Exhibit 4.4
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 _____________, 2003 [FIRST ANNIVERSARY OF EFFECTIVE
DATE]. VOID AFTER 5:00 P.M. EASTERN TIME, _______________, 2007 [FIFTH
ANNIVERSARY OF EFFECTIVE DATE].
PURCHASE OPTION
FOR THE PURCHASE OF
200,000 SHARES OF COMMON STOCK
AND/OR
200,000 COMMON STOCK PURCHASE WARRANTS
OF
MONTANA XXXXX BREAD CO., INC.
(A DELAWARE CORPORATION)
1. PURCHASE OPTION.
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on behalf
of ____________________________ ("Holder"), as registered owner of this Purchase
Option, to Montana Xxxxx Bread Co., Inc. ("Company"), Holder is entitled, at any
time or from time to time at or after _____________, 2003 [FIRST ANNIVERSARY OF
EFFECTIVE DATE] ("Commencement Date"), and at or before 5:00 p.m., Eastern Time,
___________, 2007 [FIFTH ANNIVERSARY OF EFFECTIVE DATE] ("Expiration Date"), but
not thereafter, to subscribe for, purchase and receive, in whole or in part, up
to two hundred thousand (200,000) shares of Common Stock of the Company, $.001
par value ("Common Stock") and/or two hundred thousand (200,000) Common Stock
Purchase Warrants, each to purchase one share of Common Stock ("Warrants")
during the period commencing one year and expiring five years from the effective
date of the registration statement on Form SB-2 (No. 333-86956) ("Registration
Statement") pursuant to which the Company has registered shares of Common Stock
and warrants to purchase Common Stock ("Effective Date"). Each Warrant is the
same as the warrants that have been registered for sale to the public pursuant
to the Registration Statement ("Public Warrants"). The shares of Common Stock
and Warrants are sometimes collectively referred to herein as the "Securities."
The Holder can purchase, upon exercise of the Purchase Option, either shares of
Common Stock or Warrants or both. 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 which 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 ________[165% OF INITIAL PUBLIC
OFFERING PRICE] per share of Common Stock and _________ [165% OF INITIAL PUBLIC
OFFERING PRICE] per Warrant 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 and the number of
shares of Common Stock and 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 of a
share of Common Stock or a Warrant.
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 in
cash or by certified check or official bank check for the Securities being
purchased. 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 Securities purchased under this Purchase
Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act of 1933, as amended:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("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 the manner required by Section 2.1, the Holder shall have the right
(but not the obligation) to convert any exercisable but unexercised portion of
this Purchase Option into either Common Stock or Warrants ("Conversion Right")
as provided in this Section 2 below.
2.3.2 COMMON STOCK. 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 shares of Common Stock equal to the
quotient obtained by dividing (x) the "Stock Value" (as defined below), at the
close of trading on the next to last trading day immediately preceding the
exercise of the Conversion Right, of the portion of the Purchase Option being
converted by (y) the Market Price at that same time. The "Stock 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 shares of
Common Stock
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underlying that portion of the Purchase Option being converted from (b) the
Market Price of the Common Stock multiplied by the number of shares of Common
Stock underlying that portion of the Purchase Option being converted. As used in
this Section 2.3.2, the term "Market Price" at any date shall be deemed to be
the last reported sale price of the Common Stock on such date, 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 Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Common Stock is listed is not its principal trading market, the
last reported sale price as furnished by the NASD through the Nasdaq National
Market or SmallCap Market, or, if applicable, the OTC Bulletin Board, or if the
Common Stock is 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.
2.3.3 WARRANTS. 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 Warrants equal to the quotient obtained by
dividing (x) the "Warrant Value" (as defined below), at the close of trading on
the next to last trading day immediately preceding the exercise of the
Conversion Right, of the portion of the Purchase Option being converted by (y)
the Market Price at that same time. The "Warrant 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 Warrants
underlying that portion of the Purchase Option being converted from (b) the
Market Price of the Warrants multiplied by the number of Warrants underlying
that portion of the Purchase Option being converted. As used in this Section
2.3.3, the term "Market Price" at any date shall be deemed to be the last
reported sale price of the Warrants on such date, 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 Warrants are listed
or admitted to trading, or, if the Warrants are not listed or admitted to
trading on any national securities exchange or if any such exchange on which the
Warrants are listed is not its principal trading market, the last reported sale
price as furnished by the NASD through the Nasdaq National Market or SmallCap
Market, or, if applicable, the OTC Bulletin Board, or if the Warrants are not
then traded on any of the foregoing markets, or similar organization, then the
"Market Price" shall equal the remainder derived from subtracting (a) the
exercise price of the underlying Warrant from (b) the "Market Price" of the
Common Stock as determined in Section 2.3.2.
2.3.4 MECHANICS OF CONVERSION. 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 the Purchase Option with a duly executed
exercise form attached hereto with the conversion right section completed to the
Company, exercising the Conversion Right and specifying the total number of
shares of Common Stock and/or Warrants that the Holder will purchase pursuant to
such Conversion Right.
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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 partner of such Holder, (ii) an officer of Xxxxxx
Securities, Inc. ("Underwriter") or an officer or partner of any Selected Dealer
or member of the underwriting syndicate in connection with the Company's public
offering with respect to which this Purchase Option has been issued, or (iii)
any Selected Dealer or member of the underwriting syndicate. 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 shares of Common Stock and Warrants purchasable
hereunder or such portion of such number as shall be contemplated by any such
assignment.
3.2 RESTRICTIONS IMPOSED BY THE ACT. This Purchase Option and 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
this Purchase Option or the Securities, as the case may be, may be transferred
pursuant to an exemption from registration under the Act and applicable state
law, 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 relating to such Purchase Option or Securities, as
the case may be, has been filed by the Company and declared effective by the
Securities and Exchange Commission and compliance with applicable state law.
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section 3
hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise 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 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 shares of Common Stock and Warrants purchasable hereunder as
to which this Purchase Option has not been exercised 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
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date. Any such new Purchase Option executed and delivered as a result of such
loss, theft, mutilation or destruction shall constitute a substitute 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% of the Purchase Options and/or
the underlying shares of Common Stock and Warrants ("Majority Holders"), agrees
to register on one occasion, all or any portion of the Purchase Options
requested by the Majority Holders in the Initial Demand Notice and all of the
Securities underlying such Purchase Options, including the Common Stock, the
Warrants and the Common Stock underlying the Warrants (collectively the
"Registrable Securities"). On such occasion, the Company will file a
registration statement covering the Registrable Securities within sixty (60)
days after receipt of the Initial Demand Notice and use its best efforts to have
the registration statement declared effective promptly thereafter. If the
Company 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 ten 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 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 register or license to do business in
such State, 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 filed pursuant to the demand rights granted under Section
5.1.1 to remain effective for a period of at least twelve consecutive months
from the date that the Holders of the Registrable Securities covered by such
registration statement are first given the opportunity to sell all of such
securities.
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 for a period of six
years commencing one year from
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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 or any equivalent form); provided, however, that if, in the written
opinion of the Company's managing underwriter or underwriters, if any, for such
offering, the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective and provided further that, if any securities are registered
for sale on behalf of other stockholders in such offering and such stockholders
have not agreed to defer such sale until the expiration of such 90 day period,
the number of securities to be sold by all stockholders in such public offering
during such 90 day period shall be apportioned PRO RATA among all such selling
stockholders, including all holders of the Registrable Securities, according to
the total amount of securities of the Company owned by said selling
stockholders, including all holders of the Registrable Securities.
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 thirty 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 registration statement filed by the Company until such time as all of
the Registrable Securities have been sold by the Holder. The holders of the
Registrable Securities shall exercise the "piggy-back" rights provided for
herein by giving written notice, within twenty 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 twelve 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
hereunder 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 any claim
whatsoever) 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
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Section 5 of the Underwriting Agreement between the Underwriter and the Company,
dated the Effective Date. 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 Underwriter has agreed to indemnify the Company.
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 EXCLUSIVITY. The Company shall not permit the inclusion of any
securities other than the Registrable Securities to be included in any
registration statement filed pursuant to Section 5.1 hereof without the prior
written consent of the Majority Holders of the Registrable Securities.
5.3.4 DOCUMENTS DELIVERED TO HOLDERS. The Company shall furnish to
each Holder participating in any of the foregoing offerings and to each
underwriter of any such offering, if any, a signed counterpart, addressed to
such Holder or underwriter, 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 each Holder participating
in the offering requesting the correspondence and memoranda described below and
to the managing underwriter 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 each Holder and underwriter 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 National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of
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the Company with its officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such Holder shall
reasonably request.
5.3.5 UNDERWRITING AGREEMENT. The Company shall enter into an
underwriting agreement with the managing underwriter(s) selected by any Holders
whose Registrable Securities are being registered pursuant to this Section 5,
which managing underwriter shall be reasonably satisfactory to the Company. Such
agreement shall be reasonably satisfactory in form and substance to the Company,
each Holder and such managing underwriters, 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 underwriters 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
underwriters except as they may relate to such Holders, their shares and their
intended methods of distribution.
5.3.6 DOCUMENTS TO BE DELIVERED BY XXXXXX(S). Each of the Holder(s)
participating in any of the foregoing offerings shall furnish to the Company a
completed and executed questionnaire provided by the Company requesting
information customarily sought of selling securityholders.
6. ADJUSTMENTS.
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise
Price and the number of shares of Common Stock underlying the Purchase Option
and underlying the Warrants underlying the Purchase Option shall be subject to
adjustment from time to time as hereinafter set forth:
6.1.1 STOCK DIVIDENDS - RECAPITALIZATION, RECLASSIFICATION, 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 shares of Common Stock issuable on
exercise of the Purchase Option and the Warrants underlying the Purchase Option
shall be increased in proportion to such increase in outstanding shares;
provided, however, that nothing in this Section 6.1 is intended to provide for
an adjustment with respect to the Warrants beyond that provided for in the
Warrant Agreement between the Company and Continental Stock Transfer & Trust
Company. For example, if the Company declares a two-for-one stock dividend and
at the time of such dividend the Purchase Option is for the purchase of 1,000
shares of Common Stock at $10.00 per share and 1,000 Warrants at $0.25 per
Warrant (each Warrant exercisable for $5.00 per share), upon effectiveness of
the dividend, the Purchase Option will be adjusted (disregarding for purposes of
this example that adjustments shall be rounded to the nearest cent, as provided
in Section 6.1.3) to allow for the purchase of 2,000 shares at $5.00 per share
and 2,000 Warrants at $0.125 (each Warrant exercisable for $2.50 per share).
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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, upon the effective date thereof, the
number of shares of Common Stock issuable on exercise of the Purchase Option and
the Warrants underlying 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 shares of
Common Stock purchasable upon the 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
shares of Common Stock purchasable upon the exercise of this Purchase Option
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter. If
it is determined that such Exercise Price and number of shares of Common Stock
must be adjusted, then the Exercise Price of the Purchase Option with respect to
the underlying Warrants and the number of Warrants purchasable hereunder shall
also be similarly adjusted.
6.1.4 REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 hereof or which solely affects the
par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Purchase Option shall have the right thereafter (until the
expiration of the right of exercise of this Purchase Option) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Purchase Option immediately
prior to such event; and if any reclassification also results in a change in
shares of Common Stock covered by Section 6.1.1, then such adjustment shall be
made pursuant to Sections 6.1.1, 6.1.3 and this Section 6.1.4. The provisions of
this Section 6.1.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
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 shares of Common Stock and Warrants 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 a prior adjustment
or the computation thereof.
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6.2 [Intentionally Omitted]
6.3 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required
to issue certificates representing fractions of shares of Common Stock or
Warrants upon the exercise or transfer 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 or down to the nearest whole number of
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 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 underlying the Purchase Options 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 (i) shares of Common Stock
issuable upon exercise of the Purchase Options and the Warrants, and (ii) the
Warrants underlying the Purchase Options to be listed (subject to official
notice of issuance) on all securities exchanges (or, if applicable on Nasdaq) on
which the Common Stock or the Public Warrants issued to the public in connection
herewith are then 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
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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 on the date of delivery if delivered personally or
sent by overnight courier, with acknowledgement of receipt to the party to which
notice is given, or on the fifth day after mailing if mailed to the party to
whom notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (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 its principal
executive office.
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9. MISCELLANEOUS.
9.1 AMENDMENTS. The Company and the Underwriter 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 the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem shall not
adversely affect the interest of the Holders. All other modifications or
amendments shall require the written consent of 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 respective
successors, legal representatives 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 agrees
that the prevailing party(ies) in any such action shall be entitled to recover
from 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.
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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 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.
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ____ day of ______________,
2002.
MONTANA XXXXX BREAD CO., INC.
By:
-------------------------------------
Name:
Title:
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Form to be used to exercise Purchase Option:
Montana Xxxxx Bread Co., Inc.
Date:_________________, 200__
The undersigned hereby elects irrevocably to exercise the within
Purchase Option and to purchase ____ shares of Common Stock and/or Warrants to
purchase shares of Common Stock of Montana Xxxxx Bread Co., Inc. and hereby
makes payment of $____________ (at the rate of $_________ per share of Common
Stock and $ per Warrant) in payment of the Exercise Price pursuant thereto.
Please issue the Common Stock and Warrants as to which this Purchase Option is
exercised in accordance with the instructions given below.
OR
The undersigned hereby elects irrevocably to exercise the within
Purchase Option and to purchase _________ shares of Common Stock and/or Warrants
to purchase ______ shares of Common Stock of Montana Xxxxx Bread Co., Inc. by
surrender of the unexercised portion of the within Purchase Option (with a
"Stock Value" of $_______ based on a "Market Price" of $__________ and a
"Warrant Value" of _________ based on a "Market Price" of $__________). Please
issue the Common Stock and Warrants as to which this Purchase Option is
exercised in accordance with the instructions given below.
----------------------------------------
Signature
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.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name
-----------------------------------------------------------------------
(Print in Block Letters)
Address
-----------------------------------------------------------------------
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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
_______________________ shares of Common Stock and/or Warrants to purchase
______ shares of Common Stock of Montana Xxxxx Bread Co., 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:___________________, 200_
----------------------------------------
Signature
---------------------------------
Signature Guaranteed
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, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.
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