EXHIBIT 10.11
OPTION AGREEMENT
This AGREEMENT, dated as of April 7, 2004 (this "AGREEMENT"), is
entered into by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual resident of the State of
Minnesota ("GRANTEE"), the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Estate (the "Estate"), and
Minnesota River Aviation, Inc., a Minnesota corporation ("MRAI," and together
with the Estate, the "GRANTORS").
WHEREAS, the Estate and MRAI are holders of 574,159 and 704,800 shares
of common stock, par value $0.05 per share (the "COMMON STOCK"), of Dotronix,
Inc., a Minnesota corporation (the "COMPANY"), respectively.
WHEREAS, the Grantors have agreed to grant to Grantee an option to
purchase shares of Common Stock, upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
STOCK OPTION
Section 1.01. GRANT OF STOCK OPTION. The Grantors hereby grant Grantee
an irrevocable option (collectively, the "OPTION") to purchase, in the
aggregate, up to 1,000,000 shares of Common Stock (as the same may be adjusted
from time to time pursuant to Section 1.05, the "OPTIONED SHARES") at a purchase
price of $0.05 per Optioned Share (the "PURCHASE PRICE"), subject to the terms
and conditions provided herein.
Section 1.02. EXERCISE OF OPTION. (a) Subject to the conditions below
and as set forth in 1.03 hereof, Grantee may exercise the Option, in whole or in
part, at any time or from time to time on any business day after the date hereof
and prior to 5:00 p.m., Minneapolis time, on November 5, 2010 (the "EXPIRATION
DATE"). If Grantee wishes to exercise the Option for all or some of the Optioned
Shares, Grantee shall send a written notice (the "EXERCISE NOTICE") to the
Grantors specifying the total number of Optioned Shares that Grantee wishes to
purchase pursuant to such exercise and the place (which shall be within the
State of Minnesota), the date of purchase (which shall be not less than one nor
more than 20 business days after the date of the Exercise Notice, and no later
than the Expiration Date), and the time for the closing of such purchase. Each
closing of a purchase of Optioned Shares (a "CLOSING") shall take place at the
place, on the date (the "CLOSING DATE") and at the time designated by Grantee in
the Exercise Notice; PROVIDED, HOWEVER, that if, at any Closing Date, the
conditions set forth in Section 1.04 shall not have been satisfied (or waived by
the Grantors), Grantee may postpone the Closing until a date within five
business days after such conditions are satisfied (but no later than the
Expiration Date).
(b) The number of Optioned Shares that Grantee wishes to purchase
pursuant to each Exercise Notice shall be allocated between the Grantors based
upon mutual agreement of the Grantors. If the Grantors cannot mutually agree
upon such allocation prior to a given Closing, the Optioned Shares with respect
to such Closing shall be allocated first to the Estate and then to MRAI;
PROVIDED, HOWEVER, that in no event shall more than an aggregate of 574,159
shares of Common Stock be allocated to the Estate. The obligations of each
Grantor pursuant to this Agreement are several and not joint.
(c) Grantee shall not be under any obligation to deliver any Exercise
Notice and may allow the Option to terminate without purchasing any Optioned
Shares hereunder; PROVIDED, HOWEVER, that once Grantee has delivered to the
Grantors an Exercise Notice, subject to the terms and conditions of this
Agreement, Grantee shall be bound to effect the purchase as described in such
Exercise Notice.
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(d) The Purchase Price for the Optioned Shares to be purchased upon any
exercise of the Option shall be payable, at Grantee's option, in cash or a
cashier's check.
Section 1.03. CLOSING. At each Closing, (a) each Grantor shall deliver
to Grantee a certificate or certificates representing the Optioned Shares to be
purchased from such Grantor at such Closing (in the amount as provided in in
Section 1.02(b) hereof), in each case duly endorsed or accompanied by stock
powers duly executed in blank and (b) Grantee shall deliver to Grantors the
Purchase Price for such Optioned Shares.
Section 1.04. CONDITIONS TO GRANTORS' OBLIGATIONS. The obligation of
Grantors to sell Optioned Shares at any Closing is subject to the following
conditions:
(a) The representations and warranties of Grantee contained in Article
3 shall be true and correct at and as of the Closing Date as if made at and as
of such date, and the Grantors shall have received a certificate signed by
Grantee to the foregoing effect; and
(b) There shall be no preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, nor any
statute, rule, regulation or order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining the purchase and sale of such
Optioned Shares at the Closing.
Section 1.05. ADJUSTMENT UPON CHANGE IN CAPITAL STOCK. In the event of
any change in the Company's capital stock by reason of any stock dividend, stock
split, reverse stock split, stock combination, recapitalization,
reclassification, exchange of securities, or extraordinary or liquidating
dividend or distribution, or in the event of any merger, reorganization, or
consolidation to which the Company is a party but is not the surviving entity,
then the number and kind of shares or securities subject to the Option and the
Purchase Price (but not the total purchase price for all Optioned Shares) shall
be appropriately and equitably adjusted so that Grantee shall receive, upon
exercise of the Option, and payment of the same total purchase price, the number
and class of shares or other securities or property that Grantee would have
received in respect of the Optioned Shares purchasable upon exercise of the
Option if the Option had been exercised immediately prior to such event.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF GRANTORS
Each Grantor severally represents and warrants to Grantee that:
Section 2.01. POWER AND AUTHORITY; BINDING EFFECT. Such Grantor has all
requisite power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery, and performance by such Grantor
of this Agreement and the consummation by such Grantor of the transactions
contemplated hereby (i) have been duly authorized by such Grantor and no other
action on the part of such Grantor is necessary to authorize the execution,
delivery, or performance by such Grantor of this Agreement and the consummation
by such Grantor of the transactions contemplated hereby and (ii) require no
action by or in respect of, or filing with, any governmental body, agency, or
official. This Agreement has been duly executed and delivered by such Grantor
and is a valid and binding agreement of such Grantor, enforceable against it in
accordance with its terms, except as
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enforcement may be limited by bankruptcy, insolvency, moratorium, or other
similar laws relating to creditors' rights generally.
Section 2.02. VALID TITLE. Such Grantor is the sole beneficial owner of
the Optioned Shares allocated to such Grantor with no restrictions on the
Grantor's rights of disposition pertaining thereto. At each Closing, such
Grantor will convey good title to the Optioned Shares being purchased free and
clear of any and all claims, liens, charges, encumbrances, and security
interests.
Section 2.03. EXCEPTION TO REPRESENTATIONS AND WARRANTIES.
Notwithstanding anything to the contrary contained elsewhere in this Agreement,
neither Grantor makes any representation or warranty as to whether the grant or
the exercise of the Option requires approval by the board of directors or the
shareholders of the Company pursuant to Minnesota Statutes, Section 302A.671, or
as to whether any such approval has been obtained.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF GRANTEE
Grantee represents and warrants to each of the Grantors:
SECTION 3.01. POWER AND AUTHORITY. Grantee has all requisite power and
authority to enter into this Agreement and to perform Grantee's obligations
hereunder. The execution, delivery, and performance by Grantee of this
Agreement, including the exercise of the Option and purchase of the Optioned
Shares hereunder, (i) have been duly authorized by Grantee and no other action
on the part of Grantee is necessary to authorize the execution, delivery, or
performance by Grantee of this Agreement and the consummation by Grantee of the
transactions contemplated hereby and (ii) require no action by or in respect of,
or filing with, any governmental body, agency, or official. This Agreement has
been duly executed and delivered by Grantee and is a valid and binding agreement
of Grantee, enforceable against Grantee in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium, or other
similar laws relating to creditors' rights generally.
SECTION 3.02. INVESTMENT REPRESENTATIONS.
(a) Concurrently with the execution and delivery of this Agreement,
Grantee is entering into certain separate transactions directly with the
Company. In connection with those transactions, Grantee has requested and
received from the Company such information concerning the Company as he has
deemed necessary or appropriate for the purpose of entering into such
transactions and for the purpose of entering into this Agreement. Grantee
represents and warrants that he is not relying on any statements or
representations made by either Grantor, other than those set forth in Article 2
above, in entering into this Agreement. Grantee represents and warrants that he
is an "accredited investor" within the meaning of Rule 501(a) under the
Securities Act.
(b) Grantee understands and acknowledges that neither Grantor is making
any representation or warranty to Grantee concerning whether the Grantors might
be deemed "affiliates" of the Company for purposes of Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or whether Grantor,
upon the execution and delivery of this Agreement or upon his exercise of the
Option granted hereunder, might be deemed such an "affiliate." Grantor further
understands and acknowledges that neither the Option nor the Optioned Shares
have been registered under the Securities Act or any state securities laws,
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and that neither the Option nor the Optioned Shares may be transferred by
Grantee except pursuant to an available exemption from the registration
requirements of the Securities Act and such state securities laws or pursuant to
such registration. Grantee agrees that he shall not transfer the Option or any
Optioned Shares except pursuant to such an exemption or registration, and shall
not transfer the Option except pursuant to Section 4.05 hereof.
ARTICLE 4
MISCELLANEOUS
Section 4.01. EXPENSES. Each party hereto agrees to pay the
out-of-pocket expenses incurred by such party in connection with the
transactions contemplated hereby.
Section 4.02. FURTHER ASSURANCES. Grantee and the Grantors will each
execute and deliver or cause to be executed and delivered all further documents
and instruments and take all such further action as may be reasonably necessary
in order to consummate the transactions contemplated hereby.
Section 4.03. NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or three
(3) days following deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified, or
one (1) day following timely deposit with a reputable overnight courier with
next day delivery instructions (including, but not limited to, Federal Express,
DHL or UPS), at the address indicated below or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties.
To Grantee: ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
To Grantors: Minnesota River Aviation, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Estate
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 4.04. AMENDMENTS AND WAIVERS. This Agreement may not be
modified, amended, altered, or supplemented, except upon the execution and
delivery of a written agreement executed by each of the parties hereto. Any
provision of this Agreement may be waived if, but only if, such waiver is in
writing and is signed by the party against whom the waiver is to be effective.
Section 4.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that no party may assign,
delegate, or otherwise transfer any
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of its rights or obligations under this Agreement without the consent of the
other parties hereto; AND, PROVIDED, FURTHER, that the Estate may assign,
delegate, or otherwise transfer any of its rights or obligations under this
Agreement pursuant to the Will of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Deceased, without the
consent of the other parties hereto, PROVIDED, THAT the transferee of such
rights or obligations signs an agreement to be bound and abide by the terms of
this Agreement and that Grantee is notified of the name and address of the
transferee.
Section 4.06. GOVERNING LAW. This Agreement shall construed in
accordance with and governed by the law of the State of Minnesota without giving
effect to the principles of conflicts of laws thereof.
Section 4.07. JURISDICTION. Any legal action or proceeding with respect
to this Agreement and any action for enforcement of any judgment in respect
thereof may be brought exclusively in the courts of the State of Minnesota or of
the United States of America for the District of Minnesota, and, by execution
and delivery of this Agreement, the parties hereby accept for themselves and in
respect of their property, generally and unconditionally, the exclusive
jurisdiction of the aforesaid courts. The parties further irrevocably consent to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the parties at their addresses referred to in Section
4.03. The parties hereby irrevocably waive any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
aforementioned courts and hereby further irrevocably waive and agree, to the
extent permitted by applicable law, not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 4.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 4.09. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective as of the date hereof when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
Section 4.10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday or a Sunday or shall be a legal
holiday within the State of Minnesota, then such action may be taken or such
right may be exercised on the next succeeding weekday not a legal holiday.
Section 4.11. SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provisions were so excluded and the balance shall be
enforceable in accordance with its terms.
Section 4.12. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, whether oral or written, between the parties hereto with respect
to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GRANTEE:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
GRANTORS:
MINNESOTA RIVER AVIATION INC., a
Minnesota corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ESTATE
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇,
Personal Representative
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, Personal Representative
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇,
Personal Representative
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