Exhibit 4(n)
OPTION AGR6EEMENT
OPTION AGREEMENT, dated as of January 11, 2002, between Xxxxxx Xxxxxxx, an
individual residing in the State of New Jersey ("Optionee"), and Artera Group,
Inc., a Delaware corporation ("Issuer").
WITNESSETH:
WHEREAS, Optionee wishes to acquire an option to purchase certain shares of
common stock, par value $.001 per share (the "Common Stock") of Issuer, as more
fully described herein; and
WHEREAS Issuer is willing to grant Optionee an option to purchase certain
shares of Common Stock of Issuer, as more fully described herein;
NOW THEREFORE, in consideration of the foregoing and of the mutual
representations, covenants and agreements hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Terms of Option.
a) Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Optionee, and Optionee hereby accepts from
Issuer, the right and option (the "Option") to acquire that number of
shares of Common Stock that, as of the Closing Date (as defined
below), constitutes a ten percent (10%) equity interest in Issuer,
taking into account all adjustments under Section 1(f) hereof (the
"Option Shares").
b) Exercise Price. The exercise price for Optionee's acquisition of the
Option Shares shall be equal to ten percent (10%) of the pre-money
enterprise value attributed to Issuer in the first transaction
following the date hereof in which a person or entity not then
affiliated with Issuer purchases, or commits to purchase, an equity
interest in Issuer for payment of, or a commitment to pay within 30
days, at least $5,000,000 (the "Third Party Contribution").
c) c) Option Period. Subject to the terms and conditions hereof, the
Option may be exercised by Optionee at any time and from time to time
commencing on the date of the Third Party Contribution and continuing
until the date that is five (5) years after the date of this Agreement
(the "Option Termination Date"), on which date the Option shall
expire. If the Option Termination Date occurs prior to any Third Party
Contribution, the Option shall expire on the Option Termination Date
without any exercise right having ever arisen.
d) Manner of Exercise. Optionee may exercise the Option (an "Option
Exercise") by providing written notice thereof to Issuer (the "Option
Notice"). Exercise may be made only as to all, not part, of the
Option. Upon an exercise of the Option, the obligation of Issuer to
consummate the Closing (as defined in Section 2(a) hereof) shall be
absolute, except for the satisfaction of the conditions set forth in
Section 3(b) hereof.
e) Disclosure Schedule. At any time prior to the Option Termination Date,
if Optionee has a good faith interest in investigating a possible
Option Exercise, Optionee may, by notice to Issuer, demand that Issuer
deliver to Optionee a disclosure schedule with respect to Issuer (the
"Disclosure Schedule"). Within 15 days of such notice, Issuer shall
deliver the Disclosure Schedule to Optionee, which Disclosure Schedule
shall be true and correct as of a date no more than 30 days prior to
the date of delivery. The Disclosure Schedule shall contain such
financial and other material non-public information regarding the
Issuer as will enable Optionee to make an informed investment decision
with respect to an Option Exercise and a disposition of the Option
Shares. It shall be a condition of Issuer's obligation to deliver the
Disclosure Schedule that Optionee execute an appropriate
non-disclosure agreement with respect to the information contained
therein.
f) Anti-Dilution Protection. The number of Option Shares as to which the
Option is exerciseable shall be equitably adjusted for any increase or
decrease, at any time between the date hereof and the date the Option
is exercised, in the number of issued and outstanding shares of Common
Stock of Issuer after the date hereof resulting from any
reorganization, recapitalization, stock split, stock distribution or
combination of shares, or the payment of a share dividend or other
increase or decrease in the number of shares outstanding effected
after the date hereof and without the receipt of consideration
therefor by Issuer (other than stock or option grants that may be made
to new or current employees of Issuer pursuant to a stock-based
compensation plan approved by Issuer's Board of Directors).
2. Closing.
a) Time and Place. The closing (the "Closing") of any Option Exercise
shall take 20 days after the date of the Option Notice, unless another
time is agreed upon by the parties (the "Closing Date"). The Closing
shall be held at the principal offices of Issuer, unless another place
is agreed upon by the parties.
b) Closing Deliverables. At the Closing of any Option Exercise, (i)
Issuer shall deliver to Optionee a certificate representing the Option
Shares and (ii) Optionee shall deliver to Issuer a letter
acknowledging receipt of the Option Shares.
3. Closing Conditions
a) Closing Conditions of Optionee. The obligations of Optionee to
consummate a Closing are subject to the satisfaction of the following
conditions precedent: (i) between the date of the Disclosure Schedule
and the Closing Date, there shall have been be no material change in
the representations and warranties in the Disclosure Schedule or in
the assets, business, financial or operating condition or prospects of
the Issuer; (ii) all of Issuer's representations and Warranties set
forth in Section 4(a) hereof are true and correct in all material
respects as of the Closing Date; and (iii) Issuer shall have delivered
to Optionee the stock certificate described in Section 2(b)(i) hereof.
b) Closing Conditions of Issuer. The obligations of Issuer to consummate
a Closing are subject to the satisfaction of the following condition
precedent: (i) all of Optionee's representations and Warranties set
forth in Section 4(b) hereof are true and correct in all material
respects as of the Closing Date; and (ii) Optionee shall have
delivered to Issuer the letter described in Section 2(b)(ii) hereof.
c) Effect of Failure of Condition. If a condition to Closing fails
hereunder and the Option Termination Date has not occurred, the Option
shall be reinstated with respect to the Option Exercise contemplated
by such Closing, as if the Option has not been exercised.
4. Representations and Warranties.
a) Representations and Warranties by Issuer. Issuer hereby represents and
warrants to Optionee, as of the date hereof and as of any Closing
Date, that (i) the execution, delivery and performance of this
Agreement by Issuer and the issuance of the Option by Issuer have been
duly authorized by the Board of Directors of Issuer; and (b) upon
exercise of the Option as described in this Agreement and issuance of
the Option Shares by Issuer to Optionee in connection therewith, the
Option Shares shall be duly authorized, validly issued, fully paid and
non-assessable.
b) Representations and Warranties by Optionee. Optionee hereby represents
and warrants to Issuer, as of the date hereof and as of any Closing
Date, that (i) the Option and, if the Option is exercised, the Option
Shares acquired thereby are being acquired for the account of Optionee
for investment, and not with a present view to, or for resale in
connection with, the distribution thereof, and that Optionee has no
present intention of distributing or reselling such securities, in
each case, other than pursuant to a registration statement under the
Securities Act of 1933, as amended (the "1933 Act"); (ii) Optionee is
an "Accredited Investor" -------- as defined in Regulation D under the
1933 Act; (iii) neither the Option nor any Option Shares acquired upon
Option Exercise shall be sold or transferred unless they first shall
have been registered under the 1933 Act and any applicable state
securities laws or unless Issuer first shall have been furnished with
either (A) an opinion of legal counsel (in form, substance and scope
reasonably satisfactory to Issuer) to the effect that such sale or
transfer is exempt from the registration requirements of the 1933 Act
or (B) satisfactory representations from Optionee that Optionee may
immediately sell all of such securities (to the extent such securities
are deemed owned by Optionee on the same date) pursuant to Rule 144
under the 1933 Act (or a successor thereto).
c) Option Share Legend. Upon issuance, the stock certificate representing
the Option Shares shal bear on the face thereof substantially the
following legend, insofar as is consistent with Delaware law:
"The shares of common stock represented by this certificate have
not been registered under the Securities Act of 1933, as amended,
or the securities laws of any state or other jurisdiction, and
may not be sold, offered for sale, assigned, transferred or
otherwise disposed of, unless registered pursuant to the
provisions of that Act and of such securities laws or an opinion
of counsel acceptable to the Corporation is obtained stating that
such disposition is in compliance with an available exemption
from such registration."
5. Miscellaneous.
a) Expenses. Each party shall pay its own expenses (including expenses of
legal counsel and other advisors) in connection with the negotiation
and performance of this Agreement and the consummation of any Option
Exercise and Closing.
b) Amendment and Waiver. This Agreement may be amended, and any provision
of this Agreement may be waived, only via a written instrument
executed by both parties hereto. No course of dealing between or among
any persons having any interest in this Agreement will be deemed
effective to modify or amend any part of this Agreement or any rights
or obligations of any person under or by reason of this Agreement.b)
c) Notices. Notices, demands and other communications given under this
Agreement shall be in writing and shall be deemed to have been given
when delivered (if personally delivered), on the scheduled date of
delivery (if delivered via commercial courier), three days after
mailed (if mailed by certified or registered mail, return receipt
requested) or when sent by facsimile (if sent by facsimile with
evidence of successful transmission retained by the sender); provided,
however, that failure to give proper and timely notice as set forth in
the "with a copy to" provisions below shall not invalidate a notice
properly and timely given to the associated party. Unless another
address or facsimile number is specified by notice hereunder, all
notices shall be sent as follows:
If to Optionee: with a copy to:
Xx. Xxxxxx Xxxxxxx Xxxxx Xxxxx, Esq.
c/o Sills, Cummis, Radin, Tishman, Xxxxx & Xxxxxxxxx
Xxxxxxx & Xxxxx 000 Xxxxx 00 Xxxx
Xxx Xxxxxxxxxx Xxxxx Xxxxxxxx, XX 00000
Xxxxxx XX 00000
Facsimile: 000-000-0000 Facsimile: 973-361-1644
If to Issuer: with a copy to:
Artera Group, Inc. NCT Group, Inc.
00 Xxxxxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attention: Chief Financial Officer Attention: General Counsel
Facsimile: 000-000-0000 Facsimile: 000-000-0000
d) Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that (i) Issuer
may not assign this Agreement or any of Issuer's rights, interests or
obligations hereunder except with the prior written consent of
Optionee; and (ii) Optionee may not assign this Agreement or any of
Optionee's rights, interests or obligations hereunder except (A) with
the prior written consent of Issuer or (B) to an individual that is a
member of Optionee's family.
e) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
f) Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes
any prior understandings, agreements or representations by or between
the parties, written or oral, with respect to such subject matter.
g) Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more
than one party, and all such counterparts taken together shall
constitute one and the same instrument.
h) Governing Law and Jurisdiction. This Agreement shall be governed by
the internal laws of the State of Delaware, without regard to
conflicts of laws principles. The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located in
the state of New Jersey with respect to any dispute arising under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ARTERA GROUP, INC.
By: _______________________________________________
Name: _______________________________________________
Title: _______________________________________________
______________________________________________________
XXXXXX XXXXXXX