EXHIBIT 4.6
THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.
NOT EXERCISABLE PRIOR TO THE LATER OF ___________, 2002 OR THE CONSUMMATION OF A
BUSINESS COMBINATION AS DEFINED HEREIN. VOID AFTER 5:00 P.M. EASTERN TIME,
___________, 2006.
UNIT PURCHASE OPTION
For the Purchase of
________Units
of
FROST CAPITAL GROUP, INC.
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $100 duly paid by or on behalf
of ____________________ ("Holder"), as registered owner of this Purchase Option,
to Frost Capital Group, Inc. ("Company"), Xxxxxx is entitled, at any time or
from time to time, commencing on the later to occur of ___________, 2002 or the
consummation of a merger, exchange of capital stock, asset acquisition or other
similar business combination ("Business Combination") ("Commencement Date"), and
at or before 5:00 p.m., Eastern Time, ___________, 2006 ("Expiration Date"), but
not thereafter, to subscribe for, purchase and receive, in whole or in part, up
to ( ) units ("Units") of the Company, each Unit consisting of one share of
common stock of the Company, $.0001 par value per share ("Common Stock"), and
one Class A redeemable warrant ("Class A Warrant"). Each Class A Warrant
entitles the Holder of such warrant to purchase one share of Common Stock and
one Class B redeemable warrant ("Class B Warrant"). Each Class B Warrant
entitles the Holder of such warrant to purchase one share of Common Stock and
one Class C redeemable warrant ("Class C Warrant" and, together with the Class A
Warrants and the Class B Warrants, "Warrants"). Each Class C Warrant entitles
the Holder of such warrant to purchase one share of Common Stock. The terms of
the Class A Warrant, the Class B Warrant and the Class C Warrant are identical
to the respective terms of the Class A redeemable warrant, the Class B
redeemable warrant and the Class C redeemable warrant (collectively, the "Public
Warrants"), which have been registered for sale in connection with an offering
of Units to the public ("Offering") as more fully described in a registration
statement on Form S-1 [File No. ] ("Registration Statement"), except that the
expiration date of each of the Warrants is five years after the effective date
(the "Effective Date") of the Registration Statement. The terms of the Public
Warrants are fully described in that certain warrant agreement, dated as of ,
2001, between the Company and American Stock Transfer & Trust Company. If the
Expiration Date is a day on which banking institutions are authorized by law to
close, then this Purchase Option may be exercised on the next succeeding day
that is not such a day in accordance with the terms herein. During the period
ending on the Expiration Date, the Company agrees not to take any action that
would terminate the Purchase Option. This Purchase Option is initially
exercisable at $6.60 per Unit so purchased; provided, however, that upon the
occurrence of any of the events specified in Section
6 hereof, the rights granted by this Purchase Option, including the exercise
price per Unit and the number of Units (and shares of Common Stock and Class A
Warrants) to be received upon such exercise, shall be adjusted as therein
specified. The term "Exercise Price" shall mean the initial exercise price or
the adjusted exercise price, depending on the context.
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Units being purchased payable in cash. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, this Purchase Option shall become and be void without
further force or effect, and all rights represented hereby shall cease and
expire.
2.2 Legend. Each certificate for the securities purchased under this
Purchase Option shall bear a legend as follows unless such securities have been
registered under the Securities Act of 1933 ("Act").
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 ("Act") or
applicable state law. The securities may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act, or pursuant to
an exemption from registration under the Act and applicable
state law."
2.3 Conversion Right.
2.3.1 Determination of Amount. In lieu of the payment of the
Exercise Price in cash as set forth in Section 2.1 hereof, the Holder shall have
the right (but not the obligation) to convert any exercisable but unexercised
portion of this Purchase Option into securities ("Conversion Right") as follows:
Upon exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Exercise Price in cash) that number
of Units equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of the Purchase Option being converted by (y) the "Market
Price" (as defined below). The "Value" of the portion of the Purchase Option
being converted shall equal the remainder derived from subtracting (a) the
Exercise Price multiplied by the number of Units underlying the portion of the
Purchase Option being converted from (b) the Market Price of the Units,
multiplied by the number of Units underlying the portion of the Purchase Option
being converted. As used herein, the term "Market Price" shall be deemed to be
the last reported sale price of the Units on the date prior to the date the
Conversion Right is exercised, or, in case no such reported sale takes place on
such day, the average of the last reported sale prices for the immediately
preceding three trading days, in either case as officially reported by the
principal securities exchange on which the Units are listed or admitted to
trading, or, if the Units are not listed or admitted to trading on any national
securities exchange or if any such exchange on which the Units are listed is not
their principal trading market, the last reported sale price as furnished by the
National Association of Securities Dealers, Inc. ("NASD") through the Nasdaq
National Market or SmallCap Market, or, if applicable, the OTC Bulletin Board,
or if the Units are not listed or admitted to trading on any of the foregoing
markets, or similar organization, as determined in good faith by resolution of
the Board of Directors of the Company, based on the best information available
to it; provided, however, that if the Units are no longer quoted on the
principal trading market on which the Common Stock and the Class A Warrants are
traded, the Market Price of the Units shall be equal to the average last
reported sale price of the Common Stock for the five trading days immediately
preceding such date ("Common Stock Price") plus the average last reported sale
price of the Class A Warrants for the five trading days preceding such date, as
quoted on the principal trading market for such securities determined as
described above; and provided
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further that if the Common Stock is traded but the Class A Warrants are not, the
Market Price of the Units shall be equal to two times the Common Stock Price
less the then exercise price of the Class A Warrants.
2.3.2 Exercise of Conversion Right. The Conversion Right may
be exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date by delivering to the Company this
Purchase Option with a duly executed exercise form attached hereto with the
conversion section completed.
2.4 Redemption of Warrants. The Company may redeem the Warrants only to
the extent that the Purchase Option has been exercised and the Warrants are
outstanding. In the event that the Company has redeemed the Class A Warrants
included in the Units sold to the public before this Purchase Option has been
exercised in full ("Redemption Date"), then the Holder shall have a period of
seven business days following the exercise of any portion of this Purchase
Option after the Redemption Date to exercise the Class A Warrants issuable upon
the exercise of the Purchase Option and, to exercise the Class B Warrants
issuable upon exercise of the Class A Warrants and to exercise the Class C
Warrants issuable upon exercise of the Class B Warrants. The Company shall
redeem such Warrants on the eighth business day following the exercise of the
Purchase Option if such Warrants have not been exercised during the seven-day
period.
3. Transfer.
3.1 General Restrictions. The registered Holder of this Purchase
Option, by its acceptance hereof, agrees that it will not sell, transfer or
assign or hypothecate this Purchase Option prior to the Commencement Date to
anyone other than (i) an officer or director of GBI Capital Partners Inc. ("GBI"
or the "Representative"), or of any broker-dealer that executed the Agreement
Among Underwriters with the Representative (each an "Underwriter" and together
with GBI, the "Underwriters") or of any broker-dealer that executed the Selected
Dealer Agreement with the Representative ("Selected Dealer") in connection with
the Offering, or (ii) any Underwriter or Selected Dealer. On and after the
Commencement Date, transfers to others may be made subject to compliance with or
exemptions from applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with the Purchase Option and
payment of all transfer taxes, if any, payable in connection therewith. The
Company shall immediately transfer this Purchase Option on the books of the
Company and shall execute and deliver a new Purchase Option or Purchase Options
of like tenor to the appropriate assignee(s) expressly evidencing the right to
purchase the aggregate number of Units purchasable hereunder or such portion of
such number as shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Act. The securities underlying this
Purchase Option shall not be transferred unless and until (i) the Company has
received the opinion of counsel for the Holder that the securities may be sold
pursuant to an exemption from registration under the Act, the availability of
which is established to the reasonable satisfaction of the Company (the Company
hereby agreeing that the opinion of Xxxxxxxx Xxxxxx shall be deemed satisfactory
evidence of the availability of an exemption), or (ii) a registration statement
or a post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the
Securities and Exchange Commission ("Commission").
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4. New Purchase Options to be Issued.
4.1 Partial Exercise, Conversion or Transfer. Subject to the
restrictions in Section 3 hereof, this Purchase Option may be exercised,
converted or assigned in whole or in part. In the event of the exercise,
conversion or assignment hereof in part only, upon surrender of this Purchase
Option for cancellation, together with the duly executed exercise or assignment
form and funds (except in the case of conversion) sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of Units purchasable hereunder as to which this Purchase Option
has not been exercised, converted or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.
5. Registration Rights.
5.1 Demand Registration.
5.1.1 Grant of Right. The Company, upon written demand
("Initial Demand Notice") of the Holder(s) of at least 51% in the aggregate
("Majority Holders") of the Common Stock underlying, directly and indirectly,
the Purchase Options, agrees to register, on one occasion, all or any portion of
the securities underlying, directly and indirectly, the Purchase Options,
including the Common Stock included in the Units, the Warrants and the Common
Stock underlying the Warrants (the "Registrable Securities") requested by the
Majority Holders in the Initial Demand Notice. On such occasion, the Company
will file a registration statement or a post-effective amendment to the
Registration Statement covering the Registrable Securities within 60 days after
receipt of the Initial Demand Notice and use its best efforts to have such
registration statement or post-effective amendment declared effective as soon as
possible thereafter. If the Company willfully fails to comply with the
provisions of this Section 5.1.1, the Company shall, in addition to any other
equitable or other relief available to the Holder(s), be liable for any and all
incidental, special and consequential damages sustained by the Holder(s). The
demand for registration may be made at any time during a period of four years
beginning one year from the Effective Date. The Company covenants and agrees to
give written notice of its receipt of any Initial Demand Notice by any Holder(s)
to all other registered Holders of the Purchase Options and/or the Registrable
Securities within 10 days from the date of the receipt of any such Initial
Demand Notice.
5.1.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. The Company agrees to use its reasonable best efforts to
cause the filing required herein to become effective promptly and to qualify or
register the Registrable Securities in such States as are reasonably requested
by the Holder(s); provided, however, that in no event shall the Company be
required to register the Registrable Securities in a State in which such
registration would cause (i) the Company to be obligated to qualify to do
business in such State, or would subject the Company to taxation as a foreign
corporation doing business in such jurisdiction or (ii) the principal
stockholders of the Company to be obligated to escrow their shares of capital
stock of the Company. The Company shall cause any registration statement or
post-effective amendment filed pursuant to the demand rights granted under
Section
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5.1.1 to remain effective for a period of nine consecutive months from the
effective date of such registration statement or post-effective amendment.
5.2 "Piggy-Back" Registration.
5.2.1 Grant of Right. In addition to the demand right of
registration, the Holders of the Purchase Options shall have the right at any
time commencing one year from the Effective Date and terminating on the seventh
anniversary of the Effective Date to include the Registrable Securities as part
of any other registration of securities filed by the Company (other than in
connection with a transaction contemplated by Rule 145(a) promulgated under the
Act or pursuant to Form S-8).
5.2.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than 15 days written notice prior to the proposed date of filing
of such registration statement. Such notice to the Holders shall continue to be
given for each applicable registration statement filed (during the period in
which the Purchase Option is exercisable) by the Company until such time as all
of the Registrable Securities have been registered and sold. The holders of the
Registrable Securities shall exercise the "piggyback" rights provided for herein
by giving written notice, within 20 days of the receipt of the Company's notice
of its intention to file a registration statement. The Company shall cause any
registration statement filed pursuant to the above "piggyback" rights to remain
effective for at least nine months from the date that the Holders of the
Registrable Securities are first given the opportunity to sell all of such
securities.
5.3 General Terms.
5.3.1 Indemnification. The Company shall indemnify the
Holder(s) of the Registrable Securities to be sold pursuant to any registration
statement filed in accordance with this Section 5 and each person, if any, who
controls such Holders within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
against all loss, claim, damage, expense or liability (including all reasonable
attorneys' fees and other expenses reasonably incurred in investigating,
preparing or defending against litigation, commenced or threatened, or any claim
whatsoever whether arising out of any action between the Underwriter and the
Company or between the Underwriter and any third party or otherwise) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such registration statement but only to the same extent and with
the same effect as the provisions pursuant to which the Company has agreed to
indemnify the Underwriter contained in Section 5 of the Underwriting Agreement.
The Holder(s) of the Registrable Securities to be sold pursuant to such
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
or their successors or assigns, in writing, for specific inclusion in such
registration statement to the same extent and with the same effect as the
provisions contained in Section 5 of the Underwriting Agreement pursuant to
which the Underwriters have agreed to indemnify the Company.
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5.3.2 Exercise of Warrants. Nothing contained in this Purchase
Option shall be construed as requiring the Holder(s) to exercise their Purchase
Options or Warrants prior to or after the initial filing of any registration
statement or the effectiveness thereof.
5.3.3 Documents Delivered to Holders. The Company shall
furnish GBI, as representative of the Holders participating in any of the
foregoing offerings, a signed counterpart, addressed to the participating
Holders, of (i) an opinion of counsel to the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, an opinion dated the date of the closing under any
underwriting agreement related thereto), and (ii) a "cold comfort" letter dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the date of the closing
under the underwriting agreement) signed by the independent public accountants
who have issued a report on the Company's financial statements included in such
registration statement, in each case covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities. The Company shall
also deliver promptly to GBI, as representative of the Holders participating in
the offering, and to the managing underwriter the correspondence and memoranda
described below and copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the registration statement and
permit GBI, as representative of the Holders, to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the NASD. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as GBI, as
representative of the Holders, shall reasonably request. The Company shall not
be required to disclose any confidential information or other records to GBI, as
representative of the Holders, or to any other person (i) until and unless such
persons shall have entered into reasonable confidentiality agreements (in form
and substance reasonably satisfactory to the Company, with the Company with
respect thereto and (ii) if such disclosure would require disclosure to the
public in accordance with Regulation FD promulgated under the Act.
5.3.4 Underwriting Agreement. The Company shall enter into an
underwriting agreement with the managing underwriter, if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this
Section 5, which managing underwriter shall be reasonably acceptable to the
Company. Such agreement shall be reasonably satisfactory in form and substance
to the Company, each Holder and such underwriter, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Registrable Securities and may, at their
option, require that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriter shall also be made to and
for the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriter except as they may relate to such Holders, their securities and
their intended methods of distribution. Such Holders, however, shall agree to
such covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that type used by the
managing underwriter. Further, such Holders shall execute appropriate custody
agreements and otherwise cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include
securities pursuant to this Section 5. Each Holder shall also furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of
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disposition of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.
5.3.5 Rule 144 Sale. Notwithstanding anything contained in
this Section 5 to the contrary, the Company shall have no obligation pursuant to
Sections 5.1 or 5.2 for the registration of Registrable Securities held by any
Holder (i) when such Holder would then be entitled to sell under Rule 144 within
any three-month period (or such other period prescribed under Rule 144 as may be
provided by amendment thereof) all of the Registrable Securities then held by
such Holder, and (ii) when the number of Registrable Securities held by such
Holder is within the volume limitations under paragraph (e) of Rule 144
(calculated as if such Holder were an affiliate within the meaning of Rule 144).
5.3.6 Supplemental Prospectus. Each Holder agrees, that upon
receipt of any notice from the Company of the happening of any event as a result
of which the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, such Holder
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
Xxxxxx's receipt of the copies of a supplemental or amended prospectus, and, if
so desired by the Company, such Holder shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
such destruction) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Units underlying the Purchase Option shall be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock Dividends - Split-Ups. If after the date hereof,
and subject to the provisions of Section 6.3 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock or by a split-up, recapitalization or reclassification of shares of
Common Stock or other similar event, then, on the effective date thereof, the
number of Units issuable on exercise of the Purchase Option shall be increased
in proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.3, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, on the effective date
thereof, the number of Units issuable on exercise of the Purchase Option shall
be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of
Units purchasable upon exercise of this Purchase Option is adjusted, as provided
in this Section 6.1, the Exercise Price shall be adjusted (to the nearest cent)
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of Units purchasable
upon the exercise of this Purchase Option immediately prior to such adjustment,
and (y) the denominator of which shall be the number of Units so purchasable
immediately thereafter.
6.1.4 Reorganizations, etc. If after the date hereof, any
capital reorganization or reclassification of the Common Stock of the Company,
or consolidation or merger of the Company with another corporation, or the sale
of all or substantially all of its assets to another corporation or
7
other similar event shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful and
fair provision shall be made whereby the Holders shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and conditions
specified in the Purchase Option and in lieu of the Units immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, such shares of stock, securities, or assets as may be
issued or payable with respect to or in exchange for the number of securities
equal to the number of Units immediately theretofore purchasable and receivable
upon the exercise of the rights represented by the Purchase Option, had such
reorganization, reclassification, consolidation, merger, or sale not taken place
and in such event, appropriate provision shall be made with respect to the
rights and interests of the Holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise Price
and of the number of Units purchasable upon the exercise of the Purchase Option)
shall thereafter be applicable, as nearly as may be, to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger, or sale unless, prior
to the consummation thereof, the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation
purchasing such assets, shall assume, by written instrument executed and
delivered to the Holders its obligation to deliver such shares of stock,
securities, or assets which, in accordance with the foregoing provisions, such
Holders may be entitled to purchase.
6.1.5 Changes in Form of Purchase Option. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of Units as are stated in the Purchase
Options initially issued pursuant to this Agreement. The acceptance by any
Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to an adjustment
occurring after the Commencement Date or the computation thereof.
6.2 Substitute Purchase Option. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger that does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental Purchase Option providing that the holder of each
Purchase Option then outstanding or to be outstanding shall have the right
thereafter (until the stated expiration of such Purchase Option) to receive,
upon exercise of such Purchase Option, the kind and amount of shares of stock
and other securities and property receivable upon such consolidation or merger,
by a holder of the number of shares of Common Stock of the Company for which
such Purchase Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental Purchase Option shall
provide for adjustments that shall be identical to the adjustments provided in
Section 6. The above provision of this Section shall similarly apply to
successive consolidations or mergers.
6.3 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
or Class A Warrants upon the exercise of the Purchase Option, nor shall it be
required to issue scrip or pay cash in lieu of any fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of Class A
Warrants, shares of Common Stock or other securities, properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of the Purchase Options or the Warrants, such number
of shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and
8
agrees that, upon exercise of the Purchase Options and payment of the Exercise
Price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid and non-assessable
and not subject to preemptive rights of any stockholder. The Company further
covenants and agrees that upon exercise of the Warrants and payment of the
respective Warrant exercise price therefor, all shares of Common Stock and other
securities issuable upon such exercises shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Purchase Options shall be outstanding, the Company shall use its
best efforts to cause all Registrable Securities to be listed (subject to
official notice of issuance) on all securities exchanges (or, if applicable on
the Nasdaq National Market or SmallCap Market) on which the Common Stock or the
Public Warrants issued to the public in connection herewith may then be listed
and/or quoted.
8. Certain Notice Requirements.
8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Options and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be.
8.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly
after an event requiring a change in the Exercise Price pursuant to Section 6
hereof, send notice to the Holders of such event and change ("Price Notice").
The Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company's President and Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered, or mailed by express mail or
overnight courier service: (i) if to the registered Holder of the Purchase
Option, to the address of such Holder as shown on the books of the Company, or
(ii) if to the Company, to following address or to such other address as the
Company may designate by notice to the Holders:
Frost Capital Group, Inc.
000 Xxxxx Xxxx, Xxxxx 000
9
Boca Raton, Florida 33432
Attn: Xxxxxxx X. Xxxxx
9. Miscellaneous.
9.1 Amendments. The Company and GBI may from time to time supplement or
amend this Purchase Option without the approval of any of the Holders in order
to cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and GBI may deem necessary or desirable and which the Company
and GBI deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed
by the party against whom enforcement of the modification or amendment is
sought.
9.2 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.
9.3 Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.4 Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representative and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Purchase
Option or any provisions herein contained.
9.5 Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The Company and the
Holder agree that the prevailing party(ies) in any such action shall be entitled
to recover form the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
9.6 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Purchase Option shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such
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breach, non-compliance or non-fulfillment shall be construed or deemed to be a
waiver of any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Execution in Counterparts. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
9.8 Exchange Agreements. As a condition of Xxxxxx's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and GBI
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding Purchase Options held by GBI and/or designees of GBI will be
exchanged for securities or cash or a combination of both, then Holder shall
agree to such exchange and become a party to the Exchange Agreement.
IN WITNESS WHEREOF, the Company has caused this Purchase
Option to be signed by its duly authorized officer as of the ____ day of
________, 2001.
FROST CAPITAL GROUP, INC.
By: ____________________________
Xxxxxxx X. Xxxxx
President
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Form to be used to exercise Purchase Option:
Frost Capital Group, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Date:_________________, ____
The undersigned hereby elects irrevocably to exercise the
within Purchase Option and to purchase ____ Units of Frost Capital Group, Inc.
and hereby makes payment of $____________ (at the rate of $_________ per Unit)
in payment of the Exercise Price pursuant thereto. Please issue the Common Stock
and Class A Warrants as to which this Purchase Option is exercised in accordance
with the instructions given below.
or
The undersigned hereby elects irrevocably to convert _________
of the Units purchasable under the within Purchase Option into _________ shares
of Common Stock and ________ Class A Warrants of Frost Capital Group, Inc.
(based on a "Market Price" of $___________). Please issue the Common Stock and
Class A Warrants in accordance with the instructions given below.
------------------------------
Signature
------------------------------
Print Name
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name _____________________________________________________________
(Print in Block Letters)
Address __________________________________________________________
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Purchase Option in every particular
without alteration or enlargement or any change whatsoever.
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Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Purchase Option):
FOR VALUE RECEIVED,__________________________________________
does hereby sell, assign and transfer unto_____________________________________
the right to purchase __________ Units of Frost Capital Group, Inc. ("Company")
evidenced by the within Purchase Option and does hereby authorize the Company to
transfer such right on the books of the Company.
Dated: ___________________, ____
------------------------------
Signature
------------------------------
Print Name
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Purchase Option in every particular
without alteration or enlargement or any change whatsoever.
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