Document:

EXHIBIT 10.19

 

MOTHERS WORK, INC.

FORM OF NON-QUALIFIED STOCK
OPTION AGREEMENT

UNDER 1994 DIRECTOR STOCK OPTION
PLAN

 

Mothers Work, Inc., a
Delaware corporation (the “Company”), hereby grants to [insert name of
Optionee] (the “Optionee”) an option to purchase a total of [insert number of
shares] shares of Common Stock (the “Shares”) of the Company, at the price and
on the terms set forth herein, and in all respects subject to the terms and
provisions of the Company’s 1994 Director Stock Option Plan, as amended (the “Director
Plan”), which terms and provisions are hereby incorporated by reference
herein.  Unless the context herein
otherwise requires, the terms defined in the Director Plan shall have the same
meanings herein.

 

1.              Nature of the Option. 
This Option is intended to be nonstatutory stock option and is not
intended to be incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), or to otherwise qualify
for any special tax benefits to the Optionee.

 

2.              Date of Grant; Term of
Option.  This Option is granted as of [insert grant date] and
it may not be exercised later than [insert date that is 10 years after grant
date].

 

3.              Option Exercise Price. 
The Option exercise price is [insert exercise price] per Share.

 

4.    Exercise of Option.

 

(a)          Right to Exercise.  This Option
shall be exercisable at any time during its term in accordance with the terms
and provisions of the Director Plan.

 

(b)          Method of Exercise.  This Option shall be exercisable by
written notice which shall state the election to exercise this Option, the
number of Shares in respect to which this Option is being exercised and such
other representations and agreements as to the Optionee’s investment intent
with respect to such Shares as may be required by the Company hereunder or
pursuant to the provision of the Director Plan. 
Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company or
such other person as may be designated by the Company.  The written notice shall be accompanied by
payment of the purchase price.  Payment
of the purchase price shall be by check or such consideration and method of
payment authorized by the Board pursuant to the Director Plan.  The certificate or certificates for the
Shares as to which the Option shall be exercised shall be registered in the
name of the Optionee and shall be legended as required under the Director Plan
and/or applicable law.

 

(c)          Restrictions on Exercise.  This Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations.  As a condition to the exercise of this
Option, the Company may require the Optionee to make any representation and
warranty to the Company or otherwise enter into any stock purchase or other
agreement as may be required by any applicable law or regulation or as may
otherwise be reasonably requested by the Board.

 

1

 

5.               Investment Representations.  Unless the Shares have been registered under the Securities
Act of 1933, in connection with acquisition of this Option, the Optionee
represents and warrants as follows:

 

(a)           The Optionee is acquiring this Option, and upon
exercise of this Option, he will be acquiring the Shares for investment for his
own account, not as nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof.

 

(b)           The Optionee has a preexisting business or personal
relationship with the Company or one of its directors, officers or controlling
persons and by reason of his business or financial experience, has, and could
be reasonably assumed to have, the capacity to protect his interest in
connection with the acquisition of this Option and the Shares.

 

6.              Termination of Status as a
Director.  If the Optionee ceases to serve as a director
 of the Company for any reason other than
death or disability, the Optionee shall have the right to exercise this Option
at any time within the thirty (30) day period after the date of such
termination, subject to extension at the discretion of the Board.  If the Optionee ceases to serve as a director
due to death or disability, this option may be exercised at any time within one
(1) year after the date of death or termination of employment due to
disability, in the case of death, by the Optionee’s estate or by a person who
acquired the right to exercise this Option by bequest or inheritance, or, in
the case of disability, by the Optionee, but in any case only to the extent the
Optionee was entitled to exercise this Option at the date of such termination.
To the extent the Option is not exercised within the time specified herein,
this Option shall terminate. 
Notwithstanding the foregoing, this Option shall not be exercisable
after the expiration of the term set forth in Section 2 hereof.

 

7.              Nontransferability of
Option.  This Option may not be sold, pledged assigned, hypothecated,
gifted, transferred or disposed of in any manner either voluntarily or
involuntarily by the operation of law, other than by the will or by the laws of
descent or distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee.  Subject
to the foregoing and the terms of the Director Plan, the terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.

 

8.              Withholding.  The Company reserves the right to withhold, in
accordance with any applicable laws, from any consideration payable to Optionee
any taxes required to be withheld by federal, state or local law as a result of
the grant or exercise of this Option or the sale or other disposition of the
Shares issued upon exercise of this Option. 
If the amount of any consideration payable to the Optionee is
insufficient to pay such taxes or if no consideration is payable to the
Optionee, upon request of the Company, the Optionee (or such other person
entitled to exercise the Option pursuant to Section 6 hereof) shall pay to the
Company an amount sufficient for the Company to satisfy any federal, state or
local tax withholding requirements it may incur, as a result of the grant or
exercise of this Option or the sale or other disposition of the Shares issued
upon exercise  of this Option.

 

9.              The Director Plan.  This Option is subject to, and the Company and its
Optionee agree to be bound by, all of the terms and conditions of the Director
Plan as such Director Plan may be amended from time to time in accordance with
the terms thereof.  Pursuant to the
Director Plan, the Board of Directors of the Company is authorized to adopt
rules and regulations not inconsistent with the Director Plan as it shall deem
appropriate and proper.  A copy of the
Director Plan in its present form is available for inspection during business
hours by the Optionee or the persons entitled to exercise this Option at the
Company’s principal office. All questions of

 

2

 

the interpretation and application of the Director Plan and the Option
shall be determined by the Committee designated under the Director Plan, and
such determination shall be final, binding and conclusive.

 

10.       Entire Agreement.  This Agreement, together with the
Director Plan and other exhibits attached thereto or hereto, represents the
entire agreement between the parties.

 

11.       Governing Law.  This Agreement
shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania.

 

12.       Amendment.  Subject to the provisions of the Director
Plan, this Agreement may only be amended by writing signed by each of the
parties hereto.

 

 

 

	
  Date: [insert date of signature]

  	
  MOTHERS WORK, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

	
                   Name:

  	
  [insert name of optionee]

  
	
  Shares in Option:

  	
  [insert total shares subject to option]

  
	
  Exercise Price:

  	
  [insert exercise price]

  

 

3Exhibit 10.13

                    In the Matter of an Arbitration under the

                     Arbitrations Act, 1991, S.O. 1991, c.17

BETWEEN:

                          BESTNET COMMUNICATIONS CORP.                 Plaintiff

                                     - and -

                             SOFTALK INC. Defendant

                              MINUTES OF SETTLEMENT

WHEREAS on April 23, 1999 BestNet Communications Corp. ("BestNet") entered into
a License Agreement whereby Softalk Inc. ("Softalk") granted BestNet a licence
to market Softalk's intellectual property and Softalk transferred certain beta
accounts to BestNet and whereas the agreement was amended and restated on July
30, 1999 and further amended on October 25, 1999 (collectively hereinafter
"Licence Agreement")

AND WHEREAS on August 6, 1999 BestNet entered into a loan agreement with Softalk
whereby BestNet agreed to loan to Softalk up to US$2,000,000.00 (:Loan
Agreement")

AND WHEREAS on October 25, 1999 BestNet, Softalk and Interpretel (Canada) Inc.,
a wholly owned subsidiary of BestNet, entered into a Purchase Agreement whereby
BestNet would receive from Softalk certain products and beta accounts for use in
the transmission of voice, data and fax using Softalk's intellectual property as
contemplated under the License Agreement ("Purchase Agreement")

AND WHEREAS on June 14, 2000 BestNet and Softalk entered into a Product
Customization and Maintenance Agreement whereby Softalk would customize
proprietary software for BestNet and carry out certain Projects as defined in
the agreement ("Customization Agreement")

AND WHEREAS on September 12, 2002, Softalk turned over the monitoring and
maintenance of the BestNet network to BestNet;

<PAGE>

AND WHEREAS on September 13, 2002, BestNet commenced an application in the
Ontario Court of Justice (Commercial List) under Court File number
02-CV-235933CM1, and moved for, and was granted, an order requiring Softalk to
continue to monitor and maintain BestNet's network until arrangements for an
orderly transition of those services could be made and requiring the delivery of
documents necessary to assume the monitoring and maintenance of the BestNet
network;

AND WHEREAS BestNet commenced a claim in accordance with the Arbitrations Act
for certain relief as against Softalk;

AND WHEREAS thereafter, Softalk commenced a counterclaim in accordance with the
Arbitration Act for certain relief as against BestNet;

AND WHEREAS on consent of the parties hereto Mr. John Keefe was appointed as the
arbitrator to arbitrate the above noted claim and counterclaim;

AND WHEREAS Softalk brought a motion in the arbitration proceedings which came
before Mr. John Keefe on February 11, 2003 resulting in an interim interlocutory
order granting, inter alia, that all commissions due and owing from June 2002 by
BestNet to Softalk shall be paid forthwith into a separate trust account at
WeirFoulds LLP and which funds are not to be paid out other than by further
Order of Mr. John Keefe;

AND WHEREAS the parties wish to settle all outstanding issues between them,
including those arising out of the Licence Agreement, Purchase Agreement, Loan
Agreement and Customization Agreement, Court File No. 02-CV-235933CM1, the claim
and the counterclaim commenced under the Arbitrations Act, and the Order of Mr.
John Keefe dated February 11, 2003.

NOW THEREFORE, in consideration of the mutual covenants hereinafter described
and in consideration of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
hereby agree to settle all matters on the following terms and conditions:

1. The parties agree that the foregoing recitals are true.

Obligations under the Loan Agreement

2. BestNet agrees to release its claim against Softalk under the Loan Agreement
for payment of principal and interest in the amount of $1,589,768.21.

Obligations under the License Agreement

3. BestNet agrees to release its claim against Softalk for rights to source code
and future products as outlined and defined in the License Agreement. Further,
BestNet accepts the BestNet Network as delivered by Softalk on September 12,
2002.

<PAGE>

4. Softalk agrees to release its claim for payment on the outstanding invoices
as set out in paragraph 63(a) of the counterclaim.

5. Softalk agrees to accept payment of US $27,709.42 in full and final
satisfaction of its present and future claim to commissions under the Licence
Agreement. Such payment to be made forthwith following execution of these
Minutes of Settlement from the trust account at Weir Foulds LLP to Softalk Inc.

6. BestNet agrees to give up its claim to any future communications software
under the Amended and Restated Licence Agreement. BestNet shall be entitled to
continued commercial exclusivity and individual non-exclusivity over current
Softalk products in accordance with the terms of the Amended and Restated
License Agreement. For greater clarity, this shall include the following
products that make up the Bestnetcall network as delivered to BestNet on
September 12, 2002:

   (a)      WebCall
   (b)      Webconferencecall
   (c)      Desktop
   (d)      Pda call
   (e)      Callme

7. BestNet agrees to give up any and all claims to the SMS calling service as
developed by Softalk for Internet Operator.

Obligations under the Purchase Agreement

8. Softalk agrees to release to BestNet all of the outstanding warrants in
BestNet granted Softalk.

9. Bestnet acknowledges that Softalk currently has 3.8 million restricted shares
in BestNet. BestNet agrees to give an irrevocable direction to American Stock
Transfer to release these shares at the rate of 100,000 shares per month over 19
months, commencing September 1, 2003. Softalk shall have the right to accrue
unsold shares which remain unsold and to sell such shares thereafter at its
discretion.

10. The remaining 1.9 million shares held by Softalk will be returned by Softalk
to the BestNet Treasury.

11. On the successful enforcement of the US Patent No. 6,188,683 by BestNet and
upon settlement or other final determination of any enforcement proceeding,
Softalk is to receive 25% of the gross proceeds of any such infringement
recoveries or damages obtained by BestNet.

Housekeeping - Implementing Settlement

<PAGE>

12. The parties agree to not interfere in any way with the business and affairs
of each other.

13. Subject to the right of each party to seek enforcement of the provisions of
the Minutes of Settlement, neither party shall disparage the other.

14. The parties agree to take all reasonably necessary steps and to act in good
faith to achieve the goals of these Minutes of Settlement.

15. The parties agree to execute full and final releases, in the forms attached
hereto as Schedule "A" and "B". The parties agree that such releases shall
forthwith be delivered to each of WeirFoulds LLP and Morris Cooper, Esquire,
upon receipt of executed Minutes of Settlement.

16. The parties agree to execute a Consent Order dismissing the claim and
counterclaim in the Arbitration on a without cost basis, in the form attached
hereto as Schedule "C"

17. The parties agree to execute a Consent Order dismissing the application
commenced under Court file No. 02-CV-235933CM1, on a without cost basis, in the
form attached hereto as Schedule "D"

18. The parties agree that each party is entitled to the return of their
retainer deposit provided to Mr. John Keefe under the Arbitration.

19. These Minutes of Settlement shall be binding upon the parties hereto and
their respective parent, subsidiary, affiliate and related companies, heirs,
executors, administrators, successors, assigns, directors, officers, agents,
shareholders, employees and other legal representatives.

20. These Minutes of Settlement may be executed in counterparts and all such
counterparts shall for all purposes constitute one agreement, providing each of
the parties has executed at least one counterpart and each shall be deemed to be
an original, notwithstanding that the parties are not signatory to the same
counterpart. Signatures delivered by telecopier or facsimile shall be deemed to
be original signatures for the purpose of these Minutes of Settlement.

21. These Minutes may be amended only by a further agreement in writing.

DATED  this:      day of September, 2003    SOFTALK INC.

                                            ----------------------
                                            Per:  Christopher Lang

                                            I have authority to bind the Company

DATED this day of September, 2003 BESTNET COMMUNICATIONS CORP.

                                            -----------------------
                                            Per:  Robert A. Blanchard

                                            I have authority to bind the Company

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