STOCK OPTION
This Stock Option Agreement is made effective this 22 day of December,
1995 by and between A-Z Professional Consultants, Inc. (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 has refrained from collecting certain commissions,
stock payments and monies due to Optionee from Company pursuant to prior
contracts with the Company; and
WHEREAS, Optionee and its employees, including, but not limited to
Xxxxxxx Xxxxxx who has acted as the past President of Canton, and who is a
current Director on the Board of Directors for Canton, and who is additionally
acting as the Chief Executive Officer for Canton, have provided, and continue to
provide valuable information, and business contacts.
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:
Execution of this Agreement constitutes good and sufficient
consideration for the Option granted hereunder. Additionally, consideration for
the Option granted hereunder is acknowledged in the forbearance by Optionee of
pursuing payments of stock and monies due Optionee under prior agreements with
Company.
GRANT
1. Grant of Option. The Company hereby grants Optionee the right and
option ("Option") to purchase all or any part of up to 26% of the
issued and outstanding shares of The Canton Industrial Corporation's
Common Stock, as of the date of this Agreement, on the terms and
conditions set forth herein and subject to the provisions of this Stock
Option.
2. Exercise Price. The Option price of the shares of Common Stock which
are subject to this Option (the "Option Shares") shall be fifty-nine
cents ($.59) per share.
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 five years from the date of , 1995.
4. Persons Entitled to Exercise. During the Optionee's lifetime, this
Option can only be exercised by the Optionee, unless Company receives a
written notarized assignment by Optionee which shall be valid only in
the following fashion, to wit: 50% of any remaining option rights by
the Xxxxx Xxxxxxx Irrevocable Trust, and 50% of any remaining option
rights by the Xxxxxxxx X. Senkovski Irrevocable Trust. 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, 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 first approved by the Board of
Directors, with the sole exclusion of a promissory note.
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 acquiring a total of 26% of Canton's issued and
outstanding stock at any time prior to the final termination date of
this Option, and/or any extensions thereto. Subsequent to such time as
the Optionee has purchased, and, or otherwise acquired shares totalling
26% 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, prior to or subsequent to the Optionee's
exercise of a total of 26% 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, within a reasonable time frame.
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.
The Optionee acknowledges that unless a registration statement with
respect to this 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
the 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 22day of December, 1995.
The Canton Industrial Corporation
By: Xxxxxx X. Xxxxxxxxxxx
Title: President
Accepted:
By: /s/ Xxxxxxx X. Xxxxxx
Title: President
