PIONEER COMMERCIAL FUNDING CORP.
COMMON STOCK PURCHASE OPTION
Option (the "Option") dated as of the 16th day of August, 1996,
from Pioneer Commercial Funding Corp., a New York corporation (the "Company"),
to United Mizrahi Bank and Trust Company (the "Holder"), or its assigns (who,
upon recordation of the transfer of ownership of this Option on the records of
the Company maintained for such purpose, shall be deemed to be the "Holder" or
the "Holders").
WHEREAS, pursuant to a certain agreement of even date herewith
between the Company and the Holder (the "Agreement"), the Company desires to
afford the Holder an opportunity to purchase shares of the Company's $.01 par
value common stock (the "Common Stock"), subject to the terms and conditions set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the Company
hereby agrees as follows:
1. Grant of Option. The Company hereby grants to the Holder the
right and option to purchase up to an aggregate of 41,271 shares of Common Stock
(the "Option Shares"), subject to adjustment as provided for herein.
2. Purchase Price;. The purchase price of the shares of Common
Stock covered by this Option shall be $5.50 per share (the "Initial Exercise
Price"), subject to adjustment (such price as so adjusted from time to time
referred to herein as the "Purchase Price") as provided for herein.
3. Term of Option; Vesting; Termination; Transferability. The
term of this Option shall be for a period of five years commencing on the date
first above written (the "Exercise Period"). Until the first anniversary of the
date first above written, the Holder shall not be entitled to purchase any
Option Shares hereunder. This Option shall vest at the rate of 10,318 Option
Shares per annum on the first, second and third anniversaries of the date first
above written. On the fourth anniversary of the date first above written, this
Option shall vest with respect to 10,317 Option Shares. Anything herein
contained to the contrary notwithstanding, if, at any time during the term of
this Option, the Revolving Line of Credit and Security Agreement dated as of May
25, 1993 and executed by the Holder and the Company, as amended, modified and/or
superseded from time to time thereafter, shall be terminated, canceled or not
renewed for any reason, the term of this Option shall thereupon be deemed to
have expired, and the then unexercised and/or unvested portion of this Option
shall thereupon be canceled
and shall be thereafter unenforceable. Subject to the conditions and limitations
set forth in Section 9 hereof, the Holder shall be entitled to sell, assign or
otherwise transfer ownership of this Option at any time during, but not after,
the Exercise Period.
4. Reservation of Shares. At all times during the Exercise Period
there shall be reserved for issuance and/or delivery upon exercise of this
Option such number of shares of Common Stock as shall be required for issuance
and delivery in connection therewith.
5. Exercise of Option. This Option may be exercised in whole at
any time during the Exercise Period or in part from time to time during such
period by executing and delivering a notice of exercise in the form attached
hereto as Exhibit A. Such notice shall be accompanied by payment of the full
purchase price of such shares by certified or bank check payable to the order of
the Company.
6. Exchange, Transfer, Assignment or Loss of Option. This Option
is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company for other options (collectively, the
"Options") of different denominations entitling the Holder thereof to purchase
in the aggregate, upon the same terms, and subject to the same conditions set
forth, in this Option, the same number of shares of Common Stock purchasable
hereunder. Subject to the provisions of Section 9 of this Option, upon surrender
of this Option to the Company with the Assignment Form (annexed hereto as
Exhibit B) duly executed, the Company, at its sole expense, shall execute and
deliver a new Option in the name of the assignee named in such instrument of
assignment and this Option shall promptly be cancelled. This Option may be
divided or combined with other Options upon presentation hereof and thereof at
the office of the Company together with a written notice specifying the names
and denominations in which new Options are to be issued and signed by the Holder
hereof. The term "Option" as used herein includes any Option into which this
Option may be divided or exchanged. Upon receipt by the Company of an affidavit
executed by the Holder attesting to the loss, theft, destruction or mutilation
of this Option, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Option, if mutilated, the Company will execute and deliver a new Option of like
tenor and date.
7. Rights before Issuance and Delivery of Shares. No Holder shall
be entitled to the privileges of stock ownership in respect of any shares issued
upon exercise of this Option, unless and until such shares of Common Stock have
been issued to such Holder as fully paid and non-assessable shares.
8. Conditions Upon Issuance of Option Shares; Registration
Rights.
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(a) Unregistered Shares. Neither this Option nor the
Common Stock issuable upon exercise of this Option has been registered pursuant
to a registration statement (a "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"). Until such time as a
Registration Statement pertaining to the Option Shares shall be declared
effective by the Securities and Exchange Commission (the "Commission"), the
Company shall not be required to issue any certificate for shares of Common
Stock purchased upon the exercise of this Option unless, in connection with such
exercise:
(i) The Holder makes and delivers the following
representations to the Company in writing:
a) The Holder is purchasing the Option
Shares solely for its own account.
1) The Holder is an "accredited investor"
(as that term is defined in rule 501 of Regulation D under the Act). The Holder
acknowledges that it has been given, or the person who exercises full investment
discretion to act on the Holder's behalf has been given, the opportunity to ask
questions and receive satisfactory answers concerning the purchase of Option
Shares upon exercise of this Option, the operations and financial condition of
the Company, and the accuracy of the information provided by the Company to the
Holder or the person who exercises full investment discretion to act in the
Holder's behalf.
2) The Holder has no intention of
distributing or reselling the Option Shares or any part thereof, or interest
therein, in any transaction which would be in violation of the securities laws
of the United States of America or any state securities laws, without prejudice,
however, to the Holder's right at all times to sell or otherwise dispose of all
or any part of the Option Shares pursuant to the above-mentioned registration
thereof under the Securities Act and, if applicable, qualification under such
state securities laws or under an exemption from such registration available
under the Securities Act.
3) If the Holder desires to sell or
otherwise dispose of all or any part of the Option Shares (other than pursuant
to an effective Registration Statement under the Securities Act or a sale or
other disposition made pursuant to the Commission's Rule 144), if requested by
the Company, the Holder will deliver to the Company, an opinion of counsel,
reasonably satisfactory in form and substance to the Company and its counsel,
that such exemption is available.
(ii) Upon original issuance thereof, and until such
time as the same is no longer required under the applicable requirements of the
Securities Act, the certificates evidencing the Holder's ownership of the Option
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Shares (and all certificates for securities issued in exchange therefor or
substitution thereof) shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED
UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SAID ACT OR SUCH LAWS."
(b) Piggyback Registration. If, at any time during the
period of five years commencing on the date hereof, the Company proposes to
register any of its shares of capital stock under the Securities Act (other than
in connection with an initial public offering or other offering in which the
underwriter thereof objects to the registration of option shares, a merger or
pursuant to Form S-8) it will give written notice by registered mail, at least
thirty (30) days prior to the filing of each such Registration Statement, to the
Holder of its intention to do so. If the Holder or, if there shall be more than
one Holder, if the Holders holding a majority (as such term is defined in
Section 8(f) hereof) of the Option Shares then issued and outstanding, notify
the Company within twenty (20) days after receipt of any such notice of its or
their desire to include any of the Option Shares in such proposed Registration
Statement, the Company shall afford to each of such Holders the opportunity to
have any such Option Shares registered under such Registration Statement.
Notwithstanding the provisions of this Section 8(b), the Company shall
have the right at any time after it shall have given written notice pursuant
this Section (irrespective of whether a written request for inclusion of any
Option Shares shall have been made) to elect not to file any such proposed
Registration Statement, or to withdraw the same after the filing but prior to
the effective date thereof.
(c) Covenants of the Company with Respect to Registration.
In connection with any registration of Option Shares under Section 8(b) hereof,
the Company covenants and agrees as follows:
(i) The Company shall use its best efforts to file
a Registration Statement within sixty (60) days of receipt of any demand
therefor, shall use its best efforts to have any Registration Statement declared
effective at the earliest possible time, shall file such post-effective
amendments thereto as may be necessary to maintain such effectiveness for a
period of not less than nine months and shall furnish each Holder desiring to
sell Option Shares, such number of prospectuses as shall reasonably be
requested.
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(ii) The Company shall pay all costs (excluding
fees and expenses of Holder(s) counsel and any underwriting or selling
commissions), fees and expenses in connection with all Registration Statements
filed pursuant to Section 8(b) hereof including, without limitation, the
Company's legal and accounting fees, printing expenses, and blue sky fees and
expenses.
(iii) The Company will take all necessary action
which may be required in qualifying or registering the Option Shares included in
a Registration Statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s), provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(iv) In the event that the Company becomes aware of
any untrue statement of a material fact, or of an omission to state a material
fact that is required to be stated therein or that is necessary to make the
statements contained therein not misleading in the light of the circumstances
then existing, the Company will thereupon give notice to the Holder(s) of the
Option Shares of such mistatement or omission. The Company also shall indemnify
the Holder(s) of the Option Shares to be sold pursuant to any Registration
Statement and each person, if any, who controls such Holder(s) within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), against all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, arising from such Registration Statement.
(d) The Company's obligations to file a Registration
Statement pursuant to Section 8(b) hereof with respect to any of the Option
Shares are expressly conditioned, in each instance, upon the Company's receipt
from the Holder(s) of the Option Shares to be offered for sale pursuant to such
Registration Statement, severally, and not jointly, of written agreements to
indemnify the Company, its officers and directors and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Securities Act, the Exchange Act or otherwise, arising from
information furnished in writing by or on behalf of such Holders for specific
inclusion in such Registration Statement.
(e) The Company shall as soon as practicable after the
effective date of such Registration Statement, and in any event within 15 months
thereafter, issue an earnings statement (which need not be audited) complying
with
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Section 11(a) of the Securities Act and covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement.
(f) For purposes of this Agreement, the term "majority" in
reference to the Holder or Holders of this Option and the Option Shares
purchasable hereunder, shall mean any combination of issued and outstanding
Option Shares and rights to purchase Option Shares which if exercised, would at
the time in question equal or exceed 10,001 Option Shares
9. Transfer to Comply with the Securities Act. Neither this
Option nor the Option Shares issuable upon exercise of this Option may be sold,
assigned, transferred or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel for the
Company, is a person to whom this Option or Option Shares may legally be
transferred without registration and without the delivery of a current
prospectus under the Securities Act with respect thereto, and then only against
receipt of an agreement of such person setting forth the representations
specified in Section 8(a) hereof, and such person's agreement to comply with the
provisions of this Section 9 with respect to any resale or other disposition of
such securities which agreement shall be reasonably satisfactory in form and
substance to the Company and its counsel; or
(b) to any person upon delivery of a prospectus then
meeting the requirements of the Securities Act relating to such securities and
the offering thereof for such sale or disposition.
10. Adjustment of Purchase Price. The Purchase Price shall be
subject to adjustment from time to time during the Exercise Period as follows:
(a) If (and on each occasion that) the Company shall, at
any time during the Exercise Period, issue or sell Additional Stock (as that
term is defined in Section 10(b)(i) hereof) either without consideration or for
a consideration per share less than the Purchase Price in effect immediately
prior to the issue or sale of such Additional Stock, then, and in any such
event, the Purchase Price in effect immediately prior to such issue or sale
shall be reduced, as of the opening of business on the date of such issue or
sale, to a price determined by multiplying such Purchase Price in effect
immediately prior to such issue or sale, by a fraction: (i) the numerator of
which shall be equal to the sum of (A) the total number of shares of Common
Stock issued and outstanding at the close of business on the day next preceding
the date of such issue or sale, plus (B) the total number of shares of Common
Stock which could be purchased at the aforesaid Purchase Price with the
aggregate amount of the consideration (if any) received by the Company (or,
without duplication, deemed to be received as provided in Sections 10(b)(iii)
and
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10(b)(iv) hereof) upon such issue or sale; and (ii) the denominator of which
shall be equal to the total number of shares of Common Stock issued and
outstanding at the close of business on the date of such issue or sale
(including any such shares deemed to have been issued or sold as provided in
Sections 10(b)(iii) and 10(b)(iv) hereof).
(b) For the purposes of this Section 10 the following
provisions shall also be applicable:
(i) The term Additional Stock shall mean any Common
Stock issued or sold, or deemed to have been issued or sold pursuant to Section
10(b)(iii) or Section 10(b)(iv) hereof, by the Company during the Exercise
Period, other than Common Stock issued upon the exercise of this Option or upon
exercise of any of the other Options, or upon the exercise of such other options
as may be issued by the Company to the Initial Holder, (in each case) in whole
or in part.
(ii) In determining the number of shares of Common
Stock outstanding at any time, shares of Common Stock owned by the Company shall
not be deemed to be outstanding.
(iii) In case the Company, at any time during the
Exercise Period, shall issue or sell any rights to subscribe for or to purchase,
or grant any options for the purchase of, shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
("Convertible Securities"), whether or not such rights or options or the right
to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share at which shares of Common Stock are
issuable upon the exercise of such rights or options or upon conversion or
exchange of such Convertible Securities, determined by dividing:
1) the total amount, if any, received or
receivable by the Company as consideration for the issuance of
such rights or the granting of such options, plus the minimum
aggregate amount of additional consideration payable to the
Company upon the exercise of such rights or options, plus, in
the case of such Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the
issue of such Convertible Securities and upon the conversion or
exchange thereof; by
2) the maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or
upon the conversion or exchange of the maximum number of such
Convertible Securities issuable on the exercise of such rights
or options;
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shall be less than the Purchase Price in effect immediately prior to the issue
of such rights or the grant of such options, then the maximum number of shares
of Common Stock issuable upon the exercise of such rights or options or upon
conversion or exchange of the maximum number of such Convertible Securities
issuable upon the exercise of such rights or options shall be deemed to be
issued or sold for such price per share; provided, however, that upon the
expiration of such rights or options, and, in the case of options to purchase
Convertible Securities, upon the expiration of the right to convert or exchange
such Convertible Securities, the currently applicable Purchase Price in effect
immediately prior to such expiration shall forthwith be adjusted to such
Purchase Price as would have obtained had the adjustments made upon the issuance
of such rights or the granting of such options been made upon the basis of the
issuance of only the number of shares of Common Stock actually issued on the
exercise of such rights or options or on the conversion or exchange of such
Convertible Securities (or in the case of rights or options to purchase
Convertible Securities, actually issued and at the time still issuable upon the
conversion or exchange of the Convertible Securities actually issued), and upon
the basis of only the consideration applicable thereto, and any shares issuable
upon the exercise of such rights or options which have expired or upon the
conversion or exchange of such Convertible Securities, the right to convert or
exchange which has expired, shall not thereafter be deemed to be outstanding and
the consideration applicable thereto shall not thereafter be deemed to have been
received. If the said rights or options are issued or granted in conjunction
with the sale of other securities of the Company, the part of the consideration
allocable to the said rights and options, and the part of the consideration
allocable to the said other securities, shall be determined in good faith by the
Board of Directors of the Company.
(iv) In case the Company, at any time during the
Exercise Period, shall issue or sell any Convertible Securities, whether or not
the rights to convert or exchange are immediately exercisable, and the price per
share at which shares of Common Stock are deliverable upon such conversion or
exchange, determined by dividing:
1) the total amount received or receivable
by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon
such conversion or exchange; by
2) the maximum number of shares of Common
Stock issuable as of the date of issue of such Convertible
Securities to effect the conversion or exchange of all such
Convertible Securities;
shall be less than the Purchase Price in effect immediately prior to the time of
such issue or sale, then such issue or sale shall be deemed to be an issue or
sale (as of the
8
date of issue or sale of such Convertible Securities) of the maximum number of
shares of Common Stock necessary to be issued as of that date to effect the
conversion or exchange of all such Convertible Securities, and the gross amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional
consideration (if any) payable to the Company upon such conversion or exchange,
shall be deemed to be the consideration actually received (as of the date of the
issue or sale of such Convertible Securities) for the issue or sale of such
Common Stock; provided, however, that upon the termination of the right to
convert or to exchange such Convertible Securities for Common Stock, the
Purchase Price shall forthwith be adjusted to such Purchase Price which would
have obtained had the adjustments made upon the issuance of such Convertible
Securities been made upon the basis of the issuance of only the number of shares
of Common Stock actually issued upon the conversion or exchange thereof, and
upon the basis of the consideration applicable only to the Convertible
Securities so converted or exchanged, and no shares issuable upon the conversion
or exchange of such Convertible Securities which were not actually so issued
shall thereafter be deemed to be outstanding and the consideration applicable
thereto shall not thereafter be deemed to have been received. No adjustment of
the Purchase Price shall be made pursuant to the provisions of this Section
10(b)(iv) upon any issue or sale of Convertible Securities if such issue or sale
has been made upon the exercise of any rights to subscribe for or to purchase,
or any options to purchase, any such Convertible Securities for which an
adjustment of the Purchase Price has been made pursuant to Section 10(b)(iii)
hereof.
(v) If the amount of consideration payable to the
Company upon the exercise of any right or option to which Section 10(b)(iii)
hereof is applicable or upon the conversion or exchange of any Convertible
Securities referred to in Sections 10(b)(iii) or 10(b)(iv) hereof shall change
at any time (other than under or by reason of provisions designed to protect
against dilution), then, forthwith upon each such change becoming effective, all
such rights or options or all such rights of conversion or exchange not
theretofore exercised shall be deemed to have expired or terminated, as the case
may be, and the Purchase Price shall forthwith be adjusted in accordance with
the proviso contained in Section 10(b)(iii) or Section 10(b)(iv) hereof, as the
case may be, and further adjusted as though such rights or options or
Convertible Securities deemed expired or terminated were newly issued and
convertible or exercisable upon the payment of such changed consideration.
(vi) If the consideration payable to the Company
upon the exercise of any right or option to which Section 10(b)(iii) hereof is
applicable or upon the conversion or exchange of any Convertible Securities
referred to in Section 10(b)(iii) or 10(b)(iv) hereof shall decrease at any time
under or by reason of provisions with respect thereto designed to protect the
Holders thereof against
9
dilution, the Purchase Price which would apply if purchase rights hereunder were
being exercised immediately after such event shall forthwith be decreased to the
Purchase Price that would have obtained had the adjustments made upon the
issuance of such right, option or Convertible Securities been made upon the
basis of 1) the issuance of (and the total consideration received for) the
shares of Common Stock theretofore delivered upon the exercise of such rights or
options or upon the conversion or exchange of such Convertible Securities, and
2) the issuance of (and the total minimum consideration thereafter receivable
for) the maximum number of shares of Common Stock thereafter deliverable upon
the exercise of such rights or options or upon the conversion or exchange of
such Convertible Securities.
(vii) In case any dividends on any class of stock
(other than Common Stock) of the Company, payable in Common Stock or Convertible
Securities, shall be declared or paid by the Company, the Common Stock, or such
Convertible Securities, as the case may be, so issued, shall be deemed to have
been issued without consideration.
(viii) In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued or sold for cash, the
consideration received by the Company therefor shall be deemed to be the amount
received by the Company therefor, before deducting therefrom all underwriting
commissions, discounts or concessions and all finder's fees paid or allowed by
the Company in connection therewith.
(ix) In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued or sold for a consideration
other than cash, then, in any such event, the amount of the consideration (other
than cash) received by the Company shall be deemed to be the fair value of such
consideration, as determined in good faith by the Board of Directors of the
Company, before deducting all underwriting commissions, discounts or concessions
and all finder's fees paid or allowed by the Company in connection therewith.
(x) In case the Company shall take a record of the
Holders of its Common Stock for the purpose of entitling them 1) to receive a
dividend or other distribution payable in Common Stock or in Convertible
Securities, or 2) to subscribe for or purchase Common Stock or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the issue of such right to subscription or purchase, as the case may be.
10
(c) If (and on each occasion that) the Company shall, at
any time during the Exercise Period, (i) issue any shares of Common Stock as a
dividend upon Common Stock, or (ii) issue any shares of Common Stock in
subdivision of outstanding shares of Common Stock by reclassification or
otherwise, or (iii) combine outstanding shares of Common Stock by
reclassification or otherwise, the then current Purchase Price shall be adjusted
to a price determined by dividing 1) the number of shares of Common Stock
outstanding immediately prior to such dividend, subdivision or combination,
multiplied by the then current Purchase Price, by 2) the total number of shares
of Common Stock outstanding immediately after such issue, and the resulting
quotient shall be the adjusted Purchase Price per share.
(d) In case the Company shall, at any time during the
Exercise Period, declare a dividend or make a distribution upon the Common Stock
payable otherwise than out of earnings or earned surplus and otherwise than in
Common Stock or Convertible Securities, then thereafter the Holder hereof, upon
the exercise of any of the rights represented by this Option, will be entitled
to receive the number of Option Shares being purchased upon such exercise and,
in addition and without further payment, the cash, stock or other securities and
other property which the Holder hereof would have received by way of dividends
and distributions (otherwise than out of such earnings or surplus or in Common
Stock or Convertible Securities) if such Holder (i) had exercised this Option
immediately prior to the declaration of such dividend or the making of such
distribution so as to be entitled thereto, and (ii) had retained all dividends
in stock or securities payable in respect of such Common Stock or in respect of
any stock or securities paid as dividends and distributions and originating
directly or indirectly from such Common Stock. For the purposes of the
foregoing, a dividend other than in cash shall be considered payable out of
earnings or earned surplus only to the extent that such earnings or earned
surplus are charged an amount equal to the fair value of such dividend, as
determined in good faith by the Board of Directors of the Company.
11. Adjustment of Number of Shares Purchasable Hereunder. Upon
each adjustment of the Purchase Price pursuant to Section 10 hereof (in this
Section 11 called the Latest Purchase Price Adjustment) the Holder of this
Option shall thereafter (until another such adjustment) be entitled to purchase,
at the adjusted Purchase Price per share resulting from such Latest Purchase
Price Adjustment, the number of shares of Common Stock (calculated to the
nearest whole share), obtained by (a) multiplying the number of shares
purchasable hereunder (as adjusted from time to time as a result of all
adjustments to the Purchase Price made prior to such Latest Purchase Price
Adjustment) by the Purchase Price in effect immediately prior to such Latest
Purchase Price Adjustment, and (b) dividing the product so obtained by the
adjusted Purchase Price resulting from such Latest Purchase Price Adjustment.
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12. Notice of Adjustment of Purchase Price. Upon any adjustment
of the Purchase Price and/or an increase or decrease in the number of Option
Shares purchasable upon the exercise of this Option, then, and in each such
case, the Company, within thirty (30) days thereafter, shall give notice thereof
in writing in accordance with Section 14 hereof to the Holder of this Option
stating the adjusted Purchase Price and the increased or decreased number of
shares of Common Stock issuable upon the exercise of this Option and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.
13. Effect of Reorganization, Reclassification, Consolidation,
Merger, etc. If, at any time during the Exercise Period, there should be any
capital reorganization or reclassification of the capital stock of the Company
(other than a subdivision or combination of shares provided for in Section 10(d)
hereof) or any consolidation or merger of the Company with another corporation
or any sale, conveyance, lease or other transfer by the Company of all or
substantially all of its property to any other corporation, the Holder of this
Option shall thereafter, upon exercise of this Option, be entitled to receive
the number of shares of Common Stock or other securities or property of the
Company, or of the successor corporation resulting from such consolidation or
merger, as the case may be, to which the Option Shares (and any other securities
and property) of the Company, deliverable upon the exercise of this Option,
would have been entitled upon such capital reorganization, reclassification of
capital stock, consolidation, merger, sale or other transfer if this Option had
been exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale or other
transfer; and, in any such case, appropriate adjustment (as determined in good
faith by the Board of Directors of the Company) shall be made in the application
of the provisions herein set forth with respect to the rights and interests
thereafter of the Holder of this Option to the end that the provisions set forth
herein (including those relating to adjustments of the Purchase Price and the
number of shares issuable upon the exercise of this Option) shall thereafter be
applicable, as near as reasonably may be, in relation to any shares or other
property thereafter deliverable upon the exercise hereof as if this Option had
been exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale or other transfer
and the Holder hereof had carried out the terms of the exchange as provided for
by such capital reorganization, reclassification of capital stock, consolidation
or merger.
The Company shall not effect any such capital reorganization,
consolidation or merger unless, upon or prior to the consummation thereof, the
successor corporation shall assume by written instrument, deemed by the Board of
Directors of the Company to be satisfactory in form and substance, the
obligation to deliver to the Holder hereof such shares of stock, securities,
cash or property as such Holder shall be entitled to purchase in accordance with
the foregoing provisions.
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14. Notices. All communications and notices hereunder must be in
writing, either delivered in hand or by next day overnight delivery, or sent by
first-class mail, postage prepaid, or sent by telecopier, and, if to the
Company, shall be addressed to it at 0000 Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx
00000, or at such other address as the Company may hereafter designate in
writing by notice to the Holder of this Option, and, if to such Holder,
addressed to such Holder at the address of such Holder as shown on the books of
the Company.
15. Sundays, Holidays, etc. If the last or appointed day for the
taking of any action required or the expiration of any right granted herein
shall be a Saturday or a Sunday or shall be a legal holiday or a day on which
banking institutions in the City of New York, New York are authorized or
required by law to remain closed, then such action may be taken or right may be
exercised on the next succeeding day which is not a Saturday, a Sunday or a
legal holiday and not a day on which banking institutions in the City of New
York, New York are authorized or required by law to remain closed.
16. Type of Option; Laws Applicable to Construction. This Option
is not to be treated as an incentive stock option under the Internal Revenue
Code of 1986, as amended. This agreement shall be construed and enforced in
accordance with the laws of the State of New York without regard to its choice
of law principles.
IN WITNESS WHEREOF, the Company has granted this Option duly
executed by its officers thereunto duly authorized on the date specified above.
PIONEER COMMERCIAL FUNDING CORP.
By:
_________________________________
Xxxxxx X. Xxxxxxxx, Chairman
and Chief Executive
ATTEST:
____________________________________
13
EXHIBIT A
Pioneer Commercial Funding Corp.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
Gentlemen:
Pursuant to the terms of an Option dated ____________ __, 1996
(the "Option"), the undersigned hereby elects to exercise such Option to the
extent of purchasing _________ shares at $_____ per share for an aggregate
purchase price of $___________.
Enclosed is payment of the purchase price by certified or bank
check in the aggregate amount of the exercise price, payable to Pioneer
Commercial Funding Corp.
Please have the certificate representing said shares registered
and forwarded to the undersigned, as follows:
Name ____________________________________________________________
Street Address___________________________________________________
City__________________________ State___________ Zip Code_________
Very truly yours,
Holder:____________________________
By:________________________________
(Signature)
Name:______________________________
Title:_____________________________
_____________________________
DATE:_______________________________
14
EXHIBIT B
FOR VALUE RECEIVED,_______________________________________hereby
sells, assigns and transfers unto
Name ____________________________________________________________
(Please typewrite or print in block letters)
Address __________________________________________________________
Social Security or Employer Identification No. ____________
the right to purchase Common Stock represented by this Option to the extent of
___________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint __________________ Attorney, to transfer the
same on the books of the Company with full power of substitution in the
premises.
Holder: ____________________________
By: ________________________________
(Signature)
Name: ______________________________
Title:______________________________
DATE: ____________________________
Signature Guaranteed
__________________________________
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