DATA CALL TECHNOLOGIES, INC. OPTION AGREEMENT
Exhibit 10.19
DATA
CALL TECHNOLOGIES, INC.
Date: January 29, 2007
To
Whom
It May Concern:
DATA
CALL TECHNOLOGIES, INC.
(the
“Company”), for value received, hereby agrees to issue common stock purchase
options entitling ▇▇▇▇▇
▇▇▇▇▇▇,
or
his
assigns (“Holder”
or “Option Holder”) to purchase an aggregate of 2,000,000 shares of the
Company’s common stock (“Common Stock”). Such option is evidenced by a option
certificate in the form attached hereto as Schedule 1 (such instrument being
hereinafter referred to as a “Option,” and such Option and all instruments
hereafter issued in replacement, substitution, combination or subdivision
thereof being hereinafter collectively referred to as the “Option”). The Option
is issued to Holder in consideration for services rendered to the Company as
the
Company’s Chief Executive Officer and Director. The number of shares of Common
Stock purchasable upon exercise of the Option is subject to adjustment as
provided in Section 5 below. The Option will be exercisable by the Option Holder
(as defined below) as to all or any lesser number of shares of Common Stock
covered thereby, at an initial purchase price of US $0.10 per share (the
“Purchase Price”), subject to adjustment as provided in Section 5 below, for the
exercise period defined in Section 3(a) below. This option evidences the grant
of this Option by the Company’s Board of Directors on January 17, 2007, and as
such, the effective date of this Option shall be January 17, 2007 (the
“Effective Date”).
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1.
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Representations
and Warranties.
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The
Company represents and warrants to you as follows:
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(a)
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Corporate
and Other Action.
The Company has all requisite power and authority (corporate and
other),
and has taken all necessary corporate action, to authorize, execute,
deliver and perform this Option Agreement, to execute, issue, sell
and
deliver the Option and a certificate or certificates evidencing the
Option, to authorize and reserve for issue and, upon payment from
time to
time of the Purchase Price, to issue, sell and deliver, the shares
of the
Common Stock issuable upon exercise of the Option (“Shares”), and to
perform all of its obligations under this Option Agreement and the
Option.
The Shares, when issued in accordance with this Option Agreement,
will be
duly authorized and validly issued and outstanding, fully paid and
nonassessable and free of all liens, claims, encumbrances and preemptive
rights. This Option Agreement and, when issued, each Option issued
pursuant hereto, has been or will be duly executed and delivered
by the
Company and is or will be a legal, valid and binding agreement of
the
Company, enforceable in accordance with its terms. No authorization,
approval, consent or other order of any governmental entity, regulatory
authority or other third party is required for such authorization,
execution, delivery, performance, issue or sale.
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(b)
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No
Violation.
The execution and delivery of this Option Agreement, the consummation
of
the transactions herein contemplated and the compliance with the
terms and
provisions of this Option Agreement and of the Option will not conflict
with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Articles of Incorporation
or Bylaws of the Company or any indenture, mortgage, deed of trust,
note,
bank loan, credit agreement, franchise, license, lease, permit, or
any
other agreement, understanding, instrument, judgment, decree, order,
statute, rule or regulation to which the Company is a party or by
which it
is bound.
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2.
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Transfer.
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(a)
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Transferability
of Option.
The Option Holder agrees that the Option is being acquired as an
investment and not with a view to distribution thereof and that;
the
Option may not be transferred, sold, assigned or hypothecated except
as
provided herein. The Option Holder further acknowledges that the
Option
may not be transferred, sold, assigned or hypothecated unless pursuant
to
a registration statement that has become effective under the Securities
Act of 1933, as amended (the “Act”), setting forth the terms of such
offering and other pertinent data with respect thereto, or unless
the
Option Holder has provided the Company with an acceptable opinion
from
acceptable counsel that such registration is not required. Certificates
representing the Option shall bear an appropriate legend. Notwithstanding
the foregoing, any request to transfer the Option must be accompanied
by
the Form of Assignment and Transfer attached hereto as Schedule 2
executed
by the Option Holder.
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(b)
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Registration
of Shares.
You agree not to make any sale or other disposition of the Shares
except
pursuant to a registration statement which has become effective under
the
Act, setting forth the terms of such offering, the underwriting discount
and commissions and any other pertinent data with respect thereto,
unless
you have provided the Company with an acceptable opinion of counsel
acceptable to the Company that such registration is not required.
Certificates representing the Shares, which are not registered as
provided
in this Section 2, shall bear an appropriate legend and be subject
to a
“stop-transfer” order.
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3.
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Exercise
of Option, Partial Exercise.
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(a)
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Exercise
Period.
This Option shall expire and all rights hereunder shall be extinguished
three (3) years from the Effective Date.
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(b)
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Exercise
in Full.
Subject to Section 3(a), a Option may be exercised in full by the
Option
Holder by surrender of the Option, with the Form of Subscription
attached
hereto as Schedule 3 executed by such Option Holder, to the Company,
accompanied by payment as determined by 3(d) below, in the amount
obtained
by multiplying the number of Shares represented by the respective
Option
by the Purchase Price per share (after giving effect to any adjustments
as
provided in Section 5 below).
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(c)
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Partial
Exercise.
Subject to Section 3(a), each Option may be exercised in part by
the
Option Holder by surrender of the Option, with the Form of Subscription
attached hereto as Schedule 3 at the end thereof duly executed by
such
Option Holder, in the manner and at the place provided in Section
3(b)
above, accompanied by payment as determined by 3(d) below, in amount
obtained by multiplying the number of Shares designated by the Option
Holder in the Form of Subscription attached hereto as Schedule 3
to the
Option by the Purchase Price per share (after giving effect to any
adjustments as provided in Section 5 below). Upon any such partial
exercise, the Company at its expense will forthwith issue and deliver
to
or upon the order of the Option Holder a new Option of like tenor,
in the
name of the Option Holder subject to Section 2(a), calling in the
aggregate for the purchase of the number of Shares equal to the number
of
such Shares called for on the face of the respective Option (after
giving
effect to any adjustment herein as provided in Section 5 below) minus
the
number of such Shares designated by the Option Holder in the
aforementioned form of subscription.
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(d)
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Payment
of Purchase Price.
The Purchase Price may be made by any of the following or a combination
thereof, at the election of the Option Holder:
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(i) In
cash; by wire transfer; by certified or cashier’s check, or money order;
or
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By
delivery to the Company of an exercise notice that requests the Company
to
issue to the Option Holder the
full number of shares as to which the Option is then
exercisable, less the number of shares that have
an aggregate Fair Market Value, as determined by the Board in
its
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sole
discretion at the time of exercise, equal to the aggregate
purchase price of the shares to which such exercise relates.
(This method of exercise allows the Option Holder to use a portion of
the shares issuable at the time of exercise as payment for the shares
to which the Option relates and is often referred to as a "cashless
exercise." For example, if the Option Holder elects to exercise 1,000
shares at an exercise price of $0.25 and the current Fair Market
Value of the shares on the date of exercise is $1.00, the Option
Holder can use 250 of the 1,000 shares at $1.00 per share to pay
for
the exercise of the entire Option (250 x $1.00 = $250.00) and
receive only the remaining 750
shares).
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For
purposes of this section, "Fair Market Value” shall be defined as the average
closing price of the Common Stock (if actual sales price information on any
trading day is not available, the closing bid price shall be used) for the
five
trading days prior to the date of exercise of this Option (the “Average Closing
Bid Price”), as reported by the National Association of Securities Dealers
Automated Quotation System (“NASDAQ”), or if the Common Stock is not traded on
NASDAQ, the Average Closing Bid Price in the over-the-counter market; provided,
however, that if the Common Stock is listed on a stock exchange, the Fair Market
Value shall be the Average Closing Bid Price on such exchange; and, provided
further, that if the Common Stock is not quoted or listed by any organization,
the fair value of the Common Stock, as determined by the Board of Directors
of
the Company, whose determination shall be conclusive, shall be used). In
no event shall the Fair Market Value of any share of Common Stock be less than
its par value.
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4.
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Delivery
of Stock Certificates on Exercise.
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Any
exercise of the Option pursuant to Section 3 shall be deemed to have been
effected immediately prior to the close of business on the date on which the
Option together with the Form of Subscription and the payment for the aggregate
Purchase Price shall have been received by the Company. At such time, the person
or persons in whose name or names any certificate or certificates representing
the Shares or Other Securities (as defined below) shall be issuable upon such
exercise shall be deemed to have become the holder or holders of record of
the
Shares or Other Securities so purchased. As soon as practicable after the
exercise of any Option in full or in part, and in any event within Ten (10)
business days thereafter, the Company at its expense (including the payment
by
it of any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Option Holder, a certificate or certificates
representing the number of fully paid and nonassessable shares of Common Stock
or Other Securities to which such Option Holder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Option Holder
would
otherwise be entitled, cash in an amount determined pursuant to Section 5(e).
The term “Other Securities” refers to any stock (other than Common Stock), other
securities or assets (including cash) of the Company or any other person
(corporate or otherwise) which the Option Holder at any time shall be entitled
to receive, or shall have received, upon the exercise of the Option, in lieu
of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 below or otherwise.
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5.
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Adjustment
of Purchase Price and Number of Shares
Purchasable.
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The
Purchase Price and the number of Shares are subject to adjustment from time
to
time as set forth in this Section 5.
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(a)
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In
case the Company shall at any time after the date of this Option
Agreement
(i) declare a dividend on the Common Stock in shares of its capital
stock,
(ii) subdivide the outstanding Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of Common Stock, or (iv) issue
any
shares of its capital stock by reclassification of the Common Stock
(including any such reclassification in connection with a consolidation
or
merger in which the Company is the continuing corporation), then
in each
case the Purchase Price, and the number and kind of Shares receivable
upon
exercise, in effect at the time of the record date for such dividend
or of
the effective date of such subdivision, combination, or reclassification
shall be proportionately adjusted so that the holder of any Option
exercised after such time shall be entitled to receive the aggregate
number and kind of Shares which, if such Option had been exercised
immediately prior to such record date, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. Such adjustment shall
be
made successively whenever any event listed above shall
occur.
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(b)
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No
adjustment in the Purchase Price shall be required if such adjustment
is
less than US $0.01; provided,
however,
that any adjustments which by reason of this subsection (b) are not
required to be made shall be carried forward and taken into account
in any
subsequent adjustment. All calculations under this Section 5 shall
be made
to the nearest cent or to the nearest one-thousandth of a share,
as the
case may be.
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(c)
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Upon
each adjustment of the Purchase Price as a result of the calculations
made
in subsection (a) of this Section 5, the Option outstanding prior
to the
making of the adjustment in the Purchase Price shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number
of
Shares (calculated to the nearest thousandth) obtained by (i) multiplying
the number of Shares purchasable upon exercise of the Option immediately
prior to adjustment of the number of Shares by the Purchase Price
in
effect prior to adjustment of the Purchase Price and (ii) dividing
the
product so obtained by the Purchase Price in effect immediately after
such
adjustment of the Purchase Price.
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6.
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Further
Covenants of the Company.
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(a)
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Dilution
or Impairments.
The Company will not, by amendment of its certificate of incorporation
or
through any reorganization, transfer of assets, consolidation, merger
or
dissolution, avoid or seek to avoid the observance or performance
of any
of the terms of the Option or of this Option Agreement, but will
at all
times in good faith assist in the carrying out of all such terms
and in
the taking of all such action as may be necessary or appropriate
in order
to protect the rights of the Option Holder against dilution or other
impairment. Without limiting the generality of the foregoing, the
Company:
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(i)
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shall
at all times reserve and keep available, solely for issuance and
delivery
upon the exercise of the Option, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of the Option
and
shall take all necessary actions to ensure that the par value per
share,
if any, of the Common Stock (or Other Securities) is at all times
equal to
or less than the then effective Purchase Price per share;
and
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(ii)
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will
take all such action as may be necessary or appropriate in order
that the
Company may validly and legally issue fully paid and nonassessable
shares
of Common Stock or Other Securities upon the exercise of the Option
from
time to time outstanding.
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(b)
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Title
to Stock.
All Shares delivered upon the exercise of the Option shall be validly
issued, fully paid and nonassessable; each Option Holder shall, upon
such
delivery, receive good and marketable title to the Shares, free and
clear
of all voting and other trust arrangements, liens, encumbrances,
equities
and claims whatsoever; and the Company shall have paid all taxes,
if any,
in respect of the issuance thereof.
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(c)
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Exchange
of Option.
Subject to Section 2(a) hereof, upon surrender for exchange of any
Option
to the Company, the Company at its expense will promptly issue and
deliver
to or upon the order of the holder thereof a new Option or like tenor,
in
the name of such holder, calling in the aggregate for the purchase
of the
number of Shares called for on the face of the Option surrendered.
The
Option and all rights thereunder are not transferable in whole or
in part
upon the books of the Company.
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(d)
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Replacement
of Option.
Upon receipt of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of any Option and, in the
case of
any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company
or, in
the case of any such mutilation, upon surrender and cancellation
of such
Option, the Company, at the expense of the Option Holder, will execute
and
deliver, in lieu thereof, a new Option of like tenor.
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(e)
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Fractional
Shares.
No fractional Shares are to be issued upon the exercise of any Option,
but
the Company shall round any fraction of a share to the nearest whole
Share.
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7.
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Miscellaneous.
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All
notices, certificates and other communications from or at the request of the
Company to any Option Holder shall be mailed by first class, registered or
certified mail, postage prepaid, to such address as may have been furnished
to
the Company in writing by such Option Holder, or, until an address is so
furnished, to the address of the last holder of such Option who has so furnished
an address to the Company, except as otherwise provided herein. This Option
Agreement and any of the terms hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Option Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Texas. The headings in this Option Agreement are
for
purposes of reference only and shall not limit or otherwise affect any of the
terms hereof. This Option Agreement, together with the forms of instruments
annexed hereto as schedules, constitutes the full and complete agreement of
the
parties hereto with respect to the subject matter hereof. For purposes of this
Option Agreement, a faxed signature shall constitute an original
signature.
IN
WITNESS WHEREOF, the Company has caused this Option Agreement to be executed
on
this 29th day of January 2007, to be effective as of January 17, 2007, in
Houston, Texas, by its proper corporate officers, thereunto duly
authorized.
DATA
CALL TECHNOLOGIES, INC.
By
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇,
Chief Financial Officer
SCHEDULE 1
OPTION
THIS
OPTION AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4
OF
SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THIS OPTION MAY NOT
BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT
OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS OPTION MUST BE ACQUIRED
FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE OPTION
NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR
AN
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
OPTION OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
To
Purchase 2,000,000 Shares
of
Common
Stock
DATA
CALL TECHNOLOGIES, INC.
This
certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Option, until the
expiration date, to purchase the number of shares (the “Shares”) set forth above
of the common stock (“Common Stock”), of DATA CALL TECHNOLOGIES, INC. (the
“Company”) from the Company at the purchase price per share hereafter set forth
below, on delivery of this Option to the Company with the exercise form duly
executed and payment of the purchase price (in cash or by certified or bank
cashier’s check payable to the order of the Company) for each Share purchased.
This Option is subject to the terms of the Option Agreement between the parties
thereto dated as of January 29, 2007, the terms of which are hereby incorporated
herein. Reference is hereby made to such Option Agreement for a further
statement of the rights of the holder of this Option, including, but not limited
to the expiration dates of this Option as described in Section 3 of the Option
Agreement.
Registered
Owner: ▇▇▇▇▇
▇▇▇▇▇▇ Date:
January
29, 2007, to be effective January 17, 2007
Purchase
Price
Per
Share: US
$0.10
Expiration
Date: January
17, 2010, 5:00 p.m. Central Standard Time.
WITNESS
the signature of the Company’s authorized officer:
DATA
CALL TECHNOLOGIES, INC.
By
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
SCHEDULE 2
FORM
OF ASSIGNMENT AND TRANSFER
For
value
received, the undersigned hereby sells, assigns and transfers unto
__________________________________ the right represented by the enclosed Option
to purchase _________________ shares of Common Stock of DATA CALL TECHNOLOGIES,
INC. to which the enclosed Option relates, and appoints
Attorney
to transfer such right on the books of DATA CALL TECHNOLOGIES, INC. with full
power of substitution in the premises.
The
undersigned represents and warrants that the transfer of the enclosed Option
is
permitted by the terms of the Option Agreement pursuant to which the enclosed
Option has been issued, and the transferee hereof, by his, her or its acceptance
of this Agreement, represents and warrants that he, she or it is familiar with
the terms of said Option Agreement and agrees to be bound by the terms thereof
with the same force and effect as if a signatory thereto.
Dated:______________
____________________________________________
(Signature
must conform in all respects to name of holder
as
specified on the face of the enclosed Option)
____________________________________________
(Printed
Name)
____________________________________________
(Address)
Signed
in
the presence of:
____________________________________
SCHEDULE
3
FORM
OF SUBSCRIPTION
(To
be
signed only upon exercise of Option)
To
DATA
CALL TECHNOLOGIES, INC.:
The
undersigned, the holder of the enclosed Option, hereby irrevocably elects to
exercise the purchase right represented by such Option for, and to purchase
thereunder, *
shares
of Common Stock of DATA CALL TECHNOLOGIES, INC. and herewith makes payment
of US
$_______________(or elects to pay for the exercise in shares of common stock
pursuant to Section 3(d)(ii) of the Option Agreement as evidenced by the
calculation below by checking this box o),
and
requests that the certificate or certificates for such shares be issued in
the
name of and delivered to the undersigned.
Dated:______________
____________________________________________
(Signature
must conform in all respects to name of holder
as
specified on the face of the enclosed Option)
____________________________________________
(Printed
Name)
____________________________________________
(Address)
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(*)
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Insert
here the number of shares called for on the face of the Option or,
in the
case of a partial exercise, the portion thereof as to which the Option
is
being exercised, in either case without making any adjustment for
additional Common Stock or any other stock or other securities or
property
which, pursuant to the adjustment provisions of the Option Agreement
pursuant to which the Option was granted, may be delivered upon
exercise.
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Calculation
pursuant to Section 3(d)(ii) of the Option Agreement
________________
= Total
Shares Exercised
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________________
=
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Purchase
Price (as
defined and adjusted in the Option Agreement)
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________________
=
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Fair
Market Value
-
the
average closing price of the Common Stock (if actual sales price
information on any trading day is not available, the closing bid
price
shall be used) for the five trading days prior to the date of exercise
of
this Option (the “Average Closing Bid Price”), as reported by the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”),
or if the Common Stock is not traded on NASDAQ, the Average Closing
Bid
Price in the over-the-counter market; provided, however, that if
the
Common Stock is listed on a stock exchange, the Fair Market Value
shall be
the Average Closing Bid Price on such exchange; and, provided further,
that if the Common Stock is not quoted or listed by any organization,
the
fair value of the Common Stock, as determined by the Board of Directors
of
the Company, whose determination shall be conclusive, shall be
used). In no event shall the Fair Market Value of any share of
Common Stock be less than its par
value.
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Total Shares Exercised x Purchase Price
_____________
= Shares to be Issued = Total Shares
Exercised
--------------------------------------------------
Fair
Market Value