ex10-7.htm


    Exhibit
10.7

    


    OPTION
TO PURCHASE 6,000,000

    SHARES
OF COMMON STOCK

    


    Exercisable
Commencing June 18, 2008;

    Void
after June 18, 2009

    


    THIS
CERTIFIES that, for value received, Paul Egan with an address at Torre
Empresarial, AIRD, La Julia, Santo Domingo, Dominican Republic or his registered
assigns (“Optionholder”), is entitled, subject to the terms and conditions set
forth in this option (“Option”), to purchase from FreeStar Technology
Corporation, a Nevada Corporation (“Company”), Six Million (6,000,000) fully
paid, duly authorized and non assessable shares of free trading common stock
(“Shares”), $0.001 par value per share, of the Company (“Common Stock”), at any
time commencing as follows: From 18th
June,  2008 and continuing up to 5:00 p.m. Pacific Standard Time on
18th
of June 2009 (“Exercise Period”) at an exercise price of five cents ($0.05) per
Share, with half of such options having a net exercise or cashless exercise
provision, subject to adjustment pursuant to Section 8 hereof (the “Exercise
Price”).  This Option is not being issued under any of the Company’s
S-8 registered stock or option plans, and the securities issued hereunder shall
be “restricted securities” subject to Rule 144 promulgated under the Securities
Exchange Act of 1933, as amended, and Regulation S.

    


    This
Option is subject to the following provisions, terms and
conditions:

    


    1.           Holding
of Shares; Transfer.

     

    1.1           Transfer.  This
Option may be transferred by will, by the laws of descent and distribution, by
gift to members of the Optionholder’s immediate family and by instrument to an
inter vivos or testamentary trust under which the Option is to be passed to
beneficiaries upon the death of the Optionholder as settlor of the
trust.  The terms of the Option shall be binding upon the executors,
administrators, heirs and successors of the Grantee.

    


    1.2           Common Stock to be
Issued.  Upon valid exercise of the Options in accordance with
Section 2.1 and other applicable terms of this Option, Company shall instruct
its transfer agent to issue stock certificates in the name of Optionholder (or
its nominee) and in such denominations to be specified by Optionholder
representing the number of shares of Common Stock issuable upon such exercise,
as applicable.  The Company warrants that no instructions, other than
these instructions, have been given or will be given to the transfer agent and
that the Common Stock shall otherwise be freely transferable on the books and
records of the Company.  It shall be the Company’s responsibility to
take all necessary actions and to bear all such costs to issue the certificate
of Common Stock as provided herein, including the responsibility and cost for
delivery of an opinion letter to the transfer agent, if so
required.  The person in whose name the certificate of Common Stock is
to be registered shall be treated as a shareholder of record on and after the
exercise date. Upon surrender of any Option that is to be converted in part, the
Company shall issue to the Optionholder a new Option equal to the unconverted
amount, if so requested by Optionholder.

    


    2.           Terms
of Options: Exercise of Options.

    


    2.1.           Option
Exercise.  Subject to the terms of this Option, the
Optionholder shall have the right, during the Exercise Period, to purchase from
the Company up to the number of Shares which the Optionholder may at the time be
entitled to purchase pursuant to the terms of this Option, upon surrender to the
Company at its principal executive office the attached Election to
Exercise Option form duly filled in and signed, and upon payment to the Company
of the Exercise Price (as defined in and determined in accordance with the
provisions of Section 5 hereof) or as provided in Section 3(a)(i) hereof, for
the number of Shares with respect to which such Option is then
exercised.

    


    2.2.           Common Stock
Certificates.  Subject to the terms of this Option, upon such
surrender of this Option and payment of such Exercise Price as aforesaid, the
Company shall promptly issue and cause to be delivered to the Optionholder or to
such person or persons as the Optionholder may designate in writing, a
certificate or certificates (in such name or names as the Optionholder may
designate in writing) for the number of duly authorized, fully paid and
non-assessable whole Shares to be purchased upon the exercise of this Option,
and shall deliver to the Optionholder Common Stock or cash, to the extent
provided in Section 9 hereof, with respect to any fractional Shares otherwise
issuable upon such surrender.  Such certificate or certificates shall
be deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of such Shares as of the close of
business on the date of the surrender of this Option and payment of the Exercise
Price, notwithstanding that the certificates representing such Shares shall not
actually have been delivered or that the Share and Option transfer books of the
Company shall then be closed.  This Option shall be exercisable, at
the sole election of the Optionholder, either in full or from time to time in
part and, in the event that any certificate evidencing this Option (or any
portion thereof) is exercised prior to the Termination Date with respect to less
than all of the Shares specified therein at any time prior to the Termination
Date, a new certificate of like tenor evidencing the remaining portion of this
Option shall be issued by the Company, if so requested by the
Optionholder.

    


    2.3.           Election to
Exercise.  This Option shall be exercisable by delivering the
Election to Exercise Option notice to the Company through such delivery method
as shall be acceptable to the Company. The notice shall specify the election to
exercise the Option and the number of Shares in respect of which the Option is
being exercised, and shall be accompanied by payment of the Exercise Price. This
Option shall be deemed to be exercised upon receipt by the Company or the
designated broker of such notice accompanied by the Exercise Price.

    


    2.4.           Issuance of Common
Stock.   It shall be the Company’s responsibility to take
all necessary actions and to bear all such costs to issue the Certificate of
Common Stock as provided herein, including the responsibility and cost for
delivery of an opinion letter to the transfer agent, if so
required.  The person in whose name the certificate of Common Stock is
to be registered shall be treated as a shareholder of record on and after the
exercise date. Upon surrender of any Options that are to be converted in part,
the Company shall issue to the Optionholder new Options equal to the unconverted
amount, if so requested by Optionholder.

    


    2.5           Exercise
Default.  The Company shall at all times reserve and have
available all Common Stock necessary to meet exercise of the Options by all
Optionholders of the entire amount of Options then outstanding.  If,
at any time Optionholder submits an Election to Exercise Option and the Company
does not have sufficient authorized but unissued shares of freely tradeable
Common Stock available to effect, in full, a exercise of the Options (a
“Exercise Default”, the date of such default being referred to herein as the
“Exercise Default Date”), the Company shall issue to the Optionholder all of the
shares of Common Stock which are available, and the Election to Exercise Option
as to any Options requested to be converted but not converted (the “Unconverted
Options”), upon Optionholder’s sole option, may be deemed null and
void.  The Company shall provide notice of such Exercise Default
(“Notice of Exercise Default”) to all existing Optionholders of outstanding
Options, by facsimile, within five (5) business day of such
default  (with the original delivered by overnight or two day
courier), and the Optionholder shall give notice to the Company by facsimile
within five (5) business days of receipt of the original Notice of Exercise
Default (with the original delivered by overnight or two day courier) of its
election to either nullify or confirm the Election to Exercise
Option.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.6.           Shareholder of
Record.  Each person in whose name any certificate for shares
of Common Stock shall be issued shall for all purposes be deemed to have become
the holder of record of the Common Stock represented thereby on the date on
which the Option was surrendered and payment of the purchase price and any
applicable taxes was made, irrespective of date of issue or delivery of such
certificate, except that if the date of such surrender and payment is a date
when the Shares transfer books of the Company are closed, such person shall be
deemed to have become the holder of such Shares on the next succeeding date on
which such Share transfer books are open.  The Company shall not close
such Share transfer books at any one time for a period longer than seven (7)
days.

    


    2.7.           Payment of Exercise
Price.  This Option is exercisable in whole or in part at the
Exercise Price per share of Common Stock payable hereunder, payable in cash,
wire transfer or by cashier’s check or any combination thereof, or by “cashless
exercise.”  Upon surrender of the annexed Notice of Exercise duly
executed, together with payment of the Exercise Price for the shares of Common
Stock purchased, the Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased.

    


    3.           Payment
of Taxes.

    


    The
Company shall pay all documentary stamp taxes, if any, attributable to the
initial issuance of the Shares; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable, (a) with respect to any
secondary transfer of this Option or the Shares or (b) as a result of the
issuance of the Shares to any person other than the Optionholder, and the
Company shall not be required to issue or deliver any certificate for any Shares
unless and until the person requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have produced evidence that such tax
has been paid to the appropriate taxing authority.

    


    4.           Reservation
of Shares.

    


    The
issuance of the Options have been duly authorized by all required corporate
action on the part of the Company and when issued and delivered in accordance
with the terms hereof and thereof for the consideration expressed herein and
therein, will be duly and validly issued, fully paid, and non-assessable and
enforceable in accordance with their terms, subject to the laws of bankruptcy
and creditors’ rights generally.  The Company shall pay all taxes in
respect of the issue thereof.  As a condition precedent to the taking
of any action that would result in the effective purchase price per share of
Common Stock upon the exercise of this Option being less than the par value per
share (if such shares of Common Stock then have a par value), the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
in order that the Company may comply with all its obligations under this
Agreement with regard to the exercise of this Option.

    


    5.           Exercise
Price.

    


    During
the Exercise Period, the price per Share at which Shares shall be purchasable
upon the exercise of this Option shall be the Exercise Price, as set forth
above.

    


    6.           Adjustment
of Exercise Price and Number of Shares.

    


    The
number and kind of securities purchasable upon the exercise of this Option and
the Exercise Price shall be subject to adjustment from time to time after the
date hereof upon the happening of certain events, as follows:

    


    6.1           Adjustments.  The
number of Shares purchasable upon the exercise of this Option shall be subject
to adjustments as follows:

    


    (a)           In
case the Company shall (i) pay a dividend on Common Stock in Common Stock or
securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock, (ii) declare a dividend payable in cash on its
Common Stock and at substantially the same time offer its shareholders a right
to purchase new Common Stock (or securities convertible into, exchangeable for
or other entitling a holder thereof to receive Common Stock) from the proceeds
of such dividend (all Common Stock so issued shall be deemed to have been issued
as a stock dividend), (iii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iv) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (v)
issue by reclassification of its Common Stock any shares of Common Stock of the
Company, the number of shares of Common Stock issuable upon exercise of the
Options immediately prior thereto shall be adjusted so that the holders of the
Options shall be entitled to receive after the happening of any of the events
described above that number and kind of shares as the holders would have
received had such Options been converted immediately prior to the happening of
such event or any record date with respect thereto.  Any adjustment
made pursuant to this subdivision shall become effective immediately after the
close of business on the record date in the case of a stock dividend and shall
become effective immediately after the close of business on the effective date
in the case of a stock split, subdivision, combination or
reclassification.

    


    (b)           In
case the Company shall distribute, without receiving consideration therefor, to
all holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends other than as described in Section (8)(a)(ii)), then
in such case, the number of shares of Common Stock thereafter issuable upon
exercise of the Options shall be determined by multiplying the number of shares
of Common Stock theretofore issuable upon exercise of the Options, by a
fraction, of which the numerator shall be the closing bid price per share of
Common Stock on the record date for such distribution, and of which the
denominator shall be the closing bid price of the Common Stock less the then
fair value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets or evidences of
indebtedness so distributed per share of Common Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    (c)           Any
adjustment in the number of shares of Common Stock issuable hereunder otherwise
required to be made by this Section 8 will not have to be adjusted if such
adjustment would not require an increase or decrease in one percent (1%) or more
in the number of shares of Common Stock issuable upon exercise of the
Option.  No adjustment in the number of Shares purchasable upon
exercise of this Option will be made for the issuance of shares of capital stock
to directors, employees or independent Optionors pursuant to the Company’s or
any of its subsidiaries’ stock option, stock ownership or other benefit plans or
arrangements or trusts related thereto or for issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under such plan.

    


    (d)           Whenever
the number of shares of Common Stock issuable upon the exercise of the Options
is adjusted, as herein provided the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of shares
of Common Stock issuable upon the exercise of each share of the Options
immediately prior to such adjustment, and of which the denominator shall be the
number of shares of Common Stock issuable immediately thereafter.

    


    (e)           The
Company from time to time by action of its Board of Directors may decrease the
Exercise Price by any amount for any period of time if the period is at least
twenty (20) days, the decrease is irrevocable during the period and the Board of
Directors of the Company in its sole discretion shall have made a determination
that such decrease would be in the best interest of the Company, which
determination shall be conclusive.  Whenever the Exercise Price is
decreased pursuant to the preceding sentence, the Company shall mail to holders
of record of the Options a notice of the decrease at least fifteen (15) days
prior to the date the decreased Exercise Price takes effect, and such notice
shall state the decreased Exercise Price and the period it will be in
effect.

    


    6.2           Mergers,
Etc.   In the case of any (i) consolidation or merger of
the Company into any entity (other than a consolidation or merger that does not
result in any reclassification, exercise, exchange or cancellation of
outstanding shares of Common Stock of the Company), (ii) sale, transfer, lease
or conveyance of all or substantially all of the assets of the Company as an
entirety or substantially as an entirety, or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change in par
value, or from par value to no par value), in each case as a result of which
shares of Common Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination thereof), each
holder of Options then outstanding shall have the right thereafter to exercise
such Option only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale, transfer, capital
reorganization or reclassification by a holder of the number of shares of Common
Stock of the Company into which such Options would have been converted
immediately prior to such consolidation, merger, sale, transfer, capital
reorganization or reclassification, assuming such holder of Common Stock of the
Company (A) is not an entity with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (“constituent entity”), or an affiliate of
a constituent entity, and (B) failed to exercise his or her rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common
Stock of the Company held immediately prior to such consolidation, merger, sale
or transfer by other than a constituent entity or an affiliate thereof and in
respect of which such rights or election shall not have been exercised
(“non-electing share”), then for the purpose of this Section 8.2 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).  If necessary, appropriate adjustment shall be
made in the application of the provision set forth herein with respect to the
rights and interests thereafter of the holder of Options, to the end that the
provisions set forth herein shall thereafter correspondingly be made applicable,
as nearly as may reasonably be, in relation to any shares of stock or other
securities or property thereafter deliverable on the exercise of the
Options.  The above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers, capital reorganizations and
reclassifications.  The Company shall not effect any such
consolidation, merger, sale or transfer unless prior to or simultaneously with
the consummation thereof the successor company or entity (if other than the
Company) resulting from such consolidation, merger, sale or transfer assumes, by
written instrument, the obligation to deliver to the holder of Options such
shares of stock, securities or assets as, in accordance with the foregoing
provision, such holder may be entitled to receive under this Section
8.2.

    


    7.           Fractional
Shares.

    


    Any
fractional shares of Common Stock issuable upon exercise of the Options shall be
rounded to the nearest whole share or, at the election of the Company, the
Company shall pay the holder thereof an amount in cash equal to the closing bid
price thereof.  Whether or not fractional shares are issuable upon
exercise shall be determined on the basis of the total number of Options the
holder is at the time exercising and the number of shares of Common Stock
issuable upon such exercise.

    


    8.           No
Rights as Stockholders:  Notices to Optionholders.

    


    Nothing
contained in this Option shall be construed as conferring upon the Optionholder
or its transferees any rights as a stockholder of the Company, including the
right to vote, receive dividends, consent or receive notices as a stockholder
with respect to any meeting of stockholders for the election of directors of the
Company or any other matter.  If, however, at any time prior to the
end of the Exercise Period and prior to the exercise of this Option, any of the
following events shall occur:

    


    (a)           any
action which would require an adjustment pursuant to Section 8.1;
or

    


    (b)           a
dissolution, liquidation or winding up of the Company or any consolidation,
merger or sale of its property, assets and business as an entirety; then in any
one or more of said events, the Company shall give notice in writing of such
event to the Optionholder at least ten (10) days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the shareholders entitled to any relevant dividend, distribution, subscription
rights, or other rights or for the effective date of any dissolution,
liquidation of winding up or any merger, consolidation, or sale of substantially
all assets, but failure to mail or receive such notice or any defect therein or
in the mailing thereof shall not affect the validity of any such action
taken.  Such notice shall specify such record date or the effective
date, as the case may be.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.           Miscellaneous.

    


    9.1           Benefits of this
Agreement.  Nothing in this Option shall be construed to give
to any person or corporation other than the Company and the Optionholder any
legal or equitable right, remedy or claim under this Option, and this Option
shall be for the sole and exclusive benefit of the Company and the
Optionholder.

    


    9.2           Rights Cumulative;
Waivers. The rights of
each of the parties under this Option are cumulative.  The rights of
each of the parties hereunder shall not be capable of being waived or varied
other than by an express waiver or variation in writing.  Any failure
to exercise or any delay in exercising any of such rights shall not operate as a
waiver or variation of that or any other such right.  However, the
holders of a majority in principal amount of the Options may waive a default or
rescind the declaration of an Exercise Default and its consequences except for a
default in the exercise into Common Stock.  Any defective or partial
exercise of any of such rights shall not preclude any other or further exercise
of that or any other such right.  No act or course of conduct or
negotiation on the part of any party shall in any way preclude such party from
exercising any such right or constitute a suspension or any variation of any
such right.

    


    9.3           Benefit; Successors
Bound.  This Option and the terms, covenants, conditions,
provisions, obligations, undertakings, rights, and benefits hereof, shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
heirs, executors, administrators, representatives, successors, and permitted
assigns.

    


    9.4           Entire
Agreement.  This Option contains the entire agreement between
the parties with respect to the subject matter hereof.  There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representa­tions, oral or written, express or implied, between
them with respect to this Option or the matters described in this Option, except
as set forth in this Option.  Any such negotiations, promises, or
understandings shall not be used to interpret or constitute this
Option.

    


    9.5           Assignment.  This
Option may be assigned if the Assignment of Option, attached as Exhibit B to
this Option, is properly completed, executed and delivered to the
Company.

    


    9.6           Amendment.  This
Option may be amended only by an instrument in writing executed by the parties
hereto.

    


    9.7           Severability.  Each
part of this Option is intended to be severable.  In the event that
any provision of this Option is found by any court or other authority of
competent jurisdiction to be illegal or unenforceable, such provision shall be
severed or modified to the extent necessary to render it enforceable and as so
severed or modified, this Option shall continue in full force and
effect.

    


    9.8           Notices.  Notices
required or permitted to be given hereunder shall be in writing and shall be
deemed to be sufficiently given when personally delivered (by hand, by courier,
by telephone line facsimile transmission, receipt confirmed, or other means) or
sent by certified mail, return receipt requested, properly addressed and with
proper postage pre-paid (i) if to the Company, at its executive office (ii) if
to the Optionholder, at such address as the Optionholder shall have provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this section, and shall be effective, when
personally delivered, upon receipt and, when so sent by certified mail, four (4)
business days after deposit with the United States Postal Service.

    


    9.9           Governing Law.  This
Agreement shall be governed by the interpreted in accordance with the laws of
the State of Nevada without reference to its conflicts of laws rules or
principles.

    


    9.10         Forum Selection and Consent to
Jurisdiction.  Any litigation based thereon, or arising out of,
under, or in connection with, this agreement or any course of conduct, course of
dealing, statements (whether oral or written) or actions of the Company or
Optionholder shall be brought and maintained exclusively in the federal courts
of the State of Nevada without reference to its conflicts of laws rules or
principles.  The Company hereby expressly and irrevocably submits to
jurisdiction exclusively with the federal Courts of the State of Nevada for the
purpose of any such litigation as set forth above and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with such
litigation.  The Company further irrevocably consents to the service
of process by registered mail, postage prepaid, or by personal service within or
without the State of Nevada.  The Company hereby expressly and
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have or hereafter may have to the laying of venue of any such litigation
brought in any such court referred to above and any claim that any such
litigation has been brought in any inconvenient forum.  To the extent
that the Company has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service or notice,
attachment prior to judgment, attachment in aid of execution or otherwise) with
respect to itself or its property.  The Company hereby irrevocably
waives such immunity in respect of its obligations under this agreement and the
other loan documents.

    


    9.11           Waiver of Jury
Trial.  The Optionholder and the Company hereby knowingly,
voluntarily and intentionally waive any rights they may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under, or in
connection with, this agreement, or any course of conduct, course of dealing,
statements (whether oral or written) or actions of the Optionholder or the
Company.  The Company acknowledges and agrees that it has received
full and sufficient consideration for this provision and that this provision is
a material inducement for the Optionholder entering into this
agreement.

    


    9.12           Consents.  The
person signing this Option on behalf of the Company hereby represents and
warrants that he has the necessary power, consent and authority to execute and
deliver this Option on behalf of the Company.

    


    9.13           Further
Assurances.  In addition to the instruments and documents to be
made, executed and delivered pursuant to this Option, the parties hereto agree
to make, execute and deliver or cause to be made, executed and delivered, to the
requesting party such other instruments and to take such other actions as the
requesting party may reasonably require to carry out the terms of this Option
and the transactions contemplated hereby.

    


    9.14           Section
Headings.  The Section headings in this Option are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Option.

    


    9.15           Construction.  Unless
the context otherwise requires, when used herein, the singular shall be deemed
to include the plural, the plural shall be deemed to include each of the
singular, and pronouns of one or no gender shall be deemed to include the
equivalent pronoun of the other or no gender.

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have caused this Option to be duly executed, all as
of the day and year first above written.

    
 

    COMPANY:

    


    FREESTAR TECHNOLOGY
CORPORATION

    


    


    
      	
               
      

            	
              By:________________________________

            


    

    Ciaran
Egan, C.F.O

    


    


    


    


    


    


    By:________________________________

    


    Paul Egan