CARLYLE GOLF, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made effective as of the 24th day of January, 1997,
by and between Carlyle Golf,Inc., a Colorado corporation (the "Company"),
and The Xxxxxxx Company, Inc. ("Optionee").
WHEREAS, the Board of Directors of the Company has determined that it
is to the advantage and in the best interests of the Company and its
Shareholders to grant the option provided for herein to Optionee;
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
2. GRANT OF OPTION. The Company hereby grants to Optionee the
right and option to purchase from the Company, on the terms and conditions
following, all or any part of an aggregate of 60,000 shares of the $.001
par value common stock (the "Common Stock") of the Company. Optionee may
elect to exercise the option at any time during the term of this
Agreement. In no event shall the Company be required to transfer
fractional shares to Optionee.
2. PRICE OF OPTION. During the term of this option, the exercise
price of the shares subject to this option shall be One Dollars and Eighty
Cents ($1.80) per share, subject to adjustment as provided in paragraph 4
below (the "Exercise Price"), which shall be paid to the Company as set
forth in paragraph 5 below at the time of exercise of the option.
3. TERMINATION OF OPTION. The option and all rights granted by
this Agreement, to the extent those rights have not been exercised, will
terminate and become null and void five (5) years after the date of this
Agreement.
4. ADJUSTMENT OF SHARES AND PRICE. In the event that, prior to the
exercise of this option in its entirety, there shall be any stock dividend
or subdivision of the shares of the Common Stock of the Company into a
greater number of shares, the purchase price hereunder shall be
proportionately reduced and the number of shares subject to this option
shall be proportionately increased; conversely, in the event of any
combination of the outstanding shares of Common Stock of the Company, the
purchase price hereunder shall be proportionately increased and the number
of shares subject to this option shall be proportionately reduced. In the
event of any other change and/or reclassification of the outstanding
shares of Common Stock of the Company, the Board of Directors of the
Company shall have authority to make such adjustments, if any, in the
purchase price, and number of shares subject to this option as it may, in
its discretion, deem fair and equitable under the circumstances.
5. MANNER OF EXERCISE OF OPTION.
a. This option may be exercised by Optionee by giving written
notice to the Company of an election to exercise this option. Such notice
shall specify the number of shares to be purchased hereunder and the date,
not less than five (5) nor more than fifteen (15) days after the date of
such notice, on which the shares will be taken and payment made for them.
The notice shall be delivered either personally or by registered or
certified mail to the principal office of the Company, postage prepaid.
The purchase price shall be paid in full at the time of exercise (i) in
cash or by bank check for all shares purchased pursuant thereto, or (ii)
through a "cashless" or "net-issue" exercise ("Cashless Exercise"), in
which case upon receipt of Optionee's written request, the Company will
issue to Optionee the number of shares of Common Stock with an aggregate
Fair Market Value equal to the difference between the Exercise Price of
the option and the Fair Market Value times the number of options
exercised. Upon receipt of such notice and, if applicable, payment for
the shares being exercised, the Company shall deliver the certificates
representing such shares to Optionee forthwith.
b. As used herein, the term "Fair Market Value" shall mean,
for any date, the price determined as follows:
i) the average, calculated over a period of the twenty
(20) prior consecutive trading days (not including the date on which the
determination is made), of the last reported sale price for the Common
Stock on each such trading day on the principal securities exchange or
automated quotation service on which the Common Stock is listed or quoted
or if no such sale takes place on such date, the average of the closing
bid and asked prices thereof as officially reported;
ii) if the Common Stock shall not be listed or quoted as
provided in clause (i) above, such twenty (20) trading day average of the
Common Stock as reported on the OTC Bulletin Board or, in the absence of
such reports, as determined in good faith by the Board of Directors of the
Company.
c. In the event that Optionee shall exercise this option with
respect to less than all of the shares of Common Stock that may be
purchased under the terms hereof, the Company shall issue to Optionee
certificates for the shares of Common Stock for which this Option is being
exercised in such denominations as are required for delivery to Optionee,
and the Company shall thereupon deliver such certificates to or in
accordance with the instructions of Company, in form and substance
identical to this option for the balance of shares of Common Stock then
issuable pursuant to the terms of this option.
6. OPTIONEE REPRESENTATIONS. Optionee, by its execution of this
Agreement, acknowledges, understands and represents that:
a. This option is a "restricted security";
b. Neither the Company nor any of its officers, agents or
representatives have made or can make any assurance that either the
granting or the exercise of this option will not give rise to adverse tax
consequence to Optionee;
c. Upon exercise of this option, Optionee will receive
"restricted securities" and consents to the imposition by the Company of a
restrictive legend on any and all certificates representing said shares
and the imposition by the Company of "stop transfer" order upon such
certificate(s) with its Officers;
d. Optionee may sell, transfer, assign, encumber or otherwise
dispose of all, or any portion, of this option only in compliance with
applicable state and federal securities laws;
e. Optionee is acquiring this option and any shares purchased
pursuant to this option for investment purposes only and not for
distribution;
f. Optionee shall have no voting, dividend, participation,
liquidation or other stockholder rights with respect to the shares covered
by this option unless and until this option is exercised as to such
shares;
g. Optionee is familiar with the Company's business and
financial condition and realizes that no assurance can be given with
respect to its ultimate commercial success; and
h. Optionee shall have no right to remedies against the
Company or against any of its Officers, Directors, agents or
representatives on account of any tax consequences flowing from the
granting or exercise of this option.
7. PIGGYBACK REGISTRATION RIGHTS. The Company agrees that it will
make its best efforts to include the common stock underlying this option
in a registration statement on Form S-3 presently intended to be filed by
the Company within six (6) months of the date of this Agreement.
8. SUCCESSORS AND ASSIGNS. Except as stated herein, this Agreement
shall be binding upon the Company and its successors and assigns, and
Optionees and its successors and assigns.
9. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Colorado.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Company and by Optionee on the 31st day
of March, 1997, effective as of January 24, 1997.
CARLYLE GOLF, INC., a Colorado corporation
ATTEST:
By: /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
/s/Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Secretary
ACCEPTED this 31st day of March, 1997.
OPTIONEE:
THE XXXXXXX COMPANY, INC.
By:/s/Xxxxxxx Xxxxxxx
