OPTION AGREEMENT
AGREEMENT dated March 29, 2002 between Holding Xxxxxx X.X.,
a French corporation (the "Company"), and Xxxxxx Xxxxxxxx, an
individual residing at 0, xxx xx Xxxxxxxx, 00000 Xxxxx, Xxxxxx
("Xxxxxxxx").
This Agreement sets forth the terms and conditions upon
which the Company is granting to Xxxxxxxx an option to sell to
the Company those shares of common stock, par value $0.01 per
share (the "Shares"), of Xxxx-Son Gaming Corporation, a Nevada
corporation ("PS"), received by Xxxxxxxx upon the closing of
the Agreement and Plan of Exchange and Stock Purchase between PS
and Etablissements Bourgogne et Grasset SA (the "Exchange
Agreement"). In consideration of the mutual covenants contained
herein, and intending to be legally bound hereby, the parties
hereto agree as follows:
In consideration of the mutual agreements contained herein,
the parties agree as follows:
ARTICLE I
Definitions.
As used herein, the following terms shall have the following
meanings:
"Agreement" means this Agreement, any agreement which is
supplementary to or in amendment or confirmation of this
Agreement, and any exhibits and schedules hereto or thereto.
"Employment Agreement" means the employment
agreement between PS and Xxxxxxxx in the form attached to the
letter agreement dated the date hereof between the Company and
Xxxxxxxx, to be executed following the closing of the Exchange
Agreement.
"Market Price per Share" means the average closing
price of PS Common Stock on NASDAQ or if the PS Common Stock is
not then listed on NASDAQ, on the Pacific Stock Exchange or other
securities exchange on which the PS Common Stock is then listed,
in either case for the thirty (30) trading days preceding the
date of the Sale Notice (as hereinafter defined). During any
period the PS Common Stock is not listed on either NASDAQ or a
securities exchange, "Market Price per Share" shall mean the
average of the bid and ask prices quoted for the PS Common Stock
on the OTC Bulletin Board for the thirty (30) trading days
preceding the date of the Sale Notice.
"Purchase Price" means the number of Shares to be sold
upon exercise of the "Put Option" (as such term is hereinafter
defined) multiplied by the Market Price per Share.
"Put Option" has the meaning set forth in Section 2.01
hereof.
"Sale Notice" has the meaning set forth in Section
2.02 hereof.
"Term" has the meaning set forth in Section 5 of
the Employment Agreement.
"Triggering Event" means (i) Xxxxxxxx'x voluntary
termination of the Employment Agreement during the Term; or (ii)
PS' termination of the Employment Agreement during the Term for
any reason other than Xxxxxxxx'x death, Permanent Disability or
Cause (each as defined in the Employment Agreement).
ARTICLE II
Put Option
2.01 Grant of Option. (a) Subject to the terms, conditions and
limitations set forth herein, the Company hereby grants to
Xxxxxxxx an irrevocable option (the "Put Option") to sell to
the Company all or any part of the Shares. The Put Option shall
not be transferable by Xxxxxxxx.
(b) The Put Option may be exercised during the three (3)
month period following the occurrence of a Triggering Event (the
"Exercise Period"). The Put Option may not be exercised more
than once by Xxxxxxxx during the Exercise Period and any Shares
retained by Xxxxxxxx after the exercise of the Put Option shall
no longer be subject to the Put Option.
2.02 Exercise of Put Option. The Put Option shall be exercisable
as provided in Section 2.01 (but not more than once) by
irrevocable written notice given by Xxxxxxxx (the "Sale
Notice") of Xxxxxxxx'x election to exercise the Put Option,
specifying the number of Shares for which it is being exercised
and the date (not earlier than one hundred eighty (180) days
after the date of such notice) upon which the closing of the sale
and purchase of Shares shall take place.
2.03 Deliveries at Closing. At the Put Option closing:
(a) Xxxxxxxx shall deliver to the Company (A) the
certificates representing the Shares being sold, free and clear
of any lien or encumbrance thereon, duly endorsed accompanied by
stock powers executed in blank and/or such other documents as may
be necessary for the transfer of the Shares on the books of PS,
all in form acceptable for such purposes, and (B) a certificate
stating that the Shares sold are free and clear of any lien or
encumbrance thereon and that the representations and warranties
of Xxxxxxxx contained in Article III hereof are true and accurate
at and as of the Put Option closing date as though made as and at
such date; and
(b) The Company shall deliver in full payment for the Shares
being sold a sum equal to the Purchase Price of such Shares by
certified or official bank check or wire transfer of funds to an
account designated by Xxxxxxxx.
ARTICLE III
Representations and Warranties
3.01 Representations and Warranties of the Company. (a) This
Agreement has been duly and validly authorized and executed by
the Company and, subject to any necessary approval of Gaming
Regulatory Agencies, constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by
the Company nor the consummation of the transactions contemplated
hereby will violate any provision of the organizational documents
of the Company, or violate, or be in conflict with, or constitute
a default under, any agreement or commitment to which the Company
is a party or by which the Company is bound, or violate any
statute or law or any judgment, decree, order, regulation or rule
of any court or governmental authority.
(c) The Company has not made any assignment for the benefit
of creditors, nor does the Company presently have any plans or
intentions to do so, nor has any voluntary or involuntary
petition in bankruptcy been filed by or against the Company.
(d) The Company has complied with applicable federal
and state securities laws in connection with the issuance of this
Agreement (and the rights vested in Xxxxxxxx therein).
3.02 Representations and Warranties of Xxxxxxxx. (a) Subject to
any necessary prior approval of Gaming Regulatory Agencies, this
Agreement constitutes a valid and binding obligation of Xxxxxxxx,
enforceable in accordance with its terms.
(b) Xxxxxxxx is the sole owner (record, beneficial,
equitable or otherwise) of all of the Shares and has good and
marketable title to all of the Shares and the complete and
unrestricted power and the unqualified right to sell, assign,
transfer and deliver to the Company valid and marketable title to
all of the Shares and there exist no liens, claims, pledges,
assessments, options, proxies, equities, voting agreements,
charges or encumbrances of whatever nature affecting any of the
Shares.
(c) Upon transfer to the Company by Xxxxxxxx of the Shares,
the Company will have good and marketable title to the Shares,
free and clear of all liens, claims, pledges, assessments,
options, proxies, equities, voting agreements, charges or
encumbrances of whatever nature affecting the Shares.
(d) There exists no restriction upon the transfer and
delivery of the Shares by Xxxxxxxx, nor is Xxxxxxxx required to
obtain the approval of any person or governmental agency or
organization to effect the sale, assignment or transfer of the
Shares.
(e) Neither the execution and delivery of this Agreement by
Xxxxxxxx, nor the transfer of the Shares will violate or be in
conflict with, or constitute a default under any agreement or
commitment to which Xxxxxxxx is a party or by which Xxxxxxxx is
bound, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority.
(f) Xxxxxxxx has not made any assignment for the benefit of
creditors, nor does Xxxxxxxx presently have any plans or
intentions to do so, nor has any voluntary or involuntary
petition in bankruptcy been filed by or against Xxxxxxxx.
ARTICLE IV
Indemnification
Each party hereby agrees to indemnify and hold harmless the
other, its successors and affiliates from any and all damages,
losses, costs and expenses (including reasonable attorneys' fees)
which they, or any of them, may incur by reason of the
indemnifying party's failure, or alleged failure, to fulfill any
of the terms and conditions of this Agreement or by reason of
such party's breach of any of the agreements or representations
contained herein.
ARTICLE V
Miscellaneous
5.01 Survival of Representations and Warranties. All
representations, warranties and agreements made by each of the
parties in this Agreement shall survive any closing hereunder.
5.02 Expenses. Except as otherwise provided herein, each of the
parties hereto will pay its own expenses incurred by it or on its
behalf in connection with this Agreement or any transaction
contemplated by the Agreement, whether or not such transaction
shall be consummated, including, without limitation, all fees of
their respective attorneys and accountants.
5.03 Notices. All notices, requests, demand and other
communications required or permitted hereunder ("Notice") shall
be in writing and shall be deemed to have been duly given if sent
by prepaid certified mail, return receipt requested, by reputable
overnight courier service or by telefacsimile to the number
indicated below, with a copy by first class mail (postage
prepaid), to a party addressed as follows:
(a) If to the Company, to:
Holding Xxxxxx X.X.
0 Xxxxxx xx Xxxxxxxxx Xxxxxx
00000 Xxxxx, Xxxxxx
Attention: President
Fax No.: 00000000000
With a copy to:
CMS Bureau Xxxxxxx Xxxxxxxx - New York
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
(b) If to Xxxxxxxx, to:
Xxxxxx Xxxxxxxx
0 Xxx xx Xxxxxxxx
00000 Xxxxx, Xxxxxx
Fax No.: 00000000000
With a copy to:
Xxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxxxx Chtd.
000 Xxx Xxxxx Xxxx. Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Fax No.: (000) 000-0000
or, in each case, to such other address as a party shall furnish
to the other party in writing. Notice by certified mail shall be
deemed to have been given on the third business day following the
date of the returned receipt. Notice by courier service or
telefacsimile shall be deemed to have been given on the next
business day following delivery to the courier or transmission.
5.05 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties
hereto, but neither this Agreement nor any of the rights,
interests or obligations hereunder, including, without
limitation, the Put Option shall be assigned by Xxxxxxxx without
the prior written consent of the Company which may be withheld in
the Company's sole discretion.
5.06 Governing Law, Jurisdiction and Venue. This Agreement and
the legal relations among the parties hereto shall be governed by
and constructed in accordance with the laws of the State of
Nevada without regard to its conflicts of law doctrine. All
parties agree that the Nevada State and the U.S. Federal courts
sitting in Nevada shall have exclusive jurisdiction to enforce
the terms of this letter agreement, and the parties hereby
consent to that jurisdiction and agree that they will not proceed
in or before any other court, tribunal, or government agency or
official to seek enforcement of any of the terms of this
agreement, except that any judgment entered by a court sitting
in Nevada may be enforced by any court of competent jurisdiction
in any state or nation.
5.07 Counterparts. The 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.
5.08 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not
constitute a part hereof.
5.09 Entire Agreement. This Agreement, including any exhibits
and schedules hereto and other documents and certificates
delivered pursuant to the terms hereof, sets forth the entire
agreement and understanding of the parties hereto in respect of
the subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any
employee or representative of any party hereto.
5.10 Third Parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any
person or entity other than the parties hereto and their
successors or permitted assigns any rights or remedies under or
by reason of this Agreement.
5.11 Severability. If in any jurisdiction, any provision of this
Agreement or its application to any party or circumstance is
restricted, prohibited or unenforceable, such provision shall, as
to such jurisdiction, be ineffective only to the extent of such
restriction, prohibition or unenforceability without invalidating
the remaining provisions hereof and without affecting the
validity or enforceability of such provision in any other
jurisdiction or its application to other parties or
circumstances. In addition, of any one or more of the provisions
contained in this Agreement shall for any reason in any
jurisdiction be held to be excessively broad as to time,
duration, geographical scope, activity or subject, it shall be
construed, by limiting and reducing it, so as to be enforceable
to the extent compatible with the applicable law of such
jurisdiction as it shall then appear.
5.12 Further Assurances. Each party hereto shall execute and
deliver such instruments and take such other actions as the other
party or parties, as the case may be, may reasonably require in
order to carry out the intent of this Agreement.
5.13 Amendment and Modification. This Agreement may only be
amended, modified and supplemented by written agreement of the
parties hereto subject to the provisions of Section 5.05 hereof.
5.14 Waiver of Compliance. Any failure of the Company on the one
hand, Xxxxxxxx, on the other, to comply with any obligation,
covenant, agreement or condition herein may be expressly waived
in writing by Xxxxxxxx or the Company, respectively, but such
waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.
5.15 Effectiveness. Notwithstanding anything to the contrary set
forth herein, this Agreement shall have no force or effect and
shall not become effective unless and until the closing under the
Exchange Agreement is consummated. If the Exchange Agreement is
terminated for any reason prior to the closing thereof, this
Agreement shall automatically terminate without need of further
action by either party.
IN WITNESS WHEREOF, the parties have executed this
Agreement, all on the day and year first above written.
HOLDING XXXXXX X.X.
By: _________________
Title:
_____________________
Xxxxxx Xxxxxxxx
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