Document:

Exhibit 10.6

  

C-BOND SYSTEMS, LLC

COMMON UNIT OPTION PLAN

 COMMON UNIT OPTION AGREEMENT

This Common Unit Option Agreement (this "Agreement") is made effective as of _________________, 2015 (the "Grant Date"), between C-Bond Systems, LLC, a Texas limited liability company (the "Company")  and __________________ (the "Optionee").

WHEREAS, the Company considers that its interests will be served by granting the Optionee an option to purchase Common Units of the Company, subject to the terms and conditions of this Agreement, as an inducement for the Optionee's continued and effective performance of services as an employee of, or consultant, advisor or other service provider to, the Company;

WHEREAS, pursuant to the C-Bond Systems, LLC Common Unit Option Plan (the "Plan"), the Administrator has granted to the Optionee an option to acquire Common Units of the Company, subject to the terms and conditions of this Agreement; and

WHEREAS, the Optionee desires to accept such option subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Company and the Optionee, intending to be legally bound, hereby agree as follows:

1.             Grant.

(a)       The Administrator, on behalf of the Company, has granted to the Optionee on the Grant Date an option (the "Option") to purchase, subject to the terms and conditions set forth herein and in the Plan, all or any part of _______ Common Units of the Company (subject to adjustment as set forth in Section 9 of the Plan) (the "Common Units") at a price of $_____ per Common Unit (subject to adjustment as set forth in Section 9 of the Plan) (the "Exercise Price").  By accepting the Option, the Optionee irrevocably agrees on behalf of the Optionee and the Optionee's successors and permitted assigns to all of the terms and conditions of the award as set forth in or pursuant to this Agreement and the Plan (as the Plan may be amended from time to time).

(b)             The Option is not intended to qualify as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").  The Option will be a non-qualified option to purchase Common Units, governed by Treasury Regulation § 1.83-7. Absent a change in law prior to the exercise of the Option, upon exercise of the Option, the excess of the Fair Market Value (as determined by the Administrator in its sole discretion under the terms of the Plan) of the Common Units and other property received over the Exercise Price shall be treated as income from the provision of services.

(c)             Except as otherwise provided herein, capitalized terms used herein that are not expressly defined herein shall have the meanings set forth in the Plan.

 

Exhibit 10.6 -- Page 1

 

2.             Time for Exercise.

(a)             Subject to the provisions of the Plan and the provisions of this Agreement (including the requirement that the Optionee continue to serve as an employee of, or consultant, advisor or other service provider to, the Company on the dates set forth below), the Option will be exercisable in accordance with the following schedule, provided that the Optionee has not incurred a Termination of Employment or Service prior to the applicable lapse date:

(i)             on the first anniversary of the Grant Date, the Option will vest with respect to, and may be exercised for up to, ______  percent (____%) of the Common Units subject to the Option; and

(ii)             on each succeeding anniversary of the Grant Date, the Option will vest with respect to, and may be exercised for up to, an additional ______ percent (____%) of the Common Units subject to the Option, so that on the ____ anniversary of the Grant Date the Option shall be fully vested and exercisable in full.

To the extent not exercised, installments shall be cumulative and may be exercised in whole or in part.  If the Optionee incurs a Termination of Employment or Service for any reason, the Option shall not continue to vest after such Termination of Employment or Service.

(b)             Notwithstanding any other provision of this Agreement to the contrary, upon the occurrence of a Change in Control, the Option shall become fully exercisable immediately prior to the occurrence of the Change in Control provided that the Optionee has not incurred a Termination of Employment or Service and continues to be employed by the Company or an Affiliate immediately prior to the occurrence of such Change in Control.  For purposes of this Agreement, the term "Change in Control" shall have the meaning ascribed to such term in any written employment agreement between the Optionee and the Company, as the same may be amended or modified from time to time, or if the Optionee is not a party to any such written employment agreement, then the term "Change in Control" shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:  (i) the consummation of any sale or other disposition, made by the then current Members (as that term is defined in the Company Agreement) determined immediately before such sale or other disposition, of all or substantially all of the issued Units (as that term is defined in the Company Agreement) after which such Persons do not Control, directly or indirectly, the Company; or (ii) the sale or other disposition of substantially all of the assets of the Company to any Person (or group of Persons acting together) which is not Controlled, directly or indirectly, by the Persons who comprise the Members immediately prior to such sale or other disposition.  For purposes of this Agreement, the term "Control" means, with respect to any Person, (i) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities of such Person, and (ii) the right to direct the management or operations of such Person, directly or indirectly, whether through the ownership (directly or indirectly) of securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing.  For the avoidance of doubt, an issuance of Units by the Company, as part of a financing transaction or otherwise, shall not constitute a Change in Control.

3.             Expiration.  The Option shall expire on the tenth (10th) anniversary of the Grant Date (the "Option General Expiration Date"); provided, however, that the Option may earlier terminate as provided in this Paragraph 3 and/or in Section 9 of the Plan.

 

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(a)             Upon the Optionee's Termination of Employment or Service, that portion of the Option that is not vested and exercisable will automatically terminate and become null and void on the date of such Termination of Employment or Service and that portion of the Option that is vested and exercisable will terminate in accordance with the following:

(i)             if the Optionee's employment or other service relationship with the Company is terminated for Cause (as defined below), the vested and exercisable portion of the Option will terminate and become null and void on the date of such Termination of Employment or Service, but in no event later than the Option General Expiration Date;

(ii)             if the Optionee's employment or other service relationship with the Company is terminated by reason of the Optionee's death or disability (as such term is defined in Section 22(e) of the Code), the vested and exercisable portion of the Option will terminate on the date that is six (6) months immediately following the date of such Termination of Employment or Service, but in no event later than the Option General Expiration Date; and

(iii)             if the Optionee's employment with the Company is terminated for any reason other than death, disability or Cause, the vested and exercisable portion of the Option will terminate on the date that is thirty (30) days immediately following the date of such Termination of Employment or Service, but in no event later than the Option General Expiration Date.

(b)             For purposes of this Agreement, the term "Cause" shall have the meaning ascribed to such term in any written employment agreement between the Optionee and the Company, as the same may be amended or modified from time to time, or if the Optionee is not a party to any such written employment agreement, then the term "Cause" shall mean (i) the Optionee's continued failure substantially to perform the Optionee's duties to the Company (other than as a result of total or partial incapacity due to physical or mental illness) for a period of ten (10) days following notice by the Company to the Optionee of such failure, (ii) intentional dishonesty in the performance of the Optionee's duties to the Company, (iii) the Optionee's indictment for, conviction of, or plea of nolo contendere to a crime constituting (A) a felony under the laws of the United States or any state thereof or (B) a misdemeanor involving moral turpitude, (e) the Optionee's willful malfeasance or willful misconduct in connection with the Optionee's duties to the Company or any act or omission that is injurious to the financial condition or business reputation of the Company or any of its Affiliates, or (v) the Optionee's breach of the provisions of any non-competition and/or confidentiality agreement with the Company, or any other restrictive covenants in favor of the Company and/or its Affiliates to which the Optionee is subject.

4.             Method of Exercise.  The Option may be exercised by the Optionee at any time, or from time to time, in whole or in part, on or prior to the termination of the Option (as set forth in Paragraph 3 of this Agreement).  If the Optionee wishes to exercise the Option, in whole or part, the Optionee shall (a) deliver to the Company (Attention:  Chief Financial Officer) a fully completed and executed notice of exercise (the "Exercise Notice"), on such form as may hereinafter be designated by the Administrator in its sole discretion, specifying the exercise date and the number of Common Units to be purchased pursuant to such exercise and (b) remit to the Company in cash or by check, bank draft or money order payable to the order of the Company or on such other terms and conditions as may be acceptable to the Administrator in its sole discretion, the Exercise Price for the Common Units to be acquired on exercise of the Option, plus an amount sufficient to satisfy any withholding tax obligations of the Company and its Affiliates that arises in connection with such exercise (as determined by the Administrator).  The Company's obligation to deliver Common Units to the Optionee under this Agreement is subject to and conditioned upon the Optionee satisfying all tax obligations associated with the Optionee's receipt, holding and exercise of the Option.  The Company and its Affiliates, as applicable, shall be entitled to deduct from any payments otherwise due to the Optionee the amount necessary to satisfy all such taxes.  Upon full payment of the Exercise Price and satisfaction of all applicable tax obligations, and subject to the applicable terms and conditions of this Agreement, the Company shall cause the Common Units purchased hereunder to be issued to the Optionee.

 

Exhibit 10.6 -- Page 3

 

5.             Issuance of Units; Effect of Exercise.  Upon the exercise of all or a portion of the Option, subject to Paragraph 10 hereof, the Company shall, as soon as practicable after receipt of the Exercise Notice, (a) credit the Optionee's Capital Account (as such term is defined in the Company Agreement) with an amount equal to the aggregate Exercise Price paid by the Optionee, plus the amount of any income recognized by the Optionee in connection with such exercise as described in Paragraph 1(b) hereof, and (b) issue Common Units registered on its books and in its records in the name of the Optionee.  Furthermore, upon such exercise of the Option, the Optionee shall be treated as having received a cash payment equal to the amount so recognized as income, and such amount shall be treated as having been contributed by the Optionee to the Company, for purposes of determining the Optionee's share of the tax basis in the Company's assets for applicable income tax purposes.  Following the credit to the Optionee's Capital Account as described above, the Optionee shall be entitled to profits, losses and distributions of the Company attributable to such Common Units as determined under the Company Agreement on a going-forward basis as of the date of the Exercise Notice.

6.             Common Units Subject to Company Agreement.  The Optionee acknowledges and agrees that any Common Units acquired by the Optionee pursuant to this Agreement shall be subject to all of the terms and provisions of the Company Agreement and that any such Common Units may be transferred only in accordance with the terms of the Company Agreement.  Upon exercise of the Option, the Optionee will automatically become a party to the Company Agreement.  The Optionee agrees to execute, in connection with the exercise of the Option, such further documentation as reasonably requested by the Company or the Administrator to evidence the admission of the Optionee to the Company.

7.             Tax Withholding.  To the extent that the receipt of the Option or this Agreement, the vesting of the Option or the exercise of the Option results in income to the Optionee for federal, state or local income, employment or other tax purposes with respect to which the Company or its Affiliates have a withholding obligation, the Optionee shall deliver to the Company at the time of such receipt, vesting or exercise, as the case may be, such amount of money as the Administrator may require to meet such obligation under applicable tax laws or regulations, and, if the Optionee fails to do so, the Company and any Affiliate is authorized to withhold from the Common Units subject to the Option (based on the Fair Market Value of such Common Units as of the date the amount of tax to be withheld is determined) or from any cash or other remuneration then or thereafter payable to the Optionee any tax required to be withheld by reason of such taxable income, sufficient to satisfy the withholding obligation.  As of the Grant Date, the Company has no obligation under any federal, state or local income, employment or other tax law to withhold any taxes with respect to an independent contractor and, if the Optionee is characterized by the Company as an independent contractor, the Optionee acknowledges and agrees that, until any applicable tax laws are otherwise revised to expressly otherwise provide, he or she, and not the Company, is responsible for all tax reporting and payments with respect to the receipt of the Option or this Agreement, the vesting of the Option or the exercise of the Option and the Optionee agrees to indemnify and hold the Company harmless from all costs and expenses incurred by the Company from the Optionee's failure to properly report and pay all taxes imposed on an independent contractor granted an option under the Plan.

 

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8.             No Fractional Units.  All provisions of this Agreement concern whole Common Units of the Company.  If the application of any provision hereunder would yield a fractional unit, such fractional unit shall be rounded down to the next whole unit if it is less than 0.5 and rounded up to the next whole unit if it is 0.5 or more.

9.             Capital Adjustments and Reorganizations. The existence of the Option shall not affect in any way the right or power of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other act or proceeding.

10.           Compliance With Legal Requirements.

(a)             The Option shall not be exercisable and no Common Units shall be issued or transferred pursuant to this Agreement or the Plan unless and until all tax withholding, if any, and legal requirements applicable to such issuance or transfer have, in the opinion of counsel to the Company, been satisfied.  Such legal requirements may include, but are not limited to, (i) registering or qualifying such Common Units under any state or federal law or under the rules of any stock exchange or trading system, (ii) satisfying any applicable law or rule relating to the transfer of unregistered securities or demonstrating the availability of an exemption from applicable laws, (iii) placing a restricted legend on the Common Units issued pursuant to the exercise of the Option, or (iv) obtaining the consent or approval of any governmental regulatory body.

(b)             The Optionee understands that the Company is under no obligation to register for resale the Common Units issued upon exercise of the Option.  The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any exercise of the Option and/or any resales by the Optionee or other subsequent transfers by the Optionee of any Common Units issued as a result of the exercise of the Option, including without limitation (i) restrictions under an insider trading policy, (ii) restrictions that may be necessary in the absence of an effective registration statement under the Securities Act of 1933, as amended, covering the Option and/or the Common Units underlying the Option and (iii) restrictions as to the use of a specified brokerage firm or other agent for exercising the Option and/or for such resales or other transfers.  The sale of the Common Units underlying the Option must also comply with other applicable laws and regulations governing the sale of such Common Units.

11.           Rights as a Member.  The Optionee shall not become or otherwise be treated as a Member with respect to any of the Common Units subject to the Option, except to the extent that such Common Units shall have been purchased by the Optionee and issued and transferred by the Company to the Optionee.

 

Exhibit 10.6 -- Page 5

 

12.           Assignment or Transfer Prohibited.  The Option may not be assigned or transferred otherwise than by will or by the laws of descent and distribution, and may be exercised during the life of the Optionee only by the Optionee or the Optionee's guardian or legal representative.  Neither the Option nor any right hereunder shall be subject to attachment, execution or other similar process.  In the event of any attempt by the Optionee to alienate, assign, pledge, hypothecate or otherwise dispose of the Option or any right hereunder, except as provided for herein, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Optionee, and the Option shall thereupon become null and void.

13.           Investment Intent.  The Optionee hereby represents that as of the dates any of the Common Units are acquired by the Optionee, such Common Units will be acquired for the Optionee's own account, for investment and not with a view to the distribution thereof.  The Optionee understands that the Common Units have not been registered under federal securities law pursuant to an exemption from the registration provisions thereof.  The Optionee hereby agrees that the Common Units that have been or will hereafter be acquired by the Optionee pursuant to an exemption from the registration provisions shall not be sold, transferred, pledged, or hypothecated unless the sale of or other transaction concerning such Common Units is registered under applicable federal law or unless there is furnished an opinion of counsel reasonably satisfactory to the Administrator that registration of such Common Units is not required.  The Optionee understands that the Company is under no obligation to register under applicable law the Common Units to be acquired under the Option, and that an exemption from registration may not be available in connection with any resale of any Common Units acquired.  The provisions of this paragraph shall remain in effect until, in the opinion of counsel for the Company, they are no longer required.

14.           Administrator Authority.  Any question concerning the interpretation of this Agreement or the Plan, any adjustments required to be made under this Agreement or the Plan, and any controversy that may arise under this Agreement or the Plan shall be determined by the Administrator in its sole and absolute discretion.  All decisions by the Administrator shall be final and binding.

15.           Application of the Plan and the Company Agreement.  The terms of this Agreement are governed by the terms of the Plan and the Company Agreement, as they exist on the date hereof and as the Plan and the Company Agreement are amended from time to time.  In the event of any conflict between the provisions of this Agreement and the provisions of the Plan or the Company Agreement, the terms of the Plan and the Company Agreement shall control, and in the event of any conflict between the provisions of the Plan and the Company Agreement, the terms of the Company Agreement shall control, except as expressly stated otherwise herein.  As used herein, the term "Section" generally refers to provisions within the Plan (except as otherwise indicated herein), and the term "Paragraph" refers to provisions of this Agreement.

16.           Employment or Service Relationship. For purposes of this Agreement, the Optionee shall be considered to be in the employment of the Company and its Affiliates as long as the Optionee has an employment relationship with the Company or its Affiliates or shall be considered to be a consultant, advisor or other service provider as long as the Optionee provides such services to the Company or its Affiliates.  The Administrator shall determine any questions as to whether and when there has been a termination of such employment or service relationship and whether and when a Termination of Employment or Service has occurred, and the cause of such termination, under the Plan, and the Administrator's determination shall be final and binding on all persons.

 

Exhibit 10.6 -- Page 6

 

17.           No Right to Continued Employment.  Nothing in the Plan, in this Agreement or any other instrument executed pursuant thereto or hereto shall confer upon the Optionee any right to continued employment with the Company or its Affiliates or the right to continue to provide consulting, advisory or other services to the Company or any of its Affiliates.  This Agreement is not an employment or service agreement, and no provision of this Agreement shall be construed or interpreted to create an employment or other service relationship between the Optionee and the Company or any of its Affiliates or guarantee the right to remain employed by or to continue to provide services to the Company or any of its Affiliates, for any specified term or require the Company or any of its Affiliates to employ or utilize the services of Optionee for any period of time.

18.           Further Assurances.  Each party hereto shall cooperate with each other party, shall do and perform or cause to be done and performed all further acts and things, and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan.

19.           Entire Agreement.  This Agreement, the Plan and the Company Agreement together set forth the entire agreement and understanding between the parties as to the subject matter hereof and supersede all prior oral and written and all contemporaneous or subsequent oral discussions, agreements and understandings of any kind or nature.

20.             Successors and Assigns.  Subject to the limitations which this Agreement imposes upon the transferability of the Option granted hereby, the provisions of this Agreement will inure to the benefit of, and be binding on, the Company and its successors and assigns and the Optionee and the Optionee's legal representatives, heirs, legatees, distributees, and permitted assigns and transferees by operation of law, whether or not any such person will have become a party to this Agreement or the Company Agreement and agreed in writing to join herein or therein and be bound by the terms and conditions hereof and the Company Agreement.

21.           Gender and Number.  If the context requires, words of one gender when used in this Agreement will include the other genders, and words used in the singular or plural will include the other.

22.           Severability.  In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

23.           Headings.  Headings of Paragraphs are included for convenience of reference only and do not constitute part of this Agreement and shall not be used in construing the terms and provisions of this Agreement.

24.           Governing Law.  This Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law provisions.

 

Exhibit 10.6 -- Page 7

 

25.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

C-BOND SYSTEMS, LLC

By:  ______________________________

Name:  ____________________________

 Title:  _____________________________

Accepted and Agreed:

_____________________________________________

 Optionee's Name:

 

 

Exhibit 10.6 -- Page 8Exhibit 10.7

C-BOND SYSTEMS, LLC

RESTRICTED UNITS AWARD AGREEMENT

This RESTRICTED UNITS AWARD AGREEMENT (the "Agreement") is made as of [                   ] (the "Grant Date"), between C-Bond Systems, a Texas limited liability company (the "Company"), and [                     ] (the "Grantee").

Background Information

A. The Company has granted to the Grantee an award of [                ] restricted common unitsCommon Units (the "Common Units"), of the Company (the "Award").

B. The Company and the Grantee are entering into this Agreement in order to evidence the Award, which shall be governed in all respects by the terms and provisions hereof.

C. The Grantee desires to accept the Award grant and agrees to be bound by the terms and conditions of this Agreement.

Agreement

1. Restricted Units. Subject to the terms and conditions provided in this Agreement, the Company hereby grants to the Grantee [               ] Common Units (the "Restricted Units") as of the Grant Date. The extent to which the Grantee's rights and interest in the Restricted Units becomes vested and non-forfeitable shall be determined in accordance with the provisions of Sections 2 and 3 of this Agreement.

2. Vesting. Except as may be otherwise provided in Section 3 of this Agreement, the vesting of the Grantee's rights and interest in the Restricted Units shall be determined in accordance with this Section 2. The Grantee's rights and interest in the Restricted Units shall become fully vested and non-forfeitable on May 1, 2019, subject to adjustment by mutual agreement of the Company's Managing Members or Board of Directors and the Grantee, provided that (1) the Company does not terminate the employment of the Grantee for cause prior to May 1, 2019, with said cause being defined as a conviction of a felony or Grantee's being prevented from providing services hereunder as a result of Grantee's violation of any law, regulation and/or rule.; or (2) Grantee resigns prior to the vesting date set forth above.

  3. Change in Control. In the event of a Change in Control (as defined below), Restricted Units that is not yet vested on the date such Change in Control is determined to have occurred shall become fully vested on the date such Change in Control is determined to have occurred.  A "Change in Control" means the happening of any of the following: (i) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" as such term is used in Section 13(d) and 14(d) of the Exchange Act of 1934, as amended (the "Exchange Act") (other than any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities entitled generally to vote in the election of the Board of Directors (other than the occurrence of any contingency); (ii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation or entity, which is consummated, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (iii) the effective date of a complete liquidation of the Company or the consummation of an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, which in both cases are approved by the stockholders of the Company as may be required by law.   Notwithstanding the foregoing, the merger of the Company and a subsidiary of WestMountain Alternative Energy, Inc. shall not be a Change of Control.

 

 

Exhibit 10.7 -- Page 1

  

4. Restrictions on Transfer; Legending of Shares. Until such time as any share of Restricted Units becomes vested pursuant to Section 2 or Section 3 of this Agreement, the Grantee shall not have the right to make or permit to occur any transfer, pledge or hypothecation of all or any portion of the Restricted Units, whether outright or as security, with or without consideration, voluntary or involuntary. Any transfer, pledge or hypothecation not made in accordance with this Agreement shall be deemed null and void. The certificate evidencing the Restricted Units shall contain a legend in substantially the following form:

 

	
"The common units evidenced by this certificate are subject to restrictions on transfer set forth in the Restricted Units Award Agreement, dated [            ], between C-Bond Systems, LLC (the "Company") and [                 ], a copy of which may be obtained from the Company at its principal executive offices."

	 
	
"The Common Units of the Company represented hereby have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws and may not be transferred, pledged, hypothecated or otherwise disposed of in the absence of an effective registration statement covering such shares under that Act and any applicable state securities laws, unless, in the opinion of counsel satisfactory to the Company, an exemption from registration thereunder is available."

5. Forfeiture. The Grantee shall forfeit all of his rights and interest in the Restricted Units if the Grantee resigns prior to the vesting date defined in paragraph 2 OR is terminated for cause, as defined in 2 above.  In the event the Grantee's employment is terminated for any other reason, the Restricted Units will continue to vest in accordance with Section 2 and/or Section 3 of this Agreement.

6. Shares Held by Custodian; Rights to Dividends and Voting Rights. The Grantee hereby authorizes and directs, at the Grantee's option, the Company to deliver any common unit certificate issued by the Company to evidence the award of Restricted Units to the Secretary of the Company or such other officer of the Company (other than the Grantee) as may be designated by the Company's Board of Directors or the Compensation Committee of such Board (the "Share Custodian") to be held by the Share Custodian until the Restricted Units becomes fully vested in accordance with Section 2 or Section 3 of this Agreement. When the Restricted Units becomes vested, the Share Custodian shall deliver to the Grantee (or his beneficiary in the event of death) a certificate representing the vested Restricted Units (which then will be unrestricted) and may delete the first paragraph of the legend set forth in Section 4 above. The Grantee hereby irrevocably appoints the Share Custodian, and any successor thereto, as the true and lawful attorney-in-fact of the Grantee with full power and authority to execute any stock transfer power or other instrument necessary to transfer the Restricted Units to the Company, or to transfer the Restricted Units to the Grantee on an unrestricted basis upon vesting, pursuant to this Agreement, in the name, place, and stead of the Grantee. The term of such appointment shall commence on the Grant Date and shall continue until the Restricted Units becomes vested or is forfeited. During the period that the Share Custodian holds the Restricted Units subject to this Section 6, the Grantee shall be entitled to all rights applicable to Common Units of the Company not so held, including the right to vote and receive dividends, but provided, however, in the event of (i) any change in the Common Units of the Company by reason of any unit dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation, reorganization, combination or exchange of units or (ii) any distribution of Common Units or other securities of the Company in respect of such Common Units, the Grantee agrees that any certificate representing  such additional Common Units or other securities of the Company issued as a result of any of the foregoing shall be delivered to the Share Custodian and shall be subject to all of the provisions of this Agreement as if initially received hereunder.

7. Tax Consequences. Upon the occurrence of a vesting event specified in Section 2 or Section 3 above, the Grantee is responsible for all federal, state, local or foreign income and social insurance withholding taxes imposed by reason of the vesting of the Restricted Units.

The Grantee understands that the Grantee may elect to be taxed at the Grant Date rather than when the Restricted Units becomes vested by filing with the Internal Revenue Service an election under section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), within thirty (30) days from the Grant Date. The Grantee acknowledges that it is the Grantee's sole responsibility, and not the Company's responsibility, to timely file the Code section 83(b) election with the Internal Revenue Service if the Grantee intends to make such an election. Grantee agrees to provide written notification to the Company if the Grantee files a Code section 83(b) election.

8. No Effect on Employment. Nothing in this Agreement shall confer upon the Grantee the right to continue in the employment of the Company or affect any right which the Company may have to terminate the employment of the Grantee regardless of the effect of such termination of employment on the rights of the Grantee or this Agreement.

 

 

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9. Governing Laws. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas, without regard to any applicable conflicts of law. By accepting this Award, the Grantee irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Texas or of the United States of America, in each case located in Harris County, Texas, for any litigation arising out of or relating to this Agreement (and agrees not to commence any litigation relating thereto except in such courts). The Grantee also irrevocably and unconditionally waives any objection to the laying of venue of any litigation arising out of or related to this Award in the courts of the State of Texas or of the United States of America, in each case located in Harris County, Texas, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such litigation brought in any such court has been brought in an inconvenient forum.

10. Successors. This Agreement shall inure to the benefit of, and be binding upon, the Company and the Grantee and their heirs, legal representatives, successors and permitted assigns.

11. Severability. In the event that any one or more of the provisions or portion thereof contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.

12. Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) three (3) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows:

If to the Company:

C-Bond Systems, LLC

6035 South Loop East

Houston, TX 77033

If to Grantee:

[                    ]

[                    ]

[                    ]

13. Entire Agreement.  This Agreement expresses the entire understanding and agreement of the parties hereto with respect to the terms and conditions of this Award.

14. Headings. Section headings used herein are for convenience of reference only and shall not be considered in construing this Agreement.

 

15. Additional Acknowledgements. By their signatures below (including electronic signatures), the Grantee and the Company agree that the Restricted Units are granted under and governed by the terms and conditions of this Agreement. Grantee has reviewed the terms of this Agreement, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement. Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Compensation Committee of the Company's Board of Directors upon any questions relating to this Agreement.

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the Grant Date set forth above.  

 

	
C-BOND SYSTEMS, LLC

	 
	
By:

	 
	
GRANTEE:

	 
	
 

	 

 

 

Exhibit 10.7 -- Page 3

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