EXHIBIT NUMBER 6.4
CONSULTING AGREEMENT
THIS AGREEMENT made and entered into the 6th day of
February, 1998, effective as of December 1, 1997, by and
between Torvec, Inc., a New York corporation having a
principal place of business at 00 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx, 00000 (hereinafter "TORVEC") and Xxxxx X.
Xxxxxxxx, an individual having a principal place of business
at 00 XxXxxxx Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, 00000
(hereinafter "Consultant").
WITNESSETH
WHEREAS, Consultant has experience in the design,
development, and manufacture of gears, clutches, couplings,
and other mechanical elements , for all purposes including,
but not limited to use in automotive components and motor
vehicles and is willing to design, develop, and manufacture
such products for TORVEC; and
WHEREAS, TORVEC desires to have Consultant design,
develop, and assist in the manufacturing of such products
for TORVEC under the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
and promises set forth herein, the parties hereto agree as
follows.
1. Definitions. The following definitions shall apply
for all purposes of this Agreement:
(a) "Work Product" shall mean all data, designs,
documentation, inventions, soft-
xxxx and information, in whatever form, first produced
created or emanating from, by or for Consultant in the
performance of work or the rendition of services under this
Agreement.
(b) "Background Rights" shall mean all data,
designs, documentation, inventions, software and
information, in whatever form, not first produced created or
emanating from, by or for Consultant as a result of or
related to the performance of work or the rendition of
services under this Agreement, but included in or necessary
for use in or with the Work Product or any other product or
any portion thereof which is produced or contemplated by
Torvec.
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(c) "TORVEC Representative" shall mean the Chief
Operating Officer of Torvec or his alternate as designated
in writing by him.
2. Work to be performed and services to be rendered.
(a) Consultant agrees, during the term of this
Agreement, the Consultant shall devote his full time and
effort to the design, development, and manufacture of
inventions and products for Torvec, and the training of
others performing such work.
(b) The work to be performed and the services to be
rendered hereunder shall be performed by the Consultant, and
such work or services may not be subcontracted or otherwise
performed by third parties on behalf of Consultant without
the prior written permission of TORVEC, which permission
shall not be unreasonably withheld; provided, however, that
Consultant shall be responsible therefor pursuant to this
Agreement.
3. Rights in the Work Product and Background Rights.
(a) Consultant hereby grants to TORVEC, and TORVEC
hereby accepts, the entire, right title and interest of
Consultant in and to the Work Product and in and to all
patents, copyrights, trade secrets, trademarks, and other
proprietary rights in or based on the Work Product.
(b) Consultant hereby grants to TORVEC, and TORVEC
hereby accepts, an unlimited, unrestricted, royalty-free,
fully paid-up, worldwide exclusive right and license, with
the right to grant licenses and sublicenses to others
without accounting to Consultant, under the Background
Rights and the entire right, title, and interest of
Consultant to the Background Rights and all proprietary
rights therein or based thereon.
(c) Consultant and TORVEC agree that if the Work
Product or any portion thereof is copyrightable, it shall be
deemed to be a "work made for hire," as such term is defined
in the Copyright Laws of the United States.
(d) Consultant shall cooperate with TORVEC or its
designees and execute all documents of assignment, oaths,
declaration and other documents, as may be prepared by
TORVEC, to effect the foregoing or to perfect or enforce any
proprietary rights resulting from or related to this
Agreement. Such cooperation and execution shall be at no
additional compensation to Consultant; provided, however,
that TORVEC shall reimburse Consultant for reasonable out-of
pocket expenses incurred.
4. Compensation..
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(a) As compensation in full for the successful
performance of all work and services to be performed
hereunder, including the grant of rights and licenses in and
to Work Product and Background Rights, TORVEC shall pay
Consultant a fixed fee of $12,500.00 per month.
(b) TORVEC shall reimburse Consultant for expenses
incurred by Consultant in the performance of work and the
rendition of services under this Agreement, provided that
reimbursement of travel and related expenses shall be in
accordance with TORVEC's then current policies applicable to
TORVEC employees for the reimbursement of such expenses.
Consultant shall obtain receipts for all expenses in excess
of $25 and shall submit them to TORVEC.
(c) Subject to the approval by its shareholders of
the Company's 1998 Stock Option Plan, there is hereby
granted to the Consultant a non-qualified stock option to
purchase up to 25,000 shares of the Company's $.01 par value
Common Stock at an exercise price of $5.00 per share. The
option granted hereby shall be subject to the terms and
conditions set forth in the Stock Option Agreement attached
hereto and made a part hereof. The term of the option shall
be for a period of 10 years, shall vest on a cumulative
basis at a rate of 20% per year, shall provide for immediate
and full vesting in the event the Company is acquired and
shall provide that the right to exercise the option in
accordance with its terms shall survive the Consultant's
termination of services.
5. Confidentiality.
(a) Consultant agrees that the Work Product and
Background Rights are the sole and exclusive property of
TORVEC, and Consultant shall treat the Work Product and
Background Rights on a confidential basis and not disclose
it to any third party or use it for the benefit of other
than TORVEC; provided, however, that Consultant shall be
relieved of such obligation if and when TORVEC discloses the
Work Product and Background Rights without any restriction
on use or further disclosure.
(b) Consultant shall keep confidential and not
disclose or use for the benefit of other than TORVEC any and
all written or tangible information stamped "confidential,"
"proprietary" or with a similar legend which is made
available or disclosed to Consultant as a result of or in
any way related to this Agreement; provided, however, that
Consultant shall have no obligation hereunder for that
portion of such information which is disclosed by TORVEC to
others without any restriction on use and disclosure.
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(c) Consultant acknowledges that his promised
services hereunder are of special, unique, unusual and
extraordinary character which gives them peculiar value,
the loss of which cannot adequately be compensated in
damages in an action at law, and Consultant further
acknowledges that in his consultative capacity hereunder he
will be making use of, acquiring and adding to confidential
information of special and unique value relating to the
affairs of the TORVEC, its subsidiaries and affiliates,
including but not limited to its financial affairs, new
products, marketing plans, and costs of providing the
products. In addition to and not in limitation of any other
restrictive covenants which may be binding upon Consultant,
Consultant agrees that he will not (except for the benefit
of or with the written consent of the TORVEC, its
successors or assigns);
(1) During or after the Term of Consultation,
disclose any of said information to any
person, firm or corporation for any purpose
whatsoever; and
(2) During the Term of Consultation or within
two (2) years thereafter, in any area in
which duties have at any time been assigned
to him hereunder during the Term of
Consultation, engage (as an individual or
as a stockholder, partner, member, agent,
employee or representative of any person,
firm, corporation limited liability company
or partnership, or association), or have
any interest, direct or indirect, in any
entity developing or producing products or
related business in competition with the
business of the TORVEC; provided that this
paragraph shall not prevent the Consultant
from acquiring and holding shares of stock
of TORVEC and not to exceed two (2%)
percent of the outstanding shares of stock
of any other corporation which engages in a
related business if such shares are
available to the general public on a
national securities exchange or NASDAQ..
6. Term of agreement.
(a) This Agreement shall be for a period of three
years commencing on December 1, 1997 unless terminated or
canceled as provided herein.
(b) The term of any right or licenses under
proprietary rights granted to TORVEC as a result of or
related to this Agreement shall be for the full term of such
proprietary rights.
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7. Warranties and representations. Consultant warrants
and represents that:
(a) The Work Product is original work developed
pursuant to this Agreement;
(b) The Work Product was created by the Consultant;
(c) The Work Product, in whole or in part, does not,
upon information and belief, infringe any patents,
copyrights, trade secrets or other proprietary rights of
third parties and Consultant has received no claims or
charges of such infringement by the Work Product or any
portion thereof, and Consultant has no reason to believe
that the Work Product, in whole or in part, may infringe the
patents, copyrights, trade secrets or other proprietary
rights of third parties;
(d) Consultant has the authority to enter into this
Agreement and to perform all obligations, hereunder,
including, but not limited to, the grant of rights and
licenses to the Work Product and Background Rights and all
proprietary rights therein or based thereon; and
(e) Consultant has not granted any rights or
licenses to third parties under Work Product or any portion
thereof.
8. Indemnities. Consultant shall indemnify and hold
TORVEC harmless against any loss or liability to person or
property arising out of the performance of Consultant under
this Agreement
9. Disability waiver. TORVEC recognizes that
Consultant's past association with TORVEC has created unique
goodwill to TORVEC. TORVEC desires to retain Consultant's
services and prevent them from being used by its
competitors, even though Consultant may become disabled or
incapacitated. Accordingly, it is expressly understood that
Consultant's inability to render Services to TORVEC because
of absences, or temporary or permanent illness, disability,
or incapacity, or for any other reasonable cause, shall not
constitute a failure to perform his obligations hereunder
and shall not be deemed a breach or default by him.
10. Death benefit. Should Consultant die during the
term of this Agreement, the Agreement shall terminate as of
the last day of the month of his death. TORVEC shall, for a
period of twelve (12) months after Consultant's death, pay
to his legal representatives, or to his surviving widow
(provided that Consultant has so instructed TORVEC in
writing prior to his death) the sum of $12,500.00, monthly
to be paid on the last day of each month during the twelve
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(12) month period. If Consultant dies during the last year
of this Agreement, however, the $12,500.00 monthly payments
to his legal representatives or widow, as the case may be,
shall not in any case be made after the termination date set
forth in this Agreement.
11. Termination/Cancellation.
(a) This Agreement may be terminated or canceled by
either party upon the occurrence of any of the following
events, and neither party shall have any liability to the
other party for the exercise of such right.
(1) By either party, if the other party has
breached a covenant, obligation or warranty under this
Agreement and such breach remains uncured for a period of 30
days after notice thereof is sent to such other party;
(2) By either party, if the other party ceases
to conduct business.
(b) In the event either party terminates or cancels
this Agreement pursuant to this Paragraph 11, TORVEC shall
have no further liability to Consultant, except to pay
Consultant a pro-rata share of the compensation of Paragraph
4 for that portion of the Work Product performed through the
date of termination/cancellation.
12. Arbitration. Any controversy or claim arising out
of or relating to this Agreement shall be settled by
arbitration in accordance with the Rules of Commercial
Arbitration of the American Arbitration Association. Any
judgment upon the award rendered in such arbitration may be
entered in any court of competent jurisdiction.
Notwithstanding the provisions of this paragraph, TORVEC
shall have the right to seek enforcement of the provisions
of paragraph 5 above by a court proceeding for an
injunction.
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13. General.
(a) This Agreement is the sole and entire agreement
between the parties relating to the subject matter hereof
and the Work Product and the Background Rights, and
supersedes all prior understandings, agreements, and
documentation relating to the subject matter hereof other
than prior assignments and transfers of ownership by
Consultant to Torvec which assignments and transfers remain
in full force and effect. This Agreement may be amended
only by an instrument executed by the authorized
representatives of both parties.
(b) Any termination, cancellation or expiration of
this Agreement notwithstanding, provisions which are
intended to survive and continue shall so survive and
continue, including, but not limited to, the provisions of
Paragraphs 3, 5, 7, 8, 9,10 11 and 12.
(c) This Agreement shall be interpreted in
accordance with the substantive law of the State of New
York.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by their duly authorized
representatives and to be effective as of the date first
above written.
TORVEC, INC.
By:______________________ _______________________
Title: Xxxxx X. Xxxxxxxx
Date: ___________________ Date:_________________
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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT MADE as of this 1st day of
December, 1997 between TORVEC, INC., a New York business
corporation (herein referred to as the "Company"), and XXXXX
X. XXXXXXXX (herein referred to as the "Optionee");
WITNESSETH:
1. The Company hereby grants to the Optionee an Option
(hereinafter referred to as "Option") to purchase an
aggregate of 25,000 shares of the $.01 par value Common
Stock of the Company (herein referred to as the "Shares") at
an exercise price of $5.00 per Share to be paid by the
Optionee with cash, a certified check or a bank cashier's
check made payable to the order of the Company.
Alternatively, provided the Board of Directors shall approve
the specific transfer, the Optionee may pay for the Shares,
either in whole or in part, by the delivery of Common Stock
of the Company already owned by him which will be accepted
as payment for the Shares, based upon such Common Stock's
fair market value on the date of exercise. In addition,
provided the Board of Directors shall approve the specific
transfer, payment for the Shares, either in whole or in
part, may be made by delivery of Common Stock acquired by
the Optionee under any of the Company's stock option plans,
provided, however, that if this Option is exercised in part,
Shares acquired by such partial exercise may not be used as
payment for additional Shares to be acquired under this
Agreement. In order for the Optionee to so use shares of
Common Stock previously acquired under any of the Company's
stock option plans as payment for the Shares either in whole
or in part, the transfer of such previously acquired Common
Stock as payment for all or a portion of the exercise price
under this Agreement must occur more than two years from the
date of the grant and one year from the date of exercise of
the prior option pursuant to which the Optionee acquired
such Common Stock.
2. The term during which the Option shall be
exercisable shall commence on December 1, 1997 and expire on
the close of business November 30, 2007, subject to earlier
termination as provided in the Torvec, Inc. 1998 Stock
Option Plan (herein referred to as the "Plan"). The Option
to purchase the number of Shares granted under this
Agreement vest on the 1st day of each of the five years of
the Option Term on a cumulative basis, in accordance with
the following schedule:
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VESTED NON-VESTED
12/1/97 - 11/30/98 20% 80%
12/1/98 - 11/30/99 40% 60%
12/1/99 - 11/30/2000 60% 40%
12/1/2000 - 11/30/2001 80% 20%
12/1/2001 - 11/30/2002 100% 0%
provided however, that to the extent the Optionee shall fail
to exercise or, due to the above limitation, be prohibited
from exercising his Option in any year during the Option
period, such annual right to exercise this Option shall not
expire, but shall be cumulative and carry over into and be
exercisable in any subsequent year during which the Option
is outstanding.
This Option may be exercised by the Optionee in
accordance with its terms during the Option Term even
though, at the time of such exercise, whether in whole or in
part, the Optionee is no longer an consultant of the
Company.
3. Notwithstanding the limitation upon immediate
exercise set forth in Section 2 hereof, this Option shall be
exercisable in full immediately upon the occurrence of a
change in control of the Company. For this purpose, the
term "change in control of the Company" shall generally
include a change in the ownership or effective control of
the Company or in the ownership of a substantial portion of
the assets of the Company. Specifically, the term shall
include (i) the purchase or other acquisition by any person,
entity or group of persons, within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, or
any comparable successor provisions, of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Act) of more than 50% of either the outstanding
shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to
vote generally, or (ii) the approval by the shareholders of
the Company of a reorganization, merger, or consolidation
with respect to which, in such case, persons who were
shareholders of the Company immediately prior to such
reorganization, merger, or consolidation do not immediately
thereafter, own more than 50% of either the outstanding
shares of common stock or the combined voting power of the
reorganized, merged or consolidated Company's then
outstanding voting securities entitled to vote generally or
(iii) the liquidation and/or dissolution of the Company.
4. The Option is not transferable by the Optionee
other than by Will or the laws of descent and distribution
and is exercisable, during his lifetime, only by the
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Optionee. In the event that the right to exercise the
Option passes to the Optionee's estate, or to a person to
whom such right devolves by reason of the Optionee's death,
then the Option shall be non transferable in the hands of
the Optionee's Executor or Administrator or of such person,
except that the Option may be distributed by the Optionee's
Executor or Administrator to the distributees of the
Optionee's estate as a part thereof.
5. In order for the Option to be exercised, in whole or
in part, the notice by the Optionee to the Company in the
form attached hereto must be accompanied by payment in full
of the option price for the Shares being purchased. In
addition, the Optionee agrees to tender to the Company an
additional amount, in cash, certified check, cashier's check
or bank draft, equal to the amount of any taxes required to
be collected or withheld by the company in connection with
the exercise of his Option.
6. The Company agrees that it will use its best
efforts to register the sale of the Shares to be issued upon
the exercise of the Option with the Securities and Exchange
Commission under the Securities Act of 1933. Upon the
effectiveness of the Registration Statement covering the
Shares, the Optionee shall be able to sell the Shares in
"open market transactions" free of Federal Securities Law
restrictions, provided that at the time of sale, or within
the three month period immediately prior to such sale, he is
not nor has he been an "affiliate" of the Company. The
Optionee further understands that, in accordance with
applicable Commission rules governing controlling persons of
public companies, members of the board of directors of a
public company, and/or persons who hold significant
policy-making positions with a public company, such as the
Company, are deemed to be "affiliates" during their term of
office. The Optionee, therefore, agrees that he will
consult with the Company's counsel as to any Securities Law
restrictions, including a limitation on the number of Shares
which may be sold at any one time, on his ability to sell
the Shares prior to any sale thereof.
7. The Company agrees to provide the Optionee with a
copy of the Prospectus prepared by the Company in connection
with the Registration Statement filed to register the
Shares, together with its exhibits, and the Company hereby
acknowledges its obligation to provide the Optionee with all
proxy and other shareholder communications, including the
annual report to security holders, for the most recently
completed fiscal year of the Company and all updates
thereof. The Optionee agrees that prior to exercise, either
in whole or in part of the Option granted to him hereunder,
he shall have read such materials, including the most recent
annual and quarterly reports to shareholders, and shall have
received, if requested, and read all the documents
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incorporated by reference in the Prospectus and Registration
Statement filed with the Securities and Exchange Commission.
8. The Optionee understands that except as provided in
Paragraph 6 above, the Company has not agreed to register
either the issuance or the resale of the Shares in
accordance with the provisions of the Securities Act of 1933
or to register either the issuance or the resale of the
Shares under any applicable State Securities Laws. Hence,
the Optionee agrees that by virtue of the provision of
certain rules respecting "restricted securities" promulgated
under such Federal and/or State Laws, unless the resale of
the Shares is registered as provided in Paragraph 6 above,
and until the registration of such Shares in accordance with
Paragraph 6 above shall have been declared effective by
order of the Commission, the Shares which the Optionee shall
purchase upon the exercise of this Option must be held
indefinitely and may not be sold, transferred, pledged,
hypothecated, or otherwise encumbered for value, unless and
until a secondary distribution and/or resale of such Shares
is subsequently registered under such Federal and/or State
Securities Laws, or unless an exemption from registration is
available, in which case the Optionee still may be limited
as to the amount of the Shares that may be sold,
transferred, pledged and/or encumbered for value. The
Optionee therefore agrees that, until the registration of
such Shares shall have been declared effective by order of
the Commission, the Company may affix upon any certificate
representing the Shares, a legend that such Shares may not
be transferred in violation of Section 5 of the Securities
Act of 1933.
9. The Optionee understands and agrees that the Shares
to be acquired upon the exercise of the Option may not be
sold, transferred, exchanged, hypothecated, encumbered,
pledged or otherwise disposed of for value for a period of
six (6) months from the date of the grant of this Option.
10. The Optionee understands that the Company has
established certain policies and procedures governing trading
in the Company's securities, including the Shares to be
acquired upon the exercise of this Option, while in
possession of material, inside information regarding the
Company and/or any of its subsidiaries, receipt of which is
hereby acknowledged. The Optionee agrees that upon exercise
of this Option, either in whole or in part, he will comply
with all of the terms and conditions of such policy,
including the procedures and guidelines established for its
implementation. In particular, the Optionee agrees that
where required under such guidelines and procedures, he will
obtain permission of the Company's Clearinghouse Committee
composed of senior management prior to effectuating any sale
or other transfer for value of the Shares to be acquired by
virtue of the exercise of this Option.
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11. All the terms and provisions of the Plan, duly
adopted at a meeting of the Company's Board of Directors on
_______________ and approved by a majority vote of the
Company's shareholders either in person or by proxy at a duly
called meeting of such shareholders held on _______________
and as amended to date, are hereby expressly incorporated
into this Stock Option Agreement and made a part hereof as if
printed herein and the Optionee, by the Optionee's signature
hereon, acknowledges receipt of a certified copy of said
Plan. If there shall be any conflict between this Agreement
and the Plan, the provisions of the Plan shall control.
12. In accordance with certain terms and conditions of
the Plan, the aggregate number and kind of shares that may be
purchased pursuant to the grant of the Option under this
Agreement shall be proportionately adjusted for any increase,
decrease or change in the total number of the outstanding
shares of the Company resulting from a stock dividend,
stock-split or other corporate reorganization which would
result in or have the effect of the Optionee being treated
differently (but for the adjustment) than he would be treated
had he been the beneficial owner of the Shares subject to the
Option on the record date for such dividend, split or
reorganization, as the case may be.
13. The Optionee understands that the Option granted
hereunder constitutes a "nonqualified stock option" for
federal, and if applicable, state income tax purposes.
Consequently, the Optionee understands that under current
provisions of federal tax law, for
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regular as well as for purposes to the federal alternative
minimum income tax, no gain or loss generally is recognized
to the Optionee upon the grant of the Option. In addition,
the Company will receive no business expense deduction as a
result of the grant of the Option.
For federal income tax purposes, upon the exercise of
the Option, the difference between the exercise price and the
fair market value of the Shares on the date of exercise
constitutes ordinary income to the Optionee and is taxed to
the Optionee at normal, ordinary tax rates, except to the
extent the Shares are not transferable and are subject to a
substantial risk of forfeiture. To the extent such
difference is required to be included as income by the
Optionee, the Company is entitled to a business expense
deduction. Upon the later sale of the Shares, long or short
term capital gain or loss will be recognized by the Optionee,
depending upon the holding period (eighteen months for long
term capital gain or loss) and the extent to which the
selling price exceeds or is less than the Optionee's basis in
the stock. The amount of gain will be taxed at normal,
ordinary tax rates, with a maximum rate of 20% if the Shares
are held for a period of at least eighteen months. If the
Shares are held for a period of at least twelve months, the
maximum rate on any gain from their sale will be taxed at
28%.
The Optionee also understands that the provisions of
federal tax law described herein are subject to change and,
consequently, the Optionee agrees to consult with his or her
own tax advisor with respect to the tax treatment to be
accorded the grant of the Option herein, the exercise of such
Option, and the disposition of the Shares.
14. Consistent with the provisions of the Plan, this
Agreement shall be binding upon and inure to the benefit of
any successor or assignee of the Company and to any executor,
administrator, legal representative, legatee, or distributee
entitled by law to the Optionee's right hereunder.
15. Except insofar as an interpretation of federal
securities law otherwise is required, or is controlling, this
Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed on its behalf by its duly authorized officer
and the Optionee has hereunto set his hand, as of the day and
year first above written.
TORVEC, INC.
By: ____________________________
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____________________________
Xxxxx X. Xxxxxxxx, Optionee
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NOTICE OF EXERCISE OF STOCK OPTION
AND
RECORD OF STOCK TRANSFER
Torvec, Inc.
0000 Xxxxx 000
Xxxxxxxxxx, Xxx Xxxx 00000
Gentlemen:
I hereby exercise my Stock Option granted to me by Torvec,
Inc. under a Stock Option Agreement dated _______________,
subject to all the terms and provisions thereof and of the
Torvec, Inc. 1998 Stock Option Plan referred to therein and
notify you of my desire to purchase Shares of
the $.01 par value Common Stock of the Company which were
offered to me pursuant to the Stock Option Agreement.
Enclosed is my payment in the sum of in full
payment of such Shares.
I understand that a Registration Statement covering the
Shares to be issued to me pursuant to this exercise of the
Option granted to me was filed with the Securities and
Exchange Commission on _______________. The Registration
Statement became effective on _______________. Consequently,
I understand that unless I am an "affiliate" of the Company,
the Shares I am acquiring are freely tradeable and may be sold
by me in "open market" transactions. If I am an "affiliate"
of the Company, however, or have been one during the three
month period prior to sale, I recognize that I may not sell
freely on the open market and therefore agree that I will
consult the Company's counsel as to the securities law
restrictions on my ability to sell the Shares.
I also understand that under the Plan, and in accordance
with the terms of the Stock Option Agreement, I may not sell,
assign, alienate, pledge, encumber or otherwise transfer for
value the Shares unless a period of six (6) months has elapsed
from the date of the grant of the Option to me.
I acknowledge that I am aware that the Company has
established a policy with respect to trading in its securities
while in possession of material inside information regarding
the Company and/or its subsidiaries, and that, in accordance
with certain guidelines and procedures designed to implement
such policy, I may be required to obtain permission from a
Clearinghouse Committee, composed of Senior Management, prior
to any sale or other transfer for value of the Shares hereby
acquired.
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I also acknowledge that I have received and have read the
Prospectus dated _______________ prepared by the Company in
connection with the grant of the Option contained herein,
together with its exhibits, and all proxy and other
shareholder communications, including the annual report to
security holders, for the most recently completed fiscal year
and all quarterly and current updates thereof. I acknowledge
that I have received all documents incorporated by reference
in the Prospectus and the Registration Statement filed with
the Securities and Exchange Commission that I requested and
have read the same. I acknowledge that I have had the
opportunity to ask questions of and receive answers from the
Company's management concerning the information set forth in
such Prospectus, reports and updates and have been satisfied
with the answers provided regarding the same.
Finally, I acknowledge that there are significant federal
income tax consequences resulting from my exercise of this
Option, that I have consulted with and received advice from
qualified tax counsel both as to the nature of such tax
consequences and their impact upon my own personal income tax
situation as the result of such exercise, and that I fully
understand such impact and have planned accordingly.
DATED: __________ _____________________________
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Receipt is hereby acknowledged of the delivery to me by Torvec,
Inc. on , 19 of stock certificates
for shares of $.01 par value common stock purchased by me
pursuant to the terms and conditions of the Torvec, Inc. 1998
Stock Option Plan referred to above.
DATED: __________ _____________________________
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