Exhibit 2(8)
SHARE OPTION AGREEMENT
THIS AGREEMENT made as of the 19th day of May, 1998.
BETWEEN:
THE LIVERPOOL LIMITED PARTNERSHIP, A BERMUDA LIMITED
PARTNERSHIP AND WESTGATE INTERNATIONAL, L.P., A CAYMAN LIMITED
PARTNERSHIP
(herein respectively referred to "Liverpool" and "Westgate" or
collectively as the "Optionor")
- and -
RED XXXX LIMITED, A BODY CORPORATE GOVERNED BY THE LAWS OF THE
BRITISH VIRGIN ISLANDS
(herein referred to as the "Optionee")
WHEREAS the Optionor holds common shares of the share capital of the Corporation
(as hereinafter defined) and the Optionor wishes to grant the Optionee an option
to purchase 5,000,000 of the said common shares.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
mutual covenants hereinafter set forth, and for other valuable consideration,
the parties hereto have agreed as follows:
ARTICLE ONE
DEFINITIONS
1.01 In this Agreement the following terms shall have the following meanings:
i. "Agreement" means this agreement made as of the date first
written above, among the Optionor and the Optionee, and the
expressions "above", "below", "herein", "hereof" and similar
expressions refer to this Agreement.
ii. "Corporation" means Xenotech Inc. and any successor or continuing
corporation resulting from any form of corporate reorganization.
iii. "Covered Shares" means those Shares of the Corporation, as
defined in the Registration Rights Agreement.
iv. "First Expiration Date" means May 19, 2001, or such earlier date
as may be determined pursuant to Article 2.02.
v. "Option Shares" means the Shares the Optionee is entitled to
purchase under the Share Option.
vi. "Registration Rights Agreement" means the Registration Rights
Agreement entered into as of May 19, 1998, between Xenotech,
Liverpool and Westgate.
vii. "SEC" means the U.S. Securities and Exchange Commission.
viii. "Second Expiration Date" means May 19, 2002, or such earlier date
as may be determined pursuant to Article 2.04.
ix. "Share Option" means an option to purchase the 5,000,000 Shares
held by the Optionor pursuant to this Agreement and includes any
portion of that option.
x. "Shares" means the common shares of the share capital of the
Corporation.
1.02 In this Agreement, the masculine gender shall include the feminine
gender and the singular shall include the plural and vice versa
wherever the context requires.
1.03 All dollar amounts stated herein are in Canadian currency.
ARTICLE TWO
SHARE OPTION
2.01 The Optionor hereby grants to the Optionee subject to the terms and
conditions hereinafter set out, an irrevocable option to purchase 2,500,000 of
the Option Shares, at any time or from time to time on or before the First
Expiration Date upon payment of One Dollar and Twenty Cents ($1.20) per Share.
2.02 In the event that (a) the Shares trade on The Alberta Stock Exchange,
or such other exchange as the Corporation may have listed the Shares for
trading, at a price of $2.40 or greater for a period of twenty (20) consecutive
trading days, and (b) the Optionee receives notice of this fact from the
Optionor within ten (10) days of the twentieth (20th) trading day, the First
Expiration date shall be deemed to be the date being thirty (30) days from the
date of receipt of the notice by the Optionee.
2.03 The Option hereby grants to the Optionee subject to the terms and
conditions hereinafter set out, an irrevocable option to purchase 2,500,000 of
the Option Shares, at any time or from time to time on or before the Second
Expiration Date upon payment of One Dollar and Eighty Cents ($1.80) per Share.
2.04 In the event that (a) the Shares trade on The Alberta Stock Exchange,
or such other exchange as the Corporation may have listed the Shares for
trading, at a price of $3.60 or greater for a period of twenty (20) consecutive
trading days, and (b) the Optionee receives notice of this fact from the
Optionor within ten (10) days of the twentieth (20th) trading day, the Second
Expiration date shall be deemed to be the date being thirty (30) days from the
date of receipt of the notice by the Optionee.
2.05 Each of Westgate and Liverpool hereby agree to tender an aggregate of
the number of the Shares purchased by the Optionee pursuant to Article 4 of this
Agreement.
2.06 At 4:30 p.m. Calgary time, on the First or Second Expiration Date, as
the case may be, that portion of the Share Option shall forthwith expire and
terminate and be of no further force or effect whatsoever as to such of the
Option Shares in respect of which the Share Option hereby granted has not then
been exercised.
2.07 The Share Option granted pursuant to Article 2.01 above may only be
exercised by the Optionee in the event that (a) the Common Shares of the
Corporation are listed and trading on the NASDAQ National Market or the NASDAQ
Small Cap Market; (b) the Common Shares of the Corporation are registered under
the US Securities Exchange Act of 1934, as amended; and (c) the Covered Shares
are "US Registered" (as defined in section 3(a) of the Registration Rights
Agreement).
ARTICLE THREE
MATERIAL CHANGE
3.01 In the event that, prior to the Expiration Date or exercise in full of
the Share Option, the outstanding share capital of the Corporation shall be
subdivided or consolidated into a greater or lesser number of Shares, or, in the
event of the payment of a stock dividend by the Corporation, or in the event
that all of the shareholders of the Corporation are granted the right to
purchase additional common shares of the share capital of the Corporation, the
number and exercise price of Option Shares remaining subject to the Share Option
hereunder shall be increased or reduced accordingly, as the case may be.
3.02 If, prior to the Expiration Date or exercise in full of the Share
Option granted hereby, the Corporation shall, at any time arrange with or merge
into another corporation, the Optionee will thereafter receive, upon the
exercise of the Share Option, the securities or properties to which a holder of
the number of shares then deliverable upon the exercise of the Share Option
would have been entitled upon such arrangement or merger, and the Optionor shall
take steps in connection with such arrangement or merger as may be necessary to
assure that the provisions hereof shall thereafter be applicable, in relation to
any securities or property thereafter deliverable upon the exercise of the
Option granted hereby. A sale of all or substantially all of the assets of the
Corporation for consideration (apart from the assumption of obligations)
consisting primarily of securities shall be deemed to be an arrangement or
merger for the foregoing purposes.
ARTICLE FOUR
EXERCISE OF THE SHARE OPTION
4.01 The Share Option may be exercised by the Optionee from time to time in
whole or in part, in accordance with the provisions hereof by delivery of the
option exercise form attached hereto as Schedule "A" to the Optionors and by
tendering the payment therefor by wire
or by certified cheque to the Corporation's counsel in trust, against delivery
of certificates representing the Shares to be acquired upon such exercise of the
Share Option.
4.02 Upon receiving the option exercise form attached hereto as Schedule "A":
(a) Liverpool agrees to forthwith deliver a duly endorsed and
signature guaranteed certificate evidencing Shares together with
corporate resolution of the registered holder and the endorsing
party, if applicable, and all such other documentation as may be
required by the transfer agent of the Corporation and provide the
Corporation with irrevocable instructions to cancel the said
certificate and reissue:
(i) certificates evidencing one-half of the number of Shares
indicated upon the exercise form tendered by the Optionee
pursuant to Article 4.01 hereof registered in accordance
with the instructions provided by the Optionee; and
(ii) a certificate evidencing the balance of the Shares, if any,
not registered pursuant to Article 4.02(a)(i), registered in
accordance with the instructions of Liverpool, which shall
be delivered along with the proceeds of the exercise in
accordance with the instructions of Liverpool, without
deduction or setoff.
(b) Westgate agrees to forthwith deliver a certificate evidencing
Shares together with corporate resolution of the registered
holder and the endorsing party, if applicable, and all such other
documentation as may be required by the transfer agent of the
Corporation and provide the Corporation with irrevocable
instructions to cancel the said certificate and reissue:
(i) certificates evidencing one-half of the number of Shares
indicated upon the exercise form tendered by the Optionee
pursuant to Article 4.01 hereof registered in accordance
with the instructions thereby given; and
(ii) a certificate evidencing the balance of the Shares, if any,
not registered pursuant to Article 4.02(b)(i), registered in
accordance with the instructions of Westgate, which shall be
delivered along with the proceeds of the exercise in
accordance with the instructions of Westgate, without
deduction or setoff.
ARTICLE FIVE
GENERAL
5.01 Any notice or other communication required or permitted to be given
under this Agreement shall be in writing and may be delivered personally or sent
by fax, addressed:
If to the Optionor:
The Liverpool Limited Partnership
c/o A.S. & K. Services Ltd.
X.X. Xxx XX 0000
Xxxxxxxx, Xxxxxxx HMEX
Attn: Xx. Xxxxxxx Xxxxxxxxxxx
Fax: 000-000-000-0000
Westgate International, L.P.
c/o Midland Bank Trust Corporation (Cayman) Limited
X.X. Xxx 0000
Xxxx Xxxxxx, Xxxxx Xxxxxx
Xxxxxx Xxxxxxx, BWI
Attn: Mr. Xxxx Xxxxxx
Fax. (000) 000-0000
Copy to:
Xxxxxxx Xxxxxxxx
Stonington Management Corp.
000 - 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
00000
Fax: (000) 000-0000
If to the Optionee:
Red Reef Limited
X.X. Xxx 0000, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Fax: 000 00 0000 000000
Copy to:
Xenotech, Inc.
c/x Xxxxxxx and Company
0000 Xxxxxx Xxxxx
000 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
Attn: Xx. Xxxx-Xxxx Xxxxx
Fax: (000) 000-0000
Any such notice or other communication given as aforesaid shall be deemed to
have been effectively given, if sent by fax or other similar form of
telecommunications, on the next business day following such transmission or, if
delivered, to have been received on the date of such delivery. Any party may
change its address for service from time to time by notice given in
accordance with the foregoing and any subsequent notice shall be sent to the
party as its changed address.
5.02 The parties hereto covenant that they shall and will from time to time
and at all times hereafter do and perform all such acts and things and execute
all such additional documents as may be required to give effect to the terms and
intention of this Agreement.
5.03 This Agreement supersedes all other agreements, documents, writings and
verbal understandings among the parties relating to the subject matter hereof
and represents the entire agreement between the parties relating to the subject
matter hereof.
5.04 Subject to the other provisions hereof, this Agreement shall enure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, administrators, successors and permitted assigns.
5.05 This Agreement may not be assigned or transferred by the Optionee,
except to an affiliated entity or a director, officer or employee of the
Corporation.
5.06 Time shall be of the essence of this Agreement.
5.07 This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the parties hereto attorn to the
jurisdiction of the courts of the Province of Alberta.
5.08 This Agreement may be executed in several counterparts and by original
or by facsimile signature, each of which when so executed shall be deemed to be
an original, and such counterparts together shall constitute one and the same
instrument and, notwithstanding their date of execution, shall be deemed to bear
the date as of the date above written.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
THE LIVERPOOL LIMITED PARTNERSHIP
BY: LIVERPOOL ASSOCIATES, LTD.
GENERAL PARTNER
BY:
------------------------------------
XXXX XXXXXX, PRESIDENT
WESTGATE INTERNATIONAL, L.P.
BY: MARTLEY INTERNATIONAL, INC.
ATTORNEY-IN-FACT
BY:
------------------------------------
XXXX XXXXXX, PRESIDENT
RED REEF LIMITED
PER:
---------------------------------------
SCHEDULE "A"
OPTION EXERCISE FORM
TO: WESTGATE INTERNATIONAL, L.P.
C/O MIDLAND BANK TRUST CORPORATION (CAYMAN) LIMITED
X.X. XXX 0000, XXXX XXXXXX
XXXXX XXXXXX, XXXXXX XXXXXXX
BRITISH WEST INDIES
ATTENTION: XXXX XXXXXX
FAX: (000) 000-0000
AND:
THE LIVERPOOL LIMITED PARTNERSHIP
C/O A.S. & K. SERVICES LTD.
X.X. XXX XX 0000
XXXXXXXX, XXXXXXX XXXX
XXXXXXXXX: XXXXXXX XXXXXXXXXXX
FAX. (000) 000-0000
COPY TO: XXXXXXX XXXXXXXX
STONINGTON MANAGEMENT CORP.
000 - 0XX XXXXXX, 00XX XXXXX
XXX XXXX, XXX XXXX
00000
FAX: (000) 000-0000
Red Reef Limited hereby exercises the right to Purchase _______________________
Shares of Xenotech Inc. at purchase price of CDN$_________________ per Share,
payment for which is submitted with this Exercise Form pursuant to and in
accordance with the terms and conditions of the Option Agreement made as of May
15, 1998 among Westgate International L.P., The Liverpool Limited Partnership
and Red Reef Limited.
The Optionee hereby directs that the Shares hereby acquired by this Exercise
Form be issued and delivered as follows:
NAME:
---------------------------------------------
ADDRESS IN FULL:
---------------------------------------------
---------------------------------------------
NUMBER OF SHARES
BEING ACQUIRED:
---------------------------------------------
TOTAL EXERCISE
PRICE TENDERED:
---------------------------------------------
DATED:
---------------------------------------------
------------------------------------
(Signature of Optionee)
