EXHIBIT 10.54
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Option Agreement") is made this 21th day of
December 2001, by and between INETPURCHASING, INC., a Delaware corporation
(hereinafter the "Corporation"), and VERTICAL COMPUTER SYSTEMS, INC., a Delaware
corporation ("Vertical ").
RECITALS
The Corporation is in the business of providing Internet procurement
services and products to governmental agencies (the "Business").
Vertical desires to purchase and the Corporation desires to grant to
Vertical an option to acquire a majority interest in the Corporation, under the
terms provided in the Stock Purchase Agreement and Stockholder's Agreements, in
the form attached hereto as Exhibits A and B respectively.
IN CONSIDERATION of the foregoing and the mutual covenants set forth
herein, and intending to be legally bound, the parties agree as follows:
1. In exchange for the option price of ONE HUNDRED FORTY THOUSAND
DOLLARS (US $140,000) payable in four (4) equal payments of THIRTY FIVE THOUSAND
DOLLARS (US$35,000) on December 21, 2001, January 21, 2001, February 21, 2002
and March 21, 2002, the Corporation hereby grants to Vertical the option to
purchase the stock of the Corporation according to the terms provided in the
Stock Purchase Agreement and Stockholders Agreements, in the form attached
hereto as Exhibits A and B respectively with the following exception:
Secs.b.3.a through i (payment schedules) shall be deleted and
replaced with:
Sec.b.3.a: On or before April 1, 2002 (the Closing Date) the buyer
shall deliver to the Corporation $1,000,000 in cash or marketable securities
(which shall be defined as securities that may be immediately sold on a national
stock exchange on the date of deliver to the Corporation) (the "CASH PORTION")
(less the option payments ($140,000) plus 70,000 shares of the "Preferred
Stock".
2. Notwithstanding anything in the Stockholders Agreement to the
contrary,
a. Vertical may pledge its stock in the Corporation as
security for its capital raising efforts;
b. Upon execution of this Option Agreement, Vertical shall
be permitted to appoint one (1) director to the Board of
Directors of the Corporation;
c. The term "Sale Date," which is defined in Article 2,
paragraph 1.b. of the Stockholders Agreement, shall be
no later than September 30, 2002,"
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d. During the period, a Supermajority, as defined in the
Stockholders Agreement will be required for all "Major
Decisions," as defined in the Stockholders Agreement.
e. All terms of the Stockholders Agreement, including those
modified herein, shall be effective upon execution of
this Option Agreement.
f. If any payment date is missed by more than 15 days this
Option Agreement and the attached Stockholder's
Agreement and Stock Purchase Agreements immediately
become null and void and prior option payments are
forfeited.
3. The below options shall be issued one-half in the form of options
pursuant to the Incentive Stock Option Plan of 1999 (the "Options") and one-half
in the form of warrants ("Warrants") as set forth below
a. Upon execution of this Agreement, Vertical agrees to issue
Options at a strike price of $0.010 (the share price as of the date of the
execution of this Option Agreement) pursuant to the Employment Agreements, as
defined in the Stock Purchase Agreement, subject to a lock up provision which
limits the sales of such stock to no more than one-quarter of such share for
each month for a period of four months as follows:
(i) Xxxxx Xxxxx 1,500,000
a. (ii) Xxxxx Xxxxxxx 1,500,000
b. (iii) Xxxxx Xxxxxx 500,000
b. Vertical shall promptly issue the Options and Warrants set
forth in subparagraph (i)-(iii) below at a strike price equal to the closing
price of the Vertical common stock on the date of January 6, 2002. In the event
that Vertical does not acquire a majority interest in the Company, these Options
and Warrants set forth in b (i), (ii), and (iii) shall be void and the holder of
said warrants shall have no rights to purchase any Company common stock in
connection with these Options or Warrants, as the case may be. The Options and
Warrants to be issued in this subsection shall be issued as follows:
Holder Stock Options Warrants
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(i) Xxxxx Xxxxx 2,250,000 3,750,000
(ii) Xxxxx Xxxxxxx 2,250,000 3,750,000
(iii) Xxxxx Xxxxxx 750,000 1,250,000
c. Except as provided above, the strike price for the Option
Agreement, the Stockholders Agreement and the Stock Purchase Agreement shall be
that of the date of the signing of this Option Agreement. The terms of the
executed Employment Agreements shall not be otherwise modified by this Option
Agreement except as set forth herein.
4. Notwithstanding anything in the Stock Purchase Agreement to the
contrary, the Corporation shall deliver to Vertical:
a. A Certificate from the Secretary of State of Delaware
reflecting the Corporation's good standing within 45
days;
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b. A draft of the Amended Articles of Incorporation to be
filed with the Delaware Secretary of State, as required
by the Stock Purchase Agreement (within 45 days);
c. Within five (5) days, a final list of the Corporation's
Shareholders and their interests, as of the date of
execution of this Option Agreement;
d. Prepare by the fifteenth of each month financial
statements in accordance with GAAP:
e. Executed originals of the Stock Purchase Agreement,
Employment Agreements and Stockholders Agreement and all
Certificates, required to be delivered by the
Corporation at the Closing of the Stock Purchase
Agreement including all documents reasonably required to
dissolve the Vertical-iNPI LLC and iNetGovernment
Services LLC;
f. The EmilyTM License Agreement in the form attached
hereto as Exhibit C.
4. Seller's Default. Should the Corporation fail to satisfy any of its
obligations under the Stock Purchase Agreement, Vertical shall be entitled to a
full refund of its options and repayment of any monies advanced, plus interest.
5. Miscellaneous.
5.1 AUTHORITY. Each party hereto represents and warrants that it has
full power and authority to enter into this Option Agreement and to perform this
Option Agreement in accordance with its terms.
5.2 GOVERNING LAW. This Option Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Texas.
5.3 SUCCESSORS AND ASSIGNS. This Option Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.
5.4 CAPTIONS. The captions of the sections of this Option Agreement
are for convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Option Agreement.
5.5 SEVERABILITY. In the event that any provision of this Option
Agreement shall be invalid, illegal or otherwise unenforceable, the validity,
legality and enforceability of the remaining provisions shall in no way be
affected or impaired thereby.
5.6 AMENDMENT. This Option Agreement may be amended only in writing
executed by the parties hereto.
5.7 ATTORNEY'S FEES. In the event of a dispute the prevailing party
shall be entitled to be reimbursed for its legal fees by the other party.
5.8 CONFLICT. In the event of any conflict between the terms of this
Option Agreement and Stock Purchase Agreement and Stockholder's Agreements, the
terms of this Option Agreement shall control.
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5.9 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Option Agreement may shall be brought against any of the parties only in the
courts of the State of California, County of Los Angeles, or, if it has or can
acquire the necessary jurisdiction, in the United States District Court for the
Central District of California, and each of the parties consents to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts)
in any such action or proceeding and irrevocably waives any objection to venue
laid therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
IN WITNESS WHEREOF, the parties have executed this Option Agreement
effective as of the day and year first set forth above.
iNET PURCHASING, INC.
By:
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Xxxxx Xxxxx, President
VERTICAL COMPUTER SYSTEMS, INC.
By:
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Xxxxxxx Xxxx, President
ACCEPTED AND AGREED:
---------------------------------
Xxxxx Xxxxx, an individual shareholder
Dated:
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ACCEPTED AND AGREED:
---------------------------------
Xxxxx Xxxxxxx, an individual shareholder
Dated:
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ACCEPTED AND AGREED:
---------------------------------
Xxxxx Xxxxxx, an individual shareholder
Dated:
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EXHIBIT A
(Stock Purchase Agreement)
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EXHIBIT B
(Stockholders Agreement)
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EXHIBIT C
(Xxxxx(TM) License Agreement)
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