CONVERTIBLE NOTE OPTION AGREEMENT
THIS CONVERTIBLE NOTE OPTION AGREEMENT (this "Agreement") is made and
entered into as of the 10th day of March, 2000 by and among XXX TECHNOLOGIES,
INC., an Arizona corporation (the "Company"), XXXXX X. XXXXXXXX ("Xxxxxxxx"), an
individual resident of the State of North Carolina, and XXXX X. XXXX, an
individual resident of the State of North Carolina ("Xxxx").
STATEMENT OF PURPOSE
WHEREAS, the Company and Technology Investors, LLC ("Technology
Investors") are entering in to a Note Purchase Agreement (the "Purchase
Agreement") pursuant to which Technology Investors will purchase from the
Company a note (the "Original Note") that will be convertible into shares of the
Company's common stock ("Common Stock"); and
WHEREAS, as a condition and an inducement to Technology Investors'
decision to enter into the Purchase Agreement, the Company has agreed to grant
to Xxxx and Xxxxxxxx the Option (as hereinafter defined on the terms and
conditions set forth in this Agreement).
AGREEMENT
NOW, THEREFORE, in consideration of the promises, covenants and
agreements contained herein, the parties hereto hereby mutually covenant,
contract and agree as follows:
1. Option. The Company hereby grants to each of Xxxxxxxx and Xxxx an
unconditional, irrevocable option (the "Option") to purchase, subject to the
terms hereof, one or more Subordinated Convertible Promissory Notes (the "New
Notes") having an aggregate principal balance of up to Five Hundred Thousand
Dollars ($500,000) on terms identical (except for the origination and maturity
dates) to the Original Note. The Option shall be exercised in increments of not
less than $100,000. The Option shall be exercisable, in whole or in part, by
Xxxxxxxx or Xxxx or both of them and may be assigned, in whole or in part, by
Xxxxxxxx or Xxxx to any of their Affiliates (as such term is defined in the Note
Purchase Agreement) including, but not limited to, Technology Investors.
2. Exercise. Within ten (10) days of receipt of written notice from
Xxxxxxxx or Xxxx or their assignees that they intend to exercise all or a
portion of the Option, the Company shall execute a New Note in substantially the
same form as the Original Note payable to the purchasers indicated on such
notice.
3. Expiration. The Option shall expire on September 10, 2000.
4. Entire Agreement. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter and constitutes a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter.
5. Equitable Relief. In addition to any other remedies which may be
available, Xxxx and Xxxxxxxx and their permitted assignees shall be entitled to
seek equitable relief, including injunctive relief and specific performance, in
the event of any breach of the provisions of this Agreement by the Company.
6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original copy of this
Agreement and all of which, when taken together, shall be considered to
constitute one and the same agreement.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina without regard to that
state's conflicts of laws principles.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
XXX TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxx
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Xxxxx X. Xxx
President and Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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