SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. )*
EMBRYO DEVELOPMENT CORPORATION
.............................................................................
(Name of Issuer)
Common Stock, $.0001
.............................................................................
(Title of Class of Securities)
290818 10
.............................................................................
(CUSIP Number)
MICHAEL BECKMAN, ESQ.
LAURENCE D. PAREDES, ESQ.
BECKMAN, MILLMAN & SANDERS, L.L.P.
116 JOHN STREET, SUITE 1313
NEW YORK, NEW YORK 10038
.............................................................................
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 1, 1998
.............................................................................
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of less than five percent
of such class. See Rule 13d-7.)
SCHEDULE 13D
CUSIP No. 290818 10
- -------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
MATTHEW L. HARRITON
______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
______________________________________________________________________________
3) SEC Use Only
______________________________________________________________________________
4) Source of Funds (See Instructions)
PF
(Non-recourse Promissory Note, dated July 1, 1998, in the principal amount of
$117,250, due in five (5) years, bearing interest at 8% per annum, secured by
the common stock purchased)
______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
______________________________________________________________________________
6) Citizenship or Place of Organization
UNITED STATES
______________________________________________________________________________
Number of 7) Sole Voting Power
1,250,000
Shares ____________________________________________________________
8) Shared Voting Power
Beneficially -0-
____________________________________________________________
Owned by 9) Sole Dispositive Power
1,250,000
Each Reporting ____________________________________________________________
10) Shared Dispositive Power
Person With -0-
______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,250,000
______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
______________________________________________________________________________
13) Percent of Class Represented by Amount in row (11)
17.9%
______________________________________________________________________________
14) Type of Reporting Person (See Instructions)
IN
______________________________________________________________________________
SCHEDULE 13D
CUSIP No. 290818 10
- -------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
ANDREW FABRIKANT
______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
______________________________________________________________________________
3) SEC Use Only
______________________________________________________________________________
4) Source of Funds (See Instructions)
PF
(Non-recourse Promissory Note, dated July 1, 1998, in the principal amount of
$23,450, due in five (5) years, bearing interest at 8% per annum, secured by the
common stock purchased)
______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
______________________________________________________________________________
6) Citizenship or Place of Organization
UNITED STATES
______________________________________________________________________________
Number of 7) Sole Voting Power
250,000
Shares ____________________________________________________________
8) Shared Voting Power
Beneficially -0-
____________________________________________________________
Owned by 9) Sole Dispositive Power
250,000
Each Reporting ____________________________________________________________
10) Shared Dispositive Power
Person With -0-
______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person
250,000
______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
______________________________________________________________________________
13) Percent of Class Represented by Amount in row (11)
3.6%
______________________________________________________________________________
14) Type of Reporting Person (See Instructions)
IN
______________________________________________________________________________
SCHEDULE 13D
CUSIP No. 290818 10
- ------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
DR. DANIEL DURCHSLAG
______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
______________________________________________________________________________
3) SEC Use Only
______________________________________________________________________________
4) Source of Funds (See Instructions)
PF
(Non-recourse Promissory Note, dated July 1, 1998, in the principal amount of
$23,450, due in five (5) years, bearing interest at 8% per annum, secured by the
common stock purchased)
______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
______________________________________________________________________________
6) Citizenship or Place of Organization
UNITED STATES
______________________________________________________________________________
Number of 7) Sole Voting Power
250,000
Shares ____________________________________________________________
8) Shared Voting Power
Beneficially -0-
____________________________________________________________
Owned by 9) Sole Dispositive Power
250,000
Each Reporting ____________________________________________________________
10) Shared Dispositive Power
Person With -0-
______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person
250,000
______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
______________________________________________________________________________
13) Percent of Class Represented by Amount in row (11)
3.6%
______________________________________________________________________________
14) Type of Reporting Person (See Instructions)
IN
______________________________________________________________________________
SCHEDULE 13D
CUSIP No. 290818 10
- ------------------------------------------------------------------------------
1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
KAREN NAZZARENO
______________________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
______________________________________________________________________________
3) SEC Use Only
______________________________________________________________________________
4) Source of Funds (See Instructions)
PF
(Non-recourse Promissory Note, dated July 1, 1998, in the principal amount of
$37,520, due in five (5) years, bearing interest at 8% per annum, secured by the
common stock purchased)
______________________________________________________________________________
5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
______________________________________________________________________________
6) Citizenship or Place of Organization
UNITED STATES
______________________________________________________________________________
Number of 7) Sole Voting Power
450,000
Shares ____________________________________________________________
8) Shared Voting Power
Beneficially -0-
____________________________________________________________
Owned by 9) Sole Dispositive Power
450,000
Each Reporting ____________________________________________________________
10) Shared Dispositive Power
Person With -0-
______________________________________________________________________________
11) Aggregate Amount Beneficially Owned by Each Reporting Person
450,000
______________________________________________________________________________
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
______________________________________________________________________________
13) Percent of Class Represented by Amount in row (11)
6.4%
______________________________________________________________________________
14) Type of Reporting Person (See Instructions)
IN
______________________________________________________________________________
Item 1. Security and Issuer
The title of the class of equity securities to which this Schedule relates
is common stock, $.0001 par value per share (the "Common Stock" or, the
"Shares"), of Embryo Development Corporation, a Delaware corporation (the
"Company"). The address of the Company is 750 Lexington Avenue, New York,
New York 10022.
Item 2. Identity and background
(a) This Schedule 13 is filed on behalf of: (i) Mr. Matthew L. Harriton;
(ii) Mr. Andrew Fabrikant; (iii) Dr. Daniel Durchslag; and, (iv) Ms. Karen
Nazzareno.
Mr. Matthew L. Harriton serves as the Company's President, Chief Executive
Officer, Chief Financial Officer and Director.
Mr. Andrew Fabrikant is a Director of the Company.
Dr. Daniel Durchslag is a Director of the Company.
Ms. Karen Nazzareno is an employee of the Company.
Although the reporting persons herewith may act as a group by reason of
their relationships with other reporting persons, as described herein, they
expressly disclaim membership in a group nor do they affirm the existence of a
group, as defined in Rule 13d-3 (a) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(b) The addresses of the persons referred to in paragraph (a) are: (i)
Mr. Matthew L. Harriton, 750 Lexington Avenue, New York, New York 10022; (ii)
Mr. Andrew Fabrikant, 555 Fifth Avenue, New York, New York 10017; (iii) Dr.
Daniel Durchslag, 9400 Brighton Way, Suite 402, Beverly Hills, California
90210; and, (iv) Ms. Karen Nazzareno, 750 Lexington Avenue, New York,
New York 10022.
(c) The principal occupation of Mr. Matthew L. Harriton is as the
Company's President, Chief Executive Officer, Chief Financial Officer and
Director. Mr. Harriton also serves as President and Chief Executive Officer of
Hydrogel Design Systems, Inc., located at 750 Lexington Avenue,
New York, New York 10021, of which the Company owns a 31.1% equity interest,
since October of 1996.
The principal occupation of Mr. Andrew Fabrikant is as the President of
Fabrikant Fine Diamonds, an estate jewelry business. Fabrikant Fine Diamonds is
located at 555 Fifth Avenue, New York, New York 10017.
The principal occupation of Dr. Daniel Durchslag, D.D.S., is as a
practicing dentist, specializing in General, Cosmetic and Sports Dentistry.
Additionally, Dr. Durchslag serves as the Team Dentist for the National Football
League's Los Angeles Raiders.
The principal occupation of Ms. Karen Nazzareno is as the Comptroller of
the Company.
(d) None of the persons referred to in paragraph (a) has, during the last
five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the persons referred to in paragraph (a) above has, during the
last five years, been a party to a civil proceeding of a judicial or
dministrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violation with respect to such laws.
(f) Each individual referred to in paragraph (a) above is a citizen of the
United States.
Item 3. Source and Amount of Funds or Other Consideration
On June 17, 1998, the Company granted Mr. Matthew Harriton options to
purchase 750,000 Shares of Common Stock, at an exercise price of the then
market price of $.0938 per Share, pursuant to the Company's Incentive Stock
Option Plan. On that same date, options to purchase 500,000 Shares,
previously granted to Mr. Harriton pursuant to the terms of his prior employment
contract with the Company, was amended to change the exercise price thereof to
$.0938 per Share. On July 1, 1998, Mr. Harriton exercised his options to
purchase an aggregate of 1,250,000 Shares, at an exercise price of $.0938,
by delivering a non-recourse Promissory Note in the principal amount of
$46,900.00 and a non-recourse Promissory Note in the principal amount of
$70,350.00, for an aggregate principal amount of $117,250.00, due in five (5)
years, bearing interest at 8% per annum. Pursuant to the terms of the
Promissory Note, the total amount owed the Company is secured by the
Common Stock purchased.
On June 17, 1998, the Company granted Mr. Andrew Fabrikant options to
purchase 250,000 Shares of Common Stock, at an exercise price of the then market
price of $.0938 per Share, pursuant to the Company's Incentive Stock Option
Plan. On July 1, 1998, Mr. Fabrikant exercised his options to purchase all
250,000 Shares, at an exercise price of $.0938, by delivering a non-recourse
Promissory Note in the principal amount of $23,450.00, due in five (5) years,
bearing interest at 8% per annum. Pursuant to the terms of the Promissory
Note, the total amount owed the Company is secured by the Common Stock
purchased.
On June 17, 1998, the Company granted Dr. Daniel Durchslag options to
purchase 250,000 Shares of Common Stock, at an exercise price of the then
market price of $.0938 per Share, pursuant to the Company's Incentive Stock
Option Plan. On July 1, 1998, Dr. Durchslag exercised his options to
purchase all 250,000 Shares, at an exercise price of $.0938, by delivering a
non-recourse Promissory Note in the principal amount of $23,450.00, due in
five (5) years, bearing interest at 8% per annum. Pursuant to the terms of
the Promissory Note, the total amount owed the Company is secured by the
Common Stock purchased.
On June 17, 1998, the Company granted Ms. Karen Nazzareno options to
purchase 400,000 Shares of Common Stock, at an exercise price of the then
market price of $.0938 per Share, pursuant to the Company's Incentive Stock
Option Plan. On July 1, 1998, Ms. Nazzareno exercised her options to
purchase an aggregate of 400,000 Shares, at an exercise price of $.0938, by
delivering a non-recourse Promissory Note in the principal amount of
$37,520.00, due in five (5) years, bearing interest at 8% per annum.
Pursuant to the terms of the Promissory Note, the total amount owed the
Company is secured by the Common Stock purchased. Although the Company has
previously granted Ms. Nazzareno an option to purchase an additional 50,000
Shares, at an exercise price of $.25 per Share, to date Ms. Nazzareno has yet
to exercise such option. However, for purposes of this Schedule, and
pursuant to Rule 13d-3 (d)(1)(i) of the Exchange Act, Ms. Nazzareno shall be
deemed the beneficial owner of 450,000 Shares, by virtue of the fact that Ms.
Nazzareno may, within sixty days, exercise her existing option for an
additional 50,000 Shares. Therefore, for the purpose of computing Ms.
Nazzareno's percentage of outstanding securities of the class owned, the
50,000 Shares underlying Ms. Nazzareno's option will be included in the total
outstanding securities of the class owned by her, but shall not be deemed to
be outstanding securities for the purpose of computing the percentage of the
class by any other person.
Item 4. Purpose of the Transaction
The Reporting Persons acquired their Shares of Common Stock for investment
purposes. Such Reporting Persons, from time to time, may review the merits of
their investments in the Company and evaluate their options with respect
thereto. Subject to such review and evaluation, any or all of such Reporting
Persons may determine to acquire additional shares of Common Stock (or
securities convertible into Common Stock) through open market purchases,
privately negotiated transactions or grants pursuant to the Company's
Incentive Stock Option Plan. Furthermore, any or all of such Reporting
Persons may determine to sell shares of Common Stock (or securities
convertible into Common Stock) and/or may pursue any other options with
respect to their investment in the Company.
Notwithstanding anything to the contrary contained herein, each of the
Reporting Persons reserves the right, depending on all relevant factors, to
change its intention with respect to any and all of the matters referred to
in the preceding paragraph.
Other than as described in this Schedule, the Reporting Persons do not have
any specific plans or proposals that relate to or would result in any of the
actions specified in clauses (b) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
The number of Shares of Common Stock of the Company directly beneficially
owned as determined pursuant to Rule 13d-3 under the Exchange Act, by
Mr. Matthew Harriton as of the date hereof is 1,250,000, representing
approximately 17.9% of the outstanding Common Stock of the Company.
The number of Shares of Common Stock of the Company directly beneficially
owned as determined pursuant to Rule 13d-3 under the Exchange Act, by Mr.
Andrew Fabrikant as of the date hereof is 250,000, representing approximately
3.6% of the outstanding Common Stock of the Company.
The number of Shares of Common Stock of the Company directly beneficially
owned as determined pursuant to Rule 13d-3 under the Exchange Act, by Dr. Daniel
Durchslag as of the date hereof is 250,000, representing approximately 3.6%
of the outstanding Common Stock of the Company.
The number of Shares of Common Stock of the Company directly
beneficially owned as determined pursuant to Rule 13d-3 under the Exchange
Act, by Ms. Karen Nazzareno as of the date hereof is 450,000, representing
approximately 6.4% of the outstanding Common Stock of the Company, of which
50,000 of such Shares may be deemed to be beneficially owned pursuant to her
option to acquire an additional 50,000 Shares at an exercise price of $.25
per Share, as discussed herein.
Each of the Reporting Persons has sole voting and dispositive power with
respect to the Shares of Common Stock of the Company which they beneficially
hold.
For purposes of computing the percentage beneficial ownership of Mr.
Harriton, Mr. Fabrikant and Dr. Durchslag, the total number of Shares of Common
Stock of the Company considered to be outstanding is 6,995,000, based solely on
the number of Shares outstanding on July 20, 1998 as disclosed in the Form
10-KSB, filed by the Company.
For purposes of computing the percentage beneficial ownership of Ms.
Nazzareno, the total number of Shares of Common Stock of the Company considered
to be outstanding is 7,045,000, of which 50,000 of such Shares may be deemed to
be beneficially owned pursuant to her option to acquire an additional 50,000
Shares at an exercise price of $.25 per Share, as discussed herein, and
based solely on the number of Shares outstanding on July 20, 1998 as
disclosed in the Form 10-KSB, filed by the Company.
Except for the transactions described in this Schedule, no transactions
were effected by the Reporting Persons in the Common Stock of the Company during
the 60 days preceding the date hereof.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Other than their common employment and/or affiliation with the Company,
there are no contracts, understandings or relationships (legal or otherwise)
among the persons named in Item 2 hereof and between such persons or any persons
with respect to any securities of the Company, including but not limited to
transfer or voting of any of the Shares, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits
DOCUMENT EXHIBIT NO.
-------- -----------
Stock Option Exercise Letter, dated July 1, 1998, executed by 1
Matthew Harriton, for the exercise of options to purchase
500,000 Shares
Promissory Note, dated July 1, 1998, by and between 2
Matthew Harriton and Embryo Development Corporation, in
the principal amount of $46,900.00
Stock Option Agreement, dated June 17, 1998, by and 3
between Matthew Harriton and Embryo Development
Corporation
Stock Option Exercise Letter, dated July 1, 1998, executed by 4
Matthew Harriton, for the exercise of options to purchase
250,000 Shares
Stock Option Exercise Letter, dated July 1, 1998, executed by 5
Matthew Harriton, for the exercise of options to purchase
500,000 Shares
Promissory Note, dated July 1, 1998, by and between Mr. 6
Matthew Harriton and Embryo Development Corporation, in
the principal amount of $70,350.00
Stock Option Agreement, dated June 17, 1998, by and 7
between Andrew Fabrikant and Embryo Development
Corporation
Stock Option Exercise Letter, dated July 1, 1998, executed by 8
Andrew Fabrikant, for the exercise of options to purchase
250,000 Shares
Promissory Note, dated July 1, 1998, by and between Mr. 9
Andrew Fabrikant and Embryo Development Corporation,
in the principal amount of $23,450.00
Stock Option Agreement, dated June 17, 1998, by and 10
between Daniel Durchslag and Embryo Development
Corporation
Stock Option Exercise Letter, dated July 1, 1998, executed by 11
Daniel Durchslag, for the exercise of options to purchase
250,000 Shares
Promissory Note, dated July 1, 1998, by and between Dr. 12
Daniel Durchslag and Embryo Development Corporation,
in the principal amount of $23,450.00
Stock Option Agreement, dated June 17, 1998, by and 13
between Karen Nazzareno and Embryo Development
Corporation
Stock Option Exercise Letter, dated July 1, 1998, executed by 14
Karen Nazzareno, for the exercise of options to purchase
400,000 Shares
Promissory Note, dated July 1, 1998, by and between Ms. 15
Karen Nazzareno and Embryo Development Corporation, in
the principal amount of $37,520.00
Agreement of Joint Filing, dated August 28, 1998, by and 16
among Mr. Matthew Harriton, Mr. Andrew Fabrikant, Dr.
Daniel Durchslag and Ms. Karen Nazzareno
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
______________________________________________________________________________
Date:
AUGUST 28, 1998
______________________________________________________________________________
Signature:
/s/ MATTHEW HARRITON
______________________________________________________________________________
Name/Title:
MATTHEW HARRITON
PRESIDENT, CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND
DIRECTOR
______________________________________________________________________________
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
______________________________________________________________________________
Date:
AUGUST 28, 1998
______________________________________________________________________________
Signature:
/s/ ANDREW FABRIKANT
______________________________________________________________________________
Name/Title:
ANDREW FABRIKANT
DIRECTOR
______________________________________________________________________________
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
______________________________________________________________________________
Date:
AUGUST 28, 1998
______________________________________________________________________________
Signature:
/s/ DANIEL DURCHSLAG
______________________________________________________________________________
Name/Title:
DANIEL DURCHSLAG
DIRECTOR
______________________________________________________________________________
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
______________________________________________________________________________
Date:
AUGUST 28, 1998
______________________________________________________________________________
Signature:
/s/ KAREN NAZZARENO
______________________________________________________________________________
Name:
KAREN NAZZARENO
______________________________________________________________________________
EXHIBIT 1
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Matthew Harriton, Director
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
Dear Mr. Harriton:
This letter is to advise you that pursuant to your employment agreement the
Board of Directors have authorized the repricing of your present option to
purchase 500,000 shares of the Company's common stock, par value $0.0001, to an
exercise price of $0.0938 per share. If you decide to exercise this option,
please execute a copy of this letter and return to us together with your
secured promissory note.
Very truly yours,
BECKMAN, MILLMAN & SANDERS, LLP
/s/ Steven A. Sanders
By:________________________________
I hereby exercise options to purchase
500,000 shares of the common stock of
the Company and enclose my secured
promissory note in the amount of
$46,900.00
/s/ Matthew Harriton
_________________________
MATTHEW HARRITON
EXHIBIT 2
PROMISSORY NOTE
$46,900.00 New York, NY
Date: July 1, 1998
FOR VALUE RECEIVED, Matthew Harriton ("Borrower") promises to pay to EMBRYO
DEVELOPMENT CORPORATION, a Delaware corporation )"Lender"), on the date five
years from the date of this Note (the "Maturity Date"), the principal sum of
FORTY SIX THOUSAND NINE HUNDRED DOLLARS ($46,900.00), with EIGHT percent (8%)
interest.
Prepayment. Borrower shall have the right to prepay this Note at any time
and from time to time in whole or in part without penalty.
Late Fee. Upon default in the payment of the balance on the Maturity Date,
Borrower shall pay to Lender upon demand, in addition to all the other amounts
payable hereunder, a late charge equal to two percent of the amount so
overdue (but in no event higher than the maximum allowed by New York law).
Acceleration Upon Default. Each of the following shall be deemed an
"Event of Default":
A. If one of the following acts of insolvency occurs with respect to
Borrower or the property of Borrower:
insolvency; assignment for the benefit of creditors or calling of a
meeting of creditors preliminary thereto; appointment of a receiver,
conservator, rehabilitation or similar officer for Borrower or any
material portion of the property of Borrower, which appointment shall
not be removed within 30 days after the appointment; the issuance of
any attachment against any material portion of the property of
Borrower, which shall not be removed or bonded within 30 days of
such issuance; or the taking of possession of, or assumption of
control over, all or any substantial part of the property of
Borrower by the United States Government, foreign government (de
facto or de jure) or any agency thereof; the filing of a voluntary
petition in Bankruptcy by Borrower; or the commencement of any
proceeding by Borrower under any bankruptcy or debtor's law
(or similar law analogous in purpose or effect) for the relief or
reorganization of Borrower or for composition, extension,
arrangement or readjustment of any of the obligations of Borrower; or
the filing of any involuntarily petition in bankruptcy against
Borrower, which filing is not dismissed within 60 days of such
filing.
B. If a judgment is entered or a tax lien filed against Borrower or the
property of Borrower which is not paid or bonded on or before the 30th
day following the entry of judgment or filing of lien.
C. If Borrower fails to collect, remit or pay any tax assessment,
withholding or deficiency on or before the 30th day following the
due date.
D. The dissolution of Borrower.
Upon an Event of Default, the entire principal balance of this Note then
remaining unpaid, together with any late charges thereon, shall, at the
option of Lender, become immediately due and payable, without demand or
notice, together with all costs of collection, including reasonable
attorney's fees. Failure to exercise this option shall not constitute a waiver
of the right to exercise the same in the event of any subsequent default or
breach.
Waiver; Indulgence. All parties now or hereafter liable for payment of
any of the indebtedness evidenced by this Note, by executing and endorsing this
Note or by entering into or executing any agreement to pay any indebtedness
hereby evidenced: (a) agree to waive presentment for payment, demand, notice,
protest and diligence in collection or bringing suit; and (b) agree the
Lender shall have the right, without notice and without in any way affecting the
liability of Borrower, to (i) accept partial payment, (ii) exchange or release
security or collateral, (iii) deal in any way at any time with any parties
liable for the indebtedness evidenced by the Note, or (iv) grant us to any
party any extensions of time for payment of any said indebtedness or any other
indulgences or forbearances whatsoever.
Security. The payment of this Note is secured by a pledge to the Lender of
500,000 shares of common stock of the Company. This Note is non-recourse except
with regard to the above-referenced shares.
Severability. If any provision of this Note shall be deemed by court
having jurisdiction thereon invalid or unenforceable, the balance of this Note
shall remain in effect; if any provision of this Note is deemed by any such
court to be unenforceable because such provision is too broad in scope, such
provision shall be construed to be limited tin scope to the extent such court
deems necessary to make it enforceable; and if any provision is deemed
inapplicable by any such court to any person or circumstance, it shall
nevertheless be construed to apply to all other persons and circumstances.
Governing Law; Effect. This document shall be governed by and construed in
accordance with the substantive law of the State of New York, without giving
effect to the conflicts or choice of law provisions of New York or any other
jurisdiction, and shall have the effect of a sealed instrument.
BORROWER:
/s/ Matthew Harriton
____________________________
MATTHEW HARRITON
EXHIBIT 3
EMBRYO DEVELOPMENT CORPORATION
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 17th day of June 1998, by and between
Embryo Development Corporation (herein after called the "Corporation"), a
corporation organized and existing under the laws of the State of Delaware,
with its principal place of business at 750 Lexington Avenue, New York,
New York, and Matthew Harriton (hereinafter called "Optionee").
W I T N E S S E T H :
WHEREAS, the Corporation has adopted an Incentive Stock Option Plan
which provides for grants of options to purchase common stock of the
Corporation; and
WHEREAS, Optionee is presently a director or employed by the
Corporation or one of its subsidiaries; and
WHEREAS, the Corporation considers it desirable and in its best
interest that Optionee be given an option to purchase common stock of the
Corporation; and
WHEREAS, the Board of Directors of the Corporation adopted a plan on
March 31, 1995 by which the Optionee was granted an option described herein,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. This Agreement recites all the terms and conditions of the option
granted to Optionee by the Corporation pursuant to the Corporation's
Incentive Stock Option Plan (the "Plan") adopted on March 31, 1995.
2. The total number of shares with respect to which options may be
granted under the Incentive Option Plan is 2,000,000. No option may be
granted under the Incentive Option Plan after March 15, 2005.
3. Pursuant to the terms and conditions of the Plan, the Corporation
grants to Optionee an option (the "Option") to purchase 750,000 shares (the
"Option Shares") of its common stock, par value $0.0001 per share, at a
price of $0.0938 per share in the manner and subject to the provisions
hereinafter provided.
4. Subject to earlier termination as hereafter provided, the Option
shall terminate in all respects at, and no exercise as to any shares covered
by the Option shall be honored after the close of business ten years after
its grant ("Expiration Date"). Furthermore, the Option of shareholders owning
10% or more of the Company's voting power, shall terminate in all respects
at, and no exercise as to any shares covered by the Option shall be honored
after the close of business five years after its grant.
5. The Option is exercisable during the lifetime of the Optionee only
by the Optionee, and, subject to the provisions of Paragraph 6 hereof, only
if (i) at the time of any and every exercise of the Option Optionee is an
employee or director of an Employer Corporation and (ii) Optionee shall have
been in the continuous employ of an Employer Corporation from the date of the
Agreement to the date of exercise. As used herein, "Employer Corporation"
shall mean any of the Corporation or a "Subsidiary Corporation", as that
term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any successor statutory provision.
6. (a) The aggregate fair market value (determined at the time the
options are granted) of common stock with respect to which incentive stock
options (within the meaning of Section 422 of the Code) are exercisable for
the first time by Optionee under the Plan or any other plan of Optionee's
Employer Corporation or its parent and subsidiary corporations ( as defined
in Section 424 of the Code), shall not exceed $ 100,000.00 (or such other
individual employee maximum as may be in effect from time to time under the
Code at the time the options are granted) in any calendar year.
(b) If Optionee disposes of common stock acquired upon the exercise
of Options by sale or exchange either (a) within two years after the date of
grant of the Options under which the common stock was acquired or (b) within
one year after the acquisition of such shares, Optionee shall notify the
Corporation of such disposition and of the amount realized upon such
disposition.
7. (a) If Optionee shall cease to be employed by an Employer
Corporation by reason of death or any other reason other than voluntarily
quitting, discharge for cause or permanent and total disability as defined in
Section 22(e)(3) of the Code ("Disability"), as determined by the
administrator of the Plan, the Optionee or his duly appointed guardian or
other legal representative ("Legal Representative"), as the case may be, may,
but only within the three months next succeeding such cessation of employ-
ment, exercise the Option to the extent that the Optionee would have been
entitled to do so on the date of such cessation of his employment. If
Optionee voluntarily quits or is discharged for cause, the Option shall
terminate on the date of cessation of employment. In no event shall the
Option be exercisable after the Expiration Date specified in Paragraph 3
hereof.
(b) If Optionee shall cease to be employed by an Employer
Corporation by reason of a Disability, the Option shall be exercisable by
Optionee or Optionee's Legal Representative, to the extent that Optionee
would have been entitled to do so on the date of such cessation of
employment, but only within one year following such cessation of employment
due to said Disability. In no event shall the Option be exercisable after
the Expiration Date specified in Paragraph 3 hereof.
8. (a) Any exercise of the Option shall be made by the delivery by
Optionee (or his Legal Representative) to the Corporation at its principal
office at 750 Lexington Avenue, New York, New York, or such other place as
the Corporation may designate, of (i) written notice of such exercise stating
the number of shares with respect to which the Option is being exercised,
(ii) payment of the purchase price for such number of shares by cash, shares
of Common Stock, or promissory notes secured by assets including the shares
to be received on the exercise of the options, and (iii) a written
certificate of Optionee (or his Legal Representative) in form and substance
reasonably acceptable to the Corporation, to the effect that he will not
dispose of such shares in violation of the Securities Act of 1933, as amended,
or the rules of the stock exchanged upon which the shares of common stock of
the Corporation are listed; provided, however, if the Plan and the options
granted thereunder and the issuance of shares upon exercise of options is
registered under the Securities Act of 1933, as amended, Optionee (or his
Legal Representative) need not furnish the certification described in clause
(iii) of this sentence. Promptly after receipt of the foregoing, the
Corporation shall cause to be delivered to Optionee (or his Legal
Representative) stock certificates evidencing the number of shares as to which
the Option has then been exercised. Such certificates may contain such legend
reflecting any restrictions upon the transfer of the shares evidenced thereby
as in the opinion of counsel to the Corporation may be necessary to the
lawful and proper issuance of the certificate.
(b) Notwithstanding anything to the contrary herein contained, the
Corporation, in its discretion, may postpone the issuance and delivery of the
certificates for the shares issuable upon any exercise of the Option until
the completion of any stock exchange listing, or registration or other
qualification thereof under any state or federal law, rule or regulation
which the Corporation may deem necessary or appropriate; and may require the
person exercising an Option to make such representations and furnish such
information as it may deem appropriate in connection with the issuance of the
shares in compliance with applicable law or sound corporate practice. A
registration statement registering the shares issuable upon exercise of
Options under the Securities Act of 1933 may be in effect from time to time,
but the Corporation shall have no obligation to file or keep effective any
such registration statement.
9. Neither Optionee nor his Legal Representative shall have any of the
rights of a shareholder of the Corporation with respect to the shares of common
stock issuable upon the exercise of the Option, except to the extent that one or
more certificates for such shares shall have been issued upon the due
exercise of the Option.
10. The Option shall not be assigned, pledged or hypothecated in any way,
shall not be subject to execution, and is not transferable by Optionee
otherwise than by will or the laws of descent and distribution. Any attempt at
assignment, transfer, pledge, hypothecation or other disposition of the
Option contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall by null and void.
11. If any change is made in the shares subject to the Option by reason of
a stock dividend, stock split, recapitalization, merger, consolidation, sale
or exchange of assets or other change in the shares of common stock of the
Corporation at the time outstanding, the Board of Directors of the
Corporation may take such action as it determines to be appropriate to adjust
the kind and number of shares and price per share or both of the shares
of common stock subject to this Option if and to the extent determined to
be appropriate by the Board of Directors, whose determination shall be
conclusive.
12. Except in connection with any event described in Paragraph 10b as to
which the Board of Directors has determined to make an appropriate adjustment
as provided in paragraph 10, upon the complete liquidation of the Corporation,
the Option shall be deemed cancelled to the extent not exercised. In the event
of the complete liquidation of any Employer Corporation (Other than the
Corporation) employing Optionee, or in the event such Corporation ceases to
be an Employer Corporation, the Option shall be deemed cancelled to the
extent not exercised unless Optionee shall become employed by another
Employer Corporation (including the Corporation) concurrently with such event.
13. The Option granted hereby shall not impose any obligation on any
Employer Corporation to continue the employment of Optionee.
14. The Corporation may require a payment by Optionee to cover applicable
withholding for income and employment taxes in the event of the exercise of an
Option.
15. This Agreement is made under the provisions of the Corporation's
Incentive Stock Option Plan and all of the provisions of the Plan are also
provisions of this agreement. If there is a difference between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan
shall govern.
16. The Plan may be terminated or amended at any time by the Board of
Directors, except that, without stockholder approval, the Plan may not be
amended to increase the number of shares subject to the Plan, change the class
of persons eligible to receive options or materially increase the benefits
of participants.
17. The place of administration of the Plan shall be in the State of New
York, and the validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined in accordance with the laws of the State of New
York and the General Corporation Law of Delaware.
18. The pronouns used herein and the words Optionee and Legal
Representative and the pronouns therefor, shall be construed as masculine,
feminine or neuter, and in the singular or plural, as the sense requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above set forth.
EMBRYO DEVELOPMENT CORPORATION
By: /s/ Andrew Frabrikant
-----------------------------
Andrew Frabrikant, Director
By: /s/ Matthew Harriton
-----------------------------
Matthew Harriton, Optionee
EXHIBIT 4
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Matthew Harriton, Director
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
Dear Mr. Harriton:
This letter is to advise you that the Board of Directors and Administrators
of the Incentive Stock Option Plan have authorized the grant to you of an option
to purchase 250,000 shares of the Company's common stock, par value $0.0001, to
an exercise price of $0.0938 per share. If you decide to exercise this option,
please execute a copy of this letter and return to us together with your secured
promissory note.
Very truly yours,
BECKMAN, MILLMAN & SANDERS, LLP
/s/ Steven A. Sanders
By:________________________________
I hereby exercise options to purchase
250,000 shares of the common stock of
the Company and enclose my secured
promissory note in the amount of
$23,450.00
/s/ Matthew Harriton
_________________________
MATTHEW HARRITON
EXHIBIT 5
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
To Whom It May Concern:
Pursuant to the options granted to me on June 17, 1998, I hereby exercise
options to purchase 500,000 shares of the common stock of the Company and
enclose my secured promissory note in the amount of $46,900.00.
Very truly yours,
/s/ Matthew Harriton
_________________________
EXHIBIT 6
PROMISSORY NOTE
$70,350.00 New York, NY
Date: July 1, 1998
FOR VALUE RECEIVED, Matthew Harriton ("Borrower") promises to pay to EMBRYO
DEVELOPMENT CORPORATION, a Delaware corporation )"Lender"), on the date five
years from the date of this Note (the "Maturity Date"), the principal sum of
SEVENTY THOUSAND THREE HUNDRED FIFTY DOLLARS ($70,350.00), with EIGHT percent
(8%) interest.
Prepayment. Borrower shall have the right to prepay this Note at any time
and from time to time in whole or in part without penalty.
Late Fee. Upon default in the payment of the balance on the Maturity Date,
Borrower shall pay to Lender upon demand, in addition to all the other amounts
payable hereunder, a late charge equal to two percent of the amount so overdue
(but in no event higher than the maximum allowed by New York law).
Acceleration Upon Default. Each of the following shall be deemed an
"Event of Default":
A. If one of the following acts of insolvency occurs with respect to
Borrower or the property of Borrower:
insolvency; assignment for the benefit of creditors or calling of a
meeting of creditors preliminary thereto; appointment of a receiver,
conservator, rehabilitation or similar officer for Borrower or any
material portion of the property of Borrower, which appointment shall
not be removed within 30 days after the appointment; the issuance
of any attachment against any material portion of the property of
Borrower, which shall not be removed or bonded within 30 days of
such issuance; or the taking of possession of, or assumption of
control over, all or any substantial part of the property of
Borrower by the United States Government, foreign government (de
facto or de jure) or any agency thereof; the filing of a voluntary
petition in Bankruptcy by Borrower; or the commencement of any
proceeding by Borrower under any bankruptcy or debtor's law (or
similar law analogous in purpose or effect) for the relief or
reorganization of Borrower or for composition, extension,
arrangement or readjustment of any of the obligations of Borrower; or
the filing of any involuntarily petition in bankruptcy against
Borrower, which filing is not dismissed within 60 days of such
filing.
B. If a judgment is entered or a tax lien filed against Borrower or the
property of Borrower which is not paid or bonded on or before the 30th
day following the entry of judgment or filing of lien.
C. If Borrower fails to collect, remit or pay any tax assessment,
withholding or deficiency on or before the 30th day following the
due date.
D. The dissolution of Borrower.
Upon an Event of Default, the entire principal balance of this Note then
remaining unpaid, together with any late charges thereon, shall, at the
option of Lender, become immediately due and payable, without demand or
notice, together with all costs of collection, including reasonable
attorney's fees. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same in the event of any subsequent
default or breach.
Waiver; Indulgence. All parties now or hereafter liable for payment of
any of the indebtedness evidenced by this Note, by executing and endorsing
this Note or by entering into or executing any agreement to pay any
indebtedness hereby evidenced: (a) agree to waive presentment for payment,
demand, notice, protest and diligence in collection or bringing suit; and (b)
agree the Lender shall have the right, without notice and without in any way
affecting the liability of Borrower, to (i) accept partial payment, (ii)
exchange or release security or collateral, (iii) deal in any way at any time
with any parties liable for the indebtedness evidenced by the Note, or (iv)
grant us to any party any extensions of time for payment of any said
indebtedness or any other indulgences or forbearances whatsoever.
Security. The payment of this Note is secured by a pledge to the Lender
of 750,000 shares of common stock of the Company. This Note is non-recourse
except with regard to the above-referenced shares.
Severability. If any provision of this Note shall be deemed by court
having jurisdiction thereon invalid or unenforceable, the balance of this Note
shall remain in effect; if any provision of this Note is deemed by any such
court to be unenforceable because such provision is too broad in scope, such
provision shall be construed to be limited tin scope to the extent such court
deems necessary to make it enforceable; and if any provision is deemed
inapplicable by any such court to any person or circumstance, it shall
nevertheless be construed to apply to all other persons and circumstances.
Governing Law; Effect. This document shall be governed by and construed in
accordance with the substantive law of the State of New York, without giving
effect to the conflicts or choice of law provisions of New York or any other
jurisdiction, and shall have the effect of a sealed instrument.
BORROWER:
/s/ Matthew Harriton
____________________________
MATTHEW HARRITON
EXHIBIT 7
EMBRYO DEVELOPMENT CORPORATION
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 17th day of June 1998, by and between
Embryo Development Corporation (herein after called the "Corporation"), a
corporation organized and existing under the laws of the State of Delaware,
with its principal place of business at 750 Lexington Avenue, New York,
New York, and Andrew Fabrikant (hereinafter called "Optionee").
W I T N E S S E T H :
WHEREAS, the Corporation has adopted an Incentive Stock Option Plan
which provides for grants of options to purchase common stock of the
Corporation; and
WHEREAS, Optionee is presently a director or employed by the
Corporation or one of its subsidiaries; and
WHEREAS, the Corporation considers it desirable and in its best
interest that Optionee be given an option to purchase common stock of the
Corporation; and
WHEREAS, the Board of Directors of the Corporation adopted a plan on
March 31, 1995 by which the Optionee was granted an option described herein,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. This Agreement recites all the terms and conditions of the option
granted to Optionee by the Corporation pursuant to the Corporation's
Incentive Stock Option Plan (the "Plan") adopted on March 31, 1995.
2. The total number of shares with respect to which options may be
granted under the Incentive Option Plan is 2,000,000. No option may be
granted under the Incentive Option Plan after March 15, 2005.
3. Pursuant to the terms and conditions of the Plan, the Corporation
grants to Optionee an option (the "Option") to purchase 250,000 shares (the
"Option Shares") of its common stock, par value $0.0001 per share, at a
price of $0.0938 per share in the manner and subject to the provisions
hereinafter provided.
4. Subject to earlier termination as hereafter provided, the Option
shall terminate in all respects at, and no exercise as to any shares covered
by the Option shall be honored after the close of business ten years after
its grant ("Expiration Date"). Furthermore, the Option of shareholders owning
10% or more of the Company's voting power, shall terminate in all respects
at, and no exercise as to any shares covered by the Option shall be honored
after the close of business five years after its grant.
5. The Option is exercisable during the lifetime of the Optionee only
by the Optionee, and, subject to the provisions of Paragraph 6 hereof, only
if (i) at the time of any and every exercise of the Option Optionee is an
employee or director of an Employer Corporation and (ii) Optionee shall have
been in the continuous employ of an Employer Corporation from the date of the
Agreement to the date of exercise. As used herein, "Employer Corporation"
shall mean any of the Corporation or a "Subsidiary Corporation", as that
term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any successor statutory provision.
6. (a) The aggregate fair market value (determined at the time the
options are granted) of common stock with respect to which incentive stock
options (within the meaning of Section 422 of the Code) are exercisable for
the first time by Optionee under the Plan or any other plan of Optionee's
Employer Corporation or its parent and subsidiary corporations ( as defined
in Section 424 of the Code), shall not exceed $ 100,000.00 (or such other
individual employee maximum as may be in effect from time to time under the
Code at the time the options are granted) in any calendar year.
(b) If Optionee disposes of common stock acquired upon the exercise
of Options by sale or exchange either (a) within two years after the date of
grant of the Options under which the common stock was acquired or (b) within
one year after the acquisition of such shares, Optionee shall notify the
Corporation of such disposition and of the amount realized upon such
disposition.
7. (a) If Optionee shall cease to be employed by an Employer
Corporation by reason of death or any other reason other than voluntarily
quitting, discharge for cause or permanent and total disability as defined in
Section 22(e)(3) of the Code ("Disability"), as determined by the
administrator of the Plan, the Optionee or his duly appointed guardian or
other legal representative ("Legal Representative"), as the case may be, may,
but only within the three months next succeeding such cessation of employ-
ment, exercise the Option to the extent that the Optionee would have been
entitled to do so on the date of such cessation of his employment. If
Optionee voluntarily quits or is discharged for cause, the Option shall
terminate on the date of cessation of employment. In no event shall the
Option be exercisable after the Expiration Date specified in Paragraph 3
hereof.
(b) If Optionee shall cease to be employed by an Employer
Corporation by reason of a Disability, the Option shall be exercisable by
Optionee or Optionee's Legal Representative, to the extent that Optionee
would have been entitled to do so on the date of such cessation of
employment, but only within one year following such cessation of employment
due to said Disability. In no event shall the Option be exercisable after
the Expiration Date specified in Paragraph 3 hereof.
8. (a) Any exercise of the Option shall be made by the delivery by
Optionee (or his Legal Representative) to the Corporation at its principal
office at 750 Lexington Avenue, New York, New York, or such other place as
the Corporation may designate, of (i) written notice of such exercise stating
the number of shares with respect to which the Option is being exercised,
(ii) payment of the purchase price for such number of shares by cash, shares
of Common Stock, or promissory notes secured by assets including the shares
to be received on the exercise of the options, and (iii) a written
certificate of Optionee (or his Legal Representative) in form and substance
reasonably acceptable to the Corporation, to the effect that he will not
dispose of such shares in violation of the Securities Act of 1933, as amended,
or the rules of the stock exchanged upon which the shares of common stock of
the Corporation are listed; provided, however, if the Plan and the options
granted thereunder and the issuance of shares upon exercise of options is
registered under the Securities Act of 1933, as amended, Optionee (or his
Legal Representative) need not furnish the certification described in clause
(iii) of this sentence. Promptly after receipt of the foregoing, the
Corporation shall cause to be delivered to Optionee (or his Legal
Representative) stock certificates evidencing the number of shares as to which
the Option has then been exercised. Such certificates may contain such legend
reflecting any restrictions upon the transfer of the shares evidenced thereby
as in the opinion of counsel to the Corporation may be necessary to the
lawful and proper issuance of the certificate.
(b) Notwithstanding anything to the contrary herein contained, the
Corporation, in its discretion, may postpone the issuance and delivery of the
certificates for the shares issuable upon any exercise of the Option until
the completion of any stock exchange listing, or registration or other
qualification thereof under any state or federal law, rule or regulation
which the Corporation may deem necessary or appropriate; and may require the
person exercising an Option to make such representations and furnish such
information as it may deem appropriate in connection with the issuance of the
shares in compliance with applicable law or sound corporate practice. A
registration statement registering the shares issuable upon exercise of
Options under the Securities Act of 1933 may be in effect from time to time,
but the Corporation shall have no obligation to file or keep effective any
such registration statement.
9. Neither Optionee nor his Legal Representative shall have any of the
rights of a shareholder of the Corporation with respect to the shares of common
stock issuable upon the exercise of the Option, except to the extent that one or
more certificates for such shares shall have been issued upon the due
exercise of the Option.
10. The Option shall not be assigned, pledged or hypothecated in any way,
shall not be subject to execution, and is not transferable by Optionee
otherwise than by will or the laws of descent and distribution. Any attempt at
assignment, transfer, pledge, hypothecation or other disposition of the
Option contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall by null and void.
11. If any change is made in the shares subject to the Option by reason of
a stock dividend, stock split, recapitalization, merger, consolidation, sale
or exchange of assets or other change in the shares of common stock of the
Corporation at the time outstanding, the Board of Directors of the
Corporation may take such action as it determines to be appropriate to adjust
the kind and number of shares and price per share or both of the shares
of common stock subject to this Option if and to the extent determined to
be appropriate by the Board of Directors, whose determination shall be
conclusive.
12. Except in connection with any event described in Paragraph 10b as to
which the Board of Directors has determined to make an appropriate adjustment
as provided in paragraph 10, upon the complete liquidation of the Corporation,
the Option shall be deemed cancelled to the extent not exercised. In the event
of the complete liquidation of any Employer Corporation (Other than the
Corporation) employing Optionee, or in the event such Corporation ceases to
be an Employer Corporation, the Option shall be deemed cancelled to the
extent not exercised unless Optionee shall become employed by another
Employer Corporation (including the Corporation) concurrently with such event.
13. The Option granted hereby shall not impose any obligation on any
Employer Corporation to continue the employment of Optionee.
14. The Corporation may require a payment by Optionee to cover applicable
withholding for income and employment taxes in the event of the exercise of an
Option.
15. This Agreement is made under the provisions of the Corporation's
Incentive Stock Option Plan and all of the provisions of the Plan are also
provisions of this agreement. If there is a difference between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan
shall govern.
16. The Plan may be terminated or amended at any time by the Board of
Directors, except that, without stockholder approval, the Plan may not be
amended to increase the number of shares subject to the Plan, change the class
of persons eligible to receive options or materially increase the benefits
of participants.
17. The place of administration of the Plan shall be in the State of New
York, and the validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined in accordance with the laws of the State of New
York and the General Corporation Law of Delaware.
18. The pronouns used herein and the words Optionee and Legal
Representative and the pronouns therefor, shall be construed as masculine,
feminine or neuter, and in the singular or plural, as the sense requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above set forth.
EMBRYO DEVELOPMENT CORPORATION
By: /s/ Matthew Harriton
-----------------------------
Matthew Harriton, CEO
By: /s/ Andrew Frabrikant
-----------------------------
Andrew Frabrikant, Optionee
EXHIBIT 8
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Andrew Fabrikant, Director & Administrator
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
Dear Mr. Fabrikant:
This letter is to advise you that the Board of Directors and Administrators
of the Incentive Stock Option Plan have authorized the grant to you of an option
to purchase 250,000 shares of the Company's common stock, par value $0.0001, to
an exercise price of $0.0938 per share. If you decide to exercise this
option, please execute a copy of this letter and return to us together with your
secured promissory note.
Very truly yours,
BECKMAN, MILLMAN & SANDERS, LLP
/s/ Steven A. Sanders
By:________________________________
I hereby exercise options to purchase
250,000 shares of the common stock of
the Company and enclose my secured
promissory note in the amount of
$23,450.00
/s/ Andrew Fabrikant
_________________________
ANDREW FABRIKANT
EXHIBIT 9
PROMISSORY NOTE
$23,450.00 New York, NY
Date: July 1, 1998
FOR VALUE RECEIVED, Andrew Fabrikant ("Borrower") promises to pay to EMBRYO
DEVELOPMENT CORPORATION, a Delaware corporation )"Lender"), on the date five
years from the date of this Note (the "Maturity Date"), the principal sum of
TWENTY THREE THOUSAND FOUR HUNDRED FIFTY DOLLARS ($23,450.00), with EIGHT
percent (8%) interest.
Prepayment. Borrower shall have the right to prepay this Note at any time
and from time to time in whole or in part without penalty.
Late Fee. Upon default in the payment of the balance on the Maturity Date,
Borrower shall pay to Lender upon demand, in addition to all the other amounts
payable hereunder, a late charge equal to two percent of the amount so
overdue (but in no event higher than the maximum allowed by New York law).
Acceleration Upon Default. Each of the following shall be deemed an
"Event of Default":
A. If one of the following acts of insolvency occurs with respect to
Borrower or the property of Borrower:
insolvency; assignment for the benefit of creditors or calling of a
meeting of creditors preliminary thereto; appointment of a receiver,
conservator, rehabilitation or similar officer for Borrower or any
material portion of the property of Borrower, which appointment shall
not be removed within 30 days after the appointment; the issuance
of any attachment against any material portion of the property of
Borrower, which shall not be removed or bonded within 30 days of
such issuance; or the taking of possession of, or assumption of
control over, all or any substantial part of the property of
Borrower by the United States Government, foreign government (de
facto or de jure) or any agency thereof; the filing of a voluntary
petition in Bankruptcy by Borrower; or the commencement of any
proceeding by Borrower under any bankruptcy or debtor's law (or
similar law analogous in purpose or effect) for the relief or
reorganization of Borrower or for composition, extension,
arrangement or readjustment of any of the obligations of Borrower; or
the filing of any involuntarily petition in bankruptcy against
Borrower, which filing is not dismissed within 60 days of such
filing.
B. If a judgment is entered or a tax lien filed against Borrower or the
property of Borrower which is not paid or bonded on or before the
30th day following the entry of judgment or filing of lien.
C. If Borrower fails to collect, remit or pay any tax assessment,
withholding or deficiency on or before the 30th day following the
due date.
D. The dissolution of Borrower.
Upon an Event of Default, the entire principal balance of this Note then
remaining unpaid, together with any late charges thereon, shall, at the
option of Lender, become immediately due and payable, without demand or
notice, together with all costs of collection, including reasonable
attorney's fees. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same in the event of any subsequent
default or breach.
Waiver; Indulgence. All parties now or hereafter liable for payment of any
of the indebtedness evidenced by this Note, by executing and endorsing this Note
or by entering into or executing any agreement to pay any indebtedness hereby
evidenced: (a) agree to waive presentment for payment, demand, notice, protest
and diligence in collection or bringing suit; and (b) agree the Lender shall
have the right, without notice and without in any way affecting the liability of
Borrower, to (i) accept partial payment, (ii) exchange or release security or
collateral, (iii) deal in any way at any time with any parties liable for the
indebtedness evidenced by the Note, or (iv) grant us to any party any
extensions of time for payment of any said indebtedness or any other
indulgences or forbearances whatsoever.
Security. The payment of this Note is secured by a pledge to the Lender of
250,000 shares of common stock of the Company. This Note is non-recourse except
with regard to the above-referenced shares.
Severability. If any provision of this Note shall be deemed by court
having jurisdiction thereon invalid or unenforceable, the balance of this Note
shall remain in effect; if any provision of this Note is deemed by any such
court to be unenforceable because such provision is too broad in scope, such
provision shall be construed to be limited tin scope to the extent such court
deems necessary to make it enforceable; and if any provision is deemed
inapplicable by any such court to any person or circumstance, it shall
nevertheless be construed to apply to all other persons and circumstances.
Governing Law; Effect. This document shall be governed by and construed in
accordance with the substantive law of the State of New York, without giving
effect to the conflicts or choice of law provisions of New York or any other
jurisdiction, and shall have the effect of a sealed instrument.
BORROWER:
/s/ Andrew Fabrikant
____________________________
ANDREW FABRIKANT
EXHIBIT 10
EMBRYO DEVELOPMENT CORPORATION
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 17th day of June 1998, by and between
Embryo Development Corporation (herein after called the "Corporation"), a
corporation organized and existing under the laws of the State of Delaware,
with its principal place of business at 750 Lexington Avenue, New York,
New York, and Daniel Durchslag (hereinafter called "Optionee").
W I T N E S S E T H :
WHEREAS, the Corporation has adopted an Incentive Stock Option Plan
which provides for grants of options to purchase common stock of the
Corporation; and
WHEREAS, Optionee is presently a director or employed by the
Corporation or one of its subsidiaries; and
WHEREAS, the Corporation considers it desirable and in its best
interest that Optionee be given an option to purchase common stock of the
Corporation; and
WHEREAS, the Board of Directors of the Corporation adopted a plan on
March 31, 1995 by which the Optionee was granted an option described herein,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. This Agreement recites all the terms and conditions of the option
granted to Optionee by the Corporation pursuant to the Corporation's
Incentive Stock Option Plan (the "Plan") adopted on March 31, 1995.
2. The total number of shares with respect to which options may be
granted under the Incentive Option Plan is 2,000,000. No option may be
granted under the Incentive Option Plan after March 15, 2005.
3. Pursuant to the terms and conditions of the Plan, the Corporation
grants to Optionee an option (the "Option") to purchase 250,000 shares (the
"Option Shares") of its common stock, par value $0.0001 per share, at a
price of $0.0938 per share in the manner and subject to the provisions
hereinafter provided.
4. Subject to earlier termination as hereafter provided, the Option
shall terminate in all respects at, and no exercise as to any shares covered
by the Option shall be honored after the close of business ten years after
its grant ("Expiration Date"). Furthermore, the Option of shareholders owning
10% or more of the Company's voting power, shall terminate in all respects
at, and no exercise as to any shares covered by the Option shall be honored
after the close of business five years after its grant.
5. The Option is exercisable during the lifetime of the Optionee only
by the Optionee, and, subject to the provisions of Paragraph 6 hereof, only
if (i) at the time of any and every exercise of the Option Optionee is an
employee or director of an Employer Corporation and (ii) Optionee shall have
been in the continuous employ of an Employer Corporation from the date of the
Agreement to the date of exercise. As used herein, "Employer Corporation"
shall mean any of the Corporation or a "Subsidiary Corporation", as that
term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any successor statutory provision.
6. (a) The aggregate fair market value (determined at the time the
options are granted) of common stock with respect to which incentive stock
options (within the meaning of Section 422 of the Code) are exercisable for
the first time by Optionee under the Plan or any other plan of Optionee's
Employer Corporation or its parent and subsidiary corporations ( as defined
in Section 424 of the Code), shall not exceed $ 100,000.00 (or such other
individual employee maximum as may be in effect from time to time under the
Code at the time the options are granted) in any calendar year.
(b) If Optionee disposes of common stock acquired upon the exercise
of Options by sale or exchange either (a) within two years after the date of
grant of the Options under which the common stock was acquired or (b) within
one year after the acquisition of such shares, Optionee shall notify the
Corporation of such disposition and of the amount realized upon such
disposition.
7. (a) If Optionee shall cease to be employed by an Employer
Corporation by reason of death or any other reason other than voluntarily
quitting, discharge for cause or permanent and total disability as defined in
Section 22(e)(3) of the Code ("Disability"), as determined by the
administrator of the Plan, the Optionee or his duly appointed guardian or
other legal representative ("Legal Representative"), as the case may be, may,
but only within the three months next succeeding such cessation of employ-
ment, exercise the Option to the extent that the Optionee would have been
entitled to do so on the date of such cessation of his employment. If
Optionee voluntarily quits or is discharged for cause, the Option shall
terminate on the date of cessation of employment. In no event shall the
Option be exercisable after the Expiration Date specified in Paragraph 3
hereof.
(b) If Optionee shall cease to be employed by an Employer
Corporation by reason of a Disability, the Option shall be exercisable by
Optionee or Optionee's Legal Representative, to the extent that Optionee
would have been entitled to do so on the date of such cessation of
employment, but only within one year following such cessation of employment
due to said Disability. In no event shall the Option be exercisable after
the Expiration Date specified in Paragraph 3 hereof.
8. (a) Any exercise of the Option shall be made by the delivery by
Optionee (or his Legal Representative) to the Corporation at its principal
office at 750 Lexington Avenue, New York, New York, or such other place as
the Corporation may designate, of (i) written notice of such exercise stating
the number of shares with respect to which the Option is being exercised,
(ii) payment of the purchase price for such number of shares by cash, shares
of Common Stock, or promissory notes secured by assets including the shares
to be received on the exercise of the options, and (iii) a written
certificate of Optionee (or his Legal Representative) in form and substance
reasonably acceptable to the Corporation, to the effect that he will not
dispose of such shares in violation of the Securities Act of 1933, as amended,
or the rules of the stock exchanged upon which the shares of common stock of
the Corporation are listed; provided, however, if the Plan and the options
granted thereunder and the issuance of shares upon exercise of options is
registered under the Securities Act of 1933, as amended, Optionee (or his
Legal Representative) need not furnish the certification described in clause
(iii) of this sentence. Promptly after receipt of the foregoing, the
Corporation shall cause to be delivered to Optionee (or his Legal
Representative) stock certificates evidencing the number of shares as to which
the Option has then been exercised. Such certificates may contain such legend
reflecting any restrictions upon the transfer of the shares evidenced thereby
as in the opinion of counsel to the Corporation may be necessary to the
lawful and proper issuance of the certificate.
(b) Notwithstanding anything to the contrary herein contained, the
Corporation, in its discretion, may postpone the issuance and delivery of the
certificates for the shares issuable upon any exercise of the Option until
the completion of any stock exchange listing, or registration or other
qualification thereof under any state or federal law, rule or regulation
which the Corporation may deem necessary or appropriate; and may require the
person exercising an Option to make such representations and furnish such
information as it may deem appropriate in connection with the issuance of the
shares in compliance with applicable law or sound corporate practice. A
registration statement registering the shares issuable upon exercise of
Options under the Securities Act of 1933 may be in effect from time to time,
but the Corporation shall have no obligation to file or keep effective any
such registration statement.
9. Neither Optionee nor his Legal Representative shall have any of the
rights of a shareholder of the Corporation with respect to the shares of common
stock issuable upon the exercise of the Option, except to the extent that one or
more certificates for such shares shall have been issued upon the due
exercise of the Option.
10. The Option shall not be assigned, pledged or hypothecated in any way,
shall not be subject to execution, and is not transferable by Optionee
otherwise than by will or the laws of descent and distribution. Any attempt at
assignment, transfer, pledge, hypothecation or other disposition of the
Option contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall by null and void.
11. If any change is made in the shares subject to the Option by reason of
a stock dividend, stock split, recapitalization, merger, consolidation, sale
or exchange of assets or other change in the shares of common stock of the
Corporation at the time outstanding, the Board of Directors of the
Corporation may take such action as it determines to be appropriate to adjust
the kind and number of shares and price per share or both of the shares
of common stock subject to this Option if and to the extent determined to
be appropriate by the Board of Directors, whose determination shall be
conclusive.
12. Except in connection with any event described in Paragraph 10b as to
which the Board of Directors has determined to make an appropriate adjustment
as provided in paragraph 10, upon the complete liquidation of the Corporation,
the Option shall be deemed cancelled to the extent not exercised. In the event
of the complete liquidation of any Employer Corporation (Other than the
Corporation) employing Optionee, or in the event such Corporation ceases to
be an Employer Corporation, the Option shall be deemed cancelled to the
extent not exercised unless Optionee shall become employed by another
Employer Corporation (including the Corporation) concurrently with such event.
13. The Option granted hereby shall not impose any obligation on any
Employer Corporation to continue the employment of Optionee.
14. The Corporation may require a payment by Optionee to cover applicable
withholding for income and employment taxes in the event of the exercise of an
Option.
15. This Agreement is made under the provisions of the Corporation's
Incentive Stock Option Plan and all of the provisions of the Plan are also
provisions of this agreement. If there is a difference between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan
shall govern.
16. The Plan may be terminated or amended at any time by the Board of
Directors, except that, without stockholder approval, the Plan may not be
amended to increase the number of shares subject to the Plan, change the class
of persons eligible to receive options or materially increase the benefits
of participants.
17. The place of administration of the Plan shall be in the State of New
York, and the validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined in accordance with the laws of the State of New
York and the General Corporation Law of Delaware.
18. The pronouns used herein and the words Optionee and Legal
Representative and the pronouns therefor, shall be construed as masculine,
feminine or neuter, and in the singular or plural, as the sense requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above set forth.
EMBRYO DEVELOPMENT CORPORATION
By: /s/ Matthew Harriton
-----------------------------
Matthew Harriton, CEO
By: /s/ Daniel Durchslag
-----------------------------
Daniel Durchslag, Optionee
EXHIBIT 11
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Daniel Durchslag, Director & Administrator
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
Dear Dr. Durchslag:
This letter is to advise you that the Board of Directors and Administrators
of the Incentive Stock Option Plan have authorized the grant to you of an option
to purchase 250,000 shares of theCompany's common stock, par value $0.0001,
to an exercise price of $0.0938 per share. If you decide to exercise this
option, please execute a copy of this letter and return to us together with
your secured promissory note.
Very truly yours,
BECKMAN, MILLMAN & SANDERS, LLP
/s/ Steven A. Sanders
By:________________________________
I hereby exercise options to purchase
250,000 shares of the common stock of
the Company and enclose my secured
promissory note in the amount of
$23,450.00
/s/ Daniel Durchslag
_________________________
DANIEL DURCHSLAG
EXHIBIT 12
PROMISSORY NOTE
$23,450.00 New York, NY
Date: July 1, 1998
FOR VALUE RECEIVED, Daniel Durchslag ("Borrower") promises to pay to EMBRYO
DEVELOPMENT CORPORATION, a Delaware corporation )"Lender"), on the date five
years from the date of this Note (the "Maturity Date"), the principal sum of
TWENTY THREE THOUSAND FOUR HUNDRED FIFTY DOLLARS ($23,450.00), with EIGHT
percent (8%) interest.
Prepayment. Borrower shall have the right to prepay this Note at any time
and from time to time in whole or in part without penalty.
Late Fee. Upon default in the payment of the balance on the Maturity Date,
Borrower shall pay to Lender upon demand, in addition to all the other amounts
payable hereunder, a late charge equal to two percent of the amount so
overdue (but in no event higher than the maximum allowed by New York law).
Acceleration Upon Default. Each of the following shall be deemed an
"Event of Default":
A. If one of the following acts of insolvency occurs with respect to
Borrower or the property of Borrower:
insolvency; assignment for the benefit of creditors or calling of a
meeting of creditors preliminary thereto; appointment of a
receiver, conservator, rehabilitation or similar officer for Borrower
or any material portion of the property of Borrower, which appointment
shall not be removed within 30 days after the appointment; the
issuance of any attachment against any material portion of the
property of Borrower, which shall not be removed or bonded within 30
days of such issuance; or the taking of possession of, or
assumption of control over, all or any substantial part of the
property of Borrower by the United States Government, foreign
government (de facto or de jure) or any agency thereof; the filing
of a voluntary petition in Bankruptcy by Borrower; or the
commencement of any proceeding by Borrower under any bankruptcy or
debtor's law (or similar law analogous in purpose or effect) for
the relief or reorganization of Borrower or for composition,
extension, arrangement or readjustment of any of the obligations of
Borrower; or the filing of any involuntarily petition in bankruptcy
against Borrower, which filing is not dismissed within 60 days
of such filing.
B. If a judgment is entered or a tax lien filed against Borrower or the
property of Borrower which is not paid or bonded on or before the 30th
day following the entry of judgment or filing of lien.
C. If Borrower fails to collect, remit or pay any tax assessment,
withholding or deficiency on or before the 30th day following the due
date.
D. The dissolution of Borrower.
Upon an Event of Default, the entire principal balance of this Note then
remaining unpaid, together with any late charges thereon, shall, at the option
of Lender, become immediately due and payable, without demand or notice,
together with all costs of collection, including reasonable attorney's fees.
Failure to exercise this option shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default or breach.
Waiver; Indulgence. All parties now or hereafter liable for payment of any
of the indebtedness evidenced by this Note, by executing and endorsing this Note
or by entering into or executing any agreement to pay any indebtedness hereby
evidenced: (a) agree to waive presentment for payment, demand, notice, protest
and diligence in collection or bringing suit; and (b) agree the Lender shall
have the right, without notice and without in any way affecting the liability of
Borrower, to (i) accept partial payment, (ii) exchange or release security or
collateral, (iii) deal in any way at any time with any parties liable for the
indebtedness evidenced by the Note, or (iv) grant us to any party any
extensions of time for payment of any said indebtedness or any other indulgences
or forbearances whatsoever.
Security. The payment of this Note is secured by a pledge to the Lender of
250,000 shares of common stock of the Company. This Note is non-recourse except
with regard to the above-referenced shares.
Severability. If any provision of this Note shall be deemed by court
having jurisdiction thereon invalid or unenforceable, the balance of this
Note shall remain in effect; if any provision of this Note is deemed by any
such court to be unenforceable because such provision is too broad in scope,
such provision shall be construed to be limited tin scope to the extent such
court deems necessary to make it enforceable; and if any provision is deemed
inapplicable by any such court to any person or circumstance, it shall
nevertheless be construed to apply to all other persons and circumstances.
Governing Law; Effect. This document shall be governed by and construed in
accordance with the substantive law of the State of New York, without giving
effect to the conflicts or choice of law provisions of New York or any other
jurisdiction, and shall have the effect of a sealed instrument.
BORROWER:
/s/ Daniel Durchslag
____________________________
DANIEL DURCHSLAG
EXHIBIT 13
EMBRYO DEVELOPMENT CORPORATION
STOCK OPTION AGREEMENT
AGREEMENT, made as of the 17th day of June 1998, by and between
Embryo Development Corporation (herein after called the "Corporation"), a
corporation organized and existing under the laws of the State of Delaware,
with its principal place of business at 750 Lexington Avenue, New York,
New York, and Karen Nazzareno (hereinafter called "Optionee").
W I T N E S S E T H :
WHEREAS, the Corporation has adopted an Incentive Stock Option Plan
which provides for grants of options to purchase common stock of the
Corporation; and
WHEREAS, Optionee is presently a director or employed by the
Corporation or one of its subsidiaries; and
WHEREAS, the Corporation considers it desirable and in its best
interest that Optionee be given an option to purchase common stock of the
Corporation; and
WHEREAS, the Board of Directors of the Corporation adopted a plan on
March 31, 1995 by which the Optionee was granted an option described herein,
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. This Agreement recites all the terms and conditions of the option
granted to Optionee by the Corporation pursuant to the Corporation's
Incentive Stock Option Plan (the "Plan") adopted on March 31, 1995.
2. The total number of shares with respect to which options may be
granted under the Incentive Option Plan is 2,000,000. No option may be
granted under the Incentive Option Plan after March 15, 2005.
3. Pursuant to the terms and conditions of the Plan, the Corporation
grants to Optionee an option (the "Option") to purchase 400,000 shares (the
"Option Shares") of its common stock, par value $0.0001 per share, at a
price of $0.0938 per share in the manner and subject to the provisions
hereinafter provided.
4. Subject to earlier termination as hereafter provided, the Option
shall terminate in all respects at, and no exercise as to any shares covered
by the Option shall be honored after the close of business ten years after
its grant ("Expiration Date"). Furthermore, the Option of shareholders owning
10% or more of the Company's voting power, shall terminate in all respects
at, and no exercise as to any shares covered by the Option shall be honored
after the close of business five years after its grant.
5. The Option is exercisable during the lifetime of the Optionee only
by the Optionee, and, subject to the provisions of Paragraph 6 hereof, only
if (i) at the time of any and every exercise of the Option Optionee is an
employee or director of an Employer Corporation and (ii) Optionee shall have
been in the continuous employ of an Employer Corporation from the date of the
Agreement to the date of exercise. As used herein, "Employer Corporation"
shall mean any of the Corporation or a "Subsidiary Corporation", as that
term is defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), and any successor statutory provision.
6. (a) The aggregate fair market value (determined at the time the
options are granted) of common stock with respect to which incentive stock
options (within the meaning of Section 422 of the Code) are exercisable for
the first time by Optionee under the Plan or any other plan of Optionee's
Employer Corporation or its parent and subsidiary corporations ( as defined
in Section 424 of the Code), shall not exceed $ 100,000.00 (or such other
individual employee maximum as may be in effect from time to time under the
Code at the time the options are granted) in any calendar year.
(b) If Optionee disposes of common stock acquired upon the exercise
of Options by sale or exchange either (a) within two years after the date of
grant of the Options under which the common stock was acquired or (b) within
one year after the acquisition of such shares, Optionee shall notify the
Corporation of such disposition and of the amount realized upon such
disposition.
7. (a) If Optionee shall cease to be employed by an Employer
Corporation by reason of death or any other reason other than voluntarily
quitting, discharge for cause or permanent and total disability as defined in
Section 22(e)(3) of the Code ("Disability"), as determined by the
administrator of the Plan, the Optionee or his duly appointed guardian or
other legal representative ("Legal Representative"), as the case may be, may,
but only within the three months next succeeding such cessation of employ-
ment, exercise the Option to the extent that the Optionee would have been
entitled to do so on the date of such cessation of his employment. If
Optionee voluntarily quits or is discharged for cause, the Option shall
terminate on the date of cessation of employment. In no event shall the
Option be exercisable after the Expiration Date specified in Paragraph 3
hereof.
(b) If Optionee shall cease to be employed by an Employer
Corporation by reason of a Disability, the Option shall be exercisable by
Optionee or Optionee's Legal Representative, to the extent that Optionee
would have been entitled to do so on the date of such cessation of
employment, but only within one year following such cessation of employment
due to said Disability. In no event shall the Option be exercisable after
the Expiration Date specified in Paragraph 3 hereof.
8. (a) Any exercise of the Option shall be made by the delivery by
Optionee (or his Legal Representative) to the Corporation at its principal
office at 750 Lexington Avenue, New York, New York, or such other place as
the Corporation may designate, of (i) written notice of such exercise stating
the number of shares with respect to which the Option is being exercised,
(ii) payment of the purchase price for such number of shares by cash, shares
of Common Stock, or promissory notes secured by assets including the shares
to be received on the exercise of the options, and (iii) a written
certificate of Optionee (or his Legal Representative) in form and substance
reasonably acceptable to the Corporation, to the effect that he will not
dispose of such shares in violation of the Securities Act of 1933, as amended,
or the rules of the stock exchanged upon which the shares of common stock of
the Corporation are listed; provided, however, if the Plan and the options
granted thereunder and the issuance of shares upon exercise of options is
registered under the Securities Act of 1933, as amended, Optionee (or his
Legal Representative) need not furnish the certification described in clause
(iii) of this sentence. Promptly after receipt of the foregoing, the
Corporation shall cause to be delivered to Optionee (or his Legal
Representative) stock certificates evidencing the number of shares as to which
the Option has then been exercised. Such certificates may contain such legend
reflecting any restrictions upon the transfer of the shares evidenced thereby
as in the opinion of counsel to the Corporation may be necessary to the
lawful and proper issuance of the certificate.
(b) Notwithstanding anything to the contrary herein contained, the
Corporation, in its discretion, may postpone the issuance and delivery of the
certificates for the shares issuable upon any exercise of the Option until
the completion of any stock exchange listing, or registration or other
qualification thereof under any state or federal law, rule or regulation
which the Corporation may deem necessary or appropriate; and may require the
person exercising an Option to make such representations and furnish such
information as it may deem appropriate in connection with the issuance of the
shares in compliance with applicable law or sound corporate practice. A
registration statement registering the shares issuable upon exercise of
Options under the Securities Act of 1933 may be in effect from time to time,
but the Corporation shall have no obligation to file or keep effective any
such registration statement.
9. Neither Optionee nor his Legal Representative shall have any of the
rights of a shareholder of the Corporation with respect to the shares of common
stock issuable upon the exercise of the Option, except to the extent that one or
more certificates for such shares shall have been issued upon the due
exercise of the Option.
10. The Option shall not be assigned, pledged or hypothecated in any way,
shall not be subject to execution, and is not transferable by Optionee
otherwise than by will or the laws of descent and distribution. Any attempt at
assignment, transfer, pledge, hypothecation or other disposition of the
Option contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall by null and void.
11. If any change is made in the shares subject to the Option by reason of
a stock dividend, stock split, recapitalization, merger, consolidation, sale
or exchange of assets or other change in the shares of common stock of the
Corporation at the time outstanding, the Board of Directors of the
Corporation may take such action as it determines to be appropriate to adjust
the kind and number of shares and price per share or both of the shares
of common stock subject to this Option if and to the extent determined to
be appropriate by the Board of Directors, whose determination shall be
conclusive.
12. Except in connection with any event described in Paragraph 10b as to
which the Board of Directors has determined to make an appropriate adjustment
as provided in paragraph 10, upon the complete liquidation of the Corporation,
the Option shall be deemed cancelled to the extent not exercised. In the event
of the complete liquidation of any Employer Corporation (Other than the
Corporation) employing Optionee, or in the event such Corporation ceases to
be an Employer Corporation, the Option shall be deemed cancelled to the
extent not exercised unless Optionee shall become employed by another
Employer Corporation (including the Corporation) concurrently with such event.
13. The Option granted hereby shall not impose any obligation on any
Employer Corporation to continue the employment of Optionee.
14. The Corporation may require a payment by Optionee to cover applicable
withholding for income and employment taxes in the event of the exercise of an
Option.
15. This Agreement is made under the provisions of the Corporation's
Incentive Stock Option Plan and all of the provisions of the Plan are also
provisions of this agreement. If there is a difference between the provisions of
this Agreement and the provisions of the Plan, the provisions of the Plan
shall govern.
16. The Plan may be terminated or amended at any time by the Board of
Directors, except that, without stockholder approval, the Plan may not be
amended to increase the number of shares subject to the Plan, change the class
of persons eligible to receive options or materially increase the benefits
of participants.
17. The place of administration of the Plan shall be in the State of New
York, and the validity, construction, interpretation, administration and effect
of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined in accordance with the laws of the State of New
York and the General Corporation Law of Delaware.
18. The pronouns used herein and the words Optionee and Legal
Representative and the pronouns therefor, shall be construed as masculine,
feminine or neuter, and in the singular or plural, as the sense requires.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above set forth.
EMBRYO DEVELOPMENT CORPORATION
By: /s/ Matthew Harriton
-----------------------------
Matthew Harriton, CEO
By: /s/ Karen Nazzareno
-----------------------------
Karen Nazzareno, Optionee
EXHIBIT 14
BECKMAN, MILLMAN & SANDERS, L.L.P.
[LETTER HEAD]
July 1, 1998
Karen Nazzareno
Embryo Development Corporation
750 Lexington Avenue, Suite #2750
New York, New York 10022
Dear Ms. Nazzareno:
This letter is to advise you that the Board of Directors and Administrators
of the Incentive Stock Option Plan have authorized the grant to you of an option
to purchase 400,000 shares of the Company's common stock, par value $0.0001,
to an exercise price of $0.0938 per share. If you decide to exercise this
option, please execute a copy of this letter and return to us together with
your secured promissory note.
Very truly yours,
BECKMAN, MILLMAN & SANDERS, LLP
/s/ Steven A. Sanders
By:________________________________
I hereby exercise options to purchase
400,000 shares of the common stock of
the Company and enclose my secured
promissory note in the amount of
$37,520.00
/s/ Karen Nazzareno
_________________________
KAREN NAZZARENO
EXHIBIT 15
PROMISSORY NOTE
$37,520.00 New York, NY
Date: July 1, 1998
FOR VALUE RECEIVED, Karen Nazzareno ("Borrower") promises to pay to EMBRYO
DEVELOPMENT CORPORATION, a Delaware corporation )"Lender"), on the date five
years from the date of this Note (the "Maturity Date"), the principal sum of
THIRTY SEVEN THOUSAND FIVE HUNDRED TWENTY DOLLARS ($37,520.00), with EIGHT
percent (8%) interest.
Prepayment. Borrower shall have the right to prepay this Note at any time
and from time to time in whole or in part without penalty.
Late Fee. Upon default in the payment of the balance on the Maturity Date,
Borrower shall pay to Lender upon demand, in addition to all the other amounts
payable hereunder, a late charge equal to two percent of the amount so
overdue (but in no event higher than the maximum allowed by New York law).
Acceleration Upon Default. Each of the following shall be deemed an
"Event of Default":
A. If one of the following acts of insolvency occurs with respect to
Borrower or the property of Borrower:
insolvency; assignment for the benefit of creditors or calling of a
meeting of creditors preliminary thereto; appointment of a receiver,
conservator, rehabilitation or similar officer for Borrower or any
material portion of the property of Borrower, which appointment
shall not be removed within 30 days after the appointment; the
issuance of any attachment against any material portion of the
property of Borrower, which shall not be removed or bonded within 30
days of such issuance; or the taking of possession of, or
assumption of control over, all or any substantial part of the
property of Borrower by the United States Government, foreign
government (de facto or de jure) or any agency thereof; the filing
of a voluntary petition in Bankruptcy by Borrower; or the
commencement of any proceeding by Borrower under any bankruptcy or
debtor's law (or similar law analogous in purpose or effect) for
the relief or reorganization of Borrower or for composition,
extension, arrangement or readjustment of any of the obligations of
Borrower; or the filing of any involuntarily petition in bankruptcy
against Borrower, which filing is not dismissed within 60 days
of such filing.
B. If a judgment is entered or a tax lien filed against Borrower or the
property of Borrower which is not paid or bonded on or before the
30th day following the entry of judgment or filing of lien.
C. If Borrower fails to collect, remit or pay any tax assessment,
withholding or deficiency on or before the 30th day following the
due date.
D. The dissolution of Borrower.
Upon an Event of Default, the entire principal balance of this Note then
remaining unpaid, together with any late charges thereon, shall, at the
option of Lender, become immediately due and payable, without demand or
notice, together with all costs of collection, including reasonable
attorney's fees. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same in the event of any subsequent
default or breach.
Waiver; Indulgence. All parties now or hereafter liable for payment of
any of the indebtedness evidenced by this Note, by executing and
endorsing this Note or by entering into or executing any agreement to
pay any indebtedness hereby evidenced: (a) agree to waive presentment
for payment, demand, notice, protest and diligence in collection or bringing
suit; and (b) agree the Lender shall have the right, without notice and
without in any way affecting the liability of Borrower, to (i) accept
partial payment, (ii) exchange or release security or collateral, (iii) deal
in any way at any time with any parties liable for the indebtedness evidenced by
the Note, or (iv) grant us to any party any extensions of time for payment of
any said indebtedness or any other indulgences or forbearances whatsoever.
Security. The payment of this Note is secured by a pledge to the Lender of
400,000 shares of common stock of the Company. This Note is non-recourse except
with regard to the above-referenced shares.
Severability. If any provision of this Note shall be deemed by court
having jurisdiction thereon invalid or unenforceable, the balance of this
Note shall remain in effect; if any provision of this Note is deemed by any
such court to be unenforceable because such provision is too broad in scope,
such provision shall be construed to be limited tin scope to the extent such
court deems necessary to make it enforceable; and if any provision is deemed
inapplicable by any such court to any person or circumstance, it shall
nevertheless be construed to apply to all other persons and circumstances.
Governing Law; Effect. This document shall be governed by and construed in
accordance with the substantive law of the State of New York, without giving
effect to the conflicts or choice of law provisions of New York or any other
jurisdiction, and shall have the effect of a sealed instrument.
BORROWER:
/s/ Karen Nazzareno
____________________________
KAREN NAZZARENO
EXHIBIT 16
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as
amended, the undersigned hereby consents to the joint filing on their behalf of
a single Schedule 13D and any amendments thereto, with respect to the
ownership by each of the undersigned of shares of Common Stock of Embryo
Development Corporation. The undersigned hereby further agree that this
statement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original, but all of which counterparts
shall together constitute one and the same instrument.
Dated: August 28, 1998
/s/ Matthew Harriton
________________________________
MATTHEW HARRITON
/s/ Andrew Fabrikant
________________________________
ANDREW FABRIKANT
/s/ Daniel Durchslag
________________________________
DANIEL DURCHSLAG
/s/ Karen Nazzareno
________________________________
KAREN NAZZARENO
