ROEX, INC.
STOCK OPTION AGREEMENT
(Non-Qualified)
This Stock Option Agreement is made this ____ day of September, 1998,
between Roex, Inc. (the "Company"), and Bison Development Fund, L.P. and/or its
Assigns (the "Option Holder").
R E C I T A L S
A. The Board of Directors has determined that it is to the advantage and
best interest of the Company and its shareholders to grant an option to the
Option Holder covering shares of the Company's Common Stock as an inducement to
loan to the Company $500,000, and has approved the execution of this Stock
Option Agreement between the Company and the Option Holder.
B. The option granted hereby is to an independent contractor and is not
intended to qualify as an "incentive stock option", in regard to Employees,
under Section 422A of the Internal Revenue Code of 1954, as amended.
NOW THEREFORE, the parties hereto agree as follows:
1. The Company grants to the Option Holder the right and option to
purchase on the terms and conditions hereinafter set forth, all or any part of
an aggregate of 116,350 shares of the Common Stock of the Company at the
purchase price of $0.50 per share, and exercisable from time to time in
accordance with the provisions of this Agreement during a period expiring on the
fourth anniversary from the date the Company becomes a publicly traded company
(the "Expiration Date").
2. The Option Holder may purchase any or all shares by exercise of this
Option between the date of this Agreement and the Expiration Date. The number of
shares which may be purchased shall be calculated to the nearest full share and
shall not be for fewer than 100 shares. The foregoing limitations shall
similarly apply to the transferees and assigns of the Option Holder by will or
by the laws of descent or distribution, so that said transferees and.or assigns
shall be entitled (provided they act within twelve (12) months after the death
of the Option Holder but in no event later than the Expiration Date) to purchase
by exercise of this Option all or any portion of the shares subject to this
Option which the Option Holder could have purchased by the exercise of the
option at the time of the Option Holder's death but with respect to which this
Option was not previously exercised, and no more. This Option may be exercised
during the lifetime of the Option Holder only by the Option Holder, or within
twelve (12) months after his death by his transferees by will or the laws of the
descent or distribution, and not otherwise, regardless of any community property
interest therein of
the spouse of the Option Holder, or such spouse's successors in interest. If the
spouse of the Option Holder shall have acquired a community property interest in
this Option, the Option Holder, or Option Holder's permitted successors in
interest, may exercise the option on behalf of the spouse of the Option Holder
or such spouse's successors in interest.
3. Each exercise of this Option shall be by means of a written notice of
exercise delivered to the Secretary of the Company, specifying the number of
shares to be purchased and accompanied by payment to the Company of the full
purchase price of the shares to be purchased. The purchase price of the shares
upon exercise of an option shall be paid (i) in cash or by certified or
cashier's check payable to the order of the Company, (ii) by delivery of shares
of Common Stock of the Company already owned by and in the possession of the
option holder, or (iii) by a promissory note made by option holder in favor of
the Company, upon the terms and conditions determined by the Board of Directors
and secured by the shares issuable upon exercise complying with applicable law
(including, without limitation, state, corporate and federal margin
requirements), or any combination thereof. Shares of Common Stock used to
satisfy the exercise price of this Option shall be valued at their fair market
value determined as of the close of the business day immediately preceding the
date of exercise.
4. The fair market value of a share of Common Stock shall be determined
for purposes of this Agreement by reference to the most recent sale price of the
Company's Common Stock and such other factors as the Board of Directors may deem
appropriate to reflect the then fair market thereof, unless such shares are
publicly traded on a stock exchange or otherwise, in which case such value shall
be determined by reference to the closing price of such share on the principal
stock exchange on which such shares are traded, or, if such shares are not then
traded on a principal stock exchange, the mean between the bid and asked price
of a share as supplied by the National Association of Securities Dealers through
NASDAQ (or its successor in function), in each case as reported by The Wall
Street Journal, for the business day immediately preceding the date on which the
option is exercised.
5. No shares issuable upon the exercise of this Option shall be issued
and delivered unless and until there shall have been full compliance with all
applicable registration requirements of the Securities Act of 1933, all
applicable listing requirements of any national securities exchange on which
shares of the same class are then listed and any other requirements of law or of
any regulatory bodies having jurisdiction over such issuance and delivery.
Without limiting the foregoing, the undersigned hereby agrees
that unless and until the shares of stock covered by this Option have been
registered with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, he will purchase all shares of stock to be issued upon
exercise of this Option for investment and not for resale or for distribution
and that upon each exercise of any portion of this Option the person entitled to
exercise the same shall, upon the request of the Company, furnish evidence
satisfactory to the Company (including a written and signed representation) to
that effect in form and substance satisfactory to the Company, including an
indemnification of the Company in the event of any violation of the Securities
Act of 1933 by such person. Furthermore, the Company may, if it deems
appropriate, affix a legend to certificates
representing shares of stock upon exercise of options indicating that such
shares have not been registered with the Securities and Exchange Commission and
may so notify its Transfer Agent, and may take such other action as it deems
necessary or advisable to comply with any other regulatory or governmental
requirements.
6. If Option Holder or Option Holder's permitted successors in interest
disposes of shares of Common Stock acquired pursuant to the exercise of this
Option, the Company shall have the right to require Option Holder or Option
Holder's permitted successor in interest to pay the Company the amount of any
taxes, which the Company may be required to withhold with respect to such
shares.
7. If the outstanding shares of the Common Stock of the Company are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities of the Company through reorganization,
recapitalization,reclassification, stock dividend, stock split or reverse stock
split, an appropriate and proportionate adjustment (to be conclusively
determined by the Board of Directors of the Company) shall be made in the number
and kind of securities receivable upon the exercise of this Option, without
change in the total price applicable to the unexercised portion of this Option
but with a corresponding adjustment in the price for each unit of any security
covered by this Option.
Upon the reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon the sale of substantially all the property or
more than 80% of the then outstanding stock of the Company to another
corporation, the Company or such successor or purchasing corporation (or an
affiliate of such successor or purchasing corporation), as the case may be,
agrees that the Option Holder shall have the right thereafter upon payment of
the Exercise Price in effect immediately prior to such action to purchase upon
exercise of each Option the kind and amount of shares and other securities and
property (including cash) which he would have owned or have been entitled to
receive after the happening of such reorganization, consolidation, merger, sale
or conveyance had such Option been exercised immediately prior to such action.
The provisions of this paragraph shall similarly apply to successive
reorganizations, consolidations, mergers, sales or conveyances. Adjustments
under this paragraph 7 shall be made by the Board of Directors, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares shall be issued
under any such adjustment.
8. Neither the Option Holder nor any other person legally entitled to
exercise this option shall be entitled to any of the rights or privileges of a
shareholder of the Company in respect of any shares issuable upon any exercise
of this Option unless and until a certificate or certificates representing such
shares shall have been actually issued and delivered to him.
9. This Option has been executed and delivered the day and year first
above-written at Irvine, California, and the interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California.
ROEX, INC.
By:__________________________________
Rodney H. Burreson
President
BISON DEVELOPMENT FUND, L.P.
By:_________________________________
Jay Murphy, President of
Bison Investment Group, Inc.,
General Partner