Exhibit 4(vi)
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STOCK OPTION AGREEMENT
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This Stock Option Agreement (the "Agreement") is entered into as of this
25th day of June, 1999, by and between Xxxx Technology, Inc., a Delaware
corporation ("Xxxx"), and Xxxx Xxxxx ("Option Holder").
WHEREAS, Option Holder has acted as a finder for Xxxx and has located
financing which has resulted in a closed transaction; and
WHEREAS, as a portion of the finder's fee, Xxxx has agreed to grant Option
Holder options to purchase up to 50,000 Common Shares of Xxxx upon the terms and
conditions described below;
NOW, THEREFORE, for the consideration described above, Xxxx hereby grants
options to purchase its Common Shares to Option Holder upon the following terms
and conditions:
1. Grant of Options. Xxxx hereby grants to Option Holder options (the
"Options") to purchase 50,000 Common Shares of Xxxx. The Options do not entitle
Option Holder to any of the rights of a stockholder of Xxxx. Xxxx shall at all
times reserve and keep available the number of its authorized but unissued
Common Shares which is sufficient to permit the exercise in full of the Options.
2. Nonassignability. The Options shall not be assignable or transferable.
3. Exercise. The Options may be exercised from the date of grant to the
close of business five years from such date, in whole or in part, provided that
the Options are exercised for no fewer than 5,000 shares at any one time (unless
fewer than 5,000 shares remain, in which case the option must be exercised for
all remaining shares). Option Holder shall be deemed to have become the holder
of record of the shares on the date on which payment of the exercise price and
any applicable taxes was made, irrespective of the date of notice of exercise,
except that, if the date of payment is a date when Xxxx'x stock transfer books
are closed, Option Holder shall be deemed to have become the holder of shares at
the close of business on the next succeeding date on which the stock transfer
books are open. Except as otherwise provided herein, Option Holder shall be
entitled to receive only dividends or distributions which are payable to holders
of record on or after the date on which he is deemed to become the holder of
record of such shares.
4. Exercise Price. The price at which the shares may be purchased
pursuant to the Options during the option period is $1.00 per share, subject to
adjustment as provided below.
5. Adjustments.
(a) If after the date of this Agreement, and subject to the
provisions of Section 5(e) hereof, the number of outstanding Xxxx Common Shares
is increased by a stock dividend payable in Common Shares or by a split-up of
Common Shares, then, on the day following the date fixed for the determination
of holders of Common Shares entitled to receive the stock dividend or split-up,
the number of shares issuable on exercise of the Options shall be increased in
proportion to the increase in outstanding shares and the then applicable
exercise price shall be correspondingly decreased.
(b) If after the date of this Agreement, and subject to the
provisions of Section 5(e) hereof, the number of outstanding Xxxx Common Shares
is decreased by a combination or reclassification of Common Shares, then, after
the effective date of the combination or reclassification, the number of Common
Shares issuable on exercise of the Options shall be decreased in proportion to
the decrease in outstanding Common Shares and the then applicable exercise price
shall be correspondingly increased.
(c) If after the date of this Agreement, and subject to the
provisions of Section 5(e) hereof, shares of any class of stock of Xxxx (other
than Common Shares) are issued by way of a stock dividend on outstanding Common
Shares, then, commencing with the day following the date fixed for the
determination of holders of Common Shares entitled to receive the stock
dividend, in addition to any Common Shares receivable upon exercise of the
Options, Option Holder, upon exercise of the Options, shall be entitled to
receive, as nearly as practicable, the same number of shares of dividend stock,
plus any shares issued upon any subsequent change, replacement, subdivision or
combination of the stock dividend, to which Option Holder would have been
entitled if his Options would have been exercised immediately prior to the stock
dividend. No adjustment in the exercise price shall be made merely by virtue of
the happening of any event specified in this Section 5(c).
(d) If after the date of this Agreement any capital reorganization or
reclassification of the Xxxx Common Shares, or consolidation or merger of Xxxx
with another corporation, or sale of all or substantially all of its assets to
another corporation is effective, then, as a condition of the reorganization,
reclassification, consolidation, merger or sale, lawful and fair provision shall
be made whereby Option Holder after the transaction shall have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in this Agreement and in lieu of the Xxxx Common Shares purchasable and
receivable immediately prior to the transaction upon the exercise of the rights
represented by the Options, the shares of stock, securities or assets that may
be issued or payable with respect to or in exchange for a number of outstanding
Common Shares equal to the number of Common Shares purchasable and receivable
immediately prior to the transaction upon the exercise of the rights represented
by the Options if the reorganization, reclassification, consolidation, merger or
sale had not taken place. Appropriate provisions shall be made in connection
with a reorganization, reclassification, consolidation, merger or sale with
respect to the rights and interests of Option Holder to the end that the
provision of this Agreement (including, without limitation, provisions for
adjustments of the exercise price and of the number of shares purchasable upon
exercise of the Options) shall immediately after the transaction be applicable
as nearly as possible to any shares of stock, securities or assets deliverable
immediately after the transaction upon the exercise of the Options. Xxxx shall
not effect any consolidation, merger or sale unless, prior to the consummation
of the transaction, the successor corporation (if other than Xxxx) resulting
from the consolidation or merger, or the corporation purchasing the assets,
assumes by written instrument executed the obligation to deliver to Option
Holder the shares of stock, securities or assets in accordance with the
foregoing provisions that Option Holder may be entitled to purchase.
(e) Notwithstanding anything herein to the contrary, cumulative
adjustments in the number of shares issuable upon exercise of the Options shall
be made only to the nearest multiple of one-tenth of a share, i.e., fractions of
less than five-hundredths of a share shall be disregarded and fractions of five-
hundredths of a share or more shall be treated as being one-tenth of a share.
(f) Upon any adjustment of the exercise price or the number of shares
issuable on exercise of the Options, Xxxx shall give written notice of the
adjustment to Option Holder mailed to the address set forth above or such
changed address as Option Holder shall have notified Xxxx in writing. The notice
shall state the exercise price resulting from the adjustment and the increase or
decrease, if any, in the number of shares purchasable at that price upon
exercise of the Options, setting forth in reasonable detail the method of
calculation and the facts upon which the calculation is based. Failure to give
notice, or any defect in a notice, shall not affect the legality or validity of
the changes or adjustments.
6. Securities Requirements. Neither the Options granted hereunder nor the
shares to be issued pursuant to such Options will be registered under the
Securities Act of 1933, as amended (the "Act") or registered or qualified under
any state securities laws. The Options and the underlying shares will be issued
to Option Holder pursuant to exemptions from registration contained in the Act
and in applicable state securities laws. As a condition to receiving any shares
pursuant to the Options, Option Holder, prior to receiving said shares, shall
execute a subscription agreement and such other documents as Xxxx may reasonably
require. In addition, Option Holder hereby represents, warrants and acknowledges
to Xxxx that:
(a) he is receiving the Options and the underlying shares for
investment only, for his own account, and not with a view to the sale or
distribution thereof;
(b) he is aware that: neither the Options nor the underlying shares
will be registered or qualified under the Act or any state securities laws (nor
does Xxxx have an obligation to register or qualify either the Options or the
shares); neither the Options nor the shares may be sold or otherwise transferred
unless they are registered and/or qualified under the Act or other laws or
unless exemptions from registration or qualification are available; and the
certificates for the shares will bear a legend setting forth the restrictions on
transferability of the shares; and
(c) he is an "accredited investor" as such term is defined in
Regulation D promulgated under the Act and either: (i) will have an individual
net worth, or joint net worth with his spouse, at the time of issue of the
shares which exceeds $1,000,000; or (ii) had an individual income in excess of
$200,000 in each of the two most recent years, or joint income with his spouse
in excess of $300,000 in each of those years, and has a reasonable expectation
of reaching the same income level in the current year.
7. Benefit. This Agreement and the covenants and conditions herein
contained shall inure to the benefit of and be binding upon the parties hereto
and their successors and permitted assigns.
8. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
9. Headings. The paragraph headings contained in this Agreement are
inserted as a matter of convenience and for reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
WITNESS the signatures of the parties as of the day first above written.
Xxxx Technology, Inc.
By: /s/
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Title:
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/s/
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Xxxx Xxxxx
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