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 AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL,...
Exhibit
4.2
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 AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR
A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) PALI CAPITAL, INC. ("XXXX"), OR AN UNDERWRITER OR A SELECTED DEALER
IN
CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF PALI
OR
OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS
PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION BY
FMG
ACQUISITION CORP. ("COMPANY") OF A SHARE CAPITAL EXCHANGE, ASSET ACQUISITION
OR
OTHER SIMILAR BUSINESS COMBINATION ("BUSINESS COMBINATION") (AS DESCRIBED MORE
FULLY IN THE COMPANY'S REGISTRATION STATEMENT (DEFINED HEREIN)) OR OCTOBER
4,
2008. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, OCTOBER 4, 2012.
UNIT
PURCHASE OPTION
FOR
THE PURCHASE OF
[
] UNITS
OF
1. PURCHASE
OPTION.
THIS
CERTIFIES THAT,
in
consideration of $[ ] duly paid by or
on behalf of [ ] or its designee
("HOLDER"), as registered owner of this Purchase Option, to FMG Acquisition
Corp. ("COMPANY"), Holder is entitled, at any time or from time to time upon
the
later of the consummation of a Business Combination or October 4, 2008
("COMMENCEMENT DATE"), and at or before 5:00 p.m., New York City local time,
October 4, 2012 ("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, par value $0.0001 per share ("COMMON
SHARE(S)"), and one warrant ("WARRANT(S)") expiring four years from the
effective date ("EFFECTIVE DATE") of the registration statement ("REGISTRATION
STATEMENT") pursuant to which Units are offered for sale to the public
("OFFERING"). Each Warrant is the same as the warrants included in the Units
being registered for sale to the public by way of the Registration Statement
("PUBLIC WARRANTS"). 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 $10.00 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 Common Shares 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.
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 or by certified check or official bank
check. If the subscription rights represented hereby shall not be exercised
at
or before 5:00 p.m., New York City local 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, as amended ("ACT"):
"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 CASHLESS
EXERCISE.
2.3.1 DETERMINATION
OF AMOUNT. In lieu of the payment of the Exercise Price multiplied by the number
of Units for which this Purchase Option is exercisable (and in lieu of being
entitled to receive Common Shares and Warrants) 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 Units
(the
"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 Common Shares and Warrants comprising
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 Current Market Value (as defined below) of the portion of the Purchase
Option being converted. The "VALUE" of the portion of the Purchase Option being
converted shall equal the remainder derived from subtracting (a) (i) the
Exercise Price multiplied by (ii) the number of Units underlying the portion
of
this Purchase Option being converted from (b) the CURRENT MARKET VALUE of a
Unit
multiplied by the number of Units underlying the portion of the Purchase Option
being converted. As used herein, the term "CURRENT MARKET VALUE" per Unit at
any
date means: (A) in the event that neither the Units nor Warrants are still
trading, the remainder derived from subtracting (x) the exercise price of the
Warrants multiplied by the number of Common Shares issuable upon exercise of
the
Warrants underlying one Unit from (y) (i) the Current Market Price of the Common
Shares multiplied by (ii) the number of Common Shares underlying one Unit,
which
shall include the Common Shares underlying the Warrants included in such Unit;
(B) in the event that the Units, Common Shares and Warrants are still trading,
(i) if the Units are listed on a national securities exchange or quoted on
the
Nasdaq Global Market, Nasdaq Capital Market or NASD OTC Bulletin Board (or
successor such as the Bulletin Board Exchange), the last sale price of the
Units
in the principal trading market for the Units as reported by the exchange,
Nasdaq or the NASD, as the case may be, on the last trading day preceding the
date in question; or (ii) if the Units are not listed on a national securities
exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or the
NASD OTC Bulletin Board (or successor exchange), but is traded in the residual
over-the-counter market, the closing bid price for Units on the last trading
day
preceding the date in question for which such quotations are reported by the
Pink Sheets, LLC or similar publisher of such quotations; and (C) in the event
that the Units are not still trading but the Common Shares and Warrants
underlying the Units are still trading, the Current Market Price of the Common
Shares plus the product of (x) the Current Market Price of the Warrants and
(y)
the number of Warrants included in one Unit. The "CURRENT MARKET PRICE" shall
mean (i) if the Common Shares (or Warrants, as the case may be) are listed
on a
national securities exchange or quoted on the Nasdaq Global Market, Nasdaq
Capital Market or NASD OTC Bulletin Board (or successor such as the Bulletin
Board Exchange), the last sale price of the Common Shares (or Warrants) in
the
principal trading market for the Common Shares as reported by the exchange,
Nasdaq or the NASD, as the case may be, on the last trading day preceding the
date in question; (ii) if the Common Shares (or Warrants, as the case may be)
are not listed on a national securities exchange or quoted on the Nasdaq Global
Market, Nasdaq Capital Market or the NASD OTC Bulletin Board (or successor
exchange), but are traded in the residual over-the-counter market, the closing
bid price for the Common Shares (or Warrants) on the last trading day preceding
the date in question for which such quotations are reported by the Pink Sheets,
LLC or similar publisher of such quotations; and (iii) if the fair market value
of the Common Shares cannot be determined pursuant to clause (i) or (ii) above,
such price as the Board of Directors of the Company shall determine, in good
faith.
-2-
2.3.2 MECHANICS
OF CASHLESS EXERCISE. The Cashless Exercise 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 the duly executed
exercise form attached hereto with the cashless exercise section completed
to
the Company, exercising the Cashless Exercise Right and specifying the total
number of Units the Holder will purchase pursuant to such Cashless Exercise
Right.
3. TRANSFER.
3.1 GENERAL
RESTRICTIONS. The registered Holder of this Purchase Option, by its acceptance
hereof, agrees that it will not sell, transfer, assign, pledge or hypothecate
this Purchase Option for a period of one year following the Effective Date
to
anyone other than (i) Pali or an underwriter or a selected dealer in connection
with the Offering, or (ii) a bona fide officer or partner of Pali or of any
such
underwriter or selected dealer. On and after the first anniversary of the
Effective 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 within five business days
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 evidenced by 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 transferred pursuant to an
exemption from registration under the Act and applicable state securities laws,
the availability of which is established to the reasonable satisfaction of
the
Company (the Company hereby agreeing that the opinion of Xxxxxx Xxxxx Xxxxxxxx
& Xxxxxxx LLP 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 (the
"COMMISSION") and compliance with applicable state securities law has been
established.
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 except in the case of an exercise of this Purchase Option
contemplated by Section 2.3 hereof, 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 number
of Units purchasable hereunder as to which this Purchase Option has not been
exercised or assigned.
-3-
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 or the posting of a bond, 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 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 Units
and/or the underlying securities ("MAJORITY HOLDERS"), agrees to register (the
"DEMAND REGISTRATION") under the Act 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 Units,
Common Shares, the Warrants and the Common Shares underlying the Warrants
(collectively, the "REGISTRABLE SECURITIES"). On such occasion,
the Company will file a registration statement or a post-effective amendment
to
the Registration Statement covering the Registrable Securities within sixty
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. The demand for registration may be made at any time during
a period of five years beginning on the Effective Date. The Initial Demand
Notice shall specify the number of shares of Registrable Securities proposed
to
be sold and the intended method(s) of distribution thereof. The Company will
notify all holders of the Purchase Options and/or Registrable Securities of
the
demand within ten days from the date of the receipt of any such Initial Demand
Notice. Each holder of Registrable Securities who wishes to include all or
a
portion of such holder's Registrable Securities in the Demand Registration
(each
such holder including shares of Registrable Securities in such registration,
a
"DEMANDING HOLDER") shall so notify the Company within fifteen (15) days after
the receipt by the holder of the notice from the Company. Upon any such request,
the Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section 5.1.4.
5.1.2 EFFECTIVE
REGISTRATION. A registration will not count as a Demand Registration until
the
registration statement filed with the Commission with respect to such Demand
Registration has been declared effective and the Company has complied with
all
of its obligations under this Agreement with respect thereto; provided, however,
that if, after such registration statement has been declared effective, the
offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order or injunction of the Commission or any other
governmental agency or court, the registration statement with respect to such
Demand Registration will be deemed not to have been declared effective, unless
and until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue the offering.
-4-
5.1.3 UNDERWRITTEN
OFFERING. If the Majority Holders so elect and such holders so advise the
Company as part of the Initial Demand Notice, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder's participation in such underwriting and the inclusion of such holder's
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Majority
Holders.
5.1.4 REDUCTION
OF OFFERING. If the managing underwriter or underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and
the
Demanding Holders in writing that the dollar amount or number of shares of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other Common Shares or other securities which the Company
desires to sell and the Common Shares, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights held
by
other shareholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable,
the "MAXIMUM NUMBER OF SHARES"), then the Company shall include in such
registration: (i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata in accordance
with the number of shares that each such Person has requested be included in
such registration, regardless of the number of shares held by each such Person
(such proportion is referred to herein as "PRO RATA")) that can be sold without
exceeding the Maximum Number of Shares; (ii) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (i),
the Common Shares or other securities that the Company desires to sell that
can
be sold without exceeding the Maximum Number of Shares; (iii) third, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (i) and (ii), the Common Shares or other securities
registrable pursuant to the terms of the Registration Rights Agreement between
the Company and the initial investors in the Company, dated as of October __,
2007 (the "REGISTRATION RIGHTS AGREEMENT" and such registrable securities,
the
"INVESTOR SECURITIES") as to which "piggy-back" registration has been requested
by the holders thereof, Pro Rata, that can be sold without exceeding the Maximum
Number of Shares; and (iv) fourth, to the extent that the Maximum Number of
Shares have not been reached under the foregoing clauses (i), (ii), and (iii),
the Common Shares or other securities for the account of other persons that
the
Company is obligated to register pursuant to written contractual arrangements
with such persons and that can be sold without exceeding the Maximum Number
of
Shares.
5.1.5 WITHDRAWAL.
If a majority-in-interest of the Demanding Holders disapprove of the terms
of
any underwriting or are not entitled to include all of their Registrable
Securities in any offering, such majority-in-interest of the Demanding Holders
may elect to withdraw from such offering by giving written notice to the Company
and the underwriter or underwriters of their request to withdraw prior to the
effectiveness of the registration statement filed with the Commission with
respect to such Demand Registration. If the majority-in-interest of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 5.1.
5.1.6 TERMS.
The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the reasonable expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities, but the Holders shall pay any and all underwriting
commissions. The Company agrees to use its reasonable best efforts to qualify
or
register the Registrable Securities in such states as are reasonably requested
by the Majority 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
shareholders of the Company to be obligated to escrow their shares of share
capital of the Company. The Company shall cause any registration statement
or
post-effective amendment filed pursuant to the demand rights granted under
Section 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-
5.2 PIGGY-BACK
REGISTRATION.
5.2.2 REDUCTION
OF OFFERING. If the managing underwriter or underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and
the
holders of Registrable Securities in writing that the dollar amount or number
of
Common Shares which the Company desires to sell, taken together with Common
Shares, if any, as to which registration has been demanded pursuant to written
contractual arrangements with persons other than the holders of Registrable
Securities hereunder, the Registrable Securities as to which registration has
been requested under this Section 5.2, and the Common Shares, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other shareholders of the Company, exceeds
the
Maximum Number of Shares, then the Company shall include in any such
registration:
(a) If
the
registration is undertaken for the Company's account: (A)
first, the Common Shares or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares; (B) second,
to
the extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Common Shares or other securities, if any, comprised
of Registrable Securities and Investor Securities, as to which registration
has
been requested pursuant to the applicable written contractual piggy-back
registration rights of such security holders, Pro Rata, that can be sold without
exceeding the Maximum Number of Shares; and (C) third, to the extent that the
Maximum Number of shares has not been reached under the foregoing clauses (A)
and (B), the Common Shares or other securities
for the account of other persons that the Company is obligated to register
pursuant to written contractual piggy-back registration rights with such persons
and that can be sold without exceeding the Maximum Number of Shares;
-6-
(b) If
the
registration is a "demand" registration undertaken at the demand of holders
of
Investor Securities, (A) first, the Common Shares or other securities for the
account of the demanding persons, Pro Rata, that can be sold without exceeding
the Maximum Number of Shares; (B) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (A), the Common Shares
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), the shares of Registrable Securities, Pro Rata, as to which
registration has been requested pursuant to the terms hereof, that can be sold
without exceeding the Maximum Number of Shares; and (D) fourth, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (A), (B) and (C), the Common Shares or other securities for the account
of other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons, that can be sold without exceeding
the Maximum Number of Shares; and
(c) If
the
registration is a "demand" registration undertaken at the demand of persons
other than either the holders of Registrable Securities or of Investor
Securities, (A) first, the Common Shares or other securities for the account
of
the demanding persons that can be sold without exceeding the Maximum Number
of
Shares; (B) second, to the extent that the Maximum Number of Shares has not
been
reached under the foregoing clause (A), the Common Shares or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; (C) third, to the extent that the Maximum Number of Shares
has
not been reached under the foregoing clauses (A) and (B), collectively the
Common Shares or other securities comprised of Registrable Securities and
Investor Securities, Pro Rata, as to which registration has been requested
pursuant to the terms hereof and of the Registration Rights Agreement, as
applicable, that can be sold without exceeding the Maximum Number of Shares;
and
(D) fourth, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (A), (B) and (C), the Common Shares or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual arrangements with such persons, that
can be sold without exceeding the Maximum Number of Shares.
5.2.3 WITHDRAWAL.
Any holder of Registrable Securities may elect to withdraw such xxxxxx's request
for inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the registration statement. The Company (whether on its own
determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred
by the holders of Registrable Securities in connection with such Piggy-Back
Registration as provided in Section 5.2.4.
-7-
5.3 NO
NET-CASH SETTLEMENT OR DAMAGES UPON FAILURE OF REGISTRATION. In no event shall
the registered Holder of this Purchase Option be entitled to (i) net-cash
settlement of this Purchase Option, regardless of whether any or all of the
Registrable Securities have been registered by the Company pursuant to an
effective registration statement, or (ii) receive any damages if any or all
of
the Registrable Securities have not been registered by the Company pursuant
to
an effective registration statement, subject to the requirement that the Company
use its best efforts to have a registration statement or post-effective
amendment filed pursuant to this Section declared effective as soon as possible
after receiving the Initial Demand Notice. In the event there is no effective
registration statement related to the issuance or exercise of the Warrants
contained within the Units, that portion of the Units may not be exercised
by
the Holder and therefore may expire and be worthless.
5.4 GENERAL
TERMS.
5.4.1 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 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 underwriters contained in Section 5 of the Underwriting Agreement
between the Company, Pali and the other underwriters named therein 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, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the 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 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.
5.4.2 EXERCISE
OF PURCHASE OPTIONS. Nothing contained in this Purchase Option shall be
construed as requiring the Holder(s) to exercise their Purchase Options or
Warrants underlying such Purchase Options prior to or after the initial filing
of any registration statement or the effectiveness thereof.
-8-
5.4.3 DOCUMENTS
DELIVERED TO HOLDERS. The Company shall furnish Pali, 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)
in
the case of an underwritten offering, a "cold comfort" letter dated the
effective date of such registration statement (and 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 Pali, as representative of the Holders participating
in
the offering, 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 Pali, 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 National Association of Securities Dealers, Inc. ("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 Pali, as representative of the Holders, shall reasonably
request. The Company shall not be required to disclose any confidential
information or other records to Pali, as representative of the Holders, or
to
any other person, 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.
5.4.4 UNDERWRITING
AGREEMENT. The Company shall enter into an underwriting agreement with the
managing underwriter(s), 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 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 and their
intended methods of distribution. Such Holders, however, shall agree to such
covenants and indemnification and contribution obligations for selling
shareholders 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 disposition of such securities as shall be
reasonably required to effect the registration of the Registrable Securities.
5.4.5 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) where 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)
where 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).
-9-
5.4.6 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 SHARE
DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject to the provisions
of Section 6.3 below, the number of outstanding Common Shares is increased
by a
share dividend payable in Common Shares or by a split-up of Common Shares or
other similar event, then, on the effective date thereof, the number of Common
Shares underlying each of the Units purchasable hereunder shall be increased
in
proportion to such increase in outstanding shares. In such case, the number
of
Common Shares, and the exercise price applicable thereto, underlying
the Warrants underlying each of the Units purchasable hereunder shall be
adjusted in accordance with the terms of the Warrants. For example, if the
Company declares a two-for-one share dividend and at the time of such dividend
this Purchase Option is for the purchase of one Unit at $10.00 per whole Unit
(each Warrant underlying the Units is exercisable for $6.00 per share), upon
effectiveness of the dividend, this Purchase Option will be adjusted to allow
for the purchase of one Unit at $10.00 per Unit, each Unit entitling the holder
to receive two Common Shares and two Warrants (each Warrant exercisable for
$3.00 per share).
6.1.2 EXTRAORDINARY
DIVIDEND. If the Company, at any time while this Purchase Option is outstanding
and unexpired, shall pay a dividend or make a distribution in cash, securities
or other assets to the holders of Common Stock (or other shares of the Company's
capital stock receivable upon exercise of the Purchase Option), other than
(i)
as described in Sections 6.1.1, 6.1.3 or 6.1.4, (ii) regular quarterly or other
periodic dividends, (iii) in connection with the conversion rights of the
holders of Common Stock upon consummation of the Company's initial Business
Combination or (iv) in connection with the Company's liquidation and the
distribution of its assets upon its failure to consummate a Business Combination
(any such non-excluded event being referred to herein as an "Extraordinary
Dividend"), then the Exercise Price shall be decreased, effective immediately
after the effective date of such Extraordinary Dividend, by the amount of cash
and/or the fair market value (as determined by the Company's Board of Directors,
in good faith) of any securities or other assets paid on each share of Common
Stock in respect of such Extraordinary Dividend.
6.1.3 AGGREGATION
OF SHARES. If after the date hereof, and subject to the provisions of Section
6.3, the number of outstanding Common Shares is decreased by a consolidation,
combination or reclassification of Common Shares or other similar event, then,
on the effective date thereof, the number of Common Shares underlying each
of
the Units purchasable hereunder shall be decreased in proportion to such
decrease in outstanding shares. In such case, the number of Common Shares,
and
the exercise price applicable thereto, underlying the Warrants underlying each
of the Units purchasable hereunder shall be adjusted in accordance with the
terms of the Warrants.
-10-
6.1.4 REPLACEMENT
OF SECURITIES UPON REORGANIZATION, ETC. In case of any reclassification or
reorganization of the outstanding Common Shares other than a change covered
by
Section 6.1.1 or 6.1.3 hereof or that solely affects the par value of such
Common Shares, 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 that does not result in any
reclassification or reorganization of the outstanding Common Shares), 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 or other securities or property (including cash) receivable
upon such reclassification, reorganization, merger or consolidation, or upon
a
dissolution following any such sale or transfer, by a Holder of the number
of
Common Shares of the Company obtainable upon exercise of this Purchase Option
and the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in Common Shares covered by Section
6.1.1 or 6.1.3, 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
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.
6.1.6 ADJUSTMENTS
OF WARRANTS. To the extent the price of the Warrants are lowered pursuant to
Section 3.1 of the Warrant Agreement, dated October __, 2007, between the
Company and Continental Stock Transfer & Trust Company (the "WARRANT
AGREEMENT") the price of the Warrants underlying the Purchase Option shall
be
reduced on identical percentage terms. To the extent the duration of the
Warrants is extended pursuant to Section 3.2 of the Warrant Agreement, the
duration of the Warrants underlying the Purchase Option shall be extended on
identical terms.
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 which does not result in any reclassification or
change of the outstanding Common Shares), 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 and other securities and property
receivable upon such consolidation or merger, by a holder of the number of
Common Shares 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 which 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 Common Shares or 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 or down to the nearest
whole number of Warrants, Common Shares or other securities, properties or
rights.
-11-
7. RESERVATION
AND LISTING. The Company shall at all times reserve and keep available out
of
its authorized Common Shares, solely for the purpose of issuance upon exercise
of the Purchase Options or the Warrants underlying the Purchase Option, such
number of Common Shares 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
Common Shares 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 shareholder. 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 Common Shares 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 shareholder.
As long as the Purchase Options shall be outstanding, the Company shall use
its
best efforts to cause all (i) Units and Common Shares issuable upon exercise
of
the Purchase Options, (iii) Warrants issuable upon exercise of the Purchase
Options and (iv) Common Shares issuable upon exercise of the Warrants included
in the Units issuable upon exercise of the Purchase Option to be listed (subject
to official notice of issuance) on all securities exchanges (or, if applicable
on the Nasdaq Global Market, Capital Market, OTC Bulletin Board or any successor
trading market) on which the Units, the Common Shares 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 as a shareholder for the election
of
directors or any other matter, or as having any rights whatsoever as a
shareholder 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 shareholders 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. Notwithstanding the foregoing, the Company shall deliver to each Holder
a
copy of each notice given to the other shareholders of the Company at the same
time and in the same manner that such notice is given to the shareholders.
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 Common Shares 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 Shares any additional shares of share capital of
the
Company or securities convertible into or exchangeable for shares of share
capital 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.
-12-
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 private 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
the
following address or to such other address as the Company may designate by
notice to the Holders:
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, Chief Executive Officer and President
Facsimile:
(000) 000-0000
9.1 AMENDMENTS.
The Company and Pali 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 that may
be
defective or inconsistent with any other provisions herein, or to make any
other
provisions in regard to matters or questions arising hereunder that the Company
and Pali may deem necessary or desirable and that the Company and Pali 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
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.
-13-
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 or non-compliance.
9.7 EXCHANGE
AGREEMENT. As a condition of the Holder's receipt and acceptance of this
Purchase Option, Xxxxxx agrees that, at any time prior to the complete exercise
of this Purchase Option by Holder, if the Company and Pali enter into an
agreement ("EXCHANGE AGREEMENT") pursuant to which they agree that all
outstanding Purchase Options 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.
-14-
IN
WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by
its
duly authorized officer as of the 11th
day of
October 2007.
| FMG ACQUISITION CORP. | ||
| |
|
|
| By: | Xxxxx X. Xxxxx, Xx. | |
|
Name:
Xxxxx X. Xxxxx, Xx.
Title:
Executive
Vice President
|
||
-15-
Form
to
be used to exercise Purchase Option:
Four
Forest Park
Farmington,
CT 06032
Attn:
Xxxxxx Xxxxx, Chief Executive Officer and President
Facsimile:
(000) 000-0000
Date:_________________,
20__
The
undersigned hereby elects irrevocably to exercise all or a portion of the within
Purchase Option and to purchase ____ Units of FMG Acquisition Corp. and hereby
makes payment of $____________ (at the rate of $____ per Unit) in payment of
the
Exercise Price pursuant thereto. Please issue the Common Shares and Warrants
as
to which this Purchase Option is exercised in accordance with the instructions
given below.
or
The
undersigned hereby elects irrevocably to convert its right to purchase _________
Units purchasable under the within Purchase Option by surrender of the
unexercised portion of the attached Purchase Option (with a "Value" of $_______
based on a "Market Price" of $_______). Please issue the securities comprising
the Units as to which this Purchase Option is exercised in accordance with
the
instructions given below.
NOTICE:
The signature to this assignment must correspond with the name as written upon
the face of the purchase option in every particular, without alteration or
enlargement or any change whatever.
| Signature(s) Guaranteed: |
THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17Ad-15).
INSTRUCTIONS
FOR REGISTRATION OF SECURITIES
| Name |
| (Print in Block Letters) |
| Address |
-16-
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 FMG Acquisition Corp. ("COMPANY") evidenced by
the
within Purchase Option and does hereby authorize the Company to transfer such
right on the books of the Company.
Dated:___________________,
20__
| Signature |
NOTICE:
The signature to this assignment must correspond with the name as written upon
the face of the purchase option in every particular, without alteration or
enlargement or any change whatever.
| Signature(s) Guaranteed: |
THE
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE
17Ad-15).
