OPTION AGREEMENT
THIS OPTION AGREEMENT (the
“Agreement”), dated as of August 19, 2010, between Xxxxxxx Xxxxxxx (the
“Stockholder”) and Xxxx Xxxxxxxx (the “Grantee”).
WITNESSETH
WHEREAS, the Stockholder
wishes to grant an option (the “Option”) to the Grantee to purchase a total of
One Hundred Sixty Thousand (160,000) shares (the “Option Shares”) of common
stock of RxBids, a Nevada corporation (the “Company”) that are currently
beneficially owned by the Stockholder, pursuant to the terms and conditions
hereof; and
WHEREAS, the Stockholder and
the Grantee have simultaneously entered into a Securities Escrow Agreement with
respect to the Option Shares, a copy of which is attached hereto as Exhibit A
and incorporated herein by reference;
NOW, THEREFORE, in
consideration of the mutual promises set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Stockholder and the Grantee hereby agree as
follows:
1. The
Option.
1.1 Grant. For
one dollar and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the Stockholder hereby grants to the
Grantee the Option to purchase the Option Shares pursuant to Section 3
hereof.
1.2 Exercise
Price. The exercise price of the Option to purchase the Option
Shares shall be Sixty Thousand Dollars ($8,000) (the “Aggregate Exercise
Price”), and the exercise price shall be $0.05 per Option Share.
1.3 Option Shares Held in
Escrow. The Stockholder has agreed to DTC to the trust account
of Xxxxxxx X. Xxxxxxxxxx, Esq., or to deposit certificates representing the
Option Shares, duly endorsed and Medallion Guaranteed with respect to the
requisite signatures thereon (the “Option Certificates”), with Xxxxxxx X.
Xxxxxxxxxx, Esq., of Salt Lake City, Utah (the “Escrow Agent”), to be held in
escrow pursuant to the terms and conditions of the Securities Escrow
Agreement. Within three (3) Business Days (as defined in this
Section) after execution of this Agreement, the Stockholder shall DTC the Option
Shares and/or deliver the Option Certificates, endorsed or assigned in blank to
the Escrow Agent, for the purpose of retaining physical possession
thereof. For purposes hereof, a “Business Day” shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the City of
Salt Lake, State of Utah are authorized or required by law or executive order to
remain closed.
2. Exercise of Option;
Ownership.
2.1 Exercise. The
purchase rights represented by the Option may be exercised by the Grantee or his
assigns at any time, and from time to time, during the period commencing on the
date hereof and continuing for a period of 180 days (the “Option Period”), as
follows:
(a) The
Grantee shall deliver to the Escrow Agent a written notice of his election to
exercise the Option (the “Exercise Notice”), together with: (i) the
original Option, with the Purchase Form annexed thereto (the “Purchase Form”),
and (ii) a certified check or bank draft in the amount of the Aggregate Exercise
Price. In order for such exercise to be effective as of a particular
date, the Exercise Notice must be delivered by the Grantee to the Escrow Agent
by 5:00 p.m. Mountain Standard Time.
(b) The
Escrow Agent shall, as soon as practicable after receipt of an Exercise Notice,
effectuate the proper: (i) distribution of the Aggregate Exercise
Price to the Stockholder; and (ii) release the Option Shares to the
Grantee.
2.2 Ownership Upon
Exercise. The Grantee shall be deemed the record owner of the
Option Shares as of the close of business of the applicable
exercise.
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3. Adjustment. Subject and
pursuant to the provisions of this Section 3, the Aggregate Exercise Price and
number of shares of common stock subject to this Option shall be subject to
adjustment from time to time as set forth herein.
3.1 Subdivision or Combination
of Shares. If the Company shall at any time during the Option
Period subdivide its outstanding common stock by recapitalization,
reclassification, stock dividend or split thereof or by any other means, the
number of shares of common stock subject to the Option immediately prior to such
subdivision shall be proportionately increased and the Aggregate Exercise Price
shall be proportionately decreased, and if the Company shall at any time combine
the outstanding shares of common stock by recapitalization, reclassification or
combination thereof or by any other means, the number of shares subject to the
Option immediately prior to such combination shall be proportionately decreased
and the Aggregate Exercise Price shall be proportionately
increased. Any such adjustment in the Aggregate Exercise Price shall
become effective at the close of business on the record date for such
subdivision or combination.
3.2 Merger, Consolidation or
other Corporate Change. In case of any: (a) capital
reorganization or reclassification or change of the outstanding shares of common
stock of the Company (exclusive of a change covered by Section 3.1 hereof or
which solely affects the par value of such shares of common stock); or (b)
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification, change, capital
reorganization or change in the ownership of the outstanding common stock); or
(c) any sale or conveyance or transfer of all or substantially all of the assets
of the Company and in connection with which the Company is dissolved, which
takes place during the Option Period, the Grantee shall have the right
thereafter to receive upon the exercise hereof, for the same Aggregate Exercise
Price payable hereunder immediately prior to such event, the kind and amount of
shares of stock or other securities or property received by the Stockholder upon
such reclassification, change, capital reorganization, merger or consolidation,
or upon the dissolution following any sale or other transfer, with respect to
the number of shares of common stock obtainable upon exercise of this Option
immediately prior to such event; and if any reorganization, reclassification,
change, merger, consolidation, sale or transfer also results in a change in
common stock covered by Section 3.1, then such adjustment shall be made pursuant
to both this Section 3.2 and Section 3.1. The provisions of this
Section 3.2 shall similarly apply to successive reclassifications or capital
reorganizations, mergers or consolidations, changes, sales or other
transfers.
4. Covenants of the
Stockholder.
4.1 No
Conflict. The Stockholder covenants and agrees that she has
not entered into and will not, during the Option Period, enter into any
contract, understanding or arrangement which conflicts with the terms of this
Agreement.
5. Warranties
and Representations of the Stockholder. The Stockholder
represents and warrants as follows:
5.1 Authority. The
Stockholder has full power, authority, capacity and legal right to enter into
this Agreement and to grant the Option.
5.2 Binding
Obligation. This Agreement constitutes the legal, valid and
binding obligation of the Stockholder, enforceable in accordance with its
terms.
5.3 No Conflicts; Governmental
Approvals. There is no statute, regulation, rule, order or
judgment, and no provision of any mortgage, indenture, contract or agreement
binding upon the Stockholder which would prohibit, conflict with, or in any way
prevent the execution, delivery or performance of the terms of this
Agreement. The execution, delivery and performance by the Stockholder
of the terms of this Agreement do not require any filing with, or the consent or
approval of, any governmental agency, regulatory authority or securities
exchange.
5.4 Title to
Shares. The Option Shares are free and clear of all liens,
security interests, charges and encumbrances of every kind and nature (other
than those created hereunder or those applicable to resale under federal and
state securities laws, rules and regulations); each share of common stock
comprising the Option Shares is fully-paid and non-assessable; the Stockholder
has good and lawful authority to grant the Option, and upon exercise of the
Option, to sell and deliver such Option Shares in the manner hereby
contemplated.
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6. Warranties
and Representations of the Grantee. In granting the
rights under this Agreement to the Grantee, the Stockholder has relied upon
certain warranties and representations made by the Grantee as of the date
hereof, as follows:
6.1 Investment
Experience. The Grantee has prior investment experience,
including investment in non-registered securities such that he is able to
evaluate the merits and risks of the purchase of the Option Shares and is able
to bear the economic risk it hereby assumes.
6.2 Company
Information. The Grantee is an “accredited investor” as that
term is defined in Rule 501 of Regulation D of the Securities and Exchange
Commission, has had extensive exposure to the business plans and prospects of
the Company, has been afforded the opportunity to make, and has made, all
inquiries as he has deemed appropriate with respect to the Company’s affairs and
prospects and has reviewed the filings of the Company in the Xxxxx archives of
the Securities and Exchange Commission that have been filed during the past 12
months.
6.3 Resale of
Shares. The Grantee is aware that the Option Shares are
subject to restrictions on transferability and resale and may not be transferred
or resold except as permitted under applicable federal and state securities laws
pursuant to registration or exemption therefrom; and any requisite legal
opinions required by Grantee to publicly sell such Option Shares shall be
obtained by Grantee at his own cost and expense.
6.4 No
Registration. Grantee hereby acknowledges that, in addition to
certain restrictive legends that the securities laws of the state in which the
Stockholder resides may require, each certificate representing the Option Shares
may be endorsed with the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVENOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933;THEY HAVE BEEN ACQUIRED BY THE HOLDER FORINVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW OF
RECEIPT BY THE ISSUER OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS NOT
REQUIRED.
7. No Rights
as Stockholder. Until such time
as the Grantee has exercised his Option hereunder, the Grantee shall not be
entitled to: (a) exercise any voting rights or powers relating or
pertaining to the Option Shares; or (b) receive any cash dividends, if any, paid
on the Option Shares.
8. Indemnification. The Stockholder
and the Grantee each severally agree to indemnify and reimburse the other party
for any and all losses, damages, costs, expenses, liabilities, obligations and
claims of any kind, reasonable attorney’s fees and other reasonable legal costs
and expenses, that the indemnified party may at any time suffer or incur, or
become subject to, as a result of or in connection with any breach or inaccuracy
of any of the representations and warranties made by the indemnifying party in
this Agreement.
9. Miscellaneous.
9.1 Further
Assurances. The parties hereto will, at such time and from
time to time on and after the date hereof, execute, acknowledge and deliver all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances that may be reasonably required for the carrying out of
the purposes of this Agreement.
9.2 Complete
Agreement. This Agreement and the documents, if any, referred
to herein, shall constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject
matter.
9.3 Waiver, Discharge,
etc. This Agreement may not be released, discharged,
abandoned, changed or modified in any manner, except by an instrument in writing
signed on behalf of the Grantee or its authorized representatives.
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9.4 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered by hand or mailed by certified or registered mail
(return receipt requested) to each party at the address set forth below such
party’s name on the signature page hereto, or at such other address as may be
specified by like notice, and shall be deemed given on the date on which it is
so hand-delivered or on the business date following the date on which it is so
mailed.
9.5 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah, without regard to the rules of
conflict of laws.
9.6 Successors and
Assigns. The Stockholder may not assign any of her rights, or
delegate any of his duties, hereunder without the prior written consent of the
Grantee. The foregoing notwithstanding, the Grantee may assign all or
any of his rights hereunder without the consent of the Stockholder.
9.7 Execution in
Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed the day and year first
above written.
“STOCKHOLDER”
/s/
Xxxxxxx
Xxxxxxx
Xxxxxxx Xxxxxxx
00000 X.
Xxxxxxxxx Xxx
Xxxxxx Address
Peoria,
Arizona
85383
City State Zip
“GRANTEE”
/s/ Xxxx
Xxxxxxxx
Xxxx Xxxxxxxx
0000 X.
Xxxxxxxxx Xx.
Xxxxxx Xxxxxxx
Xxxxx,
Xxxx
00000
City State Zip
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PURCHASE
FORM
THE UNDERSIGNED does hereby exercise
its Option to purchase 160,000 shares of common stock of RxBids, a Nevada
corporation, from Xxxxxxx Xxxxxxx and hereby tenders the full purchase price for
such shares in the amount of $8,000.
DATED: _____________ ______________________________
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