EXHIBIT B
Stock Option Agreement, February 14, 1996 - Chu
50,000 Shares Exercise Price: $5.00
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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") made this 14th day of February
1996, between INDUSTRIAL SERVICES OF AMERICA, INC., herein referred to as the
"Corporation", being incorpporated under the laws of the State of Forida,
mmaintaining its principal place of business at 0000 Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, and Xxxxxx X. Xxx, herein referred to as "Consultant", of
Corporate Builders, L.P. of Xxxxx Tower, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000.
WITNESSETH:
WHEREAS, the variety of services rendered by Consultant, including general
business, management and business opportunity evaluation, represents an
important and valuable aid to the conduct of the Corporation's business
enterprise, and as such Corporation deems it to be in the best interests of
the Corporation to secure the services of Consultant; and
WHEREAS, the Corporation desires to enter into this Option Agreement with the
Consultant containing the terms and conditions hereinafter set forth, and to
grant to Consultant an option to purchase shares of the Common Stock of the
Corporation.
NOW, THEREFORE, in consideration of the promises and mutual agreements of the
parties herein contained, and for other good and valuable consideration, the
parties agree as follows:
1. GRANT OF OPTION. In consideration of the foregoing, the
Corporation hereby grants and issues to Consultant (or his estate) the right
at his option (hereinafter referred to as the "Option") to purchase up to an
aggregate of 50,000 Shares of Common Stock ($.01 par value) of the Corporation
at a price of $5.00 per share all of which Option shall be exercisable, in
whole or in part at any time until December 31, 1997(the "Expiration Date").
1.1 ANTI-DILUTION PROVISION. The number of shares underlying the
option shall be proportionately increased in the event that the Corporation
causes to be issued additional Shares in the form of a stock dividend, stock
splits, option exercise at less than book value, or other such
reclassification; or conversely, proportionately decreased in the event of a
reverse split or reclassification. In the event that stockholders of the
Corporation are granted the right to purchase additional shares from the
proceeds of a cash dividend by the Corporation, such event shall be treated as
a stock dividend as relates to the Option.
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2. METHOD OF EXERCISING OPTION. The Option may be exercised, in
whole, or in part at any time prior to 3:00 p.m. Louisville, Kentucky Time on
the Expiration Date, by giving written notice to the Corporation to that
effect. The Option evidenced hereby shall be exercisable by the delivery to
and receipt by the Corporation of (a) this original Option Agreement (b) a
written Notice of Election to Exercise specifying the number of Shares to be
purchased in not less than one thousand (1,000) share denominations. If the
Notice of Exercise is for less than the total of 50,000 Shares, and the time
for exercise has not expired, the Corporation shall provide the Consultant
with a new or revised Option Agreement for the balance of the Shares then
remaining unexercised, upon the same terms and conditions as stated herein.
3. CORPORATION'S REPRESENTATION. The Corporation represents that it
will use its best efforts to prepare, file, and maintain with the appropriate
regulatory authorities an effective Registration Statement relating to the
securities underlying the options granted herein within twelve months of the
date hereof. In addition, in connection with any registration statement of the
Corporation to be used to offer and sell shares of the Common Stock ($.01 par
value) of the Corporation for cash, Consultant is hereby granted piggyback
registration rights in connection with any registration statements of the
Corporation to be used to offer and sell shares of the Common Stock $.01 par
value of the Corporation for cash. Consultant may serve written notice upon
the Corporation and request that all or part of the underlying shares of
Common Stock be included in the first such registration statement which the
Corporation shall prepare and file with the Securities and Exchange Commission
subsequent to the date hereof satisfying the prior conditions hereof. The
number of shares of the Common Stock subject to the option that may be
included in any such registration statement shall be the sole decision of any
underwriter selected by the Corporation for the offer and sale of the shares
of the Common Stock of the Corporation included in the registration statement
of the Corporation for which the Consultant has piggyback registration rights.
All expenses associated with the registration of the option and the underlying
shares of Common Stock shall be borne solely by the Corporation.
4. RESTRICTION AGAINST ASSIGNMENT. Except as otherwise expressly
provided above, Consultant agrees on behalf of himself and of any other person
or persons claiming any benefits by virtue of this Option Agreement, that this
Option Agreement and the rights, interests and benefits under it shall not be
assigned, transferred, pledged, or hypothecated in any way by Consultant or
any other person claiming under Consultant by virtue hereof. Such rights,
interests or benefits shall not be subject to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge, or hypothecation,
or other disposition of this Option Agreement or of such rights, interests,
and benefits contrary to the preceding provisions, or the levy or any
attachment or similar process thereupon, shall be null and void and without
any legal effect.
5. EXCEPTION TO NON-ASSIGNABILITY. This Agreement shall inure to the
benefit of, and shall be binding upon, the parties hereto and their respective
heirs,
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personal representatives, legal representatives, successors and assigns.
6. NOTICES. All notices required to be given by either party shall be
in writing and delivered by registered, certified or overnight express mail,
return receipt requested, to the party being noticed at the address set forth
in the first paragraph of this Option Agreement and shall be effective three
days following the mailing of said notice. Any notice to the Corporation shall
be addressed to the attention of the President. Any notice to the Corporation
shall be addressed to the attention of the President. Either party may effect
a change in such address by a prior written notice.
7. BINDING ACCEPTANCE. By acceptance of this signed Option Agreement,
the Consultant does hereby agree to be bound by all of the terms and
conditions set forth herein.
8. GOVERNING LAW. This Option Agreement shall be construed under the
laws of the Commonwealth of Kentucky.
(a) CONSENT TO JURISDICTION AND SERVICE OF PROCESS. This Option
Agreement has been entered into in the Commonwealth of Kentucky and validity,
interpretation and legal effect of this Option Agreement will be governed by
the laws of the Commonwealth of Kentucky applicable to contracts entered into
within the Commonwealth of Kentucky. Any dispute under this Option Agreement
shall be resolved by arbitration conducted in the City of Louisville and the
Commonwealth of Kentucky by the American Arbitration Association. Any process
including, without limitation, any summons or subpoena in any such action or
proceeding may, among other methods, be served upon delivering it or mailing
it, by registered or certified mail, directed to the address on page one (1)
of this Agreement. Any such delivery or mail service will be deemed to have
the same force and effect as personal service within the Commonwealth of
Kentucky.
(b) In any action or proceeding referred to above each party hereto
waives, tot he extent permitted by the Hague Convention on Service of Process
Abroad, personal services of the summons, complaint, or other process or
translation thereof and agrees that service may be mailed to its address as
set forth on page 1 of this Agreement.
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IN WITNESS WHEREOF, the Corporation has executed this Option Agreement by its
duly authorized corporate officers on the day and year first above written.
INDUSTRIAL SERVICES OF AMERICA, INC.
By: /s/ Xxxxx Xxxxxxx
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Title: CEO
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Accepted By:
/s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Senior Managing Director
CORPORATE BUILDERS L.P.
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