OPTION TO PURCHASE COMMON STOCK
THIS OPTION TO PURCHASE COMMON STOCK (this "Agreement") is made as of
this 1st day of January, 1998, by and between XXXXXXX X. XXXX ("Optionor"),
and XXXXXXX X. XXXX ("Optionee").
RECITAL
Optionor is the owner of certain Jore Corporation common stock, which
is described in EXHIBIT A (the "Stock"). Subject to the terms and conditions
contained in this Option, Optionor desires to give to Optionee and Optionee
desires to acquire from Optionor an option to purchase the Stock.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties hereinafter set forth, the parties hereby
agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions contained in
this Agreement, Optionor hereby grants to Optionee the option to purchase the
Stock (the "Option"). The term Stock as defined and used herein shall include
(i) the Stock described in EXHIBIT A, (ii) all additions to the number of
shares held whether through stock splits or stock dividends, or additional
shares purchased by Optionor.
2. OPTION PRICE. The exercise price for the Option is Two Hundred
Ten Dollars and no/100 ($210.00) per share (the "Option Price"), to be paid
in cash within thirty (30) days of Optionee's exercise under Section 4.
3. TERM OF OPTION. The term of the Option shall commence on the date
of this Agreement and shall terminate on the date which is ten years
hereafter (the "Option Period").
4. EXERCISE OF OPTION. Optionee may exercise the Option at any time
during the Option Period by delivering written notice to Optionor of such
exercise. In the event Optionee fails to exercise the Option during the
Option Period, the Option shall automatically terminate and be of no further
force or effect.
5. CLOSING; TERMS OF PURCHASE. Within thirty (30) days of the date
of exercise of the Option or at such other date as Optionor and Optionee may
agree (the "Closing Date"), the purchase and sale of the Stock shall close
(the "Closing").
5.1 PURCHASE PRICE. The purchase price for the Stock shall be
$210.00 per share (the "Purchase Price"). At Closing, Optionee shall pay the
Purchase Price in cash to Optionor.
5.2 DOCUMENTS TO BE DELIVERED BY OPTIONOR. At or prior to the
Closing, Optionor shall duly execute and deliver or cause to be delivered to
Escrow the original stock certificates representing the Stock listed in
Exhibit A along with duly executed stock assignments transferring the
ownership to Optionee.
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STOCK OPTION AGREEMENT PAGE 1
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5.3 REPRESENTATIONS AND WARRANTIES OF OPTIONOR. Optionor
hereby represents and warrants to Optionee as of the date of this Agreement
and as of the Closing Date that:
(a) ORGANIZATION. Optionor has full right, title,
authority and capacity to execute and perform this Agreement and to
consummate all of the transactions contemplated hereunder, and the
individuals who on Optionor's behalf execute and deliver this Agreement and
all documents to be delivered by Optionor hereunder are and shall be duly
authorized so to do;
(b) CONTRACTS. There are no contracts or other
obligations outstanding for the sale, exchange or transfer of the Stock or
any portion thereof; and there are no contracts of employment, management,
maintenance, service, or supply outstanding which affect any portion of the
Stock or its operation;
(c) TITLE TO STOCK. Optionor will, on the Closing Date,
have good, marketable and insurable title to all of the Stock free and clear
of all mortgages, liens, pledges, encumbrances, charges, agreements, claims,
and restrictions;
(d) FUTURE AGREEMENTS. From and after the date of this
Agreement, Optionor shall not, without the prior written consent of Optionee,
(i) enter into any agreement, contract, commitment, lease or other transaction
which affects the Stock in any way, or (ii) sell, dispose of or encumber any
portion of the Stock;
(e) INFORMATION TRUE. All statements made by Optionor
herein are true and correct to the best of Optionor's knowledge, and the
information provided and to be provided by Optionor to Optionee hereunder
does not and will not contain any statement which, at the time and in the
light of the circumstances under which it is made, is false or misleading
with respect to any material fact, or omits to state any material fact (which
is known, or in the exercise of reasonable diligence by Optionor, should have
been known) necessary in order to make any statement contained therein not
false or misleading in any material respect;
(f) NO OTHER WARRANTIES. EXCEPT FOR THE WARRANTIES
SPECIFICALLY SET OUT IN SECTION 6.3 HEREIN, Optionor EXPRESSLY DISCLAIMS ANY
AND ALL OTHER WARRANTIES AND REPRESENTATIONS WITH RESPECT TO THE STOCK
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
AND Optionee EXPRESSLY ACKNOWLEDGES TAKING TITLE TO THE STOCK UNDER THIS
AGREEMENT AND AT CLOSING "AS IS;"
In the event, during the period between the date of this Agreement and the
Closing Date, Optionor has actual knowledge of, learns of, or has reason to
believe any of the above representations and warranties may cease to be true,
Optionor hereby covenants to immediately give written notice to Optionee of
the change of circumstances. Upon the occurrence of such a change in
circumstances, Optionee may, at its sole option, terminate this Agreement and
the Option Price plus accrued interest shall promptly be returned to Optionee.
5.4 REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee
hereby represents and warrants to Optionor as of the date of this Agreement
and as of the Closing Date that Optionee has
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STOCK OPTION AGREEMENT PAGE 2
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full right, title, authority and capacity to execute and perform this
Agreement and to consummate all of the transactions contemplated hereunder,
and the individuals who on Optionee's behalf execute and deliver this
Agreement and all documents to be delivered by Optionor hereunder are and
shall be duly authorized so to do.
5.5 COVENANTS OF OPTIONOR. Optionor covenants and agrees with
Optionee that from and after the date hereof and until the Closing Date,
Optionor (i) shall maintain the Stock in the same manner as on the date of
this Agreement, (ii) shall not do or cause to be done anything that would
cause any representation or warranty of Optionor hereunder to be untrue, and
(iii) shall not enter into any debt transaction or other agreement resulting
in an encumbrance on the Stock.
5.6 CONDITIONS PRECEDENT TO OPTIONEE'S OBLIGATION TO CLOSE.
Optionee's obligation to consummate the transactions contemplated hereunder
is conditioned upon satisfaction (or written waiver by Optionee) of each of
the following conditions at or prior to Closing (or such earlier date as is
specified with respect to a particular condition):
(a) TITLE. Optionor shall clear title to all the shares
of Stock;
(b) DOCUMENTS. Optionor shall delivered to Optionee all
documents and instruments to be delivered to Optionee at Closing under the
terms of this Agreement;
(c) REPRESENTATIONS AND PERFORMANCE. The representations
and warranties made by Optionor hereunder shall be true and correct in all
material respects at and as of Closing, and Optionor shall have performed and
complied in all material respects with all agreements, covenants and
conditions contained in this Agreement required to be performed or complied
with by Optionor prior to or at Closing;
If all of the above conditions are not satisfied at or prior to Closing (or
such earlier date as is specified with respect to a particular condition)
Optionee may terminate this Agreement by written notice to Optionor, and the
Option Price plus accrued interest shall promptly be refunded to Optionee.
5.7 CONDITIONS PRECEDENT TO OPTIONOR'S OBLIGATION TO CLOSE.
Optionor's obligation to consummate the transactions contemplated hereunder
is subject to satisfaction (or written waiver by Optionor) of the following
conditions, at or prior to Closing (or such earlier date as is specified with
respect to a particular condition):
(a) REPRESENTATIONS AND PERFORMANCE. The representations
and warranties made by Optionee hereunder shall be true and correct in all
material respects at and as of Closing, and Optionee shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained in this Agreement required to be performed or complied with by
Optionee prior to or at Closing;
(b) PAYMENT AND EXECUTION OF DOCUMENTS. Optionee shall
have delivered to Escrow the Purchase Price and shall have executed and
delivered to Optionor all documents required to be executed and delivered by
Optionee hereunder;
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STOCK OPTION AGREEMENT PAGE 3
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5.8 OPTIONOR'S INDEMNITY. Optionor agrees to indemnify and
hold Optionee harmless from and against any and all liability, loss, damage
or expense (including reasonable attorneys' fees and costs), as a result of
any action, suit, proceeding, lien or claim affecting the Stock or any
portion thereof including any contracts and/or services related thereto, in
relation to which the facts which give rise to such actions, suits or
proceedings arose or occurred prior to the Closing Date. Without limiting the
generality of the foregoing, Optionor shall indemnify and hold Optionee
harmless from and against any and all claims, causes of action, liabilities,
damages, judgments, demands, fees, obligations, assessments, costs (including
reasonable attorneys' fees) and expenses of any kind or nature arising from
(i) the use of the Stock by Optionor, (ii) the status of the Stock prior to
the Closing Date.
5.9 OPTIONEE'S INDEMNITY. Optionee agrees to indemnify and
hold Optionor harmless from and against any and all liability, loss, damage
or expense (including reasonable attorneys' fees and costs), as a result of
any action, suit, proceeding, lien or claim affecting the Stock or any portion
thereof including any contracts and/or services related thereto, in relation
to which the facts which give rise to such actions, suits or proceedings
arose or occurred after the Closing Date. Without limiting the generality of
the foregoing, Optionee shall indemnify and hold Optionor harmless from and
against any and all claims, causes of action, liabilities, damages,
judgments, demands, fees, obligations, assessments, costs (including
reasonable attorneys' fees) and expenses of any kind or nature arising from
(i) the use of the Stock by Optionee, (ii) the status of the Stock caused by
Optionee after the Closing Date.
5.10 SURVIVAL. The provisions of this Agreement shall survive
Closing.
6. ATTORNEYS' FEES. If it shall be necessary for either Optionee or
Optionor to employ an attorney to enforce their rights pursuant to this
Agreement because of the default of the other party, the defaulting party
shall reimburse the non-defaulting party for reasonable attorneys' fees and
expenses.
7. NOTICES. All notices, demands, requests and other communications
required or permitted hereunder shall be in writing and shall be given
by hand delivery, overnight courier, or certified mail, postage prepaid,
addressed to the parties at the addressed listed below. All notices so
delivered shall be effective upon receipt (or when receipt is refused).
IF TO Optionor:
Xxxxxxx X. Xxxx
Jore Corporation
45O00 Xxxxxxx 00 Xxxxx
Xxxxx, XX 00000
IF TO Optionee:
Xxxxxxx X. Xxxx
Jore Corporation
00000 Xxxxxxx 00 Xxxxx
Xxxxx, XX 00000
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STOCK OPTION AGREEMENT PAGE 4
XXXXXXX X. XXXX
WITH A COPY TO:
Xxxxx X. Xxxxxxxx
Xxxxxxxx Law Offices
000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
8. GOVERNING LAW; VENUE. The laws of the state of Montana shall
govern the validity, enforcement, and interpretation of this Agreement. Any
dispute or cause of action under this Agreement shall be resolved in a court
of competent subject matter jurisdiction in Missoula County District Court,
State of Montana.
9. INTEGRATION; MODIFICATION; WAIVER. This Agreement constitutes the
complete and final expression of the agreement of the parties relating to the
Stock, and supersedes all previous contracts, agreements and understandings
of the parties, either oral or written, relating to the Stock. This Agreement
cannot be modified, or any of the terms hereof waived, except by an instrument
in writing (referring specifically to this Agreement) executed by Optionor
and Optionee.
10. COUNTERPART EXECUTION. This Agreement may be executed in several
counterparts, each of which shall be fully effective as an original and all
of which together shall constitute one and the same instrument.
11. INVALID PROVISIONS. If any one or more of the provisions of
this Agreement, or the applicability of any such provision to a specific
situation, shall be held invalid or unenforceable, such provision shall be
modified to the minimum extent necessary to make it or its application valid
and enforceable, and the validity and enforceability of all other provisions of
this Agreement and all other applications of any such provision shall not be
affected thereby.
12. ASSIGNMENT; BINDING EFFECT. Optionee may assign its rights under
this Agreement. This Agreement shall be binding upon and inure to the benefit
of Optionor and Optionee, and their respective heirs, personal
representatives, successors and assigns.
13. WAIVERS. No waiver of any breach or default by any party of the
terms of this Agreement shall be considered to be a waiver of any other
breach or default.
14. EXHIBITS. The exhibits attached hereto are incorporated herein by
this reference as if fully set forth herein.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
OPTIONOR:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
OPTIONEE:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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