Document:

Exhibit 10.22

 

TENTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT

 

This Tenth Amendment to Loan and Security Agreement (“Amendment”) is made as of the 12th day of
May, 2005 by and among ZOHAR II 2005-1, LIMITED, a Cayman Islands exempted
company (successor by assignment to LASALLE BUSINESS CREDIT, LLC) (“Lender”), PATRIARCH PARTNERS AGENCY
SERVICES, LLC, a Delaware limited liability company, as agent for the Lender
(the “Agent”), and STONEPATH
GROUP, INC., a Delaware corporation (“Stonepath”),
CONTRACT AIR, INC., a Minnesota corporation (“Contract Air”), DISTRIBUTION SERVICES, INC., a
Minnesota corporation (“Distribution
Services”), GLOBAL CONTAINER LINE, INC., a Washington
corporation (“Global Container”),
M.G.R., INC., d/b/a AIR PLUS LIMITED, a Minnesota corporation (“Air Plus”), NET VALUE, INC., a
Delaware corporation (“Net Value”), STONEPATH LOGISTICS DOMESTIC
SERVICES, INC., a Delaware corporation (“Logistics”),
STONEPATH LOGISTICS GOVERNMENT SERVICES, INC., f/k/a Transport Specialists, Inc.,
a Virginia corporation (“Government Services”),
STONEPATH LOGISTICS INTERNATIONAL SERVICES, INC., a Delaware corporation (“International Services I”), STONEPATH
LOGISTICS INTERNATIONAL SERVICES, INC., f/k/a Global Transportation
Services, Inc., a Washington corporation (“International Services II”), STONEPATH OFFSHORE
HOLDINGS, INC., a Delaware corporation (“Offshore
Holdings”), STONEPATH OPERATIONS INC., a Delaware corporation (“Operations”), and UNITED AMERICAN
ACQUISITIONS AND MANAGEMENT, INC. d/b/a UNITED AMERICAN FREIGHT
SERVICES, INC., a Michigan corporation (“United
American”, and together with Stonepath, Contract Air, Distribution
Services, Global Container, Air Plus, Net Value, Logistics, Government
Services, International Services I, International Services II, Offshore
Holdings and Operations are referred to herein collectively as the “Loan Parties” and each individually as a “Loan Party”).

 

BACKGROUND

 

A. Loan Parties and Lender are parties to a certain Loan and Security
Agreement dated May 15, 2002 (as it may heretofore have been or may
hereafter be from time to time modified, amended, restated or replaced, the “Loan Agreement”), pursuant to which Loan
Parties established certain financing arrangements with Lender. All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Loan Agreement.

 

B. Loan Parties and Lender have agreed that certain modification should
be made to the terms and provisions of the Loan Agreement on the terms and
conditions set forth in and according to the provisions of this Amendment.

 

NOW, THEREFORE, with the foregoing Background incorporated by reference
and made a part hereof and intending to be legally bound, the parties agree as
follows:

 

1.                                       Confirmation
of Indebtedness. Loan Parties confirm and agree that as of the close of
business on May 11, 2005, they are indebted to Lender under the Loan
Agreement and Other Agreements, without any deduction, defense, setoff, claim
or counterclaim of any nature whatsoever, in the aggregate principal amount of
$12,979,565.56 outstanding with respect to the principal amount of the
Revolving Credit Loans plus all
accrued interest, fees, costs and expenses (including attorneys’ fees) incurred
to date in connection with the Loan Agreement, Other Documents and related agreements.

 

2.                                       Amendments
to Loan Agreement. The Loan Agreement is hereby amended as follows:

 

a.                                       Amendments
to Definitions. Section 1
of the Loan Agreement shall be amended as follows:

 

(i)                                     The following new
definitions shall be added to Section 1
of the Loan Agreement in the appropriate alphabetical order:

 

“‘Tenth Amendment’ means the Tenth Amendment to Loan and Security
Agreement, dated as of May 12, 2005, among the Loan Parties, the Lender
and the Agent.”

 

 

“‘Tenth Amendment Date’ means the date on which the Tenth Amendment
becomes effective pursuant to the terms therein.”

 

(ii)                                  The definition of the
term “Projected Restructuring Charges” shall be amended to read in its entirety
as follows:

 

“‘Projected Restructuring Charges’ means the charges resulting from the
costs incurred by the Loan Parties in reducing their personnel, systems,
facilities and equipment in connection with their efforts to integrate their
businesses, estimated at the time of the Tenth Amendment Date to be an
aggregate of approximately $3,850,000 for the first three calendar quarters of
2005.”

 

b.                                      Amendment
to Use of Proceeds Provision. The last sentence of Section 12(g) of the Loan
Agreement is hereby amended to read in its entirety as follows:

 

“Notwithstanding anything to the contrary in the preceding sentence,
the Loan Parties shall not be permitted to use the proceeds of the Loans: (i) for
the payment of interest and principal with respect to any Subordinated Debt,
other than Subordinated Debt to Lender, its affiliates, or their successors or
assigns, or (ii) to finance in any way any action, suit, arbitration,
proceeding, application, motion or other litigation of any type adverse to the
interests of Lender and Agent or their rights and remedies under this Loan
Agreement or the Other Agreements.”

 

c.                                       Amendment
of Financial Covenants. Section 14(e) of
the Loan Agreement shall be deleted in its entirety and replaced with the
following (it being understood that for the purpose of calculations made in
respect of Section 14(e), Consolidated EBITDA shall exclude Projected
Restructuring Charges):

 

“(e) (1) Stonepath shall have a Consolidated EBITDA in the
following minimum amounts for the following periods:

 

	
  Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  3 months ended 3/31/05

  	
   

  	
  (2,036,000

  	
  )

  
	
  6 months ended 6/30/05

  	
   

  	
  (817,000

  	
  )

  
	
  9 months ended 9/30/05

  	
   

  	
  2,480,000

  	
   

  
	
  12 months ended 12/31/05

  	
   

  	
  6,246,000

  	
   

  
	
  12 months ended 3/31/06

  	
   

  	
  9,687,000

  	
   

  
	
  12 months ended 6/30/06

  	
   

  	
  9,909,000

  	
   

  
	
  12 months ended 9/30/06

  	
   

  	
  11,128,000

  	
   

  
	
  12 months ended 12/31/06

  	
   

  	
  11,634,000

  	
   

  
	
  12 months ended 3/31/07

  	
   

  	
  11,332,000

  	
   

  

 

2

 

(2) Stonepath shall have a Consolidated EBITDA, without taking
into account the performance and financial results of all Foreign Subsidiaries,
in the following minimum amounts for the following periods:

 

	
  Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  3 months ended 3/31/05

  	
   

  	
  (2,676,000

  	
  )

  
	
  6 months ended 6/30/05

  	
   

  	
  (2,289,000

  	
  )

  
	
  9 months ended 9/30/05

  	
   

  	
  (504,000

  	
  )

  
	
  12 months ended 12/31/05

  	
   

  	
  1,694,000

  	
   

  
	
  12 months ended 3/31/06

  	
   

  	
  5,015,000

  	
   

  
	
  12 months ended 6/30/06

  	
   

  	
  5,369,000

  	
   

  
	
  12 months ended 9/30/06

  	
   

  	
  6,620,000

  	
   

  
	
  12 months ended 12/31/06

  	
   

  	
  7,086,000

  	
   

  
	
  12 months ended 3/31/07

  	
   

  	
  6,676,000

  	
   

  

 

(3) Logistics shall have a Consolidated EBITDA in the following
minimum amounts for the following periods:

 

	
  Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  3 months ended 3/31/05

  	
   

  	
  (1,794,000

  	
  )

  
	
  6 months ended 6/30/05

  	
   

  	
  (1,776,000

  	
  )

  
	
  9 months ended 9/30/05

  	
   

  	
  (1,389,000

  	
  )

  
	
  12 months ended 12/31/05

  	
   

  	
  (77,000

  	
  )

  

 

(4) International Services shall have a Consolidated EBITDA in the
following minimum amounts for the following periods:

 

	
  Period

  	
   

  	
  Minimum Amount

  	
   

  
	
  3 months ended 3/31/05

  	
   

  	
  647,000

  	
   

  
	
  6 months ended 6/30/05

  	
   

  	
  1,335,000

  	
   

  
	
  9 months ended 9/30/05

  	
   

  	
  2,783,000

  	
   

  
	
  12 months ended 12/31/05

  	
   

  	
  3,719,000

  	
   

  

 

The parties intend this amendment to Section 14(e) of
the Loan Agreement to be effective for all purposes of the Loan Agreement as if
it had occurred on March 30, 2005.”

 

d.                                      Amendment
of Section 15. The following proviso at the end of Section 15 of the Loan Agreement is
hereby deleted in its entirety:

 

“; provided that,
notwithstanding the foregoing, no Event of Default shall arise as a result of
the Loan Parties’ inability to make a payment prohibited by Section 12(g)(iii) of this
Agreement.”

 

3.                                       Amendment
Fee. In consideration for the agreements of Lender contained herein, Loan
Parties shall pay to Agent for the ratable benefit of the Lenders an amendment
fee (the “Amendment Fee”) (a) equal
to $50,000 on the Tenth Amendment Date and (b) in the event the
Consolidated EBITDA is less than $2,000,000 for three month period ending June 30,
2005, an additional Amendment Fee equal to $200,000, which additional Amendment
Fee shall be deemed to be earned as of the Tenth Amendment Date, but which
additional Amendment Fee shall be due and payable in full on the last day of
the Term. The fees required by this Section shall be excluded from the
calculation of Consolidated EBITDA for all purposes of the Loan Agreement and
this Amendment (including, without limitation, clause (b) of this 

 

3

 

Section). The additional Amendment Fee under clause (b) of
this Section, if any, shall be entitled to the security interests, collateral
and other rights and benefits provided pursuant to the Loan Agreement and Other
Agreements and shall constitute a Liability under the Loan Agreement.

 

4.                                       Financial
Adviser. Loan Parties covenant and agree that as soon as practicable, but
in any event no later than thirty (30) days following the Tenth Amendment
Date, Loan Parties shall retain, at their sole expense, an outside financial
adviser acceptable to the Lender in its reasonable discretion to conduct an
evaluation of the business of the Loan Parties, which evaluation shall include,
but not be limited to, evaluation of the Loan Parties’ projections, Borrowing
Base under the Loan Agreement and material contracts (including any acquisition
and/or seller note agreements), and a valuation of the Loan Parties’ business
enterprise. Loan Parties further agree that they shall deliver to Agent any reports,
memoranda, projections and other work product received by Loan Parties from the
financial adviser and any other written reports and work product of the
financial adviser that Agent and/or Lender may reasonably request. The failure
of the Loan Parties to comply with the requirements of this Section shall
constitute an Event of Default under Section 15(b) of the Loan
Agreement.

 

5.                                       Representations
and Warranties. Each Loan Party represents and warrants to Lender that:

 

a.                                       All warranties
and representations made to Lender under the Loan Agreement, as amended or
otherwise modified by the additional disclosures set forth in Schedule I to the Ninth Amendment,
and related agreements and documents are true and correct as to the date
hereof.

 

b.                                      The execution and
delivery by each Loan Party of this Amendment and the performance by each such
Loan Party of the transactions herein contemplated (i) are and will be
within its powers, (ii) have been authorized by all necessary corporate
action, and (iii) are not and will not be in contravention of any order of
any court or other agency of government, or of any law, or be in conflict with,
result in a breach of, or constitute (with due notice and/or lapse of time) a
default under any such indenture, agreement or undertaking or result in the
imposition of any lien, charge or encumbrance of any nature on any of the
properties of such Loan Party or under the articles or certificate of
incorporation or bylaws or other corporate governance document of any such Loan
Party.

 

c.                                       This Amendment
and any related agreement or document will be valid and binding on and
enforceable against each Loan Party in accordance with its respective terms.

 

6.                                       Effectiveness.
Subject to the effectiveness provision of Section 2(c) of this
Amendment, this Amendment shall become effective upon receipt by the Agent of (a) counterparts
of this Amendment duly executed and delivered by each of the Loan Parties and
the Lender and (b) the $50,000 Amendment Fee owed pursuant to Section 3(a) above.

 

7.                                       Collateral.
As security for the payment of all Liabilities now or in the future existing,
each Loan Party hereby confirms and agrees that all security interests and
liens granted to Lender and Agent by any one of them continue in full force and
effect and shall continue to secure all such Liabilities. All Collateral
remains free and clear of any liens other than Permitted Liens. Nothing herein
contained is intended in any way to impair or limit the validity, priority and
extent of the existing security interest of Lender or Agent in and liens upon
the Collateral of any Loan Party.

 

8.                                       Release.
Each Loan Party hereby releases the Lender and Agent and each of their
respective subsidiaries, affiliates, members, partners, officers, employees,
representatives, agents, managers, counsel, directors, successors and assigns,
both present and former, from any and all actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in
equity, now known or unknown, suspected or unsuspected to the extent that any
of the foregoing arises from any action or failure to act on or prior to the
date hereof.

 

4

 

9.                                       Ratification
of Loan Agreement and Payment of Expenses. Except as expressly set forth
herein, all of the terms and conditions of the Loan Agreement are hereby
ratified and confirmed and continue unchanged and in full force and effect. All
references to the Loan Agreement shall mean the Loan Agreement as modified by
this Amendment. No modification hereof shall be binding or enforceable unless
in writing and signed by the party against whom enforcement is sought. Without
limiting the terms of the Loan Agreement and the Other Agreements, Loan Parties
shall pay all costs and expenses incurred by or on behalf of Agent and Lender
(including reasonable attorneys’ fees and expenses) arising under or in
connection with this Amendment or the Other Agreements, including without
limitation, in connection with the negotiation, preparation, execution, and
delivery of this Amendment and any and all consents, waivers, or other
documents or instruments relating thereto.

 

10.                                 Governing
Law. THIS AMENDMENT, AND ALL MATTERS RELATING HERETO OR ARISING HEREFROM,
SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA (WITHOUT REGARD TO PENNSYLVANIA’S OTHERWISE APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS) AS TO INTERPRETATION, ENFORCEMENT, VALIDITY,
CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, EXCLUDING PERFECTION OF THE
SECURITY INTERESTS IN COLLATERAL LOCATED OUTSIDE OF THE COMMONWEALTH OF
PENNSYLVANIA, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE
RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED. If any provision of
this Amendment shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or
remaining provisions of this Amendment.

 

11.                                 Counterparts.
This Amendment may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same respective agreement. Signature by
facsimile shall bind the parties hereto.

 

[SIGNATURES ON FOLLOWING PAGE]

 

5

 

IN WITNESS WHEREOF, the parties have executed this Tenth Amendment to
Loan and Security Agreement the day and year first written above.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  ZOHAR II 2005-1, LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Patriarch Partners XIV, LLC,

  its Collateral Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lynn Tilton

  
	
   

  	
   

  	
  Name: Lynn Tilton 

  
	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  PATRIARCH PARTNERS AGENCY SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Lynn Tilton

  
	
   

  	
   

  	
  Name: Lynn Tilton 

  
	
   

  	
   

  	
  Title: Manager

  

 

6

 

	
   

  	
  LOAN PARTIES:

  
	
   

  	
   

  
	
   

  	
  STONEPATH GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  CONTRACT AIR, INC.

  
	
   

  	
   

  
	
   

  	
  DISTRIBUTION SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  GLOBAL CONTAINER LINE, INC.

  
	
   

  	
   

  
	
   

  	
  M.G.R. INC., d/b/a AIR PLUS LIMITED

  
	
   

  	
   

  
	
   

  	
  NET VALUE, INC.

  
	
   

  	
   

  
	
   

  	
  STONEPATH LOGISTICS DOMESTIC SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  STONEPATH LOGISTICS GOVERNMENT SERVICES, INC., f/k/a Transport
  Specialists, Inc.

  
	
   

  	
   

  
	
   

  	
  STONEPATH LOGISTICS INTERNATIONAL

  SERVICES, INC, a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
  STONEPATH LOGISTICS INTERNATIONAL SERVICES, INC., f/k/a/ Global
  Transportation Services, Inc., a Washington Corporation

  
	
   

  	
   

  
	
   

  	
  STONEPATH OFFSHORE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  STONEPATH OPERATIONS, INC.

  
	
   

  	
   

  
	
   

  	
  UNITED AMERICAN ACQUISITIONS AND MANAGEMENT, INC. d/b/a UNITED
  AMERICAN

  FREIGHT SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Robert Arovas

  
	
   

  	
   

  	
  Name: Robert Arovas 

  
	
   

  	
   

  	
  Title: President

  

 

7

 

QuickLinks

 

TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT BACKGROUNDEXHIBIT 10.2

 

	
  2005 ISO 

  	
   

  	
   

  	
   

  	
   

  	
  Shares

  	
   

  

 

BENTLEY PHARMACEUTICALS, INC.

 

2005 Equity and Incentive Plan

 

Incentive Stock Option Certificate

 

Bentley Pharmaceuticals, Inc.
(the “Company”), a Delaware corporation, hereby grants to the person named
below an option to purchase shares of Common Stock, $0.02 par value per share,
of the Company (the “Option”) pursuant to and subject to the Company’s 2005
Equity and Incentive Plan (the “Plan”) (all such terms and conditions of the
Plan being incorporated herein by reference as fully as if set forth herein),
exercisable on the following terms and conditions including
those set forth on the reverse side of this Certificate:

 

	
  Name of
  Optionholder:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Social Security
  No:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  No. of
  Shares:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option Price:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exercisability
  Schedule:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  	
   

  	
   

  
					

 

This Option is intended
to constitute an Incentive Stock Option under section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), although the Company makes no
representation or warranty as to such qualification.

 

By acceptance of this
Option, the Optionholder agrees to all the terms and conditions hereof
including, without limitation, those set forth in the Plan and on the reverse
side hereof.

 

	
   

  	
  BENTLEY
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  ACCEPTED AND
  AGREED TO:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Optionholder

  	
   

  

 

 

BENTLEY PHARMACEUTICALS, INC. 2005 EQUITY AND
INCENTIVE PLAN

Incentive Stock Option Terms and Conditions

 

1.              Plan
Incorporated by Reference. 
This Option is issued pursuant to the terms of the Plan and may be
amended as provided in the Plan. 
Capitalized terms used and not otherwise defined in this certificate
have the meanings given to them in the Plan. This certificate does not set forth
all of the terms and conditions of the Plan, which are incorporated herein by
reference.  The Committee administers the
Plan and its determinations regarding the operation of the Plan are final and
binding.  Copies of the Plan may be
obtained upon written request without charge from the Secretary of the Company.

 

2.              Option
Price.  The price to be
paid for each share of Common Stock issued upon exercise of the whole or any
part of this Option is the Option Price set forth on the face of this
certificate, which is not less than 100% of the fair market value of a share of
Common Stock of the Company on the Date of Grant.

 

3.              Exercisability
Schedule.  This Option may
be exercised at any time and from time to time for the number of shares and in
accordance with the exercisability schedule set forth on the face of this
certificate, but only for the purchase of whole shares.  This Option may not be exercised as to any
shares after the Expiration Date.

 

4.              Method of
Exercise. To exercise this Option, the Optionholder shall
deliver written notice of exercise to the Company specifying the number of
shares with respect to which the Option is being exercised, accompanied by
payment in full of the Option Price for such shares. Such payment may be made
in whole or in part in cash or to the extent permitted by the Committee at or
after the grant of the Option, pursuant to any of the following methods: (i) by
actual delivery and transfer, or attestation of ownership and delivery of a
valid instrument of transfer, to the Company of shares of Common Stock owned by
the Optionholder, including vested Restricted Stock, (ii) by retaining
shares of Common Stock otherwise issuable pursuant to the Option, (iii) for
consideration received by the Company under a broker-assisted cashless exercise
program acceptable to the Company, or (iv) for such other lawful
consideration as the Committee may determine. Promptly following such notice,
the Company will deliver to the Optionholder a certificate representing the
number of shares with respect to which the Option is being exercised.

 

5.              Rights as
a Stockholder or Employee. 
The Optionholder shall not have any rights in respect of shares as to
which the Option shall not have been exercised and payment made as provided
above.  The Optionholder shall not have
any rights to continued employment or service by the Company or its Affiliates
by virtue of the grant of this Option.

 

6.              Change in
Control.  As provided in
the Plan, in the event of a Change in Control affecting the Company’s
outstanding Common Stock, the Committee shall equitably adjust the number and
kind of shares subject to this Option and the exercise price hereunder or make
provision for a cash payment. If such Change in Control involves a
consolidation or merger of the Company with another entity, the sale or
exchange of all or substantially all of the assets of the Company or a
reorganization or liquidation of the Company, then in lieu of the foregoing,
the Committee may upon written notice to the Optionholder provide that this Option
shall terminate on a date not less than 20 days after the date of such notice
unless theretofore exercised. In connection with such notice, the Committee may
in its discretion accelerate or waive any deferred exercise period.

 

7.              Option
Not Transferable.  This
Option is not transferable by the Optionholder otherwise than by will or the
laws of descent and distribution, and is exercisable during the Optionholder’s
lifetime only by the Optionholder or the Optionholder’s guardian or legal
representative. The naming of a Designated Beneficiary does not constitute a
transfer.

 

8.              Exercise
of Option After Termination of Employment.  If the Optionholder’s status as an employee
of (a) the Company, (b) an Affiliate, or (c) a corporation (or
parent or subsidiary corporation of such corporation) issuing or assuming a
stock option in a transaction to which section 424(a) of the Code
applies, is terminated for any reason other than by disability (within the
meaning of section 22(e)(3) of the Code) or death, the Optionholder
may exercise the rights which were available to the Optionholder at the time of
such termination only within three months following the date of
termination.  If such status is
terminated as a result of disability, such rights may be exercised within one
year from the date of termination.  Upon
the death of the Optionholder, his or her Designated Beneficiary shall have the
right, at any time within one year after the date of death, to exercise in
whole or in part any rights that were available to the Optionholder at the time
of death.  Notwithstanding the foregoing,
no rights under this Option may be exercised after the Expiration Date.  The aforesaid three-month and one-year periods
may be extended by the Committee in its sole discretion up to the Expiration
Date of the option.  If an Optionholder’s
employment relationship with the Company or any Affiliate is terminated for
cause (as defined by the Committee in its sole discretion), all such
Optionholder’s options shall terminate immediately and be of no further force
or effect.  Whether authorized leaves of
absence or absence on military or governmental service may constitute
termination for purposes of the Plan shall be conclusively determined by the
Committee.  Nothing in the Plan or in any
option granted thereunder shall be deemed to give the Optionholder the right to
continue his or her employment with the Company or any of its Affiliates or
shall be deemed to interfere in any way with the right of the Company to
terminate any Optionholder’s employment relationship at any time and for any
reason.  Options granted under the Plan
shall not be affected by any change of employment among the Company and its
Affiliates so long as the Optionholder continues to have an employment
relationship with the Company or one of its Affiliates.

 

9.              Compliance
with Securities Laws.  It
shall be a condition to the Optionholder’s right to purchase shares of Common
Stock hereunder that the Company may, in its discretion, require (a) that
the shares of Common Stock reserved for issue upon the exercise of this Option
shall have been duly listed, upon official notice of issuance, upon any
national securities exchange or automated quotation system on which the Company’s
Common Stock may then be listed or quoted, (b) that either (i) a
registration statement under the Securities Act of 1933 with respect to the
shares shall be in effect, or (ii) in the opinion of counsel for the
Company, the proposed purchase shall be exempt from registration under that Act
and the Optionholder shall have made such undertakings and agreements with the
Company as the Company may reasonably require, and (c) that such other
steps, if any, as counsel for the Company shall consider necessary to comply
with any law applicable to the issue of such shares by the Company shall have
been taken by the Company or the Optionholder, or both.  The certificates representing the shares
purchased under this Option may contain such legends as counsel for the Company
shall consider necessary to comply with any applicable law.

 

10.       Payment
of Taxes.  The
Optionholder shall pay to the Company, or make provision satisfactory to the
Company for payment of, any taxes required by law to be withheld with respect
to the exercise of this Option.  The
Committee may, in its discretion, require or permit any other federal or state
taxes imposed on the Optionholder on the exercise of this option or the sale of
the shares to be paid by the Optionholder. 
In the Committee’s discretion, such tax obligations may be paid in whole
or in part in shares of Common Stock, including shares retained from the
exercise of this Option, valued at their Fair Market Value on the date of
delivery.  The Company and its Affiliates
may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the Optionholder.

 

 

11.       Notice of
Sale of Shares.  The
Optionholder agrees to notify the Company in writing within 30 days of the
disposition of one or more shares of stock purchased upon exercise of this
Option if such disposition occurs within two years of the Date of Grant or
within one year after such purchase.

 

Adopted 05/24/2005

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