EXHIBIT 4.1
OPTION AGREEMENT BETWEEN
NEW DIRECTIONS MANUFACTURING, INC.
AND
XXXXXXX & BEAM, INC.,
DATED SEPTEMBER 15, 1997
OPTION AGREEMENT
OPTION AGREEMENT dated as of September 15, 1997, between NEW DIRECTIONS
MANUFACTURING, INC., a Nevada corporation (the "Company"), and XXXXXXX & BEAM,
INC., a California corporation, dba XXXXXXX & BEAM ("H&B").
WHEREAS, the Company proposes to issue to H&B 25,000 options (the "Options"),
each such Option entitling the holder thereof to purchase one share of Common
Stock par value $0.001 per share, of the Company (the "Shares") at an exercise
price of $2.25 per share; and
WHEREAS, the Options which are the subject of this Agreement will be issued by
the Company to H&B as part of consideration payable to H&B in connection with
the rendering of a legal opinion on behalf of the Company as well as for other
legal services to the Company in connection with the registration of certain of
the Company's Shares (the "Registration") on Form SB-2 with the Securities and
Exchange Commission ("SEC").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. Option Certificates. The Option Certificates to be delivered
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pursuant to this Agreement (the "Option Certificates") shall be in the form set
forth in Exhibit A, attached hereto and made a part hereof. The Option
Certificates shall be executed on behalf of the Company by its Chief Executive
Officer, President, or any Vice President under its corporate seal reproduced
thereon and attested by its corporate secretary or one of its assistant
secretaries. Option Certificates may be exchanged at the Optionholder's option,
when surrendered to the Company for another Option Certificate or other Option
Certificates of like tenor and representing in the aggregate a like number of
Options.
SECTION 2. Right to Exercise Options. Each Option may be exercised from the
--------------------------
date of this Agreement until 11:59 P.M. (Los Angeles time) on the date that is
five years after the date of this Agreement (the "Expiration Date"). Each
Option not exercised on or before the Expiration Date shall expire. Subject to
the provisions of this Option Agreement, including Section 10 hereof, the holder
of each Option shall have the right to purchase from the Company, and the
Company shall issue and sell to each such Optionholder, at an initial exercise
price per share of $2.25, subject to adjustment as provided herein (the
"Exercise Price"), one fully paid and nonassessable Share upon surrender to the
Company of the Option Certificate evidencing such Option, with the form of
election to purchase duly completed and signed and evidence of payment of the
Exercise Price. Payment of the Exercise Price for the Options may be permitted
by a cash payment or by setoff from legal fees incurred by the Company with H&B
in accordance with that certain Engagement Letter between the Company and H&B.
The Engagement Letter provides that legal services will be offered to the
company by H&B. Each of H&B and the Company will prepare an accounting of legal
fees incurred as of any given date which may be used to exercise any of the
Options hereunder.
Upon surrender of such Option Certificate and payment of the Exercise Price,
the Company shall cause to be issued and delivered promptly to the Optionholder
a certificate for the Shares issuable upon the exercise of the Option or Options
evidenced by such Option Certificate. The Options evidenced by an Option
Certificate shall be exercisable at the election of the Optionholder thereof,
either as an entirety or from time to time for less than all of the number of
Options specified in the Option Certificate.
SECTION 3. Reservation of Shares. The Company will at all times reserve and
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keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Shares or its authorized and issued Shares held in its
treasury for the purpose of enabling it to satisfy any obligation to issue
Shares upon exercise of Options, the full number of Shares deliverable upon the
exercise of all outstanding Options. The Company covenants that all Shares
which may be issued upon exercise of Options will be validly issued, fully paid
and nonassessable outstanding Shares of the Company.
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SECTION 4. Registration under the Securities Act of 1933. H&B represents and
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options to the Company that H&B is acquiring the Options for investment and with
no present intention of distributing or reselling any of the Options. The
Shares and the certificate or certificates evidencing any such Shares shall bear
the following legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE."
Certificates for Shares without such legend shall be issued if such shares are
sold pursuant to an effective registration statement under the Act or if the
Company has received an opinion from counsel reasonably satisfactory to counsel
for the Company, that such legend is no longer required under the Act.
Certificates for Options or Shares shall also bear such legends as may be
required from time to time by law.
SECTION 5. Registration Rights.
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(a) Piggyback Registration Rights. If the Company at any time proposes
-----------------------------
to register any of its securities under the Act, including under an S-8
Registration Statement, an SB-2 Registration Statement (including the current
SB-2 Registration Statement of the Company, File No. 333-30583), or otherwise,
it will each such time give written notice to all holders of outstanding Shares
and Options of its intention so to do. Upon the written request of a holder or
holders of any such Shares or Options given within 30 days after receipt of any
such notice, the Company will use its best efforts to cause all such Shares, the
holders of which (or of the Options for which upon exercise thereof the Company
will issue Shares) shall have so requested registration thereof, to be
registered under the Act (with the securities which the Company at the time
propose to register), all to the extent requisite to permit the sale or other
disposition by the prospective Sellers of the Shares so registered; provided,
however, that the Company may, as a condition precedent to its effective such
registration, require each prospective Seller to agree with the Company and the
managing underwriter or underwriters of the offering to be made by the Company
in connection with such registration that such Seller will not sell any
securities of the same class or convertible into the same class as those
registered by the Company (including any class into which the securities
registered by the Company are convertible) for such reasonable period after such
registration becomes effective (not exceeding 30 days) as shall then be
specified in writing by such underwriter or underwriters if in the opinion of
such underwriter or underwriters the Company's offering would be materially
adversely affected in the absence of such an agreement. All expenses incurred by
the Company in complying with this Section, including without limitation all
registration and filing fees, listing fees, printing expenses, fees and
disbursements of all independent accounts, or counsel for the Company and or
counsel for the Sellers and the expense of any special audits incident to or
required by any such registration and the expenses of complying with the
securities or blue sky laws of any jurisdiction shall be paid by the Company.
Notwithstanding the foregoing, Sellers shall pay all underwriting discounts or
commissions with respect to shares sold by the Sellers.
(b) Indemnification.
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(i) In the event of any registration of any of its Shares under
the Act pursuant to this Section, the Company hereby indemnifies and holds
harmless the Sellers of such Shares (which phrase shall include any underwriters
of such Shares), their respective directors and officers, and each other person
who participates, in the offering of such Shares and each other person, if any,
who controls such Sellers, or such participating persons within the meaning of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which each such Seller or any such director or officer or participating
person or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
registration statement under which such Shares were registered under the Act,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon any omission
or alleged omission to state therein an material fact required to be stated
therein or necessary to make the statements therein not misleading; and will
reimburse each such Seller and each director, officer or participating or
controlling person for any legal or any other expenses
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reasonably incurred by such Seller or such director, officer or participating or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus or prospectus or amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by such Seller specifically stating that it is for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Seller or such directors, officer or
participating or controlling person, and shall survive the transfer of such
Shares by such Seller.
(ii) Each holder of any Shares or Options shall by acceptance
thereof indemnify and hold harmless the Company and its directors and officers,
and each person, if any who controls the Company, against any losses, claims,
damages or liabilities, joint or several, to which the Company or any director
or officer or any such person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in any
registration statement under which Shares were registered under the Act at the
request of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company through an instrument duly executed by or on behalf of such
holder specifically stating that it is for use therein; and will reimburse the
Company or such director, officer or person for any legal or any other expense
reasonably incurred in connection with investigation or defending any such loss,
claim, damage, liability or action.
(c) Rule 144. If the Company shall be subject to the reporting
--------
requirements of Section 13 of the 1934 Act, the Company will use its best
efforts timely to file all reports required to be filed from time to time with
the Commission (including but not limited to the reports under Section 13 and
15(d) of the 1934 Act referred to in subparagraph (c)(1) of Rule 144 adopted by
the Commission under the Act). If there is a public market for any Shares of the
Company at any time that the Company is not subject to the reporting
requirements of either of said Section 13 or 15(d), the Company will, upon the
request of any holder of any Shares or Options, use its best efforts to make
publicly available the information concerning the Company referred to in
subparagraph (c)(2) of said Rule 144. The Company will furnish to each holder of
any shares or Options, promptly upon request, (i) a written statement of the
Company's compliance with the requirements of subparagraphs (c)(1) or (c)(2), as
the case may be, of said Rule 144, and (ii) written information concerning the
Company sufficient to enable such holder to complete any Form 144 required to be
filed with the Commission pursuant to said Rule 144.
SECTION 6. Adjustment of Exercise Price and Number of Shares and Class of
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Capital Stock Purchasable. The Exercise Price and the number of Shares and
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classes of capital stock of the Company purchasable upon the exercise of each
Option are subject to adjustment from time to time as set forth in this Section
6.
(a) Adjustment for Change in Capital Stock. If the Company: pays a
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dividend or makes a distribution on its Common Stock, in each case, in shares of
its Common Stock; subdivides its outstanding shares of Common Stock into a
greater number of shares; combines its outstanding shares of Common Stock into a
smaller number of shares; makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock; or issues by reclassification of its
shares of Common Stock any shares of its capital stock; then the number and
classes of shares purchasable upon exercise of each Option in effect immediately
prior to such action shall be adjusted so that the holder of any Option
thereafter exercised may receive the number and classes of shares of capital
stock of the Company which such holder would have owned immediately following
such action if such holder had exercised the Option immediately prior to such
action.
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(b) Adjustment for Other Distributions. If the Company distributes to
----------------------------------
all holders of shares of its Common Stock any of its assets or debt securities
or any rights or options to the purchase assets, debt securities or other
securities of the Company, the Company shall, at the option of each
Optionholder, either:
(1) distribute to each Optionholder, on the date of distribution
to the shareholders, the amount of such assets or debt securities or the number
of such rights or options, pro rata, determined in accordance the following
formula:
X' = X x W
------
O + W
where
X'= the amount of assets or debt securities or the number of rights or
options to be distributed to such Optionholder, as the case may be.
X = the total amount of assets or debt securities or the total number of
rights or options to be distributed, as the case may be.
W = the number of shares of Common Stock purchaseable upon exercise of the
Options held by such Optionholder outstanding on the record date set
forth in paragraph (ii) below.
O = the number of shares of Common Stock outstanding on the record date
set forth in paragraph (ii) below; or
(2) adjust the Exercise Price in accordance with the following
formula:
C' = C x (O x M) - F
-----------
O x M
where
C'= the adjusted Exercise Price.
C = the Exercise Price on the record date set forth below.
O = the number of shares of Common Stock outstanding on the record date
set forth below.
M = the Current Market Price per share of Common Stock on the date set
forth below.
F = the fair market value on the record date of the distribution of the
assets, securities, rights or options. The Board of Directors of the
Company shall in good faith determine such fair market value.
(3) Consolidation, Merger or Sale of the Company. If the Company
--------------------------------------------
is a party to a consolidation, merger or transfer of assets which reclassifies
or changes its outstanding Common Stock, the successor corporation (or
corporation controlling the successor corporation or the Company, as the case
may be) shall by operation of law assume the Company's obligations under this
Option Agreement. Upon consummation of such transaction the Options shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of an Option would have owned immediately after
the consolidation, merger or transfer if the holder had exercised the Option
immediately before the effective date of such transaction. As a condition to the
consummation of such transaction, the Company shall arrange for the person or
entity obligated to issue securities or deliver cash or other assets upon
exercise of the Option to, concurrently with the consummation of such
transaction, assume the Company's obligations hereunder by executing an
instrument so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in this
Section.
SECTION 7. Notices to Company and H&B. Any notice or demand authorized by
---------------------------
this Agreement to be given or made by any registered holder of any Option
Certificate to or on the Company shall be sufficiently give or made if sent by
registered mail, postage prepaid, addressed (until another address is filed in
writing by the Company with the holders) to the Company as follows:
New Directions Manufacturing, Inc.
0000 X. Xxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, President
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Any notice pursuant to this Agreement to be given by the Company to H&B shall
be sufficiently given if sent by registered mail, postage prepaid, addressed
(until another address is filed in writing by H&B with the Company) to H&B as
follows:
Xxxxxxx & Xxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
SECTION 8. Supplements and Amendments. The Company and H&B may from time to
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time supplement or amend this Agreement without the approval of any
Optionholders (other than H&B) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and H&B may deem necessary or
desirable and which the Company and H&B deem shall not adversely affect the
interests of the Optionholders.
SECTION 9. Successors. All the covenants and provisions of this Agreement by
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or for the benefit of the Company or H&B shall bind and inure to the benefit of
their respective successors and assigns hereunder.
SECTION 10. Governing Law. This Agreement and each Option Certificate issued
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hereunder shall be deemed to be a contract made under the laws of the State of
California and for all proposes shall be governed by and construed in accordance
with the laws of said State.
SECTION 11. Counterparts. This Agreement may be executed simultaneously in
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one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The Parties agree
that facsimile signatures of this Agreement shall be deemed a valid and binding
execution of this Agreement.
SECTION 12. Conflict Waiver. The Parties hereto agree and acknowledge that
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H&B has been hired by the Company to perform services in preparation and filing
of the Company's Form SB-2 Registration Statement with the SEC, as well as to
perform other services for the Company. The Parties hereto further acknowledge
that they have been informed of the inherent conflict of interest associated
with the drafting of this Agreement by the H&B and waive any action they may
have against the H&B regarding such conflict. All parties to this Agreement
have been given the opportunity to consult with counsel of their choice
regarding their rights under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the date and year first above written.
New Directions Manufacturing, Inc.
By: /s/ XXXXXX X. XXXXX
-------------------------------
Xxxxxx X. Xxxxx
President
Xxxxxxx & Beam, Inc.
By: /s/ XXXXXXXX X. XXXXXXX
-------------------------------
Xxxxxxxx X. Xxxxxxx,
Vice President
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EXHIBIT A
[FORM OF OPTION CERTIFICATE]
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
EXERCISABLE FROM 12:00 P.M. LOS ANGELES TIME,
ON SEPTEMBER 15, 1997 UNTIL
11:59 P.M., LOS ANGELES TIME ON SEPTEMBER 15, 2002
No. 0-2 25,000 Options
OPTION CERTIFICATE
NEW DIRECTIONS MANUFACTURING, INC.
This Option Certificate certifies that Xxxxxxx & Beam, Inc. or registered
assigns, is the registered holder of 25,000 Options (the "Options") expiring
September 15, 2002, (the "Expiration Date"), to purchase shares of Common Stock,
par value $0.001 per share (the "Shares") of New Directions Manufacturing, Inc.,
a Nevada corporation (the "Company"). Each Option entitles the holder to
purchase from the Company before 11:59 p.m. (Los Angeles time) on the
"Expiration Date" one fully paid and nonassessable share of Common Stock of the
Company at the initial exercise price for each Option, subject to adjustment in
certain events of $2.25 per share (the "Exercise Price"), upon surrender of this
Option Certificate and payment of the Exercise Price at an office or agency of
the Company, but only subject to the terms and conditions set forth herein and
in the Option Agreement. Payment of the Exercise Price may be permitted by cash
or by setoff from legal fees incurred by the Company with H&B in accordance with
that certain Engagement Letter between the Company and H&B (the "Engagement
Letter"). The Engagement Letter as modified provides that legal services will
be offered to the Company by H&B. As used herein, "Share" or "Shares" refers to
the Common Stock of the Company and, where appropriate, to the other securities
or property issuable upon exercise of an Option as provided for in the Option
Agreement upon the happening of certain events. The Exercise Price and the
number of Shares and classes of capital stock purchasable upon exercise of the
Options are subject to adjustment upon the occurrence of certain events set
forth in the Option Agreement. In the event that upon any exercise of Options
evidenced hereby, the number of Options exercised shall be less than the total
number of Options evidence hereby, there shall be issued to the holder hereof or
his or her assignee a new Option Certificate evidencing the number of Options
not exercised. No adjustment shall be made for any cash dividends on any Shares
issuable upon exercise of this Option.
No Option may be exercised after 11:59 P.M. (Los Angeles Time) on the
Expiration Date. All Options evidenced hereby shall thereafter be void.
The Options evidenced by this Option Certificate are part of a duly authorized
issue of Options issued pursuant to an Option Agreement, dated as of September
15, 1997 (the "Option Agreement"), duly executed by the Company and H&B which
Option Agreement is hereby incorporated by reference in and made a part of this
instruments and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder of the Option Certificates of Shares).
The Company may deem and treat the person(s) registered in the Company's
register as the absolute owner(s) of this Option Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s) hereof,
and for all purposes, and the Company shall not be affected by any notice to the
contrary.
1
All terms used in this Option Certificate which are defined in the Option
Agreement shall have the meaning assigned to them in the Option Agreement.
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
IN WITNESS WHEREOF, the Company has caused this Option Certificate to be duly
executed under its corporate seal.
Dated: New Directions Manufacturing, Inc.
Attested
_________________________ By:_______________________________
Secretary Xxxxxx X. Xxxxx
President
2
ELECTION TO PURCHASE
(To be executed upon exercise of Option)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Option Certificate, to purchase ______ Shares and herewith authorizes in
payment for such Shares the reduction of the legal fee exercise account in the
amount of $________ all in accordance with the terms hereof. The undersigned
requests that certificates for such Shares be registered as follows:
Name Number of Shares
---- ----------------
all of whose addresses are Xxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000, and that such certificates be delivered to Xxxxxxx & Beam whose address
is Xxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000. If said number of
Shares is less than all of the Shares purchasable hereunder, the undersigned
requests that a new Option Certificate representing the remaining balance of the
Shares be registered in the name of Xxxxxxx & Beam whose address is Xxx Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 and that such Certificates be
delivered to Xxxxxxx & Beam whose address is Xxx Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000.
Dated: Signature: ________________________
Xxxxxxxx X. Xxxxxxx for
XXXXXXX & BEAM, INC.
(Signature must conform in all
respects to name of holder as
specified on the face of the
Option Certificate)
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OPTION CERTIFICATE
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
EXERCISABLE FROM 12:00 P.M. LOS ANGELES TIME,
ON SEPTEMBER 15, 1997 UNTIL
11:59 P.M., LOS ANGELES TIME ON SEPTEMBER 15, 2002
No. 0-2 25,000 Options
OPTION CERTIFICATE
NEW DIRECTIONS MANUFACTURING, INC.
This Option Certificate certifies that Xxxxxxx & Beam, Inc. or registered
assigns, is the registered holder of 25,000 Options (the "Options") expiring
September 15, 2002, (the "Expiration Date"), to purchase shares of Common Stock,
par value $0.001 per share (the "Shares") of New Directions Manufacturing, Inc.,
a Nevada corporation (the "Company"). Each Option entitles the holder to
purchase from the Company before 11:59 p.m. (Los Angeles time) on the
"Expiration Date" one fully paid and nonassessable share of Common Stock of the
Company at the initial exercise price for each Option, subject to adjustment in
certain events of $2.25 per share (the "Exercise Price"), upon surrender of this
Option Certificate and payment of the Exercise Price at an office or agency of
the Company, but only subject to the terms and conditions set forth herein and
in the Option Agreement. Payment of the Exercise Price may be permitted by cash
or by setoff from legal fees incurred by the Company with H&B in accordance with
that certain Engagement Letter between the Company and H&B (the "Engagement
Letter"). The Engagement Letter as modified provides that legal services will
be offered to the Company by H&B. As used herein, "Share" or "Shares" refers to
the Common Stock of the Company and, where appropriate, to the other securities
or property issuable upon exercise of an Option as provided for in the Option
Agreement upon the happening of certain events. The Exercise Price and the
number of Shares and classes of capital stock purchasable upon exercise of the
Options are subject to adjustment upon the occurrence of certain events set
forth in the Option Agreement. In the event that upon any exercise of Options
evidenced hereby, the number of Options exercised shall be less than the total
number of Options evidence hereby, there shall be issued to the holder hereof or
his or her assignee a new Option Certificate evidencing the number of Options
not exercised. No adjustment shall be made for any cash dividends on any Shares
issuable upon exercise of this Option.
No Option may be exercised after 11:59 P.M. (Los Angeles Time) on the
Expiration Date. All Options evidenced hereby shall thereafter be void.
The Options evidenced by this Option Certificate are part of a duly authorized
issue of Options issued pursuant to an Option Agreement, dated as of September
15, 1997 (the "Option Agreement"), duly executed by the Company and H&B which
Option Agreement is hereby incorporated by reference in and made a part of this
instruments and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder of the Option Certificates of Shares).
The Company may deem and treat the person(s) registered in the Company's
register as the absolute owner(s) of this Option Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s) hereof,
and for all purposes, and the Company shall not be affected by any notice to the
contrary.
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All terms used in this Option Certificate which are defined in the Option
Agreement shall have the meaning assigned to them in the Option Agreement.
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
IN WITNESS WHEREOF, the Company has caused this Option Certificate to be duly
executed under its corporate seal.
Dated: New Directions Manufacturing, Inc.
Attested
/s/ Xxxx X. Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxx
-------------------------- ------------------------------------
Secretary Xxxxxx X. Xxxxx
President
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