Sample Business Contracts

Stock Option Agreement - eUniverse Inc. and Charles Beilman

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                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (the "Agreement") is made as of the _26th_ day
of January, 2000 between eUniverse, Inc., a Nevada corporation (the "Company")
and Charles Beilman an individual residing in Wallingford, Connecticut


      WHEREAS, Beilman desires to grant the Company the option to purchase the
Company's shares of common stock, $.001 par value, owned by Beilman, and the
Company desires to receive such option grant from Beilman;

      WHEREAS, the parties desire to amend that certain Stock Purchase Agreement
by and among Palisades Capital, Inc., CD Universe, Inc. and Charles Beilman
dated as of October 1, 1998, as amended by Amendment to stock Purchase Agreement
by and among Palisades Capital, Inc., CD Universe, Inc. and Charles Beilman
dated as of December 29, 1998, Amendment No. 2 to Stock Purchase Agreement by
and among Palisades Capital, Inc., CD Universe, Inc. and Charles Beilman dated
February 11, 1999, Amendment No. 3 to Stock Purchase Agreement by and among
Palisades Capital, Inc., Entertainment Universe, Inc., CD Universe, Inc. and
Charles Beilman dated as of March 1999, and Amendment Number 4 to Stock Purchase
Agreement by and between the Company and Beilman dated as of June 9, 1999, that
was subsequently assigned to the Company (the "Purchase Agreement");

      WHEREAS, the parties desire to enter into a general mutual release;


      NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:



            Subject to the terms and conditions set forth in this Agreement,
Beilman hereby grants to the Company an option (the "Option"), to purchase two
million four hundred twenty-five thousand (2,425,000) shares of the common stock
of the Company, $.001 par value (the "Common Stock") beneficially owned by
Beilman, which as of the date hereof, represents fourteen and nine tenths
percent (14.9%) of the total issued and outstanding Common Stock of the Company
(the "Shares").


            (a) The Option may be exercised from time to time by the Company for
all, or less than all, of the Shares of the Common Stock subject to this Option
at any time during the period beginning


with the date of this Agreement and ending on the day that is seventy five (75)
days from the date of this Agreement (the "Option Period").

            (b) The Company shall exercise the Option within the Option Period
by delivery to Beilman of the Purchase Form attached hereto as Exhibit A, duly
executed, and payment in cash or by check of the Exercise Price (as defined in
(c) below) for the number of Shares exercised. The Company may exercise the
Option in more than one installment. The Company may assign its rights to
exercise all or a portion of the Option at any time during the Option Period.

            (c) The exercise price (the "Exercise Price") at which the Shares
may be purchased upon the exercise of the Option shall be $1.375 per Share

            (d) Immediately upon the exercise of the Option and payment of the
Exercise Price by the Company or its designee as hereinabove provided, Beilman
shall deliver to the Company or its designee a certificate or certificates
representing the Shares so purchased, duly endorsed for transfer. Beilman
represents and warrants that he is the beneficial and record owner of all of the
Shares, free and clear of any liens, encumbrances or restrictions on transfer of
any nature whatsoever other than the obligations arising under this Agreement.
Except for this Agreement and the transactions contemplated hereby, Beilman does
not have any legal obligation, absolute or contingent, to any person or firm to
sell or otherwise encumber any of the Shares or enter into any agreement with
respect thereto. Beilman further covenants and agrees that he shall not grant
any other option or right or otherwise encumber the Shares during the Option

      1.3 RESIGNATION OF BEILMAN. At such time as Beilman beneficially owns less
than one million (1,000,000) Shares, (i) Beilman shall immediately resign as a
member of the Board of Directors of the Company; and (ii) Beilman shall
immediately resign as an employee of the Company and terminate that certain
Employment Agreement by and between CD Universe, Inc. and Charles Beilman dated
as of October 1, 1998, without liability to any party to this Agreement.

      1.4 ACCESS TO CERTAIN INFORMATION. The Company shall permit Beilman to
review all documents pertaining to a breach in the security of the Company's
customer database prepared by third party consultants referencing CD Universe,
Inc. or Beilman.


At such time as Beilman owns less than one million (1,000,000) Shares, the
Purchase Agreement shall automatically be amended by deleting Section 1.02(g)
therein in its entirety, without further consideration from any party.


      3.1 The Company and Beilman do hereby remise, release and forever
discharge one another, their respective officers, directors, employees, agents,
and attorneys, together with their heirs, executors, administrators, successors
and assigns, and predecessors in interest, from all actions, causes of action,
suits, debts, dues, sums of money, accounts, covenants, contracts,
controversies, agreements,



promises, trespasses, damages, judgments, executions, claims, and demands of
whatsoever kind and nature, at law or in equity, which the parties, and the
parties' heirs, executors, administrators, successors and assigns, ever had, now
have or hereafter can, shall or may have, for, upon, or by reason of any matter,
cause or thing of whatsoever kind and nature against one another from the
beginning of the world to the day of the date of this Agreement.

      3.2 The company releases Beilman from the non-compete clause in the
certain Employment Agreement by and between CD Universe, Inc. and Charles
Beilman dated as of October 1, 1998, without liability to any party to this

      3.3 Each party represents to the other that it has full power and
authority to enter into the release under this Section 3 and this Agreement.


      4.1 NONTRANSFERABILITY. This Agreement shall not be assigned, pledged,
hypothecated, sold or otherwise transferred or encumbered by Beilman,
voluntarily or involuntarily, including, without limitation, by operation of
law; and any attempt to do so shall be null and void.

      4.2 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Connecticut.

      4.3 SUCCESSORS AND ASSIGNS. All of the provisions of this Agreement shall
be binding upon the parties and their respective heirs, personal
representatives, legal representative, distributees, successors and assigns.

      4.4 NO WAIVERS. No party shall be deemed to waive any of its rights,
powers or remedies hereunder unless such waiver is in writing and signed by said
party. No delay or omission by any party in exercising any of said rights,
powers or remedies shall operate as a waiver thereof. Nor shall a waiver signed
by any party of any breach of the covenants, conditions or agreements binding on
any other party on one occasion be construed as a waiver or consent to such
breach on any future occasion or a waiver of any other covenant, condition, or
agreement herein contained.

      4.5 ARBITRATION. Any controversy or claim arising out of or related to
this Agreement or the breach thereof shall be settled by binding arbitration in
Fairfield County, Connecticut, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction

      4.6 INDEMNITY. Each party hereto shall indemnify and save the other
harmless from any liabilities, claims or demands (including the costs, expenses
and reasonable attorney's fees on account thereof) that may be made by anyone
for personal injuries, including death, or damage to tangible property resulting
from the negligence or willful misconduct of that party, its employees or
agents, in the performance of this Agreement. Each party shall defend the other
at the other's request against any such liability, claim or demand. Each party
shall notify the other promptly of written claims or demands against such party
of which the other party is responsible hereunder. Each party shall



cooperate fully with the other, and the indemnifying party shall control such
defense and the right to litigate, settle, appeal (provided it pays the cost of
any required appeal bond), compromise or otherwise deal with any such claim or
resulting judgment; provided that such settlement, compromise or other
resolution of such claim does not result in any liability to the indemnified

      4.7 SEVERABILITY. Any provision of this Agreement held or determined by a
court (or other legal authority) of competent jurisdiction to be illegal,
invalid, or unenforceable in any jurisdiction shall be deemed separate, distinct
and independent, and shall be ineffective to the extent of such holding or
determination without (i) invalidating the remaining provisions of this
Agreement in that jurisdiction or (ii) affecting the legality, validity or
enforceability of such provision in any other jurisdiction.

      4.8 CAPTIONS HEADINGS. Captions and paragraph headings used in this
Agreement are for convenience only and shall not be used to interpret any
provision hereof.

      4.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof, and is
intended as the parties, final expression and complete and exclusive statement
of the terms thereof, superseding all prior or contemporaneous agreements,
representations, promises and understandings, whether written or oral. This
Agreement may be amended or modified only by an instrument in writing signed by
both parties. All exhibits referred to in this Agreement are incorporated herein
by reference.

      4.10 NOTICES. Any notice required or permitted to be given hereunder shall
be (a) in writing, (b) effective on the first business day following the date of
receipt, and (c) delivered by one of the following means: (i) by personal
delivery; (ii) by prepaid, overnight package delivery or courier service; or
(iii) by the United States Postal Service, first class, certified mail, return
receipt requested, postage prepaid. All notices given under this Agreement shall
be addressed to the addresses stated below, or to new or additional addresses as
the parties may be advised in writing.

      4.11 REMEDIES CUMULATIVE AND NONEXCLUSIVE. Unless stated otherwise, all
remedies provided for in this Agreement shall be cumulative, nonexclusive and in
addition to, but not in lieu of, any other remedies available to any party at
law, in equity, or otherwise.

      4.12 PRONOUNS. Pronouns used herein shall be construed as masculine,
feminine, or neuter, and both singular and plural, as the context may require,
and the term "person" shall include an individual, corporation, association,
partnership, trust, and other organization.

      4.13 REFERENCES TO OTHER DOCUMENTS. All references herein to any document,
instrument, or agreement shall be deemed to refer to such document, instrument,
or agreement as the same may be amended, modified, restated, supplemented, or
replaced from time to time.

      4.14 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same Agreement.

      4.15 FURTHER ASSURANCES. From and after the date of this Agreement, each
of the parties shall, from time to time, at the request of any other party and
without further consideration other than



as specifically stated herein, do, execute and deliver, cause to be done,
executed and delivered, all such further acts, things and instruments as may be
reasonably requested or required more effectively to evidence and give effect to
the transactions contemplated by this Agreement.

      4.16 EFFECTIVENESS. This Agreement shall not become effective, and shall
automatically terminate and be null and void in all respects, if it is not
approved by the Board of Directors of the Company within five (5) days from the
date hereof.

                       [Signatures continue on next page]



      IN WITNESS WHEREOF, the parties have executed or caused their officer to
execute this Agreement the day and year first above written.

                                             /s/ Charles Beilman
                                             Charles Beilman
                                             32 Cooke Road
                                             Wallingford, CT  06492

                                             eUniverse, Inc.

                                             By: /s/ Brad Greenspan
                                             Name: Brad Greenspan
                                             Title: Chairman
                                             101 North Plains Industrial Road
                                             Wallingford, CT 06492

Only as to Section 2:                        CD Universe, Inc.

                                             By: /s/ William R. Wagner
                                             Name: William R. Wagner
                                             Title: V.P. and CFO
                                             101 North Plains Industrial Road
                                             Wallingford, CT 06492



                                    EXHIBIT A

                                  PURCHASE FORM

Charles Beilman
32 Cooke Road
Wallingford, CT  06492

Mr. Beilman:

      Pursuant to and in accordance with the terms and conditions of the Stock
Option Agreement dated as of ________, 2000, the undersigned hereby irrevocably
subscribes for __________ (___________) shares of Common Stock of eUniverse,
Inc. beneficially owned by you, and hereby makes payment of ________ Dollars
($_____) therefor, and requests that a certificate for such shares be issued in
the name of the undersigned and delivered to the undersigned at the address
listed below.

                                             eUniverse, Inc.

                                             By: _______________________________
                                             Name: _____________________________
                                             Title: ____________________________

Dated: ________, 2000