STOCK OPTION AGREEMENT
THIS AGREEMENT is made by and between FieldPoint Petroleum Corporation, a
Colorado corporation (the "Corporation"), and J. Xxxxx Xxxx ("Optionee") and
shall be effective the 1st day of January 1998 (the "Effective Date").
WHEREAS, Optionee has provided and will continue to provide valuable
assistance to the Corporation with respect to the Corporation's business and
operations; and
WHEREAS, in view of the foregoing, the Corporation desires to grant to
Optionee an option to purchase shares of the Corporation's Common Stock, $.01
par value (the "Common Stock") as hereinafter provided;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Corporation and Optionee, intending to be legally bound, hereby agree as
follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee an option
(the "Option") to purchase all or any part of an aggregate amount of 5,000
shares of Common Stock (the "Option Shares"), upon the terms and conditions
hereinafter set forth.
2. TERMS OF OPTION. The Option shall commence as of the Effective Date
and, except as otherwise provided in this Agreement, shall terminate on
December 31, 2000 (the "Expiration Date"). In the event of the failure of
Optionee to properly exercise the Option prior to the Expiration Date, or in
the event of the failure of Optionee to properly exercise the Option with
respect to all of the Option Shares prior to the Expiration Date, such part or
parts, or the whole, as the case may be, of the Option shall become null and
void and shall no longer be of, or have any, further force or effect.
3. PURCHASE PRICE. The purchase price of each Option Share shall be
$.88 per share.
4. PROCEDURE FOR EXERCISE OF OPTION. Subject to the restrictions stated
in this Agreement, Optionee may exercise the Option at any time after December
31, 1998 by the sending of: (a) written notice of such exercise to the
Corporation, specifying the number of Option Shares to be purchased; (b) a
check in United States funds in the amount of the purchase price; (c) a fully
completed Subscription Agreement in the form of Exhibit "A" attached hereto;
and (d) a fully completed Representations and Warranties Statement in the form
of Exhibit "B" attached hereto. Within thirty (30) days after receipt of all
of the foregoing, the Corporation shall deliver to Optionee the certificate or
certificates representing the Option Shares being purchased; provided,
however, that such delivery may be postponed at the discretion of the
Corporation to enable the Corporation to comply with any applicable procedures
or requirements of any governmental agency or regulatory authority (public or
private) to which the Corporation may be subject.
5. CONSOLIDATION, MERGER, ETC. Notwithstanding any other provisions of
this Agreement, in the event that the Corporation consolidates with, merges
into, or transfers all or substantially all of its assets or property to
another corporation or other legal entity, or in the event any such
corporation acquires a controlling interest in the Corporation, in a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended, or in the event of the Corporation's dissolution or
liquidation other than pursuant to any plan of such reorganization, the Option
of Optionee granted hereunder shall thereupon terminate; provided, however,
that, unless the Option granted under this Agreement is assumed or a
substitute Option therefor is issued by the surviving or acquiring corporation
in any such consolidation, merger, or other reorganization (within its sole
discretion), the Corporation shall give written notice to Optionee, by
registered or certified mail, return receipt requested, first-class postage
prepaid, at least thirty (30) days prior to the effective date or estimated
effective date of such consolidation, merger, reorganization, dissolution, or
liquidation, of the effective date or estimated effective date of such
consolidation, merger, reorganization, dissolution, or liquidation.
6. CHANGES IN CAPITAL STRUCTURE OF THE CORPORATION. If the Corporation
shall subdivide or split the outstanding shares of Common Stock of the
Corporation into a greater number of shares or combine such outstanding shares
into a lesser number of shares, or if the Corporation shall declare any
dividend or other distribution upon its outstanding shares of Common Stock
payable in shares of the Corporation's Common Stock, then the number of Option
Shares subject to Option specified in this Agreement and price per share shall
be equitably and proportionately adjusted for any such action. The
Corporation may, but shall not be obligated to, issue a fractional share of
the Corporation's Common Stock as a result of any such action and the exercise
of the Option specified herein; in lieu of issuing such a fractional share,
the Corporation may pay in cash the fair value of a fractional share. The
foregoing are the only adjustments which shall be made to the number of Option
Shares subject to the Option specified in this Agreement and the price per
share.
7. NONTRANSFERABILITY OF OPTION. Optionee's Option to purchase Option
Shares under this Agreement may not be sold, transferred, exchanged, assigned,
pledged, discounted, hypothecated, or otherwise disposed of, voluntarily,
involuntarily or by operation of law, except the same may be transferred by
will or pursuant to the laws of descent and distribution. In addition, this
Option is not subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition of
the Option contrary to the provisions hereof and the levy of any execution,
attachment, or similar process upon the Option shall be null and void and
without effect.
8. NO RIGHTS AS STOCKHOLDER. The Option specified in this Agreement
shall not, prior to proper exercise and issuance of a share certificate,
entitle Optionee to any rights as a stockholder of the Corporation including,
without limitation, the right to receive dividends or other distributions of
any kind, the right to vote or otherwise act at any annual or special meeting
of Stockholders of the Corporation, the right to receive notice of any
corporate action (except as otherwise specified in Article 5 hereof), or the
right to exercise any preemptive rights.
9. EXPENSES. All expenses incurred by or on behalf of either party
hereto in connection with the authorization, preparation, execution, and
consummation of this Agreement, the Option specified herein, and the possible
purchase of the Option Shares, subject to the Option, including, without
limitation of the generality of the foregoing, all fees and expenses of
representatives, counsel, and accountants employed by either such party, shall
be borne solely and entirely by the party who or which has incurred the same.
10. WARRANTIES OF CORPORATION. The Corporation hereby represents and
warrants as follows:
A. The Board of Directors of the Corporation has authorized the
execution and delivery of this Agreement by the officer of the Corporation
executing same;
B. The Board of Directors of the Corporation has reserved for
issuance, during the period the Option specified herein is exercisable, such
number of shares of Common Stock as shall be necessary for full exercise of
the Option specified in this Agreement; and
C. Any shares of Common Stock issued and delivered pursuant to the
exercise of the Option specified herein shall be validly issued, fully paid,
and nonassessable.
11. TERMINATION OF SERVICE. In the event that the Optionee shall not
be serving as an officer of the Corporation on December 31, 1998, the Option
granted hereunder shall be terminated.
12. MISCELLANEOUS.
A. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if
delivered, any delivery charges prepaid, or sent by registered or certified
mail, return receipt requested, first-class postage prepaid, as follows:
(1) If to the Corporation, to:
FieldPoint Petroleum Corporation
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000
Attention: President
(2) If to Optionee, to:
J. Xxxxx Xxxx
0000 San Jacinto Center
00 Xxx Xxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000-0000
or to such other address as either such party may designate in accordance with
this Section.
B. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns, heirs, legatees, executors, administrators,
and legal and personal representatives.
C. The provisions of this Agreement are not intended to be (and shall
not serve) for the benefit of any creditor (other than a party hereto in its
or his capacity as such) of, or any other person (other than a party hereto in
its or his capacity as such) to whom any debts, liabilities, or obligations
are owed by (or who otherwise has a claim against), either party hereto, and
no such creditor or other person shall obtain any right under any provision
hereof or shall by reason of any such provision make claims in respect of the
aforesaid debts, liabilities, or obligations (or otherwise) against the
Corporation or the other party hereto.
D. The Article and other headings in this Agreement are inserted
solely as a matter of convenience and for reference and are not a part of this
Agreement. When the context requires, the masculine includes the female and
neuter genders and singular nouns and pronouns include the plural.
E. This Agreement supersedes all prior agreements and understandings,
oral or written, between the parties hereto with respect to the subject matter
hereof. Neither this Agreement, nor any provision hereof, may be changed,
waived, discharged, or terminated orally, but only by a statement in writing
signed by the party against which or whom the enforcement of such change,
waiver, discharge, or termination is sought.
F. This Agreement shall be construed and enforced in accordance with
the laws of the State of Texas and venue for all purposes hereunder shall be
Xxxxxx County, Texas.
CORPORATION:
FIELDPOINT PETROLEUM CORPORATION
By:
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Xxx X. Xxxxxx, Xx., its President
OPTIONEE:
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J. Xxxxx Xxxx
