STOCK OPTION AGREEMENT
AGREEMENT, made as of this 22nd day of February 2003, by and between
Critical Home Care, Inc., a Nevada corporation having its principal executive
offices at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Grantor"), and the
Xxxxxxx Xxxxxxxxx Family Partnership, a partnership with offices at 00 Xxx Xxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000 ("Optionee").
W I T N E S S E T H:
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WHEREAS, Optionee and the Grantor executed a promissory note dated
February 22, 2003 (the "Note"); and
NOW, THEREFORE, in consideration of the Optionee lending to
the Corporation Seventy Five Thousand Dollars ($75,000.00), the Grantor hereby
grants the Optionee an option (the "Option") to purchase shares of the Grantor's
common stock, $.25 par value per share (the "Common Stock"), upon the following
terms and conditions:
1. OPTIONS.
The Grantor hereby grants to the Optionee a non-qualified stock option
not intended to qualify under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), to purchase, until 5:00 P.M. New York City time on
February 21, 2008, unless earlier terminated hereunder ("Termination Date"), up
to an aggregate of 37,500 fully paid and non-assessable shares of Common Stock.
2. PURCHASE PRICE.
The purchase price ("Purchase Price") shall be the lesser of $1.00 per
share or an amount equal to the conversion price of any new convertible debt
issued by the Grantor within twelve (12) months of this agreement. The Grantor
shall pay all original issue or transfer taxes on the exercise of this Option
and all other fees and expenses necessarily incurred by the Grantor in
connection therewith.
3. EXERCISE OF OPTION.
(a) The Optionee shall notify the Grantor by hand delivery or
by registered or certified mail, return receipt requested, addressed to its
principal office (Attn: Chief Executive Officer), as to the number of shares of
Common Stock which Optionee desires to purchase pursuant to the exercise of the
Option herein granted, which notice shall be accompanied by (i) a certified or
bank check payable to the order of the Grantor in an amount equal to the
Purchase Price multiplied by the number of shares of Grantor's Common Stock for
which this Option is being exercised, or (ii) the delivery of shares of
Grantor's Common Stock having a fair market value equal to the Purchase Price
multiplied by the number of shares of Grantor's Common Stock for which this
Option is being exercised.
(b) The Option granted hereunder shall vest immediately.
4. DIVISIBILITY AND ASSIGNABILITY OF THE OPTIONS.
(a) The Optionee may exercise the Option herein granted from time
to time subject to the provisions above with respect to any whole number of
shares included therein, but in no event may an Option be exercised as to less
than one hundred (100) shares at any one time, or the remaining shares covered
by the Option if less than one hundred (100).
(b) Except as specifically provided herein, the Optionee may not
give, grant, sell, exchange, transfer legal title, pledge, assign or otherwise
encumber or dispose of the Option herein granted or any interest therein,
otherwise than by will or the laws of descent and distribution, and the Option
herein granted, or any of them, shall be exercisable during the Optionee's
lifetime only by the Optionee.
5. STOCK AS INVESTMENT.
By accepting the Option herein granted, the Optionee agrees for
himself, his heirs and legatees that any and all shares of Common Stock
purchased hereunder shall be acquired for investment purposes only and not for
sale or distribution, and upon the issuance of any or all of the shares of
Common Stock issuable under the Option, the Optionee, or his heirs or legatees
receiving such shares of Common Stock, shall deliver to the Grantor a
representation in writing, that such shares of Common Stock are being acquired
in good faith for investment purposes only and not for sale or distribution.
Grantor may place a "stop transfer" order with respect to such shares of Common
Stock with its transfer agent and place an appropriate restrictive legend on the
stock certificate evidencing such shares of Common Stock.
6. RESTRICTION ON ISSUANCE OF SHARES.
The Grantor shall not be required to issue or deliver any certificate
for shares of its Common Stock purchased upon the exercise of the Option unless
(a) the issuance of such shares has been registered with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, or counsel to
the Grantor shall have given an opinion that such registration is not required;
(b) approval, to the extent required, shall have been obtained from any state
regulatory body having jurisdiction thereof, and (c) permission for the listing
of such shares shall have been given by any national securities exchange on
which the Common Stock of the Grantor is at the time of issuance listed.
7. ADJUSTMENT ON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, recapitalizations,
reclassifications, combinations and exchanges of shares, the number of shares of
Common Stock as to which the Option may be exercised shall be correspondingly
adjusted by the Grantor, and the Purchase Price shall be adjusted so that the
product of the Purchase Price immediately after such event multiplied by the
number of options subject to this Agreement immediately after such event shall
be equal to the product of the Purchase Price multiplied by the number of shares
subject to this Agreement immediately prior to the occurrence of such event. No
adjustment shall be made with respect to stock dividends or splits which do not
exceed 5% in any fiscal year, cash dividends or the issuance to stockholders of
the Grantor of rights to subscribe for additional shares of Common Stock or
other securities. Anything to the contrary contained herein notwithstanding, the
Board of Directors of the Grantor shall have the discretionary power to take any
action necessary or appropriate to prevent the Option from being disqualified as
"Non-Qualified Stock Options" under the United States Income Tax laws then in
effect.
(b) In the event of any consolidation or merger of the Grantor
with or into another company, or the conveyance of all or substantially all of
the assets of the Grantor to another company for solely stock and/or securities,
each then unexercised Option granted hereunder shall upon exercise thereafter
entitle the holder thereof to such number of shares of Common Stock or other
securities or property to which a holder of shares of Common Stock of the
Grantor would have been entitled to upon such consolidation, merger or
conveyance; and in any such case appropriate adjustment, as determined by the
Board of Directors of the Grantor (or successor entity) shall be made as set
forth above with respect to any future changes in the capitalization of the
Grantor or its successor entity. In the event of the proposed dissolution or
liquidation of the Grantor, or, except as provided in (d) below, the sale of
substantially all the assets of the Grantor for other than stock/and or
securities, all unexercised Options granted hereunder will automatically
terminate, unless otherwise provided by the Board of Directors of the Grantor or
any authorized committee thereof.
(c) Any adjustment in the number of shares of Common Stock shall
apply proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of a share of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock so long as such increase does not result in the holder of
the Option being deemed to own more than 5% of the total combined voting power
or value of all classes of shares of capital stock of the Grantor or
subsidiaries.
(d) If any unexercised option is not terminated pursuant to
subparagraph (b) above, any option granted under the Plan may, at the discretion
of the Board of Directors of the Grantor and said other corporation, be
exchanged for options to purchase shares of capital stock of another corporation
which the Grantor and/or a subsidiary thereof is merged into, consolidated with,
or all or a substantial portion of the property or stock of which is acquired by
or separated or reorganized into. The terms, provisions and benefits to the
Optionee of such substitute option(s) shall in all respects be identical to the
terms, provisions and benefits of Optionee under
this Option prior to said substitution. To the extent the above may be
inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall be
deemed interpreted so as to comply therewith.
8. NO RIGHTS IN OPTION STOCK.
Optionee shall have no rights as a shareholder in respect of shares of
Common Stock as to which the Option granted hereunder shall not have been
exercised and payment made as herein provided. Grantor acknowledges that all
options transferee to Optionee shall be the property of Optionee and Grantor
shall have no ownership interest or other claim to the options at any time,
including, but not limited to once the Grantor fulfills its obligation under the
Note.
9. BINDING EFFECT.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
10. WITHHOLDING.
Optionee agrees to cooperate with the Grantor to take all steps
necessary or appropriate for the withholding of taxes by the Grantor under law
or regulation in connection therewith. In the event the Optionee does not make
the required withholding payment at the time of exercise, the Grantor may make
such provisions and take such steps as it, in its sole discretion, may deem
necessary or appropriate for the withholding of any taxes that the Grantor is
required by any law or regulation of any governmental authority, whether
federal, state or local, domestic or foreign, to withhold in connection with the
exercise of any Option, including, but not limited to, (i) the withholding of
payment of all or any portion of such Option and/or SAR until the Optionee
reimburses the Grantor for the amount the Grantor is required to withhold with
respect to such taxes, or (ii) the canceling of any number of shares of Common
Stock issuable upon exercise of such Option and/or SAR in an amount sufficient
to reimburse the Grantor for the amount it is required to so withhold, (iii) the
selling of any property contingently credited by the Grantor for the purpose of
exercising such Option, in order to withhold or reimburse the Grantor for the
amount it is required to so withhold, and/or (iv) withholding the amount due
from the Optionee's wages if he is employed by the Grantor or any subsidiary
thereof.
11. MISCELLANEOUS.
This Agreement shall be construed under the laws of the State of New
York, without application to the principles of conflicts of laws. Headings have
been included herein for convenience of reference only, and shall not be deemed
a part of the Agreement. References in this Agreement to the pronouns "him,"
"he" and "his" are not intended to convey the masculine gender alone and are
employed in a generic sense and apply equally to the feminine gender or to an
entity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CRITICAL HOME CARE, INC.
By:
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Name: Xxxxx X. Xxxxxx
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Title: President and Chief Executive Officer
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ACCEPTED AND AGREED TO:
Xxxxxxx Xxxxxxxxx Family Partnership
By:
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Xxxxxxx Xxxxxxxxx
EXERCISE OF OPTION
TO
PURCHASE SHARES
TO: Critical Home Care, Inc.
The undersigned hereby exercises the enclosed option for the purchase
of _________ shares of Common Stock according to the terms and conditions
thereof and herewith makes payment of $_________ representing the purchase price
in full. The undersigned is purchasing such shares for investment purposes only
and not with a view to the sale or distribution thereof.
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Name (please print)
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Signature
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Social Security or
Taxpayer I.D. Number
