Exhibit 10.9
ADUROMED CORPORATION
STOCK OPTION AGREEMENT
WITH XXXXXXX XXXXX
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This Non-Statutory Option Agreement (the "Agreement") is made and
entered into as of September 23, 2005 (the "Effective Date") by and between
ADUROMED CORPORATION, a Delaware corporation (the "Corporation"), and XXXXXXX
XXXXX (the "Optionee").
RECITALS
WHEREAS, the Corporation originally granted to Optionee the option to
purchase 850,000 shares of its common stock (par value $.01 per share) on June
1, 2003, upon the terms and conditions confirmed below, as compensation for his
acting as a consultant to the Corporation, such option herein after referred to
as the "ORIGINAL OPTION"; and
WHEREAS, as of the Effective Date, the Corporation does by this
Agreement grant to Optionee the option to purchase an additional 570,386 shares
of its Common Stock (par value $.01 per share), upon terms and conditions set
forth below, to induce him to continue to act in a consulting capacity to the
Corporation, such option hereinafter referred to as the "CONSULTANT'S OPTION".
(Collectively, the Original Option and the Consultant's Option are hereinafter
referred to as the "Options", and separately as an "Option".) ;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Grant of Options. The Corporation hereby confirms the grant under
the Original Option and the Consultant's Option to the Optionee, and his
permitted designees and assignees, of the right and option to purchase a total
of 1,420,386 shares of the Corporation's Common Stock (the "Optioned Shares").
It is understood and acknowledged that the Options are designated as a
non-statutory stock options that will not qualify as an incentive stock option
under Section 422 of the Internal Revenue Code.
2. Option Price. The price to be paid for the Optioned Shares of Common
Stock to be issued upon exercise of the Options or any part thereof shall be
$0.25 per share (the "Exercise Price").
3. Right to Exercise.
(a) The rights to exercise the Original Option shall vest, or shall
have vested -
(i) as to 283,333 shares, on June 1, 2004;
(ii) as to an additional 283,333 shares, on June 1, 2005; and
(iii) as to the balance of 283,334 shares, on June 1, 2006.
(b) The right to exercise the Consultant's Option shall vest -
(i) as to 190,128 shares when (A) the price (if the stock is
traded in a NASDAQ market or on a national exchange) or bid price (if quoted in
an OTC market) per share of Common Stock in each of twenty (20) continuous
trading days meets $0.855 and (B) the average daily trading volume during such
twenty (20) day period is at least 100,000 shares;
(ii) as to an additional 100,129 shares when (A) the price (if
the stock is traded in a NASDAQ market or on a national exchange) or bid price
(if quoted in an OTC market) per share of Common Stock in each of twenty (20)
continuous trading days meets $1.140 and (B) the average daily trading volume
during such twenty (20) day period is at least 100,000 shares; and
(iii) as to the balance of 100,129 shares, when (A) the price
(if the stock is traded in a NASDAQ market or on a national exchange) or bid
price (if quoted in an OTC market) per share of Common Stock in each of twenty
(20) continuous trading days meets $1.425 and (B) the average daily trading
volume during such twenty (20) day period is at least 100,000 shares;
(c) Except as expressly provided below, the Optionee's non-vested
rights to exercise the Consultant's Option or any part thereof shall terminate
upon his ceasing to be retained or employed by the Corporation or any of its
affiliates or any of their respective successors in interest, for any reason
including death or disability.
4. Securities Law Requirements. To the extent these Options shall have
vested as provided in Section 3 above, they may be exercised as to the vested
portion at any time, subject to an opinion of legal counsel for the Corporation
(which shall not be unreasonably withheld by the Corporation) that, at the time
of such exercise, the issuance of the optioned shares is in compliance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated there under (the "Securities Act")
5. Term of the Options. The Options shall remain exercisable for a
period continuing until May 31, 2009.
6. Registration Rights. The Corporation hereby covenants and agrees to
register on an SEC Form S-8, or other applicable SEC Form, as soon as reasonably
practicable, as may be necessary under the Securities Laws to permit the resale
of the optioned shares issued upon exercise of this Option by the Grantee.
7. Nontransferability. Except as otherwise provided herein or unless
the Corporation otherwise consents in writing, the rights of Optionee hereunder
shall be non-
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assignable and non-transferable by the Optionee, either voluntarily or by
operation of law, and shall not be pledged or hypothecated in any way. Except as
otherwise provided herein, any attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary or
involuntary, with respect to all or any part of the Options or any right
thereunder, shall be null and void and, at the Corporation's option, shall cause
all of Optionee's rights under this Agreement to terminate. Notwithstanding the
foregoing, the Optionee may assign and transfer all or any part of these Options
to his affiliates and partners, provided in each instance the assignee agrees to
assume the obligations of Optionee hereunder with respect to that part of the
Option or Options so assigned.
8. Effect of Exercise. Upon exercise of all or any part of these
Options, the number of shares of Common Stock subject to the particular Option
being exercised under this Agreement shall be reduced by the number of shares
with respect to which such exercise is made.
9. Method of Exercise. Each exercise of an Option shall be by means of
a written notice of exercise in substantially the form attached hereto as
Exhibit A delivered to the Secretary of the Corporation at its principal office
and accompanied by payment in full, by certified or bank or cashier's check
payable to the Corporation, of the Exercise Price for each share of Common Stock
purchased under the Option. Such notice shall specify the number of shares of
Common Stock with respect to which the Option is exercised and shall be signed
by the person exercising the Option. If the Option is exercised by a person
other than Optionee, such notice shall be accompanied by proof, reasonably
satisfactory to the Corporation, of such person's right to exercise the Option.
The Exercise Price may also be paid, at the election of Optionee, by
cancellation of indebtedness owed by the Corporation to the Optionee.
10. Issuance of Shares. Subject to the foregoing conditions, the
Corporation, as soon as reasonably practicable after receipt of a proper notice
of exercise and without transfer or issue tax or other incidental expense to the
person exercising an Option, shall, subject to the conditions herein expressly
stated, deliver to such person at the principal office of the Corporation, or
such other location as may be agreed in writing by the Corporation and such
person, one or more certificates for the shares of Common Stock with respect to
which the Option has been exercised. Such shares shall be fully paid and
nonassessable and shall be issued in the name of such person.
11. Limitation of Optionee's Rights. Neither Optionee nor any person
entitled to exercise an Option shall be or have any of the rights of a
shareholder of the Corporation in respect of any share issuable upon the
exercise of the Option unless and until a certificate or certificates
representing shares of Common Stock shall have been issued and delivered upon
exercise of the Option in full or in part. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued.
12. Consent Required to Transfer. Except as otherwise expressly
provided herein, if at any time the Corporation shall have filed a registration
statement pursuant to the
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federal securities laws in connection with any underwritten public offering by
the Company of its equity securities, the Optionee shall not sell, make any
short sale of, loan, hypothecate, pledge, grant any option for the purchase of,
or otherwise dispose of or transfer for value or otherwise agree to engage in
any of the foregoing transactions with respect to any Optioned Shares held by
him without the prior written consent of the Corporation or its underwriters.
Such limitations shall be in effect for such period of time from and after the
effective date of such registration statement, or withdrawal of the filing with
the SEC, as may be requested by the Corporation or such underwriters.
13. Protection Against Dilution.
13.1 Adjustment Mechanism. If an adjustment of the Exercise
Price is required pursuant to this Section 13, the Optionee shall be entitled to
purchase such number of additional shares of Common Stock as will cause (i) the
total number of shares of Common Stock it is entitled to purchase pursuant to
this Option, multiplied by (ii) the adjusted purchase price per share, to equal
(iii) the dollar amount of the total number of shares of Common Stock it is
entitled to purchase before adjustment multiplied by the total purchase price
before adjustment.
13.2 Capital Adjustment. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Corporation, the provisions of this Section 13 shall be
applied as if such capital adjustment event had occurred immediately prior to
the date of this Option and the original purchase price had been fairly
allocated to the stock resulting from such capital adjustment; and in other
respects the provisions of this Section 13 shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof. A rights offering to stockholders shall be deemed a stock dividend to
the extent of the bargain purchase element of the rights.
13.3 Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Option in full, the Corporation spins off or otherwise divests
itself of a part of its business or operations or disposes of all or a part of
its assets in a transaction (the "Spin Off') in which the Corporation does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Corporation, then Optionee shall be entitled to receive
its pro rata share of the Spin Off Securities determined as if it had exercised
the entire unexercised portion of the Option outstanding on the trading day
immediately prior to record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Corporation.
14. Restricted Securities. Optionee understands that the Option and the
Common Stock issuable upon exercise of the Option are "restricted securities"
under the Federal securities laws in as much as they are being acquired from the
Corporation in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended,
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only in certain limited circumstances. All certificates representing shares of
Common Stock purchased upon the exercise of the Option shall bear the following
legend:
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."
15. Notices. Any notice to the Corporation contemplated by this
Agreement shall be addressed to it in care of its President; any notice to the
Optionee shall be addressed to Optionee at the address on file with the
Corporation on the date hereof or at such other address as Optionee may
hereafter designate in a writing delivered to the Corporation as provided
herein.
16. Consulting or Employment Agreement. The rights and obligations of
the parties hereunder as they apply to the Consulting Option are subject to and
with the benefit of the terms and conditions of any future employment or
consulting agreement, as from time to time amended, by and between Optionee and
the Corporation, and to the extent the terms or conditions of this Agreement, as
they apply to such future Consulting Option, should in any way conflict with
those of such future consulting or employment Agreement, those of such
consulting or employment Agreement shall prevail.
17. Governing Law. This Agreement has been made, executed and delivered
in, and the interpretation, performance and enforcement hereof shall be governed
by and construed under the laws of the State of New York.
ADUROMED CORPORATION OPTIONEE
By /s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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EXHIBIT A
OPTION EXERCISE FORM
(To be executed only upon exercise of an Option)
The undersigned Holder of [Designate applicable Option(s)]
/ / Original Option or
/ / Consultant's Option
hereby irrevocably exercises the foregoing designated Option(s) for
the purchase of that number of shares of the Common Stock (par value $.01 par
value per share), of Aduromed Corporation set forth below, and hereby makes
payment of the aggregate Exercise Price therefor which is also set forth below,
all on the terms and subject to the conditions specified in the Stock Option
Agreement between him and the Corporation.
Number of Shares:
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x
Exercise Price: $
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Aggregate Exercise
Price paid: $
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Dated:
HOLDER:
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ACCEPTED:
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