OPTION AGREEMENT Dated January 10, 2006
EXHIBIT
10.18
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Dated
January 10, 2006
THIS
OPTION AGREEMENT (“Agreement”)
is
among Trulite, Inc. (“Trulite”)
Synexus Energy, Inc. (“Synexus”)
and
the shareholders of Synexus (“Shareholders”).
Synexus and Trulite are sometimes collectively referred to as the “Parties”.
Synexus
desires to sell, and Trulite desires to buy, the option to purchase the
ownership of Synexus in exchange for the cash and services described below,
subject to the terms and conditions set forth below.
1. |
Right
of First Refusal and Option.
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x. |
Xxxxx.
The Shareholders hereby unconditionally and irrevocably grant to
Trulite
or its nominee, in exchange for providing integration services and
related
costs for the Kitty Hawk project for the Agreement Term specified
in this
document, a right of first refusal and an Option to purchase, the
Interests for the Purchase Price.
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b. |
Interests.
The “Interests”
are (A) all of the ownership rights, title and interest with respect
to
Synexus, including but not limited to (i) the certificates (if any)
representing ownership of Synexus, and all books and records related
thereto, electronic or otherwise and whether now or hereafter created
by
or for the benefit of Synexus, (ii) all rights and privileges of
Synexus
with respect to the ownership of Synexus (including without limitation,
all subscription warrants, rights or options issued with respect
to
Synexus and all representations, warranties, registration rights
and other
undertakings of any person inuring to the benefit of the Shareholders
in
respect thereof) and (iii) all unpaid cash and non-cash dividends
and all
other unpaid payments, return of capital, property and distributions
made
on or with respect to Synexus and (B) all rights and obligations
of
Shareholders related to Synexus, if the “Interests” are in the nature of a
contract.
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c. |
Purchase
Price.
The “Purchase
Price”
is (i) if the Option Notice is delivered from January 3, 2006 up
to and
including April 30, 2006, $4,750,000.00 in cash and Trulite Stock
(ii) if
the Option Notice is delivered from May 1, 2006 up to and including
October 31, 2006, $6,500,000.00 in cash and Trulite Stock. The number
of
common shares of Trulite Stock delivered under the proceeding sentences
shall be equal to the dollar amount of cash divided by a price per
share
equal to either (a) if Trulite is not listed on a national exchange
on the
day of the delivery of the Option Notice, at the value determined
by
[Energy Capital Solutions] in its valuation report delivered to Trulite
during January 2006 or (b) if such shares of Trulite are traded on
a
national exchange on the day of the delivery of the Option Notice,
the
average price per share publicly reported as of the close of business
on
the 20 days on which the shares were available for trading immediately
preceding the day of the delivery of the Option
Notice.
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d. |
Exercise
of Option.
At any time during the term of this Agreement, Trulite or its nominee
may
make its election to exercise its option to purchase the Interests
(“Option”)
by delivering written notice (“Option
Notice”)
to the Shareholders referring to the Option and specifying the date
and
place of the closing, which must be within 60 days of such notice
and no
later than the last day of the term of this Agreement. The Option
shall be
deemed exercised upon payment of the Purchase Price. Synexus and
the
Shareholders will cooperate and assist with completing the purchase
of the
Interests, including executing documents as reasonably requested
and
meeting in person to complete the closing.
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e. |
Right
of First Refusal.
The Shareholders must deliver to Trulite written notice of any direct
or
indirect proposed sale, assignment, transfer or encumbrance of the
Interests or of any entity that directly or indirectly owns or has
any
current or contingent interest in the Interests which describes the
material terms and conditions of such transaction and its proposed
date,
which notice must be delivered to Trulite before 60 days before such
proposed date. Within 20 days of the receipt of such notice by Trulite,
Trulite shall deliver a written response which either consents to
such
proposed transaction or gives notice of Trulite’s exercise of the Option
(or notice of Trulite’s nominee’s exercise of the Option). If Trulite
consents to such proposed transaction, the Shareholders may complete
the
transaction on or after such proposed date and this Agreement shall
terminate on the date of such transaction, or such earlier date to
which
Trulite may consent in writing.
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f. |
If
this Agreement is terminated with the consent of Trulite without
Trulite
having given notice of its election to exercise its Option, then
the
ownership of the Interests shall remain with the Shareholders. If
this
Agreement is terminated without the consent of Trulite, then Trulite
may,
within 20 days of receiving written notice of such termination, give
notice and Trulite (or its nominee) may specify a closing date that
is
after such termination.
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2. |
Agreement
Term.
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a. |
This
Agreement shall be effective for the period beginning on January
3,
2006 up
to and including October 31, 2006, unless earlier terminated as herein
provided or such term is extended by mutual written agreement of
the
Parties. At any time while this Agreement is in effect, either Party
may
terminate this Agreement, during the occurrence of an Event of Default
(defined below), by giving written notice to the other Party not
less than
[90 days] in advance of the desired termination
date.
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b. |
Upon
the termination of this Agreement the respective rights and obligations
of
the Parties shall cease and be of no further force and effect except
that:
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i. |
If
the agreement has been terminated by Synexus pursuant to Section
3 below,
and Trulite has not delivered the Option Notice under Section 1 on
or
before the date of such termination, Trulite shall pay Synexus $750,000
in
cash, due [within 10 days of such notice]. If Trulite fails to pay
such
amount on such date, such amount shall accrue interest at the highest
lawful rate until paid.
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ii. |
If
the Agreement has been terminated by Trulite pursuant to Section
3 below,
Trulite shall not be obligated to pay any additional
amount.
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iii. |
The
obligations of Synexus under Section 11 shall survive termination
for the
period set forth therein.
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3. |
Events
of Default:
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a. |
If
Synexus breaches a covenant hereunder, Trulite may give written notice
to
Synexus and Synexus may attempt to cure such breach. If such breach
has
not been cured within 30 days after the delivery of such notice,
an “Event
of Default” of Synexus will have occurred, and Trulite may, but is not
required to, send the notice of termination described in Section
2.
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b. |
If
Trulite breaches a covenant hereunder, Synexus may give written notice
to
Trulite, and Trulite may attempt to cure such breach. If such breach
has
not been cured within 30 days after the delivery of such notice,
an “Event
of Default” of Trulite will have occurred and Synexus may, but is not
required to, send the notice of termination described in Section
2.
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4. |
Governing
Law.
This Agreement is expressly subject to all valid laws, regulations,
rules,
or orders of governmental authorities with jurisdiction over the
subject
matter of this Agreement. This Agreement shall be interpreted under
the
laws of the State of Texas, without regard to any choice of law rule
otherwise requiring application of laws of another
jurisdiction.
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5. |
Confidential
Information.
During the term of this Agreement and for a period of five (5) years
thereafter, Synexus will hold in confidence and not disclose to any
other
entity, except as necessary for the performance of the services (and
then
only to the extent required for the particular portion of the services
being performed and on a confidential basis satisfactory to Trulite)
or
except as is required by law, any confidential information that is
disclosed to or acquired by Synexus in performing services hereunder.
For
purposes of this Agreement, “confidential information” includes all
information relating to Trulite’s technology in a documentary or tangible
form, and (subject to the exclusions set forth below) includes all
information relating to Trulite, Trulite’s subsidiaries or affiliates, or
to any other company or person, or to their respective operations,
plans,
projections, or interest in power generation matters and/or power
distribution matters, and any related reports, technical or other
data,
analyses, opinions or other materials that: (i) are proprietary to
Trulite
or any other person or entity; (ii) constitute a trade secret of
Trulite
or any other person or entity; (iii) have been marked proprietary
or
confidential by or on behalf of Trulite or any other person or entity,
or
(iv) is or have been disclosed to Synexus by Trulite or any other
person
or entity with the clear understanding that it is confidential and
is to
remain so.
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6. |
Entire
Agreement; Amendments.
This Agreement constitutes the entire understanding of the Parties
with
respect to the subject matter hereof, and supersedes all prior or
contemporaneous negotiations, understandings and agreements, whether
written or oral, of the Parties with respect to the subject matter
hereof.
Any amendments or modifications to this Agreement shall be enforceable
only if made in writing and signed by an authorized representative
of the
Party against whom enforcement is sought. In particular, the Parties
agree
that no term, condition, or provision of any work order, invoice,
delivery
ticket, or other document submitted by Synexus to Trulite shall have
the
effect of modifying or waiving in any manner the provisions of this
Agreement unless such document shall be accepted and executed by
Trulite
expressly as an amendment to this Agreement.
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7. |
Intellectual
Property.
The Parties shall be the joint owners of any work product, whether
completed or not, created, produced, developed or prepared in connection
with the performance of services under this Agreement, including
all data,
information, ideas (whether or not patentable) and expressions of
ideas
(“Work
Product”).
The Parties shall be the joint owner of all intellectual property
rights
in such work product, including all trade secret rights (e.g., the
right
of first publication), all patent rights, and all rights of copyright
(“Intellectual
Property”).
It is the intention of the Parties that any work product is a “work for
hire” as that term is used in the Federal Copyright Act. The Parties agree
that each may separately use, sell, assign or grant licenses to use,
on a
non-exclusive basis, the rights to use and develop the Work Product
and
Intellectual Property (collectively “IP”).
The Parties may separately modify the IP, alone or in combination
with
separate intellectual property, and may own, utilize and transfer
such
modifications, and such separate intellectual property, on an exclusive
basis, and may take actions to protect such modifications or separate
intellectual property, including but not limited to creating patents,
trademarks or copyrights, but only if such actions do not unreasonably
interfere with the other Party’s nonexclusive rights to the IP.
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8. |
Assignment.
This Agreement may not be assigned by Synexus in whole or in part.
This
Agreement shall be assignable by Trulite, without the consent of
Synexus,
to a subsidiary, parent or other affiliate of Trulite and in such
event
this Agreement shall bind and inure to the benefit of any such assignee,
and such assignee shall be substituted for Trulite in all respects
under
this Agreement.
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9. |
Notices.
All notices hereunder must be in writing and shall be deemed to have
been
given upon receipt of delivery by: (a) personal delivery to the designated
individual, (b) certified or registered mail, postage prepaid, return
receipt requested, (c) a nationally recognized overnight courier
service
(against a receipt therefor) or (d) facsimile transmission with
confirmation of receipt. All such notices must be addressed as follows
or
such other address as to which any party hereto may have notified
the
other in writing:
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If
to
Synexus, to:
12335
Kingsride, #205
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx Xxxxxx
Fax:
____________.
If
to
Trulite, to:
ADDRESS
Attention:
Fax:
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With
a
copy to:
Jones,
Walker, Waechter, Poitevent, Carrère & Xxxxxxx, L.L.P.
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxx
Fax:
(000) 000-0000
[SEE
ATTACHED SIGNATURE PAGES]
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SYNEXUS ENERGY, INC. | ||
By: | ||
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Name: | ||
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Title: | ||
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Address: | ||
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Fax: | ||
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E-Mail (but delivery by email shall not constitute notice): | ||
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Attention: | ||
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TRULITE TECHNOLOGIES, INC | ||
By: | ||
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Name: | ||
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Title: | ||
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Address: | ||
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Fax: | ||
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E-Mail (but delivery by email shall not constitute notice): | ||
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Attention: | ||
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SHAREHOLDERS:
CONTANGO
CAPITAL PARTNERS, L.P.
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By: Contango Capital Partnership Management, L.L.C. By:
Xxxxxxx X. Xxxxxx
Managing
Partner
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J. XXXXX XXXXXXXXX |
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XXXX X. XXXX |
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XXXXX X. XXXXXXXXX |
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XXXXXX X. XXXXXXXXX |
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