NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the 12th day of August, 1998, by and between HUMASCAN
INC., a Delaware corporation ("Company"), and PHYSICIANS WORLD COMMUNICATIONS
GROUP ("Consultant").
WHEREAS, the Consultant and the Company have entered into a Consulting
Agreement, dated as of July 1, 1998 ("Consulting Agreement"), pursuant to which
the Consultant shall provide certain consulting services to the Company;
WHEREAS, by written consent dated August 12, 1998 ("Grant Date"), the Board
of Directors of the Company ("Board") authorized the grant to the Consultant of
an option ("Option") to purchase an aggregate of 50,000 shares of the authorized
but unissued Common Stock of the Company, $.01 par value ("Common Stock"),
conditioned upon the Consultant's acceptance thereof upon the terms and
conditions set forth in this Agreement; and
WHEREAS, the Consultant desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Consultant the Option
to purchase all or any part of an aggregate of 50,000 shares of Common Stock
("Option Shares") on the terms and conditions set forth herein.
2. Nonqualified Stock Option. The Option represented hereby is not intended to
be an Option which qualifies as an "Incentive Stock Option" under Section 422 of
the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option shall be $1.375 per share,
subject to adjustment as hereinafter provided.
4. Exercisability. The Option is exercisable as follows: (i) the right to
purchase 25,000 of the Option Shares shall become exercisable on the Grant Date;
and (ii) the right to purchase 25,000 of the Option Shares shall become
exercisable on December 31, 1998. After a portion of the Option becomes
exercisable, it shall remain exercisable, except as otherwise provided herein,
until the date that is 5 years after the Grant Date.
5. Effect of Termination of Service.
5.1 Termination by Consultant. If the Consultant's service as a consultant
to the Company is terminated by the Consultant for any reason, the portion of
the Option, if any, that was exercisable as of the date of termination of
service may thereafter be exercised by the Consultant until the expiration of
the Exercise Period. The portion of the Option, if any, that was not exercisable
as of the date of the termination of service shall immediately terminate upon
the termination of service.
5.2 Termination by the Company. If the Consultant's service as a consultant
to the Company is terminated by the Company for proper cause pursuant to Section
3.2 of the Consulting Agreement, the Option, whether or not then exercisable,
shall immediately expire upon such termination.
6. Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend (other than cash dividend), stock split, reverse
stock split, or other change in corporate structure affecting the number of
issued shares of Common Stock, the Company shall adjust the number and kind of
Option Shares and the exercise price of the Option proportionally in order to
prevent the dilution or enlargement of the Consultant's proportionate interest
in the Company and his rights hereunder, provided that the number of Option
Shares shall always be a whole number and any fractional shares resulting from
such adjustments shall be eliminated.
7. Method of Exercise.
7.1 Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice.
7.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Consultant as soon as practicable after payment
therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Consultant shall make cash payments by wire
transfer, certified or bank check or personal check, in each case payable to the
order of the Company; the Company shall not be required to deliver certificates
for Option Shares until the Company has confirmed the receipt of good and
available funds in payment of the purchase price thereof.
7.3.2 Cashless Payment. The Consultant may, with the consent of the
Board, use Common Stock of the Company owned by it to pay the purchase price for
the Option Shares by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the fair market value, as determined by the Board in its sole
discretion. Alternatively, at the election of the Consultant and with the
consent of the Board, the Company may retain from the Option Shares that number
of shares having a fair market value on the date of exercise (as determined by
the Board in its sole discretion) equal to the option price of the number of
Option Shares for which the Option is being exercised.
7.3.3 Exchange Act Compliance. Notwithstanding the foregoing, the
Company shall have the right to reject payment in the form of Common Stock if in
the opinion of counsel for the Company, (i) it could result in an event of
"recapture" under Section 16(b) of the Securities Exchange Act of 1934
("Exchange Act"); (ii) such shares of Common Stock may not be sold or
transferred to the Company; or (iii) such transfer could create legal
difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or transferable except
to the principals of the Consultant and by will or by the laws of descent and
distribution in the event of the death of a holder that is a principal of the
Consultant. No transfer of the Option by a principal of the Consultant by will
or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
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9. Company Representations. The Company hereby represents and warrants to the
Consultant that:
(1) the Company, by appropriate and all required action, is duly authorized
to enter into this Agreement and consummate all of the transactions contemplated
hereunder; and
(2) the Option Shares, when issued and delivered by the Company to the
Consultant in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Consultant Representations. The Consultant hereby represents and warrants
to the Company that:
(1) it is acquiring the Option and shall acquire the Option Shares for its
own account and not with a view towards the distribution thereof;
(2) it has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Exchange Act within the last 24 months and all reports issued by the Company to
its stockholders;
(3) it understands that it must bear the economic risk of the investment in
the Option Shares, which cannot be sold by it unless they are registered under
the Securities Act of 1933 ("Securities Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the Securities Act;
(4) it has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above; (1)
(5) it is aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the Securities Act or an exemption therefrom as provided
herein; and
(6) The certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired pursuant
to a Stock Option Agreement, dated as of August 12, 1998, a copy of
which is on file with the Company, and may not be transferred, pledged
or disposed of except in accordance with the terms and conditions
thereof."
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11. Restriction on Transfer of Option Shares. Anything in this Agreement to the
contrary notwithstanding, the Consultant hereby agrees that it shall not sell,
transfer by any means or otherwise dispose of the Option Shares acquired by him
or her without registration under the Securities Act, or in the event that they
are not so registered, unless (i) an exemption from the Securities Act
registration requirements is available thereunder, and (ii) the Consultant has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
12. Miscellaneous.
12.1 Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth herein, or to such other address as either shall have specified by notice
in writing to the other. Notice shall be deemed duly given hereunder when
delivered or mailed as provided herein.
12.2 Stockholder Rights. The Consultant shall not have any of the rights of
a stockholder with respect to the Option Shares until such shares have been
issued after the due exercise of the Option.
12.3 Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach.
12.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended except by writing executed by the Consultant and the Company.
12.5 Binding Effect; Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and, to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.7 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
day and year first above written.
HUMASCAN INC. Address:
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By:____________________________
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Chief Financial Officer
CONSULTANT: Address:
PHYSICIANS WORLD COMMUNICATIONS ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
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By:_____________________________________
Name:
Title:
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
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DATE
HumaScan Inc.
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Attention: Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of August 12, 1998
("Agreement") with HumaScan Inc. ("Company"), I hereby irrevocably elect to
exercise the right to purchase _________ shares of the Company's common stock,
par value $.01 per share ("Common Stock"), which are being purchased for
investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
/ / a [personal check] [certified check] [bank check] payable to the order
of "HumaScan Inc." in the sum of $_________;
/ / confirmation of wire transfer in the amount of $_____________; and/or
/ / certificate for ____ shares of the Company's Common Stock, free and
clear of any encumbrances, duly endorsed, having a fair market value of
$_________.
I hereby represent, warrant to, and agree with, the Company that:
(1) I am acquiring the Option and shall acquire the Option Shares for my
own account and not with a view towards the distribution thereof;
(2) I have received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 within the last 24 months and all reports issued
by the Company to its stockholders;
(3) I understand that I must bear the economic risk of the investment in
the Option Shares, which cannot be sold by me unless they are registered under
the Securities Act of 1933 ("Securities Act") or an exemption therefrom is
available and that the Company is under no obligation to register the Option
Shares for sale under the Securities Act;
(4) I have had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(5) I am aware that the Company shall place stop transfer orders with its
transfer agent against the transfer of the Option Shares in the absence of
registration under the Securities Act or an exemption therefrom as provided
herein;
(6) the certificates evidencing the Option Shares shall bear the following
legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired pursuant
to a Stock Option Agreement, dated as of August 12, 1998, a copy of
which is on file with the Company, and may not be transferred, pledged
or disposed of except in accordance with the terms and conditions
thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
(Signature) (Address)
(Print Name) (Address)
(Social Security Number)
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