Document:

stbr_ex103.htm

Exhibit 10.3

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").

 

NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.

 

 

THE HOLDER OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES MUST NOT TRADE THE SECURITIES IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS IN SECTION 13 OF MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S. OVER THE COUNTER MARKETS ARE MET.

 

STOCK OPTION AND SUBSCRIPTION AGREEMENT

 

 

(for Non-U.S. Persons)

 

 

THIS STOCK OPTION AND SUBSCRIPTION AGREEMENT is entered into as of the 3rd day of November, 2015 (the "Date of Grant").

 

BETWEEN:

 

STRONGBOW RESOURCES INC. (the "Company"), a company incorporated in the State of Nevada and doing business in the City of Calgary in the Province of Alberta

 

AND:

 

ROBERT MADZEJ (the "Optionee"), a business person, having a business address of 5-331 Riverside Drive, North Vancouver, British Columbia

 

RECITALS

 

WHEREAS:

 

A.                      The Optionee is a director, officer, consultant or employee of the Company or one of the Company’s subsidiaries;

 

  

  

  

 

B.                      The Board of Directors of the Company (the "Board") has approved and adopted the 2014 Stock Option Plan (the "Plan"), pursuant to which the Board is authorized to grant to employees and other selected persons stock options to purchase common shares of the Company; and

 

C.                      The Board has authorized the grant to the Optionee of stock options to purchase a total of 300,000 common shares of the Company.

 

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of other good and valuable consideration and the sum of One ($1.00) Dollar now paid by the Optionee to the Company (the receipt and sufficiency whereof is hereby acknowledged), it is hereby agreed by and between the parties as follows:

 

1.1 In this Agreement, the following terms shall have the following meanings:

 

	
(a)  

	
"Common Stock" means the shares of common stock of the Company;

 

	
(b)  

	
"Exercise Payment" means the amount of money equal to the Exercise Price multiplied by the number of Optioned Shares specified in the Notice of Exercise;

 

	
(c)  

	
"Exercise Price" means $0.10USD per Optioned Shares;

 

	
(d)  

	
"Expiry Date" means the date that is the fifth anniversary of the Date of Grant;

 

	
(e)  

	
"Notice of Exercise" means a notice in writing addressed to the Company at its address first recited (or such other address of the Company as may from time to time be notified to the Optionee in writing), substantially in the form attached as Exhibit "A" hereto, which notice shall specify therein the number of Optioned Shares in respect of which the Options are being exercised;

 

	
(f)  

	
"Options" means the irrevocable right and option to purchase, from time to time, all, or any part of the Optioned Shares granted to the Optionee by the Company pursuant to Section 1.3 of this Agreement;

 

	
(g)  

	
"Optioned Shares" means the shares of Common Stock, subject to the Options;

 

	
(h)  

	
"Securities" means, collectively, the Options and the Optioned Shares;

 

	
(i)  

	
"Shareholders" means holders of record of the shares of Common Stock;

 

	
(j)  

	
"U.S. Person" shall have the meaning ascribed thereto in Regulation S under the 1933 Act, and for the purpose of the Agreement includes any person in the United States; and

 

	
(k)  

	
"Vested Options" means the Options that have vested in accordance with Section 1.4 of this Agreement.

 

1.2 Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Plan.

 

1.3 The Company agrees to offer to the Optionee the option to purchase, upon the terms and conditions set forth herein and in the Plan, as applicable, Options to purchase a total of 300,000 Optioned Shares at the Exercise Price, subject to the cancellation provisions in Section.

 

  

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1.4 The Options vest on the Date of Grant.

 

1.5 The Options shall, at 5:00 p.m. (Pacific time) on the Expiry Date (or on such earlier date as provided for by the Plan) forthwith expire and be of no further force or effect whatsoever.

1.6 These Options are subject to the rules of any stock exchange on which the Common Stock is trading, including any rules relating to the termination of options.

1.7 Subject to compliance with any applicable securities laws, the Options shall be exercisable, in full or in part until termination; provided, however, that any Optionee who is subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934 with respect to the Common Stock shall be precluded from selling, transferring or otherwise disposing of any Common Stock underlying any Options during the six (6) months immediately following the grant of that Option.  If less than all of the shares included in the vested portion of any Options are purchased, the remainder may be purchased at any subsequent time prior to the Expiry Date.  No portion of any Options for less than fifty (50) shares (as adjusted pursuant to Section 5.1(m) of the Plan) may be exercised; provided, that if the vested portion of any Options is less than fifty (50) shares, it may be exercised with respect to all shares for which it is vested.  Only whole shares may be issued pursuant to the exercise of any Options, and to the extent that any Options covers less than one (1) share, it is unexercisable.

1.8 Each exercise of the Options shall be by means of delivery of a Notice of Exercise (which may be in the form attached hereto as Exhibit A) to the Secretary of the Company at its principal executive office, specifying the number of shares of Common Stock to be purchased and accompanied by payment in cash by certified check or cashier's check in the amount of the full exercise price for the Common Stock to be purchased.  In addition to payment in cash by certified check or cashier's check, an Optionee or transferee of the Options may pay for all or any portion of the aggregate exercise price by complying with one or more of the following alternatives:

 

	
  

	
(a)

	
by delivering a properly executed Notice of Exercise together with irrevocable instructions to a broker promptly to sell or margin a sufficient portion of the Common Stock and deliver directly to the Company the amount of sale or margin loan proceeds to pay the exercise price; or

 

	
  

	
(b)

	
by complying with any other payment mechanism approved by the Plan Administrator at the time of exercise.

 

It is a condition precedent to the issuance of Optioned Shares that the Optionee execute and/or deliver to the Company all documents and withholding taxes required in accordance with Section 5.1 of the Plan.

 

 

1.9 Nothing in this Agreement shall obligate the Optionee to purchase any Optioned Shares except those Optioned Shares in respect of which the Optionee shall have exercised the Options in the manner provided in this Agreement.

 

1.10 The terms of the Options are subject to the provisions of the Plan, as the same may from time to time be amended, and any inconsistencies between this Agreement and the Plan, as the same may be from time to time amended, shall be governed by the provisions of the Plan, a copy of which has been delivered to the Optionee, and which is available for inspection at the principal offices of the Company.

 

2.  Acknowledgements of the Optionee

 

2.1 The Optionee acknowledges and agrees that:

 

  

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(a)  

	
none of the Options or the Optioned Shares have been registered under the 1933 Act or under any state securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state securities laws;

 

	
(b)  

	
the Company has not undertaken, and will have no obligation, to register any of the Securities under the 1933 Act;

 

	
(c)  

	
the Optionee has received and carefully read this Agreement and the public information which has been filed with the Securities and Exchange Commission (the "SEC") in compliance or intended compliance with applicable securities legislation (collectively, the "Company Information");

 

	
(d)  

	
the decision to execute this Agreement and acquire the Securities hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company, and such decision is based entirely upon a review of the Company Information (the receipt of which is hereby acknowledged);

 

	
(e)  

	
no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities;

 

	
(f)  

	
there is no government or other insurance covering the Securities;

 

	
(g)  

	
there are risks associated with an investment in the Securities;

 

	
(h)  

	
the Company has advised the Optionee that the Company is relying on an exemption from the requirements to provide the Optionee with a prospectus and to sell the Securities through a person registered to sell securities under the Securities Act (British Columbia) (the "B.C. Act") and, as a consequence of acquiring the Securities pursuant to this exemption, certain protections, rights and remedies provided by the B.C. Act, including statutory rights of rescission or damages, will not be available to the Optionee;

 

	
(i)  

	
the Optionee has not acquired the Securities as a result of, and will not itself engage in, any "directed selling efforts" (as defined in Regulation S under the 1933 Act) in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Securities; provided, however, that the Optionee may sell or otherwise dispose of the Securities pursuant to registration thereof under the 1933 Act and any applicable state and provincial securities laws or under an exemption from such registration requirements;

 

	
(j)  

	
the Optionee and the Optionee's advisor(s) (if applicable) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the distribution of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information about the Company;

 

  

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(k)  

	
the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Optionee during reasonable business hours at its principal place of business, and all documents, records and books in connection with the distribution of the Securities hereunder have been made available for inspection by the Optionee, the Optionee's attorney and/or advisor(s) (if applicable);

 

	
(l)  

	
the Company is entitled to rely on the representations and warranties and the statements and answers of the Optionee contained in this Agreement;

 

	
(m)  

	
the Optionee will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Optionee contained herein or in any document furnished by the Optionee to the Company in connection herewith being untrue in any material respect or any breach or failure by the Optionee to comply with any covenant or agreement made by the Optionee to the Company in connection therewith;

 

	
(n)  

	
no representation has been made to the Optionee that any of the Securities will be listed on any stock exchange or automated dealer quotation system at the time that Optionee chooses to exercise their Options;

 

	
(o)  

	
in addition to resale restrictions imposed under U.S. securities laws, there are additional restrictions on the Optionee’s ability to resell any of the Securities in Canada under applicable provincial securities laws and Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over-the-Counter Markets (“MI 51-105”) of the Canadian Securities Administrators;

 

	
(p)  

	
the Company will refuse to register any transfer of the Securities not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and in accordance with applicable state and provincial securities laws;

 

	
(q)  

	
the statutory and regulatory basis for the exemption claimed for the offer of the Securities, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act or any applicable state and provincial securities laws;

 

	
(r)  

	
the Optionee has been advised to consult the Optionee's own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:

 

	
(i)  

	
any applicable laws of the jurisdiction in which the Optionee is resident in connection with the distribution of the Securities hereunder, and

 

	
(ii)  

	
applicable resale restrictions; and

 

  

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(s)  

	
this Agreement is not enforceable by the Optionee unless it has been accepted by the Company.

 

3.  Representations, Warranties and Covenants of the Optionee

 

3.1 The Optionee hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the closing) that:

 

	
(a)  

	
the Optionee is a director, officer, consultant or employee of the Company or one of the Company’s subsidiaries;

 

	
(b)  

	
if the Optionee is a consultant, the Optionee:

 

	
(i)  

	
is engaged to provide services to the Company other than services provided in relation to a distribution,

 

	
(ii)  

	
provides the services under a written contract with the issuer or a related entity of the Company, and

 

	
(iii)  

	
spends or will spend a significant amount of time and attention on the affairs and business of the Company;

 

	
(c)  

	
the Optionee has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto;

 

	
(d)  

	
the Optionee has received and carefully read this Agreement;

 

	
(e)  

	
the Optionee has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Optionee enforceable against the Optionee in accordance with its terms;

 

	
(f)  

	
the Optionee is not acquiring the Securities for the account or benefit of, directly or indirectly, any U.S. Person;

 

	
(g)  

	
the Optionee is not a U.S. Person;

 

	
(h)  

	
the Optionee is resident in the jurisdiction set out on page 1 of this Agreement;

 

	
(i)  

	
the acquisition of the Securities by the Optionee as contemplated in this Agreement complies with or is exempt from the applicable securities legislation of the jurisdiction of residence of the Optionee;

 

	
(j)  

	
the Optionee is acquiring the Securities for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons;

 

	
(k)  

	
the Optionee is outside the United States when receiving and executing this Agreement and is acquiring the Securities as principal for the Optionee's own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalisation thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Securities;

 

  

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(l)  

	
the Optionee is not an underwriter of, or dealer in, the common shares of the Company, nor is the Optionee participating, pursuant to a contractual agreement or otherwise, in the distribution of the Securities;

 

	
(m)  

	
the Optionee (i) has adequate net worth and means of providing for his/her/its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Securities for an indefinite period of time, and can afford the complete loss of such investment;

 

	
(n)  

	
the Optionee is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the investment, and the Optionee has carefully read and considered the matters set forth under the caption "Risk Factors" appearing in the Company's various disclosure documents, filed with the SEC;

 

	
(o)  

	
the Optionee has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Securities and the Company;

 

	
(p)  

	
the Optionee understands and agrees that the Company and others will rely upon the truth and accuracy of the acknowledgements, representations and agreements contained in this Agreement, and agrees that if any of such acknowledgements, representations and agreements are no longer accurate or have been breached, the Optionee shall promptly notify the Company;

 

	
(q)  

	
the Optionee acknowledges that the Optionee has not acquired the Securities as a result of, and will not itself engage in, any "directed selling efforts" (as defined in Regulation S under the 1933 Act) in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of the Securities; provided, however, that the Optionee may sell or otherwise dispose of the Securities pursuant to registration of the Securities pursuant to the 1933 Act and any applicable state and provincial securities laws or under an exemption from such registration requirements and as otherwise provided herein;

 

	
(r)  

	
the Optionee has made an independent examination and investigation of an investment in the Securities and the Company and has depended on the advice of its legal and financial advisors and agrees that the Company will not be responsible in anyway whatsoever for the Optionee's decision to invest in the Securities and the Company;

 

	
(s)  

	
the Optionee understands and agrees that none of the Options or the Optioned Securities have been or will be registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state securities laws;

 

	
(t)  

	
it understands and agrees that the Company will refuse to register any transfer of the Optioned Securities not made in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act;

 

  

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(u)  

	
the Optionee is not aware of any advertisement of any of the Securities and is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

 

	
(v)  

	
no person has made to the Optionee any written or oral representations:

 

	
(i)  

	
that any person will resell or repurchase any of the Securities;

 

	
(ii)  

	
that any person will refund the purchase price of any of the Securities; or

 

	
(iii)  

	
as to the future price or value of any of the Securities.

 

4.  Acknowledgement and Waiver

 

4.1 The Optionee has acknowledged that the decision to purchase the Securities was solely made on the basis of publicly available information contained in the Company Information.  The Optionee hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Optionee might be entitled in connection with the distribution of any of the Securities.

 

5.  Legending of Subject Securities

 

5.1 The Optionee hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").  NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.

 

  

8

  

 

THE HOLDER OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES MUST NOT TRADE THE SECURITIES IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS IN SECTION 13 OF MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S. OVER THE COUNTER MARKETS ARE MET.

 

5.2 The Optionee hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Agreement.

 

6.  Costs

 

6.1 The Optionee acknowledges and agrees that all costs and expenses incurred by the Optionee (including any fees and disbursements of any special counsel retained by the Optionee) relating to the acquisition of the Securities shall be borne by the Optionee.

 

7.  Governing Law

 

7.1 This Agreement is governed by the laws of the State of Nevada.  The Optionee irrevocably attorns to the exclusive jurisdiction of the courts of the State of Nevada.

 

8.  Survival

 

8.1 This Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the shares underlying the Options by the Optionee pursuant hereto.

 

9.  Assignment

 

9.1 This Agreement is not transferable or assignable.

 

10.  Counterparts and Electronic Means

 

10.1 This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument.  Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date first above written.

 

11.  Severability

 

11.1 The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

12.  Entire Agreement

 

12.1 Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement is the only agreement between the Optionee and the Company with respect to the Options, and this Agreement and the Plan supersede all prior and contemporaneous oral and written statements and representations and contain the entire agreement between the parties with respect to the Options.

 

  

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13.  Effectiveness

 

13.1 This Agreement shall be deemed to be effective following the delivery by the Optionee to the Company of two fully executed copies of this Agreement.

 

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of the date first above written.

 

 

STRONGBOW RESOURCES INC.

 

 

By:           /s/Michael Caetano                                                      

Authorized Signatory

 

	
 

SIGNED, SEALED and DELIVERED by ROBERT MADZEJ in the presence of:

	
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Signature

	
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/s/Robert Madzej

	  	
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ROBERT MADZEJ

	  	
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Print Name

	
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Address

	
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Occupation

	
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EXHIBIT A

 

	
TO:

	
STRONGBOW RESOURCES INC. (the "Company")

 

	
  

	
Suite 200, 6751 Westminster Highway

 

	
  

	
Richmond, British Columbia

 

Notice of Exercise

 

This Notice of Election to Exercise shall constitute proper notice pursuant to the Company’s 2014 Stock Option Plan (the "Plan") and Section 1.9 of that certain Stock Option Agreement (the "Agreement") dated as of ____________________________, between the Company and the undersigned.  The undersigned hereby elects to exercise Optionee's option to purchase____________________ shares of the common stock of the Company at a price of $______ per share, for aggregate consideration of $____________, on the terms and conditions set forth in the Agreement and the Plan.  Such aggregate consideration, in the form specified in Section 1.9 of the Agreement, accompanies this notice.

 

The Optionee represents that, at the time of exercise of any of the Options, all of the representations and warranties contained in the Agreement are true and accurate.

 

The Optionee hereby directs the Company to issue, register and deliver the certificates representing the shares as follows:

 

	
Registration Information:

	  	
Delivery Instructions:

	  	  	  
	
Name to appear on certificates

	  	
Name

	  	  	  
	
Address

	  	
Address

	  	  	  
	  	  	  
	  	  	  
	  	  	
Telephone Number

 

DATED at ____________________________________, the ____ day of______________, _______.

 

(Name of Optionee – Please type or print)

 

(Signature and, if applicable, Office)

 

(Address of Optionee)

 

(City, State, and Zip Code of Optionee)

(Fax Number)Exhibit_10_19_4

		

			EXHIBIT 10.19.4

		

		
			FOURTH AMENDMENT TO AMENDED AND RESTATED 
		

		
			LOAN AND SECURITY AGREEMENT
		

		
			 
		

		
			This Fourth Amendment to Amended and Restated Loan and Security Agreement (“Amendment”) is dated as of September 2, 2015, by and among C&F FINANCE COMPANY and such other Persons joined to the Loan Agreement as Borrowers from time to time (collectively, the “Borrowers” and each a “Borrower”), WELLS FARGO BANK, N.A., successor by merger to Wells Fargo Preferred Capital, Inc., as agent for Lenders (in such capacity, “Agent”), and the financial institutions a party hereto as lenders (collectively, the “Lenders” and each is a “Lender”).
		

		
			BACKGROUND
		

		
			 
		

			
	
			
				 A.
			Borrowers, Lenders and Agent are parties to a certain Amended and Restated Loan and Security Agreement dated as of August 25, 2008 (as amended or modified from time to time, the “Loan Agreement”).  Capitalized terms used but not otherwise defined in this Amendment shall have the meanings respectively ascribed to them in the Loan Agreement.

			
	
			
				 B.
			Borrowers have requested and Agent and Lenders have agreed to amend the Loan Agreement in certain respects, all on the terms and conditions set forth herein.

		
			NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby promise and agree as follows:
		

			
	
			
				 1.
			Amendments.  Upon the effectiveness of this Amendment, the Loan Agreement shall be amended as follows:

		
			 
		

			
	
			
				 (a)
			Definition.  The following definition contained in Section 1.1 of the Loan Agreement is amended and restated as follows:

		
			 
		

		
			“Maturity Date” means July 31, 2018, as such date may be extended from time to time in accordance with the provisions of Section 2.4 of this Agreement.
		

			
	
			
				 (b)
			Optional Prepayments.  Section 2.8(a) of the Loan Agreement is amended and restated as follows:

		
			(a)Optional Prepayments.  Borrowers may prepay the Loan from time to time, in full or in part not to exceed $5,000,000 without notice, and, in part, in excess of $5,000,000 upon 5 Business Day’s prior notice to Agent without premium or penalty, provided that (i) in the event Borrowers repay the Loan in full or the Obligations are accelerated prior to the date which is twenty four (24) months before the Maturity Date, Borrower shall pay the sum equal to 0.75% of the Maximum Principal Amount as a prepayment fee, (ii) in the event Borrowers repay the Loan in full or the Obligations are accelerated on or after the date which is twenty four (24) months before the Maturity Date but prior to the date which is twelve (12) months before the Maturity Date, Borrowers shall pay the sum equal to 0.50% of the 

		 

 

Maximum Principal Amount as a prepayment fee, (iii) in the event Borrowers repay the Loan in full or the Obligations are accelerated on or after the date which is twelve (12) months before the Maturity Date but prior to the date which is six (6) months before the Maturity Date, Borrower shall pay the sum equal to 0.25% of the Maximum Principal Amount as a prepayment fee; (iv) prepayments shall be in a minimum amount of $10,000 and $10,000 increments in excess thereof; and (iii) partial prepayments prior to the Termination Date shall not reduce Lenders’ Commitments under this Agreement and may be reborrowed, subject to the terms and conditions hereof for borrowing, and partial prepayments will be applied first to accrued interest and fees and then to outstanding Advances.  Each Borrower acknowledges that the above described fee is an estimate of Lenders’ damages in the event of early termination and is not a penalty.  In the event of termination of the credit facility established pursuant to this Agreement, all of the Obligations shall be immediately due and payable upon the termination date stated in any notice of termination.  All undertakings, agreements, covenants, warranties and representations of Borrowers contained in the Credit Documents shall survive any such termination, and Agent shall retain its liens in the Collateral and all of its rights and remedies under the Credit Documents notwithstanding such termination until Borrowers have paid the Obligations to Agent and Lenders, in full, in immediately available funds, together with the applicable prepayment fee, if any.   Notwithstanding anything to the contrary contained herein, Borrowers shall not be obligated to pay the above described prepayment fee if Borrowers repay the Loan in full as a result of Agent making a demand for payment under Section 2.10 hereof and Borrowers have not exercised their rights under Section 2.14 hereof as a result of such demand.
		

			
	
			
				 (c)
			Litigation, Enforcement Actions and Requests for Information.  Section 6.11 of the Loan Agreement is amended and restated as follows:

		
			Section 6.11Litigation, Enforcement Actions and Requests for Information.  Borrowers will promptly notify Agent (a) any litigation or action instituted or, to Borrowers’ knowledge, threatened against any Borrower or any of their Subsidiaries and of the entry of any judgment or lien against any property of Borrower in an amount of $25,000 or more as to any separate action, litigation, judgment or lien instituted, threatened or entered or in an aggregate amount of $75,000 or more as to all actions, litigation, judgments, or liens instituted, threatened or entered; (b) any enforcement action or investigation instituted or, to Borrowers’ knowledge, threatened in writing, against any Borrower or any of their Subsidiaries by any governmental authority, including without limitation any proceeding or action to be commenced by the filing of a stipulation and consent; or (c) receipt by any Borrower or any of their Subsidiaries of an “Early 

		 

		

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Warning Notice,” “Notice and Opportunity to Respond and Advise” or “Civil Investigative Demand” from the Consumer Financial Protection Bureau or similar notice or request from any other governmental authority.
		

			
	
			
				 (d)
			New Affirmative Covenant.  The following new Section 6.15 is added to the Loan Agreement:

		
			Section 6.15Chattel Paper/Jurisdictions.
		

		
			(a)Upon Agent’s written request from time to time, but in no event more frequently than once per calendar year while no Event of Default has occurred and is continuing, Borrowers shall engage outside legal counsel reasonably acceptable to Agent (at Borrowers’ sole cost and expense) to undertake a review of Receivable documentation of Borrowers and their Subsidiaries to confirm that such documentation complies with applicable law in all material respects.  Borrowers shall provide Agent with copies of such review within sixty (60) days after each such request with the results of such documentation review to be reasonably acceptable to Agent in all material respects.
		

		
			(b)Borrowers shall promptly (i) notify Agent of either (A) Borrowers or any of their Subsidiaries conducting business in any new jurisdiction, and (B) Borrowers or any of their Subsidiaries making any material modifications to its respective Receivable documentation and (ii) upon the request of Agent, provide Agent a list of jurisdictions in which Borrowers and their Subsidiaries conduct business and licenses held in each such jurisdiction.
		

			
	
			
				 (e)
			Investments and Acquisitions.  Section 7.7 of the Loan Agreement is amended and restated as follows:

		
			Section 7.7Investments and Acquisitions.  (a) Make any investments in any other firm, entity or corporation; (b) enter into any new business activities or ventures not related to such Borrower’s business existing as of the date of this Agreement; (c) create or form any Subsidiary; or (d) purchase any Property for an amount greater than $25,000,000 in one or a series of related transactions; provided, however, (x) Borrowers shall provide written notice to Agent at least 10 days prior to each such purchase and (y) for purchases of greater than $1,000,000, all such Receivables shall be excluded from the determination of the Borrowing Base and deemed ineligible Receivables except with the written consent of Agent.
		

			
	
			
				 2.
			Effectiveness Conditions.  This Amendment shall be effective upon the completion of the following conditions precedent (all agreements, documents and instruments to be in form and substance satisfactory to Agent and Agent’s counsel):

		 

		

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				 (a)
			Execution and delivery by Borrowers and Lenders of this Amendment to Agent;

			
	
			
				 (b)
			Execution and/or delivery by the parties of all other agreements, instruments and documents requested by Agent to effectuate and implement the terms hereof and the Credit Documents.

			
	
			
				 3.
			Representations and Warranties.  Each Borrower represents and warrants to Agent and Lenders that:

			
	
			
				 (a)
			All warranties and representations made to Agent under the Loan Agreement and the Credit Documents are true and correct as to the date hereof.

			
	
			
				 (b)
			The execution and delivery by Borrowers of this Amendment and the performance by each of them of the transactions herein contemplated (i) are and will be within such party’s powers, (ii) have been authorized by all necessary organizational action, and (iii) are not and will not (1) be in contravention of any order of any court or other agency of government, of law or any other indenture, agreement or undertaking to which Borrowers, or any of them, is a party or by which the property of Borrowers, or any of them, is bound, or (2) be in conflict with, result in a breach of, or constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or undertaking or result in the imposition of any lien, charge or encumbrance of any nature on any of the properties of Borrowers, or any of them.

			
	
			
				 (c)
			This Amendment and any assignment, instrument, document, or agreement executed and delivered in connection herewith will be valid, binding and enforceable in accordance with its respective terms.

			
	
			
				 (d)
			No Event of Default or Default has occurred under the Loan Agreement or any of the other Credit Documents.

			
	
			
				 4.
			Business Operations.  Each Borrower hereby agrees to continue to operate its business and operations in a manner consistent with its past business practice, continue to meet the standards generally observed by prudent finance companies and conform to its policies as have been previously disclosed to Agent in writing.

			
	
			
				 5.
			Representations and Release of Claims.  Except as otherwise specified herein, the terms and provisions hereof shall in no manner impair, limit, restrict or otherwise affect the obligations of any Borrower or any third party to Agent and Lenders as evidenced by the Credit Documents.  Each Borrower hereby acknowledges, agrees, and represents that (a) as of the date of this Amendment, there are no claims or offsets against, or defenses or counterclaims to, the terms or provisions of the Credit Documents or the other obligations created or evidenced by the Credit Documents; (b) as of the date of this Amendment, no Borrower has any claims, offsets, defenses or counterclaims arising from any of Agent’s or any Lender’s acts or omissions with respect to the Credit Documents or Agent’s or any Lender’s performance under the Credit Documents; and (c) each Borrower promises to pay to the order of Agent and Lenders the indebtedness evidenced by the Notes according to the terms thereof.  In consideration of the modification of certain provisions of the Credit Documents, all as herein provided, and the other benefits received by Borrowers hereunder, each Borrower hereby RELEASES, RELINQUISHES and forever DISCHARGES Agent and Lenders, and their 

		 

		

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	predecessors, successors, assigns, shareholders, principals, parents, subsidiaries, agents, officers, directors, employees, attorneys and representatives (collectively, the “Released Parties”), of and from any and all present claims, demands, actions and causes of action of any and every kind or character, whether known or unknown, which Borrowers, or any of them, has or may have against Released Parties arising out of or with respect to any and all transactions relating to the Loan Agreement, the Notes and the other Credit Documents occurring prior to the date hereof.

			
	
			
				 6.
			Collateral.  As security for the payment of the Obligations and satisfaction by Borrowers of all covenants and undertakings contained in the Loan Agreement and the Credit Documents, each Borrower reconfirms the prior security interest and lien on, upon and to, its Collateral, whether now owned or hereafter acquired, created or arising and wherever located.  Borrowers each hereby confirm and agree that all security interests and Liens granted to Agent for the ratable benefit of Lenders and Wells Fargo Affiliates continue in full force and effect and shall continue to secure the Obligations.  All Collateral remains free and clear of any Liens other than Permitted Liens.  Nothing herein contained is intended to in any manner impair or limit the validity, priority and extent of Agent’s existing security interest in and Liens upon the Collateral.

			
	
			
				 7.
			Acknowledgment of Indebtedness and Obligations.  Borrowers hereby acknowledge and confirm that, as of the date of this Amendment, Borrowers are indebted to Agent and Lenders, without defense, setoff or counterclaim, under the Loan Agreement (in addition to any other indebtedness or obligations owed by Borrowers to Wells Fargo Affiliates) in the aggregate principal amount of $91,029,209.41, plus continually accruing interest and all fees, costs, and expenses, including reasonable attorneys’ fees, incurred through the date hereof.

			
	
			
				 8.
			Ratification of Credit Documents.  This Amendment shall be incorporated into and deemed a part of the Loan Agreement.  Except as expressly set forth herein, all of the terms and conditions of the Loan Agreement and Credit Documents are hereby ratified and confirmed and continue unchanged and in full force and effect.  All references to the Loan Agreement shall mean the Loan Agreement as modified by this Amendment.

			
	
			
				 9.
			APPLICABLE LAW.  THIS AMENDMENT AND ALL DOCUMENTS EXECUTED IN CONNECTION HEREWITH SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN THE STATE OF IOWA AND SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF IOWA.

			
	
			
				 10.
			WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS AMENDMENT OR ANY CREDIT DOCUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR AGENT AND LENDERS TO ENTER INTO THIS AMENDMENT.

			
	
			
				 11.
			Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same respective agreement.  Signature by facsimile or PDF shall also bind the parties hereto.

		
			

		 

		

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[SIGNATURES ON FOLLOWING PAGES]
		

		
			

		 

		

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized officers as of the date first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						BORROWER:

					
					
						C&F FINANCE COMPANY

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Thomas F. Cherry

				
	
					
						 

					
					
						Name:

					
					
						Thomas F. Cherry

				
	
					
						 

					
					
						Title:

					
					
						President/CFO

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						AGENT:

					
					
						WELLS FARGO BANK, N.A.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ William M. Laird

				
	
					
						 

					
					
						Name:

					
					
						William M. Laird

				
	
					
						 

					
					
						Title:

					
					
						Senior Vice President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						LENDERS:

					
					
						WELLS FARGO BANK, N.A.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ William M. Laird

				
	
					
						 

					
					
						Name:

					
					
						William M. Laird

				
	
					
						 

					
					
						Title:

					
					
						Senior Vice President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						FIRST TENNESSEE BANK, NATIONAL

				
	
					
						 

					
					
						ASSOCIATION

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Micah Dickey

				
	
					
						 

					
					
						Name:

					
					
						Micah Dickey

				
	
					
						 

					
					
						Title:

					
					
						Vice President

				

		
			 
		

		
			 
		

		
			[SIGNATURE PAGE TO FOURTH AMENDMENT]
		

		 

		

			 

		

		

			116549.01054/22332916v.2

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