MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Settlement Agreement is entered into effective this 14th of April,
2005, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") and Maxxon, Inc., a Nevada
corporation,
WHEREAS, disputes have arisen among the parties related primarily to
▇▇▇▇▇'▇ employment and other agreements; and
WHEREAS, the parties have reached a full and final settlement of their
disputes to their mutual satisfaction as set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Upon execution of this Agreement, Maxxon will deliver to ▇▇▇▇▇ (1) a
promissory note in the amount of $216,834.16, (2) a warrant to a
purchase up to 12,913,239 shares of Maxxon common stock on or before
April 14, 2010 at a price of $0.001 per share, subject to a maximum
exercise amount of 4.99% of the outstanding common stock of the Company
and (3) an indemnification agreement.
2. ▇▇▇▇▇ agrees that this Agreement constitutes a full and complete
general release, settlement, discharge, accord and satisfaction of
Maxxon, its legal representatives, successors and assigns from and
against any and all claims, actions, causes of action, rights,
obligations, debts, duties, demands, damages and liabilities relating
to ▇▇▇▇▇'▇ service as an officer, director or employee of Maxxon,
provided however, nothing herein shall diminish in any manner
whatsoever the entitlements of ▇▇▇▇▇ to the provisions set forth in
this Agreement or to indemnification under the corporate charter or
bylaws of Maxxon, or any indemnification agreement by and between ▇▇▇▇▇
and Maxxon, or the corporate laws of Nevada as they may exist from time
to time.
3. Maxxon agrees that this Agreement constitutes a full and complete
general release, settlement, discharge, accord and satisfaction of
▇▇▇▇▇ and his heirs, legal representatives, successors and assigns from
and against any and all claims, actions, causes of action, rights,
obligations, debts, duties, demands, damages and liabilities relating
to ▇▇▇▇▇'▇ service as an officer, director or employee of Maxxon.
4. This Agreement was entered into voluntarily and without any promise,
inducement, threat, coercion, or intimidation of any kind except as
specifically set forth herein.
IN WITNESS WHEREOF, the parties have executed this Agreement this 14th day of
April, 2005.
MAXXON, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------- ------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an Individual By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and CEO
EXHIBIT A
UNSECURED PROMISSORY NOTE
$216,834.16 TULSA, OKLAHOMA
April 14, 2005
FOR VALUE RECEIVED, Maxxon, Inc. ("Maxxon") hereby promises to pay to
the order of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Holder") the principal amount of and Two Hundred
Sixteen Thousand Eight Hundred Thirty Four and 16/100 Dollars ($216,834.16),
plus interest, as provided herein.
1. Maturity. This Note shall be paid on or before April 14, 2006.
2. Interest Rate. Only the unpaid principal balance of this Note shall
bear interest at the rate of twelve percent (12%) per annum. Upon and during the
continuation of an event of default, the unpaid principal balance of this Note
shall bear interest at the default rate of eighteen percent (18%) per annum
until paid.
3. Maximum Interest Rate. Notwithstanding any provision herein, Holder
shall never be entitled to receive, collect or apply as interest on any amount
owed hereunder any amount in excess of the maximum lawful rate of interest
permitted to be charged by any applicable law. In the event Holder shall ever
receive, collect or apply as interest any amount in excess of any amount
permitted to be received under applicable law, all such excess amounts shall be
applied as of the date received to the reduction of the principal amount of
indebtedness hereunder. After payment of the indebtedness in full, all remaining
excess amounts paid shall forthwith be returned within five (5) days to Maxxon.
4. Permissive Prepayment. This Note and all indebtedness arising in
connection herewith may be prepaid at any time and from time to time in whole or
in part by Maxxon without premium, penalty or other charges or fees whatsoever.
5. Collateral. The indebtedness evidenced by this Note is unsecured.
6. Events of Default. At the option of Holder, this Note shall become
immediately due and payable upon the occurrence and during the continuation of
the following events of default:
(a) Maxxon fails to pay principal or interest due and owing
under this Note; or
(b) Maxxon shall:
(1) Be adjudicated as bankrupt or insolvent; or
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(2) Admit in writing his inability to pay his
debts generally as they become due; or
(3) Apply for or consent to the appointment of a
receiver, trustee, or liquidator of it or of
all or substantially all of his assets; or
(4) File a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization
or an arrangement with creditors or take
advantage of or seek any other relief under
any bankruptcy, reorganization,
rearrangement, debtor's relief, or other
insolvency law now or hereafter existing; or
(5) File an answer admitting the material
allegations of, or consenting to, or failure
to answer timely a petition filed against it
in any bankruptcy, reorganization,
rearrangement, debtor's relief, or other
insolvency proceedings; or
(6) Institute or voluntarily be or become a
party to any other judicial proceedings
intended to effect a discharge of all or
substantially all of his debts, in whole or
in part, or a postponement of the maturity
or the collection thereof, or a suspension
of any of the rights or powers granted
hereby; or
(c) An order, judgment, or decree shall be entered by any
court of competent jurisdiction approving a petition seeking reorganization of
Maxxon or appointing a receiver, trustee, or liquidator of Maxxon or of all or
substantially all of its assets, and such order, judgment, or decree is not
permanently stayed or reversed within sixty (60) days after entry thereof, or a
petition is filed against Maxxon seeking reorganization, an arrangement with
creditors, or any other relief under any bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency law now or hereafter
existing, and such petition is not discharged within sixty (60) days after the
filing thereof.
If one or more events of default shall occur and be continuing, after
the expiration of any grace or curative period provided herein, Holder may, at
his option, declare the entire indebtedness arising hereunder due and payable
and may proceed to protect and enforce any and all rights to enforce payment of
all indebtedness arising hereunder at law or in equity. All rights, remedies and
powers conferred upon Holder herein shall be cumulative and not exclusive of any
other rights, remedies or powers. No delay or omission to exercise any right,
remedy or power shall impair any such right, remedy or power or shall be
construed to be a waiver of any event of default or any acquiescence or
forbearance with respect thereto. Any right, remedy or power granted hereunder
or applicable under law or in equity may be exercised from time to time,
independently or concurrently. No waiver of any event of default shall extend
any other subsequent event of default. No single or partial exercise of any
right, remedy or power shall preclude the exercise of any other right, remedy or
power or the further exercise thereof.
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7. Governing Law. This Note has been executed and delivered in Tulsa
County, Oklahoma and shall be governed by and construed in accordance with the
laws of the State of Oklahoma. Maxxon expressly consents to personal
jurisdiction in Tulsa County, Oklahoma and agrees that the courts of Oklahoma
shall have jurisdiction over all proceedings in connection herewith and that
venue is proper in Tulsa County, Oklahoma.
8. Severability. In the event any provision of this Note shall be
declared by a court of competent jurisdiction to be unenforceable or invalid for
any reason whatsoever, the remaining provisions of this Note shall not be
affected thereby and all such remaining provisions shall be enforced to the
maximum extent permitted by law.
9. Costs of Collection. If this Note or any portion hereof is not paid
when due, after expiration of all curative periods, Maxxon promises to pay all
reasonable costs of collection, including but not limited to, all reasonable
attorneys' fees, court costs and reasonable expenses incurred in good faith by
Holder in order to obtain prompt, punctual and proper payment of all amounts of
indebtedness arising hereunder.
10. Waiver. Holder and all other parties now or hereafter liable for
the payment of the indebtedness arising hereunder, whether as endorser,
guarantor, surety or otherwise, waive demand, presentment, diligence in
collecting and consent to all extensions which from time to time may be granted.
11. Binding Effect. This Note and all the covenants, promises,
obligations and agreements of Maxxon and all rights, powers, privileges and
entitlements of Holder shall be binding upon and inure to the benefit of their
respective successors, legal representatives, and permitted assigns.
12. Currency and Place of Payment. All payments of principal and
interest arising in connection with this Note shall be paid to Holder at ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such other place as Holder shall
instruct Maxxon in writing.
Maxxon, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:___________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇
President
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EXHIBIT B
COMMON STOCK PURCHASE WARRANT
Issue Date: April 14, 2005
MAXXON INC, a corporation organized under the laws of the State of
Nevada (the "Company"), hereby certifies that in recognition for past services
to the Company from December 16, 1996 to Issue Date that ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Holder"), or assigns, is entitled, subject to the terms set forth below, to
purchase from the Company from and after the Issue Date and at any time or from
time to time before 5:00 p.m., New York time, through five (5) years after such
date (the "Expiration Date"), up to 12,913,239 fully paid and nonassessable
shares of Common Stock (as hereinafter defined), $.001 par value per share, of
the Company at a per share purchase price of $0.001. The aforedescribed purchase
price per share, as adjusted from time to time as herein provided, are referred
to herein as the "Purchase Price". The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include MAXXON INC. and any corporation
which shall succeed or assume the obligations of MAXXON INC. hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$0.001 par value per share, as authorized on the date of the Subscription
Agreement referred to in Section 9 hereof, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after
such date, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a majority of
directors of the Company (even if the right so to vote has been suspended by the
happening of such a contingency) and (c) any other securities into which or for
which any of the securities described in (a) or (b) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after
the Issue Date through and including the Expiration Date, the holder hereof
shall be entitled to receive, upon exercise of this Warrant in whole in
accordance with the terms of subsection 1.2 or upon exercise of this Warrant in
part in accordance with subsection 1.3, shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by
the holder, subject to the limitations of Exhibit C hereof, by delivery of an
original or facsimile copy of the form of subscription attached as Exhibit A
hereto (the "Subscription Form") duly executed by such holder and surrender of
the original Warrant within seven (7) days of exercise, to the Company at its
principal office or at the office of its Warrant Agent (as provided
hereinafter), accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of Common Stock for which this Warrant is
then exercisable by the Purchase Price then in effect.
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1.3. Partial Exercise. This Warrant may be exercised in part
(but not for a fractional share) by surrender of this Warrant in the manner and
at the place provided in subsection 1.2 except that the amount payable by the
holder on such partial exercise shall be the amount obtained by multiplying (a)
the number of whole shares of Common Stock designated by the holder in the
Subscription Form by (b) the Purchase Price then in effect. On any such partial
exercise, the Company, at its expense, will forthwith issue and deliver to or
upon the order of the holder hereof a new Warrant of like tenor, in the name of
the holder hereof or as such holder (upon payment by such holder of any
applicable transfer taxes) may request, the whole number of shares of Common
Stock for which such Warrant may still be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of a particular date (the "Determination Date") shall mean the Fair
Market Value of a share of the Company's Common Stock. Fair Market Value of a
share of Common Stock as of a Determination Date shall mean:
(a) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") National Market System, the NASDAQ SmallCap
Market or the American Stock Exchange, Inc., then the closing or last sale
price, respectively, reported for the last business day immediately preceding
the Determination Date.
(b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ
National Market System, the NASDAQ SmallCap Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market, then the mean of
the closing bid and asked prices reported for the last business day immediately
preceding the Determination Date.
(c) Except as provided in clause (d) below, if the
Company's Common Stock is not
publicly traded, then as the Holder and the Company agree or in the absence of
agreement by arbitration in accordance with the rules then standing of the
American Arbitration Association, before a single arbitrator to be chosen from a
panel of persons qualified by education and training to pass on the matter to be
decided.
(d) If the Determination Date is the date of a
liquidation, dissolution or winding
up, or any event deemed to be a liquidation, dissolution or winding up pursuant
to the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then issuable
upon exercise of all of the Warrants are outstanding at the Determination Date.
1.5. Company Acknowledgment. The Company will, at the time of
the exercise of the Warrant, upon the request of the holder hereof acknowledge
in writing its continuing obligation to afford to such holder any rights to
which such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the holder shall fail to make
any such request, such failure shall not affect the continuing obligation of the
Company to afford to such holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or
trust company shall have been appointed as trustee for the holders of the
Warrants pursuant to Subsection 3.2, such bank or trust company shall have all
the powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
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2.1 Delivery of Stock Certificates, etc. on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within seven (7) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or
Other Securities) to which such holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then Fair Market Value
of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
2.2. Cashless Exercise.
(a) If a Registration Statement is effective and the Holder
may sell its Shares of Company Common Stock upon exercise hereof thereunder,
this Warrant may be exercisable in whole or in part for cash only as set forth
in Section 1 above. If no such Registration Statement is available, payment upon
exercise may be made at the option of the Holder either in (i) cash or by
certified or official bank check payable to the order of the Company equal to
the applicable aggregate Purchase Price, (ii) by delivery of Common Stock
issuable upon exercise of the Warrants in accordance with Section (b) below or
(iii) by a combination of any of the foregoing methods, for the number of Common
Shares specified in such form (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to
the holder per the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully-paid
and non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.
(b) Notwithstanding any provisions herein to the contrary, if
the Fair Market Value of one share of Common Stock is greater than the Purchase
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, upon consent of the Company, the holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Subscription Form in
which event the Company shall issue to the holder a number of shares of Common
Stock computed using the following formula:
X=Y (A-B)
A
Where X= the number of shares of Common Stock to be
issued to the holder
Y= the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being exercised
(at the date of such calculation)
A= the Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B= Purchase Price (as adjusted to the date of
such calculation)
(c) The Holder may not employ the cashless exercise feature
described above at any time that the Warrant Stock to be issued upon exercise is
included for unrestricted resale in an effective registration statement.
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3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization, Consolidation, Merger, etc. In case at
any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution, shall at its expense deliver or
cause to be delivered the stock and other securities and property (including
cash, where applicable) receivable by the holders of the Warrants after the
effective date of such dissolution pursuant to this Section 3 to a bank or trust
company having its principal office in New York, NY, as trustee for the holder
or holders of the Warrants.
3.3. Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may be, and shall
be binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 3, then only in such
event will the Company's securities and property (including cash, where
applicable) receivable by the holders of the Warrants be delivered to the
Trustee as contemplated by Section 3.2.
3.4 Share Issuance. If the Company, during the Exclusion
Period (as defined in the Subscription Agreement), shall issue any shares of
Common Stock except for the Excepted Issuances (as defined in the Subscription
Agreement) prior to the complete exercise of this Warrant for a consideration
less than the Purchase Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issue, the Purchase Price shall
be reduced as follows: (i) the number of shares of Common Stock outstanding
immediately prior to such issue shall be multiplied by the Purchase Price in
effect at the time of such issue and the product shall be added to the aggregate
consideration, if any, received by the Company upon such issue of additional
shares of Common Stock; and (ii) the sum so obtained shall be divided by the
number of shares of Common Stock outstanding immediately after such issue. The
resulting quotient shall be the adjusted Purchase Price. For purposes of this
adjustment, the issuance of any security of the Company carrying the right to
convert such security into shares of Common Stock or of any warrant, right or
option to purchase Common Stock shall result in an adjustment to the Purchase
Price upon the issuance of shares of Common Stock upon exercise of such
conversion or purchase rights.
4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock or (c) combine its outstanding shares of the Common Stock
into a smaller number of shares of the Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the holder of this Warrant shall thereafter, on
4
the exercise hereof as provided in Section 1, be entitled to receive shall be
increased to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant Agent of the Company (appointed pursuant to Section 11 hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant;
Financial Statements. The Company will at all times reserve and keep available,
solely for issuance and delivery on the exercise of the Warrants, all shares of
Common Stock (or Other Securities) from time to time issuable on the exercise of
the Warrant. This Warrant entitles the holder hereof to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Company's Common Stock.
7. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a "Transferor") with respect to
any or all of the Shares. On the surrender for exchange of this Warrant, with
the Transferor's endorsement in the form of Exhibit B attached hereto (the
"Transferor Endorsement Form") and together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable securities
laws, the Company at its expense, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration. This Warrant has been registered under Form S-8
pursuant to the Maxxon Inc, Employee Stock Option Plan.
10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock
of the Company on such date. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder. Subject to the foregoing, the Holder shall not be limited to
aggregate exercises which would result in the issuance of more than 4.99%. The
restriction described in this paragraph may be revoked upon seventy-five (75)
days prior notice from the Holder to the Company. The Holder may allocate which
of the equity of the Company
5
deemed beneficially owned by the Subscriber shall be included in the 4.99%
amount described above and which shall be allocated to the excess above 4.99%.
11. Warrant Agent. The Company may, by written notice to the each
holder of the Warrant, appoint an agent for the purpose of issuing Common Stock
(or Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.
12. Transfer on the Company's Books. Until this Warrant is transferred
on the books of the Company, the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company to MAXXON INC., ▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ with a copy by telecopy only to: (▇▇▇) ▇▇▇-▇▇▇▇,
and to Holder: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Associates, PLLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ -
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of Oklahoma. Any dispute relating to this Warrant shall be
adjudicated in Tulsa County in the State of Oklahoma. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
MAXXON INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
President
Exhibit A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: MAXXON INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):
___ ________ shares of the Common Stock covered by such Warrant; or
___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or
___ the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock (using a Fair Market
Value of $_______ per share for purposes of this calculation); and/or
___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to
_____________________________________________________ whose address is
------------------------------------------------
-----------------------------------------------------------------------
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.
Dated:___________________ ----------------------------------
(Signature must conform to name of
holder as specified on the face
of the Warrant)
(Address)
7
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of MAXXON INC.. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of MAXXON INC..
with full power of substitution in the premises.
---------------------------------------- -------------------------------------- --------------------------------------
Transferees Percentage Transferred Number Transferred
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
Dated: ______________, ___________
--------------------------------------------------------------
(Signature must conform to name of holder as specified on the
face of the warrant)
Signed in the presence of:
(Name)
(address)
ACCEPTED AND AGREED:
[TRANSFEREE]
(address)
(Name)
8
EXHIBIT C
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into
effective as of the 14th day of April, 2005, by and between Maxxon, Inc, (the
"Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Indemnitee").
R E C I T A L S:
WHEREAS, The Company announced a change of control on March 16, 2005 and;
WHEREAS, The Company has provided indemnification rights to each of its former
officers, directors, employees and consultants and desires to insure
continuation of the indemnification of the former officers, directors, employees
and consultants of Maxxon Inc. The Company is therefore willing to enter into
this Agreement setting forth its indemnification obligations with respect to the
Indemnitee and;
WHEREAS, The Company and Indemnitee agree that all past indemnification granted
to Indemnitee in whatever form shall remain in full force and effect (for
example, the Officer and Director Indemnification Agreement dated December 16th
1996 and filed with the SEC as Exhibit 6.3 on December 23, 1999 and the
indemnification provisions of the Amended Employment Agreement dated August 8,
2001 and filed with the SEC as Exhibit 10.22 on August 21, 2001.)
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and other good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged, the Company
and the Indemnitee hereby agree as follows:
1. Indemnification. The Company shall, to the maximum extent and in the
manner permitted by the Nevada statutes, indemnify the Indemnitee against any
liability incurred in any proceeding to which the Indemnitee is made a Party
because he or she is or was a director, officer, employee, agent or consultant
of Maxxon or is or was serving at the request of the Company as a director,
officer, employee, consultant, fiduciary or agent of the Company or it's
affiliates (the "Indemnitee"), if his or her conduct was in good faith, he or
she reasonably believed that his or her conduct was in, or not opposed to, the
Company's best interest, and in the case of any criminal proceeding, he or she
had no reasonable cause to believe his or her conduct was unlawful. Termination
of the proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent is not, of itself, determinative that the
Indemnitee did not meet the standard of conduct described in this section.
2. Mandatory Indemnification. The Company shall indemnify the
Indemnitee if he or she is successful, on the merits or otherwise, in the
defense of any proceeding, or the defense of any claim, issue, or matter in the
proceeding, to which he or she was a Party because he or she is or was an
Indemnitee, against reasonable expenses incurred by him or her in connection
with the proceeding or claim with respect to which he or she has been
successful.
3. General Indemnification. The indemnification and advancement of
expenses provided by this Agreement shall not be construed to be exclusive of
any other rights to which a person seeking indemnification or advancement of
expenses may be entitled under any Articles of Incorporation of the Company,
bylaw, other agreement, vote of shareholders or disinterested directors, or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office or acting in such capacity.
The Company and Indemnitee agree that all past indemnification
granted to Indemnitee in whatever form shall remain in full force and effect
(for example, the Officer and Director Indemnification Agreement dated December
16th 1996 and filed with the SEC as Exhibit 6.3 on December 23, 1999 and the
indemnification provisions of the Amended Employment Agreement dated August 8,
2001 and filed with the SEC as Exhibit 10.22 on August 21, 2001.)
4. Advances. The Company shall pay for or reimburse the reasonable
expenses incurred by the Indemnitee if he or she is made a Party to a proceeding
in advance of final disposition of the proceeding if: (1) the Indemnitee
furnishes the Company a written affirmation of his or her good faith belief that
he or she has met the applicable standard of conduct described in Section 1, (2)
the Indemnitee furnishes to the Company a written undertaking, executed
personally or on his or her behalf, to repay the advance if it is ultimately
determined that he or she did not meet the standard of conduct and (3) a
determination is made that the facts then known to those making a determination
would not preclude indemnification under this Agreement or the Act.
5. Scope of Indemnification. The indemnification and advancement of
expenses authorized by this Agreement is intended to permit the Company to
indemnify the Indemnitee to the fullest extent, but not in excess of the fullest
extent, permitted by the laws of the State of Nevada. In the event the Act is
amended to expand or restrict the circumstances under, extent to which, or
method by which the Company may indemnify or advance expenses to the Indemnitee,
this Agreement shall automatically be deemed to comply with and include the
substance of such amendment to the Act.
6. No New Employment Rights. This Agreement does not create in
Indemnified Person any right with respect to continuation of service, and it
shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, Indemnified Person's service at any time.
7. Titles and Captions. All Section titles and captions in this
Agreement are for convenience or reference only, and shall not be deemed part of
this Agreement, and in no way define, limit, extend or describe the scope or
intent of any provision hereof.
8. Applicable Law. This Agreement shall be construed in accordance with
and shall be governed by the laws of the State of Nevada.
9. Assignment/Binding Effect. The Indemnified Person may not transfer
or assign, by operation of law or otherwise, this Agreement or any interest in
this Agreement. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns.
10. No Waiver of Breach. No waiver by any of the Parties hereto at any
time of any breach by the other Parties hereto of, or compliance with, any
condition or provision of the Agreement to be performed by such other Parties
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
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11. Termination. This Agreement may be terminated by mutual written
agreement at any time. The rights and obligations of the parties under this
Agreement shall continue to apply with respect to all periods prior to the date
of separation
12. Severability. In the event any condition, covenant or other
provision herein contained is held to be invalid or void by any court of
competent jurisdiction, the same shall be deemed severable from the remainder of
this Agreement and shall in no way affect any other covenant or condition herein
contained. If such condition, covenant or other provision shall be deemed
invalid due to its scope or breadth, such provision shall be deemed valid to the
extent of the scope or breadth permitted by law.
13. Amendment. This Agreement may be amended only by a writing signed
by the Company and the Indemnified Person or his or her agent.
IN WITNESS WHEREOF, the Company and the Indemnified Person have
executed this Agreement as of the day and year first set forth above.
Maxxon, Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
"INDEMNITEE"
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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