EXHIBIT 10.6
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into and effective the 1st
day of October 1999, by and between NuVen Advisors Limited Partnership, a Nevada
limited partnership ("NuVen"), and Xxxx Industries Inc., a Nevada 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, a copy of which is attached hereto as Exhibit "A" and
incorporated by reference herein (the "Advisory Agreement"); and,
WHEREAS, to induce NuVen to execute 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 Five Hundred Thousand (500,000) 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 $.50 per share ("Option Price").
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 January 1, 2003.
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
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.
1
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, the number and Option Price of the shares subject
to this Option shall not change 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 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.
2
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:
3
To NuVen: NuVen Advisors Limited Partnership
0000 XxxXxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company: Xxxx Industries Inc.
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, 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 Nevada
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.
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.
4
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first written above.
"NuVen"
NuVen Advisors Limited Partnership
By:/s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
The "Company"
Xxxx Industries Inc.
By:/s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: Secretary
5
