EXHIBIT 10.9 AND 4.8
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into as of
April 10, 2002, (the "Date of Grant") by and between eWorldMedia Inc., a
Nevada corporation, ("EWM"), and First Reserve Corporation, a California
corporation, (the "Grantee" or "Buyer"), regarding the stock of EWM.
1.0. RECITALS.
1.1. EWM has 100,000,000 authorized par value $.001 common shares of
which approximately 6,800,000 of such common shares have been issued.
1.2. Grantee is a lender to EWM and Grantee and EWM have entered into an
Agreement Regarding Loan and Issuance of Shares (the "Loan Agreement")
whereby Grantee is to receive an option to purchase certain common shares.
1.3. Therefore, in consideration for the mutual covenants, agreements,
representations, and warranties contained in this Agreement and the Loan
Agreement, the Parties agree as follows.
2.0. GRANT OF OPTION.
2.1. Grant. EWM hereby grants to Grantee an option to purchase
1,000,000 $.001 par value common shares of EWM at the Exercise Price of
$.20 (twenty cents) per share or a total price of $200,000 (the "Exercise
Price"), subject to all of the terms and conditions of this Agreement (the
"Option").
2.2. Consideration for Grant. In consideration for the grant of the
Option, Grantee agreed to make certain loans and take certain actions as set
forth in the Loan Agreement.
3.0. EXERCISE PERIOD
3.1. Exercise Period of Option. Subject to the terms and conditions of
this Agreement, the Option shall become exercisable as to the Shares at any
time beginning on February 21, 2002, and ending the earlier of (a) February
21, 2004, (b) up to thirty (30) days after the time of the completion of the
sale of the 1,000,000 shares at $.50 ("50 cents") or (c) up to thirty (30)
days after notice of a transaction the effect of which would be to make the
shares readily tradable on a public market, whichever is earlier (the
"Expiration Date"). EWM shall give notice to Grantee of the transactions
contemplated in (b) or (c) above and the thirty (30) day period shall
commence upon the receipt of such notice. If Grantee does not exercise the
Option on or before the Expiration Date, the Option shall lapse and Grantee
shall have no rights to the Shares.
3.2. Transfer of Option. The Option may be exercised during the
Exercise Period only by Grantee or his assigns. The terms of the Option shall
be binding upon the executors, administrators, successors and assigns of
Grantee.
4.0. MANNER OF EXERCISE
4.1. Stock Option Exercise. To exercise this Option, Grantee must
deliver to EWM Grantee's election to exercise the Option (the "Exercise
Notice") indicating Grantee's election and the number of Shares being
purchased.
4.2. Limitations on Exercise. The Option may not be exercised unless
such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise.
4.3. Payment. The payment of the entire purchase price for such shares
(the "Purchase Price Payment") must be made within ten (10) days of delivery
of the Exercise Notice.
4.4. Issuance of Shares.
a. Provided that the Exercise Notice and Purchase Price Payment
are made in a timely manner, EWM shall issue the Shares registered in the
name of Grantee or Grantee's authorized assignee and shall deliver
certificates representing the Shares with the appropriate legends affixed
thereto within ten (10) days of receipt of the Purchase Price Payment. Such
shares shall be common, par value $.001, non-assessable shares. If EWM's
shares shall become publicly traded by registration or any other manner (e.g.
merger, etc.), Grantee's shares shall become registered at the same time
and at no cost to Grantee. In addition, EWM will provide that Grantee's
shares shall not be subject to any lock up period (i.e. a period of time in
which such shares cannot be traded).
b. If after the date hereof, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common
Stock or by a split-up of shares of Common Stock, then, on the day following
the date fixed for the determination of holders of Common Stock entitled to
receive such stock dividend or split-up, the number of shares subject to this
Option Agreement shall be increased proportionately, with no increase in the
total purchase price of the shares so covered, and the exercise price per
share reduced proportionally.
c. If after the date hereof, the number of outstanding shares of
Common Stock is decreased by a combination or reclassification of shares of
Common Stock, then, after the effective date of such combination or
reclassification, the number of shares subject to this Option Agreement shall
be decreased proportionately, with no increase in the total purchase price of
the shares so covered, and the exercise price per share increased
proportionally.
d. No fractional shares shall be issued, and any fractional
shares resulting from the computations pursuant to Section 4.4.b. or c. shall
be eliminated from this Option. No adjustment shall be made for cash
dividends, for the issuance of additional shares for consideration approved
by EWM or for the issuance to stockholders of rights to subscribe for
additional shares or other securities.
5.0. OTHER OPTION PROVISIONS
5.1. Compliance with Securities Laws and Regulations. The Option and
this Agreement are intended to comply with applicable provisions of the
California and Nevada securities laws. Any provision of this Agreement which
is inconsistent with such provisions shall, without further act or amendment
by EWM or Grantee, be reformed to comply with such provisions. The exercise
of the Option and the issuance and transfer of Shares shall be subject to
compliance by EWM and Grantee with all requirements of applicable federal and
state securities laws.
5.2. Privileges of Stock Ownership. Grantee shall not have any of the
rights of a Shareholder with respect to any Shares until the Shares are
issued to Grantee.
6.0. REPRESENTATIONS AND WARRANTIES OF EWM.
EWM represents and warrants as follows.
6.1. Organization, Standing, and Qualification of the Company. The
Company is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada, has all necessary corporate powers to own
its assets and to carry on its business as now owned and operated by it.
6.2. Stock of The Company.
a. The authorized capital stock of the Company consists of
100,000,000 shares of $.001 par value common stock, of which approximately
6,800,000 shares of common stock are issued and outstanding; there are no
other classes of stock issued and outstanding.
b. All the Shares are validly issued, fully paid, and
nonassessable, and such shares have been so issued in full compliance with
all federal and state securities laws.
6.3. Title to Shares. The Shares are free and clear of all liens,
encumbrances, security agreements, equities, options, claims, charges, and
restrictions, other than the restrictions required by the Nevada Commissioner
of Corporations. The Company has full power to transfer the Shares to
Grantee without obtaining the consent or approval of any other person or
governmental authority, other than as may be required by the Commissioner of
Corporations.
6.4. Financial and Other Information. EWM has furnished to Grantee
various information regarding financial matters and business matters of EWM.
6.5. Absence of Specified Changes. Since February 14, 2002, the date of
execution of the Loan Agreement, except as disclosed in this Agreement, there
has not been any:
(1) Transaction by the Company except in the ordinary course of
business as conducted on that date;
(2) Material adverse change in the financial condition,
liabilities, assets, business, or prospects of the Company;
(3) Destruction, damage to, or loss of any asset of the Company
(whether or not covered by insurance) that materially and adversely affects
the financial condition, business, or prospects of the Company;
(4) Declaration, setting aside, or payment of a dividend or other
distribution in respect to the capital stock of the Company, or any direct or
indirect redemption, purchase, or other acquisition by the Company of any of
its shares of capital stock;
(5) Increase in the salary or other compensation payable or to
become payable by the Company to any of its officers, directors, or
employees, or the declaration, payment, or commitment or obligation of any
kind for the payment, by the Company, of a bonus or other additional salary
or compensation to any such person;
(6) Sale or transfer of any asset of the Company, except in the
ordinary course of business;
(7) Amendment or termination of any contract, agreement, or
license to which the Company is a party, except in the ordinary course of
business;
(8) Loan by the Company to any person or entity, or guaranty by
the Company of any loan;
(9) Commencement or notice or threat of commencement of any civil
litigation or any governmental proceeding against or investigation of the
Company;
(10) Labor trouble or claim of wrongful discharge or other
unlawful labor practice or action;
(11) Agreement by the Company to do any of the things
described in the preceding clauses (1) through (10); or
(12) Other event or condition of any character that has or
might reasonably have a material and adverse effect on the financial
condition, business, assets, liabilities, or prospects of the Company taken
as a whole.
7.0. MISCELLANEOUS MATTERS
7.1. Further Acts. Each Party to this Agreement agrees to perform any
further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
7.2. Intent to be Binding. This Agreement shall be binding on, and
shall inure to the benefit of the Parties to it and their respective heirs,
legal representatives, successors and assigns. The provisions of this
Agreement may be waived, altered, amended or repealed, in whole or in part,
only on the written consent of all Parties to this Agreement.
7.3. Interpretation. It is intended that each Paragraph of this
Agreement shall be viewed as separate and divisible, and in the event that
any Paragraph shall be held to be invalid, the remaining Paragraphs shall
continue to be in full force and effect. This Agreement shall be construed
in accordance with and governed by the laws of the State of California.
7.4. Notice. Any notice required to be given or delivered to EWM under
the terms of this Agreement shall be in writing and addressed to the
President of the Company at the address indicated below or to such other
address as such party may designate in writing from time to time to the
Grantee. Any notice required to be given or delivered to Grantee shall be in
writing and addressed to Grantee at the address indicated below or to such
other address as such party may designate in writing from time to time to the
Company. All notices shall be deemed to have been given or delivered upon:
personal delivery; three (3) days after deposit in the United Sates mail by
certified or registered mail (return receipt requested); one (1) business day
after deposit with any return receipt express courier (prepaid); or one (1)
business day after transmission by facsimile, telefax or telecopier.
7.5. Arbitration. Any controversy between EWM and the Grantee involving
the construction or application of any of the terms, covenants or conditions
of this Agreement shall, upon written request of one Party served on the
other Party, be submitted to binding arbitration, and such arbitration shall
be governed by the commercial provisions of the American Arbitration
Association. The Parties may agree upon one arbitrator, but in the event
that they cannot agree, there shall be three (3), one named in writing by
each of the Parties within five (5) days after demand for arbitration is
given and the third arbitrator will be appointed by the two named arbitrators
within five (5) days. Should either Party refuse or neglect to join in the
appointment of an arbitrator(s) or to furnish the arbitrator(s) with any
paper or information demanded, the arbitrator(s) are empowered by both
Parties to proceed ex parte. The Arbitrator(s) shall be required to apply
the laws of the State
of California.
7.6. Attorneys' Fees. In the event of any action, including
arbitration, for breach or to enforce or declare rights under any provisions
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs to be paid by the non-prevailing party.
7.7. Entire Agreement. The other documents referenced herein are
incorporated in this Agreement by reference. This Agreement constitutes the
entire agreement of the parties regarding the subject matter described in
this Agreement. This Agreement supersedes all prior agreements between the
Parties, and is intended as a complete and exclusive statement of the full
agreement between the Parties.
7.8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Parties.
7.9. Counterparts. This Agreement may be executed in one or more
counterparts, with the same effect as if the signatories executing the
several counterparts had executed one counterpart, provided, however, that
the several executed counterparts shall together have been signed by all the
Parties. All such executed counterparts shall together constitute one and
the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Stock Option
Agreement effective as of the date first set forth above.
eWorldMedia TV.,
a Nevada Corporation
By /s/ Xxxxxx X. Xxxxxxxx By /s/ Xxxxx Xxxx
Xxxxxx Xxxxxxxx, President Xxxxx Xxxx, Secretary
Address: 000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
First Reserve Corporation,
a California corporation
By /s/ Xxxxxx Xxxxxxxx By /s/ Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President Xxxxx Xxxxxxxx, Secretary
Address: 00 Xxx Xxxxx
Xxx Xxxxxx, XX 00000
ADDENDUM
This Addendum (the "Addendum") is entered into this 17th day of
October 2002, by and between eWorldMedia, Inc., a Nevada corporation
("eWorld"), and First Reserve Corporation, a California corporation ("First
Reserve").
RECITALS:
A. The parties entered into a Stock Option Agreement dated April 10, 2002
(the "Option Agreement"), whereby eWorld granted options to First Reserve
to purchase 1,000,000 shares of common stock of eWorld at an exercise price
of $0.20 per share.
B. The Option Agreement was entered into as partial consideration for two
loans from First Reserve to eWorld in the amount of $50,000, as evidence by
a note in such amount dated February 25, 2002, as extended from time to
time, and in the amount of $18,000, as evidenced by a note in such amount
dated February 14, 2002, as extended from time to time (collectively
hereinafter the "Notes").
C. On or about September 19, 2002, an assignee of First Reserve exercised
options to purchase 30,000 shares, leaving a total of 970,000 options owned
and held by First Reserve.
D. In accordance with various contractual obligations between the Company
and First Reserve and or Pacific Prime Asset Management the Company
acknowledges the following the items pending.
1. 250,000 shares are issuable to First Reserve Corporation pursuant
to the Independent Contractor's Agreement.
2. 500,000 shares are issuable to Pacific Prime Asset Management
Inc. pursuant to the Agreement for Purchase of Shares, dated
March 11, 2002.
3. $22,500 cash is payable to Xxxxxx Xxxxxxxx as finder's fee
pursuant to the Pacific Prime Asset Management share purchases.
4. $55,000 plus interest is due and payable to First Reserve
Corporation pursuant to the Note (and subsequent addendums) dated
February 25, 2002.
5. 18,000 plus interest is due and payable to First Reserve
Corporation pursuant to the Note (and subsequent addendums) dated
February 18, 2002.
E. In contemplation of a proposed transaction by eWorld, the result of
which would be to provide a public trading market for the outstanding
shares of eWorld, the parties are willing to enter into this agreement to
amend the terms of the Option Agreement.
NOW, THEREFORE, in consideration of the mutual terms and benefits set
forth in this Addendum, the parties hereto hereby agree and do amend the
Option Agreement as follows:
1. Section 3.1 of the Option Agreement shall provide that
notwithstanding any other provisions of the Option Agreement, if at any
time eWorld shall issue the shares as set forth in items D.1. and D.2.
above as well as fully repay the outstanding monies owed pursuant to items
D.3, D.4 and D.5 above, any and all remaining options shall immediately and
automatically terminate and expire without further notice.
2. All other provisions of the Option Agreement not otherwise
amended by this Addendum shall remain in effect.
IN WITNESS WHEREOF, the parties have executed this Addendum the day
and year first above written.
eWorldMedia, Inc.
By /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
First Reserve Corporation
By /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
