OPTION AGREEMENT
This Option Agreement is entered into as of July 1, 1998, by and between
ImageMatrix Corporation, a Colorado Corporation ("ImageMatrix") and Xxxxxx
Xxxxxx ("Employee").
WHEREAS, Employee was induced to relocate to Colorado to become an
executive for the Company; and
WHEREAS, in conjunction with acceptance of such employment Employee was
encouraged to take an equity ownership position in the Company; and
WHEREAS, pursuant to such encouragement, Employee has purchased, and now
owns, 155,000 shares (the "Shares") of the Company's Common Stock;
WHEREAS, Employee has given notice of termination of his employment with
the Company; and
WHEREAS, Employee's termination of employment as contemplated by his notice
would be seriously detrimental to the Company; and
WHEREAS, as a consequence thereof, the Board of Directors has induced
Employee to extend his employment with the Company under the terms of this
Agreement;
NOW, THEREFORE, in consideration of the premises and of the covenants of
the parties as provided herein, the parties agree as follows:
1. For purposes of this Agreement, the following terms shall have the
meanings ascribed to them:
(a) "Acquisition" means the acquisition after the date of this
Agreement by a person or entity of not less than fifty-one percent (51%) of the
issued and outstanding capital stock, or the acquisition of substantially all of
the assets of ImageMatrix.
(b) "Cause" means (A) conviction of, or plea of nolo contendere to, any
felony, or to any crime or offense involving acts of theft, fraud, embezzlement,
moral turpitude or similar conduct, (B) repeated intoxication by alcohol or
drugs during the performance of his duties, (C) breach of any provision of this
Agreement, willful and intentional misuse or diversion of ImageMatrix's, or any
of ImageMatrix's affiliates, funds, embezzlement, or fraudulent or willful and
material misrepresentations or concealments, whether orally or in any writing
submitted to ImageMatrix, or its affiliates, (D) repeated material failure,
after written notice, to perform the duties of Employee's employment, (E)
material failure to follow or comply with any lawful directive of any superior
having authority to direct the activities of Employee, or (F) the occurrence of
an event or series of events which lead ImageMatrix to the reasonable conclusion
that Employee has materially breached or damaged ImageMatrix's trust in
Employee's character and integrity sufficiently to impair his standing with
ImageMatrix; provided, however, that in the
case of the foregoing clauses (D), (E) and (F), Employee shall have been
informed, in writing, of such material failure referred to in the foregoing
clauses (D), (E) and (F), respectively, and provided with a reasonable
opportunity to cure such material failure, if such failure is subject to cure.
(c) "Trigger Date" means the date an agreement for an Acquisition is
signed by ImageMatrix, provided, however, that, except to the extent provided in
Paragraph 4 hereof, a Trigger Date shall not occur later than one (1) year after
the date of this Agreement.
2. If the Trigger Date shall occur prior to one (1) year from the date of
this Agreement, and Employee has not been disqualified by the conditions of
Paragraph 3 hereof, then Employee shall have, pursuant to this Agreement, either
an option to require ImageMatrix to repurchase the Shares (not to exceed the
number of Shares Employee owns at the time of the option exercise) at a purchase
price of $2.25 per share (with the exercise price to be adjusted for stock
splits, stock dividends, and like matters) or an option to require ImageMatrix
to pay Employee a bonus of Three Hundred Thousand Dollars ($300,000.00) in cash
and/or marketable securities which shall be in addition to the compensation
Employee is entitled to in his capacity as an employee of ImageMatrix. The
option used will be selected solely by ImageMatrix. The option shall be
exercisable by Employee, by written notice, for fifteen (15) days after the
later to occur of (a) the Trigger Date, or (b) the date he learns of the event
causing a Trigger Date. Payment by the Company for the Shares or payment of the
cash bonus shall be contingent upon and shall be made prior to or at the closing
of an Acquisition. If the Acquisition fails to occur for any reason, the option
shall be treated as still in effect for subsequent events causing a Trigger Date
under this Agreement.
3. For Employee to be entitled to exercise this option up to and including
the Trigger Date, the following conditions shall apply:
(a) Employee shall not have been terminated by ImageMatrix for Cause,
as defined in Paragraph 1(b);
(b) Employee shall not have voluntarily terminated his employment at
ImageMatrix.
4. If ImageMatrix terminates Employee without Cause within one (1) year
from the date of this Agreement, and if a Trigger Date shall occur within ninety
(90) days after such termination (even if the Trigger Date occurs after one (1)
year from the date of this Agreement), then Employee shall be entitled to
exercise the option provided by Paragraph 2 hereof.
5. Except as provided in Paragraph 4, if a Trigger Date has not occurred
by the close of business on the date which is one (1) year from the date of this
Agreement, this Agreement shall terminate and Employee shall forfeit the right
to exercise the option provided by Paragraph 2 hereof.
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6. THE PROVISIONS OF THIS AGREEMENT SHALL IN NO WAY ALTER EMPLOYEE'S
STATUS AS AN EMPLOYEE "AT WILL" UNDER COLORADO LAW OR LIMIT IMAGEMATRIX'S
ABILITY TO TERMINATE EMPLOYEE'S EMPLOYMENT BY IMAGEMATRIX FOR ANY REASON, AT ANY
TIME, WITHOUT NOTICE.
IN WITNESS WHEREOF, the undersigned have affixed their signatures to this
Agreement as of the date first above written.
IMAGEMATRIX CORPORATION XXXXXX X. XXXXXX
0000 Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
By:______________________
Title:___________________
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