Exhibit 10.3
IRREVOCABLE NON-QUALIFIED OPTION AGREEMENT
This Irrevocable Non-Qualified Option Agreement ("Agreement") is entered
into and is effective as of June 25, 1998, between NETIVATION, INC., a Nevada
corporation, (the "Corporation") and IDAHO CONSULTING INTERNATIONAL ("ICI"), an
Idaho sole proprietorship.
R E C I T A L S :
A. ICI has provided consulting services to the Corporation regarding the
Corporation's business and equity capitalization.
B. The Corporation has agreed to compensate ICI for those services by
granting ICI an option to purchase shares of the Corporation's stock.
C. The parties wish to now specify the terms and conditions relating to
the option to be granted to ICI.
NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth below, the above recitals (which are a material part hereof and
incorporated herein by reference), and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Corporation
and ICI agree as follows:
1. Grant of Option Rights.
The Corporation grants to ICI an option (the "Option Rights") to purchase
250,000 shares of the common stock of the Corporation (the "Option Shares")
under and subject to the terms and conditions of this Agreement.
2. Terms of Option Rights.
The Option Rights have vested in ICI, and may be exercised in accordance
with the terms of this Agreement.
3. Irrevocable and Assignable.
3.1 Subject to the express terms hereof, the Option Rights are
irrevocable by the Corporation and the Option Rights shall be freely assignable
or transferable by ICI as if the shares of stock were issued. Provided, however,
that ICI will not assign or transfer the Option Rights unless it does so at its
own expense and in accordance with applicable federal and state securities laws
and regulations.
3.2 ICI will be assigning one-half (1/2) of the Option Rights to
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields, Chtd. ("Xxxxxxx") for the legal
services Xxxxxxx has rendered to the Corporation and ICI. Xxxxxxx will receive
those rights in full substitution of ICI as if Xxxxxxx were a party to this
Agreement.
4. Exercise of Option.
ICI may exercise its Option Rights as to all or any part of its Option
Shares by delivering to the Corporation at its corporate headquarters, or such
other location as the Corporation may designate from time to time, written
notice of the intention to purchase Option Shares together with the sum of One
and One-Half Cents ($.015) per Option Share to be purchased (the "Option
Price"). Option Shares may not be purchased in increments of less than 1,000
shares, unless it is for the purchase of all the remaining Option Shares.
5. Issuance of Option Shares.
Upon receipt of the items and information specified in Section 4, the
Corporation shall issue the requisite Option Shares and record the issuance in
its stock register accordingly; provided, however, the Corporation shall have no
obligation to issue fractional shares; and provided further that stock
certificates issued shall bear any restrictive legend required by any agreement
among the Corporation's shareholders or by pertinent law.
6. Restrictive Legend.
This Agreement has not been registered under the Securities Act of 1933 or
any state securities act. Any transfer of this Agreement or the Option Rights
will be invalid unless a registration statement under said act(s) is in effect
as to such transfer or, in the opinion of the Corporation's counsel, such
registration is unnecessary in order for such transfer to comply with said
act(s).
The above legend may be required on any shares of stock issued pursuant to
this Agreement if the stock is deemed by the Corporation to be "restricted
securities" at the time of issuance.
7. Conditions Applying to the Option Shares.
7.1 If the Corporation subsequently authorizes or issues other classes
of common stock during the term hereof, the Option Shares not yet purchased by
ICI shall be the kind and amount of shares that ICI would have received had the
Option Rights been exercised immediately prior to such event.
7.2 The Option Shares shall be subject to adjustment from time to time
as follows:
7.2.1 If, at any time before the Option Rights are fully exercised
or expire, the total number of shares of the Corporation's common stock
outstanding is increased by a stock dividend or subdivision or split-up of such
outstanding shares, then concurrently with the effectiveness of such subdivision
or split-up, the number of Option Shares not yet purchased
by ICI (calculated to the nearest whole share) shall be proportionately
increased, and the purchase price per share shall be proportionately decreased.
7.2.2 If, at any time before the Option Rights are fully exercised
or expire, the total number of shares of the Corporation's common stock
outstanding is decreased by a combination or reverse stock split of such
outstanding shares, then concurrently with the effectiveness of such
combination, the number of Option Shares not yet purchased by ICI (calculated to
the nearest whole share) shall be proportionately decreased, and the purchase
price per share shall be proportionately increased.
7.3 In the event of any capital reorganization or any reclassification
of the Corporation's common stock (other than a change in par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or the consolidation or merger of the Corporation with or into another
corporation, or the sale or other disposition of all or substantially all the
properties and assets of the Corporation, then after such transaction ICI shall
be entitled to receive upon the exercise of the Option Rights, in lieu of each
Option Share, the kind and amount of shares of stock, other securities, money or
property receivable upon the consummation of such transaction by the holder of
one share of common stock of the Corporation issuable under this Agreement, as
if the Option Rights had been exercised immediately prior to such transaction.
8. Representations of ICI.
ICI represents that its principals are residents of the state of Idaho as
of the effective date of this Agreement. Except as otherwise expressly set
forth herein, ICI further represents that the Option Rights and any common stock
issued pursuant to those rights will be held for investment and not with an
intent to distribute or resell.
9. Repurchase of Stock by Corporation.
In the event that ICI terminates its consulting relationship under the
Letter of Understanding with the Corporation, either voluntary or involuntary,
ICI will have at its option, five years after such termination effective date,
and for a ninety (90) day period, the right to render any or all of its Option
Shares back to the Corporation for repurchase on the following formula basis:
The number of Option Shares x 1.25 x the last offering price per share in an
offering to unrelated parties. Said repurchase shall be on the following terms:
25% cash and a note for the remaining 75% payable monthly, interest and
principal, to ICI by the Corporation on a 5 year amortization at 0.75% interest
per month on the unpaid principal until paid in full.
10. Miscellaneous.
10.1 Entire Agreement.
This Agreement constitutes the entire Agreement between the parties and no
warranties, agreements or representations have been made or shall be binding
upon either party unless herein set forth. This Agreement supersedes all prior
agreements, written or oral, between the parties relating to the Corporation's
stock. This Agreement shall be binding upon the heirs, personal
representatives, successors and assigns of the respective parties hereto.
10.2 Applicable Law.
This Agreement shall be construed in accordance with the laws of the
state of Idaho.
10.3 Notices.
Any notices or other communications required or permitted under this
Agreement shall be sufficiently given if sent by certified mail, return receipt
requested, postage prepaid, addressed as follows:
Corporation:
Xxxxxxx Xxxxxx, President
NETIVATION, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxx x'Xxxxx, XX 00000
ICI:
Managing Principal
Idaho Consulting International
X.X. Xxx 0000
Xxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxxx
Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields
X.X. Xxx 000
Xxxxx, XX 00000-0000
or other address as shall be furnished in writing by any such party, and such
notice or communication shall be deemed to have been given as of the date so
mailed.
10.4 Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which counterparts collectively shall
constitute one instrument representing the Agreement among the parties.
10.5 Further Assurances and Assistance.
The parties shall execute such further documents necessary to carry out
the intent of this Agreement. The parties shall meet and in good faith attempt
to resolve any conflicts, disagreements or differences in interpretation
concerning this Agreement.
10.6 Arbitration.
The parties shall attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement, or the breach, termination,
or validity thereof (a "Dispute") promptly by negotiation among the parties. If
a Dispute has not been resolved within thirty (30) days by negotiation, the
parties shall attempt to mediate the dispute through the selection of a mutually
agreeable mediator who shall conduct such mediation in confidence. If a Dispute
is not resolved by mediation, then the Dispute shall be settled by arbitration
in accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes by a sole arbitrator. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. __ 1-16, and judgment
upon the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The place of arbitration shall be Boise, Idaho. Each party
shall be responsible for his own attorney's fees incurred during any phase of
dispute resolution.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
NETIVATION, INC.
By /s/ Xxxxxxx Xxxxxx
---------------------------
Xxxxxxx Xxxxxx, President
IDAHO CONSULTING INTERNATIONAL
By /s/ Xxxx Xxxxxx
---------------------------
Xxxx Xxxxxx, Managing Principal
ACKNOWLEDGMENT:
---------------
Xxxxxxx Xxxxxx hereby acknowledges the terms and conditions of this
Agreement and recognizes that the Option Rights assigned to Xxxxxxx Xxxxxx
pursuant to Section 3.2 will be subject to the terms and conditions of this
Agreement.
XXXXXXX XXXXXX
By /s/ Xxxx X. Street
--------------------------
Xxxx X. Street, President
AMENDMENT TO IRREVOCABLE NON-QUALIFIED OPTION AGREEMENT
This Amendment to the Irrevocable Non-Qualified Option Agreement is
made and entered into this 26th day of February, 1999, by and between
XXXXXXXXXX.XXX, INC., a Nevada corporation, (the "Corporation") and IDAHO
CONSULTING INTERNATIONAL ("ICI"), an Idaho sole proprietorship.
RECITALS
A. Corporation and ICI entered into an Irrevocable Non-Qualified Option
Agreement dated June 25, 1998 (the "Option Agreement") providing ICI an
option to purchase 250,000 shares of the common stock of the Corporation.
B. The parties wish to amend the Option Agreement to clarify their
understanding that the Corporation is required to repurchase Option Shares
only if the Corporation's common stock is not publicly traded and then only
during the ninety (90) day period commencing June 26, 2003.
AGREEMENT
NOW THEREFORE, in consideration of the above recitals, which are
incorporated herein by reference, and for other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
amend the Option Agreement as follows:
1. Section 9 of the Option Agreement shall be amended in its entirety to
read as follows:
9. REPURCHASE OF STOCK BY CORPORATION.
ICI will have at its option, during the ninety (90) day period
commencing June 26, 2003, the right to tender any or all of its Option
Shares back to the Corporation for repurchase on the following formula
basis: The number of Option Shares x 1.25 x the last offering price
per share in an offering to unrelated parties. Said repurchase shall
be on the following terms: 25% cash and a note for the remaining 75%
payable monthly, interest and principal, to ICI by the Corporation on
a 5 year amortization at 0.75% interest per month on the unpaid
principal until paid in full. Provided, however, this Section 9 shall
not apply if the Corporation's common stock is publicly traded on a
recognized securities exchange or national market system.
2. In all other respects, the Option Agreement and all its terms remain
unchanged.
IN WITNESS WHEREOF, the parties have executed this Amendment the day
and year first written above.
CORPORATION:
XXXXXXXXXX.XXX, INC.
By /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx, President
ICI:
IDAHO CONSULTING INTERNATIONAL
By /s/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx, Managing Principal
ACKNOWLEDGMENT:
Xxxxxxx Xxxxxx hereby acknowledges the Amendment to Irrevocable Non-
Qualified Option Agreement and recognizes that the Option Rights assigned to
Xxxxxxx Xxxxxx will be subject to this Amendment.
XXXXXXX XXXXXX XXXXXXX ROCK & FIELDS, CHTD.
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------
Vice-President of the Firm
ASSIGNMENT OF AGREEMENT
For value received, Idaho Consulting International ("ICI") hereby
conveys, assigns, and transfers to Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields,
Chtd., an Idaho professional services corporation ("MTBR&F"), one half of
Assignor's right, title, and interest in and to the Irrevocable Non-Qualified
Option Agreement (the "Agreement") dated as of June 25, 1998, between ICI and
Netivation, Inc., a Novada corporation, together with all rights accrued or to
accrue under the Agreement. A true and correct copy of the Agreement is attached
as Exhibit A. ICI represents and warrants that it is the sole owner of the
Agreement and the rights and interests thereunder, and that it is free to
transfer a one half interest in the Agreement to MTBR&F, and that there are no
liens, security interests or other encumbrances on said Agreement or the rights
and interests thereunder. The execution, delivery, and performance by ICI of
this Assignment has been duly validly authorized by all necessary action of ICI.
Dated: June 25, 1998.
Idaho Consulting International
BY: /s/ Xxxx Xxxxxx
------------------------------
Xxxx Xxxxxx, Managing Principal
Acknowledged and Accepted as of July 24, 1998.
Netivation, Inc.
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxxxx, President
