EXHIBIT 10.41
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement"), by and between
Xxxxxxxxx.xxx, a Nevada corporation (the "Company"), and Xxxx Xxxxxxxx
("Optionee"), is made effective as of this 6th day of December, 1999.
RECITALS
WHEREAS, the Company desires to issue stock options to Optionee and
Optionee desires to accept such stock options on the terms and conditions set
forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Grant of Options. The Company hereby grants to the Optionee, as a
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separate incentive and not in lieu of any fees or other compensation for her
services, options ("the Options") to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of TWO HUNDRED EIGHTY
EIGHT THOUSAND (288,000) shares of common stock (the "Shares"). The right to
exercise the Options shall vest in sixteen (16) equal quarterly installments
from the date hereof.
2. Exercise Price. The exercise price shall be $1.50 per share of
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common stock (the "Exercise Price"), which is not less than the fair market
value of the Shares on the date of grant. The Exercise Price will be payable in
legal tender of the United States, in cash.
3. Time of Exercise. Upon execution of this Agreement, Optionee shall
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receive the right to exercise the Options.
4. Notice of Exercise. Optionee may exercise the Options by giving
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written notice of exercise of the Options sent by certified or registered mail,
return receipt requested, to the Company and sending a check for the Exercise
Price of the Options exercised.
5. Transferability. The Options will be exercisable for a period of
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ten (10) years from the date hereof only by Optionee. The Options shall be
non-transferable.
6. Adjustment. The number and class of shares specified in paragraph 1
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above, and the Option Price, are subject to appropriate adjustment in the event
of certain changes in the capital structure of the Corporation which alter the
per share value of Common Stock or the rights of holders thereof. A dissolution
or liquidation of the Corporation, or a merger or consolidation in which the
Corporation is not the surviving corporation, will cause the option granted
hereunder to terminate unless the agreement of merger, consolidation or other
acquisition otherwise provides. In the event of such dissolution, liquidation,
merger, or consolidation, Optionee will have the right for a period of not less
than sixty (60) days prior to the effective date of such event, to exercise the
option granted hereunder as to all of the shares specified in paragraph 1 above.
Such right of exercise will accrue, notwithstanding any limitations in this
option agreement as to the time Optionee may exercise such option, including
"vesting" schedules.
7. Securities Laws. The issuance of shares of Common Stock upon the
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exercise of the Options will be subject to compliance by the Company and the
person exercising the Options with all applicable requirements of federal and
state securities and other laws relating thereto. No person may exercise the
Options at any time when, in the opinion of counsel to the Company, such
exercise is not permitted under applicable federal or state securities laws.
Nothing herein will be construed to require the Company to register or qualify
any securities under applicable federal or state securities laws, or take any
action to secure an exemption from such registration and qualification for the
issuance of any securities upon the exercise of the Options.
8. Investment Representations. In connection with the receipt of the
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Options and potential purchase of shares of common stock Optionee represents
and warrants to the Company as follows:
a. Investment Intent. Optionee is receiving the Options and
may purchase the shares represented thereby solely for her own account for
investment. Optionee has no present intention to resell or distribute the
Options of underlying shares or any portion thereof. The entire legal and
beneficial interest of the Options and any underlying shares purchased, will be
held, for Optionee's account only, and neither in whole or in part for any other
person.
b. Information Concerning Company. Optionee has significant
prior experience and knowledge of the affairs of the Company. Optionee is aware
of the Company's business and financial condition and has acquired sufficient
information about the Company to make an informed and acknowledgeable decision
regarding the Options and the potential purchase of the Shares.
c. Economic Risk. Optionee realizes that the exercise of the
Options and purchase of the underlying shares will be a highly speculative
investment and involve a high degree of risk. Optionee is able, without
impairing his financial condition, to hold any shares purchased for an
indefinite period of time and to suffer a complete loss of his investment.
d. Restriction on Transfer. Optionee understands that the Options
and/or underlying Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Optionee understands that the certificate evidencing any shares
purchased will be imprinted with a legend that prohibits the transfer of the
shares unless they are registered or unless the Company receives an opinion of
counsel reasonably satisfactory to the Company that such registration is not
required.
e. Sales Under Rule 144. Optionee is aware of the adoption of
rule 144 by the Securities and Exchange Commission (the "Commission")
promulgated under the Securities Act, which permits limited public resale of
securities acquired in a non-public offering subject to the satisfaction of
certain conditions, including among other things: (i) the availability of
certain current public information about the Company, (ii) the resale occurring
not less than two years after the party has purchased and paid for the
securities to be sold, (iii) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a "market
maker," and (iv) the amount of securities sold during any three-month period not
exceeding specified limitations (generally 1% of the total shares outstanding).
f. Limitation on Rule 144 Sales. Optionee further acknowledges
and understands that the Company is not now and at the time she wishes to sell
the any purchased shares may not be satisfying the current public information
requirement of Rule 144, and, in such case, Optionee could be precluded from
selling any shares purchased as a result of the exercise of the Options under
Rule 144 even if the one-year minimum holding period has been satisfied.
g. Sales Not Under Rule 144. Optionee further acknowledges that,
if all of the requirements of Rule 144 are not met, then registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, although Rule 144 is not exclusive, the
staff of the Commission has expressed its opinion (i) that persons proposing to
sell private placement securities other than in a registered offering and other
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and (ii) that such persons and the brokers who participate in the
transactions do so at their own risk.
10. Legends, California Securities Law.
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a. The certificate or certificates representing any shares
purchased as a result of the exercise of the Options will bear the following
legends (as well as any legends required by applicable California and other
state corporate and securities laws):
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISPOSITION MAY BY EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
b. The Options and underlying shares which are the subject of this
Agreement have not been qualified with the Commissioner of Corporations of the
State of California, and the issuance of such securities or the payment or
receipt of any part of the consideration therefor prior to such qualification is
unlawful, unless the sale of securities is exempt from the qualification by an
applicable section of the California Corporations Code, including Section 25100,
25102 or 25105. The rights of all parties to this Agreement are expressly
conditioned upon such qualification being obtained, unless the sale is so
exempt.
11 No Rights as Shareholder. Neither Optionee nor any person claiming
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under or through Optionee will be, or have any of the rights or privileges of, a
shareholder of the Company in respect of any of the Shares issuable upon the
exercise of the Options, unless and until any of the Options are properly and
lawfully exercised.
12. Notices. Any notice to be given to the Company under the terms of
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this Agreement will be addressed to the Company, in care of its Secretary, at
its executive offices, or at such other address as the Company may hereafter
designate in writing. Any notice to be given to Optionee will be in writing and
delivered or mailed by registered or certified mail, return receipt requested,
postage prepaid, addressed to Optionee at the address set forth beneath
Optionee's signature in writing. Any such notice will be deemed to have been
duly given where deposited in a United States post office in compliance with the
foregoing.
13. Successor. Subject to the limitation on the transferability of the
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Options contained herein, this Agreement will be binding upon and inure to the
benefit of the heirs, legal representatives, successors and assigns of the
parties hereto.
14. Attorney's Fees. In the event that any legal action is brought to
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enforce or interpret any part of this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees and other costs incurred in that
action, in addition to any other relief to which that party may be entitled.
15. Governing Law. This Agreement shall in all respects be construed,
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interpreted, and enforced in accordance with, and governed by the laws of the
State of California.
16. Severability. If any term or provision of this Agreement shall be
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held invalid or unenforceable to any extent, the remainder of this Agreement
shall not be affected and each other term and provision of this Agreement shall
be valid to the fullest extent permitted by law.
17. Counterparts. This Agreement may be executed in counterparts, each
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of which shall constitute an original and all of which shall be one and the same
instrument.
18. Modification. Any amendment, change or modification of this
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Agreement shall be effective only if it is in writing and signed by the parties
hereto.
19. Waiver. The failure of either party to insist upon strict
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compliance with any of the terms, covenants or conditions of this Agreement by
the other party shall not be deemed a waiver of that term, covenant or
condition, nor shall any waiver or relinquishment of any right or power at any
one time be deemed a waiver or relinquishment of that right or power for all or
any other time.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
COMPANY: XXXXXXXXX.XXX
By: /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx, President
OPTIONEE: /s/Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Address: ___________________________
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