EXHIBIT 10.15
XXXXXXXX X. XXXXXXX STOCK OPTION AGREEMENT
Law Offices of
XXXXXXX & BEAM
TWO XXXXXXX XXXXX
XXXXX 000
XXXXXX, XXXXXXXXXX 00000
(000) 000-0000
(000) 000-0000
Fax: (000) 000-0000
Xxxxxxx X. Xxxx, Esq. Xxxxx X.X. XxXxxxxxx, Esq.
Xxxxxxxx X. Xxxxxxx, Esq. Xxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxx, Esq. K. Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxxx X. Xxxx, Esq. Xxxx X. Xxxxxxxx, Esq.
Xxxxx X. Xxxxxx, Esq. Xxxxxxxxxxx X. Xxxx, Esq.
Xxxxx X. Xxxx, Esq.
Xxxx X. Xxxxx, Esq.
of Counsel
October 6, 1999
VIA FACSIMILE ONLY
xXxxxxxxxxx.xxx, Inc.
Attn: Xx. Xxxxxx Xxxx
00000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
RE: DOCUMENTATION AND PROPOSAL
Dear Xxxxxx:
I am sending, via electronic mail, the investment documentation
which we discussed last week. Please contact me with any questions.
In accordance with your request, the following is our proposal
regarding the next 12 months of Inet's operations:
(i) Upon submission of the Form 10, we would invest $100,000 in the
Unit offering. While I cannot provide a firm commitment as to the
balance, I believe that over the next three months we will be able to
provide an additional $150,000 under the terms of the Units.
(ii) I would be appointed the corporate secretary and a member of the
corporation's Board of Directors; while I would hope to serve for an
extended period, we would have the right to remain on until the Notes
comprised in the Units are paid-off.
(iii) In addition to my role as a member of the Board of Directors, our
firm would also provide all non-litigation legal work for the company
during the 12 month period in exchange for the following (this would
include completing the Form 10 process and any registration
statement/private placement documentation eventually required):
(a) Up to 300,000 options exercisable at $1.75 per share
($1.00 of which shall be exercisable in the form of legal
services). The shares underlying these options (the "Option
Shares") would have S-8 registration rights upon completion of
the Form 10 (this is a summary form that is used for service
providers to the company; it would also be used for the
employee stock option plan which you and I have previously
discussed).
(b) The Option Shares would be locked up for the 90 day period
following the approval date of the Form 10. We would then have
the right to trade up to 10% of our exercised Option Shares
each month for an additional 10 months (i.e., after 13 months
all shares would be free-trading upon our exercising the
options). I estimate this to be at least 16 months from today
(90 days to process the Form 10, plus the 90 day lock-up, plus
10 months).
In summary, the concept is that we would receive a
$1.75 option which would be payable as $1.00 in legal services
and $.75 in cash. It would probably be to the advantage of the
company to issue all of the options immediately, but they
would only vest when and if the $1.00 in legal services is
provided (I am suggesting this because the company would not
receive an expense item for a $0.75 option at its current
stock price). Your company would remain responsible for our
out of pocket costs and expenses.
Xxxxxx, obviously I am very excited about the prospects of the
company. It is my intention to devote approximately 20% of my personal
business time to the company during the next year. I believe that at the end
of this year we will either have secured the required capital and basically
validated your vision (expanding the traditional educational format onto the
Internet and into the minority communities), or the company will continue in
its current format. While this latter conclusion is not fatal, my point is
that the structure of our compensation incentives me to maximize the value of
the shares in the marketplace (i.e., if the stock remains at around $1.00,
the options are virtually worthless and we will have expended probably
between $100,000 and $200,000 in legal time).
Please contact me with your questions or comments.
Sincerely,
XXXXXXX & BEAM
/s/ Xxxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
