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Exhibit 10.27
CONSOLIDATED WATER CO. LTD.
STOCK OPTION AGREEMENT
1. GRANT OF OPTIONS. As of the 15th day of December, 1998, Consolidated
Water Co. Ltd. (the "Company") in consideration of that certain
Contract, dated November 17, 1998, between the Company and X. X.
Xxxxxxx and Company, Inc. (the "Contract") hereby grants to R. Xxxxx
Xxxxxxx (the "Optionee'") stock options ("Options") to acquire 30,000
Ordinary Shares of CI$1.00 par value, of the Company ("Shares") at an
exercise price of US$7.875 per share. The Options may be exercised in
whole or in part from time to time, at any time until twelve (12)
months after the Contract is terminated (the ""Expiration Date").
2. EXERCISE OF OPTIONS. To exercise all or part of the Options, the
Optionee shall deliver to the Company written notice of such exercise,
substantially in the form of Schedule I attached, indicating the number
of Shares with respect to which the Optionee desires to exercise the
Options, such notice to be accompanied by full payment of the aggregate
exercise price of the Shares as to which the Options are exercised.
Unless otherwise agreed in writing by the Company, the option price of
any Shares purchased shall be paid in cash, by certified or official
bank check, or by money order. On or as soon as practicable following
the date of exercise, but in no event less than ten (10) days following
such exercise, of all or part of the Options, the Company shall deliver
to the Optionee a certificate or certificates representing the Shares
acquired pursuant to any such exercise. The Optionee shall not be
deemed to be a holder of any Shares subject to the Options unless and
until a certificate for such Shares has been issued to the Optionee
under the terms of this Agreement, and no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record
date is prior to the date any such certificate is issued, except as
expressly provided in Section 3 hereof.
3. ADJUSTMENTS
a. If at any time while any unexercised options are outstanding,
the outstanding Shares of the Company are changed into or
exchanged for a different number or kind of Shares or other
securities of the Company or of another corporation by reason
of any reorganization, merger, consolidation,
recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividend payable in capital
stock, or the like, then appropriate adjustment shall be made
in the number and kind of Shares with respect to which the
Options are exercisable and in the
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exercise price per Share with respect to the Options. Except
as otherwise expressly provided in the preceding sentence, the
issuance by the Company of shares of its capital stock of any
class, or securities convertible into shares of capital stock
of any class, either in connection with direct sale or upon
the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with
respect to the number of or exercise price of Shares then
subject to outstanding Options granted hereunder.
b. Nothing herein shall affect in any manner the right or power
of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other
changes in the company's capital structure or its business;
(ii) any merger or consolidation of the Company; (iii) any
issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to
the Options; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or part
of the assets or business of the Company; or (vi) any other
corporate act or proceeding whether of a similar character or
otherwise.
c. For all purposes of this Agreement, the term "Shares" shall
mean and include the Shares, together with any securities
issued or exchanged with respect to the Shares upon any
recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, stock dividend or
split-up or a combination of the securities of the Company.
4. ISSUANCE OF SHARES. As a condition of the issuance of Shares upon
exercise of the Option, X. X. Xxxxxxx and Company, Inc. shall be
rendering such services described in the Contract, or, if the Contract
has been terminated, those services shall have been rendered and the
Company may require the Optionee to enter into such agreements or
undertakings, if any, as the Company may deem necessary or advisable
to assure compliance with any law or regulation then in effect,
including, but not limited to (i) a representation and warranty by the
Optionee to the Company, at the time any Option is exercised, that he
is acquiring the Shares to be issued to him for investment and not with
a view to, or for sale in connection with, the distribution of any such
Shares, (ii) a representation, warranty and/or agreement to be bound by
any legends that are, in the opinion of the Company, necessary or
appropriate to comply with the provisions of any securities law deemed
by the Company
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to be applicable to the issuance of the Shares and which are endorsed
upon the Share certificates and (iii) a representation and warranty by
the Optionee to the Company, at the time any Option is exercised, that,
if the total of the number of Shares that the Optionee then owns
together with the number of Shares in respect of which the Option is
being exercised exceeds 5% of the total number of Shares then issued by
the Company, the Optionee has obtained the approval of the Governor in
Council of the Cayman Islands.
5. NONTRANSFERABILITY. The options granted hereunder shall not be
transferable by the Optionee otherwise than by will or the laws of
descent and distribution and during the lifetime of the Optionee are
exercisable only by the Optionee.
6. TERMINATION OF OPTION. At the close of business on the Expiration Date,
any unexercised portion of the Option shall automatically and without
notice terminate and become null and void.
7. INVESTMENT INTENT. The shares underlying the Options (the "underlying
Shares") being received shall be purchased solely for the Optionee's
own account for investment purposes only and not for the account of any
other person and not for distribution, assignment or resale to others,
unless distribution, assignment or resale is in compliance with all
applicable laws. No other person has a direct or indirect beneficial
interest in the Options of the Underlying Shares. Optionee has not
subdivided the beneficial ownership of the Options or the Underlying
Shares with any other person.
8. REGISTRATION RIGHT. The Company shall file for registration of the
Underlying Shares with the Securities and Exchange Commission ("SEC")
upon the earlier to occur of: (a) when the Company registers any of its
equity securities with the SEC and the form to be used for such
registration may be used to register the Underlying Shares, or (b) the
Expiration Date, or as soon as practicable, but not more than three
months, thereafter, if the Company's Board of Directors determines, in
good faith and in its reasonable business judgement, that (i) such
registration would require the public disclosure of material non-public
information concerning any pending or ongoing material transaction or
negotiations involving the Company which, in the opinion of the
Company's legal counsel, is not yet required to be publicly disclosed,
and (ii) such disclosure would materially interfere with such
transaction or negotiations or have a materially adverse effect on the
Company. The Company may only postpone such registration after the
Expiration Date so long as the Company diligently and in good faith
continues to pursue such transaction or negotiations throughout the
period of such postponement.
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The Company shall provide written notice to the Optionee as soon as
practicable (but in no event less than 30 days) before its initial
filing of a registration statement with the SEC, which notice shall (a)
specify the kind and number of securities to be registered and the
proposed offering price or prices and distribution arrangements; and
(b) include such other information that at the time and under the
circumstances would be appropriate to include in such notice. All
expenses reasonably related to the registration of the Underlying
Shares shall be paid by the Company.
9. NOTICES. Any notice under this Stock Option Agreement shall be in
writing and shall be deemed to have been duly given when delivered
personally or when deposited in the mail, registered, postage prepaid,
and addressed, in the case of the Company, to the Company's Secretary
at its Principal executive offices; P. 0. Box 1114, Grand Cayman,
B.W.I. and, in the case of the Optionee, to X.X. Xxx 0000, Xxxxxxx
Xxxxx, Xxxxxxxx 00000, X.X.X., subject to the right of either party to
designate some other address at any time hereafter in a notice
satisfying the requirements of this Section.
10. ENTIRE AGREEMENT. This Stock Option Agreement constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
both oral and written, between the parties hereto with respect to the
subject matter.
11. MISCELLANEOUS. This Stock Option Agreement shall be governed by and
construed in accordance with the laws of the Cayman Islands. Each party
hereby consents to the personal jurisdiction of all courts of the
Cayman Islands.
Date of Agreement: 20 JANUARY, 1999
CONSOLIDATED WATER CO. LTD.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
OPTIONEE
/s/ R. Xxxxx Xxxxxxx
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R. Xxxxx Xxxxxxx
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SCHEDULE 1
Date:
Consolidated Water Co. Ltd.
P. 0. Box 1114
Grand Cayman, B.W.I.
Attention: Board of Directors
Re: Exercise of Stock Options
Dear Sir or Madam:
Please be advised that pursuant to the Stock Option Agreement ("Stock
Option"), dated as of December 15, 1998 between Consolidated Water Co. Ltd. (the
"Company") and the undersigned ("Optionee"), Optionee hereby exercises the stock
option ("Option") in the amount of ________________ ordinary shares of the
Company and herewith tenders the following
_______________________________________________________________________________
having an aggregate value of ________________________________ (US$___________)
in payment for such ordinary shares. Capitalized terms not otherwise defined
herein are defined as set forth in the Stock Option.
Optionee requests _______________ stock certificates for such shares
issued in the name of ____________________ whose address is ___________________
and whose social security number is ______________.
Optionee hereby acknowledges, warrants and represents the following:
(1) Optionee's acknowledgments, representations, warranties and
agreements contained in the Stock option are true, complete
and accurate as of the date of this letter.
(2) The Option is presently exercisable and as such, has vested
and has not expired.
(3) Optionee is presently and has been in full compliance with all
the terms, conditions and provisions of the Stock Option.
Sincerely,
Optionee
