EXHIBIT 10.46
OPTION AGREEMENT
AGREEMENT, dated as of September 30, 1998, between UNITED LEISURE
CORPORATION, a Delaware corporation (the "Company"), and XXXXX XXXXXXX, Chairman
of the Board, President and Chief Executive Officer of the Company (the
"Optionee").
W I T N E S S E T H:
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WHEREAS, the Optionee is the Chairman of the Board, President and Chief
Executive Officer of the Company and is considered by the Board of Directors of
the Company to have substantially contributed to the development of the
Company's business;
WHEREAS, the Optionee has personally guaranteed certain indebtedness of the
Company or provided other credit accommodations and extraordinary benefits to
the Company and is entitled to be compensated for undertaking such liabilities
or providing such benefits; and
WHEREAS, the Company desires to provide the Optionee with such compensation
and to otherwise provide him with incentive to remain as Chairman of the Board,
President and Chief Executive Officer of the Company and to continue to work for
its best interest in the future.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants hereinafter contained, the Company and the Optionee hereby agree
as follows:
1. Grant of Option. The Company hereby grants to the Optionee the
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irrevocable option (the "Option") to purchase, on the terms and conditions
herein set forth, up to 2,100,000 of the Company's fully paid and nonassessable
shares of Common Stock, par value $.01 per share, at an option price determined
as set forth in Section 2 of this Agreement.
2. Option Price. The option price for any shares of Common Stock of the
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Company to be purchased pursuant to the Option by valid exercise from time to
time during the term thereof by the Optionee shall be $0.625, the estimated fair
market value of such Common Stock as of July 30, 1997.
3. Period of Option. The Option is exercisable at any time during a
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period of five years commencing September 30, 1998 and ending September 29,
2003. The Option may be exercised from time to time during the option period as
to the total number of shares covered thereby or any lesser amount thereof. The
Option is nonexercisable after September 29, 2003. Termination of the Optionee's
relationship with the Company shall not affect the Optionee's ability to
exercise the Option.
4. Adjustments. If each of the outstanding shares of Common Stock of the
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Company (other than shares held by dissenting stockholders) shall be changed
into or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation (whether by reason of
agreement, consolidation, recapitalization, reclassification, split-up,
combination of the shares or otherwise), then there shall be substituted for
each share covered by the Option, the number and kind of shares of stock or
other securities into which each
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outstanding share of Common Stock of the Company (other than shares held by
dissenting stockholders) shall be so changed or for which each such share shall
be changed. If there shall be any other change in the number or kind of the
outstanding shares of Common Stock of the Company, or any stock or securities
into which such Common Stock shall have been changed, or for which it shall have
been exchanged, then if the Board of Directors of the Company shall, in its sole
discretion, determine that such change equitably requires an adjustment in the
number or kind or option price of the shares covered by the Option, or an
adjustment in the number or kind of other shards subject, or which may be
subject, to the Option, such adjustment shall be made in accordance with such
determination. Fractional shares resulting from any adjustment in the Option
pursuant to this Section 4 may be settled in cash or otherwise as the Board of
Directors of the Company shall determine. Notice of any adjustment shall be
given by the Company to the Optionee and such adjustment (whether or not such
notice is given or received) shall be effective and binding for all purposes of
the Option.
5. Reservation of Shares. The Company covenants and agrees that it has
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reserved and shall at all times, so long as the Option is outstanding, reserve
and keep available out of its authorized but unissued Common Stock, par value
$.01 per share, solely for the purpose of issuing Common Stock upon the exercise
of the Option, the full number of shares of Common Stock deliverable upon the
exercise of the Option.
6. Stockholder's Rights. The Optionee shall not, based on his being
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Optionee hereunder, be entitled to vote or receive dividends or be deemed the
holder of Common Stock or any other security of the Company which may at any
time be issuable on the exercise of the
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Option for any purpose, nor shall anything contained herein be construed to
confer upon the Optionee, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of Directors on any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Option shall have been exercised and the Common Stock purchasable upon the
exercise hereof shall have become deliverable as provided herein.
7. Transferability. The Option is not transferable by the Optionee
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otherwise than by will or the laws of descent or distribution, and is
exercisable during the Optionee's lifetime only by the Optionee.
8. Method of Exercise of Option. The Option may be exercised in whole or
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in part by the Optionee's giving written notice, specifying the number of shares
which the Optionee elects to purchase and the date on which such purchase is to
be made, to the Company by mail, postage prepaid, or delivering such notice
addressed to the Company, at its principal office in Fountain Valley,
California, attention of the President, at least ten and not more than thirty
days prior to the date specified in such notice as the date on which such
purchase is to be made. Such notice shall contain (if required by the Company
so that the Company, on issuing the shares to the Option, will comply with the
applicable securities laws) a written representation by the Optionee that (i) he
is acquiring the shares to be so purchased for investment and not with a view to
distribution to the public and (ii) he will not dispose of the shares so
purchased except in
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compliance with the Securities Act of 1933, as amended, and the rules and
regulations (such as Rule 144) promulgated thereunder applicable at the time to
such disposition. The Company may require further assurances that the
acquisition of the shares will not involve any violations of law.
If such exercise shall be in accordance with the provisions of the Option,
the Company shall, on the date specified in the notice and against receipt from
the Optionee of the option price, deliver, at its principal office in Fountain
Valley, California, a certificate or certificates for the shares of Common Stock
so purchased and shall pay all stamp taxes payable in connection therewith. For
purposes of this Section 9, a person to whom the Option is transferred by will
or the laws of descent and distribution, as contemplated by Section 7, shall be
deemed the Optionee.
Each stock certificate for shares issued on exercise of the Option shall
bear the following legend:
"The Shares represented by this Certificate have not been registered
under the Securities Act of 1933. The Shares may not be sold or offered
for sale in the absence of an effective Registration Statement for the
Shares under the Securities Act of 1933 or an option of counsel of the
Company that such registration is not required."
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9. Binding Agreement. This Option Agreement shall be binding upon and
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shall inure to the benefit of any successor or assign of the Company and the
Optionee's legal representatives.
10. Entire Agreement. This Agreement contains the entire agreement of the
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parties with respect to the Option and may not be changed orally, but only by an
instrument in writing signed by the party against whom enforcement of any
change, modification or extension is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement
as of the day and year first above written.
UNITED LEISURE CORPORATION
By /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Chairman of the Board, President and Chief
Executive Officer
AGREED TO AND ACCEPTED:
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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