DIGITAL MUSIC CREATIONS, INC.
A Nevada Corporation
Exhibit 29
Option Agreement Between Xxxxx Xxxxxxxx III
and Digital Music Creations
Option Agreement
This Option Agreement ("Agreement") is made this 2 d day of October, 1998
by and between the Xxxxx Xxxxxxxx III, an individual hereinafter referred
to as "Xxxxxxxx"; and Digital Music Creations, Inc., a corporation
hereinafter referred to as "DMC".
RECITALS
WHEREAS, Xxxxxxxx currently holds 100% of the issued and outstanding stock
of DMC; and
WHEREAS, DMC will be conducting a direct public offering of its common
shares of stock pursuant to Regulation D, Rule 504 of the Securities Act,
as amended, and, if that offering is fully sold, Xxxxxxxx'x ownership
percentage will be diluted to approximately 53.85%; and
WHEREAS, it has been determined to be in the best interests of both
Xxxxxxxx and DMC that Xxxxxxxx be given the option of increasing his
ownership percentage in DMC.
NOW, THEREFORE, in consideration of the mutual representations, warranties
and covenants herein contained, the parties hereto agree as follows:
1. Grant of Options. DMC hereby agrees to grant to Xxxxxxxx the option to
purchase up to one million (1,000,000) shares of common stock of DMC, par
value $0.001, for par value. Said option shall be in effect until 5:00 p.m.
Pacific Daylight Time, May 1, 2000. Xxxxxxxx shall be issued an Option
Certificate substantially in the form of Exhibit A, attached hereto and
incorporated herein by this reference.
2. Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified or supplemented only by a written agreement signed
by Xxxxxxxx and DMC.
3. Waiver of Compliance, Consents.
3.1 Any failure of any party to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
performance of such obligation, covenant or agreement or who has the
benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, or agreement or condition will
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
3.2 Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent will be given in a manner consistent with
the requirements for a waiver of compliance as set forth above.
4. Notices. All Notices, requests, demands and other communications
required or permitted hereunder will be in writing and will be deemed to
have been duly given when delivered by (i) hand; (ii) reliable overnight
delivery service; or (iii) facsimile transmission.
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If to Xxxxxxxx, to: 0000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000
If DMC, to: 0000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000
5. Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
6. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
7. Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
8. Attorneys' Fees. In the event an arbitration, suit or action is brought
by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled
to reasonable attorneys fees to be fixed by the arbitrator, trial court,
and/or appellate court.
9. Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday,
Sunday or a legal holiday, in which event the period shall begin to run on
the next day that is not a Saturday, Sunday or legal holiday.
10. Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as
the identity of the person or persons may require.
11. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEVADA. THE PARTIES AGREE THAT ANY LITIGATION
RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT MUST BE BROUGHT BEFORE
AND DETERMINED BY A COURT OF COMPETENT JURISDICTION WITHIN THE STATE OF
NEVADA.
12. Arbitration. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of this
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed
upon by the parties, or if no single arbiter can be agreed upon, an arbiter
or arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference or disagreement shall
be settled by arbitration in accordance with the then prevailing commercial
rules of the American Arbitration Association, and judgment upon the award
rendered by the arbiter may be entered in any court having jurisdiction
thereof.
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13. Presumption. Ibis Agreement or any Section thereof shall not be
construed against any party due to the fact that said Agreement or any
section thereof was drafted by said party.
14. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of the
Agreement.
15. Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
16. Confidentiality. The parties shall keep this Agreement and its terms
confidential, but any party may make such disclosures as it reasonably
considers are required by law or necessary to obtain financing. In the
event that the transactions contemplated by this Agreement are not
consummated for any reason whatsoever, the parties hereto agree not to
disclose or use any confidential information they may have concerning the
affairs of other parties, except for information which is required by law
to be disclosed. Confidential information includes, but is not limited to,
financial records, surveys, reports, plans, proposals, financial
information, information relating to personnel contracts, stock ownership,
liabilities and litigation.
17 Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its own
costs and expenses (including attorneys' fees).
18. Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effecting during the
term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid and
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in nature in its terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid
and enforceable.
19. Counterparts and Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. For
purposes of this Agreement, facsimile signatures shall be treated as
originals until such time that applicable pages bearing non-facsimile
signatures are obtained from the relevant party or parties.
1998. IN WITNESS WHEREOF, the parties hereto have set their hands this 2 d
day of October,
DIGITAL MUSIC CREATIONS, INC. XXXXX XXXXXXXX
A Nevada Corporation ("DMC") An individual ("Xxxxxxxx")
by: by:
/s/Xxxxx X. Xxxxxxxx III, President /s/Xxxxx X. Xxxxxxxx III
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EXHIBIT A
Option Certificate
DIGITAL MUSIC CREATIONS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
OPTION CERTIFICATE
This Option Certificate certifies that
Xxxxx X. Xxxxxxxx III
is the registered holder of
One Million (1,000,000)
Options expiring May 1, 2000, $0.001 par value per share, of Digital Music
Creations, Inc., a Nevada corporation (the "Company"). Each Option entitles
the holder to purchase from the Company on or after the date hereof and on
or before the close of business on May 1, 2000, one fully paid
nonassessable share of Common Stock $0.001 par value per share, of the
Company (the "Shares") at the exercise price (the "Exercise Price") of
$0.001 payable in lawful money of the United States of America upon
surrender of this Option Certificate and payment of the Exercise Price at
the office of the Option Agent at 0000 X. Xxxxx Xxxx, Xxxxx X, Xxx Xxxxx,
Xxxxxx 00000, or at such other place as the Company may designate by notice
to the Holder, but only subject to the conditions set forth herein.
The Company does not have the right to call in the Option prior to the
Option's Expiration Date.
Reference is hereby made to the further provisions of this Option
Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at
this place,
This Option Certificate is not valid unless countersigned by the Transfer
Agent.
WITNESS the seal of the Corporation and the signature of its duly
authorized officers this 2nd day of October, 1998.
/s/Xxxxx X. Xxxxxxxx, President /s/Xxxx X. Xxxxxxx, Secretary
[SEAL]
The Options evidenced by this Option Certificate are part of a duly
authorized issue of options expiring May 1, 2000 to purchase shares of
Common Stock, $0.001 par value per share of the Company and are issued
pursuant to a Option Agreement (the "Option Agreement") duly executed and
delivered by the Company to Pacific Stock Transfer Company as Option Agent
(the "Option Agent"), which Option Agreement is hereby incorporated by
reference in and made a part of his instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties
and immunities thereunder of the Option Agent, the Company and the holders
(the words "holders" or "holder" meaning the registered holders or
registered holder) of the Options.
Options may be exercised to purchase Shares from the Company on or after
the date hereof and on or before May 1, 2000, at the Exercise Price set
forth on the face hereof. The holder of Options evidenced by this Option
Certificate may exercise them by surrendering the Option Certificate, with
the form of election to purchase set forth herein properly completed and
executed, together with payment of the Exercise Price at the office of the
Option Agent. In the event that. upon any exercise of Options evidenced
hereby the number of Options exercised shall be less than the total number
of Options evidenced hereby, there shall be issued to the holder hereof or
his assignee a new Option Certificate evidencing the number of Options not
exercised.
The Company does not have the right to call the Options prior to the
Option's Expiration Date.
Option Certificates, when surrendered at the office of the Option Agent, by
the registered holder thereof in person or by legal representative by
attorney duly authorized in writing may be exchanged in the manner and
subject to the limitations provided in the Option Certificate or Option
Certificates of like tenor evidencing in the aggregate a like number of the
Options.
Upon due presentation for registration of transfer of this Option
Certificate at the office of the Option Agent, a new Option Certificate or
Option Certificates of like tenor and evidencing in the aggregate a like
number of Options shall be issued to the transferee in exchange for this
Option Certificate, subject to the limitations provided in the Option
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Option Agent may deem and treat the registered holder
hereof as the absolute owner of this Option Certificate (notwithstanding
any notation of ownership or other writing thereon made by anyone) for the
purpose of any exercise of conversion thereof and for all other purposes,
and neither the Company nor the Option Agent shall be affected by any
notice to the contrary.
