Exhibit 4
Comet Technologies, Inc.
Form 10-SB
COMET TECHNOLOGIES, INC.
Option for the Purchase of 200,000
Shares of Common Stock
Par Value $0.001
STOCK OPTION AGREEMENT
THE HOLDER OF THIS OPTION, BY ACCEPTANCE HEREOF, BOTH WITH
RESPECT TO THE OPTION AND COMMON STOCK ISSUABLE UPON EXERCISE OF
THE OPTION, AGREES AND ACKNOWLEDGES THAT THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR OTHER
COMPLIANCE UNDER THE SECURITIES ACT OR THE LAWS OF THE APPLICABLE
STATE OR A "NO ACTION" OR INTERPRETIVE LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT AND SUCH STATE STATUTES.
This is to certify that, for value received, XXXXXX X. XXXXX
(the "Optionee") is entitled to purchase from COMET TECHNOLOGIES,
INC. (the "Company"), on the terms and conditions hereinafter set
forth, all or any part of 200,000 shares ("Option Shares") of the
Company's common stock, par value $0.001 (the "Common Stock"), at
the purchase price of $0.1875 per share ("Option Price"). Upon
exercise of this option in whole or in part, a certificate for
the Option Shares so purchased shall be issued and delivered to
the Optionee. If less than the total option is exercised, a new
option of similar tenor shall be issued for the unexercised
portion of the options represented by this Agreement.
This option is granted subject to the following further
terms and conditions:
1. This option shall vest and be exercisable immediately, and
shall expire at 5:00 p.m. Salt Lake City time on March 10, 2009.
In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time
exercisable, Optionee (or in the case of exercise after
Optionee's death, Optionee's executor, administrator, heir or
legatee, as the case may be) must take the following actions:
(a) Deliver to the Corporate Secretary of the
Corporation an executed notice of exercise in substantially the
form of attached to this Agreement (the "Exercise Notice") in
which there is specified the number of Option Shares which are to
be purchased under the exercised option.
(b) Pay the aggregate Option Price for the purchased
shares through one or more of the following alternatives:
(i) full payment in cash or by check made payable
to the Corporation's order;
(ii) full payment in shares of Common Stock held
for the requisite period necessary to avoid a
charge to the Company's earnings for
financial reporting purposes and valued at
Fair Market Value on the Exercise Date (as
such term is defined below);
(iii) full payment through a combination of
shares of Common Stock held for the requisite
period necessary to avoid a charge to the
Company's earnings for financial reporting
purposes and valued at Fair Market Value on
the Exercise Date and cash or check payable
to the Company's order;
(iv) full payment effected through a broker-dealer sale and
remittance procedure pursuant to which Optionee shall
provide concurrent irrevocable written instructions (i)
to a brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the
sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Price payable for the
purchased shares plus all applicable Federal, state and
local income and employment taxes required to be withheld
in connection with such purchase and (ii) to the Company
to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the
sale transaction; or
(v) full payment through conversion of the option
to purchase Option Shares into the number of
fully paid and nonassessable Option Shares
calculated pursuant to the following formula:
X = Y (A-B)
A
where: X = the number of Option
Shares to be issued to the Optionee;
Y = the number of Option Shares for
which the conversion right is being
exercised;
A = the Fair Market Value per share as
of the date of exercise of such conversion
right; and
B = the Option Price with respect to
such Option Shares.
(c) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this option.
(d) For purposes of this Agreement, the Exercise Date
shall be the date on which the executed Exercise Notice shall
have been delivered to the Company. Except to the extent the
sale and remittance procedure specified above is utilized in
connection with the option exercise, payment of the Option Price
for the purchased shares must accompany such Exercise Notice.
(e) For all valuation purposes under this Agreement,
the Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed
or admitted to trading on any national
securities exchange but is traded on the
Nasdaq National Market, the Fair Market Value
shall be the mean between the highest "bid"
and lowest "offered" quotations of a share of
Common Stock on such date (or if none, on the
most recent date on which there were bid and
offered quotations of a share of Common
Stock), as reported by the Nasdaq National
Market or any successor system.
(ii) If the Common Stock is at the time listed or
admitted to trading on any national
securities exchange, then the Fair Market
Value shall be the closing selling price per
share on the date in question on the
securities exchange, as such price is
officially quoted in the composite tape of
transactions on such exchange. If there is
no reported sale of Common Stock on such
exchange on the date in question, then the
Fair Market Value shall be the closing
selling price on the exchange on the last
preceding date for which such quotation
exists.
(iii) If the Common Stock is not listed on
such date on any national securities exchange
nor included in the Nasdaq National Market,
but is traded in the over-the-counter market,
the highest "bid" quotation of a share of
Common Stock on such date (or if none, on the
most recent date on which there were bid
quotations of a share of Common Stock), as
reported on the Nasdaq Smallcap Market or the
NASD OTC Bulletin Board, as applicable.
(f) Upon such exercise, the Company shall issue and
cause to be delivered with all reasonable dispatch (and in any
event within three business days of such exercise) to or upon the
written order of the Optionee at its address, and in the name of
the Optionee, a certificate or certificates for the number of
full Option Shares issuable upon the exercise together with such
other property (including cash) and securities as may then be
deliverable upon such exercise. Such certificate or certificates
shall be deemed to have been issued and the Optionee shall be
deemed to have become a holder of record of such Option Shares as
of the Exercise Date.
2. The Optionee acknowledges that the shares subject to
this option have not and will not be registered as of the date of
exercise of this option under the Securities Act or the
securities laws of any state. The Optionee acknowledges that this
option and the shares issuable on exercise of the option, when
and if issued, are and will be "restricted securities" as defined
in Rule 144 promulgated by the Securities and Exchange Commission
and must be held indefinitely unless subsequently registered
under the Securities Act and any other applicable state
registration requirements. Except as provided herein, the
Company is under no obligation to register the securities under
the Securities Act or under applicable state statutes. In the
absence of such a registration or an available exemption from
registration, sale of the Option Shares may be practicably
impossible. The Optionee shall confirm to the Company the
representations set forth above in connection with the exercise
of all or any portion of this option. The Company agrees to
register or qualify the Option Shares, but not this option, for
resale as follows:
(a) If, at any time during the period in which the rights
represented by this Agreement are exercisable, the Company
proposes to file a registration statement or notification under
the Securities Act for the primary or secondary sale of any debt
or equity security, it will give written notice at least 30 days
prior to the filing of such registration statement or
notification to the Optionee of its intention to do so. The
Company agrees that, after receiving written notice from the
Optionee of its desire to include its Option Shares in such
proposed registration statement or notification, the Company
shall afford the Optionee the opportunity to have its Option
Shares included therein. Notwithstanding the provisions of this
paragraph 2(b), the Company shall have the right, at any time
after it shall have given written notice pursuant to this
paragraph (whether or not a written request for inclusion of the
Option Shares shall be made) to elect not to file any such
proposed registration statement or notification or to withdraw
the same after the filing but prior to the effective date
thereof. In no event shall the Company be obligated to include
the Option Shares in any registration statement or notification
under this paragraph 2(b) if, in the opinion of the underwriter,
the inclusion of the Option Shares in such registration statement
or notification would be materially detrimental to the proposed
offering of debt or equity securities pursuant to which the
Company gave notice to the holders under this paragraph;
provided, that the Option Shares shall not be excluded from any
such registration statement or notification if debt or equity
securities of the Company held by any other persons are, or will
be, included in such registration statement or notification.
(b) In connection with the filing of a registration
statement, notification, or post-effective amendment under this
section, the Company covenants and agrees:
(i) to pay all expenses of such registration
statement, notification, or post-effective amendment,
including, without limitation, printing charges, legal fees
and disbursements of counsel for the Company, blue sky
expenses, accounting fees and filing fees, but not including
legal fees and disbursements of counsel to the Optionee and
any sales commissions on Option Shares offered and sold;
(ii) to take all necessary action which may reasonably
be required in qualifying or registering the Option Shares
included in a registration statement, notification or post-
effective amendment for the offer and sale under the
securities or blue sky laws of such states as requested by
the Optionee; provided that the Company shall not be
obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction; and
(iii) to utilize its best efforts to keep the same
effective on a continuous or shelf basis until all
registered Option Shares of the Optionee have been sold.
(c) The Optionee shall cooperate with the Company and shall
furnish such information as the Company may request in connection
with any such registration statement, notification or post-
effective amendment hereunder, on which the Company shall be
entitled to rely, and the Optionee shall indemnify and hold
harmless the Company (and all other persons who may be subject to
liability under the Securities Act or otherwise) from and against
any and all claims, actions, suits, liabilities, losses, damages,
and expenses of every nature and character (including, but
without limitation, all attorneys' fees and amounts paid in
settlement of any claim, action, or suit) which arise or result
directly or indirectly from any untrue statement of a material
fact furnished by the Optionee in connection with such
registration or qualification, or from the failure of the
Optionee to furnish material information in connection with the
facts required to be included in such registration statement,
notification or post-effective amendment necessary to make the
statements therein not misleading.
3. The Company, during the term of this Agreement, will
obtain from the appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of shares of
its Common Stock as shall be sufficient to satisfy the
requirements of the Agreement.
4. The number of Option Shares purchasable upon the
exercise of this option and the Option Price per share shall be
subject to adjustment from time to time subject to the following
terms. If the outstanding shares of Common Stock of the Company
are increased, decreased, changed into or exchanged for a
different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, the Company or its
successors and assigns shall make an appropriate and
proportionate adjustment in the number or kind of shares, and the
per-share Option Price thereof, which may be issued to the
Optionee under this Agreement upon exercise of the options
granted under this Agreement. The purchase rights represented by
this option shall not be exercisable with respect to a fraction
of a share of Common Stock. Any fractional shares of Common
Stock arising from the dilution or other adjustment in the number
of shares subject to this option shall rounded up to the nearest
whole share.
5. The Company covenants and agrees that all Option Shares
which may be delivered upon the exercise of this option will,
upon delivery, be free from all taxes, liens, and charges with
respect to the purchase thereof; provided, that the Company shall
have no obligation with respect to any income tax liability of
the Optionee and the Company may, in its discretion, withhold
such amount or require the Optionee to make such provision of
funds or other consideration as the Company deems necessary to
satisfy any income tax withholding obligation under federal or
state law.
6. The Company agrees at all times to reserve or hold
available a sufficient number of shares of Common Stock to cover
the number of Option Shares issuable upon the exercise of this
and all other options of like tenor then outstanding.
7. This option shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or
to any other rights whatsoever, except the rights herein
expressed, and no dividends shall be payable or accrue in respect
of this option or the interest represented hereby or the Option
Shares purchasable hereunder until or unless, and except to the
extent that, this option shall be exercised..
8. The Company may deem and treat the registered owner of
this option as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
9. In the event that any provision of this Agreement is
found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be
construed as rendering any other provisions contained herein
invalid or unenforceable, and all such other provisions shall be
given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
10. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Utah, without
regard to the principles of conflicts of law thereof.
11. Except as otherwise provided herein, this Agreement
shall be binding on and inure to the benefit of the Company and
the person to whom an option is granted hereunder, and such
person's heirs, executors, administrators, legatees, personal
representatives, assignees, and transferees.
IN WITNESS WHEREOF, the Company has caused this option to be
executed by the signature of its duly authorized officer,
effective this 11th day of March, 1999.
COMET TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxx, Treasurer
The undersigned Optionee hereby acknowledges receipt of a
copy of the foregoing option and acknowledges and agrees to the
terms and conditions set forth in the option.
/s/ Xxxxxx X. Xxxxx
Exercise Notice
(to be signed only upon exercise of Option)
TO: Comet Technologies, Inc.
The Optionee, holder of the attached option, hereby
irrevocable elects to exercise the purchase rights represented by
the option for, and to purchase thereunder,
________________________________ shares of common stock of Comet
Technologies, Inc., and herewith makes payment therefor, and
requests that the certificate(s) for such shares be delivered to
the Optionee at:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
If purchase is to be effected by conversion of the option to
Common Stock, the Optionee hereby converts option rights with
respect to __________________________________ Option Shares
represented by the option.
If acquired without registration under the Securities Act of
1933, as amended ("Securities Act"), the Optionee represents that
the Common Stock is being acquired without a view to, or for,
resale in connection with any distribution thereof without
registration or other compliance under the Securities Act and
applicable state statutes, and that the Optionee has no direct or
indirect participation in any such undertaking or in the
underwriting of such an undertaking. The Optionee understands
that the Common Stock has not been registered, but is being
acquired by reason of a specific exemption under the Securities
Act as well as under certain state statutes for transactions by
an issuer not involving any public offering and that any
disposition of the Common Stock may, under certain circumstances,
be inconsistent with these exemptions. The Optionee acknowledges
that the Common Stock must be held and may not be sold,
transferred, or otherwise disposed of for value unless
subsequently registered under the Securities Act or an exemption
from such registration is available. The Company is under no
obligation to register the Common Stock under the Securities Act,
except as provided in the Agreement for the option. The
certificates representing the Common Stock will bear a legend
restricting transfer, except in compliance with applicable
federal and state securities statutes.
The Optionee agrees and acknowledges that this purported
exercise of the option is conditioned on, and subject to, any
compliance with requirements of applicable federal and state
securities laws deemed necessary by the Company.
DATED this ________ day of ________________________________,
__________.
_______________________________________
Signature
