TEXHOMA ENERGY, INC. OPTION AGREEMENT
Exhibit 10.31
TEXHOMA
ENERGY, INC.
Date: August
22, 2007
To
Whom
It May Concern:
TEXHOMA
ENERGY, INC. (the “Company”), for value received, hereby agrees to
issue common stock purchase options entitling Valeska
Energy Corp.,
or its assigns (“Holder”
or “Option Holder”) to purchase an aggregate of 60,000,000 shares of the
Company’s common stock (“Common Stock”). Such option is evidenced by
an option certificate in the form attached hereto as Schedule 1 (such instrument
being hereinafter referred to as an “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 in connection with a Management Services
Agreement, and more specially, pursuant to the terms and conditions of the
Second Amendment to Management Services Agreement, pursuant to which Holder
has
agreed to perform management services on the Company’s behalf. 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 $0.02 per share, which represents greater than 110% of the trading price
of the Company’s common stock on the Pinksheets on the Effective Date (as
defined below) of the Option (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 August 21, 2007, and as such, the effective
date of this Option shall be August 21, 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) 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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(ii) 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 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 or Pinksheets trading 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.
(a) 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 $0.001; 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 22nd day of August 2007, to be effective as of August 21, 2007, in Dallas
Texas, by its proper corporate officers, thereunto duly authorized.
TEXHOMA
ENERGY, INC.
By
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇
Chief Executive Officer
SCHEDULE1
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 60,000,000 Shares
of
Common
Stock
TEXHOMA
ENERGY, 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 TEXHOMA ENERGY, 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 August 22, 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: Valeska Energy
Corp. Date:
August 22, 2007, to be effective August 21,
2007
Purchase
Price
Per
Share: US
$0.02
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Expiration
Date:
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August
21, 2010, 5:00 p.m. Central Standard
Time.
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WITNESS
the signature of the Company’s authorized officer:
TEXHOMA
ENERGY, INC.
By
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
SCHEDULE2
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 TEXHOMA ENERGY, INC.
to
which the enclosed Option relates, and appoints Attorney to transfer
such right on the books of TEXHOMA ENERGY, 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
TEXHOMA ENERGY, 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 TEXHOMA ENERGY, 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
________________
= Purchase Price
(as defined and adjusted in the Option Agreement)
________________
= 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 or the Pinksheets; 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.
Total
Shares Exercised x Purchase Price
_____________
= Shares to be
Issued = Total Shares
Exercised --------------------------------------------------
Fair
Market Value