Exhibit 10.3
OPTION AGREEMENT
THIS OPTION AGREEMENT is made and entered into as of the date
shown
below in the signature area,
by, between and among Evolution Services, Inc., a
Utah corporation, ("ESI"),
and the entity named and signing below in the
signature area ("Member"),
and the persons listed and signing in the signature
area as the equity owners of
the Member (the "Shareholders").
RECITALS:
A. Together with and as consideration for this Option Agreement,
ESI
and Member have entered into
a Services Agreement for the provision of certain
described services by ESI to
Member. The execution of this Option Agreement is a
condition to the
effectiveness of the Services Agreement and the execution
of
the Services Agreement is a
condition to the effectiveness of this Option
Agreement. (The form of
Services Agreement is attached as Appendix 1 to this
Option Agreement.)
B. Because the Services Agreement is only available to members of
a
parent-subsidiary control
group under Sections 414(c) and Section 1563(a)(1) of
the Internal Revenue Code of
1986, as amended, Member desires to join and ESI
desires to welcome Member
into the "Evolution Control Group" of companies. To
enable Member to join the
Evolution Control Group, ESI must acquire a sufficient
ownership and control
position in Member for Member to be considered part of
the
Evolution Control Group.
Shareholders and ESI have agreed to accomplish this
ownership through this Option
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of
the
entering into by the parties
of the Service Agreement, the parties hereby agree
as follows:
1. Member Representations.
Member and the Shareholders hereby represent and
warrant to ESI that Member is
a duly organized entity under the laws of its
organizing jurisdiction, and
is presently validly existing and in good standing
under the laws of that
jurisdiction, as well as all other jurisdictions where
such good standing is
required for Member to conduct its current business.
Furthermore, Shareholders
represent and warrant that each of them may lawfully
enter into this Option
Agreement, and that the execution and delivery of this
Option Agreement has been
authorized by proper corporate action where necessary.
Member has provided ESI with
copies of its organizational documents, together
with any amendments thereto,
and represents and warrants that such documents are
true, correct and complete
and currently in force.
2. Capital Structure of
Member. Member and the Shareholders hereby represent and
warrant to ESI that the
equity ownership of Member consists of those issued and
outstanding securities
described on Exhibit "A". Member and the Shareholders
further represent and warrant
to ESI that all outstanding equity securities of
Member have been properly and
validly issued by proper legal action and such
securities are all fully paid
and nonassessable. Member and the Shareholders
further represent and warrant
that there are no outstanding options or warrants
of any kind for the issuance
of additional securities of Member except as set
forth on Exhibit "A". It is
the intent of the parties hereto that ESI at all
times shall have an option to
acquire 80% of the total issued and outstanding
equity ownership in Member,
on a fully diluted basis.
3. Grant of Option. The
Shareholders hereby grant to ESI an option (the
"Option") to acquire eighty
percent (80%) of the issued and outstanding voting
securities of Member, ("80%
Control"), as listed on Exhibit "B", attached hereto
and incorporated herein by
this reference, on the terms and conditions
hereinafter set forth1. In
the event of a mistake in the number of equity
securities of Member which
are issued and outstanding, as shown on Exhibit "A",
the Option shall be construed
to extend to the requisite number of units of such
equity securities owned by
the Shareholders to ensure that ESI at all times has
the right to acquire at least
80% Control. The securities now and hereafter held
by Shareholders shall
henceforth bear a legend on the front or reverse side
thereof making reference to
this Option Agreement.
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1 If Member is a limited
liability company taxed as a partnership or a
partnership, then the securities
covered by the Option will be 80% of the
profits interest. If Member is a
sole proprietor, this Option covers the
entire ownershi
