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STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Agreement") is dated as of April 15, 1999
(the "Effective Date"), by and between GTC Telecom Corp., a Nevada corporation,
(the "Company"), and Xxxx X. Xxxxxxxxx, an individual ("Holder").
RECITALS
WHEREAS, the Company proposes to issue to Holder an option to acquire up to
526,316 shares (the "Shares") of the authorized and issued common stock of the
Company (the "Common Stock") in accordance with the terms of this Agreement; and
WHEREAS, in consideration of the promises and the mutual agreements herein
set forth, the parties hereto agree as follows:
AGREEMENT
SECTION 1. Issuance of Option. Upon execution of this Agreement, the
Company hereby issues Holder an option to acquire up to 526,316 Shares of the
Company's Common Stock, fully paid and non-assessable at an exercise price of
$0.475 per share (the "Exercise Price"), subject to the terms of this Agreement
(the "Option").
SECTION 2. Exercise of the Option. If and when Holder elects to
exercise this Option, the exercise must be for a minimum of 5,000 Shares. Upon
such exercise of the Option and payment of the Exercise Price, the Company shall
cause to be issued and delivered promptly to Holder a certificate for the Shares
issuable upon the exercise of the Option.
SECTION 3. Expiration of Option. Holder's option rights to acquire
any Shares not previously purchased by him shall expire on the date which is one
(1) year from the date hereof.
SECTION 4. Mutilated or Missing Option Certificates. In case the
original of this Agreement shall be mutilated, lost, stolen or destroyed, the
Company shall issue and deliver, in exchange and substitution for and upon
cancellation of this Agreement, a new Option of like tenor and representing an
equivalent right or interest.
SECTION 5. Reservation of Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury for the purpose of enabling it to satisfy its
obligation to issue Shares upon exercise of the Option, the full number of
Shares deliverable upon the exercise of the entire Option.
SECTION 6. Non-Assignable Option Rights. Holder's Option right to
acquire all or the balance of Shares that Holder has the right to acquire under
this Agreement is non-assignable by Holder.
SECTION 7. Certificates to Bear Language. The Shares and the
certificate or certificates evidencing any such Shares shall bear the following
legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993. THE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
Share Certificates can be issued, without such restrictive language or legend,
if the Option or the Shares are sold pursuant to an effective registration
statement under the Securities Act of 1933 or if the Company has received an
opinion from counsel, reasonably satisfactory to counsel for the Company, that
such restrictive language or legend is no longer required under the Act.
SECTION 8. Consolidation, Merger or Sale of the Company. If the
Company is a party to a consolidation, merger or transfer of assets which
reclassifies or changes its outstanding Common Stock, the successor corporation
(or corporation controlling the successor corporation or the Company, as the
case may be) shall by operation of law assume the Company's obligations under
this Agreement. Upon consummation of such transaction the Option shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of the Option would have owned immediately after
the consolidation, merger or transfer if the holder had exercised the Option
immediately before the effective date of such transaction.
SECTION 9. Company Transfer of Shares. The Company shall use its best
efforts to assure that the Shares shall be transferable under Rule 144
promulgated under the Securities Act of 1933, as amended, on that date in which
the Holder has held the Shares for the applicable holding period under Rule 144,
and shall use its best efforts at no cost or expense to Holder to cause its
transfer agent to transfer the Shares under such Rule 144 when the same is
sought by Holder.
SECTION 10. Notices to Company and Holder. Any notice or demand
authorized by this Agreement to be given or made by Holder or by the Company
shall be sufficiently given or made if sent by registered mail, postage prepaid,
return receipt requested to the principal office of the party to receive the
notice as provided below:
If to Company: GTC Telecom Corp.
0000 Xxxxxx Xxxxxx, Xxxxx X-0
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, President
With copy to: Law offices of M. Xxxxxxx Xxxxxx, Esq.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: M. Xxxxxxx Xxxxxx
If to Holder: Xxxx X. Xxxxxxxxx
_________________________
_________________________
_________________________
SECTION 11. Supplements and Amendments. This Agreement may only be
amended with the express written consent of Holder and the Company.
SECTION 12. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or Holder shall bind and inure to
the benefit of their respective successor and assigns hereunder.
SECTION 13. Counterparts. This Agreement may be executed in one or more
counter parts, such that when integrated together they will form a binding
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.
GTC TELECOM CORP.
/s/ S. Xxxx Xxxxxx
By: S. Xxxx Xxxxxx
Its: President
/s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
