OPTION AGREEMENT
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE ("BLUE SKY
LAWS"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND APPLICABLE BLUE SKY LAWS OR DELIVERY TO
THE COMPANY OF EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT AN EXEMPTION FROM
REGISTRATION THEREUNDER IS AVAILABLE.
This Option Agreement (the "Option") is made and entered into
as of October 27, 1999, by and between Electrosource, Inc., a
Delaware corporation (the "Company"), and Kamkorp Limited, a
United Kingdom Company (the "Purchaser").
The parties to this Option therefore agree as follows:
1. Grant of Option. This certifies that, for value received,
Purchaser, as the holder of this Option, is entitled to purchase
from the Company up to three million (3,000,000) shares (the
"Option Shares") of the Company's Common Stock, $1.00 par value
("Common Stock"), at an exercise price of One Dollar ($US 1.00)
per share, subject to the terms and conditions contained herein.
2. Exercise of Option.
(a) This Option may be exercised by the Purchaser as
follows:
(i) As to two million (2,000,000) Option Shares, from the
date hereof until 5:00 PM, Austin, Texas time on April 27, 2000;
(ii) As to five hundred thousand (500,000) Option Shares,
from the date hereof until 5:00 PM, Austin, Texas time on on
July 27, 2000; and
(iii) As to five hundred thousand (500,000) Option Shares,
from the date hereof until 5:00 PM, Austin, Texas time on on
October 27, 2000.
Each partial exercise shall be applied against the earliest
expiring tranche of options that remain exercisable at the date
of the contemplated exercise.
(b) In order to exercise this Option, the Purchaser shall
give written notice of exercise at the principal office of the
Company located at 0000 Xxxxxxxxxx 00 Xxxxx, Xxx Xxxxxx, Xxxxx,
and tender to the Company by certified or cashiers check or bank
wire transfer of funds a sum equal to the Exercise Price for the
shares of Common Stock to be purchased.
(c) As promptly as practicable, after receipt of such notice
and the tender of the Exercise Price for the Option Shares to be
purchased, the Company shall issue at its expense, and shall
deliver to The Purchaser at its principal office, or at such
other place as Purchaser reasonably may request, a certificate
or certificates for the number of shares of Common Stock
issuable upon the exercise in question. Such exercise shall be
deemed to have been effected immediately prior to the close of
business on the date (the "Exercise Date") on which the Company
shall have received such notice and the tender of the aggregate
Exercise Price for the Option Shares, and at such time the
Purchaser shall be deemed to have become the holder of record of
the shares represented thereby.
(d) The Company shall bear all sales, use, documentary,
stamp and other transfer taxes, if any, arising out of or by
reason of the transactions contemplated by this Option,
including without limitation the issuance of the Option and the
issuance of Common Stock on exercise of the Option.
3. No Rights as Stockholder. This Option shall not entitle the
Purchaser to any of the rights of a stockholder of the Company
prior to the exercise hereof.
4. Representations of the Company. The Company represents and
warrants to The Purchaser as of the date of this Option as
follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and is
qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to
qualify. The Company has all requisite corporate power and
authority and all material licenses, permits and authorizations
necessary to own and operate its properties, to carry on its
business as now conducted and as currently proposed to be
conducted and to carry out the transactions contemplated by this
Option.
(b) The execution, delivery and performance of this Option
have been duly authorized by the Company. This Option
constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except as such enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting
creditors' rights generally or by equitable principles. The
execution, delivery and performance by the Company of this
Option, the issuance of Common Stock upon exercise of this
Option, and the fulfillment of and compliance with the
respective terms hereof and thereof by the Company, do not and
will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under,
(iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's or any subsidiary's
capital stock or assets pursuant to, (iv) give any third party
the right to accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or
administrative or governmental body pursuant to, the Certificate
of Incorporation or Bylaws of the Company, or any law, statute,
rule or regulation to which the Company is subject, or any
agreement, instrument, order, judgment or decree to which the
Company is subject.
(c) All shares of Common Stock issuable upon exercise of
this Option will, when issued, be duly and validly issued, fully
paid and nonassessable and free from all taxes, liens and
charges.
5. Amendment. This Option may be amended only by a written
instrument executed by the Company and the Purchaser
6. Assignment. This Option may not be sold, transferred,
hypothecated or assigned without the express written consent of
the Company.
7. Governing Law; Venue. All questions concerning the
construction, validity and interpretations of this Option will
be governed by the internal laws, and not the law of conflicts,
of the State of Delaware. Each party waives the right to demand
a jury in any action, suit or proceeding arising pursuant to
this Option.
8. Termination; Survival. This Option shall terminate and
expire at 5:00 p.m., Austin, Texas time, on October 27, 2000, if
not exercised on or prior to such time.
IN WITNESS WHEREOF, the Company executed and delivered this
Option as of October 27, 1999.
ELECTROSOURCE, INC.
By: /s/ Xxxxx Xxx
Xxxxx Xxx, President and CEO
ACCEPTED:
KAMKORP, LTD.
By: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
