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Exhibit 10.2
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PATIENT PORTAL TECHNOLOGIES, INC.
RESTRICTED STOCK GRANT AGREEMENT
RESTRICTED STOCK GRANT AGREEMENT (the "Agreement"), dated February 6,
2009, between Patient Portal Technologies, Inc., a Delaware corporation (the
"Company"), and Auspicium, LLC, a New York limited liability company (the
"Grantee").
W I T N E S S E T H:
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WHEREAS, Grantee is a key consultant to the Company; and
WHEREAS, the Company desires to issue and grant to the Grantee, and the
Grantee desires to accept, shares of the Company's Common Stock, $.001 par value
("Common Shares"), upon the terms and subject to the conditions herein set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Grant of Restricted Stock. In recognition of the Grantee's commitment to the
continued growth and financial success of the Company, the Company hereby grants
to the Grantee 2,000,000 (restricted) Common Shares (the "Restricted Stock").
Such Grantee shall have the same rights of any other holder of shares of common
stock of the Company, including the right to receive dividends and to vote the
shares. Simultaneously with the execution and delivery of this Agreement by the
parties hereto, the Company shall deliver to the Grantee a stock certificate (or
certificates) representing the shares of the Restricted Stock, which
certificate(s) shall (a) be registered on the Company's stock transfer books in
the name of the Grantee and (b) bear (in addition to any other legends required
by applicable law) the following legend (or a legend substantially similar
thereto):
"This certificate and the shares represented hereby are subject to, and
shall be transferable only in accordance with, the provisions of a
certain Restricted Stock Grant Agreement dated February 6, 2009 between
Patient Portal Technologies, Inc. and Auspicium, LLC."
2. Removal of Restricted Stock Legend. Promptly after shares of the Restricted
Stock issued to the Grantee hereunder have become vested, the Company shall
cause the transfer agent for the Common Shares to issue separate Certificates
representing the Common Shares which are free of restrictions and without the
legend referred to above.
3. Vesting.
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(a) Beneficial ownership of the restricted stock shall vest in the
Grantee according to the following schedule: One hundred percent (100%) of the
Stock shall vest on the five-year anniversary of this Agreement.
Notwithstanding the foregoing, 100% beneficial ownership of the
aforementioned shares of Restricted Stock shall vest immediately, without any
action on the part of the Company (or its successor as applicable) or the
Grantee, if any of the following events occur:
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(i) the death of the Grantee; or
(ii) the occurrence of a "Change-in-Control" of the Company (as
hereinafter defined).
(b) For all purposes of this Agreement, the following terms shall have
the following respective meanings:
(i) "Change-in-Control" of the Company shall be deemed to have
occurred if (A) any "person", (as such term is used in
Section 13(d) and 14(d)(2) of the Exchange Act) (but
excluding any Grantee benefit plan of the Company and
excluding any person who is an Owning Person) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting
power of the Company's outstanding securities then entitled
ordinarily (and apart from rights accruing under special
circumstances) to vote generally for the election of
directors; (B) the Board shall approve a sale of all or
substantially all of the assets of the Company and its
subsidiaries (taken as a whole); or (C) the Board shall
approve any merger, consolidation, or like business
combination transaction or reorganization of the Company,
the consummation of which would result in the occurrence of
any event described in clause (A) through (B) above.
(ii) "Owning Person" means any person who, on the date of this
Agreement, is the beneficial owner of, or, upon the
exercise on the date hereof of rights, warrants or options
held by such person (and irrespective of whether such
rights, warrants or options are then exercisable) would be
on the date hereof the beneficial owner of, 5% or more of
the Common Stock.
(c) Upon an event of vesting, the Company shall redeem forty percent of
the shares of stock from the Grantee (800,000), the net proceeds of which will
be adequate to cover any state and / or federal incomes taxes that may be due as
a result of the vesting. The redeemed shares will be valued at the greater of
the then market price of the stock or the price paid by the acquiring entity.
4. Non-Transferability of Restricted Stock. Except as expressly provided in
Section 3 hereof, prior to the vesting date, none of the then unvested shares of
the Restricted Stock (nor any interest therein) may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, shall not be
assignable by operation of law and shall not be subject to execution,
attachment, or similar process. Any attempted sale, assignment, transfer,
pledge, hypothecation or other disposition of any unvested shares of the
Restricted Stock contrary to the provisions hereof shall be null and void and
without effect. The Grantee agrees to the Company and the transfer agent
imposing stop transfer restrictions to enforce this Section 4.
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5. Forfeiture.
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(a) Upon the Grantee's voluntary termination of its engagement with the
Company or any of its subsidiaries, or upon the termination of the Grantee's
engagement with the Company or any of its subsidiaries for Cause, which event
occurs, in either case, on a date prior to the vesting date, beneficial
ownership of the unvested shares of the Restricted Stock shall be deemed to have
been forfeited by the Grantee to the Company (a "Forfeiture") without any
consideration therefore. "Cause" shall mean (A) the conviction of the Grantee
for the commission of a felony; or (B) willful and gross misconduct by the
Grantee, that results in material and demonstrable damage to the business or
reputation of the Company. No act or failure to act on the part of Grantee shall
be considered "willful" unless it is done, or omitted to be done, by him in bad
faith or without reasonable belief that its action or omission was in the best
interests of the Company. Any act or failure to act that is based upon authority
given pursuant to a resolution duly adopted by the Board of Directors of the
Company (the "Board"), or the advice of counsel for the Company, shall be
conclusively presumed to be done, or omitted to be done, by the Grantee in good
faith and in the best interests of the Company. The Grantee shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by a majority of the Board
of Directors of the Company at a meeting of such Board of Directors duly called
and held for the purpose of determining whether, in the good faith judgment of a
majority of the Board of Directors of the Company, the Company has "cause" to
terminate the Grantee's engagement pursuant to these provisions.
(b) Upon the occurrence of a Forfeiture, the Grantee shall, within ten
(10) business days thereafter, transfer and deliver to the Company all stock
certificates representing all shares of the Restricted Stock, together with
stock powers duly executed in blank by the Grantee. From and after the
occurrence of such Forfeiture, the Grantee shall have no rights to or interests
in any shares of the forfeited Restricted Stock or under this Agreement (other
than the obligation to transfer and deliver all stock certificates representing
all shares of the Restricted Stock pursuant to this Section 5(b)).
6. Stock Splits, Etc. If, from time to time during the term of this Agreement:
(i) there is any stock dividend or liquidating dividend of cash and/or property,
stock split or other change in the character or amount of any of the outstanding
securities of the Company, except in the ordinary course of business of issuing
warrants or additional shares of stock to individuals for the purpose of
assisting the company with achieving its business plans or the issuance4 of
shares under a private placement transaction; or (ii) there is any
consolidation, merger or sale of all, or substantially all, of the assets of the
Company; then, in such event, any and all new, substituted or additional
securities or other property to which Grantee is entitled by reason of Grantee's
ownership of the Restricted Stock shall be immediately subject to this Agreement
and be included in the word "Stock" for all purposes with the same force and
effect as the shares of Restricted Stock currently subject to the other terms of
this Agreement.
7. Registration Rights.
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(a) Piggy Back Registration Rights. If at any time after the vesting
date the Company shall determine to register for its own account or the account
of others under the Securities Act of 1933, as amended (the "Securities Act")
any of its equity securities, other than on Form S-8 or Form S-4 or their then
equivalents relating to shares of Common Stock to be issued solely in connection
with any acquisition of any entity or business or shares of Common Stock
issuable in connection with stock option or other employee benefit plans, it
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shall send to the Grantee written notice of such determination and, if within 15
days after receipt of such notice, the Grantee shall so request in writing, the
Company shall use its best efforts to include in such registration statement all
or any part of the Restricted Stock, except that if, in connection with any
offering involving an underwriting of the Company's Common Stock to be issued by
the Company, the managing underwriter shall impose a limitation on the number of
shares of such Common Stock which may be included in the registration statement
because, in its judgment, such limitation is necessary to effect an orderly
public distribution, then the Company shall be obligated to include in such
registration statement only such limited portion of the Restricted Stock with
respect to which the Grantee has requested inclusion hereunder. Any exclusion of
the Restricted Stock shall be made pro rata among all holders of the Company's
Common Stock with similar registration rights seeking to include such shares, in
proportion to the number of such shares sought to be included by such holders.
No incidental right under this Section 7(a) shall be construed to limit any
registration required under Section 7(b). The obligations of the Company under
this Section 7(a) may be waived at any time upon the written consent of the
Grantee and shall expire on the 6th anniversary of this Agreement.
(b) S-3 Registration Rights. In addition to the rights provided the
Grantee and other holders of the Company's Common Stock with registration rights
in Section 7(a) above, if the registration of the Company's Common Stock under
the Securities Act can be effected on Form S-3 (or any similar form promulgated
by the Commission that permits secondary offerings of securities), then upon the
written request of the Grantee after the vesting date, the Company will, as
expeditiously as possible, use its best efforts to effect registration under the
Securities Act on Form S-3 of all or such portion of the Restricted Stock as the
Grantee shall specify; provided, however, that the Company shall not be required
to effect more than one registration during any 12-month period pursuant to this
Section 7(b).
(c) The Company will use its best efforts to maintain the effectiveness
for up to 90 days (or such shorter period of time as the underwriters need to
complete the distribution of the registered offering, or one year in the case of
a "shelf" registration statement on Form S-3) of any registration statement
pursuant to which any of the Restricted Stock is being offered, and from time to
time will amend or supplement such registration statement and the prospectus
contained therein to the extent necessary to comply with the Securities Act and
any applicable state securities statute or regulation. The Company will also
provide the Grantee with as many copies of the prospectus contained in any such
registration statement as he may reasonably request.
8. Other Rights. In the event that the Company consummates a transaction for the
sale of a majority of the Common Stock of the Company to a third party, the
Company agrees, upon Grantee's request, to cause Grantee's Restricted Stock to
be acquired by such third party as part of such transaction.
9. Representations and Warranties of Grantee. The Grantee hereby represents and
warrants to the Company as follows:
(a) The Grantee has the legal right and capacity to enter into this
Agreement and it fully understands the terms and conditions of this Agreement.
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(b) The Grantee is acquiring the Restricted Stock for investment
purposes only and not with a view to, or in connection with, the public
distribution thereof in violation of the Securities Act.
(c) The Restricted Stock has not been registered with the Securities
and Exchange Commission, is for investment purposes only, and may not be resold
unless registered or pursuant to an exemption from registration. The Restricted
Stock is being issued pursuant to the exemption from registration provided by
Regulation "D" promulgated under the Securities Act of 1933, as amended. The
Restricted Stock is being offered to accredited investors as defined in
Regulation "D", Section 501, and to a limited number of additional investors.
These securities may not be resold or transferred except pursuant to an
effective registration statement under the Act or in accordance with the
provisions of Rule 144. Rule 144 is only available for the Company's stock if a
public trading market exists for the Company's Common Stock. The Company's
Common Stock is presently traded on the OTC Bulletin Board under trading symbol
PPRG. Assuming the continuance of a public market, there can be no assurance as
to the price of the Common Stock of the Company. There is no assurance that the
Company will be in compliance with the requirements of Rule 144 at such time as
Grantee hereunder may be eligible to and may desire to sell their securities, or
that a Registration Statement filed by the Company with respect to such
securities will be declared effective.
10. Notices. Any notice required or permitted hereunder shall be deemed given
only when delivered personally or when deposited in a United States Post Office
as certified mail, postage prepaid, addressed, as appropriate, if to the
Grantee, at 5109 Waterford Wood Way, Fayetteville, NY 13066 or such other
address as he may designate in writing to the Company, and, if to the Company,
at 8276 Willett Parkway, Suite 200, Baldwinsville, NY 13027, or such other
address as the Company may designate in writing to the Grantee.
11. Failure to Enforce Not a Waiver. The failure of the Company to enforce at
any time any provision of this Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.
12. Amendment: Termination. This Agreement may not be amended or terminated
unless such amendment or termination is in writing and duly executed by each of
the parties hereto.
13. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
but one and the same instrument.
14. Benefit and Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and assigns, and the
Grantee, his executors, administrators, personal representatives and heirs. In
the event that any part of this Agreement shall be held to be invalid or
unenforceable, the remaining parts hereof shall nevertheless continue to be
valid and enforceable as though the invalid portions were not a part hereof.
15. Entire Agreement. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, discussions and understandings with respect to such subject
matter.
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16. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal substantive laws of the State of New
York, without giving effect to principles and provision thereof relating to
conflict or choice of laws.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
PATIENT PORTAL TECHNOLOGIES, INC., AUSPICIUM, LLC, a New York
a Delaware corporation limited liability company
By: /s/ Kevin J. Kelly By: /s/ Michael J. Lorenz
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Title: Chief Executive Officer Title: Chief Executive Officer
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