Document:

soho-ex1024_24.htm

EXHIBIT 10.24

SHARE EXCHANGE AGREEMENT

This Share Exchange Agreement (the “Agreement”) is made and entered into effective as of December 9, 2021 (the "Effective Date"), by and between Sotherly Hotels Inc., a Maryland Corporation (“Sotherly” or the “Company”), and Palogic Value Fund, L.P., a Delaware limited partnership (“Palogic”).

RECITALS

A.Palogic approached Sotherly about its desire to exchange certain shares of 

7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“SOHOO”) of Sotherly, held by it for shares of Common Stock, par value $0.01 per share (“Common Stock”), of the Company.

B.The Company is willing to effect such an exchange on the terms and conditions set forth in this Agreement.

AGREEMENT

The parties hereby agree as follows:

1.Exchange.  Palogic hereby agrees to (i) 75,000 shares of SOHOO (the “Palogic Shares”) to the Company in exchange for 620,919 shares of Common Stock of the Company (the “Company Shares”), as determined in accordance with Schedule A attached hereto and incorporated herein by reference and (ii) waive any and all rights it may have to receipt of declared and unpaid dividends and any accrued and unpaid dividends payable in respect of the Palogic Shares.  The transfer of the Palogic Shares to the Company and the waiver of Palogic’s interest in the dividends and the issuance of the Company Shares to Palogic is referred to as the “Exchange” and such Exchange shall occur on the Closing Date (as defined herein), as set forth in Section 2 of this Agreement.  The parties agree and acknowledge that the foregoing economic terms of the Exchange were determined based upon arm’s-length negotiations, and that no additional consideration, financial or otherwise, is or will be provided by either party in consideration of the Exchange of the Palogic Shares and Company Shares described herein.

	
2.
	
Closing; Delivery.  The Exchange shall occur simultaneously through the transfer of the Palogic Shares by Palogic to the Company and the issuance of the Company Shares by the Company to Palogic on the Closing Date.  On the Closing Date, (a) Palogic shall direct the Depository Trust Company (“DTC”) participant through which Palogic holds its interest in the Palogic Shares to submit instructions through DTC’s Deposits and Withdrawal at Custodian (“DWAC”) program to the Company’s transfer agent and registrar, American Stock Transfer & Trust Company, LLC (the “Transfer Agent”), to transfer all of the Palogic Shares to the Company, free and clear of all liens and encumbrances, and (b) the Company shall instruct the Transfer Agent, upon receipt of the Palogic Shares, to instruct the DTC to credit the account of Palogic at Palogic’s DTC participant with the Company Shares, free and clear of all liens and encumbrances. The Company Shares shall be issued free and clear of any restrictive legends under applicable securities laws and other restrictions on transfer.  The closing of the Exchange 

 

 

		
shall occur no later than three (3) business days following the Effective Date (the “Closing Date”).  

The Company will not receive any cash proceeds as a result of the Exchange. The issuance of the Company Shares will be made by the Company pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), contained in Section 3(a)(9) of such act on the basis that the Exchange constitutes an exchange with existing holders of the Company’s securities, and no commission or other remuneration was or will be paid to any party in connection with the Exchange, including for soliciting such Exchange. 

	
3.
	
Representations, Warranties and Acknowledgements of Palogic.  In connection with the Exchange, Palogic represents, warrants and agrees that:

	
(a)
	
Existence, Power and Authorization.  Palogic is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware.  Palogic has full limited partnership power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery by Palogic of this Agreement, the performance by Palogic of its obligations hereunder and the consummation by Palogic of the transactions contemplated hereby have been duly authorized by all requisite limited partnership action.  

	
(b)
	
Execution and Delivery; Enforceability.  This Agreement has been duly executed and delivered by Palogic and constitutes the valid and legally binding obligation of Palogic, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles (whether considered in a proceeding at law or in equity).

	
(c)
	
Title to Shares.  Palogic has valid marketable title to the Palogic Shares, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than pursuant to this Agreement; and upon delivery of the Palogic Shares hereunder in the Exchange, the Company will obtain valid marketable title to the Palogic Shares, free and clear of any pledge, lien, security interest pertaining to Palogic’s property, encumbrance, claim or equitable interest, or any liability to or claims of any creditor or beneficiary of Palogic.

	
(d)
	
Securities Act Exemption. Neither Palogic nor anyone acting on behalf of Palogic has received any commission or remuneration directly or indirectly in connection with or in order to solicit or facilitate the Exchange. Palogic understands that the Exchange contemplated hereby is intended to be exempt from registration by virtue of Section 3(a)(9) of the Securities Act. Palogic further understands that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Palogic set forth herein for purposes of qualifying for the exemption under Section 3(a)(9) of the Securities Act as well as qualifying for exemptions under applicable state securities laws.

	
(e)
	
Non-Affiliate Status.  Neither Palogic nor its general partner, nor any entity owned or controlled by Palogic or its general partner, nor any of their respective shareholders, limited 

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partners, directors, officers or affiliates, presently is, or in the prior six (6) months has been an “Affiliate” of the Company as that term is used in Rule 144 under the Securities Act. 

	
(f)
	
Non-Distribution.  Palogic is not acquiring the Common Shares with a view to a distribution thereof as that term is used in Section 2(a)(11) of the Securities Act in a manner which would require registration under the Securities Act or any state securities laws.

	
(g)
	
Independent Analysis.  Palogic has made its own decision to engage in the Exchange based on its own due diligence review and independent analysis, which includes a review of the filings and disclosures made by the Company with the Securities and Exchange Commission and which Palogic deems to have been sufficient.  The Company did not recommend or encourage Palogic participate in the Exchange or provide any advice to Palogic.

	
(h)
	
No Legal, Tax, or Investment Advice.  Palogic has had an opportunity to review the federal, state, local, and foreign tax consequences to it of the Exchange.  Palogic understands that nothing in this Agreement or any other materials presented to Palogic in connection with the Exchange constitutes legal, tax, or investment advice.  Palogic has consulted such legal, tax, and investment advisors as Palogic, in its sole discretion, has deemed necessary or appropriate in connection with the Exchange.  Palogic acknowledges that Palogic shall be responsible for its own tax liability, if any, that may arise as a result of the Exchange.

	
(i)
	
Sophistication; Investment Intent. Palogic, through its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks associated with the Exchange, and has so evaluated the related merits and risks. Palogic is able to bear the economic risk of the Exchange and is able to bear a complete loss of its investment.  

	
4.
	
Representations and Warranties of the Company.  In connection with the Exchange, the Company represents and warrants that: 

	
(a) 
	
Execution and Delivery; Enforceability.  This Agreement has been duly executed and delivered by David R. Folsom, President and Chief Executive Officer of the Company and constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles (whether considered in a proceeding at law or in equity).

	
(b)
	
Title to Shares.  Palogic will obtain valid marketable title to the Company Shares, free and clear of any pledge, lien, security interest pertaining to the Company’s property, encumbrance, claim or equitable interest, or any liability to or claims of any creditor or beneficiary of the Company.

	
(c)
	
Information About the Company.  The Company has received all information about the Exchange it determined was necessary or appropriate to enable it to evaluate its decision to effect the Exchange. The Company acknowledges that none of such information has been provided directly or indirectly by Palogic and that they have in no event relied upon any information provided by Palogic.  The number of the Company Shares to be received in the Exchange was negotiated by Palogic and the Company.

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(d)
	
No Legal, Tax, or Investment Advice.  The Company has had an opportunity to review the federal, state, local, and foreign tax consequences to it of the Exchange.  The Company understands that nothing in this Agreement or any other materials presented to the Company in connection with the Exchange constitutes legal, tax, or investment advice.  The Company has consulted such legal, tax, and investment advisors as the Company, in its sole discretion, have deemed necessary or appropriate in connection with the Exchange.  The Company acknowledges that it is responsible for its own tax liability, if any, that may arise as a result of the Exchange.

(e)No Material Non-Public Information.  Other than with respect to the Exchange, neither the Company nor any person acting on its behalf has provided to Palogic any information that is not publicly available or would be considered material non-public Information.  The Company acknowledges that Palogic will be relying on the foregoing representation and warranty in effecting transactions in the Company’s securities. 

 5.Legends.  The issuance of the shares of the Company Shares will be made by the Company pursuant to the exemption from the registration requirements of Section 3(a)(9) of the Securities Act and will contain no restrictive resale legend.  The Company shall cause, at its own expense, its legal counsel to deliver any opinions reasonably required by the Company’s transfer agent for the issuance of the Company Shares free from such restrictive legends. 

6.Miscellaneous.

(a)Governing Law.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.  Palogic and the Company hereby submit to the exclusive jurisdiction of the courts of the State of Delaware and the federal district court sitting in the State of Delaware having subject matter jurisdiction with respect to any and all disputes arising under this Agreement or otherwise in connection with the Exchange.

 

	
(b)
	
Entire Agreement; Amendment.  Except as expressly set forth herein, this Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.

	
(c)
	
Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by fax (as evidenced by sender's confirmation receipt) or two business days after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party's address as set forth below or as subsequently modified by written notice.

	
(d)
	
Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

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(e)
	
Further Actions.  The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

	
(f)
	
Survival.  The representations, warranties, covenants and agreements made herein shall survive the closing of the transactions contemplated hereby.

	
(g)
	
Expenses.  Palogic and the Company shall each bear their own expenses and legal fees incurred in preparation of this Agreement and effecting the transaction contemplated hereby.

	
(h)
	
Third Party Beneficiaries.  This Agreement is not intended to, and shall not, confer any rights or remedies upon any person other than the Company and Palogic and their respective successors and permitted assigns.

	
(i)
	
Successors and Assigns.  The respective rights and obligations of Palogic and the Company under this Agreement may be assigned only with the prior written consent of the other.

	
(j)
	
Announcement.  The Company shall file a Current Report on Form 8-K describing the material terms of this Agreement and attaching this Agreement as an exhibit by not later than 5:30 p.m. (local time in New York City, New York) on the Effective Date.  Following the filing of such Current Report on Form 8-K, the Company shall be deemed to have publicly disclosed any material, non-public information that may have been provided to Palogic.   

[Signature Page Follows]

 

 

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The parties have executed this Share Exchange Agreement as of the date first set forth above.

 

	
	
PALOGIC:

 

PALOGIC VALUE FUND, L.P.

 

By:Palogic Value Management, L.P., its general

partner

By:Palogic Capital Management, LLC, its general partner

 

By:___/s/ Ryan Vardeman________________

Ryan Vardeman, Member

 

 

Address:  5310 Harvest Hill Road, Suite 110

Dallas, TX 75230

 

 

 

	
	
COMPANY:

 

SOTHERLY HOTELS INC.

 

 

By:___/s/ David R. Folsom_____________

David R. Folsom

President and Chief Executive Officer

 

 

Address: 306 South Henry Street, Suite 100

Williamsburg , Virginia 23185

 

 

 

 

SCHEDULE A

The number of Company Shares to be issued to Palogic in the Exchange shall be determined as follows as of the Effective Date:

 

	
 
	
1.
	
The average of the average of the closing price per share for each of the SOHOB, SOHOO and SOHON over the thirty trading days prior to the Effective Date shall be the “Palogic Share Price”. 

	
 
	
2.
	
The sum of the Palogic Share Price and $3.50 (representing the average per share accrued and unpaid dividends on the three classes of Sotherly’s preferred stock) shall be the “Palogic Price”.

	
 
	
3.
	
The average closing price per share for the Common Stock over the thirty trading days prior to the Effective Date multiplied by 0.90 shall be the “Discounted Soho Share Price”.

	
 
	
4.
	
The Palogic Price divided by the Discounted Soho Share Price shall be the “Exchange Ratio”. 

	
 
	
5.
	
The aggregate number of shares of Common Stock to be issued to Palogic in connection with the Exchange shall equal the product of the number of Palogic Shares multiplied by the Exchange Ratio, rounded to the nearest whole number.

	
 
	
6.
	
No fractional shares or scrip representing fractional shares shall be issued in connection with the Exchange.

 

Attached as an exhibit to this Schedule A is the calculation of the number of Company Shares, as agreed by the parties.Exhibit
10.1

 

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”) is made effective as of this 9th day of December, 2021 (“Grant
Date”), between Harold E. Hutchins (“Optionee”) and Webstar Technology Group, Inc., a Wyoming corporation (the “Company”).

 

WHEREAS,
on the Grant Date, the Company grants the Optionee a non-qualified stock option (this “Option”) to acquire 2,500,000 shares
(the “Option Shares”) of the Company’s common stock, par value $0.0001 per share (the “Shares”), as set
forth herein; and

 

WHEREAS,
the parties hereto desire to set forth the terms of the grant and the conditions associated with the exercise of this Option.

 

NOW,
THEREFORE, in consideration of representations, warranties, covenants and agreements herein contained, the parties agree as follows:

 

1.
Grant of Option. The Company hereby irrevocably grants this Option to purchase all or any part of the Option Shares on the terms
and conditions hereinafter set forth.

 

2.
Exercise Price. The per share exercise price (“Exercise Price”) for the Option Shares shall be $0.0001 per Share.

 

3.
Vesting. The Option is fully vested with respect to all of the Option Shares on the Grant Date.

 

4.
Term of Option.

 

(a)
The Option shall expire no later than the tenth (10th) anniversary of the Grant Date, but shall be subject to earlier termination
as herein provided. Upon expiration or termination of the Option, all of the Optionee’s rights hereunder shall cease.

 

(b)
Except as otherwise provided in this Section 4, if the Optionee’s employment, directorship, consultancy or advisory position is
terminated as a result of death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the “Code”)), by the Company other than for Cause (as defined below) or by the Optionee for any reason, the unvested portion
of the Option shall terminate immediately without consideration therefor and the vested portion of the Option shall terminate on the
earlier of (A) one year after the date the Optionee ceases to be an employee, director, consultant or advisor of the Company or (B) the
date on which the Option otherwise expires by its terms.

 

(c)
If the Optionee’s employment, directorship, consultancy or advisory position is terminated by the Company for Cause, then this
entire Option shall terminate immediately upon the last day of the Optionee’s employment, directorship, consultancy or advisory
position without consideration therefor.

 

    	 

     

    

 

(d)
If the Optionee breaches any material provision of any noncompetition or similar restrictive covenant agreement, then this entire Option
shall terminate immediately upon such breach without consideration therefor. For the avoidance of doubt, the termination described in
this paragraph shall be in addition to, and not in place of, any other remedies at law or equity available to the Company or any affiliate
for such breach.

 

(e)
“Cause” shall have the meaning given in any employment, director or consulting agreement with the Optionee that defines cause
or, in the absence of such an agreement, “Cause” shall mean a good faith finding by the Company that the Optionee has (A)
failed, neglected, or refused to perform the lawful employment duties related to the Optionee’s position or as from time to time
assigned to the Optionee (other than due to disability within the meaning of Code Section 22(e)(3)); (B) committed any willful, intentional,
or grossly negligent act having the effect of injuring the interests, business or reputation of the Company or any affiliate; (C) violated
or failed to comply in any material respect with the Company’s or an affiliate’s published rules, regulations or policies,
as in effect or amended from time to time, to the extent applicable to the Optionee; (D) committed an act constituting a felony or misdemeanor
involving moral turpitude, fraud, theft, or dishonesty; (E) misappropriated or embezzled any property of the Company or an affiliate
(whether or not an act constituting a felony or misdemeanor); or (F) breached any material provision of this Agreement, the Noncompetition
Agreement or any other applicable confidentiality, non-compete, non-solicit, general release, covenant not-to-sue or other agreement
with the Company or any affiliate.

 

5.
Exercisability and Manner of Exercise.

 

(a)
To the extent that the Option has vested in accordance with the vesting schedule and is in effect, the Option may be exercised in full
or in part by the Optionee or, in the event of the Optionee’s death, by the Optionee’s representative, by (A) giving written
notice to the Company stating the number of Shares exercised; (B) providing payment in full for such Shares, plus an amount sufficient
to satisfy all minimum federal, state and local withholding tax requirements (provided that the Optionee may elect to satisfy such amount
to be paid for such Shares and withholding tax requirements by having the Company withhold a number of Shares otherwise issuable under
this Option with a fair market value sufficient to satisfy such payment and tax amounts); and (C) becoming a party to any shareholders
or similar agreement as may be approved by the Company’s Board of Directors. Payment may be wholly in cash or by certified check
payable to the order of the Company. Upon such exercise pursuant to this Section 5(a), delivery of a certificate for paid-up, non-assessable
Shares shall be made at the principal office of the Company to the Optionee, not more than thirty (30) days from the date of the Optionee’s
compliance with the procedures specified in the preceding sentence; provided that this Option may not be issued, and no Shares subject
to this Option will be issued, unless and until the Company has determined to its satisfaction that such exercise and issuance will comply
with all applicable laws and regulations.

 

(b)
The Company shall at all times during the term of the Option reserve and keep available such number of Shares of its Common Stock as
will be sufficient to satisfy the requirements of this Option.

 

    	2

     

    

 

6.
Non-Transferability. The right of the Optionee to exercise the Option shall not be assignable or transferable by the Optionee
otherwise than by will or the laws of descent and distribution, and the Option may be exercised during the lifetime of the Optionee only
by him. The Option shall be null and void and without effect upon the bankruptcy of the Optionee or upon any attempted assignment or
transfer, except as hereinabove provided, including without limitation any purported assignment, whether voluntary or by operation of
law, pledge, hypothecation or other disposition contrary to the provisions hereof, or levy of execution, attachment, trustee process
or similar process, whether legal or equitable, upon the Option.

 

7.
Representation Letter and Investment Legend.

 

(a)
In the event that for any reason the Shares to be issued upon exercise of the Option shall not be effectively registered under the Securities
Act of 1933, upon any date on which the Option is exercised in whole or in part, the person exercising the Option shall give a written
representation to the Company in the form attached hereto as Exhibit A and the Company shall place an appropriate legend upon
any certificate for the Shares issued by reason of such exercise.

 

(b)
The Company shall be under no obligation to qualify Shares or to cause a registration statement or a post-effective amendment to any
registration statement to be prepared for the purpose of covering the issue of Shares.

 

8.
Adjustments on Changes in Recapitalization, Reorganization and Changes in Control. In the event that any recapitalization, split,
reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of securities of the Company,
or other similar corporate transaction or other event, affects the Shares transferable or issuable on exercise of the Option, an appropriate
and equitable adjustment shall be made in order to prevent dilution or enlargement of the benefits or potential benefits intended to
be made available under the Option, which may include adjusting the number and type of shares, interests or units subject to this Agreement,
or the terms, conditions, or restrictions of this Agreement. Upon a recapitalization, split, reverse split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, change of control or exchange of securities of the Company, or other similar corporate transaction
or other event, the Company may elect to cancel the Option in exchange for a payment of cash, securities or other property (or any combination
thereof) equal to the excess, if any, of the value (as determined by the Board of Directors of the Company by the reasonable application
of a reasonable valuation method) of the Option Shares as to which the Option is vested as of such event over the aggregate Exercise
Price for such Option Shares (less any applicable tax withholding) or, if such value does not exceed such Exercise Price, may cancel
the Option as of such event without consideration therefor.

 

9.
No Special Engagement Rights. Nothing contained in this Agreement shall be construed or deemed by any person under any circumstances
to bind the Company to continue the employment of, or other relationship with, the Optionee for the period within which this Option may
be exercised. However, if the Optionee is an employee, during the period of the Optionee’s employment, the Optionee shall render
diligently and faithfully the services which are assigned to the Optionee from time to time by the Board of Directors or by the executive
officers of the Company and shall at no time take any action which directly or indirectly would be inconsistent with the best interests
of the Company.

 

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10.
Rights as a Shareholder; Board Interpretation. The Optionee shall have no rights as a shareholder with respect to any Shares which
may be purchased by exercise of this Option unless and until a certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in this Agreement, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is issued. As a condition to the grant of this Option, the
Optionee agrees, with such agreement being binding on the Optionee’s legal representatives, guardians, legatees or beneficiaries,
that this Agreement shall be administered and interpreted by the Board of Directors of the Company, and that any interpretation or determination
made by the Board of Directors pursuant to this Agreement shall be final, binding and conclusive.

 

11.
No Fractional Shares; Withholding Taxes. Notwithstanding anything to the contrary herein, no fractional Shares or other securities
may be issued or delivered pursuant to this Agreement, and the Company may determine whether cash, other securities or other property
will be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities
or any rights to fractional Shares or other securities will be canceled, terminated or otherwise eliminated. Whenever Shares are to be
issued upon exercise of this Option, or payments or transfers made under Section 8 hereof, the Company shall have the right to require
the Optionee to remit to the Company cash sufficient to satisfy all minimum federal, state and local withholding tax requirements prior
to issuance of the Shares and the delivery of any certificate or certificates for such Shares.

 

12.
Amendment. This Agreement may be amended, modified, superseded or terminated by the Company only by a written instrument executed
by the Optionee and the Company; provided that the Company may otherwise modify the terms of the Option to the extent deemed necessary
to comply with any applicable law or the listing requirements of any principal securities exchange on which the Shares are then traded,
or to preserve favorable accounting or tax treatment of the Option for the Company.

 

13.
No Guarantee of Tax Treatment. Notwithstanding any provisions of this Agreement, the Company does not guarantee to the Optionee
or any other person with an interest in the Option that the Option is exempt from or compliant with Code Section 409A, and the Company
shall not indemnify, defend or hold harmless any individual with respect to the tax consequences of any failure to be so exempt or compliant.

 

14.
Governing Law. This Agreement shall be governed and construed, and the rights of the parties hereto determined, in accordance
with Delaware law. If any of the provisions contained in this Agreement is prohibited by law, that provision shall be unenforceable,
but shall not affect the effectiveness or enforceability of any other provision of this Agreement. The granting of this Option and the
issuance of Shares in connection with this Option are subject to all applicable laws, rules and regulations and to such approvals by
any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision of this Agreement,
the Company has no liability to deliver any Shares under this Agreement or make any payment unless such delivery or payment would comply
with all applicable laws and the applicable requirements of any securities exchange or similar entity as well as the Company’s
own insider trading policy or other policies. In such event, the Company may delay issuing such Shares or substitute cash for any Share(s)
otherwise deliverable hereunder without the consent of the Optionee or any other person. In addition, if applicable, the Company has
no liability to deliver any Shares under this Agreement if the delivery of such Shares would cause the Company to lose its status as
an S corporation under Federal tax laws. In such event, the Company may substitute cash for any Share(s) otherwise deliverable hereunder
without the consent of the Optionee or any other person.

 

15.
Counterparts: Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which shall be original,
but all of which together shall constitute one and the same instrument. This Agreement may be effective upon the execution and delivery
by any party hereto of facsimile copies of signature pages duly executed by such party.

 

*
* * * *

 

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IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officer thereunto duly authorized, and the Optionee has
hereunto set his or her hand, all as of the day and year first set forth below.

 

	 	Webstar
    Technology Group, Inc.
	 	 	 
	 	By:	/S/
    Don D. Roberts
	 	Name:
    	Don
    D. Roberts
	 	Title:
    	Chief
    Executive Officer

 

Optionee’s
Acceptance

 

The
undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof.

 

	 	OPTIONEE
	 	 	 
	 	 	/S/
    Harold E. Hutchins
	 	Name:
    	Harold
    E. Hutchins
	 	 	 
	 	Address:
    	1531
    Talbot Avenue
	 	 	Jacksonville,
    FL 32205

 

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EXHIBIT
A

TO STOCK OPTION AGREEMENT

 

[INSERT
DATE]

 

Webstar
Technology Group, Inc.

4231
Walnut Bend

Jacksonville,
FL 32257

 

Ladies
and Gentlemen:

 

In
connection with the acquisition by me of ______ shares of Common Stock, par value $0.0001 per share (the “Shares”) of Webstar
Technology Group, Inc., a Wyoming corporation (the “Company”), pursuant to the exercise of an Option dated as of ________________, 20__,
I hereby represent to the Company as follows:

 

(a)
I hereby confirm that: (i) the Shares to be received by me will be acquired for investment only, for my own account, not as a nominee
or agent and not with a view to the sale or distribution of any part thereof; and (ii) I have no current intention of selling, granting
participation in or otherwise distributing the Shares. I further represent that I do not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such person, or to any third person, with respect to any of the
Shares.

 

(b)
I understand that the Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”) on the
basis that the acquisition of the Shares by me and the issuance of securities by the Company to me is exempt from registration under
the 1933 Act and that the Company’s reliance on such exemption is predicated on my representations set forth herein.

 

(c)
I understand that the Shares may not be sold, transferred or otherwise disposed of without registration under the 1933 Act and applicable
state securities laws, or an exemption therefrom, and that in the absence of an effective registration statement covering the Shares
or an available exemption from registration under the 1933 Act or applicable state securities laws, the Shares must be held indefinitely.

 

(d)
I represent that I (i) am capable of bearing the economic risk of holding the unregistered Shares for an indefinite period of time and
have adequate means for providing for my current needs and contingencies, (ii) can afford to suffer a complete loss of my investment
in the Shares, and (iii) understand and have taken cognizance of all risk factors related to the acquisition of the Shares.

 

(e)
I understand that the acquisition of the Shares involves a high degree of risk and there will be no established market for the Company’s
capital stock and it is not likely that any public market for such stock will develop in the near future.

 

    	 

     

    

 

(f)
Independent of the additional restrictions on the transfer of the Shares contained herein, I agree that I will not make a transfer, disposition
or pledge of any of the Shares other than pursuant to an effective registration statement under the 1933 Act and applicable state securities
laws, unless and until: (i) I shall have notified the Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the disposition and (ii) if requested by the Company and at my expense or at the expense of
my transferee, I shall have furnished to the Company an opinion of counsel, reasonably satisfactory (as to counsel and as to substance)
to the Company and its counsel, to the effect that such transfer may be made without registration of the Shares under the 1933 Act, and
applicable state securities laws.

 

(g)
I also acknowledge that, in addition to the restrictions described herein, the transfer of the Shares may be further restricted by the
terms of any Shareholders’ Agreement to which I am or become a party.

 

(h)
I acknowledge that all certificates evidencing the Shares shall bear the following investment legend:

 

These
securities have not been registered under the Securities Act of 1933, as amended, and may not be sold, offered for sale, pledged or hypothecated
in the absence of an effective registration statement as to the securities under said Act, or an opinion of counsel satisfactory to the
Company and its counsel that such registration is not required.

 

(i)
The certificates evidencing the Shares shall also bear any legend required by any shareholders, stock restriction or other similar agreement
which I am required to sign as a condition to the issuance of the Shares and any applicable state securities law.

 

(j)
In addition, the Company shall make a notation regarding the restrictions on transfer of the Shares in its stock books, and the Shares
shall be transferred on the books of the Company only if transferred or sold pursuant to an effective registration statement under the
1933 Act and applicable state securities laws covering such Shares or pursuant to and in compliance with the provisions any shareholders,
stock restriction or other similar agreement which I am required to sign as a condition to the issuance of the Shares. A copy of any
such agreement, together with any amendments thereto, shall remain on file with the Secretary of the Company and shall be available for
inspection to any properly interested person without charge within five (5) days after the Company’s receipt of a written request
therefor.

 

Very
truly yours,

 

    	2

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