a motor vehicle for business
and private use, such vehicle to be approved by the Company as
suitably commensurate with his status. The allowance will also
cover the cost of road fund licence, insurance premiums and running
expenses in respect of the motor car including fuel, oil, maintenance
and repairs.
10. PENSION AND OTHER BENEFITS
10.1 The Executive will be entitled to continue to be a member of the [NAME
OF SCHEME] Scheme ("the Pension Scheme") subject to and upon the rules
of the Pension Scheme from time to time in effect. There is no
contracting out certificate in force in respect of the Executive's
employment under the provisions of the Pension Schemes Act 1993.
10.2 During his employment the Executive will be entitled to participate at
the Company's expense in the Company's:
10.2.1 life insurance scheme;
10.2.2 private medical expenses insurance scheme for the benefit of
the Executive and his wife and all dependent children in full
time education under the age of 21; and
10.2.3 permanent health insurance scheme,
subject to the rules of the said schemes from time to time (and any
replacement schemes provided by the Company) and subject to the
Executive (and where appropriate his wife and dependent children) being
eligible to participate in or benefit from such schemes pursuant to
their rules.
10.3 The Executive may be invited to participate in the Company's Share
Option Scheme ("the Share Option Scheme") in accordance with its rules
from time to time ("the Rules").
11. VACATIONS
11.1 In addition to normal public holidays the Executive will be entitled to
25 working days' paid holiday from the Commencement Date until 31 March
2001 and 25 working days' paid holiday in each holiday year after that,
such holiday to be taken at such time or times as may be approved by
the Board.
11.2 For the purposes of this CLAUSE 11 "holiday year" means the period from
1 April to 31 March in each year. The Executive may carry forward to
the following holiday year with the Board's written approval his unused
holiday entitlement but he must take any holiday which is carried
forward before the end of December in that year.
11.3 The Executive's entitlement to paid holiday in the calendar year in
which his employment terminates will be 2.1 days for each completed
calendar month in that year rounded up to the nearest half day provided
that no such entitlement to paid holiday will arise if the Executive
terminates his employment without the Company's consent before the
expiry of notice given by him pursuant to CLAUSE 3.2 or without giving
notice or if the Company terminates the Executive's employment pursuant
to CLAUSE 19.1 or 19.2.
11.4 Where the Executive has taken more or less than his holiday entitlement
in the year his employment terminates, a proportionate adjustment will
be made by way of addition to or deduction from (as appropriate) his
final gross pay calculated on a pro-rata basis.
12. CONFLICT OF INTERESTS
12.1 The Executive will disclose promptly to the Board in writing all his
interests in any business other than that of the Company and the Group
and will notify the Board immediately of any change in his external
interests. Except with the written consent of the Board (such consent
not to be unreasonably withheld) the Executive will not during his
employment under this Agreement be directly or indirectly engaged,
<PAGE>
concerned or interested whether as principal, servant or agent (on his
own behalf or on behalf of or in association with any other person) in
any other trade, business or occupation competing in any material
respect with the business for the time being of the Company or any
Group Company other than the business of the Company or any Group
Company provided that the Executive will not be precluded from being
interested for investment purposes only as a member, debenture holder
or beneficial owner of any stock, shares or debentures which are listed
or dealt in on a recognised investment exchange and which do not
represent more than four per cent. of the total share or loan capital
from time to time in issue in such company.
12.2 The Executive will not during his employment introduce to any other
person, firm, company or organisation business of any kind with which
the Company or any other Group Company for which he has performed
services under this Agreement is able to deal and he will not have any
financial interest in, or derive any financial or other benefit from,
contracts or transactions entered into by the Company or any other
Group Company for which he has performed services under this Agreement
with any third party without first disclosing such interest or benefit
to the Board and obtaining its written approval.
13. SHARE DEALINGS
13.1 The Executive will comply (where relevant) with every rule of law,
every regulation of the London Stock Exchange and every requirement,
recommendation or regulation of the Company from time to time in force
in relation to dealings with shares, debentures or other securities of
the Company or any Group Company and unpublished price-sensitive
information affecting the shares, debentures or other securities of any
such company. In relation to overseas dealings, the Executive will also
comply with all laws of the state and all regulations of the stock
exchange, market or dealing system in which such dealings take place.
13.2 The Executive will not (and will procure so far as he is able that his
wife and children do not) deal or become or cease to be interested
(within the meaning of Part I of Schedule 13 to the Companies Act 1985)
in any securities of the Company except in accordance with the Model
Code of the London Stock Exchange for transactions in securities by
directors and others and any legislation, regulations or rules for
securities transactions applicable from time to time.
14. RESTRICTIVE COVENANTS
14.1 In this clause 14 the following expressions have the following
meanings:
"CRITICAL PERSON" any person who was an
employee, agent, director,
consultant or independent
contractor employed,
appointed or engaged by the
Company or any Relevant Group
Company at any time within
the Relevant Period who by
reason of such employment,
appointment or engagement and
in particular his/her
seniority and expertise or
knowledge of trade secrets or
confidential information of
the Company or any Group
Company or knowledge of or
influence over the clients,
customers or suppliers of the
Company or any Group Company
is likely to be able to
assist or benefit a business
in or proposing to be in
competition with the Company
or any Relevant Group
Company
"RELEVANT CUSTOMER" any person, firm company or
organisation who or which at
any time during the Relevant
Period is or was:
(a) negotiating with
the Company or a Relevant
Group Company for the sale or
supply of Relevant Products
or Services; or
(b) a client or customer
of the Company or any
Relevant Group Company for
the sale or supply of
Relevant Products or
Services; or
(c) in the habit of
dealing with the Company or
any Relevant Group Company
for the sale of supply of
Relevant Products or
Services,
and in each case with whom or
which the Executive was
directly concerned or
connected or of whom or which
the Executive had personal
knowledge during the Relevant
Period in the course of his
<PAGE>
employment hereunder
"RELEVANT GROUP COMPANY" any Group Company (other than
the Company) for which the
Executive has performed
services under this Agreement
or for which he has had
management responsibility at
any time during the Relevant
Period
"RELEVANT PERIOD" the period of 12 months
immediately before the
Termination Date
"RELEVANT PRODUCTS OR SERVICES" products or services which
are of the same kind as or of
a materially similar kind to
or competitive with any
products or services sold or
supplied by the Company or
any Relevant Group Company
within the Relevant Period
and with which sale or supply
the Executive was directly
concerned or connected or of
which he had personal
knowledge during the Relevant
Period in the course of his
employment hereunder
"TERMINATION DATE" the date on which the
Executive's employment under
this Agreement terminates and
references to "from the
Termination Date" mean from
and including the date of
termination
"RESTRICTED TERRITORY" any area or territory in
which the Executive worked or
to which the Executive was
assigned by the Company or
any Relevant Group Company at
any time during the Relevant
Period.
14.2 The Executive will not without the prior written consent of the Company
(such consent not to be unreasonably withheld) directly or indirectly
and whether alone or in conjunction with or on behalf of any other
person and whether as a principal, shareholder, director, employee,
agent, consultant, partner or otherwise:
14.2.1 within the Restricted Territory for a period of twelve months
from the Termination Date be engaged, concerned or interested
in, or provide technical, commercial or professional advice
to, any other business which supplies Relevant Products or
Services in competition with the Company or any Relevant Group
Company provided that this restriction does not apply to
prevent the Executive from holding shares or other securities
in any company which is quoted, listed or otherwise dealt in
on a recognised investment exchange or other securities market
and which confer not more than 1% of the votes which could be
cast at a general meeting of such company;
14.2.2 within the Restricted Territory for a period of twelve months
from the Termination Date be engaged, concerned or interested
in any business which at any time during the Relevant Period
has supplied Relevant Products or Services to the Company or
any Relevant Group Company or is or was at any time during the
Relevant Period a Relevant Customer of the Company or any
Relevant Group Company if such engagement, concern or interest
causes or would cause the supplier to cease or materially
reduce its supplies to the Company (or any Relevant Group
Company as the case may be) or the Relevant Customer to cease
or materially to reduce its orders or contracts with the
Company or any Relevant Group Company;
14.2.3 for a period of twelve months from the Termination Date so as
to compete with the Company or any Relevant Group Company
canvass, solicit or approach or cause to be canvassed,
solicited or approached any Relevant Customer for the sale or
supply of Relevant Products or Services or endeavour to do so;
14.2.4 for a period of twelve months from the Termination Date so as
to compete with the Company or any Relevant Group Company deal
or contract with any Relevant Customer in relation to the sale
or supply of any Relevant Products or Services, or endeavour
to do so;
14.2.5 for a period of twelve months from the Termination date
solicit, induce or entice away from the Company or any
Relevant Group Company or, in connection with any business in
or proposing to be in competition with the Company or any
Relevant Group Company, employ, engage or appoint or in any
way cause to be employed, engaged or appointed a Critical
Person whether or not such person would commit any breach of
his or her contract of employment or engagement by leaving the
service of the Company or any Relevant Group Company;
14.2.6 use in connection with any business any name which includes
the name of any Group Company or any colourable imitation of
it.
14.3 Whilst the restrictions in this clause 14 are regarded by the
parties as fair and reasonable, it is hereby declared that each of the
restrictions in this clause 14 is intended to be separate and
severable. If any restriction is held to be unreasonably wide but would
be valid
<PAGE>
if part of the wording (including in particular but without limitation
the defined expressions referred to in clause 14.1) were deleted, such
restriction will apply with so much of the wording deleted as may be
necessary to make it valid.
14.4 The parties agree that the period referred to in CLAUSES
[14.2.1, 14.2.2, 14.2.3, 14.2.4 AND 14.2.5] above will be reduced by
one day for every day during which at the Company's direction and
pursuant to CLAUSE 19.2 below the Executive has been excluded from the
Company's premises and/or has not carried out any duties or has carried
out duties other than his normal duties.
14.5 If the Executive breaches any of the provisions in this clause
14 the Company will be entitled by written notice to the Executive to
extend the period during which the provisions of clause 14 which have
been breached apply by an equivalent period to that during which the
breach or breaches have continued, such additional period to commence
on the date on which the said period would have otherwise expired. The
Executive hereby agrees that if the Company so extends the period of
any such restriction, this will not prejudice the right of the Company
to apply to the Courts for injunctive relief in order to compel the
Executive to comply with the provisions of this clause 14 and/or
damages, as the case may be.
14.6 For the purposes of CLAUSES 14 and 15 the Company has entered
into this Agreement as agent for and trustee of all Relevant Group
Companies.
14.7 If the Executive applies for or is offered a new employment,
appointment or engagement, before entering into any related contract
the Executive will bring the terms of this clause 14 and clauses 3,4,15
[16, 17 AND 19.2] to the attention of a third party proposing directly
or indirectly to employ, appoint or engage him.
15. CONFIDENTIALITY
15.1 The Executive acknowledges that in the ordinary course of his
employment he will be exposed to information about the Company's
business and the business of other Group Companies and that of the
Company's and the Group Companies' suppliers and customers which
amounts to a trade secret, is confidential or is commercially sensitive
and which may not be readily available to others engaged in a similar
business to that of the Company or any of the Group Companies or to the
general public and which if disclosed will be liable to cause
significant harm to the Company or such Group Companies. The Executive
has therefore agreed to accept the restrictions in this clause 15.
15.2 Without prejudice to clause 15.3 or 15.4 and subject to clause 15.3 the
Executive will not during the period of his employment with the
Company:
15.2.1 sell or seek to sell to anyone information acquired by him in
the course of his employment with the Company;
15.2.2 obtain or seek to obtain any financial advantage (direct or
indirect) from disclosure of such information.
15.3 The Executive will not either during his employment or after its
termination without limit in time for his own purposes or for any
purposes other than those of the Company or any Group Company (for any
reason and in any manner) use or divulge or communicate to any person,
firm, company or organisation except to those officials of any Group
Company whose province it is to know the same any secret or
confidential information or information constituting a trade secret
acquired or discovered by him in the course of his employment with the
Company relating to the private affairs or business of the Company or
any Group Company or their suppliers, customers, management or
shareholders.
15.4 The restrictions contained in this CLAUSE 15 do not apply to:
15.4.1 any disclosure authorised by the Board or required in the
ordinary and proper course of the Executive's employment or as
required by the order of a court of competent jurisdiction [or
an appropriate regulatory authority] or otherwise required by
law; or
15.4.2 any information which the Executive can demonstrate was known
to the Executive prior to the commencement of the Executive's
employment by the Company or by a Group Company or is in the
public domain otherwise than as a result of a breach by him of
this CLAUSE 15; or
15.4.3 any information disclosed to the Executive by a third party
who is not bound by any duty of confidence to the Company or
any Group Company.
15.5 The provisions of this clause 15 are without prejudice to the duties
and obligations of the Executive to be implied into this Agreement at
common law.
16. PATENTS
16.1 The Executive must disclose immediately to the Company any discovery or
invention or secret process or improvement in procedure made or
discovered by the Executive during his employment in connection with or
in any way affecting or relating to the business of the Company or any
Group Company or capable of being used or adapted for use in or in
connection with any such company ("Inventions") which Inventions will
belong to and be the absolute property of the Company or such other
person, firm, company or organisation as the
<PAGE>
Company may require.
16.2 If requested by the Board (whether during or after the termination of
his employment) the Executive will at the expense of the Company apply
or join in applying for letters patent or other similar protection in
the United Kingdom or any other part of the world for all Inventions
and will do everything necessary (including executing documents) for
vesting letters patent or other similar protection when obtained and
all right and title to and interest in all Inventions in the Company
absolutely and as sole beneficial owner or in such other person, firm,
company or organisation as the Company may require.
16.3 The Executive will (both during and after the termination of his
employment) at the Company's expense anywhere in the world and at any
time promptly do everything (including executing documents) that may be
required by the Board to defend or protect for the benefit of the
Company all Inventions and the right and title of the Company to them.
16.4 The Executive hereby irrevocably authorises the Company to appoint a
person to execute any documents and to do everything necessary to
effect his obligations under this clause 16 on his behalf.
16.5 The provisions of clause 16.1 to 16.3 (inclusive) are without prejudice
to the provisions of the Patents Act 1977.
17. COPYRIGHT
17.1 The entire copyright and all similar rights (including future
copyright, the right to register trade marks or service marks and the
right to register designs and design rights) throughout the world in
works of any description produced by the Executive in the course of or
in connection with his employment ("Works") will vest in and belong to
the Company absolutely throughout the world for the full periods of
protection available in law including all renewals and extensions.
17.2 The Executive will (both during and after the termination of his
employment) at the Company's request and expense anywhere in the world
and at any time promptly do everything (including executing documents)
that may be required by the Board to assure, defend or protect the
rights of the Company in all Works.
17.3 The Executive hereby irrevocably authorises the Company to appoint a
person to execute any documents and to do everything necessary to
effect the obligations of the Executive under this clause 17 on the
Executive's behalf.
17.4 For the purposes of clause 16 and clause 17, the Executive hereby
irrevocably and unconditionally waives in favour of the Company the
moral rights conferred on him by Chapter IV Part 1 of the Copyright
Designs and Patents Act 1988 in respect of any Inventions or Works in
which the copyright is vested in the Company under clause 16, this
clause 17 or otherwise.
18. INCAPACITY
18.1 If the Executive is absent from his duties as a result of illness or
injury he will notify the Chief Operations Officer as soon as possible
and complete any self-certification forms which are required by the
Company. If the incapacity continues for a period of seven days or more
he will produce to the Company a medical certificate to cover the
duration of such absence.
18.2 Subject to the rest of clause 18 and to clause 19.1.7 and subject to
the receipt of the appropriate certificates in accordance with clause
18.1, if the Executive is absent from his duties as a result of illness
or injury he will be entitled to payment of his salary at the full rate
in respect of such illness or injury for a period (in total) of no more
than 26 weeks in any period of 12 months (whether the absence is
intermittent or continuous). Thereafter the Executive will not be
entitled to any further payment from the Company or any other Group
Company until the resumption of his duties.
18.3 If the Executive is absent from work because of any injury or condition
(physical or mental and whether or not sustained in the course of his
duties) caused wholly or partly by any act or omission of any person,
firm, company or organisation (other than the Company or any Group
Company) from whom the Executive may be or become entitled to recover
damages or compensation, any sum paid by the Company to the Executive
in respect of the said absence will be an interest free loan (subject
to any limit imposed under the Companies Act 1985 or other relevant
legislation) to the Executive repayable immediately by the Executive to
the Company on recovery by him of any such damages or compensation.
18.4 If the Executive has been absent from work because of any injury or
condition caused wholly or partly by the Company or any Group Company
or any person for whom the Company or any Group Company is vicariously
liable and for which the Executive may be or become entitled to recover
damages or compensation, any such damages or compensation payable will
be reduced by the amount of any sick pay (statutory or otherwise) paid
to him and by the pension received or receivable by him in the period
in respect of which such damages or compensation are calculated.
18.5 The remuneration paid under clause 18.2 will include any Statutory Sick
Pay payable and when this is exhausted will be reduced by the amount of
any Social Security Sickness Benefit or other benefits recoverable by
the Executive (whether or not recovered). For the
<PAGE>
avoidance of doubt the provisions of this clause 18 and any right or
prospective right the Executive has or may have to receive any
benefits under the Company's permanent heath insurance scheme referred
to in CLAUSE [10.2.3] will not prejudice or limit in any way the
Company's right to terminate this Agreement pursuant to clauses
[3.2, 3.3, 3.5, 19.1] or otherwise pursuant to its terms.
18.6 Whether or not the Executive is absent by reason of sickness, injury or
other incapacity the Executive will at the request of the Board agree
to have a medical examination performed by a doctor appointed and paid
for by the Company and the Executive hereby authorises the Board to
have unconditional access to any report or reports (including copies)
produced as a result of any such examination as the Board may from time
to time require and entitlements to salary pursuant to clause 18.2 will
be conditional on the Executive complying with the terms of this clause
18.6.
19. TERMINATION
19.1 The Company may terminate the Executive's employment immediately by
summary notice in writing (notwithstanding that the Company may have allowed any
time to elapse or on a former occasion may have waived its rights under this
clause 19) if he:
19.1.1 commits, repeats or continues any breach of any part of this
Agreement or his obligations under it;
19.1.2 in the performance of his duties under this Agreement or
otherwise commits any act of gross misconduct or serious
incompetence or does or omits to do any thing else which is
seriously prejudicial to the interests of the Company or any
Group Company;
19.1.3 adversely prejudices or because of his behaviour is likely in
the reasonable opinion of the Board to prejudice adversely the
interests or reputation of the Executive, the Company or any
Group Company;
19.1.4 is convicted of any criminal offence involving dishonesty or
violence other than an offence which does not in the
reasonable opinion of the Board affect his position under this
Agreement;
19.1.5 becomes bankrupt or enters into or makes any arrangement or
composition with or for the benefit of his creditors
generally;
19.1.6 becomes of unsound mind;
19.1.7 becomes incapacitated from performing all or any of his duties
under this Agreement by illness, injury or otherwise for a
period exceeding (in total) 26 weeks (or such longer period as
the Company may agree) in any period of 12 months ; or
19.1.8 becomes prohibited by law from being a director of a company
or if the Executive ceases to be a director of the Company
without the consent or concurrence of the Company.
19.2 Without prejudice to clause 4.1 after notice of termination has been
given by either party pursuant to clause 3.2 or if the Executive seeks
to or indicates an intention to resign as a director of the Company or
any Group Company or terminate his employment, provided that the
Executive continues to be paid and enjoys his full contractual benefits
until his employment terminates in accordance with the terms of this
Agreement, the Board may in its absolute discretion without breaking
the terms of this Agreement or giving rise to any claim against the
Company or any Group Company for all or part of the notice period (as
the case may be):
19.2.1 exclude the Executive from the premises of the Company and/or
any Group Company;
19.2.2 require him to carry out specified duties (consistent with the
Executive's status, role and experience for the Company) other
than those referred to in clause 4 or to carry out no duties;
19.2.3 announce to employees, suppliers and customers and the London
Stock Exchange that he has been given notice of termination or
has resigned (as the case may be);
19.2.4 instruct the Executive not to communicate orally or in writing
with suppliers, customers, employees, agents or
representatives of the Company or any Group Company until his
employment hereunder has terminated.
19.3 On commencement of any period of exclusion pursuant to clause 19.2 the
Executive will:
19.3.1 deliver up to the Company in accordance with clause 22 all
property belonging to the Company or any Group Company; and
19.3.2 resign in accordance with clause 23 from all offices and
appointments he holds in the Company and any Group Company.
19.4 During any period of exclusion pursuant to clause 19.2 the Executive
will not be entitled to accrue holiday or any bonus/profit
share/performance-related pay under CLAUSE 7.4. Any untaken holiday
entitlement accrued up to the date of commencement of leave should
<PAGE>
be taken during the leave period. The Executive agrees to notify the
Company of any day or days during the exclusion period when he will be
unavailable due to holiday and will endeavour to agree convenient
holiday dates in advance with the Board.
19.5 At the expense of the Company, before and after termination of the
Executive's employment, the Executive will provide the Company and/or
any Group Company with reasonable assistance regarding matters of which
he has knowledge and/or experience in any proceedings or possible
proceedings in which the Company and/or Group Company is or may be a
party.
19.6 The Executive agrees that at the expense and request of the Company and
in any event on termination of his employment he will transfer or
procure the transfer of all shares held by him in trust or as a nominee
by virtue of his employment with the Company to such person or persons
as the Company may direct. If the Executive fails to do so within seven
days of any such request or the termination of his employment (as the
case may be) the Company is irrevocably authorised to appoint a person
or persons to execute all necessary transfer forms and other
documentation on his behalf.
20. DEDUCTIONS
The Executive hereby authorises the Company to deduct from his
remuneration (which for this purpose includes salary, pay in lieu of
notice, commission, bonus, holiday pay and sick pay) all debts owed by
the Executive to the Company or any Group Company, including but
without limitation the balance outstanding of any loans (and interest
where appropriate) advanced by the Company to the Executive.
21. DELIVERY OF DOCUMENTS AND PROPERTY
On termination of his employment for any reason (or earlier if
requested) the Executive will immediately deliver up to the Company all property
(including but not limited to documents and software, credit cards, keys and
security passes) belonging to it or any Group Company in the Executive's
possession or under his control. Documents and software include (but are not
limited to) correspondence, diaries, address books, databases, files, reports,
minutes, plans, records, documentation or any other medium for storing
information. The Executive's obligations under this clause 22 include the return
of all copies, drafts, reproductions, notes, extracts or summaries (however
stored or made) of all documents and software.
22. RESIGNATION AS DIRECTOR
22.1 The Executive will on termination of his employment for any reason at
the request of the Board give notice resigning immediately without claim for
compensation (but without prejudice to any claim he may have for damages for
breach of this Agreement):
22.1.1 as a director of the Company and all such Group Companies of
which he is a director; and
22.1.2 all trusteeships held by him of any pension scheme or other
trusts established by the Company or any Group Company or any
other company with which the Executive has had dealings as a
consequence of his employment with the Company.
22.2 If notice pursuant to clause 23.1 is not received by the relevant
company within seven days of a request by the Company, the Company is
irrevocably authorised to appoint a person to execute any documents and
to do everything necessary to effect such resignation or resignations
on the Executive's behalf.
22.3 Except with the prior written agreement of the Board, the Executive
will not during his employment under this Agreement resign his office
as a director of the Company or any Group Company and if he does so
without the consent or concurrence of the Company, the Company will be
entitled to terminate his employment pursuant to CLAUSE 19.1.8 or at
the Company's absolute discretion, to treat such resignation as notice
of termination given by the Executive to the Company pursuant to CLAUSE
3.2 and to suspend the Executive pursuant to CLAUSE 19.2.
22.4 The Executive will not be required to retire by rotation in accordance
with any provisions in the Articles of Association of the Company. In
all other respects the Executive's appointment as a director of the
Company or any other Group Company will be subject to the Articles of
Association from time to time of the relevant company.
23. RIGHTS FOLLOWING TERMINATION
The termination of the Executive's employment under this Agreement will not
affect any of the provisions of this Agreement which expressly operate or
lawfully have effect after termination and will not prejudice any right of
action already accrued to either party in respect of any breach of any terms of
this Agreement by the other party.
24. DISCIPLINARY AND GRIEVANCE PROCEDURES
24.1 The disciplinary procedure is not incorporated by reference in this
Agreement and The Company does not have a formal disciplinary procedure
which is applicable to the Executive.
<PAGE>
24.2 If the Executive has a grievance in relation to his employment or is
dissatisfied with a disciplinary decision against him he may apply in
writing to the Board of Directors whose decision will be final.
25. NOTICES
Notice under this Agreement by the Executive to the Company should be
addressed to the Company and left at its registered office or sent by first
class post to its registered office and notices given by the Company to the
Executive should be served personally or sent by first class post or sent by
facsimile transmission to his usual or last known place of residence in England
and in case of service by post the day of service will be 48 hours after
posting.
26. MISCELLANEOUS
26.1 This Agreement will be governed by and interpreted in accordance with
the law of England and Wales.
26.2 The parties to this Agreement submit to the exclusive jurisdiction of
the English Courts in relation to any claim, dispute or matter arising
out of or relating to this Agreement.
26.3 Any delay by the Company in exercising any of its rights under this
Agreement will not constitute a waiver of such rights.
THIS DOCUMENT is executed as a deed and delivered by the Executive on the date
stated at the beginning of this Deed.
SIGNED by [NAME] )
duly authorised to sign for and on behalf of )
[NAME OF COMPANY] )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by [NAME OF EXECUTIVE] )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
<PAGE>
SCHEDULE H
UDATE ASSETS
All rights, title and interest in and to all tangible and intangible property
associated with the business (the "Business") carried on or proposed to be
carried on by UDATE including, without limitation, the business carried on or
proposed to be carried on at, through or in association with the internet domain
name "Udate.com" (the "Domain Name"), and all related internet website
development (collectively, the "Website"), including:
(i) the contractual right to maintain
registration of the Domain Name with Internic (Network
Solutions Inc.);
(ii) all URL's and HTML's used or proposed to be
used in or associated with the Business;
(iii) all databases, books and records relating to
the Business including, without limitation, all recorded
information relating to existing or prospective customers of
the Business and advertisers on and visitors to the Website;
(iv) any existing patent rights and copyright in
respect of any images, sounds, or text prepared for the
Business including, without limitation, all such work
displayed at the Website or incorporated into any customized
(non-retail) software relating to the Website or used or
proposed to be used in the Businesses annexed to or disclosed
in the disclosure letter;
(v) all trade-mark and trade name rights that
may exist anywhere in the world in respect of the Business,
the Website or either of the Domain Name;
(vi) all goodwill associated with the Business,
the Website or the Domain Name;
(vii) all other intangible assets relating to the
Business, including, without limitation, all trade secrets,
studies, data projections, processes and confidential
information;
(viii) all tangible assets such as inventory,
equipment, apparatus, furniture, fixtures and supplies used or
proposed to be used in the Business; and
(ix) the following bank accounts:
<TABLE>
<CAPTION>
------------------------------------------------------------ ---------------------------------------------------------
Bank Account Number Location
------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Sterling Current Account: 30088145
Sort Code: 20-25-85 Barclays Bank plc, Derby
------------------------------------------------------------ ---------------------------------------------------------
Dollar Current Account: 82629511
Sort Code: 20-54-78 Barclays Bank plc, Derby
------------------------------------------------------------ ---------------------------------------------------------
Dollar Deposit Account: 48761977
Sort Code: 20-25-85 Barclays Bank plc, Derby
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
III ASSETS
None.
SCHEDULE I
UDATE Directors, Officers, Employees, Contractors and Consultants:
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
Name and Address Relationship Compensation Arrangement
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Melvyn Morris, Director and Chief Executive Officer Refer to Service Agreement
Redmire Gap, Intakes Lane
Turnditch, Derbyshire
U.K. DE56 2LU
---------------------------------------- -------------------------------------- --------------------------------------
Howard Thacker Director and Chief Executive Officer Refer to Service Agreement
Trent Fish Farm
Mercaston, Derbyshire
U.K. DE6 3BL
---------------------------------------- -------------------------------------- --------------------------------------
Anthony Dunn Chief Technical Officer See Contract of Employment
Apartment 501
223 Regent Street
London W1R 8QD
---------------------------------------- -------------------------------------- --------------------------------------
Christopher MorrisRedmire Gap, Intakes Customer Service Supervisor See Contract of Employment
Lane
Turnditch, Derbyshire
U.K. DE56 2LU
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
III Directors, Officers, Employees, Contractors and Consultants:
<TABLE>
<CAPTION>
---------------------------------------- -------------------------------------- --------------------------------------
Name and Address Relationship Compensation Arrangement
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Melvyn Morris, Director No compensation.
Redmire Gap, Intakes Lane
---------------------------------------- -------------------------------------- --------------------------------------
<PAGE>
---------------------------------------- -------------------------------------- --------------------------------------
Turnditch, Derbyshire
U.K. DE56 2LU
---------------------------------------- -------------------------------------- --------------------------------------
Howard Thacker Director No compensation.
Trent Fish Farm
Mercaston, Derbyshire
U.K. DE6 3BL
---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
<PAGE>
SCHEDULE J
UDATE MATERIAL CONTRACTS
1. Compaq Service Agreement between UDATE and Compaq.
2. Web Site Affiliation Agreement between UDATE and USA Today Information
Network dated 29 February 2000.
3. Master Service Agreement between GX Networks Limited and UDATE dated 13
October 1998.
4. Service Order (No. SO14160) between GX Networks Limited and UDATE dated
7 October 1998.
5. Service Order (No. SO24160) between GX Networks Limited and UDATE dated
16 December 1998.
6. Exclusive Network Media Representation Agreements between Venture
Direct Worldwide Inc. and UDATE dated 23 August 1999, and
1 September 1999.
7. Barclays Merchant Services Merchant Agreement between Barclays Bank plc
and UDATE dated 9 December 1998.
8. Hire agreement between General Guarantee Finance Limited and UDATE
dated 29 October 1999 and 14 January 2000.
III MATERIAL CONTRACTS
None.
<PAGE>
SCHEDULE K
<TABLE>
<CAPTION>
ANTHEM BANK ACCOUNTS
------------------------------------------------------------ ---------------------------------------------------------
Bank Account Number Location
------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
US Dollar Account: 4685-928 Bank of Montreal, PO Box 49500
Transit: 00040-001 595 Burrard Street, Vancouver, B.C., V7X 1L7
------------------------------------------------------------ ---------------------------------------------------------
CDN Dollar Account: 1798-864 Bank of Montreal, PO Box 49500
Transit: 00040-001 595 Burrard Street, Vancouver, B.C., V7X 1L7
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Anthem Copyright Interests
--------------------------
COPYRIGHT DATE COPYRIGHT NUMBER
<S> <C> <C>
1. ALL I GOT 12-21-89 SR 170-560
2. BETTY 03-21-88 SR 134-056
3. BRAND NEW DAY 12-19-89 SR 169-102
4. BREAKIN' OUT 12-21-89 SR 170-558
5. BON VOYAGE 06-23-88 SR 136-508
6. CLOSE TO YOU 12-19-89 SR 169-102
7. DESERT OF LOVE 09-30-88 SR 142-643
8. EVERYTIME 12-21-89 SR 169-784
9. GIRL IN THE WIND 09-30-88 SR 142-668
10. HELP ME 09-29-88 SR 141-751
11. HOPE ANTHEM 06-23-88 SR 137-202
12. I WILL LAY ME DOWN 12-19-89 SR 169-103
13. JOHNNY'S ON PARADE 01-17-89 SR 148-077
14. LITTLE GIRL 09-29-88 SR 141-753
15. LIVE TODAY 09-29-88 SR 141-750
16. MAY I HAVE THIS DANCE 04-18-89 SR 154-962
17. RUNNING 12-18-89 SRS 169-129
18. TENDER TOUCH 09-29-88 SR 141-754
19. THANKS A LOT 12-19-89 SR 169-100
20. WATER OF LIFE 09-29-88 SR 141-752
21. WHEN YOU'RE LONELY 09-29-88 SR 142-886
22. WHERE I BELONG 07-14-92 SR 237-693
23. HEART OF A WARRIOR 07-15-92 SR 236-791
24. WINGS LIKE A DOVE 07-15-92 SR 237-201
25. HOME AGAIN 07-14-92 SR 237-773
26. READY OR NOT 07-14-92 SR 237-966
27. UNMASKED 07-15-92 SR 236-790
28. LUV, LUV, LUV 07-14-92 SR 237-697
29. NEW 07-14-92 SR 237-688
30. NEVER LET YOU GO 07-14-92 SR 237-690
31. WISHFUL DRINKING 03-01-93 SR 253-623
32. RUNAWAY TRAIN 04-13-93 SR 254-161
33. HERE WE ARE 03-04-93 SR 253-507
34. HOPE FOR ME 03-05-93 SR 252-429
35. LIVIN WELL ENOUGH 03-05-93 SR 250-240
36. WHEN YOUR COOL 03-05-93 ST 250-489
</TABLE>
<PAGE>
SCHEDULE L
RELEASE
THIS RELEASE ("Release") is being executed and delivered as of __________, by
and on behalf of ______________________ (the "Releasor") to and in favour of,
and for the benefit of uDate.Com Ltd. ("UDATE") and Internet Investments Inc.
("III") at the request of Anthem Recording West Inc. ("Anthem")
WHEREAS the Releasor, the Releasees, Anthem and others entered into a Share
Exchange Agreement dated ______________ (the "Agreement") and as a condition
to the completion of the transactions contemplated by the Agreement, the
Releasor agreed to execute and deliver this Release to and in favour of UDATE
and III;
NOW THEREFORE THIS RELEASE WITNESSES that in order to induce UDATE, III and
Anthem to consummate the transactions contemplated by the Agreement, and for
other valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by the Releasor), the Releasor hereby covenants and agrees as
follows:
1. Definitions.
1.1 The term "Associated Parties," when used herein with respect to a
Releasor, shall mean and include: (i) the Releasor's predecessors,
successors, executors, administrators, heirs and estate; (ii) the
Releasor's past, present and future assigns, agents and
representatives; (iii) each entity that the Releasor has the power to
bind (by the Releasor's acts or signature) or over which the Releasor
directly or indirectly exercises control; and (iv) each entity of which
the Releasor owns, directly or indirectly, at least 10% of the
outstanding equity, beneficial, proprietary, ownership or voting
interests.
1.2 The term "Releasees" shall mean and include: (i) UDATE and III; (ii)
each of any direct and indirect subsidiaries of UDATE or III; (iii)
each other affiliate of UDATE or III; and (iv) the successors and past,
present and future assigns, directors, officers, employees, agents,
attorneys and representatives of the respective entities identified or
otherwise referred to in clauses "(i)" through "(iv)" of this sentence.
1.3 The term "Claims" shall mean and include all past, present and future
disputes, claims, controversies, demands, rights, obligations,
liabilities, actions and causes of action of every kind and nature,
including: (i) any unknown, unsuspected or undisclosed claim; (ii) any
claim or right that may be asserted or exercised by the Releasor in the
Releasor's capacity as a stockholder, director, officer or employee of
the Releasor or in any other capacity; and (iii) any claim, right or
cause of action based upon any breach of any express, implied, oral or
written contract or agreement.
1.4 The term "Released Claims" shall mean and include each and every Claim
that (i) the Releasor or any Associated Party of the Releasor may have
had in the past, may now have or may have in the future against any of
the Releasees and (ii) has arisen or arises directly or indirectly out
of, or relates directly or indirectly to, any circumstance, agreement,
activity, action, omission, event or matter occurring or existing on or
prior to the date of this Release (excluding only such Releasor's
rights, if any, under the Agreement).
2. Release.
2.1 The Releasor, on the Releasor's own behalf and for each of the
Releasor's Associated Parties, hereby generally, irrevocably,
unconditionally and completely releases and forever discharges each of
<PAGE>
the Releasees from, and hereby irrevocably, unconditionally and
completely waives and relinquishes, each of the Released Claims.
3. Representations and Warranties.
3.1 The Releasor represents and warrants that:
(i) the Releasor has not assigned, transferred, conveyed or
otherwise disposed of any Claim against any of the Releasees,
or any direct or indirect interest in any such Claim, in whole
or in part;
(ii) to the best of the Releasor's knowledge, no other person or
entity has any interest in any of the Released Claims;
(iii) no Associated Party of the Releasor has or had any Claim
against any of the Releasees;
(iv) no Associated Party of such Releasor will in the future have
any Claim against any of the Releasees that arises directly or
indirectly from or relates directly or indirectly to any
circumstance, agreement, activity, action, omission, event or
matter occurring or existing on or before the date of this
Release;
(v) this Release has been duly and validly executed and delivered
by the Releasor;
(vi) this Release is a valid and binding obligation of the Releasor
and the Releasor's Associated Parties, and is enforceable
against the Releasor and each of the Releasor's Associated
Parties in accordance with its terms; and
(vii) there is no action, suit, proceeding, dispute, litigation,
claim, complaint or investigation by or before any court,
tribunal, governmental body, governmental agency or arbitrator
pending or, to the best of the knowledge of the Releasor,
threatened against the Releasor or any of the Releasor's
Associated Parties that challenges or would challenge the
execution and delivery of this Release or the taking of any of
the actions required to be taken by the Releasor under this
Release.
4. Indemnification.
4.1 Without in any way limiting any of the rights or remedies otherwise
available to the Releasees, the Releasor shall indemnify and hold
harmless each of the Releasees against and from any loss, damage,
injury, harm, detriment, lost opportunity, liability, exposure, claim,
demand, settlement, judgment, award, fine, penalty, tax, fee, charge or
expense (including attorneys' fees) that is directly or indirectly
suffered or incurred at any time by any of the Releasees, or to which
any of the Releasees otherwise becomes subject at any time, and that
directly or indirectly relates to or arises out of or by virtue of (a)
any failure on the part of the Releasor to observe, perform or abide
by, or any other breach of, any restriction, covenant, obligation,
representation, warranty or other provision contained herein; or (b)
the assertion or purported assertion of any of the Released Claims by
the Releasor or any of the Releasor's Associated Parties.
5. Miscellaneous.
<PAGE>
5.1 This Release sets forth the entire understanding of the parties
relating to the subject matter hereof and supersedes all prior
agreements and understandings among or between the Releasor and any of
the Releasees relating to the subject matter hereof.
5.2 If any provision of this Release or any part of any such provision is
held under any circumstances to be invalid or unenforceable in any
jurisdiction, then (i) such provision or part thereof shall, with
respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable
to the fullest possible extent, (ii) the invalidity or unenforceability
of such provision or part thereof under such circumstances and in such
jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (iii) such invalidity or enforceability of such
provision or part thereof shall not affect the validity or
enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Release. Each provision
of this Release is separable from every other provision of this
Release, and each part of each provision of this Release is separable
from every other part of such provision.
5.3 This Release shall be construed in accordance with, and governed in all
respects by, the laws of the the State of California and the laws of
the United States applicable therein.
5.4 Whenever required by the context, the singular number shall include the
plural, and vice versa; the masculine gender shall include the feminine
and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
IN WITNESS WHEREOF, the Releasor has caused this Release to be executed as of
the date first above written.
[ ]
---------------------------------------
<PAGE>
SCHEDULE M
CERTIFICATE OF CONFIRMATION
Pursuant to subclause 6.1(l) of the Share Exchange Agreement made effective
as of the ___ day of _____________, ______ (the "Agreement") among Internet
Investments Inc Employee Benefits and Shares Trust, Tavendish Enterprises
Ltd., David John Shortland, Paula Loraine Shortland, Ryley Hill Ltd.,
Shortland No. 1 Trust, uDate.Com Ltd., Internet Investments Inc., Melvyn
Morris, Howard Thacker, Anthem Recording West Inc. ("Anthem") and
[Anthem Shareholders] the undersigned hereby confirms to Anthem that the
representations and warranties of the undersigned contained in the Agreement
or contained in any certificates or documents delivered by the undersigned
pursuant to the Agreement are true and correct in every material respect as
of the Time of Closing of the Agreement being _______________ o'clock a.m.
local time in [ ] or at such other time as may be agreed between the
parties to the Agreement on the ___ day of _____________ 2000. Dated at
____________, this ______, day of __________, 2000.
-----------------------------------
<PAGE>
SCHEDULE N
CERTIFICATE OF CONFIRMATION
Pursuant to subclause 6.2(e) of the Share Exchange Agreement made effective
as of the ___ day of ______________, ______ (the "Agreement") among Internet
Investments Inc Employee Benefits and Shares Trust, Tavendish Enterprises
Ltd., David John Shortland, Paula Loraine Shortland, Ryley Hill Ltd.,
Shortland No. 1 Trust, uDate.com Ltd., Internet Investments Inc., Melvyn
Morris, Howard Thacker, Anthem Recording West Inc. ("Anthem") and the
[Anthem Shareholders] the undersigned hereby confirms to the UDATE Group (as
defined in the Agreement) that the representations and warranties of Anthem
contained in the Agreement or contained in any certificates or documents
delivered by Anthem pursuant to the Agreement are true and correct in every
material respect as of the Time of Closing of the Agreement being _____
o'clock a.m. local time in [ ] or such other time as may be agreed
between the parties to the Agreement on the ___ day of ____________, 2000.
Dated at ________________________-, this ___ day of ______, 20000, ____.
Anthem
Per:
----------------------------------
, Director
----------------
