STOCK OPTION
This Stock Option Agreement is made effective this 22 day of December,
1995 by and between Investment Sanctuary Corporation (hereinafter "Optionee") a
Utah corporation with offices at 000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx 00000, and The Canton Industrial Corporation, Inc., a Nevada corporation
(hereinafter "Company" or "Canton") with offices at 000 Xxxx 000 Xxxxx, Xxxxx
000, with respect to the following:
RECITALS
WHEREAS, Optionee is in the business of providing marketing and general
business consulting services to privately held and publicly-held corporations;
and
WHEREAS, Company desires to compensate Optionee for advice and
consultation with Company's management concerning its growth strategy, potential
business relations, its financial public relations communication obligations,
and other matters connected to Company's business; and
WHEREAS, Optionee's agent, Xxxxxxx Xxxxxx, has acted as the past
President of Canton, is a Director on the Board for Canton, and is acting as the
Chief Executive Officer for Canton, and has an intimate knowledge of the
Company's business.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, the parties agree as
follows:
By executing this Agreement as consideration, the Optionee is being
issued this new option to purchase up to a maximum of 25% of the Common stock of
Company's issued and outstanding Common Stock, as of the date of this Agreement,
based on the following premises:
GRANT
1. Grant of Option. The Company hereby grants Optionee the right and
option ("Option") to purchase all or any part of the above described
25% of the issued and outstanding shares of The Canton Industrial
Corporation's Common Stock, on the terms and conditions set forth
herein and subject to the provisions of this Stock Option.
2. Exercise Price. The initial exercise price of the shares of Common
Stock which are subject to this Option (the "Option Shares") shall be
fifty-nine cents ($.59) per share. Thereafter, on the anniversary date
of this Agreement, if Optionee has not exercised all of his option
rights pursuant to this Agreement, the parties agree that the Option
will be automatically renewed annually on the same terms and conditions
as set forth herein, up to four additional years.
3. Term of Option. This Option may be exercised, in whole or in part, at
any time prior to 12:00 Midnight, Mountain Standard Time, on the date
that is one year from the date of , 1995 with annual extensions up to a
total of five years.
4. Persons Entitled to Exercise. During the Optionee's lifetime, this
Option can only be exercised by the Optionee, or its assigns. Neither
this Option nor any right hereunder shall be subject to lien,
attachment, execution, or similar process.
5. Method of Exercising. This Option may be exercised in accordance with
all the terms and conditions set forth in this Option and any Stock
Option Plan, by delivery of a notice of exercise, a form of which is
attached hereto as Exhibit "A" and incorporated herein by this
reference, setting forth the number of Options to be exercised along
with either:
(a) A certified check or bank check payable to the order of
the Company in the amount of the full exercise price of the
Common Stock being purchased; or
(b) Other consideration acceptable to the Company, which
consideration shall be approved by the Board of Directors,
with the exception of the exclusion of a promissory note as
payment, which shall not be acceptable.
6. Availability of Shares. During the term of this option, the Company
shall reserve for issuance the number of shares of Common Stock
required to satisfy this Option.
7. Adjustments to Number of Shares. The number of shares of Common Stock
subject to this Option shall be adjusted to take into account any stock
splits, stock dividends, or recapitalization of the Common Stock. The
total number of shares available under this Option shall be satisfied
upon the Optionee exercising a total of 25% of Canton's issued and
outstanding stock at any time prior to the final termination date of
this Option, and/or any extensions thereto. At such time as the
Optionee has purchased, or otherwise acquired 25% of the issued and
outstanding shares of Canton, the Optionee will not thereafter be
entitled to exercise additional options on Canton stock, i.e., if
Canton, subsequent to the Optionee's exercise of a total of 25% of the
outstanding shares of Canton, issues or authorizes additional shares,
the Optionee is not entitled to additional options.
8. Limitation on Exercise. If the Board of Directors of the Company, in
their sole discretion, shall determine that it is necessary or
desirable to list, register, or qualify the Common Stock under any
state or federal law, this Option may not be exercised, in whole or
part, until such listing, registration , or qualification shall have
been obtained free of any conditions not acceptable to the board of
directors.
9. Restrictions on Transfer. Neither this Option, nor the securities
covered thereby, have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), or any state securities statutes.
Optionee acknowledges that unless a registration statement with respect
to the Option is filed and declared effective by the Securities and
Exchange Commission and the appropriate state governing agency, the
Option has or will be issued in reliance on specific exemptions from
such registration requirements for transactions by an issuer not
involving a public offering and specific exemptions under applicable
state statutes. In some states, specific conditions must be met, or the
approval of the state's security regulatory authority may be required
before an offer or sale. The Company is under no obligation to register
the Option with the Securities and Exchange Commission or any state
agency. If rule 144 is available (and no assurance is given that it
will be), only routine sales of the Option in limited amounts can be
made after holding the securities for two years from the acquisition
date of the Securities, as determined under rule 144(d), and in
accordance with the terms and conditions of rule 144. Neither the
Company, its registrar or its transfer agent, will dispose of the
Securities without proper registration or exemptions. The Company and
its registrar and transfer agent will maintain a stop transfer order
against the transfer of the shares obtained pursuant to this Option and
any certificate representing the Option shares shall bear a legend in
substantially the following form so restricting the sale or other
transfer thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
10. Record Owner. The Company may deem the Optionee as the absolute owner
of this Option for all purposes.
11. Shareholder's Rights. The Optionee shall have shareholder rights with
respect to the Option shares only when it has exercised this Option to
purchase those shares and fully paid for such shares.
12. Validity and Construction. The validity and construction of this
Agreement shall be governed by the laws of the State of Utah.
13. Attorney's Fees. If any action at law or in equity, including an action
for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
recover actual attorney's fee from the other party. The attorney's fees
may be ordered by the court in the trial of any action described in
this paragraph or may be enforced in a separate action brought for
determining attorney's fees.
IN WITNESS WHEREOF, the parties have executed this Option.
DATED this 22 day of December, 1995.
The Canton Industrial Corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Title:President
Accepted:
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
