EXHIBIT 10.9
Certificate number: _____
Form of Stock Option Agreement
This Option, and the underlying securities issuable upon the exercise
hereof, have not been registered under the Securities Act of 1933, as amended,
and applicable state securities laws and neither this Option nor such underlying
securities may be assigned, hypothecated, pledged, sold or otherwise transferred
or encumbered except as provided in this Option.
COMMON STOCK OPTION
Carnegie International Corporation
(a Colorado Corporation)
For value received, Carnegie International Corporation (the "Corporation")
hereby grants to ___________________ (the "Holder"), subject to the terms and
conditions hereinafter set forth, the option to purchase such number of shares
of the common stock without par value (the "Common Stock") of the Corporation as
shall, immediately upon the exercise of this Option by the Holder, be issued
(the "Shares").
1. Term and Exercise.
(a) This Option may be exercised by the Holder for all, or any
part, of the Shares of the Common Stock subject to this Option at any time or
times prior to the expiration of this Option, which expiration shall occur four
(4) years from the original issue date (the "Issue Date") being 29th September,
1997.
(b) The Holder shall exercise this Option by surrender to the
Corporation of this Option with the Purchase Form attached hereto as Exhibit A,
duly executed, accompanied by payment in cash or by check of the price
hereinafter set forth for the Shares of the Common Stock so purchased (the
"Option Price").
(c) Within fifteen (15) business days of an exercise of this
Option by the Holder as herein above provided, the Corporation shall cause to be
issued in the name of and delivered to the Holder a certificate or certificates
for the Shares of the Common Stock so purchased. The Corporation covenants and
agrees that all of the Shares of the Common Stock which may be issued and
delivered upon the due exercise of this Option by the Holder shall, upon such
issuance and delivery, be fully paid and non-assessable and free from all stamp
taxes, liens and charges and such Shares shall rank in pari passu in all
respects with the issued stock of the Corporation at the date of issue. The
Corporation agrees at all times to reserve and hold available a sufficient
number of Shares of the authorized but unissued Common Stock of the Corporation,
to cover the Shares of the Common Stock issuable upon the exercise of this
Option, together with any other outstanding options, warants or conversion
rights.
2. Option Price.
The Option Price at which the Shares of the Common Stock shall be
purchased upon the exercise of this Option shall be one tenth of one cent
($.001) per share.
3. Number of Shares to be Issued.
(a) The total number of shares which may be issued pursuant to
this Option shall be determined by dividing the number 2,500,000 by the average
Market Price of the Corporation Shares as quoted by the NASD Over the Counter
Bulletin Board Service ('OTCBB") for the thirty (30) consecutive trading days
before the exercise date. The Holder may elect to exercise all or part of the
Option. The term "'Market Price" shall be defined as (i) the closing price of
the Shares; or (ii) the highest closing price if the Shares trade on more than
one market or exchange; or (iii) the mean between the highest bid and the lowest
asked prices.
(b) Notwithstanding anything to the contrary herein, in the event
of the occurrence of a capital transaction, including but not limited to, a
share dividend, share exchange, merger, reverse merger or other capital
transaction of an extraordinary nature which shall make the computation of the
number of shares or the Market Price, as set forth in paragraph (a) of section 3
hereof, inaccurate or inappropriate, the said method of computation shall be
appropriately revised.
(c) The Corporation hereby agrees to maintain such records on a
daily basis so as to have the ability to provide the Holder with the average
Market Price on any given day. The Holder may request such information from the
Corporation at any reasonable time.
4. Put Option.
To the extent that the Option is not fully exercised on the third
anniversary of the Issue Date, the Holder may, for a period of thirty (30) days
following such anniversary exercise the remainder of the Option, in whole or in
part, and require the Corporation to purchase the resultant number of shares, in
accordance with Section 3 above, at the price at which the number of Shares was
computed. The Put Option shall be exercised by the Holder by forwarding written
notice to the Corporation (the "Put Notice"), which shall be received within
thirty (30) days from the said third anniversary. In the event the Put Option
shall be elected, Corporation shall remit payment within thirty (30) days of its
receipt of the Put Notice. Any payments received after said date shall accrue
interest at the rate of six (6%) percent per annum.
5. Legend on Shares.
The stock certificates of the Corporation that will evidence the
shares of Common Stock with respect to which this Option may be exercisable will
be imprinted with a conspicuous legend in substantially the following form:
- 2 -
THIS SECURITY AND ANY SECURITY EVIDENCED OR REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE
WITH RULE 144A TO A PERSON THAT IT AND ANY PERSON ACTING ON ITS BEHALF
REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER (QIB) PURCHASING FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF ANOTHER QIB, OR(2) IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S, OR (3) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
The Corporation does not currently file periodic reports with the Securities and
Exchange Commission ("SEC") pursuant to the provisions of the Securities
Exchange Act of 1934, as amended. Except as provided in Section 5 of this Stock
Option Agreement, the Corporation has not agreed to register any of the Holder's
Shares with respect to which this Option may be exercisable for distribution in
accordance with the provisions of the Act or the State Acts. Hence, it is the
understanding of the Holders of this Option that by virtue of the provisions of
certain rules respecting "restricted securities" promulgated by the SEC, the
Shares with respect to which this Option may be exercisable may be required to
be held for up to 2 years pursuant to Rule 144 or Regulation S of the Act,
subject to the prohibitions of said rule and regulation, unless said Shares
become registered, or unless another exemption from such registration is
available, in which case the Holder may still be limited as to the number of
Shares with respect to which this Option may be exercised that may be sold.
6. Non-Transferabilily.
This Option shall not be pledged, hypothecated, sold or otherwise
transferred or encumbered by the Holder except as set out in the legend referred
to in section 5 above. Notwithstanding the above, Holder shall have the right to
assign this Option, in whole or in part, to the Talidan shareholders, or
beneficial owners, immediately upon receipt hereof, to any private "family type
trusts" or similar transfers, provided such is a completely private transaction
and provided the transferee intends to and shall be bound to the terms hereof or
as otherwise agreed with the Corporation and provided said transfer is not
otherwise in violation of the appropriate US and state securities laws. As a
result of any such assignment, the Corporation shall cancel this Option and
reissue such Options in such smaller amounts in a similar form hereto consistent
with the terms hereof.
- 3 -
7. Registration Rights.
(a) (i) If the Corporation at any time elects or proposes to
register any of its Shares (the "Registration Shares") under the Securities Act
of 1933 (the "Act") on Forms S-1, S-2, S-3 or S-18, or any successor
registration statement forms in effect at such time (a "Registration Statement")
with the Securities and Exchange Commission (the "SEC") pursuant to which Shares
owned by any shareholder of the Corporation may be registered, the Corporation
shall give thirty (30) days prior written notice (the "Registration Notice") to
the Holder of its intention to register the Registration Shares. Notwithstanding
anything to the contrary herein, Holder shall have no rights under this section
pertaining to Options which remain unexercised at the time of any registration.
(ii) Within twenty (20) days after the Registration Notice
shall have been given to the Holder, the Holder shall give written notice to the
Corporation (the "Holder Notice"), stating the number of Shares to be registered
(the "Holder Shares") and the states in which the Holder wishes to register the
Shares. In the event the Registration Notice is given by the Corporation prior
to the time that this Option is otherwise exercisable pursuant to Section 1(b)
hereof, the Holder Notice shall be accompanied by this Option Certificate
together with a duly executed Purchase Form and payment of the Exercise Price
for the Holder Shares in accordance with Section 1 hereof.
(iii) The Corporation shall use reasonable cfforts to
register the Holder Shares under the Act and the applicable state securities
laws (the "State Acts") designated by the Holder in the Holder Notice. Anything
contiined herein to the contrary notwithstanding, the Corporation shall have the
right to withdraw and discontinue registration of the Holder Shares at any time
prior to the effective date of such Registration Statement if the registration
of the Registration Shares is withdrawn or discontinued.
(iv) The Corporation shall not be required to include any of
the Holder Shares in any Registration Statement unless the Holder agrees, if so
requested by the Corporation, to: (A) offer and sell the Holder Shares to or
through an underwriter selected by the Corporation and, to the extent possible,
on substantially the same terms and conditions (and in any event on no less
favourable terms and conditions) under which the Registration Shares are to be
offered and sold; (B) comply with any arrangements, terms and conditions with
respect to the offer and sale of the Shares to which the Corporation may be
required to agree; and (C) enter into any underwriting agreement containing
customary terms and conditions, including provisions for the indemnification of
the underwriters.
(b) If the offering of the Registration Shares by the Corporation
is, in whole or in part, an underwritten public offering, and if the managing
underwriter determines and advises the Corporation in writing that the inclusion
in such Registration Statement of all of the Holder Shares, together with the
Shares of other persons who have exercised their right to include their Shares
in the Registration Statement (collectively referred to as the "Aggregate
Shares")
- 4 -
would adversely affect the marketability of the offering of the Registration
Shares, then the Holder shall be entitled to register a proportion, as
determined in Subsection (b)(i) below, of such number of Aggregate. Shares as
the managing underwriter determines may be included without such adverse effects
("Aggregate Underwriter Shares"), subject to the terms, exceptions and
conditions of this Section 7.
(i) The proportion of the Aggregate Underwriter Shares which
the Holder in its capacity as such shall be entitled to register shall be equal
to the ratio which the Holder Shares bears to the Aggregate Shares.
(c) The Corporation shall bear all costs and expenses of
registration of the Registration Shares; provided, however, that the Holder
shall bear all costs and expenses directly related to registration of the Holder
Shares, including its proportionate amount of underwriters discounts and
commissions, and expenses of counsel for the Holder.
(d) It shall be a condition precedent to the Corporation's
obligation to register any Holder Shares pursuant to this Section 7 that the
Holder provide the Corporation with all information and documents, and shall
execute, acknowledge, seal and deliver all documents reasonably necessary, to
enable the Corporation to comply with the Act, the State Acts, and all
applicable laws, rules and regulations of the SEC or of any State Securities
Commission.
(e) The Holder shall indemnify and hold harmless the Corporation,
each of its directors and officers who have signed the Registration Statement,
each person, if any, who is a controlling person or the Corporation and any
underwriter from and against any and all losses, claims, damages, expenses or
liabilities (including amounts paid in settlement and reasonable attorneys'
fees) (the "Liabilities"), on a several basis, to which they or any of them may
become subject under the Act, under any State Act or at common law or otherwise
insofar as the Liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or prospectus (as from time to time amended or supplemented) or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, which statement or omission was made in
reliance upon and in conformity with information fiimished to the Corporation by
the Holder in connection therewith.
(f) Shelf Registration. The Company hereby agrees that in the
event it shall meet all of the requirements necessary to file a Form S-3 to
effectuate a "Shelf Registration" in accordance with the applicable securities
laws of the United States, and it shall in all respects be eligible for and
qualify for the same, it shall use its best efforts to effectuate and maintain a
Shelf Registration.
- 5 -
8. Loss or Destruction.
Upon receipt of evidence satisfactory to the Corporation of the
loss, theft, destruction, or mutilation of this Option Agreement and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
agreement or bond satisfactory in form, substance and amount to the Corporation
or, in the case of any such mutilation, upon surrender and cancellation of this
Option Agreement, the Corporation at its expense will execute and deliver, in
lieu thereof, a new Option Agreement of like tenor.
9. Survival.
The various rights and obligations of the Holder hereof as set
forth herein shall survive the exercise of the Options represented hereby and
the surrender of this Option Agreement.
10. Notices.
Any notice or other communication to the Corporation or to the
Holder of this Option shall be in writing and any such notice or communication
shall be deemed duly given or made if mailed by registered or certified mail,
return receipt requested, postage prepaid, and if to the Corporation: to the
Corporatioifs office at 00000 Xxxxxxxxx Xxxxx, Xxxxx 0, Xxxxxx Xxxxx, Xxxxxxxx
00000 or at such other address as the Corporation may designate by notice to the
Holder, and if to such Holder: to _________________________________ or at such
other address as the Holder may designate by notice to the Corporation.
11. Governing Law.
This Option shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland. In the event of any ambiguity
or conflict between this instrument and the Agreement of Purchase between the
Parties, this instrument shall control.
12. Successors and Assigns.
All of the provisions of this Option shall be binding upon the
Corporation and its successors and assigns and the Holder, its successors and
permitted assigns.
- 6 -
IN WITNESS WHEREOF, Carnegie International Corporation has caused this
instrument to be signed in its corporate name under its corporate seal by its
President this ______ day of _____________________, 1997.
ATTEST: Carnegie International Corporation
/s/ By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, President
- 7 -
EXERCISE FORM
OPTION AGREEMENT
Date
TO: Carnegie International Corporation
The undersigned hereby irrevocably elects to exercise the attached
Option Agreement to the extent of _________________ shares of the Common Stock,
par value $0.00 per share, of ___________________ and hereby makes payment of
$__________ in accordance with the provisions of Section 2 of the Option
Agreement in payment of the purchase price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
(Please typewrite or print in block letters)
Address:
------------------------------------
By:
- 8 -
