OPTION AGREEMENT
THIS AGREEMENT is made as of the 12th day of November, 1996, by and
between Preferred Telecom, Inc., a publicly owned Delaware corporation with
principal offices at 00000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
("Preferred") and Bisbro Investments Company Ltd., with an address of XX Xxx
0000, Xxxxx 00000, Xxxxxx city, Kuwait, and maintains offices in care of X.X.
Xxxxxxx & Company Incorporated, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx
Xxxxxxx, XX 00000 ("Bisbro"). Bisbro and Preferred are sometimes hereinafter
collectively referred to as the "Parties".
RECITALS
WHEREAS, in consideration for a Loan rendered by Bisbro to Preferred,
Preferred desires to grant an option ("Option") to Bisbro to purchase 600,000
shares of Preferred common stock under the terms and conditions as set forth in
this Option Agreement.
WHEREAS, in reliance upon the respective representations and warranties
of Preferred and the terms and conditions hereinafter set forth, Bisbro desires
to purchase, and Preferred desires to sell, under the terms set forth herein,
the number of shares (the "Shares") of common stock of Preferred (the "Company")
desired by Bisbro.
NOW, THEREFORE, in consideration of the premises and the respective
covenants hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. SALE AND PURCHASE OF SECURITIES. Preferred hereby grants Bisbro or
its assignee the Option to purchase up to 600,00 shares of Preferred common
stock, based upon an anticipated 2:1 reverse split of existing shares, for three
(3) years from the date of execution hereof, based upon an anticipated 2:1
reverse split of existing shares.
2. PURCHASE PRICE. Preferred agrees to sell to Bisbro the amount of
shares of Preferred common stock it desires, at a purchase price on the date of
purchase of fifty cents (US$.50) per share ("Purchase Price"), based upon an
anticipated 2:1 reverse split of existing shares. Funds paid as consideration
for said shares shall be transferred on a DVP basis or by any other means
acceptable to the parties, to the account of Preferred in compliance with
instructions to be provided at the time of purchase.
3. EXERCISE OF OPTION.
a. Upon exercise of the option as set forth above, Bisbro or
its assignee shall have "piggy back" registration rights, with regard to any
registration of an offering of Preferred securities. Preferred shall give notice
as promptly as possible of any such proposed registration to Bisbro, and will
include the shares of Bisbro upon the same terms of any offering, subject to any
requirements, limitations, and/or lockups of the underwriter, if applicable.
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b. Preferred will also timely cooperate with, approve, provide
and/or deliver opinions and all reasonable documentation, and execute as
necessary, any registration statements and documents customarily utilized in
connection with any sale of its securities by Bisbro (including any and all
amendments thereto including post-effective amendments), standby or other
underwriting or selling agreements, instructions to its transfer agent, sales or
transfer documentation reasonably requested by Bisbro or its assignee that shall
be necessary or required to implement Bisbro, or its assignee's sale, transfer,
pledge or hypothecation of the shares under the 33 Act, the securities or "blue
sky" laws of the various states or the rules of any governing body having
jurisdiction thereof.
c. Any registration, sale or transfer may include, but shall
not be limited to: (i) transactions made or consummated under or pursuant to a
Registration Statement under the 33 Act on Form X-0, X-0, X-0, or SB-2; (ii)
transactions made or consummated under or pursuant to an exemptions from
registration under the 33 Act under Regulation A, Rule 701, etc.; or (iii)
private or other sales of the shares and Warrants under the 33 Act or the rules
or regulations adopted thereunder including but not limited to Regulation S and
D. In this regard, the Preferred specifically covenants and agrees to prepare,
execute and deliver any and all documentation necessary to cause its securities
counsel o publish opinions and deliver written instructions to Preferred's
transfer agent within ten 910) business days from the date Bisbro or its
designee delivers written request to Preferred for the transfer, sale, and/or
removal of restrictive legend (where applicable) of or from the applicable
shares, options or warrants.
4. MISCELLANEOUS
a. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigned of the
parties hereto. Nothing in this Agreement, express or implied is intended to
confer upon any party, other than the parties hereto, and their respective
successors and assigned, any rights, remedies obligations or liabilities under
or by reason of this Agreement, except as expressly provided herein.
b. This Agreement shall be governed by and construed in
accordance with the laws of the state of Colorado.
c. This Agreement may be executed in two counterparts
via facsimile, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
d. The warranties and representations of Bisbro and Preferred
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the closing hereunder.
e. Except as herein provided, any provision of this
Agreement may be amended or waived only by a written instrument signed by the
parties hereto.
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f. In the event a dispute arises concerning enforcement
of the terms of this Agreement, the prevailing party shall be entitled to its
costs and attorney fees.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals as of the date and year first written above.
Preferred Telecom Inc.
By:/s/ G. Xxx Xxxxxx
--------------------------
G. Xxx Xxxxxx, Chairman, CEO
By:/s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx, President
Bisbro Investments Company, Ltd.
By:/s/ Xxxxx A-Rezaihan
------------------------
Xxxxx A-Rezaihan
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