OPTION AGREEMENT,
Dated as of December 29, 1997
Between
MUSI Investments S.A.
and
Xxxxxx Technologies, Inc.
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made and entered into as of
December 29, 1997, by and between MUSI Investments S.A., a Luxembourg societe
anonyme ("Investor"), and Xxxxxx Technologies, Inc., a North Carolina
corporation (the "Company").
RECITALS:
A. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto have entered into a Purchase Agreement (the "Purchase
Agreement") which sets forth the terms of the purchase by Investor from the
Company of the Initial Shares.
B. In connection with the transactions contemplated under the Purchase
Agreement, the Company desires to grant to Investor an option to acquire
additional shares of Common Stock.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. DEFINITIONS AND CERTAIN INTERPRETIVE MATTERS
I.1. Defined Terms. In addition to the terms defined elsewhere herein,
terms used herein which are not defined herein will have the meanings ascribed
to them in the Purchase Agreement.
I.2. Certain Interpretive Matters. This Agreement will be interpreted
in accordance with the provisions of the Purchase Agreement.
II. THE OPTION
II.1. Option Grant. On the terms and subject to the conditions set
forth in this Agreement, for $10.00 and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company hereby
grants to Investor an option (the "Option") to purchase up to 587,500 shares of
Convertible Preferred Stock (the "Option Shares") at a price per share equal to
$4.26 (the "Exercise Price").
II.2. Vesting and Exercise of Option. (a) The Option may be exercised
in whole or part at any time and from time to time from and after the date
hereof. Notwithstanding the foregoing, this Agreement and the Option shall
terminate and expire on the earlier of (i) February 27, 1998 or (ii) the date on
which all of the Option Shares are purchased pursuant to exercise of the Option.
(b) Investor may exercise the Option by giving the Company a
notice (an "Exercise Notice") which specifies (i) the total number of Option
Shares to be purchased, (ii) the aggregate Exercise Price payable in respect of
such Option Shares, and (iii) a date not earlier than 5 Business Days nor later
than 10 Business Days from the date of the Exercise Notice for the closing of
such purchase (the "Option Closing Date"). The closing of any complete or
partial exercise of the Option (the "Option Closing") will take place at the
principal executive offices of the Company.
II.3. The Closing. Subject to adjustment as contemplated by Section
2.4, on each Option Closing Date, (a) Investor shall pay to the Company the
aggregate Exercise Price in immediately available funds for the Option Shares
being purchased, (b) the Company will deliver to Investor a certificate or
certificates evidencing the Option Shares acquired in connection therewith, and
(c) each of the parties will take such additional actions as may be reasonably
requested by the other to carry out the intent and purposes hereof.
II.4. Adjustments to Option Shares. (a) In the event of any change in
the outstanding equity securities of the Company by reason of any stock dividend
or stock split that would alter the percentage of equity interest in the Company
to be acquired by Investor hereunder, the number of Option Shares subject to the
Option shall be adjusted appropriately so as to provide that upon exercise of
the Option, Investor will acquire the same percentage of equity interest in the
Company as Investor would have acquired prior to such stock dividend or stock
split.
(b) The Company will not effect (i) any change in the
outstanding shares of the capital stock in the Company as a result of any
recapitalization, combination, consolidation or merger of the Company into
another Person or other similar transaction, unless, prior thereto, the Company
and all other Persons participating in the transaction shall have executed and
delivered to Investor (or any permitted assignee) an agreement reasonably
satisfactory to it that provides that Investor (or any permitted assignee) will
have the right thereafter, upon exercise of the Option and payment of the
Exercise Price in effect immediately prior to such event, to purchase, on the
same terms and conditions that were available to the other Persons, the kind and
amount of shares of the Convertible Preferred Stock and other securities, assets
and property that Investor (or any permitted assignee) would have been entitled
to receive upon or after the happening of any such transaction had Investor (or
any permitted assignee) exercised the entire Option immediately prior to such
event, or (ii) a distribution of the proceeds of any sale, transfer, license,
lease or other disposition, financing or refinancing of all or any portion of
the assets or property of the Company outside of the ordinary course of
business.
(c) The Company shall provide prompt written notice to
Investor as to any event requiring an adjustment to the number of Option Shares.
Prior to the termination of the Option, Investor shall have the right,
exercisable upon notice to the Company, to inspect the records of the Company
with respect to its security holders and others who may have rights to acquire
equity securities of the Company.
III. REPRESENTATIONS AND WARRANTIES
III.1. Representations and Warranties of the Company. Each of the
representations and warranties of the Company set forth in the Purchase
Agreement are hereby incorporated herein by reference as if stated herein in
their entirety. In addition, the Company hereby represents and warrants to
Investor as follows:
(a) The Option Shares which are subject to the Option are
presently authorized but unissued and such Option Shares will remain
reserved and available for issuance upon the timely exercise of the
Option. The Option Shares to be purchased upon any complete or partial
exercise of the Option will be validly issued upon payment of the
Exercise Price and such Option Shares, when so issued upon such
exercise, will be duly and validly issued, fully paid and free and
clear of all Liens, claims and encumbrances and the holder thereof will
be entitled to all of the rights and benefits afforded holders of
shares of the Convertible Preferred Stock;
(b) The execution and delivery of this Agreement and
performance by the Company of its obligations hereunder will not
conflict with or result in a breach of or constitute a default under
any options or rights to purchase or acquire, or agreements,
arrangements, commitments or understandings relating to, any of the
shares of the capital stock of the Company, and the exercise of any
rights under any such agreement, arrangement, commitment or
understanding will not have an adverse effect on the rights of Investor
hereunder.
IV. MISCELLANEOUS
IV.1. Notices. All notices and other communications required or
permitted hereunder will be in writing and, unless otherwise provided in this
Agreement, will be deemed to have been duly given when delivered in person or by
a nationally recognized overnight courier service or when dispatched during
normal business hours by electronic facsimile transfer (confirmed in writing by
mail simultaneously dispatched) to the appropriate party at the address
specified below:
(a) if to Investor, to:
MUSI INVESTMENTS S.A.
c/o CMB Compagnie Monegasque de Banque
00, xxxxxx xx xx Xxxxx
XX 000 XX00000 Monaco
Attention: Dott. Xxxx Xxxxxxx Antivari
Fax: 000 000 0000 0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
00 xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx, Xxxxxx
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: 011 00 (0) 00 00 00 00
(b) if to the Company, to:
Xxxxxx Technologies, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Ruskin, Moscou, Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxx, Esq.
Fax: (000) 000-0000
or to any changed address of which the parties are notified in accordance with
this Section. All such notices, requests and other communications will be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice, request or communication will be deemed not
to have been received until the next succeeding business day in the place of
receipt.
IV.2. Amendments and Waivers. (a) Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder will operate as a waiver thereof nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided will be cumulative and not exclusive of any rights or
remedies provided by law.
IV.3. Expenses. Except as otherwise provided in the Purchase Agreement,
each of the parties will pay all of their own expenses incurred in connection
with the transactions contemplated by this Agreement.
IV.4. Successors and Assigns. The provisions of this Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of the other parties hereto; provided further, however, that
Investor may assign the Option to any Person to whom Investor transfers the
Initial Shares.
IV.5. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied will give or be construed to give to any person or entity,
other than the parties hereto and such permitted assigns, any legal or equitable
rights hereunder.
IV.6. Governing Law. This Agreement will be governed by, and construed
in accordance with, the law of the State of New York, without regard to the
conflict of laws rules of such State.
IV.7. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
IV.8. Counterparts. This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IV.9. Headings. The headings in this Agreement are for convenience of
reference only and will not control or affect the meaning or construction of any
provisions hereof.
IV.10. Entire Agreement. This Agreement and the Purchase Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement. This Agreement and the Purchase Agreement supersede
all prior agreements and understandings, both oral and written, among the
parties with respect to the subject matter of this Agreement and the Purchase
Agreement.
IV.11. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance is held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
MUSI INVESTMENTS S.A.
By: /s/ Xxxx Xxxxxxx Antivari
------------------------------------
Name: Dott. Xxxx Xxxxxxx Antivari
Title: President
