SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
COMMISSION FILE NUMBER 0-20848
UNIVERSAL HEIGHTS, INC.
(Name of small business issuer in its charter)
DELAWARE 65-0231984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2875 N.E. 191 STREET
SUITE 400 A
MIAMI, FLORIDA 33180
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (305) 792-4200
Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Company
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Number of shares of the Common Stock of Universal Heights, Inc. issued
and outstanding as of July 15, 1999: 14,672,604.
Transitional Small Business Disclosure Format Yes __ No X
<PAGE>
UNIVERSAL HEIGHTS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited, condensed consolidated financial statements of
the Company have been prepared in accordance with the instructions to Form
10-QSB and, therefore, omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Results of operations for the six months ended June 30, 1999 are not necessarily
indicative of the results for the year ending December 31, 1999.
2
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
ASSETS
Debt securities held-to-maturity, at amortized cost
(fair value of $2,018,784) $2,108,376
Equity securities available for sale at fair value
(cost of $224,916) 540,696
Cash and cash equivalents 9,683,404
Property, plant and equipment 53,592
Receivables:
Reinsurance recoverable 6,204,056
Premiums and other receivables 1,685,057
Deferred policy acquisition costs 1,131,461
Due from related parties 125,510
-----------
Total assets $21,532,152
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $1,929,944
Unearned premiums 8,705,303
Accounts payable 961,742
Other accrued expenses 1,214,183
Accrued taxes, licenses and fees 14,262
Due to related parties 20,041
----------
Total liabilities 12,845,475
==========
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01
par value, 1,000,000 shares authorized,
138,640 shares issued and outstanding, minimum
liquidation preference of $1,419,700 1,387
Common stock, $.01 par value, 40,000,000 shares
authorized, 14,672,604 shares issued and
outstanding 146,726
Additional paid-in capital 15,015,581
Accumulated other comprehensive income 315,780
Accumulated deficit (6,792,797)
-----------
Total stockholders' equity 8,686,677
----------
Total liabilities and stockholders' equity $21,532,152
===========
The accompanying notes to consolidated financial statements are an integral part
of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For Six Months Ended For Three Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
PREMIUMS EARNED AND OTHER REVENUES
Premium income - net $ 3,568,028 $ 3,387,488 $ 1,513,040 $ 2,787,011
Net investment income 287,099 336,812 141,495 244,195
Commission revenue 537,758 - 163,666 -
Other income 4,704 3,545 - 980
----------- ----------- ----------- -----------
Total revenues 4,397,589 3,727,845 1,818,201 3,032,186
OPERATING COST AND EXPENSES:
Losses and loss adjustment expenses 1,375,050 1,628,814 311,653 1,317,882
General and administrative expenses 1,962,874 551,515 965,992 539,619
----------- ---------- ----------- -----------
Total operating expenses 3,337,924 2,180,329 1,277,645 1,857,501
NET INCOME $ 1,059,665 $ 1,547,516 $ 540,556 $ 1,174,685
=========== =========== =========== ===========
INCOME PER COMMON SHARE:
Basic
Net income $ 0.07 $ 0.11 $ 0.04 $ 0.08
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC 14,673,000 14,676,000 14,673,00 14,681,000
=========== =========== =========== ===========
INCOME PER COMMON SHARE:
Diluted
Net income $ 0.07 $ 0.09 $ 0.03 $ 0.07
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 15,770,000 17,783,000 15,854,000 17,787,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
4
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(Unaudited)
For Six Months For Three Months
Ended Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
-------- -------- -------- --------
NET INCOME $1,059,665 $1,547,516 $540,556 $1,174,685
OTHER COMPREHENSIVE INCOME:
Net unrealized gain on
available-for-sale
securities 289,711 - 242,991 -
---------- ---------- -------- ----------
COMPREHENSIVE INCOME $1,349,376 $1,574,516 $783,547 $1,174,685
========== ========== ======== ==========
The accompanying notes to consolidated financial statements are an integral
part of these statements
5
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For Six Months Ended
JUNE 30, JUNE 30,
1999 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations $ 1,059,665 $ 1,547,516
Add (deduct):
Adjustments to reconcile income from
continuing operations to cash
provided by (used in) operations:
Amortization and depreciation --- 84,197
Net change in assets and liabilities
relating to continuing operations:
Prepaid reinsurance premiums 8,012,128 (5,027,165)
Other receivables and deposits (978,001) (1,335,722)
Reinsurance recoverable on losses (4,784,902) (1,274,130)
Deferred policy acquisition costs 355,551 (156,232)
Accounts payable (229,304) 308,496
Accrued expenses (210,132) 51,752
Accrued taxes, licenses and fees (110,738) 52,500
Unpaid losses and loss adjustment expenses (594,112) 2,548,260
Unearned premiums (5,107,612) 8,882,831
Due to/from related parties and other (224,437) (267,911)
----------- -----------
Net cash provided by (used in) operating
activities (2,811,894) 5,414,392
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures 73,765 ---
Purchase of equity securities
available-for-sale --- (156,460)
Proceeds from sale of equity securities
available-for-sale 235,232 ---
Purchase of debt securities
held-to-maturity (769,453) (2,674,638)
Proceeds from maturities of debt
securities held-to-maturity 743,639 ---
Payments for notes receivable 250,000 ---
----------- -----------
Net cash provided by (used in) investing
activities 533,183 (2,831,098)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Preferred stock dividend (24,976) ---
----------- -----------
Net cash provided by (used in) financing
activities (24,976) 0
------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH (2,303,687) 2,583,294
EQUIVALENTS
CASH AND CASH EQUIVALENTS, Beginning of Period 11,987,091 1,172,418
------------ -----------
CASH AND CASH EQUIVALENTS, End of Period $ 9,683,404 $ 3,755,712
============ ============
The accompanying notes to consolidated financial statements are an integral part
of these statements.
6
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of
Universal Heights, Inc. ("Company"), its wholly-owned subsidiary, Universal
Property & Casualty Insurance Company ("UPCIC"), and other entities which are
under common control through common ownership. All intercompany accounts and
transactions have been eliminated in consolidation.
UPCIC's application to become a Florida licensed property and casualty insurance
company was approved on October 29, 1997. In 1998, the subsidiary began
operations through the acquisition of homeowner insurance policies issued by the
Florida Residential Property and Casualty Joint Underwriting Association
("JUA").
The Company continues to develop into a vertically integrated insurance holding
company performing all aspects of insurance underwriting, distribution and
claims. Universal Risk Advisors, Inc. was incorporated in Florida on July 2,
1998 and became licensed by the Florida Department of Insurance on September 28,
1998 as the Company's wholly-owned Managing General Agent ("MGA"). Through the
MGA, the Company will have underwriting and claims authority for third-party
insurance companies. The MGA currently generates revenue through policy fee
income and other administrative fees from the marketing of UPCIC's insurance
products through the Company's distribution network and UPCIC. In the future it
will also generate revenue from third party insurance products. Universal
Florida Insurance Agency was incorporated in Florida on July 2, 1998 and U.S.
Insurance Solutions, Inc. was incorporated in Florida on August 4, 1998 as
wholly-owned subsidiaries of Universal Heights, Inc. to solicit voluntary
business and generate commission revenue. These two entities are the foundation
of the Company's agency operations which generate income from policy fees,
commissions, premium financing referral fees and the marketing of ancillary
services. U.S.A Insurance Solutions, Inc., was incorporated in Florida on
December 10, 1998 as a wholly-owned subsidiary of U.S. Insurance Solutions, Inc.
to acquire the assets of an insurance agency. On August 31, 1998 World Financial
Resources (Barbados) LTD. ("WFR") was incorporated as a subsidiary of the
Company to participate in the international insurance and reinsurance markets.
In addition, Universal Risk Life Advisors, Inc. was incorporated in Florida on
June 1, 1999 as the Company's wholly-owned managing general agent for life
insurance products. The Company has also formed a subsidiary that will
specialize in selling insurance via the Internet.
The consolidated balance sheet of the Company, as of June 30, 1999, and the
related consolidated statements of operations for the six months ended June 30,
1999 and 1998 and cash flows for six months ended June 30, 1999 and 1998 are
unaudited. The accounting policies followed for quarterly financial reporting
are the same as those disclosed in the Notes to
7
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES, (continued)
Consolidated Financial Statements included in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1998. The interim financial
statements reflect all adjustments (consisting of only normal and recurring
accruals and adjustments) which are, in the opinion of management, necessary to
a fair statement of the results for the interim periods presented. The Company's
operating results for any particular interim period may not be indicative of
results for the full year and thus should be read in conjunction with the
Company's annual statements.
Certain reclassifications have been made in the prior financial statements to
conform them to and make them consistent with the presentation used in the
current financial statements.
In June, 1997, SFAS Statement No. 130, "Reporting Comprehensive Income," was
issued. SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components. SFAS No. 130 requires unrealized gains
or losses on the Company's available-for-sale securities, which currently are
reported in shareholders' equity, to be included in other comprehensive income
and the disclosure of total comprehensive income. The Company has adopted SFAS
No. 130 and disclosed other comprehensive income in the consolidated statements.
Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes reporting
standards for public companies concerning annual and interim financial
statements of their operating segments and related information. Operating
segments are components of a company about which separate financial information
is available that is regularly evaluated by the chief operating decision
maker(s) in deciding how to allocate resources and assess performance. The
standard sets criteria for reporting disclosures about a company's products and
services, geographic areas and major customers. The Company has one reportable
segment, insurance services, during the period reported in the accompanying
consolidated financial statements, based upon management reporting.
In December 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position 97-3, ACCOUNTING BY INSURANCE AND OTHER
ENTERPRISES FOR INSURANCE AND REINSURANCE-RELATED ASSESSMENTS ("SOP 97-3"). SOP
97-3 provides guidance on the recognition and measurement of liabilities for
guaranty-fund and other insurance related assessments. SOP 97-3 is effective for
financial statements for fiscal years beginning after December 15, 1998. The
effect of the initial adoption of SOP 97-3 is required to be reported in a
manner similar to the reporting of a cumulative effect of a change in accounting
principle. The adoption of SOP 97-3 did not currently impact the Company's
financial condition or results of operations or cash flows.
8
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES, (continued)
In April 1998, the AICPA issued Statement of Position 98-5, "Reporting on the
Costs of Start-Up Activities." This Statement of Position ("SOP") provides
guidance on the financial reporting of start-up costs and organization costs and
requires such costs to be expensed as incurred. This SOP is effective for
financial statements for fiscal years beginning after December 15, 1998. The
Company adopted SOP 98-5 effective January 1, 1999 through a charge to earnings
of $127,357.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (the "Statement"
or "SFAS No. 133"). The Statement establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. The Statement requires
that changes in the derivative's fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. Special accounting for
qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting. SFAS No. 133 will be effective for the Company on
January 1, 2001 and cannot be applied retroactively. The Company has not yet
quantified the impact of adopting SFAS No. 133 on its financial statements.
In October 1998, the AICPA issued Statement of Position 98-7 DEPOSIT ACCOUNTING:
ACCOUNTING FOR INSURANCE AND REINSURANCE CONTRACTS THAT DO NOT TRANSFER
INSURANCE RISK ("SOP 98-7"). SOP 98-7 provides guidance on the accounting for
insurance and reinsurance contracts that do not transfer insurance risk. SOP
98-7 is effective for financial statements for fiscal years beginning after June
15, 1999, with earlier adoption encouraged. The effect of the initial adoption
of SOP 98-7 is required to be reported as a cumulative effect of a change in
accounting principle. The adoption of SOP 98-7 is not expected to have a
material impact on the Company's financial position, results of operations or
cash flows.
NOTE 2 - INSURANCE OPERATIONS
UPCIC maintains its records in conformity with the accounting practices
prescribed or permitted by the Florida Department of Insurance ("DOI"). To the
extent that certain of these practices differ from generally accepted accounting
principles ("GAAP"), adjustments have been made in order to present the
accompanying financial statements on the basis of GAAP.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
9
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 2 - INSURANCE OPERATIONS (Continued)
expenses during the reporting period. Actual results could differ from those
estimates.
UPCIC commenced its insurance activity in February 1998 by assuming policies
from the JUA. UPCIC received the unearned premiums and is servicing such
policies. In addition, UPCIC has been actively renewing these policies as well
as soliciting business actively in the open market through independent agents.
Unearned premiums represent amounts that UPCIC would refund policyholders if
their policies were canceled. UPCIC determines unearned premiums by calculating
the pro-rata amount that would be due to the policyholder at a given point in
time based upon the premiums owed over the life of each policy. At June 30,
1999, the Company recorded $8,705,303 in connection with unearned premiums.
Universal Property and Casualty Management, Inc., an outside management company,
provides the Company with management and personnel for the subsidiary's
underwriting, claims and financial requirements, together with support offices,
equipment and services. The fees for such services for the six months ended June
30, 1999 have been recorded at $320,599.
The JUA's incentive program provided approximately $2,700,000 to an escrow
account. These funds will be released to UPCIC when certain conditions are met,
including not canceling policies acquired from the JUA for a three year period.
To date, the Company has substantially complied with the requirements related to
the bonus payments. The escrow account is not included in the financial
statements.
Premiums earned are included in earnings evenly over the terms of the policies.
UPCIC does not have policies that provide for retroactive premium adjustments.
Policy acquisition costs, consisting of commissions and other costs that vary
with and are directly related to the production of business, net of unearned
ceding commissions are deferred and amortized over the terms of the policies,
but only to the extent that unearned premiums are sufficient to cover all
related costs and expenses. At June 30, 1999, deferred policy acquisition costs
amounted to $1,131,461.
10
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 2 - INSURANCE OPERATIONS (Continued)
An allowance for uncollectible premiums receivable will be established when it
becomes evident collection is doubtful. No allowance is deemed necessary at June
30, 1999.
Claims and claim adjustment expenses, less related reinsurance, are provided for
as claims are incurred. The provision for unpaid claims and claim adjustment
expenses includes: (1) the accumulation of individual case estimates for claims
and claim adjustment expenses reported prior to the close of the accounting
period; (2) estimates for unreported claims based on past experience modified
for current trends; and (3) estimates of expenses for investigating and
adjusting claims based on past experience.
Liabilities for unpaid claims and claim adjustment expenses are based on
estimates of ultimate cost of settlement. Changes in claim estimates resulting
from the continuous review process and differences between estimates and
ultimate payments are reflected in expense for the year in which the revision of
these estimates first became known.
UPCIC estimates claims and claims expenses based on historical experience of
similar entities and payment and reporting patterns for the type of risk
involved. These estimates are continuously reviewed by UPCIC's affiliated
management professionals and any resulting adjustments are reflected in
operations for the period in which they are determined.
Inherent in the estimates of ultimate claims are expected trends in claim
severity, frequency and other factors that may vary as claims are settled. The
amount of uncertainty in the estimates for casualty coverage is significantly
affected by such factors as the amount of historical claims experience relative
to the development period, knowledge of the actual facts and circumstances, and
the amount of insurance risk retained.
NOTE 3 - REINSURANCE
In the normal course of business, UPCIC seeks to reduce the loss that may arise
from catastrophes or other events that cause unfavorable underwriting results by
reinsuring certain levels of risk in various areas of exposure with other
insurance enterprises or reinsurers.
Amounts recoverable from reinsurers are estimated in a manner consistent with
the reinsurers policy. Reinsurance premiums, losses and loss adjustment expenses
("LAE") are accounted for on bases consistent with those used in accounting for
the original policies issued and the terms of the reinsurance contracts.
Reinsurance ceding commissions received are deferred and amortized over the
effective period of the related insurance policies.
UPCIC limits the maximum net loss that can arise from large risks or risks in
concentrated areas of exposure by reinsuring (ceding) certain levels of risks
with other insurers or reinsurers, either on an automatic basis under general
11
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 3 - REINSURANCE (continued)
reinsurance contracts known as "treaties" or by negotiation on substantial
individual risks. The reinsurance arrangements are intended to provide UPCIC
with the ability to maintain its exposure to loss within its capital resources.
Such reinsurance includes quota share, excess of loss and catastrophe forms of
reinsurance.
Effective February 1, 1998, UPCIC entered into quota share, excess per risk and
excess catastrophe agreements with various reinsurers, rated A- or better by
A.M. Best. Under the quota share treaty, UPCIC ceded fifty percent of its gross
written premiums, losses and loss adjustment expenses with a ceding commission
of twenty-seven percent. Under the excess per risk agreement, UPCIC obtained
coverage of $1,250,000 in excess of $500,000 ultimate net loss for each risk,
each loss, excluding losses arising from the peril of wind. A $2,500,000 limit
applied to any one loss occurrence. Under the excess catastrophe reinsurance
contract, UPCIC obtained coverage of $23,300,000 in excess of $2,000,000.
Effective June 1, 1998, with respect to losses arising out of loss occurrences
commencing on or after that date, UPCIC obtained coverage of $41,000,000 in
excess of $2,000,000. UPCIC also obtained coverage from the Florida Hurricane
Catastrophe Fund which amount was approximately $32,400,000. In addition, in the
event a hurricane were to decrease the limits of catastrophe cover, UPCIC
purchased contingency coverage to replace the Florida Hurricane Catastrophe
Cover for 100% of losses of $42,300,000 in excess of $42,300,000 otherwise
recoverable excess of $10,600,000.
Effective November 1, 1998, UPCIC entered into an excess catastrophe treaty with
various Lloyds underwriting syndicates. This excess catastrophe treaty provided
coverage of $7,400,000 in excess of $80,000,000 for each loss occurrence.
Effective June 1, 1999, UPCIC revised and enhanced its reinsurance program.
UPCIC entered into quota share and excess per risk agreements with Swiss
Reinsurance America Corporation, rated A++ by A.M. Best. Under the quota share
treaty, UPCIC currently cedes fifty percent of its gross written premiums,
losses and loss adjustment expenses with a ceding commission of thirty-five
percent. The Company has the option to increase the annual cession to 75% or
reduce the cession to 45%. Under the excess per risk agreement, UPCIC obtained
coverage of $1,300,000 in excess of $500,000 ultimate net loss for each risk,
each loss, excluding losses arising from the peril of wind to the extent such
wind related losses are the result of a hurricane. A $2,600,000 limit applies to
any one-loss occurrence.
Effective June 1, 1999, under an excess catastrophe contract, UPCIC obtained
coverage of $39,000,000 in excess of $2,000,000. UPCIC also obtained variable
coverage of $2,000,000 in excess of the Company's 100-year probable maximum
loss.
12
<PAGE>
UNIVERSAL HEIGHTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 3 - REINSURANCE (continued)
UPCIC also obtained coverage from the Florida Hurricane Catastrophe Fund, which
is estimated to be $42,800,000. In addition, in the event a hurricane were to
decrease the limits of catastrophe cover, UPCIC purchased contingency coverage
to replace the Florida Hurricane Catastrophe Cover for losses of $47,600,000
excess of $47,600,000 otherwise recoverable excess of $11,300,000.
The ceded reinsurance arrangements had the following effect on certain items in
the accompanying consolidated financial statements:
PREMIUMS:
Six Months Ended Six Months Ended
JUNE 30, 1999 JUNE 30, 1998
---------------- ----------------
WRITTEN EARNED WRITTEN EARNED
------- ------ ------- ------
Direct $ 4,932,294 $8,757,818 $ 2,289,024 $ 88,833
Assumed (40,312) 1,241,809 12,995,102 6,071,456
Ceded (3,638,045) (6,431,599) (8,760,239) (2,772,801)
------------ ----------- ------------ ------------
Net $ 1,253,937 $3,568,028 $ 6,523,887 $ 3,387,488
============ =========== ============ ============
OTHER AMOUNTS:
June 30, June 30,
1999 1998
---- ----
Reinsurance recoverable on unpaid losses
and loss adjustment expenses $ 444,056 $ 1,274,130
Unearned premiums reserve ceded $ 2,793,520 $ 4,781,364
UPCIC's reinsurance contracts do not relieve UPCIC from its obligations to
policyholders. Failure of reinsurers to honor their obligations could result in
losses to UPCIC; consequently, allowances are established for amounts deemed
uncollectible. No allowance is deemed necessary at June 30, 1999. UPCIC
evaluates the similar geographic regions, activities, or economic
characteristics of the reinsurers to minimize its exposure to significant losses
from reinsurer insolvencies. UPCIC currently has reinsurance contracts with
various reinsurers located throughout the United States and internationally.
UPCIC believes that this distribution of reinsurance contracts adequately
minimizes UPCIC's risk from any potential operating difficulties of its
reinsurers.
13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
The following discussion and analysis of the Company's consolidated
financial condition and results of operations should be read in conjunction with
the Company's Consolidated Financial Statements and Notes thereto. This document
may contain forward-looking statements that involve risks and uncertainties. The
Company's actual results may differ significantly from the results discussed in
the forward-looking statements.
OVERVIEW
The Company has continued to implement its plan to become a financial
services company and, through its wholly-owned insurance subsidiary, Universal
Property & Casualty Insurance Company ("UPCIC"), has begun to take advantage of
what management believes to be profitable business and growth opportunities in
the marketplace.
UPCIC's application to become a Florida licensed property and casualty
insurance company was approved by the Florida Department of Insurance ("DOI") on
October 29, 1997. In 1998, the subsidiary began operations through the
acquisition of homeowner insurance policies issued by the Florida Residential
Property and Casualty Joint Underwriting Association ("JUA").
The JUA was established in 1992 as a temporary measure to provide
insurance coverage for individuals who could not obtain coverage from private
carriers because of the impact on the private insurance market of Hurricane
Andrew in 1992. Rather than serving as a temporary source of emergency insurance
coverage as was originally intended, the JUA has become a major provider of
original and renewal insurance coverage for Florida residents. In an attempt to
reduce the number of policies in the JUA, and thus the exposure of the program
to liability, the Florida legislature approved a number of initiatives to
depopulate the JUA, which resulted in policies being acquired by private
insurers and provides additional incentives to private insurance companies to
acquire policies from the JUA.
On December 4, 1997, the Company raised approximately $6,700,000 in a
private offering with various institutional and/or otherwise accredited
investors pursuant to which the Company issued, in the aggregate, 11,208,996
shares of its Common Stock at a price of $.60 per share. The proceeds of this
transaction are being used partially for working capital purposes and to meet
the minimum regulatory capitalization requirements ($5,300,000) required by the
Florida Department of Insurance to engage in the homeowners insurance company
business.
The Florida Department of Insurance requires applicants to have a minimum
capitalization of $5.3 million to be eligible to operate as an insurance company
in the state of Florida. Upon being issued an insurance license, companies must
maintain capitalization of at least $4 million. If an insurance company's
capitalization falls below $4 million, then the company will be deemed out of
compliance with DOI requirements, which could result in revocation of the
participant's license to operate as an insurance company in the state of
Florida. UPCIC's surplus at June 30, 1999 is $6,777,741.
14
<PAGE>
UPCIC's initial business and operations consisted of providing property
and casualty coverage through homeowners' insurance policies acquired through
the JUA. UPCIC entered into agreements with the JUA whereby since February 1998
UPCIC assumed approximately 30,000 policies. These policies, if renewed,
represent approximately $24,000,000 in estimated annual gross direct written
premium revenues. In addition, UPCIC has received approximately $90 per policy
in bonus incentive funds from the JUA for assuming the policies. The bonus funds
must be maintained in an escrow account for three years. UPCIC must not cancel
the policies from the JUA for this three year period at which point UPCIC will
receive the bonus money.
The Company continues to develop into a vertically integrated insurance
holding company. The Company, through its subsidiaries, is currently engaged in
insurance underwriting, distribution and claims. UPCIC generates revenue from
the collection and investment of premiums. The Company's newly formed agency
operations which include Universal Florida Insurance Agency and U.S. Insurance
Solutions, Inc. generate income from policy fees, commissions, premium financing
referral fees and the marketing of ancillary services. Universal Risk Advisors,
Inc., the Company's managing general agent, generates revenue through policy fee
income and other administrative fees from the marketing of UPCIC's insurance
products through the Company's distribution network and UPCIC. In the future,
Universal Risk Advisors, Inc. will also generate revenue from third party
insurance products. World Financial Resources (Barbados) Ltd. was formed to
participate in the international insurance and reinsurance markets. In addition,
Universal Risk Life Advisors, Inc. was formed to be the Company's managing
general agent for life insurance products. The Company has also formed a
subsidiary that will specialize in selling insurance via the Internet.
FINANCIAL CONDITION
Cash and cash equivalents at June 30, 1999 aggregated $9,683,404. The
source of liquidity for possible claims payments consists of net premiums, after
deductions for expenses.
UPCIC expects that premiums will be sufficient to meet UPCIC's working
capital requirements for at least the next twelve months. Amounts considered to
be in excess of current working capital requirements have been invested. At June
30, 1999, UPCIC's investments were comprised of $9,683,404 in cash and
repurchase agreements, $2,108,376 in fixed maturity securities and $540,696 in
equities.
UPCIC does not expect to obtain additional policies from the JUA. UPCIC
has obtained approximately 30,000 policies from the JUA. UPCIC believes that
this base of insurance business will provide opportunities for UPCIC to solicit
renewals of premiums in future periods which, if obtained, would allow UPCIC to
develop its insurance business. The renewal rate of policies acquired by UPCIC
has been approximately seventy-five percent. UPCIC is also establishing
relationships with insurance agents outside of the JUA program to write new
business. UPCIC has been selling policies in the open market through these
independent agents. In determining appropriate guidelines for such open market
policy sales, UPCIC employs standards similar to those used by UPCIC when
selecting policies from the JUA.
15
<PAGE>
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1999 VERSUS SIX MONTHS
ENDED JUNE 30, 1998
The operations for the six months ended June 30, 1999 consist of the
Company's newly started insurance business. The operations are not directly
comparative to the previous period as there were no insurance operations until
February 1998.
Revenues, loss and loss adjustment expenses and general and administrative
expenses have increased significantly when compared to the prior year period as
a result of the development of the insurance company's operations.
Income is recognized evenly over the terms of policies. Through June 30,
1999, the Company recognized revenues of $3,568,028, after reinsurance, on
approximately 25,000 policies. See MD&A section entitled, "Financial Condition -
Cash and Cash Equivalents" for a discussion of the short-term and long-term
resources for the insurance subsidiary.
The Company's investment income represents primarily interest income of
$287,099 in cash and cash equivalents aggregating $9,683,404, fixed maturity
securities aggregating $2,108,376 and equity securities aggregating $540,696 at
June 30, 1999. Such funds for investing were received for advance premiums and
from the Company's private offering.
Loss and loss adjustment expenses for the six months ended June 30, 1999 were
$1,375,050. These costs relate to insurance claims incurred by UPCIC. General
and administrative expenses, net of ceded commissions earned, were $1,962,874 as
compared to $551,515 for the six months ended June 30, 1998. General and
administrative expenses have increased due to further development of the
Company's insurance operations.
IMPACT OF THE YEAR 2000
The Company's investment in enhanced technologies and implementation of
new systems to better serve the insured is a continuing process. As part of this
process, the Company has evaluated its internal systems, both hardware and
software, facilities, and interactions with business partners, including
Universal P & C Management, Inc. where risk is concentrated in relation to year
2000 issues. As of March 31, 1999, the Company had completed efforts, which the
Company believes, have brought its systems into compliance. The total cost
incurred to modify existing systems was not material. The Company will continue
to contact its business partners (including agents, banks, reinsurers and rating
agencies) to determine the status of their compliance and to assess the impact
of noncompliance on the Company. The Company believes that it is taking the
necessary measures to mitigate issues that may arise relating to the year 2000.
To the extent that any additional issues arise, the Company will evaluate the
impact on its business, results of operations and financial condition and, if
material, make the necessary disclosures and take appropriate remedial action.
In addition, the Company is in the process of establishing a contingency plan to
address the worst case scenario of its outside management company incurring year
2000 problems. The most reasonably likely worst case scenario would potentially
result in intermittent delays in processing premiums and claims.
16
<PAGE>
UNIVERSAL HEIGHTS, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Certain claims and complaints have been filed or are pending against the
Company with respect to various matters. In the opinion of management all such
matters are adequately reserved for or covered by insurance or, if not so
covered, are without any or have little merit or involve such amounts that if
disposed of unfavorably would not have a material adverse effect on the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits required by Item 601 of Regulation S-B
are filed herewith as part of this Registration Statement:
EXHIBIT NO. EXHIBIT
10.1 Form of Option Agreement to purchase (i) 45,000 shares
of Common Stock issued to Bradley I. Meier, dated May 1,
1995, with an exercise price of $2.88 and (ii) 45,000
shares of Common Stock issued to Bradley I. Meier, dated
May 1, 1995, with an exercise price of $3.88.
17
<PAGE>
EXHIBIT NO. EXHIBIT
10.2 Form of Option Agreement to purchase 21,500 shares of
Common Stock issued to (i) Larry Martin, dated June
5, 1995 and (ii) John Walker, dated June 5, 1995.
10.3 Form of Option Agreement to purchase 3,333 shares of
Common Stock issued to (i) William Spaude, dated August
11, 1995, (ii) Amy Spaude Hambly, dated August 11, 1995
and (iii) Tod Spaude, dated August 11, 1995.
10.4 Option grant to Jay Covington, dated October 12, 1995.
10.5 Form of Option Agreement to purchase (i) 25,000 shares
of Common Stock issued to Eric Snow, dated January 2,
1996, (ii) 10,000 shares of Common Stock issued to Eric
Snow, dated July 2, 1996, and (iii) 5,000 shares of
Common Stock issued to Janet Conde, dated August 15,
1996.
10.6 Form of Option Agreement to purchase (i) 90,000
shares of Common Stock issued to Bradley Meier, dated
May 1, 1996, (ii) 250,000 shares of Common Stock to
Norman Meier, dated July 15, 1996, (iii) 50,000
shares of Common Stock issued to Craig Sherman, dated
July 15, 1996, (iv) 1,500,000 shares of Common Stock
issued to Bradley Meier, dated May 2, 1997, (v)
500,000 shares of Common Stock issued to Norman
Meier, dated May 2, 1997 and (vi) 1,500,000 shares
of Common Stock issued to Bradley Meier, dated May
2, 1997.
18
<PAGE>
EXHIBIT NO. EXHIBIT
10.7 Form of Option Agreement to purchase (i) 100,000 shares
of Common Stock issued to Myron Orlinsky, dated July 15,
1996, (ii) 100,000 shares of Common Stock issued to
Michael Pietrangelo, dated July 15, 1996, (iii) 100,000
shares of Common Stock issued to Sanford Grossman, dated
July 15, 1996, (iv) 50,000 shares of Common Stock issued
to Shephard Lane, dated July 15, 1996, (v) 50,000 shares
of Common Stock issued to Margaret Roell, dated July 15,
1996, (vi) 250,000 shares of Common Stock issued to
Bradley Meier, dated July 15, 1996, (vii) 500,000 shares
of Common Stock issued to Bradley Meier, dated July 15,
1996, (viii) 250,000 shares of Common Stock issued to
Bradley Meier, dated May 7, 1998, (ix) 500,000 shares of
Common Stock issued to Norman Meier, dated May 7, 1998,
(x) 100,000 shares of Common Stock issued to Reed
Slogoff, dated May 7, 1998, (xi) 100,000 shares of
Common Stock issued to Joel Wilentz, dated May 7, 1998
and (xii) 100,000 shares of Common Stock issued to Irwin
Kellner, dated May 7, 1998.
10.8 Form of Option Agreement to purchase 100,000 shares of
Common Stock issued to (i) Joel Wilentz, dated May 2,
1997, (ii) Reed Slogoff, dated May 2, 1997 and (iii)
Irwin Kellner, dated May 2, 1997.
10.9 Form of Option Agreement to purchase (i) 10,000 shares
of Common Stock issued to Barry Goldstein, dated March
26, 1998, (ii) 10,000 shares of Common Stock issued to
David Asher, dated March 28, 1998 and (iii) 15,000
shares of Common Stock issued to Robert Thomas, dated
March 26, 1998.
10.10 Option Agreement between the Company and James Lynch,
dated August 3, 1998.
10.11 Option Agreement between the Company and Harris Siskind,
dated December 3, 1998.
10.12 Option Agreement between the Company and James Hentzel,
dated January 28, 1999.
10.13 Form of Warrant to purchase (i) 7,500 shares of Common
Stock issued to Belmer Partners, dated October 7, 1994,
(ii) 2,494 shares of Common Stock issued to Norman
Meier, dated October 7, 1994 and (iii) 2,494 shares of
Common Stock issued to Phylis Meier, dated October 7,
1994.
19
<PAGE>
EXHIBIT NO. EXHIBIT
10.14 Form of Warrant to purchase (i) 53,333 shares of Common
Stock issued to Belmer Partners, dated January 25, 1995,
(ii) 28,538 shares of Common Stock issued to Norman
Meier, dated January 25, 1995, (iii) 28,538 shares of
Common Stock issued to Phylis Meier, dated January 25,
1995, (iv) 10,000 shares of Common Stock issued to
Phylis Meier, dated March 24, 1995, (v) 15,429 shares of
Common Stock issued to Bradley Meier, dated March 31,
1995, (vi) 120,000 shares of Common Stock issued to
Norman Meier, dated July 21, 1995, (vii) 10,000 shares
of Common Stock issued to Phylis Meier, dated July 31,
1995, (viii) 16,667 shares of Common Stock issued to
Daniel Marino, dated August 11, 1995, (ix) 30,000 shares
of Common Stock issued to Larry Martin, dated August 11,
1995, (x) 302,000 shares of Common Stock issued to
Bradley Meier, dated August 11, 1995, related to loan,
(xi) 12,653 shares of Common Stock issued to Bradley
Meier, dated August 11, 1995, related to salary
conversion, (xii) 25,000 shares of Common Stock issued
to Margaret Roell, dated August 11, 1995, (xiii) 25,000
shares of Common Stock issued to Sherman & Fischman,
dated August 11, 1995, (xiv) 25,000 shares of Common
Stock issued to Slatt & Lane, dated August 11, 1995,
(xv) 30,000 shares of Common Stock issued to John
Walker, dated August 11, 1995, (xvi) 20,000 shares of
Common Stock issued to Michael Pietrangelo, dated August
14, 1995, (xvii) 20,000 shares of Common Stock issued to
Shephard Lane, dated October 11, 1995, (xviii) 10,000
shares of Common Stock issued to Slate & Lane, dated
October 11, 1995, (xix) 82,000 shares of Common Stock
issued to Bradley Meier, dated October 11, 1995, (xx)
10,000 shares of Common Stock issued to Norman Meier,
dated October 11, 1995, related to the August loan,
(xxi) 70,000 shares of Common Stock issued to Norman
Meier, dated October 11, 1995, related to the October
loan, (xxii) 15,000 shares of Common Stock issued to
Lawrence Nusbaum, dated October 11, 1995, (xxiii) 15,000
shares of Common Stock issued to Margaret Roell, dated
October 11, 1995, (xxiv) 20,000 shares of Common Stock
issued to Sherman & Fischman, dated October 11, 1995,
(xxv) 30,000 shares of Common Stock issued to Norman
Meier, dated November 8, 1995, (xxvi) 300,000 shares of
Common Stock issued to Phylis Meier, dated March 1,
1996, (xxvii) 25,306 shares of Common Stock issued to
Bradley Meier, dated March 1, 1996, (xxviii) 131,700
shares of Common Stock issued to Bradley Meier, dated
December 3, 1996, (xxix) 500,000 shares of Common Stock
issued to Roger Tichenor, dated February 14, 1997, (xxx)
500,000 shares of Common Stock issued to Lee Meier,
dated February 14, 1997, (xxxi) 500,000 shares of Common
Stock issued to Roger Tichenor, dated February 14, 1997,
(xxxii) 500,000 shares of Common Stock issued to Lee
20
<PAGE>
Meier, dated February 14, 1997, (xxxiii) 170,000 shares
of Common Stock issued to Hermitage Capital Corp., dated
December 23, 1997, (xxxiv) 20,000 shares of Common Stock
issued to Amanda Bernardi, dated December 23, 1997,
(xxxv) 5,000 shares of Common Stock issued to Gonzalo
Mocorrea, dated December 23, 1997, (xxxvi) 5,000 shares
of Common Stock issued to Leroy Goldfarb, dated December
23, 1997, (xxxvii) 600,000 shares of Common Stock issued
to Shephard Lane, dated January 16, 1998 and (xxxviii)
100,000 shares of Common Stock issued to Value
Management, dated June 1, 1998.
10.15 Warrant to purchase 1,250,000 shares of Common Stock
issued to Joe DeAlessandro, dated May 14, 1997.
10.16 Employment Agreement between the Company and Bradley
Meier, dated August 11, 1999.
11.1 Statement of Computation of Per Share Earnings.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K: None.
21
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNIVERSAL HEIGHTS, INC.
Date: August 13, 1999 /s/ Bradley I. Meier
--------------------
Bradley I. Meier, President
22
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
10.1 Form of Option Agreement to purchase (i) 45,000 shares
of Common Stock issued to Bradley I. Meier, dated May 1,
1995, with an exercise price of $2.88 and (ii) 45,000
shares of Common Stock issued to Bradley I. Meier, dated
May 1, 1995, with an exercise price of $3.88.
10.2 Form of Option Agreement to purchase 21,500 shares of
Common Stock issued to (i) Larry Martin, dated June
5, 1995 and (ii) John Walker, dated June 5, 1995.
10.3 Form of Option Agreement to purchase 3,333 shares of
Common Stock issued to (i) William Spaude, dated August
11, 1995, (ii) Amy Spaude Hambly, dated August 11, 1995
and (iii) Tod Spaude, dated August 11, 1995.
10.4 Option grant to Jay Covington, dated October 12, 1995.
10.5 Form of Option Agreement to purchase (i) 25,000 shares
of Common Stock issued to Eric Snow, dated January 2,
1996, (ii) 10,000 shares of Common Stock issued to Eric
Snow, dated July 2, 1996 and (iii) 5,000 shares of
Common Stock issued to Janet Conde, dated August 15,
1996.
10.6 Form of Option Agreement to purchase (i) 90,000
shares of Common Stock issued to Bradley Meier, dated
May 1, 1996, (ii) 250,000 shares of Common Stock to
Norman Meier, dated July 15, 1996, (iii) 50,000
shares of Common Stock issued to Craig Sherman, dated
July 15, 1996, (iv) 1,500,000 shares of Common Stock
issued to Bradley Meier, dated May 2, 1997, (v)
500,000 shares of Common Stock issued to Norman
Meier, dated May 2, 1997 and (vi) 1,500,000 shares
of Common Stock issued to Bradley Meier, dated May
2, 1997.
23
<PAGE>
EXHIBIT NO. EXHIBIT
10.7 Form of Option Agreement to purchase (i) 100,000 shares
of Common Stock issued to Myron Orlinsky, dated July 15,
1996, (ii) 100,000 shares of Common Stock issued to
Michael Pietrangelo, dated July 15, 1996, (iii) 100,000
shares of Common Stock issued to Sanford Grossman, dated
July 15, 1996, (iv) 50,000 shares of Common Stock issued
to Shephard Lane, dated July 15, 1996, (v) 50,000 shares
of Common Stock issued to Margaret Roell, dated July 15,
1996, (vi) 250,000 shares of Common Stock issued to
Bradley Meier, dated July 15, 1996, (vii) 500,000 shares
of Common Stock issued to Bradley Meier, dated July 15,
1996, (viii) 250,000 shares of Common Stock issued to
Bradley Meier, dated May 7, 1998, (ix) 500,000 shares of
Common Stock issued to Norman Meier, dated May 7, 1998,
(x) 100,000 shares of Common Stock issued to Reed
Slogoff, dated May 7, 1998, (xi) 100,000 shares of
Common Stock issued to Joel Wilentz, dated May 7, 1998
and (xii) 100,000 shares of Common Stock issued to Irwin
Kellner, dated May 7, 1998.
10.8 Form of Option Agreement to purchase 100,000 shares of
Common Stock issued to (i) Joel Wilentz, dated May 2,
1997, (ii) Reed Slogoff, dated May 2, 1997 and (iii)
Irwin Kellner, dated May 2, 1997.
10.9 Form of Option Agreement to purchase (i) 10,000 shares
of Common Stock issued to Barry Goldstein, dated March
26, 1998, (ii) 10,000 shares of Common Stock issued to
David Asher, dated March 28, 1998 and (iii) 15,000
shares of Common Stock issued to Robert Thomas, dated
March 26, 1998.
10.10 Option Agreement between the Company and James Lynch,
dated August 3, 1998.
10.11 Option Agreement between the Company and Harris Siskind,
dated December 3, 1998.
10.12 Option Agreement between the Company and James Hentzel,
dated January 28, 1999.
10.13 Form of Warrant to purchase (i) 7,500 shares of Common
Stock issued to Belmer Partners, dated October 7, 1994,
(ii) 2,494 shares of Common Stock issued to Norman
Meier, dated October 7, 1994 and (iii) 2,494 shares of
Common Stock issued to Phylis Meier, dated October 7,
1994.
24
<PAGE>
EXHIBIT NO. EXHIBIT
10.14 Form of Warrant to purchase (i) 53,333 shares of Common
Stock issued to Belmer Partners, dated January 25, 1995,
(ii) 28,538 shares of Common Stock issued to Norman
Meier, dated January 25, 1995, (iii) 28,538 shares of
Common Stock issued to Phylis Meier, dated January 25,
1995, (iv) 10,000 shares of Common Stock issued to
Phylis Meier, dated March 24, 1995, (v) 15,429 shares of
Common Stock issued to Bradley Meier, dated March 31,
1995, (vi) 120,000 shares of Common Stock issued to
Norman Meier, dated July 21, 1995, (vii) 10,000 shares
of Common Stock issued to Phylis Meier, dated July 31,
1995, (viii) 16,667 shares of Common Stock issued to
Daniel Marino, dated August 11, 1995, (ix) 30,000 shares
of Common Stock issued to Larry Martin, dated August 11,
1995, (x) 302,000 shares of Common Stock issued to
Bradley Meier, dated August 11, 1995, related to loan,
(xi) 12,653 shares of Common Stock issued to Bradley
Meier, dated August 11, 1995, related to salary
conversion, (xii) 25,000 shares of Common Stock issued
to Margaret Roell, dated August 11, 1995, (xiii) 25,000
shares of Common Stock issued to Sherman & Fischman,
dated August 11, 1995, (xiv) 25,000 shares of Common
Stock issued to Slatt & Lane, dated August 11, 1995,
(xv) 30,000 shares of Common Stock issued to John
Walker, dated August 11, 1995, (xvi) 20,000 shares of
Common Stock issued to Michael Pietrangelo, dated August
14, 1995, (xvii) 20,000 shares of Common Stock issued to
Shephard Lane, dated October 11, 1995, (xviii) 10,000
shares of Common Stock issued to Slate & Lane, dated
October 11, 1995, (xix) 82,000 shares of Common Stock
issued to Bradley Meier, dated October 11, 1995, (xx)
10,000 shares of Common Stock issued to Norman Meier,
dated October 11, 1995, related to the August loan,
(xxi) 70,000 shares of Common Stock issued to Norman
Meier, dated October 11, 1995, related to the October
loan, (xxii) 15,000 shares of Common Stock issued to
Lawrence Nusbaum, dated October 11, 1995, (xxiii) 15,000
shares of Common Stock issued to Margaret Roell, dated
October 11, 1995, (xxiv) 20,000 shares of Common Stock
issued to Sherman & Fischman, dated October 11, 1995,
(xxv) 30,000 shares of Common Stock issued to Norman
Meier, dated November 8, 1995, (xxvi) 300,000 shares of
Common Stock issued to Phylis Meier, dated March 1,
1996, (xxvii) 25,306 shares of Common Stock issued to
Bradley Meier, dated March 1, 1996, (xxviii) 131,700
shares of Common Stock issued to Bradley Meier, dated
December 3, 1996, (xxix) 500,000 shares of Common Stock
issued to Roger Tichenor, dated February 14, 1997, (xxx)
500,000 shares of Common Stock issued to Lee Meier,
dated February 14, 1997, (xxxi) 500,000 shares of Common
Stock issued to Roger Tichenor, dated February 14, 1997,
(xxxii) 500,000 shares of Common Stock issued to Lee
25
<PAGE>
Meier, dated February 14, 1997, (xxxiii) 170,000 shares
of Common Stock issued to Hermitage Capital Corp., dated
December 23, 1997, (xxxiv) 20,000 shares of Common Stock
issued to Amanda Bernardi, dated December 23, 1997,
(xxxv) 5,000 shares of Common Stock issued to Gonzalo
Mocorrea, dated December 23, 1997, (xxxvi) 5,000 shares
of Common Stock issued to Leroy Goldfarb, dated December
23, 1997, (xxxvii) 600,000 shares of Common Stock issued
to Shephard Lane, dated January 16, 1998 and (xxxviii)
100,000 shares of Common Stock issued to Value
Management, dated June 1, 1998.
10.15 Warrant to purchase 1,250,000 shares of Common Stock
issued to Joe DeAlessandro, dated May 14, 1997.
10.16 Employment Agreement between the Company and Bradley
Meier, dated August 11, 1999.
11.1 Statement of Computation of Per Share Earnings.
27.1 Financial Data Schedule.
26
EXHIBIT 10.1
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of May 1, 1995, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
Bradley I. Meier (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of forty-five
thousand (45,000) shares of Common Stock, par value $ .01 per share, of the
Company (the "Stock") at a purchase price per share of $____.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein.
3. LIMITATION ON EXERCISE OF OPTIONS. This Option shall vest and be
exercisable in the following manner with respect to all of the shares of Common
Stock provided for hereunder on the date the Company achieves, as certified by
the Company's independent auditors, the following annual sales volumes for
Bistro trademarked products.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on May 1, 2005.
<PAGE>
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
by any other person, but only by him, unless with the written approval of the
Company's Board of Directors.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of stock the Optionee desires to purchase
under this Option, which written notice shall be accompanied by the Optionee's
check payable to the order of the Company for the full option price of such
shares of stock. As soon as practicable after the receipt of such written notice
the Company shall, at its principal office, tender to the Optionee a certificate
or certificates issued in the Optionee's name evidencing the shares of stock
purchased by the Optionee hereunder. The Company agrees if requested by Optionee
to lend money to Optionee, guarantee a loan to Optionee, or otherwise assist
Optionee to obtain the cash necessary to exercise all or a portion of Option
granted hereunder. If the exercise price is paid in whole or part with the
Optionee's promissory note, such note shall at the Company's option, (i) provide
for full recourse to the maker, (ii) be collateralized by the pledge of the
Stock that the Optionee purchases upon exercise of such Option, (iii) bear
interest at the prime rate.
7. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
2
<PAGE>
8. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Stock are not registered under
the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
10. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
11. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
3
<PAGE>
13. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Kipnis, Tescher, Lippman, Valinsky, &
Kain at One Financial Plaza, Suite 2308, Ft. Lauderdale, Fl 33394, subject to
the right of either party to designate at any time hereafter, in writing, some
other address.
14. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:____________________________
Bradley I. Meier
President
________________________________
Bradley I. Meier, Optionee
4
EXHIBIT 10.2
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of June 5, 1995, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
_________ (the "Optionee").
W I T N E S S E T H :
1. GRANT OF OPTION. As set forth in the Employment Agreement by and
between Optionee and the Company, a copy of which this Stock Option Agreement is
annexed to as an exhibit, the Company thereby grants to the Optionee, subject to
the terms and conditions herein set forth, the right and option (the "Option")
to purchase from the Company, all or any part of an aggregate of TWENTY-ONE
THOUSAND FIVE HUNDRED (21,500) shares of Common Stock, par value $.01 per share
at a price of $3.50 per share, such Option to be exercisable as hereinafter
provided.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein.
3. LIMITATION ON EXERCISE OF OPTIONS. This Option shall vest and be
exercisable as of June 5, 1995 with respect to all of the shares of Common Stock
provided for hereunder.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on June 4, 2005.
<PAGE>
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
by any other person, but only by him.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of stock the Optionee desires to purchase
under this Option, which written notice shall be accompanied by the Optionee's
check payable to the order of the Company for the full option price of such
shares of stock. As soon as practicable after the receipt of such written notice
the Company shall, at its principal office, tender to the Optionee a certificate
or certificates issued in the Optionee's name evidencing the shares of stock
purchased by the Optionee hereunder.
7. REGISTRATION RIGHTS. The Company shall include the 21,500 shares of
Common Stock underlying this Option in a Registration Statement within fourteen
(14) days from the date of the Employment Contract which this Option Agreement
is annexed.
8. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Stock are not registered under
the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock or the Company by reason of stock dividends,
2
<PAGE>
split-ups, recapitalizations, mergers, consolidations, combinations, exchanges
of shares, separations, reorganizations, or liquidations, the number of shares
of Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
10. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of Stock as to which this Option shall not
have been exercised and payment made as herein provided.
11. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
13. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Feder, Kaszovitz, Isaacson, Weber, Skala
& Bass, 750 Lexington Avenue, New York, New York 10022-1200, Attention: Lawrence
G. Nusbaum, Esq., subject to the right of either party to designate at any time
hereafter, in writing, some other address.
3
<PAGE>
14. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:___________________________________
Bradley I. Meier
President
________________________________
________________, Optionee
4
EXHIBIT 10.3
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of August 11, 1995, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
___________ (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. GRANT OF OPTION. The Company hereby grants to the Optionee, subject to
the terms and conditions herein set forth, the right and option (the "Option")
to purchase from the Company, all or any part of an aggregate of THREE THOUSAND,
THREE HUNDRED, THIRTY-THREE (3,333) shares of Common Stock, par value $.01 per
share, of the Company (the "Stock") at a purchase price of the closing bid price
as reported by NASDAQ SmallCap Market on the date hereof, such Option to be
exercisable as hereinafter provided.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein.
3. LIMITATION ON EXERCISE OF OPTION. This Option shall vest and be
exercisable on July 31, 1996 with respect to all of the shares of Common Stock
provided for hereunder.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on July 31, 2005.
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
<PAGE>
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
by any other person, but only by him.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of stock the Optionee desires to purchase
under this Option, which written notice shall be accompanied by the Optionee's
check payable to the order of the Company for the full option price of such
shares of stock. As soon as practicable after the receipt of such written notice
the Company shall, at its principal office, tender to the Optionee a certificate
or certificates issued in the Optionee's name evidencing the shares of stock
purchased by the Optionee hereunder.
7. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Stock are not registered under
the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock or the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separations, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
2
<PAGE>
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
9. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
12. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Feder, Kaszovitz, Isaacson, Weber, Skala
& Bass, 750 Lexington Avenue, New York, New York 10022-1200, Attention: Lawrence
G. Nusbaum, Esq., subject to the right of either party to designate at any time
hereafter, in writing, some other address.
13. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
3
<PAGE>
UNIVERSAL HEIGHTS, INC.
By:_____________________________
Bradley I. Meier
President
___________________________________
________________, Optionee
4
EXHIBIT 10.4
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This Agreement, dated as of October 12, 1995, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and JAY
COVINGTON, who resides at 2336 Iroquois Road, Wilmette, Illinois 60091 (the
"Optionee").
W I T N E S S E T H :
1. GRANT OF OPTION. The Company hereby grants to the Optionee, subject to
the terms and conditions herein set forth and as set forth in the Consulting
Agreement (the "Consulting Agreement") dated the date hereof by and between the
Company and the Optionee, the right and option (the "Option") to purchase from
the Company, all or any part of an aggregate of FIFTY-FIVE THOUSAND (55,000)
post-split shares of Common Stock, par value $.01 per share, of the Company (the
"Common Stock"), at an exercise price per share equal to the closing bid price
of the Company's Common Stock as quoted on the NASDAQ SmallCap Market system on
the respective date such Option vests as provided in Section 3 hereof.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein and the Consulting Agreement.
3. VESTING AND LIMITATION ON EXERCISE OF OPTION. This Option shall vest
with respect to (i) 30,000 shares of Common Stock issuable upon exercise thereof
on the date thereof (the "Initial 30,000 Option Shares"), and (ii) the remaining
25,000 shares on the date one (1) year from the date hereof (the "Remaining
25,000 Option Shares"). Following the vesting of the Option as provided in this
Section 3, the Option shall not be exercisable with respect to the Initial
<PAGE>
30,000 Option Shares and the Remaining 25,000 Option Shares until the date one
(1) year from their respective vesting dates as provided in this Section 3.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on the date ten (10) years from the respective vesting dates of the
Initial 30,000 Option Shares and the Remaining 25,000 Option Shares as set forth
in Section 3 hereof.
5. NON-ASSIGNABILITY OF OPTION. This Option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
by any other person, but only by him.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of Common Stock the Optionee desires to
purchase under this Option, which written notice shall be accompanied by the
Optionee's check payable to the order of the Company for the full option price
of such shares of Common Stock. As soon as practicable after the receipt of such
written notice the Company shall, at its principal office, tender to the
Optionee a certificate or certificates issued in the Optionee's name evidencing
the shares of Common Stock purchased by the Optionee hereunder.
7. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Common Stock underlying the
Option are not registered under the Securities Act of 1933, as amended, such
shares of Common Stock will be acquired for investment and not for resale or
with a view to the distribution thereof.
2
<PAGE>
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock or the Company by reason of stock dividends,
split-ups, recapitalizations, mergers, consolidations, combinations, exchanges
of shares, separations, reorganizations, or liquidations, the number of shares
of Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Common Stock issuable upon exercise of this Option shall apply
proportionately to only the then unexercised portion of this Option. If
fractional shares would result from any such adjustment, the adjustment shall be
revised to the next lower whole number of shares.
9. NO RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a
Stockholder in respect to the shares of Common Stock issuable upon exercise of
this Option as to which this Option shall not have been exercised and payment
made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
12. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Gusrae, Kaplan & Bruno, 120 Wall Street,
New York, New York 10005, Attention: Lawrence G. Nusbaum, Esq., subject to the
right of either party to designate at any time hereafter, in writing, some other
address.
3
<PAGE>
13. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
14. REGISTRATION RIGHTS. If permitted by the rules and regulations of the
Securities and Exchange Commission, the Company agrees to use its best efforts
to file a registration statement on Form S-8 (or any successor form) covering
the shares of Common Stock issuable upon exercise of this Option with in twelve
(12) months from the date hereof with respect to the Initial 30,000 Option
Shares and twenty-four (24) months from the date hereof with respect to the
Remaining 25,000 Option Shares.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By: /s/ Bradley I. Meier
-------------------------
Bradley I. Meier
President
/s/ Jay Covington
- ------------------------------
JAY COVINGTON, Optionee
EXHIBIT 10.5
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of _________, 1996, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
________ (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of _________ (_____)
shares of Common Stock, par value $.01 per share, of the Company (the "Stock")
at a purchase price per share of $_____.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein.
3. LIMITATION ON EXERCISE OF OPTIONS. This Option shall vest and be
exercisable as of _______, 1996 with respect to all of the shares of Common
Stock provided for hereunder.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on ________, 2006.
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
<PAGE>
by any other person, but only by him, unless with the written approval of the
Company's Board of Directors.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of stock the Optionee desires to purchase
under this Option, which written notice shall be accompanied by the Optionee's
check payable to the order of the Company for the full option price of such
shares of stock. As soon as practicable after the receipt of such written notice
the Company shall, at its principal office, tender to the Optionee a certificate
or certificates issued in the Optionee's name evidencing the shares of stock
purchased by the Optionee hereunder. The Company agrees if requested by Optionee
to lend money to Optionee, guarantee a loan to Optionee, or otherwise assist
Optionee to obtain the cash necessary to exercise all or a portion of Option
granted hereunder. If the exercise price is paid in whole or part with the
Optionee's promissory note, such note shall at the Company's option, (i) provide
for full recourse to the maker, (ii) be collateralized by the pledge of the
Stock that the Optionee purchases upon exercise of such Option, (iii) bear
interest at the prime rate.
7. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
8. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Stock are not registered under
2
<PAGE>
the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
10. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
11. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
13. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
3
<PAGE>
address set forth above with a copy to Kirkpatrick & Lockhart LLP 1800
Massachusetts Avenue, N.W., 2nd Floor, Washington, D.C. 20036-1800, subject to
the right of either party to designate at any time hereafter, in writing, some
other address.
14. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:__________________________________
President
_____________________________________
_____________, Optionee
4
EXHIBIT 10.6
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of __________, is made between Universal Heights,
Inc., a Delaware corporation, having its principal offices at 19589 N.E. 10th
Avenue, North Miami Beach, Florida 33179 (the "Company"), and
________ (the "Optionee").
W I T N E S S E T H :
- - - - - - - - - -
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of ____________
(_____) shares of Common Stock, par value $ .01 per share, of the Company (the
"Stock") at a purchase price per share of $______.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option, and
the exercise of said Option, is subject to the terms and conditions set forth
herein.
3. LIMITATION ON EXERCISE OF OPTIONS. This Option shall vest and be
exercisable in the following manner with respect to all of the shares of Common
Stock provided for hereunder on the date the Company achieves, as certified by
the Company's independent auditors, the following annual sales volumes for
Bistro trademarked products.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after 5:00
p.m. E.S.T. on ________.
<PAGE>
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given, granted,
sold, exchanged, transferred, pledged, assigned or otherwise incumbered or
disposed of by the Optionee, otherwise than by will or the laws of descent and
distribution, and, during the lifetime of the Optionee, shall not be exercisable
by any other person, but only by him, unless with the written approval of the
Company's Board of Directors.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company by
written notice sent by registered or certified mail, return receipt requested,
addressed to its principal office, or by hand delivery to such office, properly
receipted, as to the number of shares of stock the Optionee desires to purchase
under this Option, which written notice shall be accompanied by the Optionee's
check payable to the order of the Company for the full option price of such
shares of stock. As soon as practicable after the receipt of such written notice
the Company shall, at its principal office, tender to the Optionee a certificate
or certificates issued in the Optionee's name evidencing the shares of stock
purchased by the Optionee hereunder. The Company agrees if requested by Optionee
to lend money to Optionee, guarantee a loan to Optionee, or otherwise assist
Optionee to obtain the cash necessary to exercise all or a portion of Option
granted hereunder. If the exercise price is paid in whole or part with the
Optionee's promissory note, such note shall at the Company's option, (i) provide
for full recourse to the maker, (ii) be collateralized by the pledge of the
Stock that the Optionee purchases upon exercise of such Option, (iii) bear
interest at the prime rate.
7. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
2
<PAGE>
8. INVESTMENT REPRESENTATION. The Optionee represents that at the time of
any exercise of this Option, where the shares of Stock are not registered under
the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
10. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
11. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
3
<PAGE>
13. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Kipnis, Tescher, Lippman, Valinsky, &
Kain at One Financial Plaza, Suite 2308, Ft. Lauderdale, Fl 33394, subject to
the right of either party to designate at any time hereafter, in writing, some
other address.
14. COUNTERPARTS. This Agreement may be exercised in counterparts, each of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:_________________________________
Bradley I. Meier
President
________________________________
_________________, Optionee
4
EXHIBIT 10.7
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of ________, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
_________ (the "Optionee").
W I T N E S S E T H :
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of _________ (______)
shares of Common Stock, par value $.01 per share, of the Company (the "Stock")
at a purchase price per share of $______.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option,
and the exercise of said Option, is subject to the terms and conditions set
forth herein.
3. EXPIRATION OF OPTION. This Option shall not be exercisable after
5:00 p.m. E.S.T. on _________.
4. NON-ASSIGNABILITY OF OPTION. This option shall not be given,
granted, sold, exchanged, transferred, pledged, assigned or otherwise incumbered
or disposed of by the Optionee, otherwise than by will or the laws of descent
and distribution, and, during the lifetime of the Optionee, shall not be
exercisable by any other person, but only by him, unless with the written
approval of the Company's Board of Directors.
2
<PAGE>
5. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company
by written notice sent by registered or certified mail, return receipt
requested, addressed to its principal office, or by hand delivery to such
office, properly receipted, as to the number of shares of stock the Optionee
desires to purchase under this Option, which written notice shall be accompanied
by the Optionee's check payable to the order of the Company for the full option
price of such shares of stock. As soon as practicable after the receipt of such
written notice the Company shall, at its principal office, tender to the
Optionee a certificate or certificates issued in the Optionee's name evidencing
the shares of stock purchased by the Optionee hereunder. The Company agrees if
requested by Optionee to lend money to Optionee, guarantee a loan to Optionee,
or otherwise assist Optionee to obtain the cash necessary to exercise all or a
portion of Option granted hereunder. If the exercise price is paid in whole or
part with the Optionee's promissory note, such note shall at the Company's
option, (i) provide for full recourse to the maker, (ii) be collateralized by
the pledge of the Stock that the Optionee purchases upon exercise of such
Option, (iii) bear interest at the prime rate.
6. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
7. INVESTMENT REPRESENTATION. The Optionee represents that at the time
of any exercise of this Option, where the shares of Stock are not registered
under the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
9. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
12. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Kipnis, Tescher, Lippman, Valinsky, &
Kain at One Financial Plaza, Suite 2308, Ft. Lauderdale, Fl 33394, subject to
3
<PAGE>
the right of either party to designate at any time hereafter, in writing, some
other address.
13. Counterparts. This Agreement may be exercised in counterparts, each
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement
to be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:
------------------------------------
Bradley I. Meier
President
- ------------------------------
, Optionee
- ---------------
EXHIBIT 10.8
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of May 2, 1997 is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and
__________ (the "Optionee").
W I T N E S S E T H :
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of one hundred
thousand (100,000) shares of Common Stock, par value $ .01 per share, of the
Company (the "Stock") at a purchase price per share of $1.06.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option,
and the exercise of said Option, is subject to the terms and conditions set
forth herein.
3. EXPIRATION OF OPTION. This Option shall not be exercisable after
5:00 p.m. E.S.T. on May 2, 2007.
4. NON-ASSIGNABILITY OF OPTION. This option shall not be given,
granted, sold, exchanged, transferred, pledged, assigned or otherwise incumbered
or disposed of by the Optionee, otherwise than by will or the laws of descent
<PAGE>
and distribution, and, during the lifetime of the Optionee, shall not be
exercisable by any other person, but only by him, unless with the written
approval of the Company's Board of Directors.
5. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company
by written notice sent by registered or certified mail, return receipt
requested, addressed to its principal office, or by hand delivery to such
office, properly receipted, as to the number of shares of stock the Optionee
desires to purchase under this Option, which written notice shall be accompanied
by the Optionee's check payable to the order of the Company for the full option
price of such shares of stock. As soon as practicable after the receipt of such
written notice the Company shall, at its principal office, tender to the
Optionee a certificate or certificates issued in the Optionee's name evidencing
the shares of stock purchased by the Optionee hereunder. The Company agrees if
requested by Optionee to lend money to Optionee, guarantee a loan to Optionee,
or otherwise assist Optionee to obtain the cash necessary to exercise all or a
portion of Option granted hereunder. If the exercise price is paid in whole or
part with the Optionee's promissory note, such note shall at the Company's
option, (i) provide for full recourse to the maker, (ii) be collateralized by
the pledge of the Stock that the Optionee purchases upon exercise of such
Option, (iii) bear interest at the prime rate.
6. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
7. INVESTMENT REPRESENTATION. The Optionee represents that at the time
of any exercise of this Option, where the shares of Stock are not registered
2
<PAGE>
under the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
9. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
12. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
3
<PAGE>
address set forth above with a copy to Kirkpatrick & Lockhart 1800 Massachusetts
Avenue, N.W., Washington, D.C. 20036, subject to the right of either party to
designate at any time hereafter, in writing, some other address.
13. COUNTERPARTS. This Agreement may be exercised in counterparts, each
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement
to be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:
---------------------------------
Bradley I. Meier
President
- ------------------------------
, Optionee
- ---------------
EXHIBIT 10.9
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT
This agreement, dated as of March ____, 1998, is made between Universal
Heights, Inc., a Delaware corporation, having its principal offices at 19589
N.E. 10th Avenue, North Miami Beach, Florida 33179 (the "Company"), and _______
(the "Optionee").
W I T N E S S E T H :
1. GRANT OF OPTION. As set forth in this agreement by and among the
Company and Optionee, the Company hereby grants to the Optionee, subject to the
terms and conditions herein set forth, the right and option (the "Option") to
purchase from the Company, all or any part of an aggregate of ten thousand
(10,000) shares of Common Stock, par value $ .01 per share, of the Company (the
"Stock") at a purchase price per share of $1.00.
2. TERMS AND CONDITIONS. It is understood and agreed that this Option,
and the exercise of said Option, is subject to the terms and conditions set
forth herein.
3. LIMITATION ON EXERCISE OF OPTIONS. This Option shall vest and be
exercisable only after the optionee has completed a year of employment or
provides services for one year to either Universal Heights, Inc. or its
wholly-owned subsidiary Universal Property & Casualty Insurance Company,
beginning with the date of the grant of this Option.
4. EXPIRATION OF OPTION. This Option shall not be exercisable after
5:00 p.m. E.S.T. on March 26, 2003.
<PAGE>
5. NON-ASSIGNABILITY OF OPTION. This option shall not be given,
granted, sold, exchanged, transferred, pledged, assigned or otherwise incumbered
or disposed of by the Optionee, otherwise than by will or the laws of descent
and distribution, and, during the lifetime of the Optionee, shall not be
exercisable by any other person, but only by him, unless with the written
approval of the Company's Board of Directors.
6. METHOD OF EXERCISE OF OPTION. The Optionee shall notify the Company
by written notice sent by registered or certified mail, return receipt
requested, addressed to its principal office, or by hand delivery to such
office, properly receipted, as to the number of shares of stock the Optionee
desires to purchase under this Option, which written notice shall be accompanied
by the Optionee's check payable to the order of the Company for the full option
price of such shares of stock. As soon as practicable after the receipt of such
written notice the Company shall, at its principal office, tender to the
Optionee a certificate or certificates issued in the Optionee's name evidencing
the shares of stock purchased by the Optionee hereunder. The Company agrees if
requested by Optionee to lend money to Optionee, guarantee a loan to Optionee,
or otherwise assist Optionee to obtain the cash necessary to exercise all or a
portion of Option granted hereunder. If the exercise price is paid in whole or
part with the Optionee's promissory note, such note shall at the Company's
option, (i) provide for full recourse to the maker, (ii) be collateralized by
the pledge of the Stock that the Optionee purchases upon exercise of such
Option, (iii) bear interest at the prime rate.
7. REGISTRATION RIGHTS. The Company agrees that it shall include all
shares of Stock subject to purchase by the Optionee's exercise of his Option in
a Registration Statement on Form S-8 with the U.S. Securities and Exchange
Commission.
2
<PAGE>
8. INVESTMENT REPRESENTATION. The Optionee represents that at the time
of any exercise of this Option, where the shares of Stock are not registered
under the Securities Act of 1933, as amended, such Stock will be acquired for
investment and not for resale or with a view to the distribution thereof.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in the outstanding Common Stock of the Company by reason of stock dividends,
split-up, recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separation, reorganizations, or liquidations, the number of shares of
Stock issuable upon the exercise of this Option, the option price thereof and
any limitation on exercise set forth in Section 3 hereof shall be
correspondingly adjusted by the Company. Any such adjustment in the number of
shares of Stock shall apply proportionately to only the then unexercised portion
of this Option. If fractional shares would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
10. NO RIGHTS AS STOCKHOLDER. This Optionee shall have no rights as a
Stockholder in respect to the shares of stock as to which this Option shall not
have been exercised and payment made as herein provided.
11. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
3
<PAGE>
13. NOTICES. Any notice hereunder shall be delivered by hand or by
registered or certified mail, return receipt requested, to a party at its
address set forth above with a copy to Kipnis, Tescher, Lippman, Valinsky, &
Kain at One Financial Plaza, Suite 2308, Ft. Lauderdale, Fl 33394, subject to
the right of either party to designate at any time hereafter, in writing, some
other address.
14. COUNTERPARTS. This Agreement may be exercised in counterparts, each
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Universal Heights, Inc. has caused this Agreement
to be executed by an appropriate officer and the Optionee has executed this
Agreement, both as of the day and year first written.
UNIVERSAL HEIGHTS, INC.
By:
----------------------------------
Bradley I. Meier
President
- --------------------------
, Optionee
- ---------------
4
EXHIBIT 10.10
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT FOR EMPLOYEES
AGREEMENT ("Agreement") dated this 3rd day of August, 1998 by and
between Universal Heights, Inc., a Delaware corporation ("Corporation"), and
James Lynch, an employee of the Corporation ("Optionee").
WHEREAS, the Corporation entered into an agreement with Optionee on
August 3, 1998 ("Employment Agreement"), in which the Corporation agreed to
provide Optionee with an option to purchase common stock in the Corporation and
Optionee agreed to be in Corporation's employ; and
WHEREAS, the option granted hereby is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 or any successor
provision of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. NUMBER OF SHARES AND PRICE. The Corporation hereby grants to the
Optionee an option ("Option") to purchase the number of shares of common stock
of the Corporation ("Common Stock") set forth on the attached Face Sheet of this
Agreement. The exercise price per share of Common Stock of the Option shall be
as is set forth on the attached Face Sheet of this Agreement, such price being
the fair market value per share of Common Stock on the Date of Grant of the
Option ("Fair Market Value"). The Option is not intended to qualify as an
"incentive stock option" under Section 422 of the Code.
2. TERM AND EXERCISE. The Option shall expire ten (10) years from the
date hereof, subject to earlier termination as set forth in Section 3. Subject
to the provisions of Section 3, the Option shall become exercisable in
installments as set forth on the attached Face Sheet of this Agreement.
3. EXERCISE OF OPTION UPON TERMINATION OF EMPLOYMENT OR CHANGE IN
CONTROL.
(a) TERMINATION OF EMPLOYMENT.
(i) TERMINATION. Upon the Optionee's termination of
employment, other than by reason of death, disability, or
termination for cause, the Optionee may, within three (3) months
from the date of such termination of employment, exercise all or
any part of the Option to the extent it was exercisable at the date
of termination of employment. In no event may the Option be
exercised later than the expiration date described in Section 2.
(ii) TERMINATION OF EMPLOYMENT FOR CAUSE. Upon the
Corporation's termination of Optionee's employment with the
Corporation for Cause (as defined in the Employment Agreement), the
Corporation may terminate any portion of the unexercised Option.
<PAGE>
(ii) DISABILITY. Upon the date of Optionee's termination by
reason of disability ("Disability Date"), the Optionee may, within
one year after such Disability Date, exercise all or a part of the
Option, whether or not it was exercisable on such Disability Date,
but only to the extent not previously exercised. In no event,
however, may the Option be exercised later than the expiration date
described in Section 2.
(iii) DEATH. In the event of the death of the Optionee
while employed by the Corporation, the right of any individual,
trust or estate who or that, by will or the laws of descent and
distribution, succeeds to the rights and obligations of the
Optionee under this Agreement ("Beneficiary") to exercise the
Option in full (whether or not all or any part of the Option was
exercisable as of the date of death, but only to the extent not
previously exercised) shall expire upon the expiration of one year
from the date of the Optionee's death or, if earlier, on the date
of expiration of the Option determined pursuant to Section 2.
(b) TERMINATION OF UNVESTED OPTION UPON TERMINATION OF EMPLOYMENT.
Except as specified in Section 3(a), to the extent all or any part of the Option
was not exercisable as of the date of termination of employment, the
unexercisable portion of the Option shall expire at the date of such
termination.
(c) CHANGE IN CONTROL. In the event of a "change in control" of the
Corporation, the vesting of the shares of Corporation Stock referred to in the
attached Face Sheet of this Agreement shall be accelerated and immediately
vested in full. A change in control, for purposes hereof, shall mean: (i) the
acquisition by any person or group of persons of more than forty percent (40%)
of the issued and outstanding shares of capital stock of Corporation that is not
authorized or otherwise approved by the Board of Directors of the Corporation or
(ii) any plan for the liquidation or dissolution of the Corporation.
4. EXERCISE PROCEDURES. The Option shall be exercisable by written
notice to the Corporation, which must be received by the Corporation not later
than 5:00 P.M. local time at the principal executive office of the Corporation
on the expiration date of the Option. Such written notice shall set forth (a)
the number of shares of Common Stock being purchased, (b) the total exercise
price for the shares of Common Stock being purchased, (c) the exact name as it
should appear on the stock certificate(s) to be issued for the shares of Common
Stock being purchased, and (d) the address to which the stock certificate(s)
should be sent. The exercise price of shares of Common Stock purchased upon
exercise of the Option shall be paid in full (a) in cash or (b) by delivery of
such other consideration as the Board of Directors deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program approved by the Board of Directors).
5. AGREEMENT PROVISIONS CONTROL OPTION TERMS; MODIFICATIONS. The Option
is granted pursuant and subject to the terms and conditions of this Agreement
and the Employment Agreement. The Option shall not be modified after the Date of
Grant except by express written agreement between the Corporation and the
Optionee; PROVIDED, HOWEVER, that any such modification shall be approved by the
Board of Directors.
6. LIMITATIONS ON TRANSFER. The Option may not be assigned or
transferred other than by will, by the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Code, Title I
of ERISA or the rules thereunder.
7. TAXES. The Corporation shall be entitled to withhold (or secure
2
<PAGE>
payment from the Optionee in lieu of withholding) the amount of any withholding
or other tax required by law to be withheld or paid by the Corporation with
respect to any shares of Common Stock issuable under this Agreement, and the
Corporation may defer issuance of shares of Common Stock upon the exercise of
the Option unless the Corporation is indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax payment shall
be determined by the Board of Directors or its delegate and shall be payable by
the Optionee at such time as the Board of Directors determines. The Optionee may
satisfy his tax withholding obligation by (a) having cash withheld from the
Optionee's salary or other compensation payable by the Corporation or a
subsidiary, (b) the payment of cash to the Corporation, (c) the payment in
shares of Common Stock already owned by the Optionee valued at Fair Market
Value, and/or (d) the withholding from the Option, at the appropriate time, of a
number of shares of Common Stock sufficient, based upon the Fair Market Value of
such shares of Common Stock, to satisfy such tax withholding requirements. The
Board of Directors shall be authorized, in its sole and absolute discretion, to
establish such rules and procedures relating to any such withholding methods as
it deems necessary or appropriate, including, without limitation, rules and
procedures relating to elections to have shares of Common Stock withheld upon
exercise of the Option to meet such withholding obligations.
8. NO EXERCISE IN VIOLATION OF LAW. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he will not
exercise the Option granted hereby, and that the Corporation will not be
obligated to issue any shares of Common Stock to the Optionee hereunder, if the
exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by the Optionee or the Corporation of any provision of any law or
regulation of any governmental authority. Any determination in this regard by
the Board of Directors shall be final, binding and conclusive.
9. SECURITIES LAW COMPLIANCE. Optionee agrees, for the Optionee or any
Beneficiary, with respect to all shares of Common Stock acquired pursuant to the
terms and conditions of this Agreement and the Option (or any other shares of
Common Stock issued pursuant to a stock dividend or stock split thereon or any
securities issued in lieu thereof or in substitution or exchange therefor), that
the Optionee and any Beneficiary will not sell or otherwise dispose of these
shares except pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), or except in a transaction that,
in the opinion of counsel for the Corporation, is exempt from registration under
the Act. Further, the Corporation shall not be required to sell or issue any
shares under the Option if, in the opinion of the Corporation, (a) the issuance
of such shares would constitute a violation by the Optionee or the Corporation
of any applicable law or regulation of any government authority or (b) the
consent or approval of any governmental body is necessary or desirable as
condition of, or in connection with, the issuance of such shares.
10. ADJUSTMENTS. The existence of the Option shall not affect in any
way the right or power of the Corporation or its directors or shareholders to
make or authorize any or all adjustments, recapitalizations, reorganizations, or
other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issuance of bonds,
debentures, preferred stock or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
3
<PAGE>
11. DISPUTE RESOLUTION. As a condition of granting the Option, the
Optionee agrees, for the Optionee and any Beneficiary, that any dispute or
disagreement that may arise under or as a result of or pursuant to this
Agreement and the Option shall be determined by the Board of Directors in its
sole discretion, and any interpretation by the Board of Directors of the terms
of this Agreement and the Option shall be final, binding and conclusive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: UNIVERSAL HEIGHTS, INC.
/s/ Janet Conde By: /s/ Bradley I. Meier
--------------------------------
Bradley I. Meier,
President
By: /s/ Norman Meier
--------------------------------
[Member of Board of Directors]
WITNESS: OPTIONEE
/s/ Janet Conde /s/ James Lynch
--------------------------------
James Lynch
4
<PAGE>
FACE SHEET
Notice Addresses:
Optionee:
James Lynch
------------------------
------------------------
Corporation:
Universal Heights, Inc.
2875 N.E. 191 Street
Suite 400A
Miami, Florida 33180
Grant Date: 08/03/98
--------------------
Total Options Granted: 50,000
Exercise Price per share of Common Stock: $ 1.87
--------------------
Vesting Schedule:
Date Number of Shares
---- ----------------
02/03/99 25,000
--------
08/03/99 25,000
--------
Expiration Date:
Optioned shares must be purchased within ten (10) years from the date
of grant, which is AUGUST 3, 2008. That is, all options must be exercised by
AUGUST 3, 2008.
EXHIBIT 10.11
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS
AGREEMENT ("Agreement") dated this 3rd day of December, 1998 by and
between Universal Heights, Inc., a Delaware corporation ("Corporation"), and
Harris Siskind ("Optionee"), a non-employee director of Universal Risk Advisors,
Inc., a subsidiary of the Corporation.
WHEREAS, the Corporation desires to have Optionee serve on the Board of
Directors of Universal Risk Advisors, Inc. and to provide Optionee with an
incentive by sharing in the success of the Corporation; and
WHEREAS, the option granted hereby is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 or any successor
provision of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. NUMBER OF SHARES AND PRICE. The Corporation hereby grants to the
Optionee an option ("Option") to purchase the number of shares of Common Stock
set forth on the attached Face Sheet of this Agreement. The exercise price per
share of Common Stock of the Option shall be as is set forth on the attached
Face Sheet of this Agreement, such price being the fair market value per share
of Common Stock on the Date of Grant of the Option ("Fair Market Value"). The
Option is not intended to qualify as an "incentive stock option" under Section
422 of the Code.
2. TERM AND EXERCISE. The Option shall expire ten (10) years from the
date hereof. The Option shall become exercisable in installments as set forth on
the attached Face Sheet of this Agreement; PROVIDED, HOWEVER, that, if the
Optionee is removed for Cause, the Option shall cease to continue to be
exercisable on or after the date of such removal. If the Optionee ceases to be a
Non-Employee Director, the Option shall continue to be exercisable in accordance
with the preceding sentence and may be exercised until the Option expires in
accordance with the first sentence of this Section 2. Accordingly, if the
Optionee is removed for Cause, he or she may continue to exercise the Option
until the Option expires in accordance with the first sentence of this Section
2, but only to the extent that (a) the Option became exercisable prior to the
date of such removal and (b) it was not previously exercised.
3. EXERCISE PROCEDURES. The Option shall be exercisable by written
notice to the Corporation, which must be received by the Corporation not later
than 5:00 P.M. local time at the principal executive office of the Corporation
on the expiration date of the Option. Such written notice shall set forth (a)
the number of shares of Common Stock being purchased, (b) the total exercise
price for the shares of Common Stock being purchased, (c) the exact name as it
should appear on the stock certificate(s) to be issued for the shares of Common
Stock being purchased, and (d) the address to which the stock certificate(s)
should be sent. The exercise price of shares of Common Stock purchased upon
exercise of the Option shall be paid in full (a) in cash or (b) by delivery of
such other consideration as the Board of Directors deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program approved by the Board of Directors).
<PAGE>
4. AGREEMENT PROVISIONS CONTROL OPTION TERMS; MODIFICATIONS. The Option
is granted pursuant and subject to the terms and conditions of this Agreement.
The Option shall not be modified after the Date of Grant except by express
written agreement between the Corporation and the Optionee; PROVIDED, HOWEVER,
that any such modification shall be approved by the Board of Directors.
5. LIMITATIONS ON TRANSFER. The Option may not be assigned or
transferred other than by will, by the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Code, Title I
of ERISA or the rules thereunder.
6. TAXES. The Corporation shall be entitled to withhold (or secure
payment from the Optionee in lieu of withholding) the amount of any withholding
or other tax required by law to be withheld or paid by the Corporation with
respect to any shares of Common Stock issuable under this Agreement, and the
Corporation may defer issuance of shares of Common Stock upon the exercise of
the Option unless the Corporation is indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax payment shall
be determined by the Board of Directors or its delegate and shall be payable by
the Optionee at such time as the Board of Directors determines. The Optionee may
satisfy his or her tax withholding obligation by (a) having cash withheld from
the Optionee's salary or other compensation payable by the Corporation or a
Subsidiary, (b) the payment of cash to the Corporation, (c) the payment in
shares of Common Stock already owned by the Optionee valued at Fair Market
Value, and/or (d) the withholding from the Option, at the appropriate time, of a
number of shares of Common Stock sufficient, based upon the Fair Market Value of
such shares of Common Stock, to satisfy such tax withholding requirements. The
Board of Directors shall be authorized, in its sole and absolute discretion, to
establish such rules and procedures relating to any such withholding methods as
it deems necessary or appropriate, including, without limitation, rules and
procedures relating to elections to have shares of Common Stock withheld upon
exercise of the Option to meet such withholding obligations.
7. NO EXERCISE IN VIOLATION OF LAW. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he or she will not
exercise the Option granted hereby, and that the Corporation will not be
obligated to issue any shares of Common Stock to the Optionee hereunder, if the
exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by the Optionee or the Corporation of any provision of any law or
regulation of any governmental authority. Any determination in this connection
by the Board of Directors shall be final, binding and conclusive.
8. SECURITIES LAW COMPLIANCE. Optionee agrees, for the Optionee or any
individual, trust or estate who or that, by will or the laws of descent and
distribution, succeeds to the rights and obligations of the Optionee under this
Agreement upon the Optionee's death ("Beneficiaries"), with respect to all
shares of Common Stock acquired pursuant to the terms and conditions of this
Agreement and the Option (or any other shares of Common Stock issued pursuant to
a stock dividend or stock split thereon or any securities issued in lieu thereof
or in substitution or exchange therefor), that the Optionee and his
Beneficiaries will not sell or otherwise dispose of these shares except pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the "Act"), or except in a transaction that, in the opinion of counsel
for the Corporation, is exempt from registration under the Act. Further, the
Corporation shall not be required to sell or issue any shares under the Option
if, in the opinion of the Corporation, (a) the issuance of such shares would
constitute a violation by the Optionee or the Corporation of any applicable law
or regulation of any government authority or (b) the consent or approval of any
2
<PAGE>
governmental body is necessary or desirable as condition of, or in connection
with, the issuance of such shares.
9. ADJUSTMENTS. The existence of the Option shall not affect in any way
the right or power of the Corporation or its directors or shareholders to make
or authorize any or all adjustments, recapitalizations, reorganizations, or
other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issuance of bonds,
debentures, preferred stock or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
10. DISPUTE RESOLUTION. As a condition of granting the Option, the
Optionee agrees, for the Optionee and his or her Beneficiaries, that any dispute
or disagreement that may arise under or as a result of or pursuant to this
Agreement and the Option shall be determined by the Board of Directors in its
sole discretion, and any interpretation by the Board of Directors of the terms
of this Agreement and the Option shall be final, binding and conclusive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: UNIVERSAL HEIGHTS, INC.
/s/ Janet Conde By: /s/ Bradley I. Meier
-------------------------------------------
Bradley I. Meier,
President
By: /s/ Norman Meier
--------------------------------------------
[Member of Board of Directors] Norman Meier
WITNESS: OPTIONEE
/s/ Harris Siskind
- ----------------------- -----------------------------------------------
Harris Siskind
3
<PAGE>
FACE SHEET
Notice Addresses:
Optionee:
Harris Siskind
--------------------
--------------------
--------------------
Corporation:
Universal Heights, Inc.
2875 N.E. 191 Street
Suite 400A
Miami, Florida 33180
Grant Date: 12/3/98
------------
Total Options Granted: 15,000
------------
Exercise Price per share of Common Stock: $.90
------------
Vesting Schedule:
Date Number of Shares
---- ----------------
12/3/98 15,000
----------- -------------
----------- -------------
----------- -------------
Expiration Date:
Optioned shares must be purchased within 10 years from the date of
grant, which is 12/3/98. That is, all options must be exercised by 12/03/08.
EXHIBIT 10.12
UNIVERSAL HEIGHTS, INC.
STOCK OPTION AGREEMENT FOR EMPLOYEES
AGREEMENT ("Agreement") dated this 28th day of January, 1999 by and
between Universal Heights, Inc., a Delaware corporation ("Corporation"), and
James R. Hentzel, an employee of the Corporation ("Optionee").
WHEREAS, the Corporation entered into an agreement with Optionee on
January 28, 1999 ("Employment Agreement"), in which the Corporation agreed to
provide Optionee with an option to purchase common stock in the Corporation and
Optionee agreed to be in Corporation's employ; and
WHEREAS, the option granted hereby is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 or any successor
provision of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. NUMBER OF SHARES AND PRICE. The Corporation hereby grants to the
Optionee an option ("Option") to purchase the number of shares of common stock
of the Corporation ("Common Stock") set forth on the attached Face Sheet of this
Agreement. The exercise price per share of Common Stock of the Option shall be
as is set forth on the attached Face Sheet of this Agreement, such price being
the fair market value per share of Common Stock on the Date of Grant of the
Option ("Fair Market Value"). The Option is not intended to qualify as an
"incentive stock option" under Section 422 of the Code.
2. TERM AND EXERCISE. The Option shall expire ten (10) years from the
date hereof, subject to earlier termination as set forth in Section 3. Subject
to the provisions of Section 3, the Option shall become exercisable in
installments as set forth on the attached Face Sheet of this Agreement.
3. EXERCISE OF OPTION UPON TERMINATION OF EMPLOYMENT OR CHANGE IN
CONTROL.
(a) TERMINATION OF EMPLOYMENT.
(i) TERMINATION. Upon the Optionee's termination of
employment, other than by reason of death, disability, or
termination for cause, the Optionee may, within three (3) months
from the date of such termination of employment, exercise all or
any part of the Option to the extent it was exercisable at the date
of termination of employment. In no event may the Option be
exercised later than the expiration date described in Section 2.
(ii) TERMINATION OF EMPLOYMENT FOR CAUSE. Upon the
Corporation's termination of Optionee's employment with the
Corporation for Cause (as defined in the Employment Agreement), the
Corporation may terminate any portion of the unexercised Option.
<PAGE>
(ii) DISABILITY. Upon the date of Optionee's termination by
reason of disability ("Disability Date"), the Optionee may, within
one year after such Disability Date, exercise all or a part of the
Option, whether or not it was exercisable on such Disability Date,
but only to the extent not previously exercised. In no event,
however, may the Option be exercised later than the expiration date
described in Section 2.
(iii) DEATH. In the event of the death of the Optionee
while employed by the Corporation, the right of any individual,
trust or estate who or that, by will or the laws of descent and
distribution, succeeds to the rights and obligations of the
Optionee under this Agreement ("Beneficiary") to exercise the
Option in full (whether or not all or any part of the Option was
exercisable as of the date of death, but only to the extent not
previously exercised) shall expire upon the expiration of one year
from the date of the Optionee's death or, if earlier, on the date
of expiration of the Option determined pursuant to Section 2.
(b) TERMINATION OF UNVESTED OPTION UPON TERMINATION OF EMPLOYMENT.
Except as specified in Section 3(a), to the extent all or any part of the Option
was not exercisable as of the date of termination of employment, the
unexercisable portion of the Option shall expire at the date of such
termination.
(c) CHANGE IN CONTROL. In the event of a "change in control" of the
Corporation, the vesting of the shares of Corporation Stock referred to in the
attached Face Sheet of this Agreement shall be accelerated and immediately
vested in full. A change in control, for purposes hereof, shall mean: (i) the
acquisition by any person or group of persons of more than forty percent (40%)
of the issued and outstanding shares of capital stock of Corporation that is not
authorized or otherwise approved by the Board of Directors of the Corporation or
(ii) any plan for the liquidation or dissolution of the Corporation.
4. EXERCISE PROCEDURES. The Option shall be exercisable by written
notice to the Corporation, which must be received by the Corporation not later
than 5:00 P.M. local time at the principal executive office of the Corporation
on the expiration date of the Option. Such written notice shall set forth (a)
the number of shares of Common Stock being purchased, (b) the total exercise
price for the shares of Common Stock being purchased, (c) the exact name as it
should appear on the stock certificate(s) to be issued for the shares of Common
Stock being purchased, and (d) the address to which the stock certificate(s)
should be sent. The exercise price of shares of Common Stock purchased upon
exercise of the Option shall be paid in full (a) in cash or (b) by delivery of
such other consideration as the Board of Directors deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program approved by the Board of Directors).
5. AGREEMENT PROVISIONS CONTROL OPTION TERMS; MODIFICATIONS. The Option
is granted pursuant and subject to the terms and conditions of this Agreement
and the Employment Agreement. The Option shall not be modified after the Date of
Grant except by express written agreement between the Corporation and the
Optionee; PROVIDED, HOWEVER, that any such modification shall be approved by the
Board of Directors.
6. LIMITATIONS ON TRANSFER. The Option may not be assigned or
transferred other than by will, by the laws of descent and distribution, or
2
<PAGE>
pursuant to a qualified domestic relations order as defined by the Code, Title I
of ERISA or the rules thereunder.
7. TAXES. The Corporation shall be entitled to withhold (or secure
payment from the Optionee in lieu of withholding) the amount of any withholding
or other tax required by law to be withheld or paid by the Corporation with
respect to any shares of Common Stock issuable under this Agreement, and the
Corporation may defer issuance of shares of Common Stock upon the exercise of
the Option unless the Corporation is indemnified to its satisfaction against any
liability for any such tax. The amount of such withholding or tax payment shall
be determined by the Board of Directors or its delegate and shall be payable by
the Optionee at such time as the Board of Directors determines. The Optionee may
satisfy his tax withholding obligation by (a) having cash withheld from the
Optionee's salary or other compensation payable by the Corporation or a
subsidiary, (b) the payment of cash to the Corporation, (c) the payment in
shares of Common Stock already owned by the Optionee valued at Fair Market
Value, and/or (d) the withholding from the Option, at the appropriate time, of a
number of shares of Common Stock sufficient, based upon the Fair Market Value of
such shares of Common Stock, to satisfy such tax withholding requirements. The
Board of Directors shall be authorized, in its sole and absolute discretion, to
establish such rules and procedures relating to any such withholding methods as
it deems necessary or appropriate, including, without limitation, rules and
procedures relating to elections to have shares of Common Stock withheld upon
exercise of the Option to meet such withholding obligations.
8. NO EXERCISE IN VIOLATION OF LAW. Notwithstanding any of the
provisions of this Agreement, the Optionee hereby agrees that he will not
exercise the Option granted hereby, and that the Corporation will not be
obligated to issue any shares of Common Stock to the Optionee hereunder, if the
exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by the Optionee or the Corporation of any provision of any law or
regulation of any governmental authority. Any determination in this regard by
the Board of Directors shall be final, binding and conclusive.
9. SECURITIES LAW COMPLIANCE. Optionee agrees, for the Optionee or any
Beneficiary, with respect to all shares of Common Stock acquired pursuant to the
terms and conditions of this Agreement and the Option (or any other shares of
Common Stock issued pursuant to a stock dividend or stock split thereon or any
securities issued in lieu thereof or in substitution or exchange therefor), that
the Optionee and any Beneficiary will not sell or otherwise dispose of these
shares except pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), or except in a transaction that,
in the opinion of counsel for the Corporation, is exempt from registration under
the Act. Further, the Corporation shall not be required to sell or issue any
shares under the Option if, in the opinion of the Corporation, (a) the issuance
of such shares would constitute a violation by the Optionee or the Corporation
of any applicable law or regulation of any government authority or (b) the
consent or approval of any governmental body is necessary or desirable as
condition of, or in connection with, the issuance of such shares.
10. ADJUSTMENTS. The existence of the Option shall not affect in any
way the right or power of the Corporation or its directors or shareholders to
make or authorize any or all adjustments, recapitalizations, reorganizations, or
other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issuance of bonds,
debentures, preferred stock or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
3
<PAGE>
11. DISPUTE RESOLUTION. As a condition of granting the Option, the
Optionee agrees, for the Optionee and any Beneficiary, that any dispute or
disagreement that may arise under or as a result of or pursuant to this
Agreement and the Option shall be determined by the Board of Directors in its
sole discretion, and any interpretation by the Board of Directors of the terms
of this Agreement and the Option shall be final, binding and conclusive.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: UNIVERSAL HEIGHTS, INC.
/s/ Janet Conde By: /s/ Bradley I. Meier
- ---------------------- ---------------------------------
Bradley I. Meier,
President
By: /s/ Norman Meier
---------------------------------
[Member of Board of Directors]
WITNESS: OPTIONEE
/s/ Janet Conde /s/ James R. Hentzel
-------------------------------------
James R. Hentzel
4
<PAGE>
FACE SHEET
Notice Addresses:
Optionee:
James R. Hentzel
---------------------
---------------------
Corporation:
Universal Heights, Inc.
2875 N.E. 191 Street
Suite 400A
Miami, Florida 33180
Grant Date: January 28, 1999
----------------
Total Options Granted: 50,000
Exercise Price per share of Common Stock: $ .75
----------------
Vesting Schedule:
Date Number of Shares
---- ----------------
1/28/2000 25,000
--------------
1/28/2001 25,000
--------------
Expiration Date:
Optioned shares must be purchased within ten (10) years from the date
of grant, which is January 28, 2009. That is, all options must be exercised by
January 28, 2009.
EXHIBIT 10.13
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT
BE RESOLD OR OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL FOR OR
SATISFACTORY TO THE ISSUER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION
REQUIREMENTS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE
FOR THIS WARRANT.
Void after 5:00 p.m. New York Time, on _______
Warrant to Purchase _____ Shares of Common Stock.
WARRANT TO PURCHASE ______
SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
UNIVERSAL HEIGHTS, INC.
This is to certify that, FOR VALUE RECEIVED, ______ or registered
assigns ("Holder"), is entitled to purchase, subject to the provisions of this
Warrant, from UNIVERSAL HEIGHTS, INC., a Delaware corporation ("Company"), _____
fully paid, validly issued and nonassessable shares of Common Stock, par value
$.01 per share, of the Company ("Common Stock") at the exercise price of $____
per share until ______. The number of shares of Common Stock to be received upon
the exercise of this Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares," and the exercise
price of a share of Common Stock as adjusted from time to time is hereinafter
sometimes referred to as the "Exercise Price."
(a) EXERCISE OF WARRANT. This Warrant may be exercised at any time or
from time to time until 5:00 P.M. New York time on ________, provided, however,
that if either such day is a day on which banking institutions in the State of
New York are authorized by law to close, then on the next succeeding day which
shall not be such a day. This Warrant may be exercised by presentation and
surrender hereof to the Company at its principal office, or at the office of its
stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
Warrant Shares specified in such form. As soon as practicable after each such
exercise of the Warrants, but not later than seven (7) business days from the
date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificates for the Warrant Shares issuable upon such exercise,
<PAGE>
registered in the name of the Holder or the Holder's designee. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable thereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its office, in proper
form for exercise, together with the exercise price thereof in cash or certified
or bank check and the investment letter described below, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Common
Stock shall not then be physically delivered to the Holder. It shall be a
condition of the exercise of this Warrant that the Holder shall deliver to the
Company an investment letter in the form as customarily used by the Company from
time to time in connection with the exercise of non-registered options and
warrants which are issued by the Company. It is further understood that
certificates for the Warrant Shares to be issued upon exercise of this Warrant
shall contain a restrictive legend to the effect that such Warrant Shares are
restricted securities as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act") and cannot be sold except in
compliance with the Act and the rules and regulations promulgated thereunder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants. If the Common Stock is listed on any national securities exchange,
the Company shall also list such shares on such exchange subject to notice of
issuance.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or
listed for trading on the NASDAQ system, the current market value shall
be the last reported sale price of the Common Stock on such exchange or
system on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the mean
of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc., on the last business day prior to the date of
the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount, not less than
the book value thereof as at the end of the most recent fiscal year of
the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board
of Directors of the Company.
<PAGE>
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Upon surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and in the case
of loss, theft or destruction of reasonable satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon the exercise of the
Warrants shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be proportionately
adjusted as of the effective date of such event by multiplying such
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding immediately following such
event and the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior thereto. For example, if the
Company declares a 2 for 1 stock distribution and the Exercise Price
immediately prior to such event was $1.00 per share, the adjusted
Exercise Price immediately after such event would be $.50 per share.
Such adjustment shall be made successively whenever any event listed
above shall occur.
<PAGE>
(2) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (1) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously
be adjusted by multiplying the number of Shares initially issuable upon
exercise of this Warrant by the Exercise Price in effect on the date
hereof and dividing the product so obtained by the Exercise Price, as
adjusted.
(3) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least twenty-five cents ($.25) in such price; provided, however, that
any adjustments which by reason of this Subsection (3) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations
under this Section (f) shall be made to the nearest cent or to the
nearest one-hundredth of a Share, as the case may be.
(4) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly cause a notice setting forth the
adjusted Exercise Price and adjusted number of Shares issuable upon
exercise of each Warrant to be mailed to the Holders, at their last
addresses appearing in the Warrant Register, and shall cause a
certified copy thereof to be mailed to its transfer agent, if any. The
Company may retain a firm of independent certified public accountants
selected by its Board of Directors (who may be the regular accountants
employed by the Company) to make any computation required by this
Section (f), and a certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment
(5) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder of this
Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (1) to (3), inclusive above.
(6) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the Holder or any
holder of a Warrant executed and delivered pursuant to Section (a), and the
<PAGE>
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least 15 days prior the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in connection
with any such capital reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933
(1) No later than one (1) year from the date hereof, the
Company shall, if permitted by applicable regulation or any contractual
<PAGE>
provisions include in the filing of any new registration statement
(other than a registration statement on Forms S-8, S-14, S-15 or any
other Form not generally available for sale of securities to the
public) ("Registration Statement") under the Act covering securities of
the Company such information as may be required to permit a public
offering of the Warrant Shares. The Company shall supply prospectuses
and other documents in order to facilitate the public sale or other
disposition of the Warrant Shares. The Company shall file any necessary
post-effective amendments to such Registration Statement and use its
best efforts to maintain the effectiveness thereof for a period of 36
months from the date of issuance of the Warrant Shares. The Company
shall bear the entire cost and expense of a registration of securities
initiated by it, under this Paragraph (1). The Holder shall, however,
bear the fees of his own counsel and any transfer taxes or underwriting
discounts or commissions applicable to the Warrant Shares sold by him.
The Company may include other securities in any such registration
statement. The Company shall do any and all other acts and things which
may be necessary or desirable to enable the Holder to consummate the
public sale or other disposition of the Warrant Shares, and furnish
indemnification in the manner as set forth in Paragraph (2)(a) of this
Section (j). The Holder shall furnish information and indemnification
as set forth in Paragraph (2)(b) of this Section (j).
Notwithstanding the foregoing, in the event that there is an
underwritten offering of the Company's securities offered pursuant to
said registration statement pursuant to the immediately preceding
paragraph j(1), the underwriter shall have the right to refuse to
permit any Warrant Shares, or to limit the amount of Warrant Shares, to
be sold by the Holder to such underwriter(s) as such underwriter(s) may
determine in its discretion, and the Holder shall refrain from selling
such remainder of its Warrant Shares covered by such registration
statement for the period of forty five (45) days following the
effective date.
(2) (a) Whenever pursuant to this Section (j) a registration statement
relating to the Warrant Shares is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each holder
of the securities covered by such registration statement, amendment or
supplement (such holder being hereinafter called the "Distributing
Holder"), and each person, if any who controls (within the meaning of
the Act) the Distributing Holder, against any losses, claims, damages
or liabilities, joint or several, to which the Distributing Holder or
any such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement
thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse the
Distributing Holder and each such controlling person for any legal or
other expenses reasonable incurred by the Distributing Holder and each
controlling person for any legal or other expenses reasonable incurred
by the Distributing Holder or such controlling person or underwriter in
connection with investigating or defending any such loss, claim damage,
liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
<PAGE>
registration statement, said preliminary prospectus, said final
prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished by such Distributing
Holder for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers who have
signed said registration statement and such amendments and supplements
thereto, each person, if any, who controls the Company (within the
meaning of the Act) against any losses, claims, damages or liabilities
to which the Company or any such director, officer or controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained
in said registration statement, said preliminary prospectus, said final
prospectus, or said amendment or supplement, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer
or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 2 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party, give the indemnifying party notice of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Paragraph 2.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in,
and, the extent that it may wish, jointly with any other indemnifying
party similarly notified to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Paragraph 2 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(e) The Company's agreements with respect to Warrant Shares in
this Section (j) shall continue in effect regardless of the exercise or
surrender of this Warrant.
<PAGE>
Dated: As of
---------------------
UNIVERSAL HEIGHTS, INC.
By:
----------------------------------
Bradley I. Meier
President
<PAGE>
PURCHASE FORM
Dated ___________, 19__
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Common Stock of
Universal Heights, Inc., and hereby makes payment of __________ in payment of
the actual exercise price thereof.
---------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
--------------------------------------
Name (Please typewrite or print in block letters)
---------------------------
Address
------------------------
Signature
---------------
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers unto
Name (Please typewrite or print in block letters)
-----------------------------
Address
--------------------------
the right to purchase Common Stock of Universal Heights, Inc., represented by
this Warrant to the extent of _____ shares as to which such right is exercisable
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Date _____________, 19__
Signature _____________________
EXHIBIT 10.14
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT
BE RESOLD OR OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL FOR OR
SATISFACTORY TO THE ISSUER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION
REQUIREMENTS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE
FOR THIS WARRANT.
Void after 5:00 p.m. New York Time, on _________
Warrant to Purchase ______ Shares of Common Stock.
WARRANT TO PURCHASE ______
SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
UNIVERSAL HEIGHTS, INC.
This is to certify that, FOR VALUE RECEIVED, _______ or registered
assigns ("Holder"), is entitled to purchase, subject to the provisions of this
Warrant, from UNIVERSAL HEIGHTS, INC., a Delaware corporation ("Company"),
_______ fully paid, validly issued and nonassessable shares of Common Stock, par
value $.01 per share, of the Company ("Common Stock") at the exercise price of
$_____ per share until ______. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for each
share of Common Stock may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter sometimes referred to as "Warrant
Shares," and the exercise price of a share of Common Stock as adjusted from time
to time is hereinafter sometimes referred to as the "Exercise Price."
(a) EXERCISE OF WARRANT. This Warrant may be exercised as to a minimum
of 10,000 Warrant Shares at any time or from time to time until 5:00 P.M. New
York time on ______, provided, however, that if either such day is a day on
which banking institutions in the State of New York are authorized by law to
close, then on the next succeeding day which shall not be such a day. This
Warrant may be exercised by presentation and surrender hereof to the Company at
its principal office, or at the office of its stock transfer agent, if any, with
the Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price for the number of Warrant Shares specified in such form. As soon
as practicable after each such exercise of the Warrants, but not later than
seven (7) business days from the date of such exercise, the Company shall issue
and deliver to the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or the
<PAGE>
Holder's designee. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable thereunder. Upon receipt by the Company of
this Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, together with the exercise price thereof in
cash or certified or bank check and the investment letter described below, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be physically delivered to the Holder. It shall
be a condition of the exercise of this Warrant that the Holder shall deliver to
the Company an investment letter in the form as customarily used by the Company
from time to time in connection with the exercise of non-registered options and
warrants which are issued by the Company. It is further understood that
certificates for the Warrant Shares to be issued upon exercise of this Warrant
shall contain a restrictive legend to the effect that such Warrant Shares are
restricted securities as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act") and cannot be sold except in
compliance with the Act and the rules and regulations promulgated thereunder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants. If the Common Stock is listed on any national securities exchange,
the Company shall also list such shares on such exchange subject to notice of
issuance.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or
listed for trading on the NASDAQ system, the current market value shall
be the last reported sale price of the Common Stock on such exchange or
system on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average closing bid
and asked prices for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the mean
of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc., on the last business day prior to the date of
the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount, not less than
the book value thereof as at the end of the most recent fiscal year of
the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board
of Directors of the Company.
2
<PAGE>
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Upon surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and in the case
of loss, theft or destruction of reasonable satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon the exercise of the
Warrants shall be subject to adjustment from time to time upon the happening of
certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller number
of shares, the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be proportionately
adjusted as of the effective date of such event by multiplying such
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding immediately following such
event and the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior thereto. For example, if the
Company declares a 2 for 1 stock distribution and the Exercise Price
immediately prior to such event was $1.00 per share, the adjusted
Exercise Price immediately after such event would be $.50 per share.
Such adjustment shall be made successively whenever any event listed
above shall occur.
3
<PAGE>
(2) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (1) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously
be adjusted by multiplying the number of Shares initially issuable upon
exercise of this Warrant by the Exercise Price in effect on the date
hereof and dividing the product so obtained by the Exercise Price, as
adjusted.
(3) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least twenty-five cents ($.25) in such price; provided, however, that
any adjustments which by reason of this Subsection (3) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations
under this Section (f) shall be made to the nearest cent or to the
nearest one-hundredth of a Share, as the case may be.
(4) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly cause a notice setting forth the
adjusted Exercise Price and adjusted number of Shares issuable upon
exercise of each Warrant to be mailed to the Holders, at their last
addresses appearing in the Warrant Register, and shall cause a
certified copy thereof to be mailed to its transfer agent, if any. The
Company may retain a firm of independent certified public accountants
selected by its Board of Directors (who may be the regular accountants
employed by the Company) to make any computation required by this
Section (f), and a certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment
(5) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder of this
Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (1) to (3), inclusive above.
(6) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, the Company
shall forthwith file in the custody of its Secretary or an Assistant Secretary
at its principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the Holder or any
holder of a Warrant executed and delivered pursuant to Section (a), and the
4
<PAGE>
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least 15 days prior the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in connection
with any such capital reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933
(1) No later than one (1) year from the date hereof, the
Company shall, if permitted by applicable regulation or any contractual
5
<PAGE>
provisions include in the filing of any new registration statement
(other than a registration statement on Forms S-8, S-14, S-15 or any
other Form not generally available for sale of securities to the
public) ("Registration Statement") under the Act covering securities of
the Company such information as may be required to permit a public
offering of the Warrant Shares. The Company shall supply prospectuses
and other documents in order to facilitate the public sale or other
disposition of the Warrant Shares. The Company shall file any necessary
post-effective amendments to such Registration Statement and use its
best efforts to maintain the effectiveness thereof for a period of 36
months from the date of issuance of the Warrant Shares. The Company
shall bear the entire cost and expense of a registration of securities
initiated by it, under this Paragraph (1). The Holder shall, however,
bear the fees of his own counsel and any transfer taxes or underwriting
discounts or commissions applicable to the Warrant Shares sold by him.
The Company may include other securities in any such registration
statement. The Company shall do any and all other acts and things which
may be necessary or desirable to enable the Holder to consummate the
public sale or other disposition of the Warrant Shares, and furnish
indemnification in the manner as set forth in Paragraph (2)(a) of this
Section (j). The Holder shall furnish information and indemnification
as set forth in Paragraph (2)(b) of this Section (j).
Notwithstanding the foregoing, in the event that there is an
underwritten offering of the Company's securities offered pursuant to
said registration statement pursuant to the immediately preceding
paragraph j(1), the underwriter shall have the right to refuse to
permit any Warrant Shares, or to limit the amount of Warrant Shares, to
be sold by the Holder to such underwriter(s) as such underwriter(s) may
determine in its discretion, and the Holder shall refrain from selling
such remainder of its Warrant Shares covered by such registration
statement for the period of forty five (45) days following the
effective date.
(2) (a) Whenever pursuant to this Section (j) a registration statement
relating to the Warrant Shares is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each holder
of the securities covered by such registration statement, amendment or
supplement (such holder being hereinafter called the "Distributing
Holder"), and each person, if any who controls (within the meaning of
the Act) the Distributing Holder, against any losses, claims, damages
or liabilities, joint or several, to which the Distributing Holder or
any such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement
thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse the
Distributing Holder and each such controlling person for any legal or
other expenses reasonable incurred by the Distributing Holder and each
controlling person for any legal or other expenses reasonable incurred
by the Distributing Holder or such controlling person or underwriter in
connection with investigating or defending any such loss, claim damage,
liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
6
<PAGE>
registration statement, said preliminary prospectus, said final
prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished by such Distributing
Holder for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers who have
signed said registration statement and such amendments and supplements
thereto, each person, if any, who controls the Company (within the
meaning of the Act) against any losses, claims, damages or liabilities
to which the Company or any such director, officer or controlling
person may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained
in said registration statement, said preliminary prospectus, said final
prospectus, or said amendment or supplement, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer
or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 2 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party, give the indemnifying party notice of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Paragraph 2.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in,
and, the extent that it may wish, jointly with any other indemnifying
party similarly notified to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Paragraph 2 for any legal
or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(e) The Company's agreements with respect to Warrant Shares in
this Section (j) shall continue in effect regardless of the exercise or
surrender of this Warrant.
7
<PAGE>
Dated: As of _____________
UNIVERSAL HEIGHTS, INC.
By:
---------------------------------
Bradley I. Meier
President
8
<PAGE>
PURCHASE FORM
Dated ___________, 19__
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _________ shares of Common Stock of
Universal Heights, Inc., and hereby makes payment of __________ in payment of
the actual exercise price thereof.
---------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name (Please typewrite or print in block letters)
------------------------------
Address
---------------------------
Signature
------------------
9
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers unto
Name (Please typewrite or print in block letters)
---------------------------
Address
------------------------
the right to purchase Common Stock of Universal Heights, Inc., represented by
this Warrant to the extent of _____ shares as to which such right is exercisable
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Date _____________, 19__
Signature _____________________
EXHIBIT 10.15
THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT
BE RESOLD OR OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL FOR OR
SATISFACTORY TO THE ISSUER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR STATE
SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION
REQUIREMENTS. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE
FOR THIS WARRANT.
Void after 5:00 p.m. New York Time, on May 14, 2002
Warrant to Purchase 1,250,000 Shares of Common Stock.
WARRANT TO PURCHASE 1,250,000
SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
UNIVERSAL HEIGHTS, INC.
This is to certify that, FOR VALUE RECEIVED, Joe DeAlessandro or
registered assigns ("Holder"), is entitled to purchase, subject to the
provisions of this Warrant, from UNIVERSAL HEIGHTS, INC., a Delaware corporation
("Company"), 1,250,000 fully paid, validly issued and nonassessable shares of
Common Stock, par value $.01 per share, of the Company ("Common Stock") at the
exercise price of $.63 per share until May 14, 2002. The number of shares of
Common Stock to be received upon the exercise of this Warrant and the price to
be paid for each share of Common Stock may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares," and the exercise price of a share of Common Stock as
adjusted from time to time is hereinafter sometimes referred to as the "Exercise
Price."
(a) EXERCISE OF WARRANT. This Warrant may be exercised as to a minimum of
10,000 Warrant Shares at any time or from time to time until 5:00 P.M. New York
time on May 14, 2002, provided, however, that if either such day is a day on
which banking institutions in the State of New York are authorized by law to
close, then on the next succeeding day which shall not be such a day. This
Warrant may be exercised by presentation and surrender hereof to the Company at
its principal office, or at the office of its stock transfer agent, if any, with
the Purchase Form annexed hereto duly executed and accompanied by payment of the
Exercise Price for the number of Warrant Shares specified in such form. As soon
as practicable after each such exercise of the Warrants, but not later than
seven (7) business days from the date of such exercise, the Company shall issue
and deliver to the Holder a certificate or certificates for the Warrant Shares
<PAGE>
issuable upon such exercise, registered in the name of the Holder or the
Holder's designee. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant for cancellation, execute and deliver a
new Warrant evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable thereunder. Upon receipt by the Company of
this Warrant at its office, or by the stock transfer agent of the Company at its
office, in proper form for exercise, together with the exercise price thereof in
cash or certified or bank check and the investment letter described below, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be physically delivered to the Holder. It shall
be a condition of the exercise of this Warrant that the Holder shall deliver to
the Company an investment letter in the form as customarily used by the Company
from time to time in connection with the exercise of non-registered options and
warrants which are issued by the Company. It is further understood that
certificates for the Warrant Shares to be issued upon exercise of this Warrant
shall contain a restrictive legend to the effect that such Warrant Shares are
restricted securities as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act") and cannot be sold except in
compliance with the Act and the rules and regulations promulgated thereunder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
the Warrants. If the Common Stock is listed on any national securities exchange,
the Company shall also list such shares on such exchange subject to notice of
issuance.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the NASDAQ system, the current market value shall be the last
reported sale price of the Common Stock on such exchange or system on the
last business day prior to the date of exercise of this Warrant or if no
such sale is made on such day, the average closing bid and asked prices
for such day on such exchange or system; or
(2) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the last
reported bid and asked prices reported by the National Quotation Bureau,
Inc., on the last business day prior to the date of the exercise of this
Warrant; or
(3) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than the book value
thereof as at the end of the most recent fiscal year of the Company ending
2
<PAGE>
prior to the date of the exercise of the Warrant, determined in such
reasonable manner as may be prescribed by the Board of Directors of the
Company.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Upon surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer agent, if any, with
the Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock transfer agent if
any, together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and in the case
of loss, theft or destruction of reasonable satisfactory indemnification, and
upon surrender and cancellation of this Warran,t if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed,
or mutilated shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time and
the number and kind of securities purchasable upon the exercise of the Warrants
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such dividend
or distribution or of the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted as of the effective
date of such event by multiplying such Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock
outstanding immediately following such event and the numerator of which
shall be the number of shares of Common Stock outstanding immediately
prior thereto. For example, if the Company declares a 2 for 1 stock
distribution and the Exercise Price immediately prior to such event was
$1.00 per share, the adjusted Exercise Price immediately after such event
3
<PAGE>
would be $.50 per share. Such adjustment shall be made successively
whenever any event listed above shall occur.
(2) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsection (1) above, the number of Shares
purchasable upon exercise of this Warrant shall simultaneously be adjusted
by multiplying the number of Shares initially issuable upon exercise of
this Warrant by the Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.
(3) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least
twenty-five cents ($.25) in such price; provided, however, that any
adjustments which by reason of this Subsection (3) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment required to be made hereunder. All calculations under this
Section (f) shall be made to the nearest cent or to the nearest
one-hundredth of a Share, as the case may be.
(4) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise
Price and adjusted number of Shares issuable upon exercise of each Warrant
to be mailed to the Holders, at their last addresses appearing in the
Warrant Register, and shall cause a certified copy thereof to be mailed to
its transfer agent, if any. The Company may retain a firm of independent
certified public accountants selected by its Board of Directors (who may
be the regular accountants employed by the Company) to make any
computation required by this Section (f), and a certificate signed by such
firm shall be conclusive evidence of the correctness of such adjustment
(5) In the event that at any time, as a result of an adjustment made
pursuant to Subsection (1) above, the Holder of this Warrant thereafter
shall become entitled to receive any shares of the Company, other than
Common Stock, thereafter the number of such other shares so receivable
upon exercise of this Warrant shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Subsections (1)
to (3), inclusive above.
(6) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the similar Warrants
initially issuable pursuant to this Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
4
<PAGE>
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the Holder or any
holder of a Warrant executed and delivered pursuant to Section (a), and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock, or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least 15 days prior the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. In the event that in connection
with any such capital reorganization or reclassification, consolidation, merger,
sale or conveyance, additional shares of Common Stock shall be issued in
exchange, conversion, substitution or payment, in whole or in part, for a
security of the Company other than Common Stock, any such issue shall be treated
as an issue of Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
5
<PAGE>
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933
(1) No later than one (1) year from the date hereof, the Company
shall, if permitted by applicable regulation or any contractual provisions
include in the filing of any new registration statement (other than a
registration statement on Forms S-8, S-14, S-15 or any other Form not
generally available for sale of securities to the public) ("Registration
Statement") under the Act covering securities of the Company such
information as may be required to permit a public offering of the Warrant
Shares. The Company shall supply prospectuses and other documents in order
to facilitate the public sale or other disposition of the Warrant Shares.
The Company shall file any necessary post-effective amendments to such
Registration Statement and use its best efforts to maintain the
effectiveness thereof for a period of 36 months from the date of issuance
of the Warrant Shares. The Company shall bear the entire cost and expense
of a registration of securities initiated by it, under this Paragraph (1).
The Holder shall, however, bear the fees of his own counsel and any
transfer taxes or underwriting discounts or commissions applicable to the
Warrant Shares sold by him. The Company may include other securities in
any such registration statement. The Company shall do any and all other
acts and things which may be necessary or desirable to enable the Holder
to consummate the public sale or other disposition of the Warrant Shares,
and furnish indemnification in the manner as set forth in Paragraph (2)(a)
of this Section (j). The Holder shall furnish information and
indemnification as set forth in Paragraph (2)(b) of this Section (j).
Notwithstanding the foregoing, in the event that there is an
underwritten offering of the Company's securities offered pursuant to said
registration statement pursuant to the immediately preceding paragraph
j(1), the underwriter shall have the right to refuse to permit any Warrant
Shares, or to limit the amount of Warrant Shares, to be sold by the Holder
to such underwriter(s) as such underwriter(s) may determine in its
discretion, and the Holder shall refrain from selling such remainder of
its Warrant Shares covered by such registration statement for the period
of forty five (45) days following the effective date.
(2) (a) Whenever pursuant to this Section (j) a registration statement
relating to the Warrant Shares is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each holder of
the securities covered by such registration statement, amendment or
supplement (such holder being hereinafter called the "Distributing
Holder"), and each person, if any who controls (within the meaning of the
Act) the Distributing Holder, against any losses, claims, damages or
liabilities, joint or several, to which the Distributing Holder or any
such controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any such
registration statement or any preliminary prospectus or final prospectus
constituting a part thereof or any amendment or supplement thereto, or
arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse the Distributing Holder and
each such controlling person for any legal or other expenses reasonable
incurred by the Distributing Holder and each controlling person for any
6
<PAGE>
legal or other expenses reasonable incurred by the Distributing Holder or
such controlling person or underwriter in connection with investigating or
defending any such loss, claim damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in said registration statement, said preliminary
prospectus, said final prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished by such
Distributing Holder for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, each
person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or
any such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in said registration statement,
said preliminary prospectus, said final prospectus, or said amendment or
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission was made in said
registration statement, said preliminary prospectus, said final prospectus
or said amendment or supplement in reliance upon and in conformity with
written information furnished by such distributing Holder for use in the
preparation thereof; and will reimburse the Company or any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 2 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Paragraph 2.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in, and, the extent
that it may wish, jointly with any other indemnifying party similarly
notified to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Paragraph 2 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
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<PAGE>
(e) The Company's agreements with respect to Warrant Shares in this
Section (j) shall continue in effect regardless of the exercise or
surrender of this Warrant.
Dated: As of May 14, 1997
UNIVERSAL HEIGHTS, INC.
By: /s/ Bradley I. Meier
------------------------
Bradley I. Meier
President
8
<PAGE>
PURCHASE FORM
Dated ___________, 19__
The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing _________ shares of Common Stock of Universal
Heights, Inc., and hereby makes payment of __________ in payment of the actual
exercise price thereof.
---------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name (Please typewrite or print in block letters)
------------------------------
Address
--------------------------
Signature
-------------------
9
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers unto
Name (Please typewrite or print in block letters)
------------------------------
Address
--------------------------
the right to purchase Common Stock of Universal Heights, Inc., represented by
this Warrant to the extent of _____ shares as to which such right is exercisable
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Date _____________, 19__
Signature _____________________
10
<PAGE>
EXHIBIT A
UNIVERSAL HEIGHTS, INC.
19589 NE 10th Ave.
Miami, FL 33179
Ph: (305) 653-4274
Fax: (305) 653-9884
May 14, 1997
Mr. Joseph P. DeAlessandro
725 Dorian Street
Westfield, New Jersey 07090
Dear Mr. DeAlessandro:
This letter follows our recent discussions with respect to, and sets forth
the terms of, an agreement ("Supplemental Agreement") between Universal Heights,
Inc. ("Universal") and Joseph P. DeAlessandro (referred to herein as "you" or
"DeAlessandro"), which supplements the agreement between American European Group
("AEG") and Universal ("Agreement") pursuant to which you, through a management
subsidiary of AEG ("Management Subsidiary"), agree to provide your services as
Chairman and Chief Operating Officer of Universal Insurance Holding Company
("UIHC"), a wholly-owned subsidiary of Universal, and additional management
services as may be required.
1. In consideration of the foregoing, Universal will grant to you warrants
to purchase 1,250,000 shares of Universal's common stock, $0.01 par value
("Warrants"), which will expire after five years and vest in increments of
250,000 as described below.
2. None of the Warrants shall be exerciseable until (i) the execution of
the Agreement by Universal and AEG, on behalf of its Management Subsidiary, (ii)
the approval and licensing of UIHC by the State of Florida and (iii) the
commencement of operations by UIHC.
3. Upon occurrence of all of the terms set forth in paragraph 2 above, you
will be entitled to exercise 250,000 warrants at an exercise price equal to the
closing bid price on the day of execution of the Agreement ("Exercise Price").
3. You will be entitled to exercise the remaining 1,000,000 Warrants
("Additional Warrants"), in increments of 250,000 each, at the Exercise Price
upon the achievement by UHIC of pre-tax profits equal to $2.5 million, $5
million, $10 million, $20 million, respectively, based on generally accepted
accounting principles.
<PAGE>
4. Previously unexercised Additional Warrants will terminate in the event
that, prior to three years from the date of execution of the Agreement, (i) UHIC
terminates your employment for cause (ii) the arrangement with the Management
Subsidiary is otherwise terminated for cause (iii) you voluntarily discontinue
employment with UHIC or (iv) AEG or the Management Subsidiary voluntarily
terminates the management arrangement between the Management Subsidiary and
UHIC.
5. The terms of the Supplemental Agreement will be subject, among other
things, to approval by Universal's Board of Directors and shareholders and a
warrant agreement covering the Warrants described herein.
If the foregoing reflects accurately the matters which we have discussed,
please execute the enclosed duplicate copy of this letter and return it to me.
Sincerely yours,
UNIVERSAL HEIGHTS, INC.
By: /s/ Bradley I. Meier, President
----------------------------------
ACCEPTED AND AGREED TO
/s/ Joseph P. DeAlessandro
- ----------------------------
Joseph P. DeAlessandro
2
Exhibit 10.16
EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") dated as of the 11th day of
August, 1999, between Universal Heights, Inc., a corporation organized and
existing under and by virtue of the laws of the State of Delaware, having its
principal place of business at 2875 N.E. 191st Street, Suite 400A, Miami,
Florida 33180 (the "Company"), and Bradley I. Meier, who resides at 19701 East
Country Club Drive, Aventura, Florida 33180 ("Employee").
W I T N E S E T H:
------------------
WHEREAS, the Company is engaged in the investment and financial
services industry; and
WHEREAS, the Company is desirous of continuing to employ Employee to
develop and run its investment and financial services activities, and Employee
is desirous of continuing in such capacity; and
WHEREAS, the Company and Employee desire to enter into this
Agreement so that the rights, duties, benefits and obligations of each in
respect of the employment of Employee for and by the Company will be fully set
forth under the terms and conditions stated herein upon the execution hereof;
and
WHEREAS, the Board of Directors of the Company have approved the
employment of Employee upon the terms and conditions set forth herein by a
resolution issued by it, and have authorized the execution and delivery of this
Agreement.
<PAGE>
NOW, therefore, in consideration of the mutual promises contained
herein, including the extension of Employee's term of employment, and for other
good and valuable consideration, the Company and Employee agree as follows:
1. EMPLOYMENT
----------
The Company hereby employs Employee in an Employee capacity,
specifically as "President" and as the Company's "Chief Employee Officer."
Employee hereby accepts such employment and agrees to perform the services and
duties specified herein.
2. TERM
----
Subject to the terms and conditions herein, the term of the
employment of Employee under this Agreement ("Term") is effective as of January
1, 1999 (the "Effective Date") and shall terminate on December 31, 2003, unless
extended in accordance with this section or by written instrument executed by
the Company after review and approval of such extension by the Board of
Directors of the Company ("Expiration Date"). On the first anniversary of the
Effective Date and on each subsequent anniversary date, the term of this
Agreement shall be extended automatically for one (1) additional year unless one
party provides written notice to the other no less than sixty (60) days prior to
any such anniversary of the Effective Date that it does not wish to extend the
term of this Agreement; in which event there shall be no extension of the Term
on the anniversary date next following timely delivery of such written notice.
2
<PAGE>
3. DISABILITY
----------
If, during the Term, Employee shall become unable to perform his
duties as provided for herein by reason of illness or injury, for a consecutive
period of three hundred sixty five (365) days, then the Company may, on thirty
(30) days written notice to Employee, terminate the officership held by
Employee. In the event of such termination, Employee shall remain an employee of
the Company and receive seventy (70%) percent of his compensation and all of his
fringe benefits as set forth below in Articles 6 and 8, respectively.
4. TERMINATION FOR CAUSE
---------------------
This Agreement may be immediately terminated by the Company for
"cause" at any time, upon written notice to Employee, after which all
obligations of the Company to Employee shall thereupon cease. For the purposes
of this Agreement, the term "cause" when used with reference to the termination
of this Agreement, shall mean only any or all of the following:
(a) Employee's absence from his employment for any reason
other than sickness or injury, at substantially all times during a period of
ninety (90) consecutive days;
(b) Failure on the part of Employee to (i) follow material
instructions or policy of the Board of Directors given or adopted in good faith,
or (ii) carry out an agreed policy or course of action as determined by (a) the
Board of Directors or (b) a committee of the Board of Directors, any or all of
which is or may be to the detriment of the Company; or
(c) Willful misconduct or gross negligence of Employee in
connection with the performance of his duties.
3
<PAGE>
5. DUTIES
------
(a) Employee shall perform the following duties in connection
with his employment, all of which shall be subject to the paramount directions
of the Board of Directors:
(i) To serve as "President" and to be the "Chief
Employee Officer" of the Company; and
(ii) To assist the Company in its business affairs and
develop and
run its investment and financial services activities, as well as in the
Company's dealings with other companies, its regulatory affairs, banking and
other financial institutions and other groups and institutions; and
(iii) To undertake such specific assignments, consistent
with his office and position, as may be given to him from time to time by the
Board of Directors; and
(iv) To continue to serve as a director of the Company,
and then
as, if and when re-elected, to continue to serve as a director of the Company,
and also if so elected, to serve as a director of any subsidiary or affiliate of
the Company.
(b) Employee shall devote his best efforts and skills to the
affairs of the Company, and to the performance of the duties set forth in this
Article 5, on a substantially full-time basis. Employee shall not participate in
any outside business activity that will either (i) interfere with, or (ii) be a
conflict of interest with the performance of Employee's duties, activities and
employment pursuant to this Agreement. The foregoing notwithstanding, Employee
4
<PAGE>
has disclosed to the Company his other outside business interests ("Outside
Business Interests") which are listed on Schedule "1" hereto and the Company
with this full knowledge has consented to Employee's continuance thereof.
Moreover, the Company agrees to permit Employee to involve himself in other
similar Outside Business Interests, on condition that they similarly be
disclosed and are added to Schedule "1" prior to their being commenced. Employee
may also invest his assets and manage, protect and support the profitability of
such assets, as well as devote such reasonable time as is required by such
Outside Business Interests, subject to the limitations set forth in this Section
5(b).
6. COMPENSATION
------------
(a) BASE SALARY
-----------
Employee shall receive from the Company, or any of its
subsidiaries, for the discharge of Employee's duties and activities on behalf of
the Company as provided for herein, an annual salary ("Base Salary") of two
hundred fifty thousand dollars ($250,000.00), which shall be paid by the Company
to Employee in equal and regular installments not less frequently than monthly,
in accordance with the Company's policy for payment of Employee salaries and
which shall be increased by five percent (5%) each year beginning with the first
anniversary of the Effective Date.
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(b) ANNUAL BONUS
------------
Employee shall receive an annual bonus of three (3%)
percent of the Company's pre-tax income up to five million ($5,000,000) dollars,
and four (4%) percent of the Company's pre-tax income over five million
($5,000,000) dollars, which shall be computed as at December 31 for each fiscal
year commencing with the fiscal year ending December 31, 1999.
(c) SIGNING STOCK OPTION BONUS
--------------------------
Upon the execution of an Employment Agreement dated May
1, 1997, Employee was granted one million five hundred thousand (1,500,000)
options to purchase shares of Common Stock of the Company (the "Options"). The
vesting schedule for the Options is as follows: (i) five hundred thousand
($500,000) on the date of the grant, (ii) five hundred thousand ($500,000) on
the first anniversary of the grant and (iii) five hundred thousand ($500,000) on
the second anniversary of the grant.
7. OPTIONS
-------
From time to time, the Company shall grant to Employee
additional Options ("Future Options"). The Company shall enter into an option
agreement for the issuance of such Future Options.
8. FRINGE BENEFITS
---------------
In addition to the base compensation set forth in Articles 6
and 7 above, Employee shall be entitled to receive the following benefits:
6
<PAGE>
(a) Any benefits under group hospitalization, health, dental
care or sick leave plan, life or other insurance or death benefit plan, travel
or accident insurance, or contingent compensation plan, or any other present or
future plan, including any qualified retirement plan, for which any Employees
are or shall become eligible. If Employee is not eligible for health benefits as
described above, by reason of age, location or otherwise, then Employee shall be
provided equivalent benefits determined at the election of the Company. Employee
shall be eligible to receive the foregoing benefits during the five (5) year
period following the termination of his employment under this Agreement; and
(b) An annual vacation of up to thirty (30) days, whether
taken individually or consecutively ("Vacation Period"), at such time or times
as shall be approved by the Company, and which approval shall not be
unreasonably withheld. Full compensation shall be paid during any Vacation
Period. Any portion of any Vacation Period not used within any year shall be
accrued and will accumulate, and may be used by Employee at any time during his
employment in accordance with the provisions of this Article 8. Employee at any
time during the Term of this agreement or its renewal, may elect to convert to
annual Base Salary ("Conversion") all or any portion of any accrued Vacation
Period days(s), whether it accrued under the Term of this Agreement, or any
renewal hereof, or any prior employment agreement. In the event Employee elects
to effect a conversion, then the Conversion shall be pro rata based upon the
number of days of Vacation Period as that bears to the then prevailing annual
Base Salary, regardless of when the unused Vacation Period day(s) accrued. If
Employee has not used all of his accrued and accumulated vacation time at the
termination of his employment, then Employee may then elect to have his accrued
and accumulated Vacation Period time converted to annual Base Salary, pro rata
7
<PAGE>
at the then prevailing Base Salary, regardless of when the unused vacation time
accrued; and
(c) Employee may incur and shall be reimbursed for reasonable
expenses that are related to the Company's business, including expenses for
entertainment, travel and similar items ("Approved Reimbursable Expenses"). All
such reimbursement of Approved Reimbursable Expenses shall be made within thirty
(30) days of receipt by the Company from Employee of an itemized account and if
necessary proper substantiation of Approved Reimbursable Expenses. In order to
facilitate the payment of the Approved Reimbursable Expenses, the Company shall
furnish Employee with Company acquired credit cards as may be available to all
other Employee officers of the Company; and
(d) Employee shall be given a private office with secretarial
help and any and all reasonable facilities and services so as to be suitable
with his position as President and Chief Employee Officer, and so as to assist
in the performance of his duties and activities; and
(e) Employee shall be given an automobile allowance or
automobile lease plan to the extent of seven thousand five hundred dollars
($7,500.00) per annum, paid in twelve (12) equal monthly installments, to be
used to defray acquisition expense for a luxury automobile, and insurance and
maintenance expenses for the automobile.
9. CHANGE IN CONTROL
-----------------
Notwithstanding any other provision to the contrary, the
following provisions will govern in the event of a change in control as defined
herein.
8
<PAGE>
(a) A change in control shall be deemed to have occurred if,
at any time, substantially all the assets of the Company shall have been sold or
transferred by sale, merger or otherwise, or if any "person" (as such term is
used in Sections 13(d) or 14(d) of the Exchange Act) becomes the beneficial
owner, directly or indirectly, of securities of the company representing fifty
percent (50%) or more of the combined voting power of the then-existing
outstanding securities of the Company.
(b) If a change in control occurs as defined in subsection
9(a) above, then the Company shall pay to Employee an amount equal to (i)
forty-eight (48) months base salary and (ii) an amount equal two times any
bonuses paid in respect of the preceding fiscal year.
(c) If a change in control occurs as defined in subsection
9(a) above, then all Future Options granted to Employee shall immediately vest
and become exercisable. Such acceleration of the vesting of stock options shall
be in addition to, and shall have no affect on, any payments accrued pursuant to
subsection 9(b).
(d) If change in control occurs as defined in subsection 9(a)
above, then the Company shall also pay to Employee an amount equal to the sum of
(x) excise taxes imposed on Employee under Section 4999 of the Code and (y)
income taxes due from Employee with respect to the payment of the amount in
subsection (x) above as well as the payment for income taxes under this
subsection 9(d).
9
<PAGE>
10. DISCLOSURE OF INFORMATION AND NON-COMPETITION
---------------------------------------------
(a) Employee recognizes and acknowledges that during the
course of his employment he will have access to certain confidential information
of the Company and that such information constitutes valuable, special and
unique property of the Company. During the Term of this Agreement and following
termination of his employment hereunder, Employee will not disclose information,
including any trade secrets or confidential information of the Company obtained
during the course of his employment with the Company, except such information as
may have become part of the public domain through no fault of Employee, which
public domain determination shall only be made by the Company in a written
acknowledgment made at the request of Employee, before Employee may be free to
disclose any such claimed public domain information.
(b) During the Term of this Agreement, and for two (2) years
thereafter, Employee will not, directly or indirectly, engage in any business
enterprise or activity competitive with the business of the Company either as an
employee, consultant, partner, shareholder, or in any other capacity. For the
purposes of this covenant not to compete, a competing business enterprise will
be deemed competitive only if such business enterprise conducts activities in
the development of investments and financial services similar to the activities
of the Company. Further, Employee agrees that he will not either during or
within two (2) years subsequent to the termination of his employment, disturb,
entice, hire or in any other manner attempt to persuade any employee, dealer,
supplier or customer of the Company to discontinue its business relationship
with the Company.
10
<PAGE>
(c) The Employee and the Company acknowledge that it would be
very difficult or impossible to measure the damages resulting from a breach of
this Article 10, and that any such breach would cause immediate and irreparable
harm. Therefore, in consequence of the foregoing, Employee hereby agrees that
any breach or threatened breach by him of any provision of this Article 10 shall
entitle the Company, in addition to any other legal remedies available to it, to
obtain from any Court of competent jurisdiction a temporary and permanent
injunction in order to enjoin such breach or threatened breach, without the
necessity on the part of the Company, in any application for such injunctive
relief to show immediate and irreparable harm, which would be a requirement of
such an application absent this covenant waiving those requirements. Employee
also covenants that the service of any papers to commence any legal proceedings,
including proceedings to obtain injunctive relief, may be done by utilizing
Federal Express in lieu of any other form of personal delivery of the process or
orders of the Court and upon doing so the service and notice provisions for the
commencement of legal proceedings shall be satisfied.
(d) Notwithstanding any other provision to the contrary, in
the event of a change in control as defined in subsection 9(a) above, this
Article 10 will not apply.
11. DEATH DURING EMPLOYMENT
-----------------------
If Employee dies during the Term of his employment, then the
Company shall pay to his estate compensation which would otherwise be payable to
Employee for the shorter of (i) three (3) years from the date of his death, or
(ii) the period ending on the Expiration Date of this Agreement. Said sums shall
be paid in accordance with written directions given by Employee to the Company,
or lacking any such directions then to the surviving spouse of Employee, or if
11
<PAGE>
there is no surviving spouse, then to his surviving children in equal shares, or
if there are none, then to his estate.
12. PATENTS, COPYRIGHTS AND PROPRIETARY RIGHTS
------------------------------------------
During the Term of his employment, all work product emanating
directly and/or indirectly from Employee's duties and activities effected on
behalf of the Company ("Work Product") shall be exclusively owned by the
Company. If any such Work Product is the subject of an application for patent,
copyright, trade mark or similar proprietary protection ("Application"), then
regardless of the name of the person or entity submitting the Application,
Employee hereby acknowledges the Company's exclusive rights in and to the
Application for proprietary protection. If the Application results in the
issuance of the requested proprietary protection, e.g., a patent or copyright,
then Employee hereby acknowledges the Company's exclusive ownership therein, and
Employee will execute any documents necessary to give effect and implement this
ownership, including but not limited to an assignment of the Application and/or
the issued proprietary protection.
13. NOTICES
-------
Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and actually delivered, or if sent
either by Federal Express, or postage prepaid, by certified mail, return receipt
requested, with a copy by ordinary mail, to the addresses below:
As to Company: Universal Heights, Inc.
2875 N.E. 191st Street, Suite 400A
Miami, Florida 33180
12
<PAGE>
As to Employee: Bradley I. Meier
19701 East Country Club Drive
Aventura, Florida 33180
or to such other address as either party shall designate by written notice to
the other.
14. ASSIGNMENT
----------
The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company. Employee acknowledges that the services to be rendered
by him are unique and personal, and accordingly, he may not assign any of his
rights, duties, obligations or benefits under this Agreement.
15. ENTIRE AGREEMENT
----------------
This Agreement contains the entire agreement and understanding
of the Company and Employee with respect to the subject matter hereof, and shall
incorporate, merge and supersede all prior agreements and understandings between
the Company and Employee, either oral or written, if any. No modification,
change or amendment to this Agreement, shall be binding upon the Company or
Employee unless the same is in writing, and signed by the party against whom
enforcement of the modification, change or amendment is sought to be enforced.
16. MISCELLANEOUS
-------------
(a) This Agreement and the implementation of it shall be
subject to and governed by the laws of the State of Florida, and any legal
proceedings relating to (i) the interpretation or enforcement of any of the
provisions of this Agreement, or (ii) any dispute relating to the employment
13
<PAGE>
relationship created by the Agreement, shall only be brought in the Circuit
Court of the State of Florida, in and for the County of Dade.
(b) The Article headings contained herein are for reference
purposes only and shall not in any way affect the meaning or the interpretation
of this Agreement.
(c) The failure of any provision of this Agreement shall in no
manner affect the right to enforce the remainder of this Agreement, and the
waiver by either the Company or Employee of any breach of any provision of this
Agreement shall not be construed to be a waiver by the Company or Employee of
any succeeding breach of such provision or a waiver by such party of any breach
of any other provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
Employee:
Witness:
/s/ Bradley I. Meier
- -------------------------- -------------------------------
Bradley I. Meier
UNIVERSAL HEIGHTS, INC.
Witness:
/s/ Irwin Kellner
- -------------------------- -------------------------------
By: Irwin Kellner, Secretary
14
<PAGE>
SCHEDULE 1
- ----------
OUTSIDE BUSINESS INTERESTS
As of execution date:
UNIVERSAL HEIGHTS, INC.
- -----------------------------------
By:
- -----------------------------------
Bradley I. Meier
Dated: ______________, ____
15
EXHIBIT 11
UNIVERSAL HEIGHTS, INC.
Statement Regarding the Computation of Per Share Income
The following table reconciles the numerator (earnings) and denominator (shares)
of the basic and diluted earnings per share computations for net income for the
quarters ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
JUNE 30, 1999 JUNE 30, 1998
---------------- ----------------
Income Income
Available Available
to Common Per-Share to Common Per-Share
Stockholders Shares Amount Stockholders Shares Amount
------------ ------ --------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Net income $1,059,665 $1,547,516
Less: Preferred
stock dividends (24,976) ---
Income available ---------- ----------
to common stockholders 1,034,689 14,673,000 $ 0.07 $1,547,516 14,676,000 $0.11
========= =========
Effect of dilutive securities:
Stock options and warrants --- 529,000 --- --- 2,539,000 (0.02)
Preferred stock 24,976 568,000 --- --- 568,000 ---
------- ---------- --------- ------------ ----------- ---------
Income available to common
stockholders and assumed
conversion $1,059,665 15,770,000 $ 0.07 $1,547,516 17,783,000 $0.09
========== ========== ========= ========== ========== =========
</TABLE>
Options and warrants totaling 9,999,000 and 5,066,000 were excluded from the
calculation of diluted earnings per share as their effect was anti-dilutive for
the six months ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
JUNE 30, 1999 JUNE 30, 1998
---------------- ----------------
Income Income
Available Available
to Common Per-Share to Common Per-Share
Stockholders Shares Amount Stockholders Shares Amount
------------ ------ --------- ------------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 540,556 $1,174,685
Less: Preferred
stock dividends (12,488) ---
Income available ---------- ----------
to common stockholders 528,068 14,673,000 $ 0.04 $1,174,685 14,680,000 $0.08
========= =========
Effect of dilutive securities
Stock options and warrants --- 613,000 (0.01) --- 2,539,000 (0.01)
Preferred stock 12,488 568,000 --- --- 568,000 ---
------- ---------- --------- ------------ ----------- ---------
Income available to common
stockholders and assumed
conversion $ 540,556 15,854,000 $ 0.03 $1,174,685 17,787,000 $0.07
========== ========== ========= ========== ========== =========
</TABLE>
Options and warrants totaling 9,915,000 and 5,066,000 were excluded from the
calculation of diluted earnings per share as their effect was anti-dilutive for
the six months ended June 30, 1999 and 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000891166
<NAME> UNIVERSAL HEIGHTS, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 9,683,404
<SECURITIES> 2,649,072
<RECEIVABLES> 7,889,113
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,829,488
<PP&E> 53,592
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,532,152
<CURRENT-LIABILITIES> 12,845,475
<BONDS> 0
0
1,387
<COMMON> 146,726
<OTHER-SE> 8,538,564
<TOTAL-LIABILITY-AND-EQUITY> 21,532,152
<SALES> 3,568,028
<TOTAL-REVENUES> 4,397,589
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,337,924
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,059,665
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,059,665
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
