[GRAPHIC OMITED]
Sangui BioTech, Inc.
0000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000 XXX
000-000-0000 (Voice)
000-000-0000 (Fax)
e-mail: xxxxxx@xxxxxxxxx.xxx
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is entered into effective as
of October 13, 2000, by and between SANGUI BIOTECH INTERNATIONAL, INC., a
Colorado corporation (the "Company"), and Xxxx. Xxxxxxxx Xxxxxxxx, M.D., Ph.D.
(the "Optionee").
RECITALS
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A. The Company desires to give opportunity to the Optionee to purchase
certain shares of Company's common stock. The Company acknowledges Optionee's
assignment of all his related patents to the Company.
B. The Optionee desires to accept an option to purchase the number of
shares set forth below (the "Option"), during the period and at the exercise
price specified below, subject to and upon the following terms and conditions.
AGREEMENT
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1. General. As used in this Agreement, the following terms shall
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have the following meanings:
(a) Optionee: Xxxx. Xxxxxxxx Xxxxxxxx, M.D., Ph.D.
(b) Date of grant: April, ___, 1999
(c) Number of shares optioned: 3,000,000
(d) Option exercise price per share: U.S. $0.01
(e) Option termination date: June 30, 2009
2. Vesting of Option. This option shall become exercisable upon the
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date, on which an auditor's report will be issued that confirms the Company's
economical feasibility. The Company shall be deemed economical feasible on the
day, on which the Company has finished the development either of the long-term
implantable glucose sensor or of the artificial oxygen carrier for one of its
main applications, and the Company receives regulatory approval to market such
product in one of the major markets as United States, Germany or Singapore. The
Option may be exercised at one time or time by time, for all or any portion of
optioned number of shares at any time until expiration or earlier termination of
this Option.
3. Restrictions on Exercise. The following provisions shall apply
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to the exercise of this Option:
(a) Termination of Continuous Status as an Employee. In
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the event of termination of Optionee's continuous status as an employee or
Officer or Director of the Company or its subsidiaries for any other reason than
Optionee's death or disability, or mutually agreement, or retirement forced by
law, Optionee may only exercise the Option within six (6) months from the
earlier of the date of such termination or the date the Company's economical
feasibility is confirmed.
(b) Disability of Optionee. In the event of termination
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of Optionee's continuous status as an employee or Officer or Director of the
Company or its subsidiaries as a result of Optionee's disability, the Optionee
may only exercise the Option within six (6) months from the earlier of the date
of such termination or the date the Company's economical feasibility is
confirmed.
(c) Death of Optionee. In the event of termination of Optionee's
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continuous status as an employee or Officer or Director of the Company or its
subsidiaries as a result of Optionee's death, the Option may only be exercised
within six (6) months following the earlier of the date of death or the date the
Company's economical feasibility is confirmed by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance.
(d) Limitations. Under no circumstances shall the Option
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become exercisable under this section 3 after June 30, 2009. Upon the earlier of
the expiration of any limited exercise period under this section 3 or June 30,
2009, the Option shall terminate and cease to be exercisable.
(e) Immediate Termination. Should (i) the Optionee's
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continuous status as an employee or Officer or Director of the Company or its
subsidiaries be terminated for misconduct (including, but not limited to, any
act of dishonesty, willful misconduct, fraud or embezzlement) or (ii) the
Optionee make any unauthorized use or disclosure of confidential information or
trade secrets of the Company, then in any such event this Option shall terminate
immediately and cease to be exercisable.
4. Option Adjustments
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(a) Change in Capitalization. If the outstanding shares of Common
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Stock of the Company are increased, decreased, changed into or exchanged for a
different number of kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock
split, upon authorization by the Board of Directors of the Company (the "Board")
an appropriate and proportionate adjustment shall be made in the number or kind
of shares, and the per-share option price thereof, which may be issued to
Optionee under the Option; provided, however, that no such adjustment need be
made if, upon the advice of counsel, the Board determines that such adjustment
may result in the receipt of federal taxable income to the Optionee or the
holders of Common Stock or other classes of the Company's securities.
(b) Corporate Reorganizations. Upon the occurrence of a Terminating
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Transaction, as defined below, as of the effective date of such Terminating
Transaction, the Option (whether or not vested) shall terminate unless (i)
provision is made in writing in connection with such transaction for the
assumption of such Option, or for the substitution for such Option of new
options covering the securities of a successor corporation or an affiliate
thereof, with appropriate adjustments as to the number and kind of securities
and exercise prices, in which event such Option shall continue or be replaced,
as the case may be, in the manner and under the terms so provided, or (ii) the
Board otherwise shall provide in writing for such adjustments as it deems
appropriate in the terms and conditions of the Option (whether or not vested),
including without limitation providing for the cancellation of the Option and
its automatic conversion into the right to receive the securities or other
properties which a holder of the shares underlying the Option would have been
entitled to receive upon such Terminating Transaction had such shares been
issued and outstanding (net of the appropriate option exercise price). If,
pursuant to the foregoing provisions of this paragraph (b), the Option shall
terminate by reason of the occurrence of a Terminating Transaction without
provision for any of the action(s) described in clause (i) or (ii) hereof, then
Optionee shall have the right, at such time immediately prior to the
consummation of the Terminating Transaction as the Board shall designate, to
exercise his Option to the full extent not theretofore exercised. "Terminating
Transaction" shall mean any of the following events: (a) the dissolution or
liquidation of the Company; (b) a reorganization, merger or consolidation of the
Company with one or more other companies (except with respect to a transaction,
the purpose of which is to change the domicile or name of the Company), as a
result of which the Company goes out of existence or becomes a subsidiary of
another corporation (which shall be deemed to have occurred if another
corporation shall own, directly or indirectly, fifty percent (50%) or more of
the aggregate voting power of all outstanding equity securities of the Company);
or (c) a sale of all or substantially all of the Company's assets.
5. Option Not Transferable. This Option may not be sold, pledged,
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hypothecated, assigned, encumbered, gifted or otherwise transferred or alienated
in any manner, either voluntarily or involuntarily by operation of law, other
than by will or the laws of descent or distribution, and may be exercised during
the lifetime of the Optionee only by such Optionee.
6. No Rights in Shares Before Issuance and Delivery. Neither the
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Optionee, his estate nor his transferees by will or the laws of descent and
distribution shall be, or have any rights or privileges of, a shareholder of the
Company with respect to any shares issuable upon exercise of the Option unless
and until certificates representing such shares shall have been issued and
delivered notwithstanding exercise of the Option. No adjustments will be made
for a dividend or other rights where the record date is prior to the date such
stock certificates are issued, except as provided in Section 4.
7. Taxes. The Board shall make such provisions and take such
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steps
as it deems necessary or appropriate for the withholding of any federal, state,
local and other tax required by law to be withheld with respect to the grant or
exercise of the Option, including, without limitation, the deduction of the
amount of any such withholding tax from any compensation or other amounts
payable to Optionee by the Company, or requiring Optionee (or the Optionee's
beneficiary or legal representative) as a condition of granting or exercising
the Option to pay to the Company any amount require to be withheld, or to
execute such other documents as the Board deems necessary or desirable in
connection with the satisfaction of any applicable withholding obligation.
Optionee acknowledges that he has been advised to consult with a competent tax
advisor regarding the applicable tax consequences relating to the receipt or
exercise of the Option.
8. Exercise of Option. This Option may be exercised at any
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time as to all or any portions of the number of optioned shares, except that it
may not be exercised for a fraction of a share. This Option shall be exercisable
by written notice (in a form designated by the Company) which shall state the
election to exercise the Option, the number of shares in respect of which the
Option is being exercised, and such other representations and warranties of
Optionee as may be required by the Company pursuant to Section 9. Such written
notice shall be signed by Optionee and shall be delivered in person or by
certified mail to the President or Chief Financial Officer of the Company. The
written notice shall be accompanied by payment of the exercise price in cash.
9. Certain Representations and Warranties. By accepting this
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Option, the Optionee represents and agrees:
(i) that Optionee shall accept as binding and final all decisions or
interpretations of the Board upon any question arising under this Agreement;
(ii) that Optionee understands that this Option and any share purchased
upon its exercise are securities, the issuance of which requires compliance with
federal, state and other applicable securities laws;
(iii) that Optionee is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and acknowledgeable decision to acquire the securities.
Optionee is acquiring these securities for investment for Optionee's own account
only and not with a view to, or for sale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act");
(iv) that Optionee acknowledges and understands that the securities
constitute "restricted securities" under the Securities Act and must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Optionee further acknowledges
and understands that the Company is under no obligation to register such
securities. Optionee understands that the certificate evidencing the securities
will be imprinted with a legend which prohibits the transfer of the securities
unless they are registered or such registration is not required in the opinion
of counsel satisfactory to the Company, and any other legend required under
applicable securities laws;
(v) as a condition to the exercise of any portion of the Option, the Company
may require the person exercising such Option to make any representation and/or
warranty to the Company as may, in the judgement of counsel to the Company, be
required by any applicable law or regulation, including, but not limited to a
representation and warranty that the shares are being required only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required
under the Securities Act, or any other applicable law, regulation or rule of any
governmental agency; and
(vi) that no certificate or certificates for shares of stock purchased upon
exercise of this Option shall be issued and delivered unless and until, in the
opinion of counsel for the Company, such securities may be issued and delivered
without causing the Company to be in violation of or incur any liability under
any federal, state or other securities law, any requirement of any securities
exchange listing agreement to which the Company may be a party, or any other
requirement of law or any regulatory body having jurisdiction over the Company.
The Company shall be required to proceed with due diligence and to take any
reasonable action required by the Company to be taken in order to qualify the
issuance, to the Optionee, of all shares subject to the terms of this Agreement.
The inability of the Company to obtain any required permits, authorizations, or
approvals necessary for the lawful issuance and sale of the shares pursuant
hereto on terms deemed reasonable by the Board shall relieve the Company and the
Board of any liability in respect of the non-issuance or sale of such shares as
to which such requisite permits, authorizations or approvals shall not have been
obtained.
10. No Employment Rights Optionee acknowledges and agrees that
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this Option, the transactions contemplated hereunder and the vesting schedule
set forth herein do not constitute and express or implied promise of continued
engagement as an employee, Officer or Director of the Company or its
subsidiaries for the vesting period, for any period, or at all, and shall not
interfere with Optionee's right or the Company's right to terminate Optionee's
employment at any time, with or without cause. The Company shall have the right
to deal with the Optionee in the same manner as if this Agreement did not exist,
including, without limitation, with respect to all matters related to the
hiring, discharge, compensation and conditions of employment of Optionee. Any
disputes as to whether and when there has been a termination of Optionee''
employment, the reason (if any) for such termination, and/or the consequences
thereof under the terms of this Agreement shall be determined by the Board in
its sole direction, and the Board's determination thereof shall be final and
binding.
11. Agreement Binding on Successor. The terms of this Agreement
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shall be binding upon the executors, administrators, heirs, successors,
transferees and assignees of the Optionee.
12. Costs of Litigation. In any action at law or in equity to enforce
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any of the provisions or rights under this Agreement, the unsuccessful party to
such litigation, as determined by the court in a final judgment or decree, shall
pay the successful party or parties all costs, expenses and attorneys' fees
reasonably incurred by the successful party or parties (including, without
limitation costs, expenses and fees on any appeals), and if the successful party
recovers judgment in any such action or proceeding such costs, expenses and
attorneys' fees shall be included as part of the judgment.
13. Necessary Acts. The Optionee agrees to perform all acts and
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execute and deliver any documents that may be reasonably necessary to carry out
the provisions of this Agreement, including, but not limited to, all acts and
documents related to compliance with federal and/or state securities and/or tax
laws.
14. Invalid Provisions. In the event that any provision of this
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Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and/or unenforceable provision was not contained herein.
15. Notices. Any notice to be given to the Company shall be
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addressed to the Company in care of its Secretary at its principal office, and
any notice to be given to the Optionee shall be addressed to Optionee at the
address given beneath hi signature hereto or at such other address as the
Optionee may hereafter designate in writing to the Company. Any such notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered or certified, and deposited, postage
and registry or certification fee prepaid, in a post office or branch post
office regularly maintained by the United State Postal Service.
16. Entire Agreement. This Agreement constitutes the entire
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agreement among the parties pertaining to the subject matter hereof and
Optionee's rights to an equity interest in the Company and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement takes the place of the Option Agreement
of June 7, 1997 and of the Option Agreement as of April ,1999, which both
become null and void upon effectiveness of this Agreement. The Agreement of
October 29, 1996 between the parties pertaining to Royalties in exchange to the
assignment of Optionee's patents to the Company is hereby unaffected.
17. Laws Applicable to Construction. This Agreement has been
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executed and delivered by the Company in the State of California and this
Agreement shall be construed and enforced in accordance with the laws of said
State.
IN WITNESS WHEREOF, the Company gas granted this Option on the date of
grant specified above.
Sangui BioTech International, Inc. Xxxx. Xxxxxxxx Xxxxxxxx, M.D.
and Ph.D.
Date: Date: 3 November 1999
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By: /S? /S?
Joerg Alte Xxxxxxxx Xxxxxxxx
President and CEO
