OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is entered into effective the 23rd
day of December 1999, by and between GoCall, Inc. a Delaware Corporation with
principal offices located at 00 Xxxxx Xx/ X/. Xxxxxxxxx, Xxxxxxx, Xxxxxx, X0X
0X0 ("Company"), and Kipling Finance Co., a BVI corporation (the "Holder"), its
successors or assigns.
WHEREAS, the Company proposes to issue to Kipling options to purchase
shares of its common stock (the "Common Stock") in connection with the Company's
engagement of Kipling pursuant to the Fee Agreement of even date between the
Company and Kipling, incorporated by reference herein (the "Fee Agreement");
and,
WHEREAS, to induce Kipling to execute the First Amendment to the Fee
Agreement the Company hereby grants Kipling an option to purchase shares of the
Company's Common Stock subject to the terms and conditions set forth below,
NOW, THEREFORE, for and in consideration of the mutual promises
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions set forth below, Kipling and the Company agree as follows:
1. THE OPTION
The Company hereby grants to Kipling (hereinafter "Holder"), its
successors or assigns an option (the "Option") to acquire Ten Million
(l0,000,000) shares of the Company's Common Stock, with the right to
"piggy-back" on any registration, which is hereinafter referred to as
the "Option Shares"), at a purchase price of Fifty Cents ($0.50) per
share ("Option Price").
2. TERM AND EXERCISE OF OPTION
A. Term of Option. Subject to the terms of this Agreement,
Holder or assignee shall have the right to exercise the
Option in whole or in part, commencing the date hereof
through the close of business on December 23, 2001. The
Company acknowledges that Kipling's talents and services are
of a special, unique, unusual and extraordinary character
and are of particular and peculiar benefit and importance to
the Company for the purposes of locating potential
acquisition targets, mergers, introduction to entities with
capital, etc. However if Kipling shall fail to introduce to
Company an acceptable acquisition target (or reverse),
strategic partner or assets that have an asset value of Ten
Million ($10,000,000) Dollars(US$), within six (six) months
from the date hereof, then and in that event this agreement
shall be cancelled and deemed null, void and of no legal
efficacy.
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B. EXERCISE OF THE OPTION. The Option may be exercised upon
written notice to the Company at its principal office
setting out the number of Option Shares to be purchased,
together with payment of the Option Price.
C. ISSUANCE OF OPTION SHARES. Upon such notice of exercise and
payment of the Option Price, the Company shall issue and
cause to be delivered within five (5) business days
following the written order of Holder, or its successor as
provided for herein, and in such name or names as the Holder
may designate, a certificate or certificates for the number
of Option Shares so purchased. The rights of purchase
represented by the Option shall be exercisable, at the
election of the Holder thereof, either in full or from time
to time in part, and in the event the Option is exercised in
respect of less than all of the Option Shares purchasable on
such exercise at any time prior to the date of expiration
hereof, the remaining Option Shares shall continue to be
subject to adjustment as set forth in paragraph 4 hereof.
The Company irrevocably agrees to reconstitute the Option
Shares as provided herein.
3. RESERVATION OF OPTION SHARES
The Company shall at all times keep reserved and available, out of its
authorized Common Stock, such number of shares of Common Stock as
shall be sufficient to provide for the exercise of the rights
represented by this Agreement. The transfer agent for the Common Stock
and any successor transfer agent for any shares of the Company's
capital stock issuable upon the exercise of any of such rights of
purchase, will be irrevocably authorized and directed at all times to
reserve such number of shares as shall be requisite for such purpose.
The Company will cause a copy of this Agreement to be kept on file
with the transfer agent or its successors.
4. ADJUSTMENT OF OPTION SHARES
The number of Option Shares purchasable pursuant to this Agreement
shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
A. ADJUSTMENT FOR RECAPITALIZATION. Subject to paragraph 4.B
below, in the event the Company shall (a) subdivide its
outstanding shares of Common Stock, or (b) issue or convert
by a reclassification or recapitalization of its shares of
Common Stock into, for, or with other securities (a
"Recapitalization"), the number of Option Shares purchasable
hereunder immediately following such Recapitalization shall
be adjusted so that the Holder shall be entitled to receive
the kind and number of Option Shares or other securities of
the Company measured as a percentage of the total issued and
outstanding shares of the Company's Common Stock as of the
hereof which it would have been entitled to receive
immediately preceding such Recapitalization, had such Option
been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment
made pursuant to this paragraph shall be calculated and
effected taking into account the formula set forth in
paragraph 4.B below and shall become effective immediately
after the effective date of such event retroactive to the
effective date.
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B. ADJUSTMENT OF THE EXERCISE PRICE AND NUMBER OF OPTION
SHARES. In the event of any change in the Company's Common
Stock by reason of a reverse stock split, the number and the
Option Price of the shares subject to this Option shall be
changed or be adjusted pro rata to such change.
C. PRESERVATION OF PURCHASE RIGHTS UNDER CONSOLIDATION. Subject
to paragraph 4.B above, in case of any Recapitalization or
any other consolidation of the Company with or merger of the
Company into another corporation, or in case of any sale or
conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the
Company shall prior to the closing of such transaction,
cause such successor or purchasing corporation, as the case
may be, to acknowledge and accept responsibility for the
Company's obligations hereunder and to grant the Holder the
right thereafter upon payment of the Option Price to
purchase the kind and amount of shares and other securities
and property which he would have owned or have been entitled
to receive after the happening of such consolidation,
merger, sale or conveyance. The provisions of this paragraph
shall similarly apply to successive consolidations, mergers,
sales or conveyances.
D. NOTICE OF ADJUSTMENT. Whenever the number of Option Shares
purchasable hereunder is adjusted, as herein provided, the
Company shall mail by first class mail, postage prepaid, to
the Holder notice of such adjustment or adjustments, and
shall deliver to Holder setting forth the adjusted number of
Option Shares purchasable and a brief statement of the facts
requiring such adjustment, including the computation by
which such adjustment was made.
5. FAILURE TO DELIVER OPTION SHARES CONSTITUTES BREACH UNDER FEE
AGREEMENT
Failure by the Company, for any reason, to deliver the certificates
representing any shares purchased pursuant to this Option within the
five (5) business day period set forth in paragraph 2 above, or the
placement of a Stop Transfer order by the Company on any Option Shares
once issued, shall constitute a "Breach" under the Fee Agreement and,
for the purpose of determining the terms of this Agreement, shall
automatically toll the expiration of this Agreement for a period of
time equal to the delay in delivering the subject shares or term of
the Stop Transfer order.
6. ASSIGNMENT
The Option represented by this Agreement may be assigned or
transferred by Kipling to an affiliate or subsidiary, associated or
unrelated person or entity, or as the result of a corporate
reorganization or recapitalization. For the purpose of this Option the
term "Affiliate" shall be defined as a person or enterprise that
directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with the Company
otherwise, this Agreement and the rights hereunder shall not be
assigned by either party hereto.
7. COUNTERPARTS
A facsimile, telecopy or other reproduction of this instrument may be
executed by one or more parties hereto and such executed copy may
delivered by facsimile or similar instantaneous electronic
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transmission device pursuant to which the signature of or on behalf of
such party can be seen, and such execution and delivery shall be
considered valid, binding and effective for all purposes. At the
request of any party hereto, all parties agree to execute an original
of this instrument as well as any facsimile, telecopy or other
reproduction hereof.
8. FURTHER DOCUMENTATION
Each party hereto agrees to execute such additional instruments and
take such action as may be reasonably requested by the other party to
effect the transaction, or otherwise to carry out the intent and
purposes of this Agreement.
9. NOTICES
All notices and other communications hereunder shall be in writing and
shall be sent by prepaid first class mail to the parties at the
following addresses, as amended by the parties with written notice to
the other:
To Kipling Kipling Finance Co.
Xxxx 0, 0/Xx, Xxxxx X, Xxxxx Xxx. Xxxxxx
00 Xxx Xxxxxx Xx., Xxxxxxx Xxx
Xxxxxxx, Xxxx Xxxx
Telephone: (000) 0000-0000
Facsimile: (000) 0000-0000
To the Company: GoCall, Inc.
00 Xxxxx Xx., X.
Xxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11. GOVERNING LAW
This Agreement was negotiated, and shall be governed by the laws of
California notwithstanding any conflict-of-law provision to the
contrary.
12. ENTIRE AGREEMENT
This Agreement sets forth the entire understanding between the parties
hereto and no other prior written or oral statement or agreement shall
be recognized or enforced.
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13. SEVERABILITY
If a court of competent jurisdiction determines that any clause or
provision of this Agreement is invalid, illegal or unenforceable, the
other clauses and provisions of the Agreement shall remain in full
force and effect and the clauses and provision which are determined to
be void, illegal or unenforceable shall be limited so that they shall
remain in effect to the extent permissible by law.
14. AMENDMENT OR WAIVER
Every right and remedy provided herein shall be cumulative with every
other right and remedy, whether conferred herein, at law, or in
equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to
Closing, this Agreement may be amended by a writing signed by all
parties hereto.
15. HEADINGS
The section and subsection headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement written above.
Kipling Finance Co.
By: /s/ Xxxxxx X.X. Xxxx
----------------------
Xxxxxx X.X. Xxxx, Chairman
GoCall, Inc.
00 Xxxxx Xx. X.
Xxxxxxxxx, Xxxxxxx, Xxxxxx X00 0X0
By: /S/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx, CEO
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