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PART III (Continued)
Exhibit 10.32 Consulting Agreement with Redstone Securities
FINANCIAL ADVISORY AND CONSULTING AGREEMENT
This Financial Advisory and Consulting Agreement (the "Agreement")
effective as of the 23rd day of November, 1999 (the "Effective Date") by and
between Kyzen Corporation ("Kyzen"), whose principal business address is ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Redstone Securities,
Inc. ("Redstone"), whose principal business address is ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
WHEREAS, Redstone is a member of the National Association of Securities
Dealers, Inc. ("NASD") and engages in a general securities business, which
includes providing financial advisory and consulting services; and
WHEREAS, Kyzen desires to retain Redstone to provide certain financial
advisory and consulting services;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the parties hereto, agree as follows:
1. Financial Advisory and Consulting Services. Redstone agrees to
provide Kyzen with financial advisory and consulting services to assist Kyzen in
raising capital and enhancing shareholder value in the capital stock of Kyzen,
and to assist with other projects as directed by Kyzen (the "Services"), from
time to time. The Services shall be provided on a timely basis and without
unreasonable delay. The scope of the Services includes, but is not limited to
(a) assisting in locating appropriate financing services, including but not
limited to institutional buyers, individual investors or financial institutions
to provide equity and/or debt financing, (b) assisting in the preparation of
description of Kyzen and its business, operations, properties, financial
condition and prospects, (c) undertaking the study and analysis of the business,
operations, financial condition and prospects of Kyzen, (d) reviewing Kyzen's
financial plans and analyzing Kyzen's business alternatives in light of Kyzen's
strategic plans, (e) updating and maintaining its knowledge of Kyzen's business,
operations, financial condition and prospects during the term of this Agreement,
and (f) being available to meet with Kyzen's Board of Directors (in person or by
telephone) to discuss strategic alternatives and their financial implications.
Redstone will utilize its best efforts in providing the
Services to Kyzen. Redstone, however, gives no warranty, expressed or implied,
as to the success of Kyzen's business, nor can it guaranty the results of any
Services provided. It is expressly understood that Redstone, in performing its
obligations under this Agreement, will rely primarily upon publicly available
information and certain financial and other information provided by Kyzen and it
will not undertake any independent audit or confirmation of the accuracy or
completeness of such information.
2. Term; Survival. The term of this Agreement shall be one year
from the Effective Date, and thereafter will continue on a month-to-month basis
with each party retaining the right to terminate the Agreement at any time upon
thirty calendar days prior written notice to the other party. Any provision of
this Agreement related to confidentiality or indemnification, or which by its
terms provides for survival, shall survive any termination hereof.
3. Confidentiality. Redstone acknowledges that the Services
contemplated by this Agreement will involve the exchange, use and development of
confidential information of Kyzen and agrees that it will not use or disclose
and will not permit its affiliates or officers, directors, shareholders,
partners or principals to use or disclose any confidential information relating
to Kyzen. Should disclosure of any such confidential information to a third
party be required to carry out the Services or by law, Redstone must request
prior written approval from Kyzen to disclose such information to the third
party; provided, however, that the foregoing restrictions will not apply to such
information that is or becomes generally available to the public other than as a
result of disclosure in violation of this Agreement. Any such disclosure to a
third party must be preceded by a signed non-disclosure agreement with that
third party. Further, any disclosure of such confidential information shall be
made in compliance with all applicable federal and state securities laws.
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PART III (Continued)
Upon expiration or termination of this Agreement, Redstone will
promptly return to Kyzen all confidential information in the form of materials,
documents, and data, whether in written or graphic form, which was supplied by
Kyzen in connection with this Agreement.
4. Compensation. As compensation for the Services provided
hereunder, Kyzen shall ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ options to purchase Kyzen Corporation
Common Stock, par value $0.01 per share (the "Common Stock"), in accordance with
the terms and conditions set forth in the Stock Option Grant attached hereto as
EXHIBIT A.
5. Relationship of the Parties. Redstone, in its performance of
the Services pursuant to this Agreement is acting as an independent contractor
and not as a partner, affiliate, co-joint venturer or agent with or of Kyzen.
Redstone shall have no authority to bind Kyzen to arrangements, agreements,
contracts or expenses of any kind.
6. Indemnification.
a. Kyzen. Kyzen shall indemnify, hold harmless and
defend Redstone and its representatives, affiliates, directors,
officers, agents and employees, and their respective successors and
assigns and each other person controlled (within the meaning of the
Securities Act of 1933, as amended (the "1933 Act")) by Redstone
("Redstone indemnified parties") to the fullest extent permitted by
law, from and against any losses, claims, damages, demands, expenses,
liabilities or actions, including shareholder actions in respect
thereof, in connection with claims relating to or arising out of
Redstone's performance of the terms of this Agreement, to the extent
that such claims concern directly or indirectly inaccurate, incomplete
or misleading information provided by Kyzen and relied upon by Redstone
in the performance of its Services pursuant to this Agreement, and will
reimburse any Redstone indemnified party for expenses (including
reasonable attorneys' and accountants' fees and expenses of one law
firm and one accounting firm for all Redstone indemnified parties, in
the absence of a conflict of interest) as they are incurred by any
Redstone indemnified party in connection with investigating, preparing,
defending or settling any such action or claim. Nothing herein shall be
construed to require Kyzen to indemnify Redstone for liabilities
related to any action by Redstone that resulted in a violation by
Redstone of applicable federal or state securities laws, rules or
regulations or the rules or any applicable self-regulatory
organization. Notwithstanding the foregoing, Kyzen will not be
responsible for any claims, liabilities, losses, damages or expenses
which are finally judicially determined to have resulted from the
willful misconduct or gross negligence of a Redstone indemnified party.
▇. ▇▇▇▇▇▇▇▇. Redstone shall indemnify, hold harmless and
defend Kyzen and its representatives, affiliates, directors, officers,
agents and employees, and their respective successors and assigns and
each other person controlled (within the meaning of the ▇▇▇▇ ▇▇▇) by
Kyzen ("Kyzen indemnified parties") to the fullest extent permitted by
law, from and against any losses, claims, damages, demands, expenses,
liabilities or actions, including shareholder actions in respect
thereof, in connection with claims relating to or arising out of any
violation by Redstone of applicable federal or state securities laws,
rules or regulations or the rules of any applicable self-regulatory
organization or Redstone's performance of the terms of this Agreement,
and will reimburse any indemnified party for expenses (including
reasonable attorneys' and accountants' fees and expenses of one law
firm and one accounting firm for all Kyzen indemnified parties, in the
absence of a conflict of interest) as they are incurred by any Kyzen
indemnified party in connection with investigating, preparing,
defending or settling any such action or claim.
c. Indemnification Procedure. Any indemnified party must
give the indemnifying parties: (i) written notice within a reasonable
time after the indemnified party is served with legal process in an
action asserting such claims, provided that the failure or delay to
notify the indemnifying parties shall not relieve them from any
liability they may have to the indemnified parties hereunder so long as
the failure or delay shall not have prejudiced the defense of such
claim; (ii) reasonable assistance in defending the claim; and (iii)
sole authority to defend or settle the claim. In the event that the
indemnifying parties elect not to defend any such claim, the
indemnified party shall have the option, but not the duty, to
reasonably settle or defend the claim at its cost and the indemnifying
parties shall indemnify the indemnified parties for such
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PART III (Continued)
settlement or any damages finally awarded attributable to such claim,
reasonable costs and expenses (including attorneys' and accountants'
fees) and interest on such recoverable funds advanced.
7. Representations, Warranties and Covenants.
(a) Redstone.
(i) This Agreement and the transactions
contemplated herein will not (A) conflict with or result in a
breach of Redstone's organizational documents, (B) violate any
applicable statute, law, rule, regulation, decision or order
of any court or governmental agency, or (C) conflict with or
result in a breach of any undertaking, agreement or contract
to which Redstone is a party or by which it is otherwise
bound, which, in the case of (A), (B) or (C) would materially
limit or have a material adverse effect on its ability to
perform its duties under this Agreement;
(ii) As of the Effective Date Redstone is, and at
all times during the term of this Agreement will be, a company
duly organized and validly existing under the laws of the
jurisdiction of its formation and it has full capacity and
authority to enter into this Agreement, to conduct its
business and to perform its obligations under this Agreement;
(iii) This Agreement has been duly and validly
authorized, executed and delivered by Redstone and is a valid,
binding and enforceable obligation of Redstone, except as such
enforceability is limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws and
subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or
at law);
(iv) There is no pending, or to the best of
Redstone's knowledge, threatened action, investigation, suit
or proceeding, before or by any court, governmental,
administrative or self-regulatory body or arbitration panel to
which it or any of its principals, shareholders, directors,
officers or employees is a party, or to which any of its
assets is subject which might be reasonably expected to result
in any material adverse change in its condition (financial or
otherwise), business or prospects or might be reasonably
expected to have a material adverse effect on any of its
material assets or which reasonably might be expected to
materially impair its ability to discharge its obligations to
Kyzen;
(v) Redstone's business operations and any
Services provided pursuant to this Agreement have been tested
as part of an internal Year 2000 compliance plan and it does
not believe that an interruption of the Services will occur as
a result of the Year 2000; provided, however, that it cannot
assure that third parties on which it relies will not have an
interruption of services as a result of the Year 2000;
(vi) Redstone is properly registered, licensed
and/or qualified to act under all applicable United States
federal and state securities statutes and regulations in order
for it to perform its duties under this Agreement;
(vii) Any communications used by Redstone in
connection with this Agreement and the actions contemplated
thereby will not contain any untrue statement of material fact
or omit to state a material fact required to be stated
therein, in light of the circumstances under which they were
made, not misleading.
(viii) Redstone is and will remain for the term of
this Agreement, a member in good standing of the NASD and is
registered as a broker-dealer under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and in any state in
which it is required to be licensed or registered; and
(ix) Redstone will comply with all federal and
state securities laws, the rules and regulations of the
Securities and Exchange Commission (the "SEC") and applicable
state
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PART III (Continued)
regulatory agencies, and the Constitution and Bylaws and Rules
of Conduct of the NASD applicable to it in connection with
this Agreement and the Services it is to provide hereunder.
The representations, warranties and covenants contained herein
shall continue during the term of this Agreement and Redstone will promptly
notify Kyzen if any event has occurred which would make any of the foregoing
untrue or could have a material adverse effect on its operations.
(b) Kyzen:
(i) This Agreement and the transactions contemplated
herein will not (A) conflict with or result in a breach of Kyzen's
organizational documents, (B) violate any applicable statute, law,
rule, regulation, decision or order of any court or governmental
agency, or (C) conflict with or result in a breach of any undertaking,
agreement or contract to which Kyzen is a party or by which it is
otherwise bound, which, in the case of (A), (B) or (C) would materially
limit or have a material adverse effect on its ability to perform its
duties under this Agreement;
(ii) As of the Effective Date Kyzen is, and at all times
during the term of this Agreement will be, a company duly organized and
validly existing under the laws of the jurisdiction of its formation
and it has full capacity and authority to enter into this Agreement, to
conduct its business and to perform its obligations under this
Agreement;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by Kyzen and is a valid, binding and enforceable
obligation of Kyzen, except as such enforceability is limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws and subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law);
(iv) There is no pending, or to the best of Kyzen's
knowledge, threatened action, investigation, suit or proceeding, before
or by any court, governmental, administrative or self-regulatory body
or arbitration panel to which it or any of its principals,
shareholders, directors, officers or employees is a party, or to which
any of its assets is subject which might be reasonably expected to
result in any material adverse change in its condition (financial or
otherwise), business or prospects or might be reasonably expected to
have a material adverse effect on any of its material assets or which
reasonably might be expected to materially impair its ability to
discharge its obligations to Redstone; and
(v) Kyzen's business operations and any Services provided
pursuant to this Agreement have been tested as part of an internal Year
2000 compliance plan and it does not believe that an interruption of
the Services will occur as a result of the Year 2000; provided,
however, that it cannot assure that third parties on which it relies
will not have an interruption of services as a result of the Year 2000.
8. Governing Law. This Agreement is made and shall be construed
under the laws of the state of Tennessee irrespective of conflicts or choice of
law principles.
9. Severability. If and to the extent that any court of competent
jurisdiction holds any provision of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the validity of the remainder
of this Agreement, to the extent that such severed provision does not materially
change the understanding of the parties pursuant to this Agreement.
10. Entire Understanding. This Agreement, including all exhibits
hereto, contains the entire agreement of the parties hereto and supersedes all
prior agreements, negotiations, and understandings between the parties with
regard to the subject matter of this Agreement.
11. Counterparts. This Agreement may be executed in two or more
counterparts, all of which together shall be considered a single instrument. In
making proof of this Agreement it shall not be necessary to produce or account
for more than one such counterpart executed by the party against whom
enforcement of this Agreement is sought.
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PART III (Continued)
12. Amendments. This Agreement may not be amended or otherwise
modified except in writing by both parties hereto.
13. Assignment. Neither party hereto may assign this Agreement
without the prior written consent of the other party. For purposes of this
restriction on assignment, the term "Assignment" shall include any direct or
indirect transfer of a controlling block of the assigning party's outstanding
voting securities by one or more security holders of the assigning party.
14. Captions. All sections headings are for convenience of
reference only, and do not form part of this Agreement and shall not affect the
meaning or interpretation of this Agreement.
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PART III (Continued)
IN WITNESS HEREOF, this Agreement has been duly executed for, and on
behalf of the parties hereto in a manner binding upon them as of the Effective
Date written above.
KYZEN CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇,
President and Chief Executive Officer
REDSTONE SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III,
Managing Director
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PART III (Continued)
KYZEN CORPORATION EXHIBIT A
STOCK OPTION GRANT
Optionee: Redstone Securities, Inc.
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Total Shares Subject to Option: 250,000
DATE OF GRANT: NOVEMBER 23, 1999
Type of Stock Option: Stock Options
1. Grant of Option. Kyzen Corporation, a Tennessee corporation
(the "Company"), hereby grants to the optionee named above (the "Optionee") an
option to purchase a total of up to 250,000 shares, $0.01 par value per share,
of the Company's Common Stock (the "Shares") at the exercise price per share set
forth in Section 2 below (the "Exercise Price"), subject to all of the terms and
conditions of this Stock Option Grant (the "Grant or the Option"). This Option
is granted effective as of the Date of Grant set forth above (the "Date of
Grant").
2. Option Grant.: Kyzen hereby grants Redstone the following
options:
(a) options to purchase 75,000 shares of Common Stock at
an exercise price of $0.50 per share, to vest
immediately
(b) options to purchase 75,000 shares of Common Stock at
an exercise price of $1.00 per share, to vest
immediately.
(c) options to purchase 50,000 shares of Common Stock
with an exercise price of $2.00 per share to vest
immediately.
(d) options to purchase 50,000 shares of Common Stock
with an exercise price of $3.00 per share to vest
immediately.
Optionee shall in no event be entitled under this Option to purchase a
number shares of the Company's common stock greater than the total number of
Shares set forth above.
3. Restrictions on Exercise. Exercise of this Option is subject
to the following limitations:
(a) This Option may not be exercised unless such exercise
is in compliance with the Securities Act of 1933, as
amended (the "1933 Act"), and all applicable state
securities laws, as they are in effect on the date of
exercise.
(b) This Option may not be exercised as to fewer than 100
Shares unless it is exercised as to all Shares as to
which this Option is then exercisable.
4. Termination of Option. This Option shall terminate and vested
options will automatically expire on the earlier to occur of one year after
vesting dates set forth in Section 2(a)-(d) above or six months after the
termination of that certain Financial Advisory and Consulting Agreement, dated
as of November 23, 1999 (the "Agreement"). All unvested options shall expire
upon termination of the Agreement.
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PART III (Continued)
5. Manner of Exercise.
(a) This Option may be exercised at any time during the
exercise period commencing on the Date of Grant and
ending on the termination or expiration date as
determined in Section 4 above by delivery to the
Company of a written Stock Option Exercise Notice and
Agreement in the form attached hereto as Schedule A.
(B) THE STOCK OPTION EXERCISE NOTICE AND AGREEMENT SHALL
BE ACCOMPANIED BY FULL PAYMENT OF THE EXERCISE PRICE
FOR THE SHARES BEING PURCHASED. THE METHOD OF PAYMENT
FOR EXERCISE OF THIS OPTION OR ANY PART THEREOF SHALL
BE DETERMINED BY THE COMPANY IN ITS SOLE DISCRETION
AND MAY CONSIST OF (I) CASH, (II) CHECK, (III) WIRE
TRANSFER, (IV) ANY COMBINATION OF THE FOREGOING
METHODS OF PAYMENT, OR (V) SUCH OTHER CONSIDERATION
AND METHOD OF PAYMENT FOR THE ISSUANCE OF SHARES AS
MAY BE PERMITTED UNDER APPLICABLE LAWS AND AGREED TO
BY THE COMPANY.
(c) Prior to the issuance of the Shares, Optionee must
pay or make adequate provisions for any applicable
federal or state withholding obligations of the
Company therefor.
(d) Provided that such notice and payment are in form and
substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the
name of the Optionee.
6. Compliance With Laws and Regulations. The issuance and
transfer of Shares shall be subject to compliance by the Company and the
Optionee with all applicable requirements of federal and state securities laws
and regulations and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed or quotation system on which the
Company's Common Stock may be quoted at the time of such issuance or transfer.
Optionee understands that the Company is under no obligation to register,
qualify, list or quote the Shares with the Securities and Exchange Commission,
any state securities commission, any stock exchange or quotation system to
effect such compliance, except pursuant to the terms of that certain
Registration Rights Agreement, dated as of November 23, 1999.
7. Nontransferability of Option. This Option may not be sold,
assigned, pledged, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent and distribution and may be exercised
during the lifetime of the Optionee only by the Optionee. The terms of this
Option shall be binding upon the Optionee's executors, administrators, personal
representatives, successors and permitted assigns.
8. Representations by Optionee. By accepting this Option Grant,
Optionee represents and warrants the following to the Company:
(i) Optionee has been furnished with such materials and
has been given access to such financial and other
information relating to the Company as Optionee or
Optionee's qualified representatives have requested,
and Optionee has been afforded the opportunity to ask
questions regarding the Company and the Shares which
are the subject hereof as Optionee has found
necessary in order to make an informed investment
decision;
(ii) Optionee hereby acknowledges that it is an
"accredited investor" as that term is defined in
Regulation D promulgated under the 1933 Act;
(iii) Optionee intends to acquire the Common Stock options
for its own account for investment purposes only and
not with a view toward resale or distribution; and
(iv) Optionee acknowledges that it is aware that there are
substantial restrictions on the transferability of
the Common Stock options because they will not be,
and it has no right to require that they be,
registered under the 1933 Act or under any state
securities laws, in reliance upon exemptions
therefrom; such options and the Common Stock reserved
for issuance upon exercise thereof may not be, and it
agrees that they shall not be, sold
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PART III (Continued)
unless such sale is exempt from such registration
under the 1933 Act and applicable state securities
laws.
9. Stock Dividends and Stock Splits. If outstanding shares of the
Company's Common Stock shall be subdivided into a greater number of shares
thereof, or a dividend of shares of stock shall be paid pursuant thereto, the
exercise price in effect immediately prior to such subdivision or at the record
date of such dividends shall, simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend, be
proportionately reduced; and, conversely, if outstanding shares of stock shall
be combined into a smaller number of shares thereof, the exercise price in
effect immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased.
10. Reservation of Shares. The Company covenants that it will at
all times reserve and keep available, or retain the authority to issue, a
sufficient number of shares of Common Stock to permit the exercise hereof in
full.
11. No Rights as Shareholder. Until Optionee timely exercises
Optionee's rights to acquire the Shares hereunder, Optionee shall not be
entitled to vote or receive dividends or be deemed to be a shareholder of the
Company for any purpose, nor shall anything contained in this Option be
construed to grant to Optionee any rights of a shareholder of the Company or any
right to vote, give or withhold consent to any corporate action, receive notice
of meetings, receive dividends, subscription rights or otherwise.
12. Assumption of Options by Successor Companies. In the event of
a dissolution or liquidation of the Company, a merger in which the Company is
not the surviving corporation, a transaction in which 100% of the then
outstanding voting stock is sold or otherwise transferred, or the sale of
substantially all of the assets of the Company, any or all outstanding Options
shall, notwithstanding any contrary terms of this Grant, accelerate and become
exercisable in full at least ten days prior to (and shall expire on) the
consummation of such dissolution, liquidation, merger or sale of stock or sale
of assets on such conditions as the Company shall determine unless the successor
corporation assumes the outstanding Options or substitutes substantially
equivalent options.
13. Interpretation. Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or the Company forthwith to the
Company's Board of Directors, which shall review such dispute at its next
regular meeting. The resolution of such a dispute by the Company's Board of
Directors shall be final and binding on the Company and on the Optionee.
14. Governing Law. This Agreement is made and shall be construed
according to the laws of the United States and the laws of the State of
Tennessee irrespective of conflicts or choice of law principles.
15. Entire Agreement. This Grant, including Schedule A attached
hereto, constitutes the entire agreement of the parties and supersedes all prior
undertakings and agreements with respect to the subject matter hereof.
16. Paragraph Number and Headings. Headings and section numbers have
been inserted herein solely for convenience of reference and shall not be
construed to affect the meanings, construction or effect of this Agreement.
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PART III (Continued)
IN WITNESS HEREOF, this Option has been duly executed for, and on behalf of the
parties hereto in a manner binding upon them as of the Date of Grant written
above.
KYZEN CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
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PART III (Continued)
ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of this Stock Option
Grant and Schedule A attached hereto, represents that Optionee has read and
understands the terms and provisions thereof, and accepts this Option subject to
all the terms and conditions of this Stock Option Grant. Optionee acknowledges
that there may be adverse tax consequences upon exercise of this Option or
disposition of the Shares and that Optionee should consult a tax advisor prior
to such exercise or disposition.
OPTIONEE: Date:
--------------------------------- -------------------------
Sign Name Here
---------------------------------
Print Name Here
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PART III (Continued)
SCHEDULE A
STOCK OPTION EXERCISE NOTICE AND AGREEMENT
To: Kyzen Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
1. Exercise of Option. The undersigned ("Optionee") elects to exercise
Optionee's option to purchase _______ shares of the Common Stock, par
value $.01 per share (the "Shares"), of Kyzen Corporation (the
"Company") (the "Option" or the "Grant").
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Grant, restates all representations
of Optionee made in the Grant, and agrees to abide by and be bound by
its terms and conditions.
3. Compliance with Securities Laws. Optionee understands and acknowledges
that, notwithstanding any other provision of the Grant to the contrary,
the exercise of any rights to purchase any Shares are expressly
conditioned upon compliance with the Securities Act of 1933, as amended
(the "1933 Act"), and all applicable state securities laws. Optionee
agrees to cooperate with the Company to ensure compliance with such
laws.
4. Federal Restrictions on Transfer. Optionee understands that the Shares
must be held indefinitely unless they are registered under the 1933 Act
or unless an exemption therefrom is available and that the
certificate(s) representing the Shares may bear a legend to that
effect. Except as provided in that certain Registration Rights
Agreement dated as of November 23, 1999, Optionee understands that the
Company is under no obligation to register the Shares and that an
exemption may not be available or may not permit Optionee to transfer
Shares in the amounts or at the times proposed by Optionee.
Specifically, Optionee has been advised that Rule 144 promulgated under
the 1933 Act, which permits certain resales of unregistered securities,
is not presently available with respect to the Shares and, in any
event, requires that the Shares be paid for and then held for a minimum
of one year before they may be resold under Rule 144.
5. Legend. Optionee understands and agrees that the Shares are subject to
restrictions on transfer as set forth herein and that the
certificate(s) representing the Shares will bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE
SECURITIES ACT OR, IN THE OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
6. Stop-Transfer Notices. Optionee understands and agrees that, in order
to ensure compliance with the restrictions referred to herein, the
Company may issue appropriate "stop-transfer" instructions to its
transfer agent, if any, and that, if the Company transfers its own
securities, it may make appropriate notations to the same effect in its
own records.
7. Tax Consequences. Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any
tax consultant(s) Optionee deems advisable in connection with the
purchase or disposition of the Shares and that Optionee is not relying
on the Company for any tax advice.
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KYZEN CORPORATION
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PART III (Continued)
8. Delivery of Payment. Optionee herewith delivers to the Company the
aggregate purchase price of the Shares that Optionee has elected to
purchase and has made provisions for the payment of any federal or
state withholding taxes required to be paid or withheld by the Company.
9. Entire Agreement. That certain Stock Option Grant, dated as of November
23, 1999 (the "Grant") is incorporated herein by reference. This
Agreement and the Grant constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements
of the Company and Optionee with respect to the subject matter hereof,
and is governed by Tennessee law irrespective of conflicts or choice of
law principles.
Accepted by:
KYZEN CORPORATION
By:
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Its:
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Dated:
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Submitted by:
OPTIONEE:
By:
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Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dated:
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