THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.
NOT EXERCISABLE PRIOR TO ___________, 1997. VOID AFTER 5:00 P.M. EASTERN TIME,
___________, 2002.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
125,000 UNITS
OF
UNITY FIRST ACQUISITION CORP.
1. PURCHASE OPTION.
THIS CERTIFIES THAT, in consideration of $.0008 per option duly paid
by or on behalf of ____________________ ("Holder"), as registered owner of this
Purchase Option, to Unity First Acquisition Corp. ("Company"), Holder is
entitled, at any time or from time to time at or after ________, 1997
("Commencement Date"), and at or before 5:00 p.m., Eastern Time, ________, 2002
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to One Hundred Twenty-Five Thousand (125,000) units
("Units") of the Company, each Unit consisting of one share of common stock of
the Company, $.0001 par value per share ("Common Stock"), and one Class A
redeemable common stock purchase warrant and Class B redeemable common stock
purchase warrant (collectively, "Warrants") expiring five 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"), except that it expires five years from the Effective Date.
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 $6.60 per Unit so purchased; provided, however, that upon the
occurrence of any of the events specified in Section 6 hereof, the rights
granted by this Purchase Option, including the exercise price per Unit and the
number of Units (and shares of Common Stock and Warrants) to be received upon
such exercise, shall be adjusted as therein specified. The term "Exercise
Price" shall mean the initial exercise price or the adjusted exercise price,
depending on the context.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Units being purchased payable in cash. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date this Purchase Option shall become and be void without
further force or effect, and all rights represented hereby shall cease and
expire.
2.2 LEGEND. Each certificate for the securities purchased under this
Purchase Option shall bear a legend as follows unless such securities have been
registered under the Act:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 ("Act") or applicable
state law. The securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration
statement under the Act, or pursuant to an exemption from registration
under the Act and applicable state law."
2.3 CASHLESS EXERCISE.
2.3.1 DETERMINATION OF AMOUNT. In lieu of the payment of the
Exercise Price in the manner required by Section 2.1, the Holder shall have the
right (but not the obligation) to pay the Exercise Price for the Securities
being purchased with this Purchase Option upon exercise by the surrender to the
Company of any exercisable but unexercised portion of this Purchase Option
having a "Value" (as defined below), at the close of trading on the last trading
day immediately preceding the exercise of this Purchase Option, equal to the
Exercise Price multiplied by the number of Units being purchased upon exercise
("Cashless Exercise Right"). The sum of (a) the number of Units being purchased
upon exercise of the non-surrendered portion of this Purchase Option pursuant to
this Cashless Exercise Right and (b) the number of Units underlying the portion
of this Purchase Option being surrendered, shall not in any event be greater
than the total number of Units purchasable upon the complete exercise of this
Purchase Option if the Exercise Price were paid in cash. The "Value" of the
portion of the Purchase Option being surrendered shall equal the remainder
derived from subtracting (a) the Exercise Price multiplied by the number of
Units underlying the portion of this Purchase Option being surrendered from
(b) the Market Price of the Units multiplied by the number of Units underlying
the portion of this Purchase Option being surrendered. As used herein, the term
"Market Price" at any date shall be deemed to be the last reported sale price of
the Units on such date, or, in case no such reported sale takes place on such
day, the average of the last reported sale prices for the immediately preceding
three trading days, in either case as officially reported by the principal
securities exchange on which the Units are listed or admitted to trading, or, if
the Units are not listed or admitted to trading on any national securities
exchange or if any such exchange on which the Units are listed is not its
principal trading market, the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap Market, or, if applicable, the
OTC Bulletin Board, or if the Units are not listed or admitted to trading on any
of the foregoing, as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it;
provided, however, that if the Units are no longer quoted on the principal
trading market that the Common Stock is traded on, the Market Price of the Units
shall be equal to the last reported sale price of the Common Stock added to the
last reported sale price of the Public Warrants, as quoted on the principal
trading market for such securities determined as described above.
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 a 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 or assign or
hypothecate this Purchase Option prior to the Commencement Date to anyone other
than (i) an officer or director of GKN Securities Corp. ("GKN") or Selected
Dealer in connection with the Offering, or (ii) any such Selected Dealer. On
and after the Commencement Date, transfers to others may be made subject to
compliance with or exemptions from applicable securities laws. In order to make
any permitted assignment, the Holder must deliver to the Company the assignment
form attached hereto duly executed and completed, together with the Purchase
Option and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall immediately transfer this Purchase Option on the
books of the Company and shall execute and deliver a new Purchase Option or
Purchase Options of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the 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 sold
pursuant to an exemption from registration under the Securities Act of 1933, as
amended ("Act"), the availability of which is established to the reasonable
satisfaction of the Company, 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.
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in Section
3 hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Purchase Option for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any 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.
4.2 LOST CERTIFICATE. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any
such new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute an additional contractual obligation
on the part of the Company.
3
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 on one occasion, all or any portion of the Purchase Options
requested by the Majority Holders in the Initial Demand Notice and all of the
securities underlying such Purchase Options, including the Common Stock, the
Warrants and the Common Stock underlying the Warrants (collectively, the
"Registrable Securities"). On such occasion, the Company will file a
registration statement 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. Should this registration or the effectiveness thereof be delayed by
the Company, the exercisability of the Purchase Options shall be extended for a
period of time equal to the delay in registering the Registrable Securities;
provided, however, that such extension date shall not extend beyond five years
from the Effective Date. Moreover, if the Company willfully fails to comply
with the provisions of this Section 5.1.1, the Company shall, in addition to any
other equitable or other relief available to the Holder(s), be liable for any
and all incidental, special and consequential damages sustained by the
Holder(s). The demand for registration may be made at any time during a period
of four years beginning one year from the Effective Date. The Company covenants
and agrees to give written notice of its receipt of any Initial Demand Notice by
any Holder(s) to all other registered Holders of the Purchase Options and/or the
Registerable Securities within ten days from the date of the receipt of any such
Initial Demand Notice.
5.1.2 TERMS. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. The Company agrees to use its 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 stockholders of the Company to be obligated to escrow their shares of
capital stock of the Company. The Company shall cause any registration
statement or post-effective amendment filed pursuant to the demand rights
granted under Section 5.1.1 to remain effective for a period of nine consecutive
months from the effective date of such registration statement or post-effective
amendment.
5.2 "PIGGY-BACK" REGISTRATION.
5.2.1 GRANT OF RIGHT. In addition to the demand right of
registration, the Holders of the Purchase Options shall have the right for a
period of six years commencing one year from the Effective Date, to include the
Registrable Securities as part of any other registration of securities filed by
the Company (other than in connection with a transaction contemplated by Rule
145(a) promulgated under the Act or pursuant to Form S-8).
4
5.2.2 TERMS. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than fifteen days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall
continue to be given for each applicable registration statement filed (during
the period in which the Purchase Option is exercisable) by the Company until
such time as all of the Registrable Securities have been registered and sold.
The holders of the Registrable Securities shall exercise the "piggy-back" rights
provided for herein by giving written notice, within ten days of the receipt of
the Company's notice of its intention to file a registration statement. The
Company shall cause any registration statement filed pursuant to the above
"piggyback" rights to remain effective for at least nine months from the date
that the Holders of the Registrable Securities are first given the opportunity
to sell all of such securities.
5.3 GENERAL TERMS.
5.3.1 INDEMNIFICATION. The Company shall indemnify the Holder(s)
of the Registrable Securities to be sold pursuant to any registration statement
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 Underwriter contained in Section 5
of the Underwriting Agreement. The Holder(s) of the Registrable Securities to
be sold pursuant to such registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, 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 Underwriter has agreed to indemnify
the Company.
5.3.2 EXERCISE OF WARRANTS. Nothing contained in this Purchase
Option shall be construed as requiring the Holder(s) to exercise their Purchase
Options or Warrants prior to or after the initial filing of any registration
statement or the effectiveness thereof.
5.3.3 EXCLUSIVITY. The Company shall not permit the inclusion of
any securities other than the Registrable Securities to be included in any
registration statement filed pursuant to Section 5.1 hereof without the prior
written consent of the Majority Holders of the Registrable Securities.
5
5.3.4 DOCUMENTS DELIVERED TO HOLDERS. The Company shall furnish
GKN, as representative of the Holders participating in any of the foregoing
offerings, a signed counterpart, addressed to the participating Holders, of (i)
an opinion of counsel to the Company, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, an opinion dated the date of the closing under any underwriting
agreement related thereto), and (ii) a "cold comfort" letter dated the effective
date of such registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the closing under the
underwriting agreement) signed by the independent public accountants who have
issued a report on the Company's financial statements included in such
registration statement, in each case covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriter in underwritten public offerings of securities. The Company shall
also deliver promptly to GKN, 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 GKN, 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 GKN, as representative of the Holders, shall reasonably request.
The Company shall not be required to disclose any confidential information or
other records to GKN, 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.
5.3.5 UNDERWRITING AGREEMENT. The Company shall enter into an
underwriting agreement with the managing underwriter, if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this
Section 5, which managing underwriter shall be reasonably acceptable to the
Company. Such agreement shall be reasonably satisfactory in form and substance
to the Company, each Holder and such underwriter, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Registrable Securities and may, at
their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriter shall also be
made to and for the benefit of such Holders. Such Holders shall not be required
to make any representations or warranties to or agreements with the Company or
the underwriter except as they may relate to such Holders and their intended
methods of distribution. Such Holders, however, shall agree to such covenants
and indemnification and contribution obligations for selling stockholders as are
customarily contained in agreements of that type used by the managing
underwriter. Further, such Holders shall execute appropriate custody agreements
and otherwise cooperate fully in the preparation of the registration statement
and other documents relating to any offering in which they include securities
pursuant to this Section 5. Each Holder shall also furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the
intended method of
6
disposition of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.
5.3.6 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).
5.3.7 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
Holder's receipt of the copies of a supplemental or amended prospectus, and, if
so desired by the Company, such Holder shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
such destruction) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
6. ADJUSTMENTS.
6.1 ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES. The Exercise
Price and the number of Units underlying the Purchase Option shall be subject to
adjustment from time to time as hereinafter set forth:
6.1.1 STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and
subject to the provisions of Section 6.4 below, the number of outstanding shares
of Common Stock is increased by a stock dividend payable in shares of Common
Stock or by a split-up of shares of Common Stock or other similar event, then,
on the effective day thereof, the number of securities issuable on exercise of
each Unit shall be increased in proportion to such increase in outstanding
shares.
6.1.2 AGGREGATION OF SHARES. If after the date hereof, and
subject to the provisions of Section 6.4, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, on the effective date
thereof, the number of securities issuable on exercise of each Unit shall be
decreased in proportion to such decrease in outstanding shares.
6.1.3 ADJUSTMENTS IN EXERCISE PRICE. Whenever the number of Units
purchasable upon the exercise of this Purchase Option is adjusted, as provided
in this Section 6.1, the Exercise Price shall be adjusted (to the nearest cent)
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of Units purchasable
upon the exercise of this Purchase Option immediately prior to such adjustment,
and (y) the denominator of which shall be the number of Units so purchasable
immediately thereafter.
7
6.1.4 REORGANIZATIONS, ETC. If after the date hereof, any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the Holders shall thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in the
Unit Purchase Option and in lieu of the securities of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, such shares of stock, securities, or assets as may be
issued or payable with respect to or in exchange for the number of securities
equal to the number of securities immediately theretofore purchasable and
receivable upon the exercise of the rights represented by the Unit Purchase
Option, had such reorganization, reclassification, consolidation, merger, or
sale not taken place and in such event, appropriate provision shall be made with
respect to the rights and interests of the Holders to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of the Unit Purchase Option) shall thereafter be applicable, as nearly as may
be, to any share of stock, securities, or assets thereafter deliverable upon the
exercise hereof. The Company shall not effect any such consolidation, merger,
or sale unless, prior to the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger, or the
corporation purchasing such assets, shall assume, by written instrument executed
and delivered to the Holders its obligation to deliver such shares of stock,
securities, or assets which, in accordance with the foregoing provisions, such
Holders may be entitled to purchase.
6.1.5 CHANGES IN FORM OF PURCHASE OPTION. This form of Purchase
Option need not be changed because of any change pursuant to this Section, and
Purchase Options issued after such change may state the same Exercise Price and
the same number of Units as are stated in the Purchase Options initially issued
pursuant to this Agreement. The acceptance by any Holder of the issuance of new
Purchase Options reflecting a required or permissive change shall not be deemed
to waive any rights to an adjustment occurring after the Commencement Date or
the computation thereof.
6.2 [Intentionally Omitted]
6.3 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 Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental Purchase Option providing that the holder of each
Purchase Option then outstanding or to be outstanding shall have the right
thereafter (until the stated expiration of such Purchase Option) to receive,
upon exercise of such Purchase Option, the kind and amount of shares of stock
and other securities and property receivable upon such consolidation or merger,
by a holder of the number of shares of Common Stock of the Company for which
such Purchase Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental Purchase Option shall
provide for adjustments 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.
6.4 ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
or Warrants upon the exercise of
8
the Purchase Option, nor shall it be required to issue scrip or pay cash in lieu
of any fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of Warrants, shares of Common Stock or other securities,
properties or rights.
7. RESERVATION AND LISTING. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of the Purchase Options or the Warrants, such number
of shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Purchase Options and payment of the Exercise Price therefor, all
shares of Common Stock and other securities issuable upon such exercise shall be
duly and validly issued, fully paid and non-assessable and not subject to
preemptive rights of any stockholder. The Company further covenants and agrees
that upon exercise of the Warrants underlying the Purchase Options and payment
of the respective Warrant exercise price therefor, all shares of Common Stock
and other securities issuable upon such exercises shall be duly and validly
issued, fully paid and non-assessable and not subject to preemptive rights of
any stockholder. As long as the Purchase Options shall be outstanding, the
Company shall use its best efforts to cause all (i) shares of Common Stock
issuable upon exercise of the Purchase Options and the Warrants, and (ii) the
Warrants underlying the Purchase Options to be listed (subject to official
notice of issuance) on all securities exchanges (or, if applicable on the Nasdaq
National Market or SmallCap Market) on which the Common Stock or the Public
Warrants issued to the public in connection herewith may then be listed and/or
quoted.
8. CERTAIN NOTICE REQUIREMENTS.
8.1 HOLDER'S RIGHT TO RECEIVE NOTICE. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Options and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be.
8.2 EVENTS REQUIRING NOTICE. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
9
8.3 NOTICE OF CHANGE IN EXERCISE PRICE. The Company shall, promptly after
an event requiring a change in the Exercise Price pursuant to Section 6 hereof,
send notice to the Holders of such event and change ("Price Notice"). The Price
Notice shall describe the event causing the change and the method of calculating
same and shall be certified as being true and accurate by the Company's
President and Chief Financial Officer.
8.4 TRANSMITTAL OF NOTICES. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered, or mailed by express mail or
overnight courier service: (i) if to the registered Holder of the Purchase
Option, to the address of such Holder as shown on the books of the Company, or
(ii) if to the Company, to following address or to such other address as the
Company may designate by notice to the Holders:
Unity First Acquisition Corp.
245 Fifth Avenue, Suite 1502
New York, New York 10016
Attn: Lawrence Burstein, President
9. MISCELLANEOUS.
9.1 AMENDMENTS. The Company and GKN may from time to time supplement or
amend this Purchase Option without the approval of any of the Holders in order
to cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and GKN may deem necessary or desirable and which the Company
and GKN 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.
10. 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.
10.1 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.
10.2 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
10
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The Company and
the Holder agree that the prevailing party(ies) in any such action shall be
entitled to recover form the other party(ies) all of its reasonable attorneys'
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
10.3 WAIVER, ETC. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
10.4 EXECUTION IN COUNTERPARTS. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the _____th day of ________, 1996.
UNITY FIRST ACQUISITION CORP.
By: ____________________________
Lawrence Burstein
President
11
Form to be used to exercise Purchase Option:
Unity First Acquisition Corp.
245 Fifth Avenue, Suite 1502
New York, New York 10016
Attn: Lawrence Burstein, President
Date:_________________, 199_
The undersigned hereby elects irrevocably to exercise the within
Purchase Option and to purchase ____ Units of Unity First 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 Stock
and Warrants as to which this Purchase Option is exercised in accordance with
the instructions given below.
OR
The undersigned hereby elects irrevocably to convert _________ of the
Units purchasable under the within Purchase Option into _________ shares of
Common Stock and ________ Warrants of Unity First Acquisition Corp. (based on a
"Market Price" of $___________). Please issue the Common Stock and Warrants in
accordance with the instructions given below.
______________________________
Signature
______________________________
Print Name
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name _____________________________________________________________
(Print in Block Letters)
Address __________________________________________________________
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED,______________________________________________
does hereby sell, assign and transfer unto ____________________________________
the right to purchase __________ Units of Unity First 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: ___________________, 199_
______________________________
Signature
______________________________
Print Name
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.