MAXXON, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT ("AGREEMENT"), MADE AS OF THE 18TH day of November, 1999, by
and between MAXXON, INC. ("MAXXON") and Xxxx Xxxxxx ("Optionee").
1. THE OPTION. In consideration of the sum of $10 in prior services
rendered and other valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, Maxxon hereby grants to Optionee an option to
purchase 400,000 shares of common stock of Maxxon in accordance with the
Agreement.
2. OPTION EXERCISE PRICE. The exercise price is $0.50 per share, the fair
market value on the date of grant, subject to adjustment as provided in this
Agreement. The parties acknowledge and agree that the fair market value on the
date hereof is $0.50 per share.
3. EXERCISE OF THE OPTION. The Option may be exercised at any time, and
from time to time, in whole or in part, on or before October 31, 2009, as
provided in Paragraph 8 below, subject to the satisfaction of the following
conditions:
A. Options covering 80,000 shares shall be exercisable from and after the
date hereof without regard to the satisfaction of any of the
conditions set forth below; and
B. Options covering 80,000 shares shall become eligible to be exercised
from and after the time when a fully working safety syringe has been
produced and demonstrated to be safe and reliable and meeting the
specifications of the proprietary technology ("Xxxx Syringe") covered
by that certain Exclusive License Agreement dated simultaneously with
the grant of this Option ("License Agreement") as certified in good
faith by Xxxxxxx X. Xxxxxxxxx, the inventor; and
C. Options covering 80,000 shares shall become eligible to be exercised
from and after the time when a US patent covering the Xxxx Syringe is
published; and
D. Options covering 80,000 shares shall become eligible to be exercised
from and after the time when there is produced a "first article" fully
working safety syringe off of hard production molds where the first
article is certified in good faith by Xxxxxxx X. Xxxxxxxxx, inventor,
to meet all applicable specifications and is ready for full scale
production; and
E. Options covering 80,000 shares shall become eligible to be exercised
from and after the time when the FDA issues approval to sell Xxxx
Syringes in the US; or
F. In the alternative to the events covered by Subparagraphs B, C, D and
E above, Options covering 400,000 shares shall become eligible to be
exercised from and after Maxxon completes the sale of the Xxxx Syringe
Technology or Maxxon completes a Major Corporate Transaction, as
defined below;
PROVIDED, HOWEVER, that if the events describe in Subparagraphs B, C, D, E or F
do not occur on or before September 30, 2001, then any unexercised portion of
the Options covered by this Agreement and this Agreement SHALL EXPIRE AND
TERMINATE; AND PROVIDED, FURTHER, once Options first become eligible to be
exercised in accordance with the provisions set forth above, those Options shall
remain exercisable until the expiration of this Option Agreement, unless a court
of competent jurisdiction determines or Maxxon concedes in writing that the Xxxx
Syringe infringes upon the intellectual property rights of a third party, in
which event, the unexercised portion of Options covered by this Agreement, if
any, and this Agreement shall thereafter terminate.
The Options hereby granted shall be exercised by Optionee given Maxxon
written notice of exercise ("Notice") in accordance with Paragraph 9 hereof,
accompanied by payment of the full exercise price for the number of shares of
common stock specified to be exercised in the Notice. In the event Optionee
gives Notice of Exercise and does not pay the full exercise price in cash at
that time, Optionee may, in the discretion of Maxxon and to the extent permitted
by law, permit Optionee to defer payment for up to 90 days after the date of
exercise, provided Optionee shall deliver its promissory note to Maxxon in form
and substance as determined in good faith by Maxxon along with a pledge
agreement covering the shares to be so exercised in form and substance as
determined in good faith by Maxxon, which shall provide that if Optionee fails
to made payment of the full exercise price by the due date, the Option shares so
exercised shall be canceled and the note shall be canceled. The Option shares
covered by any such pledge agreement shall be issued and outstanding but such
shares shall not be eligible to be voted while and to the extent the pledge
shall remain in effect. In the event of or other form of payment as may be
agreed upon by all parties. Maxxon shall promptly deliver certificates
representing the shares of common stock to Optionee; provided that if the
Optionee is required by any law or regulation to take any action with respect to
such shares before their transfer, then the date of delivery thereof shall be
extended for the period necessary to take such action.
In the event that any business combination or other acquisitive transaction
("Major Corporate Transaction") occurs during the term of this Agreement when
any of the Options hereby granted and are then exercisable and remain
unexercised and outstanding, the occurrence of such a transaction shall
automatically result in the exercise of such unexercised Options, with the
exercise price being paid either by cash or by the reduction in the number of
Option shares issuable in an amount determined by deducting the exercise price
from the total consideration payable to Optionee had all the unexercised Options
been exercised in cash immediately before the consummation of that transaction.
It is the purpose of this provision to insure the Optionee that all of the
Options hereby granted are considered exercised and the shares issuable upon the
exercise be deemed to be issued and outstanding immediately prior to the
consummation thereof but with the exercise price being paid in any form of
consideration, including a reduction in the number of shares attributable to
this Option, so that the Optionee enjoys the full value of the Option shares
less the exercise price.
4. ANTIDILUTION PROVISIONS.
(a) Except as set forth in subparagraph (b) below, MAXXON agrees that the
total number of shares covered by this Option plus the total number of
shares covered by theretofore exercised shares under this Option shall
not be less than 2.5% of the total number of shares of MAXXON then
issued and outstanding.
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(b) Maxxon agrees to make a pro rata adjustment in the number of shares
and the price per share in the Options hereunder by reason of a change
in the capitalization of Maxxon or by reason of any stock split,
reverse stock split, reclassification, reorganization or other similar
adjustment in the capital structure of Maxxon; provided however, there
shall be no adjustment in the number of shares covered by this Option
Agreement or in the exercise price per share for (i) the sale of any
Common Stock of Maxxon for less than $.50 per share or its equivalent;
or (ii) for the sale or exchange of Common Stock of Maxxon pursuant to
any form of business combination at whatever the value of the
consideration exchanged.
(c) Nothing contained herein shall prohibit or restrict MAXXON from
selling its common stock or other securities convertible into common
stock, provided if any such sale is made at a price less than the
exercise price then in effect, the number of shares covered by this
Option shall be adjusted accordingly. No adjustment shall be made by
reason of the exercise of outstanding options on the date hereof.
5. NO RIGHTS IN OPTION STOCK. Optionee shall have no rights as a
shareholder in respect of shares as to which the Option shall not have been
exercised and payment shall not have been received by Maxxon as herein provided,
and Optionee shall have no rights with respect to such Shares other than those
rights which are expressly conferred by this Agreement.
6. SHARES RESERVED. The Optionee shall at all times during the term of this
Agreement reserve and keep available such number of shares of common stock as
will be sufficient to satisfy the requirements of this Agreement and shall pay
all original issue taxes on the exercise of this Option and all other fees and
expenses necessarily incurred in connection therewith.
7. NON-ASSIGNABILITY. This Option shall not be encumbered, assigned,
transferred or disposed of in whole or in part without the prior written consent
of Maxxon.
8. TERM. The Option, to the extent not previously exercised, shall expire
at 5:00 PM Tulsa Time on September 30, 2009.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. This Option is granted pursuant to the Maxxon, Inc.
1998 Incentive Stock Option Plan ("Plan"), as amended to include the reservation
of authorized but unissued shares of Maxxon sufficient for Maxxon to issued all
the shares authorized by this Option Agreement and the Option Agreements of
similar terms and conditions to Xxxxxxx X. Xxxxxxxxx and Xxxx Xxxxxx on the date
hereof. All the terms and conditions under the Plan are incorporated herein by
reference. This Agreement and the Plan constitutes the entire agreement between
the parties hereto with respect to the matters provided for herein and
supersedes all prior written agreements between the parties with respect
thereto. This Agreement may not be altered, amended, canceled or terminated
except by a written agreement signed by Optionee and Maxxon. The Plan may be
altered in accordance with its terms, and every alteration in the Plan not
involving the exercise price or the number of Option shares shall be
incorporated herein by reference, but the number of shares and the
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exercise price hereof shall not be altered without the consent of Optionee,
except as provided by and in effect under the Plan on the date of grant of this
Option.
9.2 NOTICES. All notices under or in conjunction with this Agreement shall
be in writing, delivered in person against a receipt therefor or sent by telex,
certified, or registered mail, return receipt requested, with postage prepaid to
the address set forth under the signatures below or to such other address as a
party may designate in a notice given in accordance with the provisions of this
Section. All notices shall be deemed given when received in any written form or
5 days after the notice is mailed.
9.3 CAPTIONS AND TITLES; COUNTERPART EXECUTION. Captions and titles have
been inserted in this Agreement for the benefit of the parties in referring to
this Agreement but shall not be construed or interpreted as part of this
Agreement. This Agreement may be executed in a number of identical counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute but one and the same agreement.
9.4 CONSTRUCTION. All conflicts between this Option Agreement and the Plan
shall be resolved in accordance with the Plan. This Agreement was negotiated,
executed and delivered in the State of Oklahoma and shall be governed by and
construed in accordance with the internal laws of the State of Oklahoma.
9.5 WAIVER. The failure by any part to enforce any of its rights hereunder
shall not be deemed to be a waiver of such rights, unless such waiver is an
express written waiver which has been signed by the waiving party. Waiver of any
one breach shall not be deemed to be a waiver of any other breach of the same or
any other provision hereof.
10. SEC REGISTRATION. Maxxon agrees to use its best good faith efforts to
file and keep effective a Form S-8 Registration Statement covering the Options
hereby granted and the Option shares issuable upon the exercise of the Options
hereby granted in accordance with applicable laws, rules and regulations. The
parties understand and agree that Maxxon is not currently eligible to use Form
S-8 and will not be eligible to use such form until the SEC declares effect
Maxxon's Form 10-SB which Maxxon believes will occur on or before January 31,
2000. Maxxon can give no assurance that Form S-8 will continue to be available
to Maxxon or that Maxxon's Form 10-SB will clear the SEC. The provisions of this
paragraph do not constitute an obligation on Maxxon's part to permit Optionee to
demand registration or to piggyback any registration which Maxxon may file in
the future. The parties understand and agree that the Options and the Option
Shares issuable hereunder shall be restricted in accordance with applicable law,
unless the a Form S-8 Registration Statement is filed and declared. Under
current law, when Maxxon becomes a fully reporting 1934 Act company, it will
become eligible to file a Form S-8 Registration Statement which shall be
automatically effective upon filing and the Options hereby granted to Optionee
would be eligible to be so registered under Form S-8. There is no assurance that
the SEC will not change such rules or that applicable laws, rules and
regulations will not change in the future.
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In witness whereof, this Option Agreement is executed and delivered with
full corporate authority by persons authorized to so act on the date first
written above.
MAXXON, INC. OPTIONEE:
BY________________________ ____________________________
Xxxxxxx Xxxxx, President Xxxx Xxxxxx
0000 Xxxxx Xxxx, Xxxxx 000 c/o Petroxx Resources, Inc.
XXXXX, XXXXXXXX 00000 0000 XXXX 00XX, Xxxxx 0-Xxxx
Phone: 000-000-0000 Xxxxx, XX 00000
Facsimile: 000-000-0000 Phone: 000-000-0000
Facsimile: 000-000-0000
