EXHIBIT 10.7
STOCK OPTION AGREEMENT
THIS AGREEMENT, effective as of the 1st day of March, 2003, by and
between XRG, INC., a Delaware corporation (hereinafter referred to as the
"Company"), and XXXXXXX X. XXXXXX (hereinafter referred to as "Optionee").
W I T N E S S E T H:
WHEREAS, the Company has retained the Optionee as corporate and securities
counsel; and
WHEREAS, the Company is agreeable to issuing the Optionee the options in
this Agreement in consideration of Optionee deferring his legal fees.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to Optionee an option to
acquire 100,000 shares of the Company's common stock subject at the exercise
price of $.001 per share.
2. General Terms. The options shall have a five (5) year term. Optionee may
exercise his option by written notice to the Company, specifying the intent of
the Optionee to exercise his option, the date on which he will purchase such
shares, and the number of shares to be purchased. Upon the date so specified,
Optionee shall pay the Company the purchase price for the number of shares to be
so purchased in cash or cashier's check, and shall sign such investment letter
as shall be required by the Company.
The Company should not be obligated to deliver any shares unless and until
there has been compliance with all applicable securities regulations.
3. Merger; Consolidation or Sale of Assets; Acceleration; Initial Public
Offering. Upon the reorganization, merger or consolidation of the Company in
which the Company is not the surviving entity (other than a merger under Section
368(f) of the Internal Revenue Code of l986, as amended, for a change of
domicile, which is excluded from the definition of Material Transaction), or
upon the dissolution or liquidation of the Company, or upon the sale of all or
substantially all the assets of the Company in a transaction or series of
related transactions, or upon an initial public offering (each of the foregoing
is referred to herein as a "Material Transaction"), Optionee shall have the
right to exercise the option with respect to all shares. The Company shall give
the Optionee written notice at least thirty (30) days prior to the consummation
of a Material Transaction. Upon receipt of such notice from the Company, the
Optionee may exercise the option and make payment of the exercise price in
accordance with the procedures described in Section 2 above by delivering a
written notice to the Company at least five (5) days prior to the consummation
of the Material Transaction. Unless otherwise provided by the Board of Directors
of the Company, if the Optionee does not exercise the Option or only exercises
the Option in part, then upon the consummation of the Material Transaction, the
Option (or the portion of the unexercised Option) shall automatically expire and
be of no further force or effect.
4. Adjustments. In the event of any stock dividend, split-up, combination
or exchange of shares, recapitalization, merger, consolidation, acquisition of
property or stock, separation, reorganization, or the like, the number and class
of shares subject to this Agreement and the option price therefor shall be
proportionately adjusted.
5. Non-Transferability of Options. The option granted hereunder shall not
be transferable by Optionee otherwise than by will or the laws of descent and
distribution, or to Optionee and his wife by tenants by the entireties and may
be exercised during the lifetime of the Optionee only by him.
6. Death.
a. In the event of the death of Optionee while the option granted
hereunder is outstanding, such option may be exercised by the person or
persons to whom Optionee's rights under the option are passed by will or
the laws of descent and distribution (including his estate during the
period of administration) at any time prior to the earlier of (i) the
expiration date of the option, or (ii) the expiration of one (1) year after
the date of Optionee's death (or such longer period, not exceeding one (1)
additional year, as the Board of Directors or Administrative Committee may
approve), to the extent of the option granted hereunder.
7. Expenses. The Company shall pay the cost of documentary stamps on any
stock issued hereunder.
8. Counterparts. This Agreement may be executed in several counterparts and
all so executed shall constitute one agreement, binding on all of the parties
hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
9. Construction and Severability. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, and the
invalidity of any one or more portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law shall not
affect the validity of any other portion of this Agreement; and in the event
that one or more portions contained herein shall be invalid, this instrument
shall be construed as if such invalid portions had not been inserted.
10. Binding. Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties
signatory hereto, their personal representatives, heirs, successors and assigns.
11. Costs and Attorney's Fees. If the obligations of the parties expressed
herein are the subject of litigation, the prevailing party shall be entitled to
recover from the other party all reasonable costs and expenses of such
litigation, including reasonable attorneys fees and costs of appeal.
12. Modification. No change or modification in this Agreement shall valid
unless the same be in writing and signed by the parties hereto.
13. Applicable Law. This Agreement shall be construed and regulated under
and by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.
XRG, INC., a Delaware corporation
By:
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President
Attest:
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Secretary
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XXXXXXX X. XXXXXX
