Document:

f8k092813ex4iii_global.htm

Exhibit 4.3

 

	WARRANT HOLDER:    	(Name) 
	 	(Street)
	 	(City, State, Zip)

  

NUMBER OF WARRANT SHARES: _______________

­­­

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.  

IN ADDITION, THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR ENCUMBERED WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY TO SUCH PROPOSED SALE, PLEDGE, TRANSFER OR ENCUMBRANCE AND TO THE PROPOSED ASSIGNEE, PLEDGEE OR TRANSFEREE.  

No. _____________

Issuance Date: _______________

UNIVERSAL TECHNOLOGY SYSTEMS CORP.

 

Common Stock Purchase Warrant

Universal Technology Systems Corp., a Florida corporation, for value received, hereby grants to the holder as indicated at the beginning of this Warrant, its successors and permitted assigns (collectively, the "Holder"), this right (the "Warrant"), subject to the terms set forth below, to purchase at the purchase price per share as defined in Section 2.1 below (the "Purchase Price"), up to that number of Shares (defined below), subject to adjustment as herein provided (such total number of Shares that may be purchased hereunder being referred to herein as the "Warrant Shares").

 

1.     Definitions.  As used herein, the following terms, unless the context otherwise requires, have the following respective meanings: 

1.1."Company" shall include Universal Technology Systems Corp., a Florida corporation, and, unless otherwise noted to the contrary, any company which shall succeed to, by merger, consolidation or similar arrangement of the Company's and assume the obligations of Universal Technology Systems Corp. hereunder. 

1.2."Other Securities" refers to any stock (other than the Shares) and other securities of the Company or any other person (corporate or otherwise) that the Holder at any time shall be entitled to receive, or shall have received, on the exercise of this Warrant, in lieu of or in addition to Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Shares. 

 

  

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1.3."Shares" means (a) the Company's Common Stock, as authorized on the date of this Warrant and (b) if the class of securities described in (a) shall cease to be issued and outstanding, securities of the same class issued in exchange for or in respect of the securities described in (a) pursuant to a plan of merger, consolidation, recapitalization or reorganization, the sale of substantially all of the Company's assets or a similar transaction. 

1.4.“Registrable Common Stock” means the number of shares of common stock underlying the warrants issued hereunder.  As to any particular Registrable Common Stock, such securities will cease to be Registrable Common Stock when they (a) have been effectively registered under the Securities Act of 1933, as amended (the “Act”) and obtained or disposed of in accordance with the registration statement covering them, (b) have been transferred pursuant to Rule 144 under the Act (or any similar provision then in force), or (c) are no longer subject to restrictions under transfer pursuant to the provisions of Rule 144(k) under the Act.

1.5."Registration Expenses" means all ex­penses incident to the Company's performance of or compliance with this Agreement, including all registra­tion and fil­ing fees, fees and expenses of compliance with secur­ities or blue sky laws, printing expenses, messenger and delivery ex­penses, expenses and fees for listing the securities to be reg­is­tered on exchanges on which similar securities issued by the Company are then listed, and fees and disbursements of counsel for the Company (but not of counsel to the Shareholder) and of all independent certified public accoun­tants, underwriters (other than Underwriting Commissions) and other persons retained by the Company.

1.6."Underwriting Commissions" means all underwriting discounts or commissions relating to the sale of secur­ities of the Company. 

2.     Exercise of Warrant. 

2.1.     Purchase Price.  The Warrant may be exercised, subject to the terms specified herein, at the purchase price of $_______per Share (the "Purchase Price").  

2.2.     Exercise Period.  The Warrant may be exercised (the "Exercise Period") at any time from the date of grant to and including the _______ anniversary of the Issuance Date (the “Expiration Date”).  

2.3.Shares.  The number of shares subject to this warrant is ____________, subject to the terms specified herein.

2.4.Exercise in Full.  Subject to the limitations stated above, this Warrant may be exercised in full at the option of the Holder by surrender of this Warrant, with the form of subscription at the end hereof duly executed by the Holder, to the Company at its principal office in the United States, accompanied by payment, in cash or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of Shares for which this Warrant may be exercised by the Purchase Price.

 

  

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2.5.     Partial Exercise.  This Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in subsection 2.4 along with payment in the amount determined by multiplying (a) the number of Shares designated by the holder in the subscription at the end hereof by (b) the Purchase Price.  On any such partial exercise, the Company at its expense will forthwith issue and deliver to or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of Shares for which such Warrant or Warrants may still be exercised.

 

2.6.     Call Right. The Company shall have the right to call the exercise of all, or the remaining portion of this Warrant outstanding and unexercised at the Purchase Price in the event (i) the Volume Weighted Average Price (“VWAP”) of the Company’s Common Stock equals or exceeds Five Dollars Cents ($5.00) per share during any ten (10) consecutive trading days, (ii) the average trading volume of the Company’s Common Stock during any ten (10) consecutive trading days is at least $100,000 per day, and (iii) all Shares for which this Warrant is exercisable are registered for resale by the Holder (the “Call Conditions”). For the purposes of this Warrant, the “VWAP” shall be the volume weighted average price reported by Bloomberg for the Common Stock.  In the event the Call Conditions are satisfied and the Company desires to exercise its call rights under this section the Company shall deliver a notice to each registered Holder of the Warrants setting for the number of Warrants held and the dollar amount due to exercise the Warrants (the “Call Notice”).  Each Holder shall have thirty (30) calendar days from the receipt of the Call Notice to exercise the unexercised portion of the Warrants (the “Call Period”).  Upon the expiration of the Call Period, any unexercised Warrant shall automatically expire.

3.     Delivery of Share Certificates on Exercise. 

3.1.As soon as practicable after the exercise of this Warrant in full or in part, the Company, at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of fully paid and non-assessable Shares (or Other Securities) to which the Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the then current market value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which the Holder is entitled upon such exercise pursuant to Section 2 or otherwise.

 

  

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4.     Covenants as to Shares.

 

4.1.Issuance of Shares upon Exercise.  All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof.  The Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of its Shares to provide for the exercise of the rights represented by this Warrant.

 

4.2 Restrictions on Transfer.  Holder represents to the company that it is acquiring the Warrants for its own investment account and without a view to the subsequent public distribution of the Warrants or Shares otherwise than pursuant to an effective registration statement under the Securities Act.  Each Warrant and each certificate for Shares issued to the Holder and any subsequent holder that have not been sold to the public pursuant to an effective registration statement under the Securities Act or as to which the restrictions on transfer have not been removed as hereinafter provided, shall bear a restrictive legend reciting that the same have not been registered pursuant to the Securities Act and may not be transferred in the absence of an effective registration statement under the Securities Act, the holder thereof shall give written notice to the Company of its intention to effect such transfer.  Each such notice shall describe the manner of the proposed transfer and shall be accompanied by an opinion of counsel experienced in federal securities laws matters and reasonably acceptable to the company and its counsel to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon, the holder of such Registrable Common Stock shall be entitled to transfer such securities in accordance with the terms of its notice and such opinion.  Restrictions imposed under this Section 4 upon the transferability of the Warrants or of Shares shall cease when:

(a) a registration statement covering such Shares becomes effective under the Securities Act, or

(b) the Company receives from the holder thereof an opinion of counsel experienced in federal securities laws matters, which counsel shall be reasonably acceptable to the Company, that such restrictions are no longer required in order to insure compliance with the Securities Act.

5.     Adjustment for Reorganization, Consolidation or Merger.

 

5.1.Reorganization, Consolidation or Merger.  If at any time or from time to time, the Company shall (a) effect a  plan of merger, consolidation, recapitalization or reorganization or similar transaction with a corporation (the "Acquiror") whereby the shareholders of the Company will exchange their shares of the Company for the shares of the parent corporation of the Acquiror, or (b) transfer all or substantially all of its properties or assets to any other person, under any plan or arrangement contemplating the dissolution of the Company (which along with any transactions set forth in (a) hereof shall be an "Extraordinary Transaction"), then, in each such case, the holder of this Warrant, on the exercise hereof as provided in Section 2 at any time after the  completion of any Extraordinary Transaction shall receive, such Shares or Other Securities and property (including cash) to which such holder would have been entitled in any Extraordinary Transaction as if such holder had so exercised this Warrant, immediately prior thereto. 

 

  

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5.2.Dissolution.  If the Company dissolves following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder after the effective date of such dissolution pursuant to this Section 5.

 

5.3.Continuation of Terms.  Upon any Extraordinary Transaction, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the securities, Shares and Other Securities and property receivable on the exercise of this Warrant after the consummation of reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, any Extraordinary Transaction and shall be binding upon the party or parties to the Extraordinary Transaction and their successors, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 7. 

6.     Adjustments for Other Events. 

6.1.Changes in Capital Structure.  If the Company shall (a) issue additional Shares as a dividend or other distribution on outstanding Shares, (b) subdivide its outstanding Shares, or (c) combine its outstanding Shares into a smaller number of Shares, then, in each such event, the Shares immediately prior to such event shall, simultaneously with the happening of such event, be adjusted by multiplying the Warrant Shares by a fraction, the numerator of which shall be the total number of Shares issued and outstanding immediately after such event and the denominator of which shall be the total number of Shares issued and outstanding immediately prior to such event, and the product so obtained shall thereafter be the Warrant Shares then in effect.  The Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 6.  After any such event specified in this subsection 6.1, the original Purchase Price shall continue to apply to any exercise of the Warrant, except that the Purchase Price shall be adjusted in any such event by multiplying the Purchase Price by a fraction the numerator of which shall be the total number of Shares issued and outstanding immediately before such event and the denominator of which shall be the total number of shares issued and outstanding immediately after such event, provided, however, the Warrant Shares shall not be issued at a discount from the par value stated in the Company's Articles of Incorporation.

7.     Notices of Record Date, etc.  In the event of:

 

7.1.any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or 

  

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7.2.any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company any other person, or 

 

7.3.any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (a) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (b) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Shares (or Other Securities) shall be entitled to exchange their Shares (or Other Securities) for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 10 days prior to the date specified in such notice on which any such action is to be taken.

8.     Transfers.

8.1.The Warrants are not transferable, in whole or in part, without compliance with the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities laws.  

8.2.Subject to subsection 8.1, this Warrant, or any portion hereof, may be transferred by the Holder's execution and delivery of the form of assignment attached hereto along with this Warrant.  Any transferee shall be required, as a condition to the assignment, to deliver all such documentation as the Company deems appropriate.  However, until such assignment and such other documentation are presented to the Company at its principal offices in the United States, the Company shall be entitled to treat the registered holder hereof as the absolute owner hereof for all purposes. 

8.3.Upon a transfer of this Warrant in accordance with this Section 8, the Company, at its expense, will issue and deliver to or on the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, calling in the aggregate on the face or faces thereof for the Shares called for on the face or faces of the Warrant or Warrants so surrendered.  If this Warrant is divided into more than one Warrant, or if there is more than one Holder thereof, all references herein to "this Warrant" shall be deemed to apply to the several Warrants, and all references to "the Holder" shall be deemed to apply to the several Holders, except in either case to the extent that the context indicates otherwise. 

8.4.To the extent the Holder is a party to the Registration Rights Agreement, the Warrants issued hereunder shall be subject to the transfer restrictions and other provisions set forth therein.

 

  

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9.     Replacement of Warrants. 

 

9.1.On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction of any Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

10.   Piggyback Registrations.

(a)   Right to Piggyback.  Whenever the Company proposes to register under the Act any of its common stock for sale to the public for cash in an underwritten offering, and the registration form to be used would permit inclusion thereto of the Registrable Common Stock (a "Piggyback Registration"), the Company will give prompt written notice to Shareholder and will include in such Piggyback Registration, subject to the allocation provisions below, all Registrable Common Stock with respect to which the Company has received from the Shareholder a written request for in­clusion within 30 days after the Company's sending of such notice; provided however, that the Company shall not be required to effect any registration of Registrable Common Stock if (i)  the registration is the Company’s underwritten offering, (ii) registration is effected by the Company on behalf of a shareholder exercising registration rights that pursuant to the terms thereof prohibit the shareholder's shares from being included in such registration (a "Limited Demand Registration"), (iii) the Registrable Common Stock was previously included in a Registration Statement, whether an underwritten offering or otherwise, or (iv) the registration statement is filed or effected on Form S-4 or Form S-8, each as promulgated under the 1933 Act, or their then equivalents.

(b)            Piggyback Expenses.  In a Piggyback Registra­tion, the Company will pay the Registration Expenses related to the sale of Registrable Common Stock by the Shareholder, but the Shareholder will pay the Underwriting Commissions related to the sale of such Registrable Common Stock; provided, however, that the Shareholder will pay its pro rata share of Registration Expenses incurred by the Company in connection with the registration if required to do so in connection with any Blue Sky law clearance sought by the Company.

(c)            Mandated Reduction of Registrable Shares.  If, for any reason, the Commission requires that the number of Registrable Shares to be registered for resale pursuant to the Registration Statement in connection with any Registration Statement, be reduced, such reduction (the “Cut Back Shares”) shall be allocated pro rata among the holders whose shares have been included in such Registration Statement until the reduction required by the Commission is effected. 

(d)            Indemnification.

(i)  In connection with any registration statement in which the Shareholder is participating, the Company will indemnify, to the extent per­mitted by law, Shareholder, its officers and directors, and each person who controls such holder (within the meaning of the Act), against all losses, claims, damages, liabilities and expenses arising out of or resulting from any untrue or alleged untrue statement of material fact con­tained in such registration statement, prospectus or preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the state­ments therein not misleading, except insofar as the same are caused by or contained in any in­formation furnished in writing to the Company by or on behalf of the Shareholder or such other indemnified party ex­pressly for use therein or by the failure to de­liver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished the underwriters with a sufficient number of copies of the same.

 

  

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(ii) In connection with any registration statement in which the Shareholder is participating, the Shareholder will furnish to the Company in writing such information as is reasonably requested by the Company for use in any such registra­tion statement or prospectus and will indemnify, to the extent permitted by law, the Company, its directors and officers and each person who controls the Company (within the meaning of the Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact or any omission or alleged omis­sion of a material fact required to be stated in the regis­tration statement or prospectus or any amendment thereof or supplement thereto or necessary to make the statements therein not mislead­ing, but only to the extent that such untrue statement or omission is contained in information so furnished in writing by the Shareholder specifically for use in preparing the registration statement.

(iii)Any person entitled to indemnification hereunder will (a) give prompt notice (and in all events within 30 days) to the indemnifying party of any claim with respect to which it seeks indemnification and (b) unless a conflict of inter­est exists with respect to such claim that prohibits the parties from using counsel selected by the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satis­factory to the indemnified party.  If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld).  An indemnifying party who is not entitled, or elects not, to assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim.

(e)            Participation in Underwritten Registrations. The Shareholder may not participate in any regis­tration hereunder unless such holder (i) agrees to sell such holder's securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrange­ments under Section 10(e), and (ii) completes and executes all questionnaires, powers of attorney, custody agreements, indemnities, underwriting agreements and other docu­ments required under the terms of such underwriting arrangements.  

(f)             Subsequent Registration Rights. The Shareholder acknowledges that, from and after the date of this Agreement, the Company may enter into agreements with any holder or prospective holder of any securities of the Company that would allow such holders or prospective holders to include such securities in any registration, whether such registration is pursuant to a demand registration or a piggyback registration.

  

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11.            Notices. 

 

11.1.All notices required hereunder shall be deemed to have been given and shall be effective only when personally delivered or sent by Federal Express, DHL or other express delivery service or by certified or registered mail to the address of the Company's principal office in the United States as follows:

 

Universal Technology Systems Corp.

20 Trading Post Way

Medford Lakes, NJ  08055

in the case of any notice to the Company, and until changed by notice to the Company, to the address of the Holder set forth above in the case of any notice to the Holder.

12.            Miscellaneous. 

 

12.1.This Warrant and any term hereof may be changed, waived, discharged or terminated, other than on expiration, only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of Nevada.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  This Warrant embodies the entire agreement and understanding between the Company and the other parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

 

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

 

	 	
UNIVERSAL TECHNOLOGY SYSTEMS CORP.

	 
	 	 	 	 
	
 

	By:	 	 
	 	 	Dean L. Ledger, CEO	 

 

  

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FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO UNIVERSAL TECHNOLOGY SYSTEMS CORP.:

 

The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise such Warrant for, and to purchase thereunder, __________ Shares (as defined in the attached Warrant) and herewith makes payment of $___________ therefor, and requests that the certificates for such shares be issued in the name of, and delivered to _____________________, whose address is ___________________________________.

Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:

___________________________

___________________________

 

	Dated: 	 	 
	 	 	 

 

	 	
(Signature must conform in all respects to name of 

holder as specified on the face of the Warrant)

	 
	 	 	 
	 	 	 
	 	(Address)	 

 

  

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FORM OF ASSIGNMENT

 

 (To be signed only on transfer of Warrant) 

 

For value received, the undersigned hereby sells, assigns, and transfers unto ______________________________________________ whose address is ________________________________________________________the right represented by the attached Warrant to purchase _____________ Shares (as defined in the Warrant Agreement governing the attached Warrant) to which the within Warrant relates, and appoints __________________________ Attorney to transfer such right on the books of ____________________________ with full power of substitution in the premises. 

 

	Dated: 	 	 
	 	 	 

 

	 	
(Signature must conform in all respects to name of 

holder as specified on the face of the Warrant)

	 
	 	 	 
	 	 	 
	 	(Address)	 

 

Signature Guaranteed:  ___________________________________________

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

12f8k092813ex4iv_global.htm

Exhibit 4.4

 

QUALIFIED STOCK OPTION AGREEMENT

AGREEMENT (“Agreement”), dated September 24, 2013 by and between Universal Technology Systems Corp., a  Florida corporation (the “Company”), and _________________ (the “Optionee”).

 

Preliminary Statement

 

The Board of Directors of the Company (the “Board”) has authorized this grant of a qualified stock option (the “Option”) on _______________, 2013 (the “Grant Date”) to purchase the number of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) set forth below to the Optionee, as an Eligible Employee of the Company or an Affiliate (collectively, the Company and all Subsidiaries and Parents of the Company shall be referred to as the “Employer”).

 

Unless otherwise indicated, capitalized terms used but not defined herein are set forth hereto in Schedule A. By signing and returning this Agreement, the Optionee (i) acknowledges that the Company has not provided any tax advice to the Optionee regarding the grant or future exercise of the Option or the subsequent sale or transfer of shares of Common Stock issuable hereunder, and (ii) understands that the Optionee should consult with the Optionee’s personal financial, accounting and tax advisors regarding the same to the extent the Optionee deems necessary.

 

Accordingly, the parties hereto agree as follows:

 

1.         Grant of Option.The Company hereby grants to Optionee, an Option to purchase ______________ (______________) shares (“Shares”) of its Common Stock in the manner and subject to the conditions provided hereinafter.

 

2.         Vesting and Exercise.

(a) The Shares underlying the Option shall vest at the time of and shall have an exercise price (the “Option Exercise Price”) as set forth in Exhibit A attached hereto. The Option shall vest proportionately in the periods prior to each vesting date. To the extent that the Option has become vested and is exercisable as provided herein, the Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with Sections 6.3(c) and 6.3(d) of the Plan, including, without limitation, by the filing of any written form of exercise notice as may be required by the Board and payment in full of the Option Exercise Price multiplied by the number of shares of Common Stock underlying the portion of the Option exercised. Upon expiration of the Option, the Option shall be canceled and no longer exercisable.

(b)  (i) At the election of the Optionee and with the approval of the Board, all or any part of the Option that has vested and have not been earlier terminated may be exercised in lieu of making the cash payment to the Company of the aggregate Option Exercise Price by electing instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (“Cashless Exercise”):

 

Net Number = (A x (B - C))/B

 

(ii)   For purposes of the foregoing formula:

A= the total number shares with respect to which the Option is then being exercised.

B= the last reported sale price (as reported by Bloomberg) of the Common Stock on the trading day immediately preceding the date of the date of receipt by the Company of the exercise representation letter attached hereto as Exhibit B (the “Exercise Representation Letter”).

C= the Option Exercise Price then in effect at the time of such exercise.

 

  

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3.         Time of Exercise of Option. Any portion of the Option which has vested may be exercised; provided, however, no portion of the Option may be exercised 5 years after their respective date of vesting (“Vesting Expiration Date”) and any portion of the Option that has not been exercised on or prior to the Vesting Expiration Date shall be automatically forfeited and of no further effect without any action by the Company or the Board (a “Vesting Expiration”).

4.         Method of Exercise. All or a portion of the Option may be exercised by payment of the Option Exercise Price in cash or Cashless Exercise by the Optionee, unless another form of payment is authorized by the Board. In the event of payment of the Option Exercise Price by check, the Option shall not be considered exercised until receipt of cleared funds by the Company upon deposit of the check.

5.         Restrictions on Exercise and Delivery. Exercise of the Option, or any portion thereof, shall be subject to the conditions set forth below as determined by the Board in its sole and absolute discretion:

(a)       the satisfaction of any withholding tax or other withholding liabilities, is necessary or desirable as a condition of, or in connection with, such exercise or the delivery or purchase of Shares pursuant thereto,

(b)      the listing, registration, or qualification of any Shares deliverable upon such exercise is desirable or necessary, under any state or federal law, as a condition of, or in connection with, such exercise or the delivery or purchase of Shares pursuant thereto, or

(c)       the consent or approval of any regulatory body is necessary or desirable as a condition of, or in connection with, such exercise or the delivery or purchase of any Shares pursuant thereto,

then in any such event, such exercise shall not be effective unless such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Board. Optionee shall execute such documents and take such other actions as are required by the Board to enable it to effect or obtain such withholding, listing, registration, qualification, consent or approval. Neither the Company nor any officer or director, or member of the Board, shall have any liability with respect to the non-issuance of any portion of the Shares on exercise or failure to sell any Shares as the result of any suspensions of exercisability imposed pursuant to this Section.

6.         Expiration of Option. Except as otherwise provided in this Agreement, to the extent not previously exercised, the Option (or the relevant portion thereof) shall terminate upon the first to occur of any of the following events (the “Expiration Date”):

	  	
(a)

	
the dissolution or liquidation of the Company;

	  	
(b)

	
the date immediately preceding the tenth (10th) anniversary of the Grant date, in the case of the Ten Percent Stockholder as provide in code Section 422;

	  	
(c)

	
at the time of a breach by Optionee of any material provision of the Optionee’s Employment Agreement with the Company or any other written agreement between the Optionee and the Company; or

	  	
(d)

	
any portion of the Option that terminate pursuant to a Vesting Expiration.

 

  

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7.          Termination of Service. If the Optionee’s employment terminates, any portion of the Option which has vested shall expire on the earliest of the following occasions (or such later date as the Board may determine):

 

(a)       the Expiration Date;

(b)      the date three (3) months after the termination of the Optionee’s employment for any reason other than for Cause (including Disability (as defined in Section 22(e)(3) of the Internal Revenue Code), death and retirement);

(c)       the date of the Optionee’s termination of employment for Cause (as such term is defined in the Optionee’s Employment Agreement with the Company).

After the date Optionee’s employment terminates, the Optionee (or in the case of the Optionee’s death or Disability, the Optionee’s representative) may exercise all or any portion of the Option which has vested at any time before its (i) expiration under the preceding sentence or (ii) termination by operation of any of the events in paragraph 5 hereof. When the Optionee’s employment terminates, any portion of this Option which have not vested shall expire immediately without any further action by the Board or the Company.

8.          Assignability. This Option may not be sold, pledged, assigned or transferred (except by will or the laws of descent and distribution) unless with the written consent of the Company.

9.          Representation Letter. Upon exercise of all or any part of the Option, the Optionee will deliver to the Company the Exercise Representation Letter substantially the same as the one set forth on Exhibit B hereto, as such Exhibit may be amended by the Board from time to time. Optionee also agrees to make such other representations as are deemed necessary or appropriate by the Company and its counsel.

10.        Rights as Shareholder. Neither Optionee nor his or her executor, administrator, heirs or legatees, shall be, or have any rights or privileges of a shareholder of the Company in respect of the Shares unless and until certificates representing such Shares shall have been issued in Optionee's name.

11.        No Right of Employment. Neither the grant nor exercise of any Option nor anything in the Plan or this Agreement shall impose upon the Company any obligation to employ or continue to employ any Optionee. The right of the Company to terminate any employee shall not be diminished or affected because an Option has been granted to such employee.

 

12.        Mandatory Arbitration. In the event of any dispute between the Company and Optionee regarding this Agreement, the dispute and any issue as to the arbitrability of such dispute, shall be settled to the exclusion of a court of law, by arbitration in New York City, New York by a panel of three arbitrators (each party shall choose one arbitrator and the third shall be chosen by the two arbitrators so selected) in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. The decision of a majority of the arbitrators shall be final and binding upon the parties. All costs of the arbitration and the fees of the arbitrators shall be allocated between the parties as determined by a majority of the arbitrators, it being the intention of the parties that the prevailing party in such a proceeding be made whole with respect to its expenses.

13.        The Company’s Rights. The existence of the Option shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

14.        Optionee. Whenever the word “Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Board, to apply to the estate, personal representative, beneficiary to whom the Option or Shares may be transferred by will or by the laws of descent and distribution, or another permitted transferee, the word “Optionee” shall be deemed to include such person.

 

  

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15.        Section 409A Compliance. To the extent applicable, the Board may at any time and from time to time amend, in whole or in part, any or all of the provisions of this Agreement (in a manner determined by the Board in its sole discretion) solely to comply with Section 409A of the Code and the regulations promulgated thereunder.

16.        Incentive Stock Option. This Option is an Incentive Stock Option. Unless otherwise indicated by the Optionee in the notice of exercise, upon any exercise of this Option, the number of exercised Shares that shall be deemed to be exercised pursuant to an Incentive Stock Option shall equal the total number of Shares so exercised multiplied by a fraction, (i) the numerator of which is the number of unexercised Shares that could then be exercised pursuant to an Incentive Stock Option and (ii) the denominator of which is the then total number of unexercised Shares.

17.        Disqualifying Disposition. In the event that Common Stock acquired upon exercise of this Option is disposed of by the Participant in a “Disqualifying Disposition,” such Participant shall notify the Company in writing within thirty (30) days after such disposition of the date and terms of such disposition. For purposes hereof, “Disqualifying Disposition” shall mean a disposition of Common Stock that is acquired upon the exercise of this Option (and that is not deemed granted pursuant to a Nonqualified Stock Option under Section 17 hereof ) prior to the expiration of either two years from the Grant Date of this Option or one year from the transfer of shares to the Participant pursuant to the exercise of this Option.

18.        Notices. All notices and other communications made or given pursuant to this Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed by certified mail, addressed to the Optionee at the address contained in the records of the Company, or addressed to the Board, care of the Company to the attention of its Corporate Secretary at its principal office or, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties.

19.        Binding Effect. This Agreement shall be binding upon and inure to the benefit of Optionee, his heirs and successors, and of the Company, its successors and assigns. 

20.        Governing Law. This Agreement shall be governed by the laws of the State of Florida, without giving effect to principles of conflicts of laws.

21.        Descriptive Headings. Titles to Sections are solely for informational purposes.

  

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IN WITNESS WHEREOF, this Agreement is effective as of, and the date of grant shall be _____________.

	 	
UNIVERSAL TECHNOLOY SYSTEMS CORP.

	 
	 	
a Florida corporation

	 
	 	
 

	 
	 	 	 	 
	 	
By:

	
Dean Ledger

	 
	 	
Its:

	
Chief Executive Officer

	 
	 	  	 
	 	
OPTIONEE

	 
	 	
 

	 
	 	
Name:

	 

 

  

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SCHEDULE A

 

The following terms used but not defined in the Agreement and defined in the Plan have been provided below for the convenience of the Optionee but are qualified in their entirety by the full text of such terms in the Plan.

 

A.   “Affiliate” means each of the following: (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company; (d) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Board; provided that the Common Stock subject to any Award constitutes “service recipient stock” for purposes of Section 409A of the Code or otherwise does not subject the Award to Section 409A of the Code.

 

B.   “Board” means the Board of Directors of the Company.

 

C.   “Cause” means with respect to an Optionee’s Termination of Employment or Termination of Consultancy from and after the date hereof, the following: (a) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Optionee at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to: (i) an Optionee’s conviction of, or plea of guilty or nolo contendere to, a felony; (ii) perpetration by an Optionee of an illegal act, or fraud which could cause significant economic injury to the Company; (iii) continuing willful and deliberate failure by the Optionee to perform the Optionee’s duties in any material respect, provided that the Optionee is given notice and an opportunity to effectuate a cure as determined by the Board; or (iv) an Optionee’s willful misconduct with regard to the Company that could have a material adverse effect on the Company; or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Optionee at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter. With respect to an Optionee’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Florida law.

 

D.   “Code” means the Internal Revenue Code of 1986, as amended. Any reference to any section of the Code shall also be a reference to any successor provision and any Treasury Regulation promulgated thereunder.

H.   “Common Stock” means the common stock, $0.01 par value per share, of the Company.

 

I.     “Company” means Universal Technology Systems Corp., a Florida corporation, and its successors by operation of law.

 

J.   “Disability” means with respect to an Optionee’s Termination, a permanent and total disability as defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the time of the determination by the Board of the Disability. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that an Optionee is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

 

  

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K.   “Eligible Employees” means each employee of the Company or an Affiliate.

 

L.   “Fair Market Value” means, unless otherwise required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date: (a) as reported on the principal national securities exchange in the United States on which it is then traded, or (b) if the Common Stock is not traded, listed or otherwise reported or quoted, the Board shall determine in good faith the Fair Market Value in whatever manner it considers appropriate taking into account the requirements of Section 409A of the Code. For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Board or, if not a day on which the applicable market is open, the next day that it is open.

 

M.   “Incentive Stock Option” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parent (if any) under this Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

 

N.   “Non-Employee Director” means a director of the Company who is not an active employee of the Company or an Affiliate.

 

O.   “Non-Qualified Stock Option” means any Stock Option awarded under this Plan that is not an Incentive Stock Option.

 

P.   “Other Stock-Based Award” means an Award under Article X of this Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including, without limitation, a restricted stock unit or an Award valued by reference to an Affiliate.

Q.   “Parent” means any parent corporation of the Company within the meaning of Section 424(e) of the Code.

  

R.   “Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, incorporated organization, governmental or regulatory or other entity.

  

S.   “Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable Treasury regulations thereunder.

 

T.   “Securities Act” means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder. Any reference to any section of the Securities Act shall also be a reference to any successor provision.

 

U.   “Stock Option” or “Option” means any option to purchase shares of Common Stock granted to Eligible Employees, Non-Employee Directors or Consultants granted pursuant to Article VI of the Plan.

 

V.   “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.

 

W.   “Ten Percent Stockholder” means a person owning stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.

  

X.   “Transfer” means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in a Person), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in a Person) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law). “Transferred” and “Transferrable” shall have a correlative meaning.

 

  

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EXHIBIT A

VESTING SCHEDULE AND OPTION EXERCISE PRICE

	
Number of Shares

	  	
Vesting Dates

	  	
Exercise Price per Share

 

  

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EXHIBIT B

______________, 20___

Universal Technology Systems Corp.

Re:   Stock Option Exercise

To Whom It May Concern:

I (the “Optionee”) hereby exercise my right to purchase ________ shares of common stock (the “Shares”) of Universal Technology Systems Corp., a Florida Company (the “Company”), pursuant to, and in accordance with, an option agreement dated ______________ (the “Agreement”). As provided in such Agreement, I deliver herewith payment as set forth in the Agreement in the amount of the aggregate option exercise price. Please deliver to me at my address as set forth above stock certificates representing the subject shares registered in my name.

The Optionee hereby represents and agrees as follows:

1.   The Optionee acknowledges receipt of a copy of the Agreement. The Optionee has carefully reviewed the Agreement.

2.   The Optionee is a resident of __________.

3.   The Optionee represents and agrees that if the Optionee is an “affiliate” (as defined in Rule 144 under the Securities Act of 1933) of the Company at the time the Optionee desires to sell any of the Shares, the Optionee will be subject to certain restrictions under, and will comply with all of the requirements of, applicable federal and state securities laws.

The foregoing representations and warranties are given on ________ at _____________________.

___ Optionee encloses a check in the amount of $ ______________ for the payment of the aggregate amount of the Option Exercise Price.

___ Optionee elects a Cashless Exercise for __________Option Shares.

OPTIONEE:

_____________________________

 

 

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