Exhibit 10.2
DATA CALL TECHNOLOGIES
OPTION AGREEMENT
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Date: February 8, 2006
To Whom It May Concern:
DATA CALL TECHNOLOGIES (the "Company"), for value received, hereby agrees to
issue common stock purchase options entitling Xxxxx Xxxxxx ("Holder") and his
assigns to purchase an aggregate of 3,000,000 shares of the Company's common
stock ("Common Stock"). Such option is evidenced by an option certificate in
the form attached hereto as Schedule 1 (such instrument being hereinafter
referred to as an "Option," and such Option and all instruments hereafter issued
in replacement, substitution, combination or subdivision thereof being
hereinafter collectively referred to as the "Option"). The Option is issued in
consideration for services rendered. The number of shares of Common Stock
purchasable upon exercise of the Option is subject to adjustment as provided in
Section 5 below. The Option will be exercisable by the Option Holder (as
defined below) as to all or any lesser number of shares of Common Stock covered
thereby, at an initial purchase price of US $0.10 per share (the "Purchase
Price"), subject to adjustment as provided in Section 5 below, for the exercise
period defined in Section 3(a) below. The term "Option Holder" refers to the
person whose name appears on the signature page of this agreement and any
transferee or transferees of any of them permitted by Section 2(a) below.
1. REPRESENTATIONS AND WARRANTIES.
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The Company represents and warrants to the Option Holder as
follows:
(a) CORPORATE AND OTHER ACTION. The Company has all requisite
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power and authority (corporate and other), and has taken all
necessary corporate action, to authorize, execute, deliver and
perform this Option Agreement, to execute, issue, sell and
deliver the Option and a certificate or certificates evidencing
the Option, to authorize and reserve for issue and, upon payment
from time to time of the Purchase Price, to issue, sell and
deliver, the shares of the Common Stock issuable upon exercise of
the Option ("Shares"), and to perform all of its obligations
under this Option Agreement and the Option. The Shares, when
issued in accordance with this Option Agreement, will be duly
authorized and validly issued and outstanding, fully paid and
nonassessable and free of all liens, claims, encumbrances and
preemptive rights. This Option Agreement and, when issued, each
Option issued pursuant hereto, has been or will be duly executed
and delivered by the Company and is or will be a legal, valid and
binding agreement of the Company, enforceable in accordance with
its terms. No authorization, approval, consent or other order of
any governmental entity, regulatory authority or other third
party is required for such authorization, execution, delivery,
performance, issue or sale.
(b) NO VIOLATION. The execution and delivery of this Option
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Agreement, the consummation of the transactions herein
contemplated and the compliance with the terms and provisions of
this Option Agreement and of the Option will not conflict with,
or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Articles of
Incorporation or Bylaws of the Company or any indenture,
mortgage, deed of trust, note, bank loan, credit agreement,
franchise, license, lease, permit, or any other agreement,
understanding, instrument, judgment, decree, order, statute, rule
or regulation to which the Company is a party or by which it is
bound.
[Remainder of page left intentionally blank.]
2. TRANSFER.
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(a) TRANSFERABILITY OF OPTION. The Option Holder agrees that the
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Option is being acquired as an investment and not with a view to
distribution thereof and that; the Option may not be transferred,
sold, assigned or hypothecated except as provided herein. The
Option Holder further acknowledges that the Option may not be
transferred, sold, assigned or hypothecated unless pursuant to a
registration statement that has become effective under the
Securities Act of 1933, as amended (the "Act"), setting forth the
terms of such offering and other pertinent data with respect
thereto, or unless the Option Holder has provided the Company
with an acceptable opinion from acceptable counsel that such
registration is not required. Certificates representing the
Option shall bear an appropriate legend. Notwithstanding the
foregoing, any request to transfer the Option must be accompanied
by the Form of Assignment and Transfer attached hereto as
Schedule 2 executed by the Option Holder.
(b) REGISTRATION OF SHARES. The Option Holder agrees not to make
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any sale or other disposition of the Shares except pursuant to a
registration statement which has become effective under the Act,
setting forth the terms of such offering, the underwriting
discount and commissions and any other pertinent data with
respect thereto, unless the Option Holder has provided the
Company with an acceptable opinion of counsel acceptable to the
Company that such registration is not required. Certificates
representing the Shares, which are not registered as provided in
this Section 2, shall bear an appropriate legend and be subject
to a "stop-transfer" order.
3. EXERCISE OF OPTION, PARTIAL EXERCISE.
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(a) EXERCISE PERIOD. This Option shall expire and all rights
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hereunder shall be extinguished Five (5) years from the date
first written above.
(b) EXERCISE IN FULL. Subject to Section 3(a), an Option may be
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exercised in full by the Option Holder by surrender of the
Option, with the Form of Subscription attached hereto as Schedule
3 executed by such Option Holder, to the Company, accompanied by
payment as determined by 3(d) below, in the amount obtained by
multiplying the number of Shares represented by the respective
Option by the Purchase Price per share (after giving effect to
any adjustments as provided in Section 5 below).
(c) PARTIAL EXERCISE. Subject to Section 3(a), each Option may
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be exercised in part by the Option Holder by surrender of the
Option, with the Form of Subscription attached hereto as Schedule
3 at the end thereof duly executed by such Option Holder, in the
manner and at the place provided in Section 3(b) above,
accompanied by payment as determined by 3(d) below, in amount
obtained by multiplying the number of Shares designated by the
Option Holder in the Form of Subscription attached hereto as
Schedule 3 to the Option by the Purchase Price per share (after
giving effect to any adjustments as provided in Section 5 below).
Upon any such partial exercise, the Company at its expense will
forthwith issue and deliver to or upon the order of the Option
Holder a new Option of like tenor, in the name of the Option
Holder subject to Section 2(a), calling in the aggregate for the
purchase of the number of Shares equal to the number of such
Shares called for on the face of the respective Option (after
giving effect to any adjustment herein as provided in Section 5
below) minus the number of such Shares designated by the Option
Holder in the aforementioned form of subscription.
(d) PAYMENT OF PURCHASE PRICE. The Purchase Price may be made by
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any of the following or a combination thereof, at the election of
the Option Holder:
(i) In cash, by wire transfer, by certified or cashier's
check, or by money order; or
(ii) By delivery to the Company of an exercise notice that
requests the Company to issue to the Option Holder the full
number of shares as to which the Option is then exercisable,
less the number of shares that have an aggregate Fair Market
Value, as determined by the Board in its sole discretion at
the time of exercise, equal to the aggregate purchase price
of the shares to which such exercise relates. (This method
of exercise allows the Option Holder to use a portion of the
shares issuable at the time of exercise as payment for the
shares to which the Option relates and is often referred to
as a "cashless exercise." For example, if the Option Holder
elects to exercise 1,000 shares at an exercise price of
$0.25 and the current Fair Market Value of the shares on the
date of exercise is $1.00, the Option Holder can use 250 of
the 1,000 shares at $1.00 per share to pay for the exercise
of the entire Option (250 x $1.00 = $250.00) and receive
only the remaining 750 shares).
For purposes of this section, "Fair Market Value" shall be
defined as the average closing price of the Common Stock (if
actual sales price information on any trading day is not
available, the closing bid price shall be used) for the five
trading days prior to the date of exercise of this Option (the
"Average Closing Bid Price"), as reported by the National
Association of Securities Dealers Automated Quotation System
("NASDAQ"), or if the Common Stock is not traded on NASDAQ, the
Average Closing Bid Price in the over-the-counter market;
provided, however, that if the Common Stock is listed on a stock
exchange, the Fair Market Value shall be the Average Closing Bid
Price on such exchange; and, provided further, that if the Common
Stock is not quoted or listed by any organization, the fair value
of the Common Stock, as determined by the Board of Directors of
the Company, whose determination shall be conclusive, shall be
used). In no event shall the Fair Market Value of any share of
Common Stock be less than its par value.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
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Any exercise of the Option pursuant to Section 3 shall be deemed
to have been effected immediately prior to the close of business on
the date on which the Option together with the Form of Subscription
and the payment for the aggregate Purchase Price shall have been
received by the Company. At such time, the person or persons in whose
name or names any certificate or certificates representing the Shares
or Other Securities (as defined below) shall be issuable upon such
exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as
practicable after the exercise of any Option in full or in part, and
in any event within Ten (10) business days thereafter, the Company at
its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of, and delivered to the
purchasing Option Holder, a certificate or certificates representing
the number of fully paid and nonassessable shares of Common Stock or
Other Securities to which such Option Holder shall be entitled upon
such exercise, plus in lieu of any fractional share to which such
Option Holder would otherwise be entitled, cash in an amount
determined pursuant to Section 6(e). The term "Other Securities"
refers to any stock (other than Common Stock), other securities or
assets (including cash) of the Company or any other person (corporate
or otherwise) which the Option Holder at any time shall be entitled to
receive, or shall have received, upon the exercise of the Option, in
lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement
of Common Stock or Other Securities pursuant to Section 5 below or
otherwise.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE.
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The Purchase Price and the number of Shares are subject to adjustment from time
to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this
Option Agreement (i) declare a dividend on the Common Stock in
shares of its capital stock, (ii) subdivide the outstanding
Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of Common Stock, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then
in each case the Purchase Price, and the number and kind of
Shares receivable upon exercise, in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be
proportionately adjusted so that the holder of any Option
exercised after such time shall be entitled to receive the
aggregate number and kind of Shares which, if such Option had
been exercised immediately prior to such record date, he would
have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if
such adjustment is less than US $.01; provided, however, that any
adjustments which by reason of this subsection (b) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(c) Upon each adjustment of the Purchase Price as a result of
the calculations made in subsection (a) of this Section 5, the
Option outstanding prior to the making of the adjustment in the
Purchase Price shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of Shares (calculated
to the nearest thousandth) obtained by (i) multiplying the number
of Shares purchasable upon exercise of the Option immediately
prior to adjustment of the number of Shares by the Purchase Price
in effect prior to adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
6. FURTHER COVENANTS OF THE COMPANY.
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(a) DILUTION OR IMPAIRMENTS. The Company will not, by amendment
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of its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger or
dissolution, avoid or seek to avoid the observance or performance
of any of the terms of the Option or of this Option Agreement,
but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the
Option Holder against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely
for issuance and delivery upon the exercise of the Option,
all shares of Common Stock (or Other Securities) from time
to time issuable upon the exercise of the Option and shall
take all necessary actions to ensure that the par value per
share, if any, of the Common Stock (or Other Securities) is
at all times equal to or less than the then effective
Purchase Price per share; and
(ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common
Stock or Other Securities upon the exercise of the Option
from time to time outstanding.
(b) TITLE TO STOCK. All Shares delivered upon the exercise of
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the Option shall be validly issued, fully paid and nonassessable;
each Option Holder shall, upon such delivery, receive good and
marketable title to the Shares, free and clear of all voting and
other trust arrangements, liens, encumbrances, equities and
claims whatsoever; and the Company shall have paid all taxes, if
any, in respect of the issuance thereof.
(c) EXCHANGE OF OPTION. Subject to Section 2(a) hereof, upon
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surrender for exchange of any Option to the Company, the Company
at its expense will promptly issue and deliver to or upon the
order of the holder thereof a new Option or like tenor, in the
name of such holder or as such holder (upon payment by such
Option holder of any applicable transfer taxes) may direct,
calling in the aggregate for the purchase of the number of Shares
called for on the face of the Option surrendered. The Option and
all rights thereunder are transferable in whole or in part upon
the books of the Company by the registered holder thereof,
subject to the provisions of Section 2(a), in person or by duly
authorized attorney, upon surrender of the Option, duly endorsed,
at the principal office of the Company.
(d) REPLACEMENT OF OPTION. Upon receipt of evidence reasonably
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satisfactory to the Company of the loss, theft, destruction or
mutilation of any Option and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in
the case of any such mutilation, upon surrender and cancellation
of such Option, the Company, at the expense of the Option Holder,
will execute and deliver, in lieu thereof, a new Option of like
tenor.
(e) FRACTIONAL SHARES. No fractional Shares are to be issued
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upon the exercise of any Option, but the Company shall round any
fraction of a share to the nearest whole Share.
7. OTHER OPTION HOLDERS: HOLDERS OF SHARES.
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The Option is issued upon the following terms, to all of which
each Option Holder by the taking thereof consents and agrees: (a) any
person who shall become a transferee, within the limitations on
transfer imposed by Section 2(a) hereof, of an Option properly
endorsed shall take such Option subject to the provisions of Section
2(a) hereof and thereupon shall be authorized to represent himself,
herself or itself as absolute owner thereof and, subject to the
restrictions contained in this Option Agreement, shall be empowered to
transfer absolute title by endorsement and delivery thereof to a
permitted bona fide purchaser for value; (b) any person who shall
become a holder or owner of Shares shall take such shares subject to
the provisions of Section 2(b) hereof; (c) each prior taker or owner
waives and renounces all of his equities or rights in such Option in
favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and
to all rights presented thereby; and (d) until such time as the
respective Option is transferred on the books of the Company, the
Company may treat the registered holder thereof as the absolute owner
thereof for all purposes, notwithstanding any notice to the contrary.
8. MISCELLANEOUS.
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All notices, certificates and other communications from or at the
request of the Company to any Option Holder shall be mailed by first
class, registered or certified mail, postage prepaid, to such address
as may have been furnished to the Company in writing by such Option
Holder, or, until an address is so furnished, to the address of the
last holder of such Option who has so furnished an address to the
Company, except as otherwise provided herein. This Option Agreement
and any of the terms hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or
termination is sought. This Option Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Texas. The headings in this Option Agreement are for purposes of
reference only and shall not limit or otherwise affect any of the
terms hereof. This Option Agreement, together with the forms of
instruments annexed hereto as schedules, constitutes the full and
complete agreement of the parties hereto with respect to the subject
matter hereof. For purposes of this Option Agreement, a faxed
signature shall constitute an original signature. A photocopy or faxed
copy of this Agreement shall be effective as an original for all
purposes.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be executed
on this 8th day of February 2006, in Houston, Texas, by its proper corporate
officers, thereunto duly authorized.
DATA CALL TECHNOLOGIES
By /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Chief Financial Officer
SCHEDULE 1
OPTION
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THIS OPTION AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4 OF
SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THIS OPTION MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS OPTION MUST BE ACQUIRED
FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE OPTION NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR AN
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
OPTION OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
To Purchase 3,000,000 Shares
of Common Stock
DATA CALL TECHNOLOGIES
This certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Option, until the
expiration date, to purchase the number of shares (the "Shares") set forth above
of the common stock ("Common Stock"), of DATA CALL TECHNOLOGIES (the "Company")
from the Company at the purchase price per share hereafter set forth below, on
delivery of this Option to the Company with the exercise form duly executed and
payment of the purchase price (in cash or by certified or bank cashier's check
payable to the order of the Company) for each Share purchased. This Option is
subject to the terms of the Option Agreement between the parties thereto dated
as of February 8, 2006, the terms of which are hereby incorporated herein.
Reference is hereby made to such Option Agreement for a further statement of the
rights of the holder of this Option.
Registered Owner: Xxxxx Xxxxxx Date: February 8,
2006
Purchase Price
Per Share: US $0.10
Expiration Date: Subject to Section 3(a) of the Option Agreement, 5:00 p.m.
Central Standard Time.
WITNESS the signature of the Company's authorized officer:
DATA CALL TECHNOLOGIES
By /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Chief Financial Officer
SCHEDULE 2
FORM OF ASSIGNMENT AND TRANSFER
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For value received, the undersigned hereby sells, assigns and transfers unto
the right represented by the enclosed Option
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to purchase shares of Common Stock of DATA CALL TECHNOLOGIES
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to which the enclosed Option relates, and appoints Attorney
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to transfer such right on the books of DATA CALL TECHNOLOGIES with full power of
substitution in the premises.
The undersigned represents and warrants that the transfer of the enclosed Option
is permitted by the terms of the Option Agreement pursuant to which the enclosed
Option has been issued, and the transferee hereof, by his, her or its acceptance
of this Agreement, represents and warrants that he, she or it is familiar with
the terms of said Option Agreement and agrees to be bound by the terms thereof
with the same force and effect as if a signatory thereto.
Dated:
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(Signature must conform in all respects to name of
holder as specified on the face of the enclosed Option)
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(Printed Name)
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(Address)
Signed in the presence of:
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SCHEDULE 3
FORM OF SUBSCRIPTION
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(To be signed only upon exercise of Option)
To DATA CALL TECHNOLOGIES:
The undersigned, the holder of the enclosed Option, hereby irrevocably elects to
exercise the purchase right represented by such Option for, and to purchase
thereunder, * shares of Common Stock of DATA CALL TECHNOLOGIES and
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herewith makes payment of US $ (or elects to pay for the exercise
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in shares of common stock pursuant to Section 3(d)(ii) of the Option Agreement
by checking this box ), and requests that the certificate or certificates for
such shares be issued in the name of and delivered to the undersigned.
Dated:
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(Signature must conform in all respects to name of
holder as specified on the face of the enclosed Option)
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(Printed Name)
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(Address)
(*) Insert here the number of shares called for on the face of the
Option or, in the case of a partial exercise, the portion thereof as
to which the Option is being exercised, in either case without making
any adjustment for additional Common Stock or any other stock or other
securities or property which, pursuant to the adjustment provisions of
the Option Agreement pursuant to which the Option was granted, may be
delivered upon exercise.
