CAVALIER HOLDINGS, INC. STOCK OPTION AGREEMENT
AGREEMENT
made as of the 28th day of August 2009, by and between Cavalier Holdings, Inc.
(the “Company”), a Delaware corporation, and Xxxxxxx Xxxx (the
“Holder”).
WHEREAS,
the Company desires to grant to the Holder an Option to purchase shares (the
“Shares”) of its common stock, $.0001 par value per share (the “Common Stock”)
pursuant to the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as
follows:
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1.
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GRANT OF
OPTION.
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The
Company hereby grants to the Holder the right and option to purchase: (i)
400,000 shares of Common Stock, at an exercise price of $0.15 per share,
expiring within two (2) years from the date hereof, and vesting provided that
Holder shall have generated proceeds from the stated value of securities or cash
proceeds earned as compensation from client companies of the Company, its
subsidiaries and/or affiliates in an amount not less than Five Million Seven
Hundred Thousand Dollars ($5,700,000) on or before April 1, 2010, subject to a
grace period of ninety (90) days; and (ii) 400,000 shares of Common Stock, at an
exercise price of $0.15 per share, expiring within two (2) years from the date
hereof, and vesting provided that Holder shall have generated proceeds from the
stated value of securities or cash proceeds earned as compensation from client
companies of the Company, its subsidiaries and/or affiliates in an amount not
less than Seven Million Six Hundred Thousand Dollars ($7,600,000) on or before
April 1, 2010, subject to a grace period of ninety (90) days.
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2.
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METHOD OF EXERCISING
OPTION.
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Subject
to the terms and conditions of this Agreement, the Option may be exercised by
written notice to the Company or its designee, in substantially the form of
Exhibit A
attached hereto. Such notice shall state the number of Shares with
respect to which the Option is being exercised and shall be signed by the person
exercising the Option. The Company shall deliver such Shares as soon
as practicable after the notice shall be received, provided, however, that the
Company may delay issuance of such Shares until completion of any action or
obtaining of any consent, which the Company deems necessary under any applicable
law (including, without limitation, state securities or “blue sky”
laws). The Shares as to which the Option shall have been so exercised
shall be registered in the Company’s share register in the name of the person so
exercising the Option (or, if the Option shall be exercised by the Holder and if
the Holder shall so request in the notice exercising the Option, shall be
registered in the name of the Holder and another person jointly, with right of
survivorship) and shall be delivered as provided above to or upon the written
order of the person exercising the Option. In the event the Option
shall be exercised, by any person other than the Holder, such notice shall be
accompanied by appropriate proof of the right of such person to exercise the
Option. All Shares that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.
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3.
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PARTIAL
EXERCISE.
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Exercise
of this Option to the extent above stated may be made in part at any time and
from time to time within the above limits, except that no fractional share shall
be issued pursuant to this Option.
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4.
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NON-ASSIGNABILITY.
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The
Option shall not be transferable by the Holder otherwise than by will or by the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act or the rules thereunder. However, the Holder, with the
approval of the Company, may transfer the Option for no consideration to or for
the benefit of the Holder’s Immediate Family (including, without limitation, to
a trust for the benefit of the Holder’s Immediate Family or to a partnership or
limited liability company for one or more members of the Holder’s Immediate
Family), and the transferee shall remain subject to all the terms and conditions
applicable to the Option prior to such transfer and each such transferee shall
so acknowledge in writing as a condition precedent to the effectiveness of such
transfer. Any attempted transfer, assignment, pledge, hypothecation
or other disposition of the Option or of any rights granted hereunder contrary
to the provisions of this Section 4, or the levy of any attachment or similar
process upon the Option shall be null and void. The term “Immediate Family”
shall mean the Holder’s spouse, former spouse, parents, children, stepchildren,
adoptive relationships, sisters, brothers, nieces, nephews and grandchildren
(and, for this purpose, shall also include the Holder.)
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5.
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NO RIGHTS AS
STOCKHOLDER UNTIL EXERCISE.
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The
Holder shall have no rights as a stockholder with respect to Shares subject to
this Agreement until registration of the Shares in the Company’s share register
in the name of the Holder.
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6.
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TAXES.
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The
Holder acknowledges that upon exercise of the Option the Holder will be deemed
to have taxable income measured by the difference between the then fair market
value of the Shares received upon exercise and the price paid for such Shares
pursuant to this Agreement. The Holder acknowledges that any income
or other taxes due from him or her with respect to this Option or the Shares
issuable pursuant to this Option shall be the Holder’s
responsibility.
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7.
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PURCHASE FOR
INVESTMENT.
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Unless
the offering and sale of the Shares to be issued upon the particular exercise of
the Option shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the “1933 Act”), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the person(s) who exercise the Option shall warrant to the Company, at the
time of such exercise, that such person(s) are acquiring such Shares for their
own respective accounts, for investment, and not with a view to, or for sale in
connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s) evidencing the
Shares issued pursuant to such exercise:
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“The
shares represented by this certificate have been taken for investment and they
may not be sold or otherwise transferred by any person, including a pledgee,
unless (1) either (a) a Registration Statement with respect to such shares shall
be effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws;” and
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8.
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NOTICES.
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Any
notices required or permitted by the terms of this Agreement shall be given by
recognized courier service, facsimile, registered or certified mail, return
receipt requested. Any such notice shall be deemed to have been given
upon the earlier of receipt, one business day following delivery to a recognized
courier service or three business days following mailing by registered or
certified mail.
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9.
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GOVERNING
LAW.
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This
Agreement shall be construed and enforced in accordance with the law of the
State Delaware, without giving effect to the conflict of law principles
thereof.
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10.
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BENEFIT OF
AGREEMENT.
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This
Agreement shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties
hereto.
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11.
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ENTIRE
AGREEMENT.
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This
Agreement, embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter
hereof. No statement, representation, warranty, covenant or agreement
not expressly set forth in this Agreement shall affect or be used to interpret,
change or restrict, the express terms and provisions of this
Agreement.
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12.
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MODIFICATIONS AND
AMENDMENTS.
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The terms
and provisions of this Agreement may be modified or amended only in writing and
executed by the Holder and the Company, or their successors and
assigns.
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13.
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WAIVERS AND
CONSENTS.
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The terms
and provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by written document executed by the party entitled to
the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether or not
similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Holder has hereunto set his or her hand, all as
of the day and year first above written.
By:
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Name | |||
Title | |||
XXXXXXX
XXXX
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4
Exhibit
A
NOTICE OF
EXERCISE OF STOCK OPTION
Ladies
and Gentlemen:
I hereby
exercise my Stock Option to purchase _________ shares (the “Shares”) of the
common stock, $.0001 par value, of Cavalier Holdings, Inc. (the “Company”), at the
exercise price of $0.15 per share, pursuant to and subject to the terms of that
certain Stock Option Agreement between the undersigned and the Company dated
August 28, 2009.
I
understand the nature of the investment I am making and the financial risks
thereof. I am aware that it is my responsibility to have consulted
with competent tax and legal advisors about the relevant national, state and
local income tax and securities laws affecting the exercise of the Option and
the purchase and subsequent sale of the Shares.
I am
paying the option exercise price for the Shares as follows:
Please
issue the Shares (check one):
o to
me and ____________________________, as joint tenants with right of
survivorship,
at the following address:
My mailing address for shareholder
communications, if different from the address listed above, is:
A-1
Very
truly yours,
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Holder
(signature)
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Print
Name
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Date
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Social
Security Number
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A-2