Exhibit 10.32
Option Agreement
AGREEMENT dated September 1, 1999, between ▇▇▇▇▇▇▇.▇▇▇, Inc. (the
"Company"), a Delaware corporation with its principal offices at ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Clearing
Corporation ("Optionee"), a Delaware corporation having its principal place of
business at .
R E C I T A L S
WHEREAS, Optionee has been retained as a consultant to the Company pursuant
to the terms and conditions of a consulting agreement (the "Consulting
Agreement") dated as of the date hereof, with respect to services commenced as
of the date hereof; and
WHEREAS, the Company has agreed to issue to Optionee and/or such
designee(s) as Optionee authorizes, an option (the "Option"), exercisable until
August 31, 2000, to purchase an aggregate of 400,000 shares of the Company's
common stock (the "Common Stock"), par value $0.001 per share, as follows:
100,000 shares at an exercise price of $2.50; 100,000 shares at an exercise
price at $3.00 per share; 100,000 shares at an exercise price of $3.50 per
share; and 100,000 shares at an exercise price of $4.00 per share.
NOW, THEREFORE, in consideration of the covenants, mutual promises
contained herein, and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties agree as follows:
1. Grant of Option. The Optionee is hereby granted the right to purchase,
until 5:30 p.m., New York time, on August 31, 2000, up to an aggregate of
400,000 shares of the Company's Common Stock as follows: 100,000 shares at an
exercise price of $2.50; 100,000 shares at an exercise price at $3.00 per share;
100,000 shares at an exercise price of $3.50 per share; and 100,000 shares at an
exercise price of $4.00 per share; all as may be adjusted pursuant to Paragraph
10.
2. Option Certificates. The option certificate (the "Option Certificate")
to be delivered pursuant to this Agreement shall be in the form set forth in
Exhibit "A" attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions, and other variations as required or
permitted by this Agreement.
3. Exercise of Option. The Option is exercisable at the exercise prices as
provided in Paragraph 1 above, upon surrender at the Company's principal offices
of the appropriate Option Certificate with a Form of Election to Purchase (in
the form set forth in Exhibit "B" attached hereto and made a part hereof) duly
executed, together with payment of the exercise price in United States currency
or by certified or official bank check, for the shares of Common Stock being
purchased, whereby the Optionee shall be entitled to receive a certificate for
the shares of Common Stock purchased. The purchase rights represented by the
Option Certificate are exercisable at the option of the Optionee thereof, in
whole or in part (but not as to fractional shares of the Common Stock). In the
case of the purchase of less than all of the shares purchasable under the Option
Certificate, the Company shall cancel the Option Certificate upon the surrender
thereof and shall execute and deliver a new Option Certificate of like tenor for
the balance of the securities purchasable thereunder.
4. Issuance of Certificates. Upon exercise of the Option, the issuance of
the certificates for the Common Stock shall be made forthwith (and in any event
within five (5) business days thereafter) without charge to the Optionee
including, without limitation, any tax which may be payable in respect of the
issuance thereof; however, the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the Optionee, and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
5. Restriction on Transfer of the Option. The Optionee covenants and agrees
that the shares upon exercise of the Option are being acquired as an investment
and not with a view to the distribution thereof; and that the shares upon
exercise of the Option may not be sold, transferred, assigned, hypothecated, or
otherwise disposed of, in whole or in part, except pursuant to a registration
statement filed under the Securities Act of 1933, as amended (the "Act") or
pursuant to an exemption therefrom. Optionee may transfer this Option in whole
or part so long as the assignee, prior to any assignment, executes and delivers
to the Company a duly executed agreement whereby the assignee agrees to be bound
by all terms and conditions of this Agreement.
6. Registration.
a. If, during the term of the Option, the Company proposes to register any
of its securities under the Act (other than in connection with a merger or
acquisition), the Company will give written notice by registered mail, at least
thirty (30) days prior to the filing of such registration statement, to Optionee
of its intention to do so. If Optionee notifies the Company within twenty (20)
days after receipt of such notice of Optionee's desire to register its
securities in the proposed registration statement, the Company shall afford
Optionee the opportunity to have the shares registered for resale under same. If
Optionee fails to so notify the Company of its desire to be included in the
registration statement, Optionee waives its right to be included in that
registration statement but does not lose its right to be included in a
subsequent registration statement.
b. Subject to paragraph 6(a), if, during the term of the Option, at least
fifty (50%) percent of the holders identified herein (to wit, Optionee and
Messrs. Rosenblum, Stefansky, ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇) demand registration of
the shares underlying their Option, the Company shall prepare and file the
appropriate registration statement within thirty (30) days of such demand or as
soon thereafter as reasonably practicable.
c. Notwithstanding the provisions of subparagraphs a and b above, the
Company shall have the right at any time to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof if (i) the exercise price is greater than the 30 day
closing average for the Company's Common Stock or (ii) the Company engages an
Underwriter to raise capital for the Company and such Underwriter does not
desire to include the shares underlying the Option in a registration statement
for such raise of capital. In the case of (ii) above the demand right shall be
automatically waived by the Optionee until 90 days after the completion of the
underwritten offering, or the termination of the offering.
d. Prior to the registration (either demand or piggyback) of the shares
underlying the Option, Optionee shall execute and deliver to the Company a
selling securityholder questionnaire and a representation letter. In addition,
the Company and Optionee shall cross indemnify each other against misstatements
and omissions in such registration statement.
7. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock upon
exercise of the Option; nor shall it be required to issue scrip or pay cash in
lieu of fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Common Stock.
8. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance of shares upon exercise of the Option, such number
of shares as are issuable upon exercise of the Option. The Company covenants and
agrees that, upon exercise of the Option, and payment therefor, pursuant to
Paragraph 3 herein, all shares of Common Stock issuable upon such exercise shall
be duly and validly issued, fully paid, and non-assessable and shall not be
subject to the preemptive rights of any stockholder. - 9. Optionee not a
Stockholder. Nothing contained in this Agreement shall be construed as
conferring upon the Optionee the right to vote or to consent or to receive
notice as a stockholder in respect of any meetings of stockholders for the
election of Directors or any other matter, or as having any rights whatsoever as
a stockholder of the Company.
10. Adjustments to the Exercise Price and the Number of Securities.
a. Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the exercise price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
b. Adjustment in Number of Securities. Upon each adjustment of the exercise
price pursuant to the provisions of this paragraph, the number of shares of
Common Stock underlying the Option shall be adjusted to the nearest full amount
by multiplying a number equal to the exercise price in effect immediately prior
to such adjustment by the number of shares of Common Stock underlying same
issuable upon exercise of the Option immediately prior to such adjustment and
dividing the product so obtained by the adjusted exercise prices.
c. In case of any consolidation of the Company with, or merger of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any reclassification or change
of the outstanding Common Stock), the corporation formed by such consolidation
or merger shall execute and deliver to the Optionee a supplemental option
agreement providing that the Optionee shall have the right thereafter (until the
expiration of such Option) to receive, upon exercise of such Option, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by a holder of the number of shares of Common
Stock of the Company for which such Option might have been exercised immediately
prior to such consolidation or merger. Such supplemental option agreement shall
provide for adjustments which shall be identical to the adjustments provided in
subparagraphs a and b above.
d. No Adjustment of Exercise Price in Certain Cases. No adjustment of the
exercise price shall be made if the amount of such adjustment shall be less than
ten cents ($0.10) per share, provided, however, that in such case, any
adjustment that otherwise would be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least twenty cents ($0.20) per share.
11. Notices. All notices requests, consents, and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered or mailed by registered or certified mail, return receipt requested:
a. If to the registered Optionee, to the address of such Optionee as shown
on the books of the Company; or b. If to the Company, to the address set forth
herein; or c. To such other address as the Company and/or the Optionee may
designate by written notice to the other party.
12. Successors. All the covenants and provisions of this Agreement shall be
binding upon and shall inure to the benefit of the Company, the Optionee, and
their respective successors and assigns hereunder.
13. Termination. This Agreement shall terminate at 5:30 p.m., New York
time, on August 31, 2000.
14. Governing Law: Submission to Jurisdiction. This Agreement and each
Option Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be construed in
accordance with the laws of such State without giving effect to the rules of
said State governing the conflicts of laws. The Company and the Optionee hereby
agree that any action, proceeding, or claim against it arising out of, or
relating in any way to, this Agreement shall be brought and enforced in the
courts of the State of New York or of the United States of America District
Court having jurisdiction over the New York County area, and each party
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company and the Optionee hereby irrevocably waive any objection to such
exclusive jurisdiction or inconvenient forum. Any such process or summons to be
served upon either of the Company or the Optionee (at the option of the party
bringing such action, proceeding, or claim) may be served by transmitting a copy
thereof, by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth herein. Such mailing shall be
deemed personal service and shall be legal and binding upon the party so served
in any action, proceeding, or claim. The Company and the Optionee agree that the
prevailing party in any such action or proceeding shall be entitled to recover
from the other party all of its reasonable legal costs and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
15. Entire Agreement: Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.
16. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
17. Captions. The caption headings of the Paragraphs of this Agreement are
for convenience of reference only and are not intended to be, nor should they be
construed as, a part of this Agreement; accordingly, same shall be given no
substantive effect.
18. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
registered Optionee of the Option Certificate or Common Stock underlying same
any legal or equitable right, remedy, or claim under this Agreement, and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Optionee.
19. Counterparts. This Agreement may be executed in any number of
counterparts, and each of such counterparts shall, for all purposes, be deemed
to be an original, and such counterparts shall, together, constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
Optionee: Company:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Clearing Corp. ▇▇▇▇▇▇▇.▇▇▇, Inc.
By: By: _______________________
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
EIN:
EXHIBIT "A"
The Option Represented By This Certificate And The Shares Of Common Stock
Issuable Upon Exercise Thereof May Not Be Offered Or Sold Except Pursuant To (I)
An Effective Registration Statement Under The Securities Act Of 1933; (II) To
The Extent Applicable, Rule 144 Under Such Act (Or Any Similar Rule Under Such
Act Relating To The Disposition Of Securities); Or (III) An Opinion Of Counsel,
If Such Opinion Shall Be Reasonably Satisfactory To Counsel For The Issuer, That
An Exemption From Registration Under Such Act Is Available.
The Transfer Or Exchange Of The Option Represented By This Certificate Is
Restricted In Accordance With The Option Agreement Referred To Herein.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, August 31, 2000
OPTION CERTIFICATE
This Option Certificate certifies that ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Clearing
Corporation ("Optionee"), or registered assigns, is the registered holder of an
Option to purchase up to fully-paid and non-assessable shares of common stock,
par value $0.001 per share ("Common Stock"), of ▇▇▇▇▇▇▇.▇▇▇, Inc. (the
"Company"), until 5:30 p.m., New York time, on August 31, 2000 (the "Expiration
Date"), at an exercise price of $____ per share, upon surrender of this Option
Certificate and payment of the exercise price at an office or agency of the
Company, but subject to the conditions set forth herein and in the Option
Agreement dated September 1, 1999 between the Company and Optionee. Payment of
the exercise price shall be made by (i) bank or certified check, (ii) promissory
note, or (iii) a combination of (i) and (ii) to the order of the Company,
subject to approval by the Company
No Option may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time the Option evidenced hereby, unless exercised
prior thereto, shall expire and become void.
The Option evidenced by this Option Certificate is granted pursuant to the
Option Agreement, which agreement is hereby incorporated by reference and made a
part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties, and immunities thereunder of
the Optionee.
Upon due presentment for registration of transfer of this Option
Certificate at an office or agency of the Company, a new Option Certificate or
Option Certificates of like tenor and evidencing in the aggregate a like number
of shares of Common Stock underlying the Option shall be issued to the
transferee(s) in exchange for this Option Certificate, subject to the
limitations provided herein and in the Option Agreement, without any charge
except for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the shares underlying the Option
evidenced by this Certificate, the Company shall forthwith issue to the holder
hereof a new Option Certificate representing such numbered shares underlying the
unexercised portion of the Option.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Option Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Option Certificate which are defined in the Option
Agreement shall have the meanings assigned to them in the Option Agreement.
IN WITNESS WHEREOF, the Company has caused this Option Certificate to be
duly executed under its corporate seal.
Dated as of __________________ ▇▇▇▇▇▇▇.▇▇▇, Inc.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
EXHIBIT "B"
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase shares of Common Stock ,
underlying the Option, and herewith tenders in payment for such securities a
certified or official bank check payable to the order of ▇▇▇▇▇▇▇.▇▇▇, Inc. in
the amount of $ , all in accordance with the terms hereof. The undersigned
requests that a certificates for such securities be registered in the name of
------------------------- --------- whose address is and that such Certificate
be delivered to whose address is . -------------------------------
Dated:
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Option Certificate.)
Insert Social Security or Other
Identifying Number of Optionee)