EXHIBIT 10.1
ADVISORY AND MANAGEMENT AGREEMENT
THIS ADVISORY AND MANAGEMENT AGREEMENT ("Agreement") is made this 1st day
of October, 1999 effective the first day the Services (as defined below) were
first rendered by and between NuVen Advisors, Limited Partnership, a Nevada
limited partnership ("Advisor") with offices at 0000 XxxXxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 and Phileo Management Company Inc., a Nevada
corporation with its principal offices at 000-000 Xxxxxxx Xx. Xxxxxxxxx, X.X.
Xxxxxx X0X 0X0 ("Client").
WHEREAS, Advisor and Advisor's personnel have numerous years of experience
in managing and in performing administrative duties for public, privately-held
companies and development stage investment opportunities; and
WHEREAS, Client desires to retain the Services of Advisor, and Advisor
desires to provide the Services (as defined below) for Client on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Client and Advisor
agree as follows:
1. Engagement
Client hereby engages Advisor to provide Client with merger and acquisition
advice, and management and general administrative services ("Advisor's
personnel"), and Advisor accepts such engagement.
2. Scope of Services to be Provided
Advisor, subject to the control, direction and supervision of Client's
Board of Directors, and in conformity with applicable laws, Client's
Articles of Incorporation, By-laws, registration statements, business plan
objectives, policies and restrictions, shall provide the following
Services, excluding the compensation to Advisor's employees or agents
covered under separate agreements, if any, and their related expenses, as
provided below:
(A) Management of Assets. Advisor will manage the Client's assets
including, by way of illustration, the evaluation of pertinent
economic, statistical, financial and other data, and formulation
and/or implementation of a corporate business plan; and
(B) Management of Operations. Advisor will conduct and manage the
day-to-day operations of the Client including, by way of illustration,
the furnishing of routine legal, supervisory, accounting and
administrative services, and the supervision of the Client's
administrative personnel, except for services provided by outside
counsel selected by Client; and
(C) Administrative Facilities. Advisor will furnish, if necessary, to
Client office space, facilities, equipment and personnel adequate to
provide the Services.
3. Term
This Agreement shall have an initial term of five (5) years (the "Initial
Advisory Period"), with an effective date of October 1, 1999. At the
conclusion of the Initial Advisory Period, this Agreement will
automatically be extended on an annual basis (the "Extension Period")
unless Advisor or Client shall serve written notice on the other party
terminating the Agreement; provided, however, that Advisor and Client shall
agree in writing as to Advisor's continuing compensation during any
Extension Period. Any notice to terminate given hereunder shall be in
writing and shall be delivered at least ten (10) days prior to the end of
the Initial Advisory Period or any subsequent Extension Period.
4. Time and Effort of Advisor
Advisor shall cause Advisor's personnel to devote that amount of time, as
necessary, on a weekly basis, to fulfilling Advisor's obligations under
this Agreement. The particular amount of time may vary from day to day or
week to week. Advisor unconditionally agrees that Advisor's personnel, or
his replacement, will at all times, faithfully and to the best of his
experience, ability, and talents, perform all the duties required of
Advisor under this Agreement.
5. Compensation
Client agrees to pay Advisor the following (the "Consideration") for the
Services rendered hereunder:
(A) Advisory Fee. The Client shall pay to the Advisor, as compensation for
the Services rendered, facilities furnished and expenses paid by the
Advisor, a monthly advisory fee equal to Three Thousand Five Hundred
Dollars ($3,500). Such advisory fee shall be payable for each calendar
month as soon as practicable after the end of that month.
(B) Merger Fee: As to Services provided by Advisor related to the
introduction of Business Opportunities which results in a Merger
Transaction or which the Company acquires or otherwise obtain an
equity interest or interest as a creditor, the Company agrees to pay
Advisor a transaction fee (the "Merger Fee"). The Merger Fee shall be
equal to ten percent (10%) of the asset value or investment made in
the Company (including assumed debt) in such Business Opportunity as a
result of Advisor's introduction or efforts. One third (1/3) of the
Merger Fee shall be due and payable upon completion of the definitive
agreements related to each transaction, and the balance shall be
issued upon closing;
(C) Transaction Fee: As to Services provided by Advisor related to the
sale of the Company's assets, the Company agrees to pay Advisor a fee
("Transaction Fee") equal to five percent (5%) of the net proceeds
received by the Company.
(D) Options. As incentive to execute this Agreement, Client agrees to
grant to Advisor an option to purchase shares of Client's common stock
("Option Shares") subject to the terms and conditions of the Option
Agreement attached hereto as Exhibit "A" and incorporated herein by
reference (the "Option"). Notwithstanding the date of the Option, the
right of Advisor to exercise such Option will vest to Advisor upon
execution hereof.
The parties acknowledge that the consideration for Client's shares to
be delivered to Advisor shall consist of the Services rendered to
Client, and that Advisor is accepting payment in Client's shares
("Advisory Fee Shares") as an accommodation to Client. Client and
Advisor acknowledge that Advisor may be considered an affiliate
subject to Section 16(b) of the Securities Exchange Act of 1934 and,
in this regard, Client and Advisor agree that for purposes of any
"profit" computation under Section 16(b) the price paid for the
Advisory Fee Shares is equal to Two Hundred Fifty Thousand Dollars
($250,000).
6. Role of Advisor
The Advisor, and any person controlled by or under common control with the
Advisor, shall be free to render similar services to others and engage in
other activities, so long as the Services rendered to the Client are not
impaired.
Except as otherwise required by the Investment Company Act of 1940 ( the
"1940 Act"), any of the shareholders, directors, officers and employees of
the Client may be a shareholder, trustee, director, officer or employee of,
or be otherwise interested in, the Advisor, and in any person controlled by
or under common control with the Advisor, and the Advisor and any person
controlled by or under common control with the Advisor, may have an
interest in the Client.
Except as otherwise agreed, in the absence of willful misfeasance, bad
faith, negligence or reckless or reckless disregard or obligations or
duties hereunder on the part of the Advisor or Advisor's personnel, Advisor
shall not be subject to liability to the Client, or to any shareholder of
the Client, for any act or omission in the course of, or connected with,
rendering services hereunder or for any losses that may be sustained in the
purchase, management, holding or sale of any asset of or security issued by
Client.
7. Other Services
Such agreement as to the make-up of the consideration shall be reduced to
writing prior to the execution and a definitive agreement between Client
and the prospective purchaser/seller of such Business Opportunity. Failing
to reach an agreement as to the make-up of such Finder's Fee, Client agrees
that such fee shall consist solely of cash. In the event that the Finder's
Fee contains capital stock ("Finders Fee Shares"), unless otherwise
mutually agreed between the parties in writing, such stock to be issued to
Advisor shall be valued at fifty percent (50%) of the "Market Price", which
shall be the average bid price of such stock during the ten (10) business
days preceding the execution of the definitive agreement relative to such
Business Combination, or any public announcement related to such
transaction, whichever is the earlier date.
If there is no bid price for Client's shares then the book value of such
stock at the close of the month preceding execution of the definitive
agreement relating to such Business Combination or any public announcement
related to such Business Combination shall be considered the Market Price.
8. Registration of Client's Shares
No later than ten (10) days following the date of an event giving use to
the obligation by Client to issue Advisory Fee Shares, Option Shares or
Finder Fee Shares, Client will register such shares with the Securities and
Exchange Commission under a Form S-8 or other applicable registration
statement. At Client's sole discretion, such shares may be issued prior to
registration in reliance on exemptions from registration provided by
Section 4(2) of the Securities Act of 1933 (the "Act"), Regulation D of the
Act, and applicable state securities laws. Such issuance or reservation
shall be in reliance on representations and warranties of Advisor set forth
herein.
9. Costs and Expenses
All third party and out-of-pocket expenses, filing fees, copy, and mailing
expenses incurred by Advisor in the performance of the Services under this
Agreement are the responsibility of Client, and shall be paid by Client, or
reimbursed to Advisor, within ten (10) days, of receipt of written notice
by Advisor.
10. Place of Services
The Services provided by Advisor hereunder will be performed primarily at
Advisor's offices except as otherwise mutually agreed by Advisor and
Client. It is understood and expected that Advisor may make contacts with
persons and entities and perform the Services in other locations as deemed
appropriate by Advisor.
11. Independent Contractor
Advisor and Advisor's personnel will act as an independent contractor in
the performance of its duties under this Agreement. Accordingly, Advisor
will be responsible for payment of all federal, state, and local taxes on
compensation paid under this Agreement, including income and social
security taxes, unemployment insurance, and any other taxes due relative to
Advisor's personnel, and any and all business license fees as may be
required.
12. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship of
principal and agent between Client and Advisor, or Employee and Employer as
between Advisor's personnel and Client. Neither Advisor's personnel or
Advisor are authorized to enter into any agreements on behalf of Client.
Advisor expressly retains the right to approve, in its sole discretion,
each and every transaction introduced to Client, and to make all final
decisions with respect to activities undertaken by Advisor or Advisor's
personnel related to this Agreement.
13. Termination
(A) Termination for Disability. If during the Initial Advisory Period,
Advisor or Advisor's personnel shall be unable to provide the Services
as set forth under this Agreement for 120 consecutive business days
because of illness, accident, or other incapacity, Client shall have
the right to terminate this Agreement upon written notice to Advisor
not less than 30 business days after the end of any such 120-day
period. Termination under this paragraph shall be effective upon
receipt by Advisor of the written notice.
(B) Death. In the event of the death of Advisor's personnel with
replacement, this Agreement and all obligations hereunder shall
immediately be terminated.
(C) Termination for Cause. The Client may, at its option, terminate this
Agreement by giving written notice of termination to Advisor without
prejudice to any other remedy to which the Client may be entitled
either at law, in equity, or under this Agreement, if Advisor:
(i) Willfully breaches or neglects the duties that Advisor is
required to perform under the terms of this Agreement;
(ii) Fails to promptly comply with and carry out all directives of
Client's Board of Directors;
(iii) Commits any dishonest or unlawful act, in the judgment of
Client's Board of Directors;
(iv) Engages in any conduct which disrupts the business of Client or
any entity affiliated with Client; or
(D) Termination Other Than For Cause. This Agreement shall terminate
immediately on the occurrence of any one of the following events:
(i) The occurrence of circumstances, in the judgment of Client's
Board of Directors, that make it impracticable for Client to
continue its present line(s) of business;
(ii) The decision of and upon notice by Advisor to voluntarily
terminate this Agreement;
(iii) If Client files a petition in a court of bankruptcy or is
adjudicated a bankrupt;
(iv) If Client institutes, or has instituted against it any
bankruptcy proceeding for reorganization for rearrangement of
its financial affairs;
(v) If Client has a receiver of its assets or property appointed
because of insolvency;
(vi) If Client makes a general assignment for the benefit of
creditors; or
(vii) If either party otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of business.
(E) Effect of Termination on Compensation. In the event of the Termination
Other Than For Cause prior to the completion of the Initial Advisory
Period, Advisor shall be entitled to the full Compensation, the rights
under the Options, and any outstanding unpaid portion of the
Consideration and expenses.
14. Representations and Warranties of Client
Client represents and warrants to Advisor that:
(A) Corporate Existence. Client is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada
with the corporate power to own property and carry on its business as
it is now being conducted.
(B) Financial Information. Client has or will cause to be delivered
concurrently with the execution of this Agreement, copies of the
Disclosure Documents (as defined herein) which accurately set forth
the financial condition of Client as of the respective dates of such
documents.
(C) No Conflict. This Agreement has been duly executed by Client and the
execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in any agreement,
instrument, judgment, decree or order to which Client is a party or to
which Client is subject, nor will such execution and performance
constitute a violation or conflict of any fiduciary duty to which
Client is subject.
(D) Full Disclosure. The information concerning Client provided to Advisor
pursuant to this Agreement is, to the best of Client's knowledge and
belief, complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
(E) Date of Representations and Warranties. Each of the representations
and warranties of Client set forth in this Agreement is true and
correct at and as of the date of execution of this Agreement.
15. Representations and Warranties of Advisor
Advisor represents and warrants to Client that:
(A) No Conflict. This Agreement has been duly executed by Advisor and the
execution and performance of this Agreement will not violate, or
result in a breach of, or constitute a default in any agreement,
instrument, judgment, decree or order to which Advisor is a party or
to which Advisor is subject, nor will such execution and performance
constitute a violation or conflict of any fiduciary duty to which
Advisor is subject.
(B) No Litigation. Advisor is not a defendant, nor plaintiffs against whom
a counterclaim has been asserted, in any litigation, pending or
threatened, nor has any material claim been made or asserted against
Advisor, nor are there any proceedings threatened or pending before
any United States or other territorial, federal, state or municipal
government, or any department, board, body or agency thereof,
involving as of the date hereof, that may entitle a successful
litigant to a claim against any assets of Advisor, or interfere in any
way with the duties of Advisor hereunder.
(C) Registration and/or Exemption of Client's Shares. Option Shares or
Finder's Fee Shares may be issued prior to registration in reliance on
the exemptions from registration provided by Section 4(2) of the
Securities Act of 1933 (the "Act"), Regulation D, and applicable state
securities laws. Representations and warranties by Advisor herein will
be used and relied upon by Client to determine whether any issuance of
Option Shares may be made to Advisor pursuant to Section 4(2) of the
Act and Regulation D and applicable state securities laws, and Advisor
will notify Client immediately of any material changes. With these
specific understandings, Advisor represents and warrants that:
(1) Advisor has been furnished with a copy of Client's most recent
Annual Report on Form 10-K and all reports or documents required
to be filed under Sections 13(a), 14(a), and 15(d) of the
Securities and Exchange Act of 1934, as amended, including but not
limited to quarterly reports on Form 10-Q, current reports on Form
8-K, and proxy statements (the "Disclosure Documents"). In
addition, Advisor has been furnished with a description of
Client's capital structure and any material changes in Client's
affairs that may not have been disclosed in the Disclosure
Documents.
(2) Advisor has had the opportunity to ask questions and receive
answers concerning the terms and conditions of the Advisory Fee
Shares (if any), the Option Shares and/or Finder's Fee Shares to
be issued and/or reserved for issuance and to obtain any
additional information which Client possesses or can acquire
without unreasonable effort or expense that is necessary to verify
the accuracy of information furnished hereunder.
(3) By reason of Advisor's knowledge and experience in financial and
business matters in general, and investments in particular,
Advisor is capable of evaluating the merits and risks of this
transaction and in bearing the economic risks of an investment in
the Advisory Fee Shares (if any), the Option Shares and the
Finders Fee Shares, if any, and XxxXxx in general, and fully
understand the speculative nature of such securities and the
possibility of such loss.
(4) The present financial condition of Advisor is such that Advisor is
not under any present or contemplated future need to dispose of
any portion of the Advisory Fee Shares (if any), the Option Shares
or the Finder's Fee Shares, if any, to satisfy an existing or
contemplated undertaking, need, or indebtedness.
(5) Advisor is fully aware that the Advisory Fee Shares (if any), any
Option Shares and Finder's Fee Shares issued to Advisor prior to
registration are "Restricted Securities" as defined by Rule 144 of
the Act and that any resale of such securities by Advisor may be
governed by Rule 144. Advisor is further aware of the specific
restrictions on resale of such securities contained in Rule 144.
(6) Advisor will not sell, transfer or otherwise dispose of the
Advisory Fee Shares (if any), any Option Shares or Finder's Fee
Shares issued or reserved for issuance prior to registration
except in compliance with the Act.
(7) Any and all certificates representing Clients share issued upon
exercise of options or otherwise prior to registration of such
shares and any and all securities issued in replacement thereof or
in exchange therefore, shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144
under the Act. The shares may not be offered for sale, sold, or
otherwise transferred except pursuant to an effective
Registration Statement under the Act or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of XxxXxx."
(D) Full Disclosure. The information concerning Advisor provided to Client
pursuant to this Agreement is, to the best of Advisor's knowledge and
belief, complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
(E) Date of Representations and Warranties. Each of the representations
and warranties of Advisor set forth in this Agreement is true and
correct at and as of the date of execution of this Agreement.
16. Indemnification
Client and Advisor agree to indemnify, defend and hold each other harmless
from and against all demands, claims, actions, losses, damages,
liabilities, costs and expenses, including without limitation, interest,
penalties and attorneys' fees and expenses asserted against or imposed or
incurred by either party by reason of or resulting from a breach of any
representation, warranty, covenant, condition, or agreement of the other
party to this Agreement.
17. Specific Performance
Advisor and Client acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the
non-breaching party would have no adequate remedy at law. Accordingly, in
the event of any controversy concerning the rights or obligations under
this Agreement, such rights or obligations shall be enforceable in a court
of equity by a decree of specific performance. Such remedy, however, shall
be cumulative and non-exclusive and shall be in addition to any other
remedy to which the parties may be entitled.
18. Miscellaneous
(A) Subsequent Events. Advisor and Client each agree to notify the other
party if, subsequent to the date of this Agreement, either party
incurs obligations which could compromise its efforts and obligations
under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the parties
hereto.
(C) Further Actions and Assurances. At any time and from time to time,
each party agrees, at its or their expense, to take actions and to
execute and deliver documents a may be reasonably necessary to
effectuate the purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with any
of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed. The failure
of any party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
(E) Assignment. Neither this entire Agreement nor any right created by it
shall be assignable by either party without the prior written consent
of the other.
(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication is
addressed:
(i) In the case of Client:
Phileo Management Company Inc.
000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(ii) In the case of Advisor and Advisor's personnel, to:
NuVen Advisors Limited Partnership
0000 XxxXxxxxx Xxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
or to such other person or address designated by Client or Advisor to
receive notice.
(G) Headings. The section and subsection headings in this agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(H) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(I) Governing Law. Notwithstanding that this Agreement was negotiated and
is being contracted for outside of the State of Nevada, it shall be
governed by the laws of the State of Nevada, notwith standing any
conflict-of-law provision to the contrary.
(J) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
(K) Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and supersedes any and all prior agreements,
arrangements, or understandings between the parties relating to the
subject matter of this Agreement. No oral understandings, statements,
promises, or inducements contrary to the terms of this Agreement
exist. No representations, warranties, covenants, or conditions,
express or implied, other than as set forth herein, have been made by
any party.
(L) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force
and effect.
(M) Facsimile Counterparts. A facsimile, telecopy, or other reproduction
of this Agreement may be executed by one or more parties hereto and
such executed copy may be delivered by facsimile of similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
(N) Termination of Any Prior Agreements. Effective the date hereof, all
prior rights of Advisor relating to the accrual or payment of any form
of compensation or other benefits from Client based upon any
agreements other than this Agreement, whether written or oral, entered
into prior to the date hereof, are hereby terminated.
(O) Consolidation or Merger. Subject to the provisions hereof, in the
event of a sale of the stock, or substantially all of the stock of
Client, or consolidation or merger of Client with or into another
corporation or entity, or the sale of substantially all of the
operating assets of Client to another corporation, entity or
individual, Client may assign its rights and obligations under this
Agreement to its successor-in-interest and such successor-in-interest
shall be deemed to have acquired all rights and assumed all
obligations of Client hereunder; provided, however, that in no event
shall the duties and Services of Advisor provided for in Paragraph 2
hereof, or the responsibilities, authority or powers commensurate
therewith, change in any material respect as a result of such sale of
stock, consolidation, merger or sale of assets.
(P) Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
above written.
"Advisor"
NuVen Advisors Limited Partnership
a Nevada Limited Partnership
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: President
"Client"
Phileo Management Company, Inc.
a Nevada corporation
By: /s/ Xxxxx Xx
Name: Xxxxx Xx
Title: President
EXHIBIT "A"
to the
Advisory and Management Agreement
dated October 1, 1999
THE OPTION
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into and effective the 1st
day of October 1999, by and between NuVen Advisors Limited Partnership, a Nevada
limited partnership ("NuVen"), and Phileo Management Company, Inc., a Nevada
corporation with offices 000-000 Xxxxxxx Xx. Xxxxxxxxx, X.X. Xxxxxx,X0X-0X0 (the
"Company").
WHEREAS, the Company proposes to issue to NuVen options to purchase shares
of its common stock (the "Common Stock") in connection with the Company's
engagement of NuVen pursuant to the Advisory Agreement of even date between the
Company and NuVen, a copy of which is attached hereto as Exhibit "A" and
incorporated by reference herein (the "Advisory Agreement"); and,
WHEREAS, to induce NuVen to execute the Advisory Agreement the Company
hereby grants NuVen an option to purchase shares of the Company's Common Stock
subject to the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the mutual promises herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and subject to the terms and conditions set forth
below, NuVen and the Company agree as follows:
1. The Option
The Company hereby grants to NuVen (hereinafter "Holder") an option (the
"Option") to acquire Five Hundred Thousand (500,000) shares of the
Company's Common Stock, subject to adjustment as set forth herein (such
shares, as adjusted, are hereinafter referred to as the "Option Shares"),
at a purchase price of $.50 per share ("Option Price").
2. Term and Exercise of Option
A. Term of Option. Subject to the terms of this Agreement, Holder shall
have the right to exercise the Option in whole or in part, commencing
the date hereof through the close of business on January 1, 2005.
B. Exercise of the Option. The Option may be exercised upon written
notice to the Company at its principal office setting out the number
of Option Shares to be purchased, together with payment of the Option
Price
C. Issuance of Option Shares. Upon such notice of exercise and payment of
the Option Price, the Company shall issue and cause to be delivered
within five (5) business days following the written order of Holder,
or its successor as provided for herein, and in such name or names as
the Holder may designate, a certificate or certificates for the number
of Option Shares so purchased. The rights of purchase represented by
the Option shall be exercisable, at the election of the Holder
thereof, either in full or from time to time in part, and in the event
the Option is exercised in respect of less than all of the Option
Shares purchasable on such exercise at any time prior to the date of
expiration hereof, the remaining Option Shares shall continue to be
subject to Adjustment as set forth in paragraph 4 hereof. The Company
irrevocably agrees to reconstitute the Option Shares as provided
herein.
3. Reservation of Option Shares
The Company shall at all times keep reserved and available, out of its
authorized Common Stock, such number of shares of Common Stock as shall be
sufficient to provide for the exercise of the rights represented by this
Agreement. The transfer agent for the Common Stock and any successor
transfer agent for any shares of the Company's capital stock issuable upon
the exercise of any of such rights of purchase, will be irrevocably
authorized and directed at all times to reserve such number of shares as
shall be requisite for such purpose. The Company will cause a copy of this
Agreement to be kept on file with the transfer agent or its successors.
4. Adjustment of Option Shares
The number of Option Shares purchasable pursuant to this Agreement shall be
subject to adjustment from time to time upon the happening of certain
events, as follows:
A. Adjustment for Recapitalization. Subject to paragraph 4.B below, in
the event the Company shall (a) subdivide its outstanding shares of
Common Stock, or (b) issue or convert by a reclassification or
recapitalization of its shares of Common Stock into, for, or with
other securities (a "Recapitalization"), the number of Option Shares
purchasable hereunder immediately following such Recapitalization
shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Option Shares or other securities of the Company
measured as a percentage of the total issued and outstanding shares of
the Company's Common Stock as of the hereof which it would have been
entitled to receive immediately preceding such Recapitalization, had
such Option been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this paragraph shall be calculated and effected taking
into account the formula set forth in paragraph 4.B. below and shall
become effective immediately after the effective date of such event
retroactive to the effective date.
B. Adjustment of the Exercise Price and Number of Option Shares. In the
event of any change in the Company's Common Stock by reason of a
reverse stock split, the number and Option Price of the shares subject
to this Option shall not change or be adjusted.
C. Preservation of Purchase Rights Under Consolidation. Subject to
paragraph 4.B above, in case of any Recapitalization or any other
consolidation of the Company with or merger of the Company into
another corporation, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety, the Company shall prior to the closing
of such transaction, cause such successor or purchasing corporation,
as the case may be, to acknowledge and accept responsibility for the
Company's obligations hereunder and to grant the Holder the right
thereafter upon payment of the Option Price to purchase the kind and
amount of shares and other securities and property which he would have
owned or have been entitled to receive
after the happening of such consolidation, merger, sale or conveyance.
The provisions of this paragraph shall similarly apply to successive
consolidations, mergers, sales or conveyances.
D. Notice of Adjustment. Whenever the number of Option Shares
purchasable hereunder is adjusted, as herein provided, the Company
shall mail by first class mail, postage prepaid, to the Holder notice
of such adjustment or adjustments, and shall deliver to Holder setting
forth the adjusted number of Option Shares purchasable and a brief
statement of the facts requiring such adjustment, including the
computation by which such adjustment was made.
5. Failure to Deliver Option Shares Constitutes Breach Under
Advisory Agreement
Failure by the Company, for any reason, to deliver the certificates
representing any shares purchased pursuant to this Option within the five
(5) business day period set forth in paragraph 2 above, or the placement of
a Stop Transfer order by the Company on any Option Shares once issued,
shall constitute a "Breach" under the Advisory Agreement and, for the
purpose of determining the terms of this Agreement, shall automatically
toll the expiration of this Agreement for a period of time equal to the
delay in delivering the subject shares or term of the Stop Transfer order.
6. Assignment
The Option represented by this Agreement may only be assigned or
transferred by NuVen to an Affiliate or subsidiary, or as the result of a
corporate reorganization or recapitalization. For the purpose of this
Option the term "Affiliate" shall be defined as a person or enterprise that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with the Company otherwise, this
Agreement and the rights hereunder shall not be assigned by either party
hereto.
7. Counterparts
A facsimile, telecopy or other reproduction of this instrument may be
executed by one or more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding
and effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this instrument as well as any
facsimile, telecopy or other reproduction hereof.
8. Further Documentation
Each party hereto agrees to execute such additional instruments and take
such action as may be reasonably requested by the other party to effect the
transaction, or otherwise to carry out the intent and purposes of this
Agreement.
9. Notices
All notices and other communications hereunder shall be in writing and
shall be sent by prepaid first class mail to the parties at the following
addresses, as amended by the parties with written notice to the other:
To NuVen: NuVen Advisors Limited Partnership
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
With copy to: Xxxxxx & Weed
0000 XxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Company: Phileo Management Company, Inc.
000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11. Governing Law
This Agreement was negotiated, and shall be governed by the laws of Nevada
notwithstanding any conflict-of-law provision to the contrary.
12. Entire Agreement
This Agreement sets forth the entire understanding between the parties
hereto and no other prior written or oral statement or agreement shall be
recognized or enforced.
13. Severability
If a court of competent jurisdiction determines that any clause or
provision of this Agreement is invalid, illegal or unenforceable, the other
clauses and provisions of the Agreement shall remain in full force and
effect and the clauses and provision which are determined to be void,
illegal or unenforceable shall be limited so that they shall remain in
effect to the extent permissible by law.
14. Amendment or Waiver
Every right and remedy provided herein shall be cumulative with every other
right and remedy, whether conferred herein, at law, or in equity, and may
be enforced concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as a waiver
of the same or any other default then, theretofore, or thereafter occurring
or existing. At any time prior to Closing, this Agreement may be amended by
a writing signed by all parties hereto.
15. Headings
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first written above.
"NuVen"
NuVen Advisors Limited Partnership
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx, General Partner
The "Company"
Phileo Management Company, Inc.
By: /s/ Xxxxx Xx
Xxxxx Xx, President
