EXHIBIT 10.A.
OPTION AGREEMENT XXXX X. XXXX, INDIVIDUALLY
AND AS PRESIDENT OF NUVEN ADVISORS, INC.
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into effective the 1st
day of day of April 1999, by and between Xxxx X. Xxxx, individually and as
President of NuVen Advisors Inc., a Nevada corporation ("NuVen"), and The
Hartcourt Companies Inc., a Utah corporation (the "Company").
WHEREAS, the Company proposes to issue to NuVen options to purchase
shares of its common stock (the "Common Stock") in connection with the Company's
engagement of NuVen pursuant to the Advisory Agreement of even date between the
Company and NuVen, incorporated by reference herein (the "Advisory Agreement");
and,
WHEREAS, to induce NuVen to execute the First Amendment to the Advisory
Agreement the Company hereby grants NuVen an option to purchase shares of the
Company's Common Stock subject to the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the mutual promises herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and subject to the terms and conditions set forth
below, NuVen and the Company agree as follows:
1. The Option
The Company hereby grants to NuVen (hereinafter "Holder") an option
(the "Option") to acquire One Million (1,000,000) shares of the
Company's Common Stock, subject to adjustment as set forth herein (such
shares, as adjusted, are hereinafter referred to as the "Option
Shares"), at a purchase price of Fifty Cents ($.50) per share ("Option
Price") representing one hundred ten percent (110%) of the ten (10) day
moving average closing bid price for the Company's common stock.
2. Term and Exercise of Option
A. Term of Option. Subject to the terms of this Agreement, Holder
shall have the right to exercise the Option in whole or in part,
commencing the date hereof through the close of business on
December 1, 2001.
B. Exercise of the Option. The Option may be exercised upon written
notice to the Company at its principal office setting out the
number of Option Shares to be purchased, together with payment of
the Option Price
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C. Issuance of Option Shares. Upon such notice of exercise and
payment of the Option Price, the Company shall issue and cause to
be delivered within five (5) business days following the written
order of Holder, or its successor as provided for herein, and in
such name or names as the Holder may designate, a certificate or
certificates for the number of Option Shares so purchased. The
rights of purchase represented by the Option shall be
exercisable, at the election of the Holder thereof, either in
full or from time to time in part, and in the event the Option is
exercised in respect of less than all of the Option Shares
purchasable on such exercise at any time prior to the date of
expiration hereof, the remaining Option Shares shall continue to
be subject to adjustment as set forth in paragraph 4 hereof. The
Company irrevocably agrees to reconstitute the Option Shares as
provided herein.
3. Reservation of Option Shares
The Company shall at all times keep reserved and available, out of its
authorized Common Stock, such number of shares of Common Stock as shall
be sufficient to provide for the exercise of the rights represented by
this Agreement. The transfer agent for the Common Stock and any
successor transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of such rights of purchase, will be
irrevocably authorized and directed at all times to reserve such number
of shares as shall be requisite for such purpose. The Company will
cause a copy of this Agreement to be kept on file with the transfer
agent or its successors.
4. Adjustment of Option Shares
The number of Option Shares purchasable pursuant to this Agreement
shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
A. Adjustment for Recapitalization. Subject to paragraph 4.B below,
in the event the Company shall (a) subdivide its outstanding
shares of Common Stock, or (b) issue or convert by a
reclassification or recapitalization of its shares of Common
Stock into, for, or with other securities (a "Recapitalization"),
the number of Option Shares purchasable hereunder immediately
following such Recapitalization shall be adjusted so that the
Holder shall be entitled to receive the kind and number of Option
Shares or other securities of the Company measured as a
percentage of the total issued and outstanding shares of the
Company's Common Stock as of the hereof which it would have been
entitled to receive immediately preceding such Recapitalization,
had such Option been exercised immediately prior to the happening
of such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph shall be calculated
and effected taking into account the formula set forth in
paragraph 4.B. below and shall become effective immediately after
the effective date of such event retroactive to the effective
date.
B. Adjustment of the Exercise Price and Number of Option Shares. In
the event of any change in the Company's Common Stock by reason
of a reverse stock split, neither the number nor the Option Price
of the shares subject to this Option shall be changed or be
adjusted.
C. Preservation of Purchase Rights Under Consolidation. Subject to
paragraph 4.B above, in case of any Recapitalization or any other
consolidation of the Company with or merger of the Company into
another corporation, or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety
or substantially as an entirety, the Company shall prior to the
closing of such transaction, cause such successor or purchasing
corporation, as the case may be, to acknowledge and accept
responsibility for the Company's obligations hereunder and to
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grant the Holder the right thereafter upon payment of the Option
Price to purchase the kind and amount of shares and other
securities and property which he would have owned or have been
entitled to receive after the happening of such consolidation,
merger, sale or conveyance. The provisions of this paragraph
shall similarly apply to successive consolidations, mergers,
sales or conveyances.
D. Notice of Adjustment. Whenever the number of Option Shares
purchasable hereunder is adjusted, as herein provided, the
Company shall mail by first class mail, postage prepaid, to the
Holder notice of such adjustment or adjustments, and shall
deliver to Holder setting forth the adjusted number of Option
Shares purchasable and a brief statement of the facts requiring
such adjustment, including the computation by which such
adjustment was made.
5. Failure to Deliver Option Shares Constitutes Breach Under Advisory
Agreement
Failure by the Company, for any reason, to deliver the certificates
representing any shares purchased pursuant to this Option within the
five (5) business day period set forth in paragraph 2 above, or the
placement of a Stop Transfer order by the Company on any Option Shares
once issued, shall constitute a "Breach" under the Advisory Agreement
and, for the purpose of determining the terms of this Agreement, shall
automatically toll the expiration of this Agreement for a period of
time equal to the delay in delivering the subject shares or term of the
Stop Transfer order.
6. Assignment
The Option represented by this Agreement may only be assigned or
transferred by NuVen to an Affiliate or subsidiary, or as the result of
a corporate reorganization or recapitalization. For the purpose of this
Option the term "Affiliate" shall be defined as a person or enterprise
that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the
Company otherwise, this Agreement and the rights hereunder shall not be
assigned by either party hereto.
7. Counterparts
A facsimile, telecopy or other reproduction of this instrument may be
executed by one or more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party
can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this instrument as
well as any facsimile, telecopy or other reproduction hereof.
8. Further Documentation
Each party hereto agrees to execute such additional instruments and
take such action as may be reasonably requested by the other party to
effect the transaction, or otherwise to carry out the intent and
purposes of this Agreement.
9. Notices
All notices and other communications hereunder shall be in writing and
shall be sent by prepaid first class mail to the parties at the
following addresses, as amended by the parties with written notice to
the other:
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To NuVen: Xxxx X. Xxxx
NuVen Advisors Inc.
0000 Xx. Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
With copy to: Xxxxxx & Weed
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company: The Hartcourt Companies Inc.
0000 Xxxxxxx Xxxx Xxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. Counterparts
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11. Governing Law
This Agreement was negotiated, and shall be governed by the laws of
Utah notwithstanding any conflict-of-law provision to the contrary.
12. Entire Agreement
This Agreement sets forth the entire understanding between the parties
hereto and no other prior written or oral statement or agreement shall
be recognized or enforced.
13. Severability
If a court of competent jurisdiction determines that any clause or
provision of this Agreement is invalid, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full
force and effect and the clauses and provision which are determined to
be void, illegal or unenforceable shall be limited so that they shall
remain in effect to the extent permissible by law.
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14. Amendment or Waiver
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in equity,
and may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be construed as
a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to Closing, this
Agreement may be amended by a writing signed by all parties hereto.
15. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first written above.
"NuVen"
By: /s/ Xxxx X. Xxxx
----------------------------------
Xxxx X. Xxxx, individually
and as President of NuVen
Advisors Inc.
The "Company"
The Hartcourt Companies Inc.
By: /s/ Xx. Xxxx X. Xxxx
----------------------------------
Name: Xx. Xxxx X. Xxxx
Title: President
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