OPTION TO PURCHASE COMMON STOCK OF
GS AGRIFUELS CORPORATION
HOLDER: [ENTER NAME]
NUMBER OF SHARES: _______,________
EXERCISE PRICE: $__________
GRANT DATE: MARCH ___, 2007
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR ANY OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
This certifies that, for value received, the above-named Holder is entitled,
subject to the terms set forth below, to purchase from GS AGRIFUELS CORPORATION
("Company"), a Delaware corporation, the number of Shares of Common Stock of the
Company as set forth above, as constituted on the date hereof (the "Option Grant
Date"), upon surrender hereof, at the principal office of the Company referred
to below, with the subscription form attached hereto duly executed, and
simultaneous payment therefor in lawful money of the United States or otherwise
as hereinafter provided, at the Exercise Price as set forth above. The number,
character and Exercise Price of such shares of Common Stock are subject to
adjustment as provided below. The term "Option" as used herein shall include
this Option and any options delivered in substitution or exchange therefor as
provided herein.
Exercise of Option
(a) Manner of Exercise. The purchase rights represented by this Option are
exercisable by the Holder in whole or in part, at any time, or from time to
time, through and until the FIFTH (5th) ANNIVERSARY of the Grant Date
stated above, by the surrender of this Option and the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the Company as it
may designate by notice in writing to the Holder at the address of the
Holder appearing on the books of the Company), upon payment (i) in cash or
by check acceptable to the Company, (ii) by cancellation by the Holder of
indebtedness of the Company to the Holder, or (iii) by a combination of (i)
and (ii), of the purchase price of the shares to be purchased.
(b) Time of Exercise. This Option shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares
of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares as of the close of business
on such date. As promptly as practicable on or after such date and in any
event within TEN (10) days thereafter, the Company at its expense shall
issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of shares issuable upon such
exercise. In the event that this Option is exercised in part, the Company
at its expense will execute and deliver a new Option of like tenor
exercisable for the number of shares for which this Option may then be
exercised.
(c) Net Issue Exercise. Notwithstanding any provisions herein to the contrary,
if the fair market value of one share of Common Stock is greater than the
Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Option for cash, the Holder may elect to receive shares
equal to the value (as determined below) of this Option (or the portion
thereof being cancelled) by surrender of this Option at the principal
office of the Company together with the properly endorsed Notice of
Exercise and notice of such election in which event the Company shall issue
to the Holder a number of shares of Common Stock computed using the
following formula:
X = Y(A-B)/A
X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under the Option
or, if only a portion of the Option is being exercised,
the portion of the Option being canceled (at the date of such
calculation)
A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
(d) For purposes of the above calculation, fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in
good faith; provided, however, that where there exists a public market for
the Company's Common Stock at the time of such exercise, the fair market
value per share shall be the average of the closing bid and asked prices of
the Common Stock quoted in the Over-the-Counter Market Summary or the last
reported sale price of the Common Stock or the closing price quoted on the
NASDAQ National Market System or on any exchange on which the Common Stock
is listed, whichever is applicable, as published in the Eastern Edition of
The Wall Street Journal for the five (5) trading days prior to the date of
determination of fair market value.
No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Option. In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company shall make a cash payment equal to the Exercise Price multiplied by such
fraction.
Replacement of Option. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Option and, in the
case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Option, the Company at its
expense shall execute and deliver, in lieu of this Option, a new Option of like
tenor and amount.
Rights of Stockholders. Subject to the terms of this Option, the Holder shall
not be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company that may at any time be issuable on
the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
the Option shall have been exercised as provided herein.
Reservation of Stock. The Company covenants that during the term this Option is
exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of this Option and, from time to time, will take all steps
necessary to amend its Certificate of Incorporation (the "Certificate") to
provide sufficient reserves of shares of Common Stock issuable upon exercise of
the Option. The Company further covenants that all shares that may be issued
upon the exercise of rights represented by this Option, upon exercise of the
rights represented by this Option and payment of the Exercise Price, all as set
forth herein, will be free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its
issuance of this Option shall constitute full authority to its officers and
agents, including transfer agents, who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of
Common Stock upon the exercise of this Option.
Notices of Certain Events
(a) In case (i) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of this Option) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or of
any voluntary dissolution, liquidation, or (iii) winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder or Holders a notice specifying, as the case may be, (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise of
this Option) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 15
days prior to the date therein specified.
(b) All such notices, advices and communications shall be deemed to have been
received (i) when delivered personally, (ii) three business days after
being mailed by first class mail, postage prepaid, or (iii) one business
day after being sent by a reputable overnight delivery service, postage or
delivery charges prepaid. Notices, advices and communications may also be
given by facsimile and shall be effective on the date transmitted if
confirmed within 24 hours thereafter by a signed original sent in the
manner provided in the preceding sentence.
Amendments and Waivers. This Option and any term of this Option may be amended,
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such amendment, change, waiver,
discharge or termination is sought. No waivers of, or exceptions to, any term,
condition or provision of this Option, in any one or more instances, shall be
deemed to be, or construed as, further or continuing waiver of any such term,
condition or provision.
Adjustments. The Exercise Price and the number of shares purchasable hereunder
are subject to adjustment from time to time as follows:
(a) Merger, Sale of Assets, etc. If at any time while this Option, or any
portion thereof, is outstanding and unexpired there shall be (i) a
reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in
which the Company is the surviving entity but the shares of the Company's
capital stock outstanding immediately prior to the merger are converted by
virtue of the merger into other property whether in the form of securities,
cash or otherwise, or (iii) a sale or transfer of the Company's properties
and assets as, or substantially as, an entirety to any other person, then
as a part of such reorganization, merger, consolidation, sale or transfer,
lawful provision shall be made so that the holder of this Option, during
the period specified herein and upon payment of the Exercise Price then in
effect, receives the number of shares of stock or other securities or
property of the successor corporation resulting from such reorganization,
merger, consolidation, sale or transfer that a holder of the shares
deliverable upon exercise of this Option would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if
this Option had been exercised immediately before such reorganization,
merger, consolidation, sale or transfer, all subject to further adjustment
as provided in this Section. The foregoing provisions of this Section shall
similarly apply to successive reorganizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other corporation
that are at the time receivable upon the exercise of this Option. If the
per-share consideration payable to the holder hereof for shares in
connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be
determined in good faith by the Company's Board of Directors. In all
events, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the
provisions of this Option with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Option
shall be applicable after that event, as near as reasonably may be, in
relation to any shares or other property deliverable after the event upon
exercise of this Option.
(b) Reclassification, etc. If the Company, at any time while this Option, or
any portion thereof, remains outstanding and unexpired by reclassification
of securities or otherwise, shall change any of the securities as to which
purchase rights under this Option exist into the same or a different number
of securities of any other class or classes, this Option shall thereafter
represent the right to acquire such number and kind of securities as would
have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Option
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section.
(c) Split, Subdivision or Combination of Shares. If the Company at any time
while this Option, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which
purchase rights under this Option exist, into a different number of
securities of the same class, the Exercise Price for such securities shall
be proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
(d) Adjustments for Dividends in Stock or Other Securities or Property. If
while this Option, or any portion hereof, remains outstanding and unexpired
the holders of the securities as to which purchase rights under this Option
exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock or
other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Option shall represent the right to
acquire, in addition to the number of shares of the security receivable
upon exercise of this Option, and without payment of any additional
consideration therefor, the amount of such other or additional stock or
other securities or property (other than cash) of the Company that such
holder would hold on the date of such exercise had it been the holder of
record of the security receivable upon exercise of this Option on the date
hereof and had thereafter, during the period from the date hereof to and
including the date of such exercise, retained such shares and/or all other
additional stock available to it as aforesaid during such period, giving
effect to all adjustments called for during such period by the provisions
of this Section.
(e) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each Holder of this Option a certificate
setting forth, in reasonable detail, the event requiring the adjustment or
readjustment, the amount of such adjustment or readjustment, the method by
which such adjustment or readjustment was calculated, the Exercise Price at
the time in effect, and the number of shares and the amount, if any, of
other property that at the time would be received upon the exercise of the
Option. The Company shall upon the written request, at any time, of any
such Holder, furnish or cause to be furnished to such Holder a like
certificate. (f) No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of
this Section and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holders of this Option
against impairment.
(g) Adjustment in Number of Shares. Upon each adjustment of the Exercise Price
pursuant to this Section, this Option shall thereafter evidence the right
to receive upon payment of the adjusted Exercise Price that number of
shares of Common Stock (calculated to the nearest hundredth) obtained from
the following formula:
X = Y*(A/B)
X = the adjusted number of shares of Common Stock
issuable upon exercise of the Option by payment of
the adjusted Exercise Price.
Y = the number of shares of Common Stock previously
issuable upon the exercise of the Option by payment
of the Exercise Price prior to adjustment.
A = the Exercise Price prior to adjustment.
B = the adjusted Exercise Price.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
officers thereunto duly authorized as of the date first above written.
GS AGRIFUELS CORPORATION
XXX XXXXXXXXXX
President and Chief Executive Officer
NOTICE OF EXERCISE
TO: GS AGRIFUELS CORPORATION
The undersigned hereby elects to purchase _____________________________________
shares of Common Stock of GS AGRIFUELS CORPORATION pursuant to the terms of the
attached Option, and tenders herewith payment of the purchase price for such
shares in full.
Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name as is specified
below:
(Name)
(Name)
Please issue a new Option for the unexercised portion of the attached Option in
the name of the undersigned or in such other name as is specified below:
(Name)
(Name)
(Date)
