EXHIBIT 10.5
OPTION AGREEMENT
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This OPTION AGREEMENT (this "Agreement"), is made and entered into as of
_________ __, 2001, by and between HOTEL OUTSOURCE SERVICES, INC., a Delaware
corporation (the "Company"), and BARTECH SYSTEMS INTERNATIONAL, INC., a Delaware
corporation ("Bartech").
RECITALS:
WHEREAS, Bartech desires to obtain from the Company and the Company desires
to grant to Bartech, an option to purchase up to 400 shares (subject to
adjustment in accordance with Section 1.3, the "Option Shares") of the Company's
common stock, par value $0.01 per share (the "Common Stock").
AGREEMENT:
NOW, THEREFORE, in consideration of $1.00, the premises and mutual
covenants of the parties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. OPTION.
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1.1 Option.
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(a) Grant of Option. The Company hereby grants Bartech the right and option
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(sometimes referred to herein as the "Option") to purchase all or a portion
of the Option Shares, at the applicable per share purchase price as set forth in
Section 1.1(c) hereof.
(b) Exercise Period. The Option evidenced hereby shall vest and become
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exercisable with respect to all or a portion of the Option Shares on the date
hereof and shall expire on the 18-month anniversary of the date hereof (the
"Option Period").
(c) Purchase Price. If Bartech exercises any part of this Option on or
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prior to the 12-month anniversary of the date hereof, the purchase price per
Option Share shall be equal to the Equity Per Share (as defined below). If
Bartech exercises any part of this Option after the 12-month anniversary of the
date hereof, the purchase price per Option Share shall be 115% of the Equity Per
Share. For purposes of this Agreement, "Equity Per Share"shall be determined at
any time by dividing (i) the aggregate dollar amount of equity capital
contributions then made by (ii) the number of shares outstanding. The initial
Equity Per Share shall be $500, determined by dividing the $500,000 initially
contributed to capital by the 1,000 shares of Common Stock initially issued.
1.2 Manner of Exercise.
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(a) Notice of Exercise. At any time during the Option Period, Bartech may
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exercise any part of this Option by delivering to the Company written notice of
same, substantially in the form of Exhibit A to this Agreement (the "Option
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Notice"). Such Option Notice shall be accompanied by payment in full of the
aggregate Equity Per Share for the Options Shares to be acquired upon such
exercise in cash, by wire transfer of immediately available funds to an account
designated by the Company, or by certified check, bank draft or money order
payable to the order of the Company (the "Option Payment").
(b) Deliveries. Promptly upon receipt of the Option Notice and the Option
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Payment, the Company shall deliver to Bartech (i) a certificate (a "Company
Certificate"), executed by an executive officer of the Company, certifying that
the representations and warranties of the Company contained in Section 2 of this
Agreement are true and correct as of the date thereof as if made on the
date thereof, and (ii) a certificate or certificates representing the Option
Shares, registered in the name of Bartech or its designee(s). In the event that
the Company is unable to deliver a Company Certificate because any
representation or warranty contained in Section 2 hereof is not true and correct
as of the date thereof, then the Company shall instead deliver to Bartech,
promptly upon receipt of the Option Notice, a statement (a "Disclosure
Statement") setting forth in reasonable detail any amendments or modifications
to such representation or warranty.
(c) Revocation and Confirmation. Following receipt of a Disclosure
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Statement, Bartech shall have 10 days to either (i) confirm its exercise of the
Option, or (ii) revoke its exercise of the Option, in either case by written
notice of same; provided, that Bartech's failure to give notice of confirmation
or revocation within the aforementioned 10-day period shall be deemed a
confirmation of its exercise of the Option. If Bartech revokes its exercise
within such 10-day period, then the Company shall promptly, and in any event
within two business days following its receipt of such revocation notice, return
to Bartech the Option Payment, together within interest at 5% per annum from the
date of the Company's receipt of the Option Payment, by wire transfer of
immediately available funds to an account designated by Bartech or by returning
the certified check, bank draft or money order originally delivered by Bartech
if not yet deposited, plus a separate wire transfer, check or money order
representing payment of such interest. If Bartech confirms its exercise of the
Option, the Company shall promptly and, in any event within two business days
following receipt of such confirmation notice or the last day of the 10-day
revocation period, whichever is earlier, deliver a certificate or certificates
representing the Option Shares, registered in the name of Bartech of its
designee(s).
(d) Continuing Option. If Bartech exercises this Option for less than the
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full number of Option Shares then available for exercise, this Option and this
Agreement shall thereafter represent the right to acquire the remaining number
of Option Shares not previously acquired hereunder.
1.3 Adjustments upon Changes in Capitalization; Reclassifications, Mergers,
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Etc.
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(a) Changes in Capitalization. The number of Option Shares shall be
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proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company.
(b) Reclassifications, Mergers, etc. In case of any (i) reclassification or
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change (other than a change in capitalization described in subsection (a)
above) of the Company's capitalization, (ii) merger or consolidation of the
Company with or into any other corporation or other entity (other than a merger
or consolidation in which the Company is the surviving or continuing
corporation), (iii) sale, lease or conveyance to another corporation or other
entity of the property and assets of any nature of the Company as an entirety or
substantially as an entirety, or (iv) liquidation, dissolution or other
winding-up of the Company (any such case, an "Event"), this Option shall
thereafter be exercisable for the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable upon such
Event by a holder of the number of Common Shares for which this Option might
have been exercised or converted immediately prior to such Event. No such Event
shall be carried into effect unless all necessary steps shall have been taken to
ensure that Bartech shall thereafter be entitled to receive the kind and amount
of shares of stock and other securities, property, cash, or any combination
thereof which Bartech shall be entitled in accordance with this Section 1.3(b).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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2.1 The Company represents and warrants to Bartech as follows:
2.2 Organization. The Company is a corporation duly incorporated, validly
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existing and in good standing under the laws of its jurisdiction of
incorporation.
2.3 Authority. The Company has full power and authority (i) to execute,
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deliver and perform this Agreement, and (ii) to issue the Option Shares upon
exercise of the Option by Bartech. All action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance by the Company of all its obligations under this
Agreement and for the issuance of the Option Shares has been taken. This
Agreement, when executed and delivered by the Company and the other parties
thereto will constitute legally binding and valid obligations of the Company,
enforceable in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, moratorium, creditors'
rights and other similar laws.
2.4 Validity of Option Shares. The Option Shares, when issued, sold and
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delivered in accordance with the terms and for the consideration expressed in
this Agreement, shall be duly and validly issued (including, without limitation,
issued in compliance with applicable federal and state securities laws, assuming
the accuracy of the representations and warranties of Bartech set forth herein
and therein), and free and clear of all liens, encumbrances and restrictions on
transfer of every kind and nature whatsoever, other than restrictions on
transfer imposed on Bartech under applicable state and federal securities laws
and the Stockholders' Agreement dated as of even date herewith among the parties
hereto (the "Stockholders' Agreement). The issuance, sale and delivery of the
Option Shares is not subject to any preemptive right, right of first refusal or
other similar right in favor of any person.
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2.5 No Conflict with Other Instruments. The execution, delivery and
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performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby will not result in any violation of, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under, with or without the passage of time or
the giving of notice, or both, (i) any provision of the Company's Certificate of
Incorporation or By-laws (each as may have been amended, supplemented or
restated); (ii) any provision of any judgment, writ, injunction, decree or order
to which the Company is a party; (iii) any law, statute, rule or regulation
applicable to the Company; or (iv) any contract, agreement or understanding to
which the Company is a party or by which any of its properties or assets are
bound.
2.6 Government Consents. No consent, approval, order or authorization of,
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or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with (i) the execution, delivery and performance of this
Agreement or the Purchase Agreement, or (ii) the issuance, sale and delivery of
the Option Shares, except for such filings required pursuant to applicable
federal and state securities laws and blue sky laws, which filings, if any, will
be effected by the Company within the required statutory period.
2.7 No Defaults or Violations. The Company is not in violation of, in
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conflict with, in breach of or in default under any term or provision of, and no
right of any party to accelerate, terminate, modify or cancel has come into
existence under, (i) its Certificate of Incorporation or By-laws (each as may
have been amended, supplemented or restated), (ii) any provision of any
judgment, writ, injunction, decree or order to which the Company is a party;
(iii) any law, statute, rule or regulation applicable to the Company; or (iv)
any contract, agreement or understanding to which the Company is a party or by
which any of its properties or assets are bound
2.8 Litigation. There is no action, suit, proceeding or investigation
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pending or, to the Company's knowledge, currently threatened against the
Company.
2.9 Capitalization. The authorized capital stock of the Company shall
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consist of a total of 3,000 shares of Common Stock. The Capitalization Table
attached hereto as Exhibit B (which Exhibit B shall be updated by the Company
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from time to time during the Option Period as necessary to reflect any changes
in the Company's capitalization (the "Capitalization Table")) sets forth a
complete and correct list of all of the stockholders of the Company and the
respective number of shares and percentage interest owned of record by each such
stockholder. Except as provided in the Stockholders' Agreement and the Option
Agreement, dated as of even date herewith, by and among the Company, Bartech,
Bartech Mediterranean Ltd. and Hila International Corp., (i) there are no
outstanding warrants, options, conversion or exchange privileges, preemptive
rights, or other rights or agreements to purchase or otherwise acquire or issue
any securities of the Company, and (ii) there is no agreement or understanding
between any persons and/or entities, which affects or relates to the voting or
giving of written consents with respect to any security or any instrument or
security exercisable or exchangeable for, or convertible into any security of
the Company.
2.10 Financial Statements; Absence of Debts and Liabilities. The Company
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has previously delivered to Bartech true and complete copies of the Company's
Financial Statements (as defined in Section 3.6 hereof). All such Financial
Statements (i) have been prepared in accordance with generally accepted
accounting principles ("GAAP"), consistently applied, (ii) are consistent with
the books and records of the Company, and (iii) fairly present the financial
condition of the Company at the dates and the results of operations for the
periods set forth therein. Except as set forth in the Financial Statements, the
Company has no debts, liabilities or obligations (including obligations in
respect of third party guarantees or indemnities), whether accrued, contingent
or otherwise.
2.11 Brokers' Fees and Commissions. Neither the Company nor any of its
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officers, employees or agents has employed any investment banker, broker, or
finder in connection with the transactions contemplated by this Agreement or the
Purchase Agreement.
3. OTHER AGREEMENTS.
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3.1 Covenants of the Company. During the Option Period, the Company shall
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not, without the prior written consent of Bartech, (a) authorize or issue any
capital stock or any option, warrant, put, call, note, bond, debenture, or other
right exercisable, convertible or exchangeable for the Company's capital
stock, (b) take any action relating to the merger, sale, consolidation,
dissolution, winding-up, liquidation or similar transaction, in one or more
related transactions, involving all or substantially all of the capital stock or
assets of the Company, or (c) take any other action which might reasonably be
expected to adversely affect the rights of Bartech hereunder.
3.2 No Rights as Shareholder Bartech shall not be entitled to any rights of
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a stockholder of the Company with respect to any of the Option Shares until such
Option Shares have been purchased and sold in accordance with the terms
hereof
3.3 Notification.
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(a) Notification of Certain Events. In case at any time the Company shall
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propose to effect an Event, the Company shall give written notice thereof to
Bartech, at least 30 days prior to the earlier of (i) the date on which any such
Event is expected to become effective, and (ii) the date as of which it is
expected that holders of record of shares of Common Stock shall be entitled to
exchange their shares for securities or other property, if any, deliverable upon
such Event.
(b) Notification of Breach of Representation or Warranty. During the Option
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Period, the Company will promptly notify Bartech in writing of any fact or
condition that causes or constitutes a breach of any of the Company's
representations and warranties contained in Section 2 hereof, or of any fact or
condition that would cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the of occurrence
of such fact or condition.
(c) Changes to the Capitalization Table and Equity Per Share. If at any
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time during the Option Period the Company shall effect a change in its
capitalization by issuing additional shares of capital stock or otherwise, the
Company shall promptly deliver to Bartech (i) an updated Capitalization Table to
reflect such change in capitalization, and (ii) notice of the new Equity
Per Share amount, together with a statement setting forth the aggregate dollar
amount of equity capital contributions then made, and the number of shares
outstanding used in calculating such new Equity Per Share amount.
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3.4 Taxes. The issuance of certificates for shares of Common Stock upon
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exercise of this Option shall be made without charge to Bartech for any tax or
other charge in respect of the issuance of such certificates or the Option
Shares represented thereby; provided that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of any certificate in a name other than that of Bartech and
the Company shall not be required to issue or deliver any such certificate
unless and until the person or persons requesting the issue 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.
3.5 Reservation of Shares. The Company shall at all times reserve and keep
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available out of its authorized and unissued shares of Common Stock, solely for
the purpose of providing for the exercise of the right to purchase all Option
Shares granted pursuant to this Option, such number of shares of Common Stock as
shall, from time to time, be sufficient therefor.
3.6 Financial Statements. During the Option Period, the Company hereby
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covenants and agrees to deliver to Bartech the following financial statements
(the "Financial Statements"):
(a) as soon as available, and in any event within 30 days after the end of
each month, a profit and loss statement and key monthly metrics for such monthly
accounting period and on a cumulative basis for the fiscal year to date and
a balance sheet as at the last day of such monthly accounting period;
(b) as soon as available, and in any event within 45 days after the end of
each quarterly fiscal period of each fiscal year of the Company, consolidated
statements of income, retained earnings and cash flow of the Company, for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, and the related consolidated balance sheet of the
Company as at the end of such period setting forth in the case of each such
statement in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, if any;
(c) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, consolidated statements of income, retained
earnings and cash flow of the Company for such fiscal year, and the related
consolidated balance sheet of the Company as at the end of such fiscal year,
setting forth in the case of each such statement in comparative form the
corresponding figures for the preceding fiscal year, if any, and accompanied by
an audit report from the Company's independent public accountants.
3.7 Other Information Rights. During the Option Period, the Company hereby
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covenants and agrees to deliver to Bartech (a) with reasonable promptness
after the date on which the Company first obtains knowledge of such, written
notice of all legal or arbitration proceedings, and all proceedings by or before
any governmental or regulatory authority or agency, and each material
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development in respect of such legal or other proceedings, affecting the
Company, which proceeding involves at least $25,000; (b) as soon as available,
but in any event within 90 days after commencement of each new fiscal year, a
budget consisting of a business plan and projecting financial statements for
such fiscal year; and (c) with reasonable promptness, such other notices,
information and data as the Company deems material to its business or
operations. In addition, the Company shall permit you and your representatives
to visit and inspect the properties of the Company, including its corporate and
financial records, and to discuss its business and finances with officers of the
Company, during normal business hours following reasonable notice and as often
as may be reasonably requested, without interruption of the business of the
Company.
4. INDEMNIFICATION.
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4.1 Indemnification Obligations of the Company. The Company agrees to and
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will indemnify, defend and hold Bartech (including for purposes of this Section
4, each officer, director, employee, stockholder, agent and representative of
Bartech) harmless from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorneys'
fees and expenses (hereinafter collectively referred to as "Damages"), imposed
upon or incurred by Bartech by reason of or resulting from or arising out of a
breach of any representation, warranty, covenant or agreement of the Company
contained in this Agreement.
4.2 Third Party Claims; Notification of Claims. Any party entitled to
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indemnification pursuant to Section 4.1 hereof (each, an "Indemnified Party")
shall (i) provide the Company with prompt notice of all third party actions,
suits, proceedings, claims, demands or assessments subject to the
indemnification provisions of this Section 4 (collectively, "Third Party
Claims") brought at any time following the date hereof, and (ii) provide the
Company with notice of all other claims or demands for indemnification pursuant
to the provisions of this Section 4; provided, however, that the failure to
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provide timely notice shall not affect the indemnification obligations of the
Company except to the extent the Company shall have been materially prejudiced
as a result of such failure. In the case of a Third Party Claim, the Indemnified
Party shall make available to the Company all relevant information material
to the defense of such claim. The Company shall have the right to control the
defense of all Third Party Claims with counsel reasonably acceptable to the
Indemnified Party, subject to the Indemnified Party's right to participate in
the defense; provided, that the Indemnified Party may control such defense at
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the Company's expense in the event (i) of a failure by the Company to assume
control of the defense of any Third Party Claim within five days after the
Company is notified of such Third Party Claim, (ii) that the defense of the
Indemnified Party by the Company would be inappropriate due to actual or
potential conflicts of interest between such Indemnified Party and any other
party represented by such counsel in such proceeding, or (c) the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Party and the Company, and the Indemnified Party reasonably
determines that there may be legal defenses available to such Indemnified Party
which are different from or in addition to those available to the Company.
Notwithstanding any assumption of such defense and without limiting the
indemnification obligations provided for under this Section 4, the Indemnified
Party shall have the right to elect to join or participate in the defense of any
Third Party Claim (at its sole expense if the Company is permitted to assume and
continue control of the defense and has elected to do so and otherwise at the
expense of the Company), and no claim shall be settled or compromised without
the consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed.
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5. MISCELLANEOUS.
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5.1 Governing Law. This Agreement shall be governed by the laws of the
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State of New York.
5.2 Entire Agreement. This Agreement and the other documents delivered
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pursuant to this Agreement constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and merge all prior discussions,
negotiations, proposals and offers (written or oral) between them, and no party
shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. The Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.
5.3 Amendments and Waivers. Except as expressly provided in this Agreement,
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neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
5.4 Headings. The titles and subtitles used in this Agreement are used for
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convenience only and are not considered in construing or interpreting this
Agreement.
5.5 Construction. All pronouns shall be deemed to refer to the masculine,
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feminine or neuter, as the identity of the person referred to may require; the
singular imports the plural and vice versa.
5.6 Notices. All notices and other communications required or permitted
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under this Agreement shall be sent by registered or certified mail, postage
prepaid, overnight courier, confirmed telex or facsimile transmission or
otherwise delivered by hand or by messenger, addressed to the parties as
follows (or at such other address as any such party shall have furnished to the
other parties hereto in writing):
If to the Company: With a Copy to:
Hotel Outsource Services, Inc. ________________________________
00 Xxxx Xxxxxx, Xxxxx 00X ________________________________
Xxx Xxxx, Xxx Xxxx 00000 ________________________________
Attention: Xxxxx Xxxxxx Attention:________________________
Facsimile:011.9723.516.8577 Facsimile:________________________
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If to Bartech: With a Copy to:
Bartech Systems International, Inc.
000 Xxxxxxx Xxxx, Xxxxx X Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx & Xxxxx, P.C.
Xxxxxxxxxxxx, Xxxxxxxx 00000 000 Xxxxx Xxxxxx
Attention: Xxxxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: (000) 000.0000
5.7
5.8 Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given (i) when delivered if
delivered personally, (ii) if sent by registered or certified mail, at the
earlier of its receipt or three business days after registration or
certification thereof, (iii) if sent by overnight courier, on the next business
day after the same has been deposited with a nationally recognized courier
service, or (iv) when sent by confirmed telex or facsimile, on the day sent (if
a business day) if sent during normal business hours of the recipient, and if
not, then on the next business day.
5.9 No Third Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any person other than the parties hereto and their
permitted successors and assigns.
5.10 Severability. In the event that any provision of this Agreement
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becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
5.11 Successors and Assigns. The provisions of this Agreement shall inure
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to the benefit of, and be binding upon, the permitted successors and assigns of
the parties to this Agreement. Notwithstanding the foregoing, the Company may
not assign this Agreement without the written consent of Bartech, and Bartech
may not assign this Agreement or its rights hereunder to any party other than a
person or entity that controls, is controlled by, or is under common control
with, Bartech.
5.12 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument. This Agreement may be delivered by facsimile, and facsimile
signatures shall be treated as original signatures for all applicable purposes.
5.13 Delays and Omissions. Except as expressly provided in this Agreement,
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no delay or omission to exercise any right, power or remedy accruing to the
Company or Bartech or their respective successors or assigns, upon any breach or
default by another party hereto under this Agreement shall impair any such
right, power or remedy of the Company or Bartech or their respective successors
or assigns, as the case may be, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of a waiver of or
acquiescence in any similar breach or default thereafter occurring; nor shall
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any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring; provided, however, that
this Section 5.11 shall not be interpreted to extend the date or time for any
right, privilege or option beyond that expressly set forth elsewhere in this
Agreement. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder shall be cumulative and
not alternative.
5.14 Further Assurances. The parties agree (a) to furnish upon request to
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each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as they
other party may reasonable request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
{Signature Page Follows.}
5.15 IN WITNESS WHEREOF, the parties have hereunto set their hands as
of the date first above written.
"COMPANY" HOTEL OUTSOURCE SERVICES, INC.
/s/ Xxxxx Xxxxxx and Xxxxx Xxxxx
By:_____________________________
Name: Xxxxx Xxxxxx and Xxxxx Xxxxx
Title: CEO COO
"BARTECH" BARTECH SYSTEMS INTERNATIONAL, INC.
/s/ Xxxxxx Xxxxx
By:_____________________________
Name: Xxxxxx Xxxxx
Title: President and CEO
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EXHIBIT A
FORM OF
OPTION NOTICE
__________________________
Date
Hotel Outsource Services, Inc.
00 Xxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is hereby made to that certain Option Agreement (the "Option
Agreement") dated as of __________ ___, 2001, between Hotel Outsource Services,
Inc. (the "Company") and Bartech Systems International, Inc. ("Bartech").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Option Agreement.
Bartech hereby exercises its right to purchase _________ Option Shares
covered by the Option Agreement and tenders the Option Payment in the amount of
$__________ in accordance with the terms thereof, and request that certificates
for such securities be issued in the name of, and delivered to:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
(Print Name, Address and Tax Identification No.)
Very truly yours,
BARTECH SYSTEMS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
EXHIBIT B
CAPITALIZATION TABLE
As of __________ __, 2001
Name of Stockholder Number of Shares of Common Stock
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Hila International Corp. 700
Bartech Systems International, Inc. 300*
TOTAL 1,000
* Does not include shares issuable upon exercise of the Option Agreement to
which this Capitalization Table is attached.
