United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-26624
ALTERNATE MARKETING NETWORKS, INC.
formerly ALTERNATE POSTAL DELIVERY, INC.
(Exact name of small business issuer as specified in its charter)
Michigan 38-2841197
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Ionia, SW, Suite 300, Grand Rapids, Michigan 49503
(Address of principal executive offices) (Zip Code)
616-235-0698 FAX 616-235-3405
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes (X)
No ( )
As of October 28, 1999, 4,082,177 shares of the issuer's common stock were
outstanding.
Transitional Small Business Disclosure Format: Yes ( ) No (x)
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
FORM 10-QSB
INDEX
Page
PART I. Financial Information: No.
Condensed Consolidated Balance Sheets - September 30, 1999,
and December 31, 1998. . . . . . . . . . . . . . . . . . . 3 & 4
Condensed Consolidated Statements of Operations - three
and nine months ended September 30, 1999 and 1998 . . . . . . .5
Condensed Consolidated Statements of Cash Flows - nine
months ended September 30, 1999 and 1998. . . . . . . . . . . .6
Notes to Condensed Consolidated Financial Statements. . . . 7 & 8
Management's Discussion and Analysis . . . . . . . . . . . 9 - 12
PART II. Other Information:
Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . .13
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . .14
Part I. Financial Information
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1999 1998
(unaudited)
------------ ------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 1,956,494 $ 222,590
Accounts receivable, trade, less
allowance of $275,000 at September 30
and December 31 3,775,609 4,542,858
Prepaid expenses and other assets 1,373,567 267,782
----------- -----------
Total current assets 7,105,670 5,033,230
Notes receivable, less current portion 16,269 29,536
Property and equipment:
Computer equipment 390,342 331,008
Furniture and fixtures 369,027 363,914
----------- -----------
759,369 694,922
Accumulated depreciation and
amortization (553,198) (475,754)
----------- -----------
206,171 219,168
Computer software, net 166,750 175,975
Intangible assets, net 992,375 1,055,161
----------- -----------
$ 8,487,235 $ 6,513,070
=========== ===========
</TABLE>
Continued
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
LIABILITIES
September 30, December 31,
1999 1998
(unaudited)
----------- -----------
Current liabilities:
<S> <C> <C>
Notes payable, bank $1,575,000
Accounts payable $1,242,851 790,067
Accrued liabilities 322,570 253,838
Deferred revenue 1,589,872 366,240
Capitalized lease obligations 3,278
--------- ---------
Total current liabilities 3,155,293 2,988,423
SHAREHOLDERS' EQUITY
Preferred stock-no par value, 2,000,000
authorized shares, no shares issued and
outstanding
Common stock-no par value, voting, 8,000,000
authorized shares; 4,159,677 shares issued and
outstanding at September 30, 1999 and 3,873,227
at December 31, 1998 10,534,494 9,554,454
Accumulated losses, through September 30, 1993
(Note 4) (1,291,039) (1,291,039)
--------- ---------
Total common stock 9,243,455 8,263,415
Accumulated losses, since October 1, 1993
(Note 4) (3,911,513) (4,738,768)
--------- ---------
Total shareholders' equity 5,331,942 3,524,647
--------- ---------
$ 8,487,235 $ 6,513,070
=========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales $6,008,074 $5,432,796 $20,885,922 $14,448,103
Cost of sales 4,358,906 4,135,520 15,921,118 11,040,361
--------- ---------- ----------- -----------
Gross profit 1,649,168 1,297,276 4,964,804 3,407,742
Selling, general and
administrative expenses 1,412,345 1,289,134 4,141,931 3,495,858
---------- ---------- ----------- -----------
Income (loss) from operations 236,823 8,142 822,873 ( 88,116)
Other income (expense), net 17,231 2,565 6,271 13,836
---------- ---------- ----------- -----------
Income (loss) before income
taxes 254,054 10,707 829,144 ( 74,280)
Income tax expense (Note 3) 1,889 2,650
---------- ---------- ----------- -----------
Net income (loss) $ 254,054 $ 10,707 $ 827,255 ($ 76,930)
========== ========== ========== ===========
Income (loss) per share (Note 4)
Basic:
Net income (loss) $ .07 $ .00 $ .22 ($ .02)
========== ========== =========== ===========
Diluted:
Net income (loss) $ .06 $ .00 $ .21 ($ .02)
========== ========== =========== ===========
Weighted average number of shares
outstanding: (Note 4)
Basic 3,889,568 3,994,306 3,846,379 4,014,946
========== ========== =========== ===========
Diluted 3,931,406 3,994,306 3,863,663 4,014,946
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine months ended
September 30,
--------------------------
1999 1998
------------ ------------
(unaudited)
Net cash provided by (used in) operating
<S> <C> <C>
activities $2,422,553 ($1,359,369)
---------- ----------
Net cash used in investing activities ( 90,411) ( 190,767)
---------- ----------
Net cash provided by (used in) financing
activities ( 598,238) 589,472
---------- ----------
Net increase (decrease) in cash and cash
equivalents 1,733,904 ( 960,664)
Cash and cash equivalents, beginning
of period 222,590 1,057,898
---------- ----------
Cash and cash equivalents, end of
period $1,956,494 $ 97,234
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. The interim financial data is unaudited; however, in the opinion of
management, the interim data includes all adjustments, consisting only of
normal recurring adjustments necessary for a fair presentation of the results
of operations for the interim periods. The consolidated financial statements
included herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although the Company
believes that the disclosures included herein are adequate to make the
information presented not misleading. The results of operations for the three
months and nine months ended September 30, 1999 are not necessarily indicative
of the results of operations expected for the year ended December 31, 1999.
2. The organization and business of the Company, accounting policies
followed by the Company and other information are contained in the notes to
the Company's consolidated financial statements filed as part of the Company's
Form 10-KSB for the fiscal year ended December 31, 1998. This quarterly
report should be read in conjunction with the Form 10-KSB.
3. Income Taxes:
During 1999, the Company utilized its deferred tax assets, consisting
primarily of net operating loss carryforwards.
4. Net Income (Loss) Per Share Calculation:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
Income (Numerator):
<S> <C> <C> <C> <C>
Net income (loss) $ 254,054 $ 10,707 $ 827,255 ($ 76,930)
========== ========== ========== ===========
Shares (Denominator):
Basic income (loss) per share:
Actual weighted average
shares outstanding 3,889,568 3,994,306 3,846,379 4,014,946
========== ========== ========== ===========
Basic income (loss) per share:
Net income (loss) per share $ .07 $ .00 $ .22 ($ .02)
========== ========== ========== ==========
</TABLE>
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, continued
(unaudited)
4. Net Income (Loss) Per Share Calculation, continued:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
Diluted income (loss) per share:
Actual weighted average
<S> <C> <C> <C> <C>
shares outstanding 3,889,568 3,994,306 3,846,379 4,014,946
Shares upon conversion of
warrants and options 41,838 * 17,284 *
---------- --------- ---------- -----------
3,931,406 3,994,306 3,863,663 4,014,946
========== ========== ========== ===========
Diluted income (loss) per share:
Net income (loss) per share $ .06 $ .00 $ .21 ($ .02)
========== ========== ========== ==========
</TABLE>
* The incremental shares resulting from the conversion of warrants and options
are not included in the computation of earnings per share due to the anti-
dilution resulting from the exercise prices of the warrants and options
exceeding the average market price of the common stock and the net loss in
1998.
5. Accumulated losses, through September 30, 1993, represent the losses and
capital of the Company during the period of time it was a subchapter S
corporation. All subsequent losses of the combined entities are presented
under Accumulated losses, since October 1, 1993.
6. Common Stock:
On September 10, 1999, the Company issued an aggregate of 350,000 shares
of the Company's common stock to The Times Mirror Company for an aggregate
price of $1,050,000.
ALTERNATE MARKETING NETWORKS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
Overview
Alternate Marketing Networks, Inc. and Subsidiaries is a marketing
services company focusing on targeted consumer product sampling, suburban
newspaper advertising, and delivery of telephone directories. The Company's
clients include packaged goods clients who desire a sample to be delivered to
a targeted household audience, national advertisers who place Run of Press
(ROP) or insert advertisements into newspapers, and telephone directory
publishers who wish to have their directories delivered to the households of
communities across the nation. The Company believes it offers these clients
unrestricted reach, unequaled access and unduplicated delivery to
approximately 100 million households in the United States.
The Company utilizes its Media Optimizer TM database, Internet based End-
to-End TM tracking, and direct delivery capabilities to execute high quality,
large marketing campaigns efficiently and thoroughly, in accordance with
clients' specifications.
In July 1999, the Company was named the preferred vendor for in-home
sampling events by the Kellogg Company and announced the addition of newspaper
media veteran, Celeste Lavezzari, to its management team. In August 1999, the
Company reported significantly higher revenue and profit for the second
quarter of 1999 as compared to the previous year. In September 1999, the
Company announced that The Times Mirror Company (TMC: NYSE) acquired stock
representing approximately 16% of the Company. The shares were acquired in
part from the Company and in part from a venture fund controlled by Harry
Edelson, a director of the Company who resigned concurrently with the
acquisition. See Part II, Items 2 and 5.
Results of Operations
During the third quarter ended September 30, 1999, the Company continued
experiencing the positive impact of initiatives implemented in 1998. In each
of the first three quarters of 1999, the Company experienced an increase in
revenue compared to the same period in 1998. This is a reflection of the
positive impact of the 1998 initiatives. The sales initiatives included
restructuring of the sampling sales organization and development of a client
services department. The operational initiatives included the implementation
of Good Manufacturing Practices and the development of a core supplier
network. The Company reported a profit in all three 1999 quarters due to
these initiatives and improvements made to the Media Optimizer TM database and
the Internet based End-to-End TM tracking system. These improvements have
enabled the Company to efficiently execute larger advertising campaigns while
achieving a high level of quality.
The third quarter of 1999 showed an overall increase in revenues of
approximately 11% over the same period in 1998. Increases in sampling offset
decreases in suburban newspaper revenues and telephone directory distribution.
The Company's revenues may fluctuate from quarter to quarter and from year to
year, primarily due to the timing of product sample programs. The gross
profit percentage of 27.4% for the quarter ended September 30, 1999 was up
from 23.9% for the previous year quarter due to the mix of revenues during
each quarter.
During this quarter, selling, general and administrative expenses
increased approximately 10% over the same period last year. This was largely
due to an increase in personnel and advertising and marketing expenses
associated with obtaining, servicing and executing larger marketing campaigns
for the Company's clients, as compared to some of the smaller marketing
campaigns executed in previous periods.
Other income (expense), net consists primarily of interest income and
interest expense. Interest income for the three months ended September 30,
1999 and 1998 was $18,591 and $5,833 respectively. Interest expense for the
three months ended September 30, 1999 and 1998 was $1,360 and $3,268
respectively. These changes are largely attributable to the positive cash
change resulting from improved profitability and the sale of the Company's
common stock.
For the nine months ending September 30, 1999 the Company has generated
an approximate 45% increase in revenues over the same period in 1998.
Contributing to this increase in revenues were the timing of significant
sample programs compared to last year and a significant increase in automotive
ROP advertising. The Company's revenues may fluctuate from quarter to quarter
and from year to year, primarily due to the timing of product sample programs.
The gross profit percentage of 23.8% for the nine months ending September 30,
1999 was up slightly from 23.6% for the previous year due to the mix of
revenues during the periods.
During the nine months ended September 30, 1999, selling, general and
administrative expenses increased approximately 18% over the same period last
year. Approximately half of this increase was due to an increase in
personnel, travel, and advertising and marketing expenses associated with
obtaining, servicing and executing larger marketing campaigns for the
Company's clients, as compared to some of the smaller marketing campaigns
executed in previous periods.
Other income (expense), net consists primarily of interest income and
interest expense for the nine months ending September 30. Interest income for
the nine months ended September 30, 1999 and 1998 was $33,093 and $25,382
respectively. Interest expense for the nine months ended September 30, 1999
and 1998 was $26,822 and $7,069 respectively. During the first six months of
1999, it was necessary for the Company to use its line of credit. Improved
profitability and cash flows has enabled the Company to decrease the
borrowings and the interest expense, and to invest excess cash into interest
bearing investments.
Liquidity and Capital Resources
During the first nine months of 1999, the Company's cash balance
increased by approximately $1,734,000 primarily due to net income and proceeds
from the sale of 350,000 shares of the Company's common stock for $3.00 per
share.
Accounts receivable decreased by approximately $767,000 during the
period, due to improved collections. The Company recognized an increase in
prepaid expenses of approximately $1,100,000, and an increase in deferred
revenue of approximately $1,224,000 due to sample deliveries in progress at
the end of the period. Also during this period, the bank line of credit was
paid down by $1,575,000, by utilizing available cash balances. Accounts
payable increased by approximately $453,000 due to expenses incurred at the
end of the period.
During the same period in 1998, the Company's cash balance decreased by
approximately $961,000 primarily due to the increase in accounts receivable.
These changes are the results of the timing of billing and payments for
revenues and expenses of product sample distributions.
In addition, during the nine month periods ended September 30, 1999 and
1998, the Company used approximately $104,000 and $201,000, respectively, to
purchase computer and office equipment and to enhance the capabilities of its
software and database system, the Media Optimizer TM.
The Company has a bank line of credit for $2,500,000 to assist in future
cash flow needs. The line of credit expires June 30, 2000. As of September
30, 1999, there was no outstanding balance. The Company believes that this
line of credit along with its current cash flows will enable it to fund its
current growth plans as well as meet its presently anticipated capital
requirements.
Year 2000 Update
In early 1998, the Company implemented a plan to evaluate the impact of
the Year 2000 on its computer systems. The plan addresses three areas:
outside supplier software; suppliers and vendors; and internal operating
systems and hardware.
The Company sent out questionnaires to suppliers of externally obtained
software, and to other suppliers and vendors (including distributors of
samples and advertising materials), requesting verification of the status of
Year 2000 compliance. The Company has accumulated the responses and reviewed
them during the fourth quarter of 1998 and the first quarter of 1999 to
confirm compliance. To date, all responses from suppliers of externally
obtained software have indicated Year 2000 compliance. The Company completed
its own testing during the third quarter of 1999. During the fourth quarter
of 1999, the Company has begun putting out an additional questionnaire to
distributors who log into the Company's End-To-End TM tracking system. This
questionnaire will enable the Company to receive additional computer and
compliance information from these distributors.
The Company has completed testing on all of the equipment in each of its
office locations. During this process, an inventory was prepared of all of
the equipment and the status of its compliance. To date, there have been no
unanticipated problems with the hardware and software.
The Company has remained under its expected costs of $20,000 for
remediation and replacement of non-compliant systems. This amount is not
considered to be significant since necessary upgrades to internal operating
systems and hardware are already part of the ongoing operations of the
Company. Costs for remediation and replacement were incurred in the first and
second quarter of 1999. Costs associated with identifying and utilizing
alternative vendors and suppliers are not considered to be material.
The Company believes that its largest risk is the possible failure of its
Media Optimizer TM system. This is the software which the Company uses in
many facets of its business, including cost analysis, price quoting, media
placement, targeting, and calculations for billing and payments. The Company
completed its testing during the third quarter of 1999 and found the system to
be compliant. In addition, the Company uses spreadsheet and word processing
software for many of its analyses and client presentations. If the Company's
computer systems were to fail, the Company might be unable to provide quotes
to clients or fully perform on its contracts with clients, resulting in loss
of potential business and claims for nonperformance that could have a material
impact on the results of operations.
The Company's contingency plan is to rely on historical printed
information to facilitate the many functions of its computers. Prior to the
development of the Company's Media Optimizer TM, all planning and delivery
capabilities were analyzed in this manner. While this method is time
consuming and labor intensive, it would enable the Company to continue its
services to its clients.
Due to the general uncertainty inherent in the Year 2000 problem,
resulting in part from the uncertainty of the Year 2000 readiness of third-
party suppliers, the Company is unable to determine at this time whether the
consequences of the Year 2000 failures will have a material impact on the
Company's results of operations, liquidity or financial condition. The
Company believes that timely completion of its planned evaluations will reduce
the possibility of significant interruptions of normal operations.
Outlook for the Future
The Company expects the fourth quarter of 1999 to closely track with the
financial results of the first nine months of 1999, resulting in revenue and
profit increases over the same period last year. In addition, the Company
continues to believe in the necessity of investing in resources for planning
for its clients' marketing and advertising campaigns for next year. Due to
the timing and uncertainty of implementation of marketing campaigns, the
quarterly revenue and profits could fluctuate.
Forward-looking Statements
Except for historical information contained herein, the matters set forth
in this management's discussion and analysis are forward-looking statements
based on current expectations. Actual results may differ materially. These
forward-looking statements involve a number of risks and uncertainties
including, but not limited to, competition, the timing of receipt of orders,
the continuing implementation of the Company's reorientation as a marketing
services company, the effectiveness of the marketing program, and the
Company's success in developing and capitalizing on strategic alliances.
PART II. Other Information:
Item 2(c).
On September 10, 1999, the Company issued an aggregate of 350,000 shares
of Common Stock to The Times Mirror Company (See Part II, Item 5). This
placement did not involve any underwriter or placement agent and was made in
reliance on exemptions from registration contained in Section 4(2) and Section
4(6) of the Securities Act of 1933.
Item 5. Other Information.
On August 20, 1999 the Board of Directors unanimously approved sale by
the Company of 350,000 shares of the Company's common stock to The Times
Mirror Company for an aggregate price of $1,050,000. The Times Mirror
investment was consummated on September 10, 1999.
Concurrently with the Times Mirror Investment, Harry Edelson resigned as
a member of the Board of Directors of the Company (leaving 3 directors).
Pursuant to agreement with Times Mirror, the vacancy will be filled with a
Times Mirror nominee and the Board will be expanded to 5 members (in each
case, solely by Board action, as permitted by the Company's bylaws).
On September 29, 1999, the Board of Directors voted to increase the
number of shares reserved for issuance under the Company's 1995 Long-Term
Incentive and Stock Option Plan from 400,000 to 500,000 shares and the number
of shares reserved for issuance under the Company's 1995 Outside Directors and
Advisors Stock Option Plan from 50,000 to 75,000. Both of these increases are
subject to ratification at the next annual shareholders' meeting.
Subsequent to the end of the quarter ended September 30, 1999, the
Company proceeded to repurchase 82,500 shares of the Company's common stock.
Such purchases were made pursuant to a 1998 authorization by the Company's
Board of Directors for repurchase from time to time, of up to 300,000 shares
of the Company's common stock on the open market or in privately negotiated
transactions, consistent with overall market and financial conditions. To
date, the Company has repurchased 292,950 shares of its stock pursuant to this
Board authorization.
Item 6. Exhibits and Reports on Form 8-K.
During the period of this report, there were no filings on Form 8-K.
Exhibit 10.17 Times Mirror Stock Purchase Agreement
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ALTERNATE MARKETING NETWORKS, INC.
Date: November 10, 1999 By: /s/Phillip D. Miller
Phillip D. Miller
Chief Executive Officer
By: /s/Sandra J. Smith
Sandra J. Smith
Chief Financial Officer
Stock Purchase Agreement
Dated as of August 20, 1999
by and between
Alternate Marketing Networks, Inc.
and
The Times Mirror Company
TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE 1
SECTION 1.1. Purchase and Sale of the Shares 1
SECTION 1.2. Purchase Price 1
SECTION 1.3. Closing 1
(a) Times Mirror's Deliveries at Closing 1
(b) AMNI's Deliveries at Closing 1
ARTICLE 2 CONDITIONS TO CLOSING 2
SECTION 2.1. Conditions to All Parties' Obligations 2
(a) Governmental Approvals 2
(b) No Order 2
(c) Listed on NASDAQ 2
SECTION 2.2. Conditions to AMNI's Obligations 2
(a) Representations, Warranties and Covenants 2
SECTION 2.3. Conditions to Times Mirror's Obligations 2
(a) Representations, Warranties and Covenants 2
(b) Certificate of Good Standing 3
(c) Resolutions 3
(d) Third-Party Consents 3
(e) Ancillary Agreements 3
(f) Edelson Stock Purchase Agreement 3
(g) Legal Opinion 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF AMNI 3
SECTION 3.1. Organization and Good Standing of AMNI 4
SECTION 3.2. Authority 4
SECTION 3.3. No Breach 4
SECTION 3.4. Consents and Approvals 4
SECTION 3.5. Capital Stock of AMNI 5
(a) Authorized Capital Stock of AMNI 5
(b) Subsidiaries 5
(c) Registered Common Stock 6
(d) Shares 6
(e) No Appraisal Rights 6
SECTION 3.6. SEC Reports; Financial Statements 6
(a) SEC Reports; Audited Financial Statements 6
(b) Amendments to SEC Reports 6
SECTION 3.7. Litigation; Decrees 6
SECTION 3.8. Absence of Changes or Events 7
SECTION 3.9. Compliance with Applicable Laws 7
(a) General 7
(b) Hazardous Materials 7
(c) Notices of Certain Environmental Matters 7
(d) Definitions 7
SECTION 3.10. Employee Benefit Plans 8
SECTION 3.11. Taxes 8
(a) Tax Returns and Taxes 8
(b) Tax Claims 8
(c) Definitions 8
SECTION 3.12. Brokers 9
SECTION 3.13. Year 2000 9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF TIMES MIRROR 9
SECTION 4.1. Organization and Good Standing of Times Mirror 9
SECTION 4.2. Authority 9
SECTION 4.3. No Breach 9
SECTION 4.4. Consents and Approvals 10
SECTION 4.5. Brokers 10
SECTION 4.6. Acquisition of Additional Stock 10
ARTICLE 5 COVENANTS OF AMNI 10
SECTION 5.1. Access 10
SECTION 5.2. Ordinary Conduct 10
(a) Common Stock 10
(b) Dividends 10
(c) Redemption or Acquisition of Capital Stock 10
(d) Stock Issuances 11
(e) Reorganizations 11
(f) Asset Dispositions 11
(g) Charter and Bylaws 11
(h) Agreements 11
SECTION 5.3. Acquisition of Additional Shares of Common
Stock by Times Mirror; Shareholder Approval 11
ARTICLE 6 MUTUAL COVENANTS 11
SECTION 6.1. Publicity 11
SECTION 6.2. Further Assurances 12
ARTICLE 7 TERMINATION; AMENDMENT; WAIVER 12
SECTION 7.1. Termination 12
SECTION 7.2. Effects of Termination 12
ARTICLE 8 INDEMNIFICATION 13
SECTION 8.1. Indemnification 13
(a) Indemnification by AMNI 13
(b) Indemnification by Times Mirror 13
SECTION 8.2. Losses Net of Insurance 13
SECTION 8.3. Termination of Indemnification 13
SECTION 8.4. Claims for Indemnification 13
SECTION 8.5. Defense of Claims 14
ARTICLE 9 MISCELLANEOUS 15
SECTION 9.1. Expenses 15
SECTION 9.2. Attorneys' Fees 15
SECTION 9.3. Assignment 15
SECTION 9.4. No Third-Party Beneficiaries 15
SECTION 9.5. Notices 15
SECTION 9.6. Counterparts; Facsimile 16
SECTION 9.7. Entire Agreement 16
SECTION 9.8. Severability 16
SECTION 9.9. Amendment 17
SECTION 9.10. Extension; Waiver 17
SECTION 9.11. Dispute Resolution; Equitable Enforcement 17
(a) Arbitration 17
(b) Equitable Enforcement 17
SECTION 9.12. Interpretation of this Agreement 18
(a) Construction 18
(b) Governing Law 18
(c) Headings, Exhibits and Schedules 18
(d) Representation By Counsel; Interpretation 18
TABLE OF EXHIBITS
Exhibit A Terms of Registration Rights Agreement
Exhibit B Terms of Shareholder Agreement
Exhibit C Terms of Strategic Agreements
Exhibit D Items to be Addressed in Opinion of Counsel to AMNI
TABLE OF SCHEDULES
3.1 Foreign Jurisdictions
3.3 AMNI Consents
3.5 Capitalization
TABLE OF DEFINED TERMS
Cross Reference
Term in Agreement Page
Agreement Preamble 1
AMNI Material Adverse Effect Section 3.1 4
AMNI Preamble 1
Applicable Laws Section3.9(a) 7
Benefit Plans Section 3.10 8
Closing Date Section 1.3 1
Closing Section 1.3 1
Code Section 3.10 8
Common Stock Section 3.5(a) 5
Contracts Section 3.3 4
Edelson Shares Section 2.3(f) 3
Edelson Stock Purchase Agreement Section 2.3(f) 3
Enforceability Exceptions Section 3.2 4
Environmental Law Section 3.9(d)(ii) 8
Exchange Act Section 3.6(a) 6
Hazardous Material Section 3.9(d)(i) 7
Losses Section 8.1(a) 13
NASDAQ Section 2.1(c) 2
Purchase Price Section 1.2 1
Registration Rights Agreement Section 2.3(e) 3
SEC Reports Section 3.6(a) 6
Securities Act Section 3.6(a) 6
Share or Shares Recitals 1
Shareholder Agreement Section 2.3(e) 3
Strategic Agreements Section 2.3(e) 3
Tax or Taxes Section 3.11(c)(i) 8
Tax Return Section 3.11(c)(ii) 8
Times Mirror Preamble 1
Transaction Documents Section 3.2 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of August 20,
1999 is by and between THE TIMES MIRROR COMPANY, a Delaware corporation ("Times
Mirror"), and ALTERNATE MARKETING NETWORKS, INC., a Michigan corporation
("AMNI").
RECITALS
WHEREAS, on the terms and subject to the conditions set forth herein, AMNI
desires to sell to Times Mirror, and Times Mirror desires to purchase from AMNI,
350,000 shares of common stock, no par value, of AMNI (individually, a "Share"
and collectively, the "Shares").
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and intending to be
legally bound hereby, Times Mirror and AMNI hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
SECTION 1.1. Purchase and Sale of the Shares. On the terms and subject
to the conditions of this Agreement, AMNI will sell, transfer and deliver to
Times Mirror, and Times Mirror will purchase from AMNI, free and clear of all
liens, claims, encumbrances, security interests, options, charges and
restrictions of any kind, the Shares.
SECTION 1.2. Purchase Price. In consideration of the sale, transfer and
delivery of the Shares, Times Mirror shall pay to AMNI one million, fifty
thousand dollars ($1,050,000) in cash (the "Purchase Price"), payable as set
forth in Section 1.3(a)(i).
SECTION 1.3. Closing. The closing of the purchase and sale of the Shares
(the "Closing") will take place on September 10, 1999 (the "Closing Date") at
the offices of Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los
Angeles, California 90071, unless another time, date or place is agreed to
in writing by the parties hereto.
(a) Times Mirror's Deliveries at Closing. At the Closing, Times
Mirror shall deliver to AMNI (i) by wire transfer (to a bank account designated
at least two business days prior to the Closing Date in writing by AMNI)
immediately available funds in an amount equal to the Purchase Price and (ii)
such other documents as are specifically required by this Agreement.
(b) AMNI's Deliveries at Closing. At the Closing, AMNI shall
deliver or cause to be delivered to Times Mirror (i) a certificate representing
the Shares and (ii) such other documents as are specifically required by this
Agreement.
ARTICLE 2
CONDITIONS TO CLOSING
SECTION 2.1. Conditions to All Parties' Obligations. The respective
obligations of the parties hereto to consummate the Closing shall be subject to
the satisfaction (or waiver by each party in writing) on or before the Closing
Date of the following conditions:
(a) Governmental Approvals. Any notice or approvals to or of any
federal, state or foreign governmental authority with respect to the
transactions contemplated hereby shall have been either filed or received.
(b) No Order. No federal, state or foreign governmental
authority or other agency or commission or court of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, injunction or other order (whether temporary, preliminary or
permanent) which remains in effect, and which has the effect of making the
transactions contemplated hereby illegal or otherwise prohibiting consummation
of the transactions contemplated by this Agreement.
(b) Listed on NASDAQ. The Common Stock of AMNI shall not have
ceased trading on or been delisted from the NASDAQ SmallCap Market ("NASDAQ"),
and no event shall have occurred which would cause the Common Stock of AMNI to
cease trading on or to be delisted from NASDAQ.
SECTION 2.2. Conditions to AMNI's Obligations. The obligations of AMNI
to consummate the Closing are subject to the satisfaction (or waiver by AMNI in
writing) on or before the Closing Date of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of Times Mirror made in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and,
except as specifically contemplated by this Agreement, on and as of the Closing
Date, as though made on and as of the Closing Date, and Times Mirror shall have
performed or complied with, or shall have caused to be performed or complied
with, in all material respects all obligations and covenants required by this
Agreement to be performed or complied with by Times Mirror by the time of the
Closing; and AMNI shall have received from Times Mirror a certificate dated the
Closing Date and signed by an authorized officer of Times Mirror confirming the
foregoing.
SECTION 2.3. Conditions to Times Mirror's Obligations. The obligations
of Times Mirror to consummate the Closing are subject to the satisfaction (or
waiver by Times Mirror in writing) on or before the Closing Date of the
following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of AMNI made in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and on and as
of the Closing Date, as though made on and as of the Closing Date, and AMNI
shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by AMNI or any affiliate of AMNI by the time of the Closing; and
Times Mirror shall have received from AMNI a certificate dated the Closing Date
and signed by an authorized officer of AMNI confirming the foregoing.
(b) Certificate of Good Standing. Times Mirror shall have
received from AMNI a certificate as to AMNI issued by the Secretary of State of
the State of Michigan and the appropriate governmental authority of each other
state in which AMNI is qualified to do business, evidencing its good standing
in each such state as of a date not more than ten days prior to the Closing
Date.
(c) Resolutions. Times Mirror shall have received from AMNI
certified copies of resolutions duly adopted by the Board of Directors of AMNI
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, and all such resolutions
shall not have been revoked and shall remain in full force and effect.
(d) Third-Party Consents. AMNI shall have obtained in writing
any third-party consents required under any of the Contracts that are indicated
with an asterisk on Schedule 3.3 to which AMNI is a party.
(e) Ancillary Agreements. AMNI shall have executed and delivered
to Times Mirror (i) a Registration Rights Agreement (the "Registration Rights
Agreement"), consistent with the terms and conditions set forth on Exhibit A,
dated as of the Closing Date, (ii) a Shareholder Agreement (the "Shareholder
Agreement"), consistent with the terms and conditions set forth on Exhibit B,
dated as of the Closing Date, and (iii) one or more strategic agreements
(collectively, the "Strategic Agreements") based on the terms and conditions
set forth in Exhibit C.
(f) Edelson Stock Purchase Agreement. That certain Stock
Purchase Agreement (the "Edelson Stock Purchase Agreement") by and between
Times Mirror and Edelson Technology Partners II, L.P., a Delaware limited
partnership, dated as of the date hereof, with respect to the purchase by Times
Mirror of 339,552 shares of Common Stock held by Edelson Technology Partners
II, L.P. (the "Edelson Shares"), shall have been executed and delivered by
the other party thereto, on terms mutually acceptable to the parties thereto.
(g) Legal Opinion. Times Mirror shall have received the opinions
of Moss & Barnett, legal counsel to AMNI, and Bergesen and Clark, PLC, special
counsel to AMNI as to matters of Michigan law, as to the matters set forth in
Exhibit D.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF AMNI
AMNI hereby represents and warrants to Times Mirror as follows:
SECTION 3.1. Organization and Good Standing of AMNI. AMNI and each of its
subsidiaries is a corporation duly organized and validly existing under the
laws of its incorporation. Each of AMNI and each of its subsidiaries has all
requisite corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to carry on its business as presently conducted other than such
franchises, licenses, permits, authorizations and approvals, the lack of which
would not, individually or in the aggregate, have a material adverse effect on
the business, financial condition, prospects or results of operations of AMNI
and its subsidiaries, taken as a whole (an "AMNI Material Adverse Effect").
Each of AMNI and each of its subsidiaries is duly qualified and in good
standing to do business in the jurisdictions set forth on Schedule 3.1, which
jurisdictions constitute each jurisdiction in which the nature of its business
or the ownership, leasing or holding of its properties makes such qualification
necessary, except such jurisdictions where the failure be so qualified or in
good standing would not have an AMNI Material Adverse Effect.
SECTION 3.2. Authority. AMNI has all requisite corporate power and
authority to execute and deliver this Agreement, the Registration Rights
Agreement, the Shareholder Agreement and the Strategic Agreements
(collectively, the "Transaction Documents") and to consummate the transactions
contemplated hereby and thereby. All necessary corporate action required to
have been taken by or on behalf of AMNI by applicable law or its charter
documents has been taken to authorize (a) the approval, execution and delivery
on behalf of AMNI of the Transaction Documents and (b) the performance by AMNI
of its obligations under the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby. Each of the Transaction
Documents constitutes a valid and binding agreement of AMNI, enforceable
against it in accordance with its terms, except (i) as the same may be limited
by applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (ii) for the limitations imposed by general principles of
equity (the foregoing exceptions set forth in clauses (i) and (ii) being
referred to as the "Enforceability Exceptions").
SECTION 3.3. No Breach. The execution and delivery of each of the
Transaction Documents by AMNI do not, and the consummation of the transactions
to which AMNI is a party contemplated hereby and thereby will not, (i) violate
or conflict with the Articles of Incorporation or Bylaws of AMNI or (ii) except
as set forth on Schedule 3.3 hereto, constitute a material breach or default or
give rise to any lien, third-party right of termination, cancellation, material
modification or acceleration under any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which AMNI or
any of its subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound (collectively, "Contracts"), or
violate or conflict with any law, rule or regulation to which AMNI or any of
its subsidiaries or any material portion of AMNI's or any of its subsidiaries'
assets is subject.
SECTION 3.4. Consents and Approvals. Neither the execution and delivery
of the Transaction Documents by AMNI nor the consummation of the transactions
to which AMNI is a party contemplated hereby or thereby will require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification would not have an AMNI Material Adverse Effect.
SECTION 3.5. Capital Stock of AMNI.
(a) Authorized Capital Stock of AMNI. The authorized capital
stock of AMNI consists of 8,000,000 shares of common stock, no par value
("Common Stock") of which, as of August 20, 1999, 3,809,677 shares of Common
Stock were issued and outstanding, and 2,000,000 shares of preferred stock, no
par value, none of which have been issued or are outstanding. All of the
shares of Common Stock are duly authorized and validly issued and
outstanding, fully paid and nonassessable. Except for the outstanding shares
of Common Stock and except as set forth on Schedule 3.5, there are no shares of
capital stock or other equity securities of AMNI outstanding. The shares of
Common Stock have not been issued in violation of, and none of the shares of
Common Stock is subject to, any preemptive or subscription rights. Except as
set forth on Schedule 3.5, there are no outstanding warrants, options,
"phantom" stock rights, agreements, convertible or exchangeable securities or
other commitments (other than this Agreement) pursuant to which AMNI is or may
become obligated to issue, sell, purchase, return or redeem any shares of
capital stock or other securities of AMNI, and no equity securities of
AMNI are reserved for issuance for any purpose. AMNI is not a party to any
agreement pursuant to which the shares of Common Stock are subject to any
voting trust agreement or other contract, agreement, arrangement, commitment
or understanding restricting or otherwise relating to the voting, dividend
rights or disposition of the shares of Common Stock other than (i) this
Agreement and (ii) certain options to purchase Common Stock granted by the
shareholders of AMNI to certain third parties.
(b) Subsidiaries. All of the outstanding capital stock of AMNI's
subsidiaries is owned by AMNI, free and clear of any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other limitation
or restriction. All of the shares of capital stock of each of AMNI's
subsidiaries are duly authorized and validly issued and outstanding, fully paid
and nonassessable. Except for the outstanding shares of the capital stock of
each subsidiary and except as set forth on Schedule 3.5, there are no shares of
capital stock or other equity securities of any of AMNI's subsidiaries
outstanding. The shares of capital stock of each of AMNI's subsidiaries have
not been issued in violation of, and none of such shares of capital stock is
subject to, any preemptive or subscription rights. Except as set forth on
Schedule 3.5, there are no outstanding warrants, options, "phantom" stock
rights, agreements, convertible or exchangeable securities or other commitments
pursuant to which any of AMNI's subsidiaries is or may become obligated to
issue, sell, purchase, return or redeem any shares of capital stock or
other securities of such subsidiary, and no equity securities of such
subsidiary are reserved for issuance for any purpose. The shares of capital
stock of each of AMNI's subsidiaries are not subject to any voting trust
agreement or other contract, agreement, arrangement, commitment or
understanding, including any such agreement, arrangement, commitment or
understanding restricting or otherwise relating to the voting, dividend rights
or disposition of the shares of such capital stock.
(c) Registered Common Stock. The Common Stock constitutes the
only class of equity securities of AMNI or its subsidiaries registered or
required to be registered under the Exchange Act.
(d) Shares. The Shares, when issued and sold to Times Mirror, in
accordance with the terms of this Agreement and against payment therefore as
described herein, will be duly and validly issued, fully paid and nonassessable.
(e) No Appraisal Rights. The holders of shares of Common Stock
shall not be entitled to appraisal rights as a result of the consummation of
the sale of the Shares by AMNI to Times Mirror as contemplated by this
Agreement.
SECTION 3.6. SEC Reports; Financial Statements.
(a) SEC Reports; Audited Financial Statements. AMNI has filed
all required forms, reports and documents ("SEC Reports") with the SEC since
December 31, 1995, each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), each as in effect on the dates such forms, reports and
documents were filed. None of such SEC Reports, including, without limitation,
any financial statements or schedules included or incorporated by reference
therein, contained when filed any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein in light
of the circumstances under which they were made not misleading. The audited
consolidated financial statements of AMNI included in the SEC Reports were
prepared in accordance with GAAP and present fairly the consolidated financial
position of AMNI and its consolidated subsidiaries as of the dates thereof
and their consolidated results of operations and changes in financial position
for the periods then ended.
(b) Amendments to SEC Reports. AMNI has heretofore made available
or promptly will make available to Times Mirror a complete and correct copy of
any amendments or modifications which are required to be filed with the SEC but
have not yet been filed with the SEC to any SEC Reports.
SECTION 3.7. Litigation; Decrees. As of the date of this Agreement,
there are no pending and, to the knowledge of AMNI, threatened, lawsuits or
claims with respect to which AMNI or any of its subsidiaries has contacted in
writing the defendant or has been contacted in writing by the claimant or by
counsel for the claimant by or against AMNI or any of its subsidiaries or any
of the properties, assets, operations or businesses or AMNI or any of its
subsidiaries and which (a) involve a claim by or against AMNI or any of its
subsidiaries of more than $50,000, (b) seek any injunctive relief or (c) relate
to the transactions contemplated by this Agreement. Except as publicly
disclosed by AMNI in the SEC Reports, neither AMNI nor any of its
subsidiaries is in default under any judgment, order or decree of any court,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, applicable to AMNI or any of its
subsidiaries or any of the properties, assets, operations or
businesses of AMNI or any of its subsidiaries, except where such default would
not have an AMNI Material Adverse Effect.
SECTION 3.8. Absence of Changes or Events. Except as publicly disclosed
by AMNI in the SEC Reports, since June 30, 1999, there has not been an AMNI
Material Adverse Effect, other than changes relating to the economy in
general or the industries in which AMNI conducts its business in general and
not specifically relating to AMNI. Except as contemplated by this
Agreement, since June 30, 1999, the business of AMNI and its subsidiaries has
been conducted in the ordinary course.
SECTION 3.9. Compliance with Applicable Laws.
(a) General. AMNI and each of its subsidiaries is in compliance
with all applicable statutes, laws, ordinances, rules, orders and regulations
of any governmental authority or instrumentality, domestic or foreign
(collectively, "Applicable Laws"), except for any such incidents of
noncompliance that would not have an AMNI Material Adverse Effect. This
Section 3.9 does not relate to matters with respect to Taxes or any other
taxes, which are the subjects of Section 3.11. This Section 3.9(a) does not
relate to environmental matters, which are the subjects of Sections 3.9(b),
3.9(c) and 3.9(d).
(b) Hazardous Materials. There has been no release of any
Hazardous Material to soil or water originating at, on, or from any of the real
property of AMNI during the period that AMNI or any of its divisions or
subsidiaries has owned, operated on or leased such real property,
except for any such releases that would not have an AMNI Material Adverse
Effect.
(c) Notices of Certain Environmental Matters. AMNI has not
received written notice of any alleged violation of Environmental Law or
liability for any release of any Hazardous Material in connection with the
present or past business or properties of AMNI or any of its subsidiaries,
and there exists no writ, injunction, decree, order or judgment outstanding,
nor any lawsuit, proceeding, citation, summons or government agency
investigation relating thereto, except for any such matters that would not have
an AMNI Material Adverse Effect.
(d) Definitions. For purposes of Sections 3.9(b) and 3.9(c):
(i) "Hazardous Material" means any chemical substance the
presence of which requires investigation or remediation under any federal,
state or local statute, regulation, ordinance, order, or common law; or which
is defined as a "hazardous waste" or "hazardous substance" under any federal,
state or local statute, regulation or ordinance, including the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section
9601 et seq.) or the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.); or which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated
as such by any governmental authority, agency, department, commission, board,
agency or instrumentality of the United States or state or any political
subdivision thereof.
(ii) "Environmental Law" means any applicable statute,
regulation, rule, ordinance, code, license or order, of any governmental
agency, department, commission, board, bureau or instrumentality of the United
States, states and political subdivisions thereof and all applicable judicial
and administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment with respect to Hazardous
Materials.
SECTION 3.10. Employee Benefit Plans. With respect to each employee
benefit plan, program, arrangement and contract (including, without limitation,
any "employee benefit plan," as defined in Section 3(3) of ERISA) maintained or
contributed to by AMNI or any of its subsidiaries or with respect to which AMNI
or any of its subsidiaries could incur liability under Section 4069, 4212(c)
or 4204 of ERISA (the "Benefit Plans") no event has occurred and, to the
knowledge of AMNI, there currently exists no condition or set of circumstances
in connection with which AMNI or any of its subsidiaries could be subject to
any liability under the terms of the Benefit Plans, ERISA, the Internal Revenue
Code of 1986, as amended (the "Code" or any other Applicable Law which would
have an AMNI Material Adverse Effect.
SECTION 3.11. Taxes.
(a) Tax Returns and Taxes. Except as publicly disclosed in the
SEC Reports, AMNI and its subsidiaries have filed or caused to be filed in a
timely manner (within any applicable extension periods) with the appropriate
Tax authorities all Tax Returns they are required to have filed and have paid
or provided for all Taxes they are required to have paid, except where the
failure to have filed such a Tax Return or paid or provided for such Taxes
would not have an AMNI Material Adverse Effect. Except as publicly disclosed
in the SEC Reports, there are no material Tax liens or assessments against AMNI
or any property or assets of AMNI , other than liens for Taxes that are not due
and payable or which may thereafter be paid without penalty.
(b) Tax Claims. Except as publicly disclosed in the SEC Reports,
no material claim for assessment or collection of Taxes is presently being
asserted against AMNI or any of its subsidiaries and neither AMNI nor any of
its subsidiaries is a party to any pending action, proceeding, or investigation
by any governmental taxing authority nor does AMNI have knowledge of any such
threatened action, proceeding or investigation.
(c) Definitions. For purposes of this Agreement:
(i) "Tax" (including "Taxes") means all federal, state,
local, foreign and other net income, gross income, gross receipts, sales, use,
ad valorem, transfer, franchise, profits, license, lease, withholding, payroll,
employment, excise, stamp, premium, property or other taxes of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts with respect thereto; and
(ii) "Tax Return" means any return, report, statement
or information statement required to be filed with respect to Taxes.
SECTION 3.12. Brokers. No broker, finder or investment banker is
entitled to any brokerage finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of AMNI.
SECTION 3.13. Year 2000. All of the material computer software, computer
firmware, computer hardware (whether general or special purpose), and other
similar or related items of automated, computerized, and/or software system(s)
that are used or relied on by each of AMNI and each of its subsidiaries in the
operation of its business will not malfunction, will not cease to function,
will not generate incorrect data, and will not produce incorrect results when
processing, providing, and/or receiving (a) date-related data into and between
the twentieth and twenty-first centuries and (b) date-related data in
connection with any valid date in the twentieth and twenty-first centuries.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF TIMES MIRROR
Times Mirror hereby represents and warrants to AMNI as follows:
SECTION 4.1. Organization and Good Standing of Times Mirror. Times
Mirror is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Times Mirror has all requisite
corporate power and authority and, to the knowledge of Times Mirror, possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to carry on its business as presently conducted other
than such franchises, licenses, permits, authorizations and approvals the lack
of which would not prevent Times Mirror from performing its obligations under
the Transaction Documents.
SECTION 4.2. Authority. Times Mirror has all requisite corporate power
and authority to execute and deliver the Transaction Documents and to
consummate the transactions to which Times Mirror is a party contemplated
hereby and thereby. All necessary corporate action required to have been
taken by or on behalf of Times Mirror by applicable law or its charter
documents has been taken to authorize (a) the approval, execution and delivery
on behalf of Times Mirror of the Transaction Documents and (b) the performance
by Times Mirror of its obligations under the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby. Each of
the Transaction Documents constitutes a valid and binding agreement of Times
Mirror, enforceable against it in accordance with its terms, except as the same
may be limited by the Enforceability Exceptions.
SECTION 4.3. No Breach. The execution and delivery of the Transaction
Documents by Times Mirror do not, and the consummation of the transactions to
which Times Mirror is a party contemplated hereby and thereby will not, (a)
violate or conflict with the Certificate of Incorporation or Bylaws of Times
Mirror or (b) constitute a breach or default or give rise to any lien,
third-party right of termination, cancellation, material modification or
acceleration under any material agreement, understanding or undertaking to
which Times Mirror is a party or by which it is bound, or violate or conflict
with any law, rule or regulation to which it or any material portion
of its assets is subject, other than such violations, conflicts, breaches,
defaults, liens or third-party rights, the existence of which would not prevent
Times Mirror from performing its obligations under the Transaction Documents.
SECTION 4.4. Consents and Approvals. Neither the execution and delivery
of the Transaction Documents by Times Mirror nor the consummation of the
transactions to which Times Mirror is a party contemplated hereby and thereby
will require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, except where the
failure to obtain such consent, approval, authorization or permit, or to
make such filing or notification, would not prevent Times Mirror from
performing its obligations under the Transaction Documents.
SECTION 4.5. Brokers. No broker, finder or investment banker is entitled
to any brokerage finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Times Mirror.
SECTION 4.6. Acquisition of Additional Stock. Times Mirror does not have
any present intention to acquire, either directly or through any of its
affiliates (as such term is defined under the Securities Act), shares of Common
Stock in an amount which, in the aggregate, would result in ownership by Times
Mirror and its affiliates of 45% or more of the Common Stock of AMNI.
ARTICLE 5
COVENANTS OF AMNI
SECTION 5.1. Access. Prior to the Closing, AMNI and its officers,
directors, employees, advisors, representatives and authorized agents will
provide Times Mirror and its representatives, employees, counsel and
accountants, reasonable access to the personnel, properties, books and
records of AMNI.
SECTION 5.2. Ordinary Conduct. Except as contemplated by this Agreement,
from the date of this Agreement to the Closing Date, AMNI will conduct its
business in the ordinary course in substantially the same manner as presently
conducted and will make all reasonable efforts substantially consistent with
past practices to preserve its relationships with customers, suppliers
and others with whom AMNI deals. Except as contemplated by this Agreement,
from the date of this Agreement to the Closing Date, AMNI will not do any of
the following, without the prior written consent of Times Mirror:
(a) Common Stock. Take any action that would result in a failure
to maintain the trading of the Common Stock on NASDAQ;
(b) Dividends. Declare, set aside or pay any dividend or other
distribution in respect of its capital stock;
(c) Redemption or Acquisition of Capital Stock. Redeem or
otherwise acquire any shares of its capital stock;
(d) Stock Issuances. Authorize for issuance, issue, sell,
deliver or agree or commit to issue sell or deliver (whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights
to purchase or otherwise) any stock of any class or any other securities or
equity equivalents (including, without limitation, any stock options or stock
appreciation rights) of AMNI or any of its subsidiaries, except for (i) the
issuance and sale of shares of Common Stock pursuant to options previously
granted under any stock option plans of AMNI and (ii) the issuance of options
to purchase shares of Common Stock of AMNI currently reserved for issuance and
available under its 1995 Long-Term Incentive and Stock Plan and its 1995
Outside Directors and Advisors Stock Plan, as in effect as of the date of this
Agreement;
(e) Reorganizations. Acquire or agree to acquire by merging or
consolidating with, by purchasing an equity interest in or the assets of, or by
any other manner, any business or any corporation, partnership or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other entity (other than the purchase of assets from
suppliers, clients or vendors in the ordinary course of business and consistent
with past practice);
(f) Asset Dispositions. Sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets, except in the
ordinary course of business and except for sales, leases or dispositions of
assets that, in the aggregate, have a value of less than $50,000;
(g) Charter and Bylaws. Adopt or propose to adopt any amendments
to its charter documents which would have an adverse impact on the consummation
of the transactions contemplated by this Agreement; or
(h) Agreements. Agree, whether in writing or otherwise, to do
any of the foregoing.
SECTION 5.3. Acquisition of Additional Shares of Common Stock by Times
Mirror; Shareholder Approval. If Times Mirror desires to acquire shares of
Common Stock of AMNI in addition to the Shares and the Edelson Shares, AMNI
shall use its best efforts to assist Times Mirror in acquiring such additional
shares of Common Stock of AMNI from AMNI's shareholders, including but not
limited to (a) promptly preparing and filing any documents with the SEC in
connection with the commencement of any tender offer by Times Mirror, and (b)
promptly seeking the approval of AMNI's shareholders of any such purchase by
Times Mirror in accordance with the Michigan Control Share Acquisition Act.
ARTICLE 6
MUTUAL COVENANTS
SECTION 6.1. Publicity. Times Mirror and AMNI agree that, from the date
of this Agreement through the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued by any party
without the prior consent of each other party (which consent shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the rules or regulations of any United States securities exchange,
NASDAQ, or the Securities and Exchange Commission, in which case the party
required to make the release or announcement shall allow each other party
reasonable time to comment on such release or announcement in advance of such
issuance.
SECTION 6.2. Further Assurances. From time to time, as and when
requested by any party hereto, the other parties shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and
shall take, or cause to be taken, all such further or other actions as such
requesting party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement.
ARTICLE 7
TERMINATION; AMENDMENT; WAIVER
SECTION 7.1. Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by mutual written consent of Times Mirror and AMNI;
(b) by Times Mirror and AMNI if (i) any federal, state or foreign
governmental authority or other agency or commission or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
order, decree or ruling which remains in effect, and which has the effect of
making the transactions contemplated hereby illegal or otherwise prohibiting
consummation of the transactions contemplated by this Agreement and such order,
decree, ruling or other action is or shall have become nonappealable; (ii) the
Closing has not occurred by 60 days after the date hereof, provided that no
party may terminate this Agreement pursuant to this clause (ii) if such party's
failure to fulfill any of its obligations under this Agreement shall have been
the reason that the Closing Date shall not have occurred on or before said
date; or (iii) if the Common Stock has been delisted from NASDAQ;
(c) by Times Mirror if (i) there shall have been a breach of any
representation or warranty on the part of AMNI set forth in this Agreement or
if any representation or warranty of AMNI shall have become untrue, provided
that Times Mirror has not breached any of its obligations hereunder; or (ii)
there shall have been a breach by AMNI of any of its covenants or agreements
hereunder, provided that Times Mirror has not breached any of obligations
hereunder; or
(d) by AMNI, if (i) there shall have been a breach of any
representation or warranty on the part of Times Mirror set forth in this
Agreement or if any representation or warranty of Times Mirror shall have
become untrue, provided that AMNI has not breached any of its obligations
hereunder; or (ii) there shall have been a breach by Times Mirror of any of its
covenants or agreements hereunder, provided that AMNI has not breached any of
obligations hereunder.
SECTION 7.2. Effects of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned pursuant to Section 7.1,
this Agreement shall become void and of no further force and effect, except for
the provisions of (a) Section 6.1 relating to publicity, (b) Section 9.1
relating to expenses generally, (c) Section 9.2 relating to attorneys' fees
and expenses, (d) Section 9.5 relating to notices, (e) Section 9.11 relating to
arbitration and consent to jurisdiction and (f) this Article 7. Nothing in
this Article 7 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1. Indemnification.
(a) Indemnification by AMNI. AMNI shall indemnify Times Mirror
and its officers, directors, employees and agents against and hold them
harmless from any and all damage, loss (including any diminution in the value
of the assets of AMNI), liability and expense (including reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with
any action, suit or proceeding) ("Losses") suffered or incurred by any such
indemnified party to the extent arising from (i) any failure of any
representation or warranty of AMNI to be true and correct as of the Closing
Date or (ii) any breach by AMNI of any covenant contained in this Agreement
requiring performance after the Closing Date.
(b) Indemnification by Times Mirror. Times Mirror shall
indemnify AMNI and its officers, directors, employees and agents against and
hold them harmless from any and all Losses suffered or incurred by any such
indemnified party to the extent arising from (i) any failure of any
representation or warranty of Times Mirror to be true and correct as of the
Closing Date or (ii) any breach by Times Mirror of any covenant contained in
this Agreement requiring performance after the Closing Date.
SECTION 8.2. Losses Net of Insurance. The amount of any Losses for which
indemnification is provided under this Article 8 shall be net of any amounts
recovered or recoverable by the indemnified party under insurance policies with
respect to such Losses.
SECTION 8.3. Termination of Indemnification. The obligations to
indemnify and hold harmless a party hereto, (a) pursuant to clause (a) of
Section 8.1 shall terminate when the applicable statute of limitations expires
and (b) pursuant to clause (b) of Section 8.1 shall not terminate; provided,
however, that as to clause (a) above, such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the person to
be indemnified or the related party hereto shall have, before the expiration of
the applicable period, previously made a claim by delivering a notice (setting
forth the detailed basis of such claim) to the indemnifying party.
SECTION 8.4. Claims for Indemnification. If any party shall believe that
such party (the "Indemnitee") is entitled to indemnification pursuant to this
Article 8 in respect of any Losses, such Indemnitee shall give the appropriate
indemnifying party (the "Indemnifying Party") prompt written notice thereof.
Any such notice shall set forth in reasonable detail and to the extent then
known the basis for such claim for indemnification. The failure of such
Indemnitee to give notice of any claim for indemnification promptly shall not
adversely affect such Indemnitee's right to indemnity hereunder except to the
extent that such failure adversely affects the right of the Indemnifying Party
to assert any reasonable defense to such claim. The Indemnifying Party shall
have twenty (20) business days following its receipt of such notice either (a)
to acquiesce in such claim and their respective responsibilities to indemnify
the Indemnitee in respect thereof in accordance with the terms of this Article
8 by giving such Indemnitee written notice of such acquiescence or (b) to
object to the claim by giving such Indemnitee written notice of the objection.
If the Indemnifying Party does not object thereto within such twenty (20)
business day period, such Indemnifying Party shall be deemed to have acquiesced
in such claim and their respective responsibilities to indemnify the Indemnitee
in respect thereof in accordance with the terms of this Article 8.
SECTION 8.5. Defense of Claims.
(a) In connection with any claim which may give rise to indemnity
under this Article 8 resulting from or arising out of any claim or proceeding
against an Indemnitee by a person that is not a party hereto, the Indemnifying
Party shall have the right to, upon written notice sent at any time to the
Indemnitee, participate in or assume control of the defense of such claim or
proceeding, at its own expense, and shall take all steps reasonably necessary
in the defense or settlement thereof and shall at all times diligently and
promptly pursue the resolution thereof. Such Indemnitee shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by such Indemnitee as the result of a request by the
Indemnifying Party. Such Indemnitee shall have the right to approve legal
counsel selected by the Indemnifying Party, which approval shall not be
unreasonably withheld. If the Indemnifying Party elects to assume control of
the defense of any third-party claim or proceeding, such Indemnitee shall have
the right to participate in the defense of such claim or proceeding with
legal counsel of its own selection; provided, however, that such Indemnitee
shall pay the fees and expenses of such counsel unless the named parties to any
such claim or proceeding include both such Indemnitee and the Indemnifying
Party and such Indemnitee has been advised by legal counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party (in which case, if such
Indemnitee informs the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of such claim or
proceeding on behalf of such Indemnitee), it being understood that the
Indemnifying Party shall not, in connection with any one claim or proceeding,
be liable for the fees and expenses of more than one separate firm of attorneys
at any time for such Indemnitee.
(b) If the Indemnifying Party does not elect to assume control or
otherwise participate in the defense of any third-party claim or proceeding, it
shall be bound by the results obtained by such Indemnitee with respect to such
claim or proceeding; provided, however, that no settlement or compromise of any
claim which may result in any indemnification liability may be made by such
Indemnitee without the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. No settlement or
compromise of any claim may be made by the Indemnifying Party without the prior
written consent of such Indemnitee. In the event that such Indemnitee provides
written consent to the Indemnifying Party with respect to the settlement or
resolution of any claim by the Indemnifying Party, the Indemnifying Party shall
pay or cause to be paid all amounts arising out of such settlement or judgment
either concurrently with the effectiveness thereof or shall obtain and deliver
to such Indemnitee prior to the execution of such settlement a general release
executed by the third-party claimant, which general release shall release such
Indemnitee from any liability in such matter.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Expenses. Whether or not the transactions contemplated
hereby are consummated, and except as otherwise provided in this Agreement, all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
fees, costs or expenses.
SECTION 9.2. Attorneys' Fees. Should any arbitration or litigation be
commenced concerning this Agreement or the rights and duties of any party with
respect to it, the party prevailing shall be entitled, in addition to such
other relief as may be granted, to a reasonable sum for such party's attorneys'
fees and expenses determined by the court in such arbitration or litigation
or in a separate action brought for that purpose.
SECTION 9.3. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Times Mirror or AMNI
without the prior written consent of the other parties hereto; provided,
however, that Times Mirror shall be permitted to assign this Agreement or
any of its rights, interests or obligations hereunder to any of its affiliates
without the prior written approval or any other party; and provided, further,
however, that no assignment shall limit or affect the assignor's obligations
hereunder.
SECTION 9.4. No Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any person or
entity, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
SECTION 9.5. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent prepaid telecopy, or sent, postage prepaid, by registered,
certified or express mail, or reputable overnight courier service and shall be
deemed given when so delivered by hand or telecopied, or if mailed, three
days after mailing (one business day in the case of express mail or overnight
courier service), as follows:
(i) if to AMNI,
One Ionia S.W., Suite 300
Grand Rapids, MI 49503
Attention: Phillip D. Miller
Telecopier No.: (616) 235-3405
with a copy to:
Moss & Barnett, a Professional Association
4800 Norwest Center, 90 South 7th Street
Minneapolis, MN 55402
Attention: Janna R. Severance
Telecopier No.: (612) 339-6686
(ii) if to Times Mirror,
One Times Mirror Square
Los Angeles, California 90053
Attention: Edward L. Blood
Telecopier No.: (213) 237-3917
with a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: Peter F. Ziegler, Esq.
Telecopier No.: (213) 229-6595
SECTION 9.6. Counterparts; Facsimile. This Agreement may be executed and
delivered in one or more counterparts and via facsimile, all of which shall be
considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered or
faxed to the other party.
SECTION 9.7. Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto) contains the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to such subject matter.
SECTION 9.8. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision hereof.
SECTION 9.9. Amendment. This Agreement may be amended by action taken by
Times Mirror and AMNI at any time only by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 9.10. Extension; Waiver. At any time prior to the Closing Date,
any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of any other party, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document, certificate or writing delivered pursuant hereto or (c) waive
compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of such party. The failure of any party hereto
to assert any of its rights hereunder shall not constitute a waiver of such
rights.
SECTION 9.11. Dispute Resolution; Equitable Enforcement.
(a) Arbitration. Except as otherwise provided in Section
9.11(b), any controversy, dispute or claim arising under this Agreement shall
be settled by arbitration conducted in New York, New York in accordance with
the rules of the American Arbitration Association as then in effect and
judgment upon any award rendered by the arbitrator may be entered by any
federal or state court having jurisdiction thereof. Any such arbitration shall
be conducted by a single arbitrator who shall be a retired judge of any
appellate or trial court of the State of New York, any United States appellate
court or the United States District Court for any New York district. The
parties intend that this agreement to arbitrate be valid, enforceable and
irrevocable.
(b) Equitable Enforcement. Notwithstanding anything to the
contrary contained in this Section 9.11, any claim by either party for
injunctive or other equitable relief, including specific performance (including
the agreement to arbitrate contained in Section 9.11(a)), may be brought in
the Supreme Court of the State of New York, New York County, or in the United
States District Court for the Southern District of New York before or as a
result of arbitration, and any judgment, order or decree relating thereto shall
have precedence over any arbitral award or proceeding. Each of Times Mirror
and AMNI irrevocably submits to the exclusive jurisdiction of (i) the Supreme
Court of the State of New York, New York County, and (ii) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of Times Mirror and AMNI agrees to
commence any action, suit or proceeding relating hereto either in the
United States District Court for the Southern District of New York or, if, for
jurisdictional reasons, such suit, action or other proceeding may not be
brought in such court, in the Supreme Court of the State of New York, New York
County. Each of Times Mirror and AMNI further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth in Section 9.5 above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each of Times Mirror and AMNI irrevocably and
unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (x) the Supreme Court of the State of New York, New York
County, or (y) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 9.12. Interpretation of this Agreement.
(a) Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, "including" is not limiting
and "or" has the inclusive meaning represented by the phrase "and/or." The
words "hereof," "herein," "hereby," "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole (including the Preamble, the
Recitals, the Schedules and the Exhibits) and not to any particular provision
of this Agreement. Article, section, exhibit, schedule, recital and preamble
references in this Agreement are to those portions of this Agreement unless
otherwise specified.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
(c) Headings, Exhibits and Schedules. The headings contained in
this Agreement, in any Exhibit or Schedule hereto and in the Table of Contents
to this Agreement, are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Any capitalized terms
used in any Exhibit or Schedule but not otherwise defined therein shall have
the meaning as defined in this Agreement.
(d) Representation By Counsel; Interpretation. Times Mirror and
AMNI each acknowledges that each party to this Agreement has been represented
by counsel in connection with this Agreement and the transactions contemplated
by this Agreement. Accordingly, any rule of law, including Section 1654 of the
California Civil Code or any comparable provision of New York law, or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly
waived. The provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of Times Mirror and AMNI.
IN WITNESS WHEREOF, the parties have caused this Stock Purchase
Agreement to be duly executed as of the date first written above.
THE TIMES MIRROR COMPANY,
a Delaware corporation
By: /s/ Edward L. Blood
Name: Edward L. Blood
Title: Vice President- Strategic Planning
ALTERNATE MARKETING NETWORKS, INC.,
a Michigan corporation
By: /s/ Phillip D. Miller
Name: Phillip D. Miller
Title: Chairman and Chief Executive Officer
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1999 (UNAUDITED) AND THE
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<NAME> ALTERNATE MARKETING NETWORKS, INC.
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