EXHIBIT 99.4
STOCK OPTION AGREEMENT
----------------------
THIS STOCK OPTION AGREEMENT (the "Stock Option Agreement") is made as of
the ____ day of ________, 2002 among the Sellers, the Purchaser Group and John
B. Lowy, having an address at Olympic Capital Group, Inc., Suite 403, 645 Fifth
Avenue, New York, NY 10022 ( the "Escrow Agent"). Words and phrases used but not
defined in this Option Agreement shall have the meanings set forth in the Stock
Purchase Agreement dated November 6, 2002 by and among the Purchasers, the
Sellers and the Company.
WITNESSETH:
WHEREAS, the Purchasers are purchasing certain shares from the Sellers
pursuant to the Stock Purchase Agreement;
WHEREAS, as part of the Stock Purchase Agreement the Sellers have agreed to
grant an option to the Purchaser Group to purchase an additional number of
shares over a certain period of time;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions.
(a) The following words and phrases shall have the meanings set forth
below:
"Closing Instruments" means all documents and instruments to be
executed and delivered pursuant to Section 4 of this Option Agreement.
"Escrow Agent" shall mean the party identified as such on the
signature page to this Option Agreement.
"Exercise Date" means the date upon which Purchaser Group gives the
Exercise Notice.
"Exercise Notice" means the notice in the form attached hereto as
Exhibit A.
"Legal Proceeding" means an action, litigation, arbitration,
administrative proceeding, or other legal or equitable proceeding of any
kind.
"Person" means an individual person, a corporation, partnership,
trust, joint venture, limited liability company, proprietorship, estate,
association, land trust, other trust, or other incorporated or
unincorporated enterprise, entity or organization of any kind.
(b) Wherever used in this Option Agreement:
(i) the words "include" or "including" shall be construed as
incorporating, also, "but not limited to" or "without limitation";
(ii) the word "day" means a calendar day unless otherwise
specified;
(iii) the word "party" means each and every Person whose
signature is set forth at the end of this Option Agreement;
(iv) the word "law" (or "laws") means any applicable law, rule,
regulation, order, statute, ordinance, resolution, regulation, code,
decree, judgment, injunction, mandate or other legally binding
requirement of a government entity having jurisdiction;
(v) each reference to the Property (or any part or component
thereof) shall be deemed to include "and/or any portion thereof";
(vi) the words "herein", "hereof" and "hereunder" mean the entire
Option Agreement and not any particular provision or section;
(vii) the word "notice" shall mean notice in writing (whether or
not specifically so stated);
(viii) "month" means a calendar month unless otherwise specified;
(ix) the word "amended" means "amended, modified, extended,
renewed, changed, or otherwise revised"; and the word "amendment"
means "amendment, modification, extension, change, renewal, or other
revision";
(x) the phase "subject to the terms of this Option Agreement"
means "upon and subject to all terms, covenants, conditions and
provisions of this Option Agreement".
2. Grant of Option; Option Price; Exercise. (a) Upon and subject to the
terms, covenants and conditions in this Option Agreement, each of the Sellers
hereby grants to Purchaser Group the exclusive option to purchase the Shares set
forth in Schedule I hereto opposite each of their names (the "Option") at the
exercise prices set forth in such schedule (the "Option Price") pursuant to the
timetable set forth therein (the "Option Period").
2
(b) The Option may be exercised, if at all, only in the following
manner: If Purchaser Group, in its sole discretion, desires to exercise the
Option, in whole or in part, then Purchaser Group shall send the Exercise
Notice along with a certified check for the Option Price to Escrow Agent,
at any time during the Option Period. Upon receipt of the copy of the
Exercise Notice and the certified check for the Option Price, Escrow Agent
shall (i) date the Closing Instruments as of the date of the giving of the
Exercise Notice, (ii) immediately deliver by overnight courier service to
each of the Sellers and Purchaser Group the originals of the dated Closing
Instruments and (iii) immediately deliver by overnight courier service to
the Purchaser Group certificates representing the Shares purchased as a
result of the Option Exercise.. If Escrow Agent does not receive a copy of
the Exercise Notice during the Option Period, then Escrow Agent shall
immediately return the Shares to each of the Sellers, destroy the undated
original Closing Instruments, and send notice to each of Purchaser Group
and Sellers of such destruction. In the event the Option Exercise
represents less than all of the Shares, new certificates shall be issued
representing the unexercised Shares.
3. Representations and Warranties of Sellers. Each of the Sellers hereby
represents and warrants to Purchaser Group, as of the date hereof, and covenants
to Purchaser Group that the following shall be true as of the date of the
exercise by Purchaser Group of the Option, as follows:
(a) The execution and delivery of this Option Agreement by such Seller
and the consummation by such Seller of the transactions contemplated
hereunder will not violate any agreement, or any judgment, decree, order or
award of any arbitrator or government entity, to which such Seller is a
party or by which it or its assets are bound.
(b) Such Seller does not need the consent of any Person to enter into,
or conclude the transactions contemplated by, this Option Agreement.
(c) This Option Agreement, and the respective Closing Instruments to
be executed by such Seller, constitute the valid and binding obligations of
such Seller, enforceable against seller in accordance with their respective
terms.
(d) Such Seller owns such Seller's Shares free and clear of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature, and has the right to sell and transfer such
Seller's Shares to the Purchaser Group hereunder.
(e) The transfer of the Shares to the Purchaser Group hereunder will
pass good and marketable title to the Shares to the Purchaser Group, free
and clear of any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance of any nature.
3
4. Closing Documents. Simultaneously herewith, each of the Sellers has
delivered to Escrow Agent the following documents:
(i) Original stock certificates of the Company corresponding to
the Shares set forth on Schedule I attached hereto; and
(ii) Stock powers executed in blank
5. Default; Remedies. In the event of a breach by either party of any of
its representations or warranties or a breach or default in the performance by
any party of its covenants and agreements hereunder, the non-defaulting party
shall be entitled to exercise all rights and remedies available to the
non-defaulting party at law or in equity. In the event of any Legal Proceeding
to enforce any provision of this Option Agreement, the prevailing party shall be
entitle to reimbursement, upon demand, from the other party for reasonable
attorney's fees and related expenses incurred by the prevailing party.
6. Certain Expenses. Each party shall pay all fees and other expenses of
its own attorneys in connection with the preparation and negotiation of this
Option Agreement and the consummation of the transactions contemplated hereunder
and the costs of any due diligence or documentation by such party with respect
thereto Sellers agree to pay (and be fully responsible for) any transfer taxes
that may be due in connection with the Option Exercise.
7. Notices. All notices, consents or other communications under this
agreement must be in writing and addressed to the respective parties as follows
(or at any other address which the respective party may designate by notice
given to the other parties as provided herein from time to time):
If to Sellers: Steven L. Siskind, Esq.
- -------------- Law Offices of Steven L. Siskind
Suite 403
645 Fifth Avenue
New York, NY 10022
If to Purchaser Group: Stanley U. North, III
- --------------------- Sills Cummis et al.
One Riverfront Plaza
Newark, NJ 07102
If to Escrow Agent: John B. Lowy
- ------------------ Olympic Capital Group, Inc.
Suite 403,
645 Fifth Avenue
New York, NY 10022
4
Any notice required by this Option Agreement to be given or made within a
specified period of time, or on or before a date certain, shall be deemed given
or made if sent by hand, by facsimile transmission with confirmed answer back
received, or by registered or certified mail, return receipt requested and
postage and registry fees prepaid. Delivery "by hand" shall include delivery by
Fedex or other express mail service or messenger service. All notices shall be
deemed given when actually received. (If a party refuses to accept delivery of a
notice, or if a party has changed such party's address but failed to give notice
of such change, delivery shall be deemed made as of the business day when notice
was actually presented at the last address of such party specified for the
giving of notices hereunder.) A notice may be given by a party or by a party's
attorney at law.
8. Further Assurances. After the date hereof, and after the Exercise Date,
each of the parties shall take such actions (and sign and deliver such other
instruments and documents) as may be reasonable and necessary to effectuate the
transactions contemplated under this Option Agreement; provided, however, that
the taking of such acts (or the execution of such instruments or documents) will
not result in any additional material cost or liability to the party taking such
act or signing and delivering any such instrument or document.
9. Miscellaneous.
(a) Governing Law. This Option Agreement shall be governed and
construed in accordance with the laws of the State of New York (without
regard to principles of conflicts of law). Each party irrevocably submits
to the exclusive jurisdiction of the Supreme Court of the State of New
York, New York County, in any action or proceeding arising out of or
relating to this Option Agreement, and each party hereby irrevocably agrees
that all claims in respect of any such action or proceeding shall be heard
and determined in such court. Each party consents to service of process by
any means authorized by New York law in any action brought under or arising
out of this Option Agreement, and each party irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding.
(b) No Modifications. This Option Agreement may not be modified,
waived or amended except by a written agreement executed by the party
against whom enforcement of such waiver, amendment or modification is
sought.
(c) Entire Agreement. This Option Agreement, together with the
Exhibits and Schedules hereto, and the Closing Instruments constitute the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements or understandings of the parties
relating hereto.
(d) No Waivers; Cumulative Rights. No delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof or as a waiver of any other right, power or privilege
hereunder, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise hereunder. The
rights and remedies in this Option Agreement are cumulative and are not
exclusive of any rights or remedies which the respective parties hereto may
otherwise have at law or in equity.
5
(e) Counterparts. This Option Agreement may be executed in any number
of counterparts and/or duplicates, each of which shall be deemed an
original but all of which together shall constitute a single instrument.
(f) Successors Bound. All of the terms of this Option Agreement,
whether so expressed or not, shall be binding upon the respective
successors, assigns and legal representatives of the parties (and shall
inure to the benefit of and be enforceable by the parties and their
respective successors, assigns and legal representatives).
(g) Captions, Headings. The captions or headings of this Option
Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
(h) Certain Constructions. If the last day of any time period is a
Saturday, Sunday or legal holiday, then such time period shall be extended
so as to end on the next succeeding day which is not a Saturday, Sunday or
legal holiday. Whenever used in this Option Agreement, the singular shall
include the plural, the plural the singular, and the use of any gender
shall be applicable to all genders.
(i) No Other Representations. No party has made (or shall be deemed to
have made) any representations or warranties concerning the subject matter
of this Option Agreement except as specifically set forth in this Option
Agreement and/or in the Closing Instruments.
(j) Limitations on Benefits. It is the explicit intention of the
parties hereto that no Person other than the parties hereto and their
permitted successors and assigns are or shall be entitled to bring any
action to enforce any provision of this Option Agreement, and the
covenants, undertakings, and agreements set forth in this Option Agreement
shall be solely for the benefit of, and shall be enforceable only by, the
parties and their permitted successors and assigns.
(k) Survival. The provisions of this Option Agreement, including the
parties' representations and warranties, shall survive the execution and
delivery of this Option Agreement and the Closing Instruments.
IN WITNESS WHEREOF, each of the Sellers and Purchasers have executed this
Option Agreement as of the date first set forth above.
-----------------------------
[Seller]
-----------------------------
[Purchaser]
-----------------------------
[Escrow Agent]
6
SCHEDULE I
Seller Number of Shares Number of Shares Number of Shares
subject to $.30 per subject to $.50 per subject to $.625 per
share Option Price share Option Price share Option Price
from November __, 2002 from ______, 2002 from ______, 2002 to
to February __, 2003 to ______, 2003 ______, 2003
[3 Months] [6 Months] [9 Months] Total
---------- ---------- ---------- -----
43,270 38,460 43,270 125,000
173 154 173 500
1,557 1,386 1,557 4,500
----------------- ----------------- ---------------- ----------------
Total 45,000 40,000 45,000 130,000
====== ====== ====== =======