EXHIBIT 10.16
OPTION AGREEMENT
This Option Agreement ("Agreement") is made this 23rd day of November, 2000, by
and between CAN CAL RESOURCES LIMITED ("Company") and FIRST COLONY MERCHANT
("First Colony"). Company and First Colony may hereinafter individually be
referred to as "Party" and collectively as "Parties".
RECITALS
First Colony desires to acquire the exclusive right to purchase, without
becoming obligated to purchase, 300,000 shares of common voting stock of the
Company ("the Shares").
WHEREFORE, in consideration of the mutual conditions, covenants, and
promises set forth herein, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged by the parties hereto, it is agreed:
ARTICLE I
GRANT OF OPTION
1.1 RECITALS. The recitals are made a part of this Agreement.
1.2 GRANT OF OPTION. Subject to the terms and conditions of this Agreement,
Company hereby grants First Colony the exclusive right to purchase the Shares at
a price and under such terms and conditions as set forth in Article II of this
Agreement.
1.3 OPTION PERIOD. The option period shall be effective upon execution of
that certain Loan Agreement between Company and First Colony and shall remain in
effect until December 1, 2005.
1.4 EXERCISE OF OPTION. First Colony may exercise this option in whole or
in part by giving written notice thereof and delivering the dollar amount of the
purchase price to Company. The written notice of exercise of option must be
given by First Colony to Company prior to the termination of the option period
provided herein, or any extension thereof. The purchase of any shares pursuant
to this Agreement shall be subject to and in compliance with all applicable
Federal and State Securities Laws.
1.5 AUTOMATIC TERMINATION. If First Colony fails to exercise this option in
accordance with its terms and within the option period or any extension thereof,
then the option contained herein and the rights of First Colony hereunder shall
automatically and immediately terminate without notice.
1.6 CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the Shares as well as the price per share of common
stock covered by the Shares shall be proportionately adjusted for any increase
or decrease in the number of issued shares of
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common stock of the Company ("Common Stock") resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued shares
of Common Stock effected without receipt of consideration by the Company.
1.7 DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Company shall notify First Colony as soon as
practicable prior to the effective date of such proposed transaction. The
Company in its discretion may provide for First Colony to have the right to
exercise its option until fifteen (15) days prior to such transaction as to all
of the Shares covered thereby. To the extent it has not been previously
exercised, the option will terminate immediately prior to the consummation of
such proposed action.
1.8 MERGER OR ASSET SALE. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, the option referenced herein shall be assumed or an equivalent option
or right substituted by the successor corporation or a parent or subsidiary of
the successor corporation.
ARTICLE II
PURCHASE OF STOCK
2.1 PURCHASE PRICE. The purchase price for each share of the Shares shall
be the lower of $.65 per share, or 50% of the lowest trading price by Yahoo!
Finance Historical Quotes during the prior complete calendar month immediately
preceding the day of notice of intent to exercise of the option.
ARTICLE III
EPRESENTATIONS AND WARRANTIES
3.1 COMPANY'S WARRANTIES. Company makes the following representations and
warranties:
3.1.1 STATUS OF SHARES. The Shares are fully paid and non-assessable
and the Company has the full power to transfer the Shares without obtaining the
consent or approval of any other person or governmental authority.
3.1.2 COMPLIANCE. Company is not now, nor at the time such shares are
issued will be, knowingly in any violation of any law, order, regulation,
requirement or directive of any governmental agency relating to the Shares.
3.1.3 LIENS. Company represents and warrants that there are not now
nor will there be any liens, claims, demands or options other than contained
herein in connection with the Shares.
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3.1.4 COMPANY'S INDEMNITIES. Company shall indemnify, defend, and hold
harmless the Corporation and First Colony against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries, and deficiencies, including interest, penalties and reasonable
attorneys' fees, that they shall incur or suffer, which arise, result from, or
relate to any breach of, or failure by Company to perform any of its
representations, warranties, covenants, or agreements in this Agreement or in
any schedule, certificate, exhibit, or other instrument furnished or to be
furnished by Company under this Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 EXPENSES. Each of the parties shall pay their own costs and expenses
incurred or to be incurred by them in negotiating and preparing this Agreement
and in closing and in carrying out the transactions contemplated by this
Agreement.
4.2 EFFECT OF HEADINGS. The subject headings of the paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
4.3 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous agreements, representations
and understandings of the parties. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver.
4.4 SEVERABILITY. Should any provision or portion of this Agreement be held
or otherwise become unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such
unenforceability or invalidity.
4.5 COUNTERPARTS. This Agreement may be executed simultaneously 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.
4.6 PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligations or liability of any third persons to any party to this
Agreement, nor shall any provision give any third party any right of subrogation
or action over against any party to this Agreement.
4.7 ASSIGNMENT. This Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective heirs, legal representatives,
successors and assigns.
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4.8 SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. All representations,
warranties and agreements of the parties contained in this Agreement, or in any
instrument, certificate, opinion or other writing provided for in it, shall
survive termination of the Agreement.
4.9 TIME. The parties agree that time is of the essence of this Agreement.
4.10 NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party whom notice is to be
given, on the 4th day after mailing if mailed to the party to whom notice is to
be given by registered or certified mail as follows:
TO Company: 0000 Xxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000-0000
TO First Colony: 0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
4.11 GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of Nevada.
4.12 VENUE. Venue for any action brought regarding the interpretation or
enforcement of this Agreement shall lie exclusively in Xxxxx County, Nevada.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on
the date and year first written above.
Company:
CAN CAL RESOURCES LIMITED
By: /s/ Xxxxxx X. Xxxxx
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First Colony:
FIRST COLONY MERCHANT
By: /s/ X. X. Xxxxxxx
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