EXHIBIT (d)(17)
NEITHER THE OPTION GRANTED PURSUANT TO THIS AGREEMENT (OR THE SHARES OF STOCK
ISSUABLE UPON EXERCISE OF SUCH OPTION) HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. NEITHER SUCH OPTION OR SHARES MAY BE SOLD, OFFERED FOR
SALE, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SUCH ACT AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
Option Agreement to subscribe
Dated: June 30, 1999 for 850,000 Shares
THE EDISON PROJECT INC. A STOCK OPTION
THIS CERTIFIES that, for value received, WSI Inc. ("Holder")
is entitled to subscribe for and purchase from The Edison Project Inc., a
Delaware corporation (the "Company"), at a price of $10.00 per share (the
"Exercise Price"), the number of shares of the Company's Series A Common Stock
first shown above (as adjusted pursuant to the provisions hereof, the "Option
Shares"). This option (the "Option") amends and restates the option granted on
December 30, 1997, which option (i) was issued in conjunction with the
Subscription Agreement, dated as of December 30, 1997, by and among the Company,
▇.▇. ▇▇▇▇▇▇ Investment Corporation, Sixty Wall Street SBIC Fund, L.P., Investor
Investments AB and certain Other Investors (as defined therein) and (ii)
replaced and superceded the option originally contained in the Management
Agreement dated as of March 14, 1995 between The Edison Project L.P. and Holder,
as amended as of March 1, 1997. The Option is subject to the following
provisions, terms and conditions:
1. Vesting; Term; Exercise.
(a) The rights of Holder to exercise the Option are fully
vested as of the date hereof and vested on the following schedule: (i) 500,000
of such Option Shares were vested on ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 100,000 of such Option
Shares were vested on June 30, 1996, (iii) 100,000 of such Option Shares were
vested on June 30, 1997; (iv) 100,000 of the Option Shares
were vested on June 30, 1998; and (iii) 50,000 of the Option Shares vested on
the date hereof.
(b) The rights of Holder to exercise this Option shall
expire on March 14, 2005.
(c) Holder may exercise this Option, in whole or in part
from time to time (but not as to a fractional share of the Series A Common
Stock) at any time by (i) giving written notice to the Company in the form
attached hereto and (ii) transferring to the account designated by the Company
immediately available funds in an amount equal to aggregate Exercise Price of
the Option Shares in respect of which this Option is then being exercised along
with any amounts required to be withheld by the Company and remitted to any
taxing authority by reason of the exercise of the Option in respect of such
Option Shares.
(d) Upon the exercise of any portion of the Option, the
books and records of the Company shall be appropriately amended to reflect
Holder's acquisition of the Option Shares then purchased, and certificates
representing such Option Shares shall be delivered to Holder (or its
designee(s)) as promptly as practicable after such date.
2. Shares to be Fully Paid; Reservation of Shares. The
Company covenants and agrees that (a) all Option Shares will, upon issuance, be
validly issued, fully paid, nonassessable, (b) at all times during the period
during which the Option may be exercised, the Company shall have authorized and
reserved for the purpose of issue upon the exercise of the Option, a sufficient
number of shares of Series A Common Stock, free from any pre-emptive rights, to
provide for the exercise of the Option in full, (c) the Company shall take all
action necessary to assure that such shares of Series A Common Stock may be so
issued without violation of any applicable law or regulation, or any
requirements of any securities exchange upon which the Series A Common Stock may
be listed, provided, however, that the Company shall not be required to register
the sale of any shares of Series A
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Common Stock with the United States Securities and Exchange Commission (the
"SEC") except as specifically provided herein.
3. Adjustment to the Number of Option Shares.
(a) Upon any capital transaction, business combination,
or reorganization (a "Reorganization") of the Company or the Company's business,
the number of Option Shares which may be purchased hereunder and the Exercise
Price per share shall be adjusted so that Holder shall thereafter be entitled to
receive, upon the exercise of the Option, the number of shares or other equity
interest or entitlement that Holder would have been entitled to receive upon the
occurrence of such event had Holder exercised the Option immediately prior to
the occurrence of such event, with the number of Option Shares and the Exercise
Price per share as so revised to be subject to (i) adjustment appropriately to
reflect stock splits, stock dividends, combinations and sales of all or
substantially all the assets of the Company and (ii) dilution in the same manner
as the Series A Common Stock outstanding immediately following such event.
(b) The Company may redeem this Option or any portion
thereof in connection with a financing transaction or capital restructuring
pursuant to which the Company is redeeming options or equity issued under the
Company's Management Option Plan, as in effect from time to time, provided,
that, the Company shall redeem the Option or any portion thereof on the same
relative terms as the Company redeems such management options.
(c) Upon any adjustment required by this Section 3, the
Company shall give written notice thereof, by first class mail, postage prepaid,
addressed to Holder at the address shown on the books of the Company, which
notice shall state the increase or decrease, if any, in the number of Option
Shares issuable upon the exercise of the Option, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based.
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(d) If at any time: (i) the Company shall declare any
dividend of cash, stock or property upon or make any other distribution in
respect of the Series A Common Stock, (ii) the Company shall offer for
subscription pro rata to the holders of Series A Common Stock any additional
shares of stock of any class or other securities or rights, (iii) there shall be
any Reorganization, or (iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company (collectively,
"Dissolution"), then the Company shall give, by first class mail, postage
prepaid, addressed to the Holder at the address shown on the books of the
Company (A) at least 20 days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution or subscription rights or for determining rights to vote in respect
of any such Reorganization or Dissolution, and (B) in the case of any such
Reorganization or Dissolution, at least 20 days' prior written notice of the
date when the same shall take place. Such notice in accordance with the
foregoing clause (A) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Series A
Common Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (B) shall also specify the date on which the holders of Series
A Common Stock shall be entitled to exchange their Series A Common Stock for
securities or other property deliverable upon such Reorganization or
Dissolution, as the case may be.
(d) If any event occurs as to which, in the good faith
opinion of the Board of Directors, the other provisions of this paragraph 3 are
not strictly applicable, then the Board of Directors shall make an adjustment in
the application of such provisions, in accordance with the essential intent and
principles of this paragraph 3, so as to protect such purchase rights, but in no
event shall any such adjustment have the effect of increasing the Exercise
Price.
4. Registration. Any registration rights which accrue to
Holder (or its permitted assignee(s)) with respect to any equity interests in
the Company (or its successor) shall apply to any
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equity obtained by Holder (or its permitted assignee(s)) upon the exercise in
whole or in part of this Option.
5. Closing of Books. The Company will at no time close
its transfer books against the transfer of the Option or any Option Shares
issued or issuable upon the exercise of the Option in any manner that interferes
with the timely exercise of the Option, unless the Company is advised by its
counsel that such closing is required by applicable law or the rules of any
exchange upon which such shares of Series A Common Stock are listed, and then
only for so long as required by such law or rules.
6. Mutilated or Missing Option Agreements. If this
Option Agreement is mutilated when surrendered to the Company, or the Company
receives evidence to its reasonable satisfaction of the destruction, loss or
theft of this Option Agreement, the Company shall issue, without charge, a
replacement Option Agreement. If requested by the Company, Holder shall supply
an indemnity on customary terms to protect the Company from any loss that it may
suffer upon the replacement of this Option Agreement.
7. No Voting Rights. This Option Agreement shall not
entitle Holder, as long as the Option is not exercised, to any voting rights or
other rights as a stockholder of the Company.
8. Parties in Interest; Assignability. Neither Holder or
the Company may assign its rights or obligations under this Option, provided,
however that the rights and obligations of the Company may be assigned, upon
notice to Holder, to any entity to which the Company's business is transferred
and further provided, however, that the rights and obligations of the Company
under this Option Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company and their affiliates, including any
transferee of all or substantially all of the business or assets of the Company
and further provided, that, Holder may (a) at any time grant to any third party
a security interest in all or any part of the Option or transfer the Option to
an Affiliate (as defined in the Company's Shareholders'
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Agreement dated December 30, 1997, as amended from time to time) and (b) by
written notice to the Company in the form attached hereto, sell, assign,
transfer or otherwise dispose of any vested portion of the Option at any time
following the fourth anniversary of the vesting of the portion of the Option to
be sold, assigned, transferred or otherwise disposed of.
9. Governing Law. This Option Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflicts of laws provisions thereof.
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IN WITNESS WHEREOF, each of the Company and Holder has duly
executed and delivered this Option Agreement as of the date first set forth
above.
THE EDISON PROJECT INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Chairman
WSI INC.
By: /s/ H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
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FORM OF NOTICE OF EXERCISE
____________________, 199__
To: THE EDISON PROJECT INC.
The undersigned, pursuant to the provisions set forth in the
Option Agreement between the Company and the undersigned dated ________________,
hereby subscribes for and agrees to purchase _____ shares of the Series A Common
Stock covered by such Option Agreement, and makes payment herewith in full
therefor at the price per share provided by such Option Agreement.
Dated: _______________, ______
Name of Holder: _________________________________
By: _____________________________________________
Name:
Title:
Address:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned,____________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
Option Agreement between The Edison Project Inc. and the undersigned dated
__________________, with respect to the number of shares of the Series A Common
Stock covered thereby set forth herein below unto:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
Dated: _______________, ______
Name of Holder: _________________________________
By: _____________________________________________
Name:
Title:
Address: ________________________________________
________________________________________