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EXHIBIT 4.5
EXHIBIT TO UNDERWRITING AGREEMENT
THIS PURCHASE OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED PRIOR TO
____________, 1997. THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE OPTION PRIOR TO THAT DATE OTHER THAN TO AN OFFICER OR PARTNER OF SUCH
HOLDER.
NOT EXERCISABLE PRIOR TO ___________, 1997. VOID AFTER 5:00 P.M. EASTERN TIME,
____________, 2001.
PURCHASE OPTION
For the Purchase of up to 100,000 Units
of
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A Nevada Corporation)
THIS CERTIFIES THAT, in consideration of $1,000.00 aggregate purchase
price duly paid by Joseph Roberts & Co., Inc., its successors or assigns as
provided herein (the "Holder"), as registered owner of this Purchase Option, to
American Professional Billiards, Inc. (the "Company"), is entitled to at any
time or from time to time at or after ____________, 1997 and at or before 5:00
p.m., Eastern Time, ____________, 2001 ("Termination Date"), but not
thereafter, to subscribe for, purchase and receive 100,000 Units ("Units"),
each Unit consisting of one (1) share of common stock, no par value ("Common
Shares") of the Company and one (1) four-year callable warrant to purchase one
share of common stock of the Company ("Warrants"). This Purchase Option is
exercisable at $7.20 per Unit so purchased ("the Exercise Price"), upon
presentation and surrender of this Purchase Option and upon payment of the
Exercise Price for such of the Units at the principal office of the Company;
provided, however, that upon the occurrence of any of the events specified in
the Statement of Rights of Purchase Option, a copy of which is attached as
Annex I hereto and by this reference made a part hereof, the rights granted by
this Purchase Option, including the number of Units to be received upon such
exercise, shall be adjusted as therein specified. If the Termination Date is a
day on which banking institutions are authorized by law to close, then this
Purchase Option may be exercised in accordance with the terms herein on the
next succeeding day which is not such a day on which banking institutions are
authorized by law to close. During the period ending on the Termination Date,
the Company agrees not to take any action that would terminate the Purchase
Option.
The Exercise Price may be paid in cash, by check or the surrender to
the Company of that number of the Units which is calculated by multiplying (i)
the total number of Units by (ii) the Exercise Price and (iii) dividing the
product by the then-current inside offer, on the date of exercise, of the
underlying securities (the "Cashless Exercise Price"). The Cashless Exercise
Price may be tendered pro rata by the holder or holders of less than all the
Units hereunder as the case may be.
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Upon exercise of this Purchase Option, the form of election attached
hereto must be duly executed and the instructions for registration of the Units
acquired by such exercise must be completed. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern Time,
on the Termination Date, then, from and after such date and time, this Purchase
Option shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.
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 ____________, 1997 to anyone other than an officer or
partner of such Holder or other firm(s) which shall have participated in the
public offering of the Company's securities (SEC File No. __________) to which
this Purchase Option relates. Subsequent to that date, this Purchase Option may
be assigned by the Holder in whole or in part by execution by the Holder of the
form of assignment, a copy of which is attached hereto, to certain persons,
including dealers or their officers or partners. In the event of any assignment
made as aforesaid, the Company, upon request and surrender of this Purchase
Option by the Holder at the principal office of the Company accompanied by
payment of all transfer taxes, if any, payable in connection therewith, shall
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 expressly evidencing the right to purchase the aggregate
number of Units purchasable hereunder or such portion of such aggregate number
as shall be contemplated by any such agreement.
Notwithstanding anything herein to the contrary, each certificate for
securities purchased under this Purchase Option shall bear a legend as follows:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933 ("the Act"). 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, the availability of which is
to be established to the satisfaction of the Company."
The Purchase Option Holder agrees for itself and all subsequent owners,
that before any disposition is made of any securities purchased pursuant to the
Purchase Option, the owner shall give written notice to the Company describing
briefly the manner of any such proposed disposition. The securities shall not
be transferred unless and until (i) the Company has received the opinion of
counsel for such owners that the securities may be sold pursuant to an
exemption from registration under the Securities Act of 1933, as amended (the
"1933 Act"), or (ii) a Registration Statement relating to such securities has
been filed by the Company and made effective by the Securities and Exchange
Commission (the "Commission").
Subject to the above, 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 and funds sufficient to pay
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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 Common Shares and Warrants purchasable hereunder as to which this
Purchase Option has not been exercised or assigned.
Upon receipt of 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.
The Company upon request, and subject to the availability of audited
financial statements which would comply with Regulation S-B or S-X under the
1933 Act, agrees to register expeditiously on one separate occasion the
Purchase Option and the securities underlying the Purchase Option and will file
on such occasion a registration statement, or Notification under Form 1-A,
under the 1933 Act, covering such Purchase Option or the securities underlying
the Purchase Option within twenty business days after receipt of each such
request. Such request must be made at any time during a period of four years
beginning one year from the effective date of the offering. In connection with
the request the Company shall bear all expenses, one time only, attendant to
registering the securities. The Company agrees to use its best efforts to cause
the filing required herein to become effective to qualify or register the
Purchase Option and/or the securities underlying the Purchase Option. In
addition, for a period of four years beginning one year after the effective
date of the offering, the holders of the Purchase Option shall have the right
to include such securities as part of any other registration of securities,
other than on Forms S-4, S-8 or other inappropriate form, filed by the Company
and the Company agrees to give the holders thereof not less than forty (40) days
written notice thereof, including any terms or conditions, prior to the filing
of any such registration statement with the Commission.
The Company will also cooperate with the then Holder(s) of the Purchase
Option or securities issued upon the exercise of the Purchase Option in
preparing and signing any Registration Statement or Notification, in addition
to the registration rights hereinabove provided, required in order to sell or
transfer the Units, Common Shares or Warrants underlying this Purchase Option
and will supply all information required therefor, but such additional
Registration or Notification shall be at the then Holder(s) cost and expense.
The Company's agreements with respect to registration of the securities will
continue in effect regardless of the exercise or surrender of this Purchase
Option.
In no event shall this Purchase Option (or the securities issuable upon
full or partial exercise hereof) be offered or sold except in conformity with
the 1933 Act.
This Purchase Option shall be governed by, and construed in accordance
with, the laws of the State of Florida, without regard to its conflicts of laws
principles.
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IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officers and to be sealed with the seal of the
Company as of this ____ day of __________, 1996.
AMERICAN PROFESSIONAL BILLIARDS, INC.
By: ____________________________
President
( S E A L )
By: ____________________________
Secretary
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ANNEX I
AMERICAN PROFESSIONAL BILLIARDS, INC.
STATEMENT OF RIGHTS OF PURCHASE OPTION
(a) In the event, prior to the expiration of the Purchase Option to
which this Statement of Rights is attached ("Option") by exercise or by its
terms, the Company shall issue any of its Common Shares as a share dividend or
shall subdivide the number of outstanding Common Shares into a greater number
of shares, then, in either of such events, the then applicable Exercise Price
per Unit comprised of the shares of Common Stock and Warrants purchasable
pursuant to this Option in effect at the time of such action shall be reduced
proportionately and the number of shares of the Common Shares and Warrants at
that time purchasable pursuant to this Option shall be increased
proportionately; and, conversely, in the event that the Company shall reduce
the number of outstanding Common Shares by combining such shares into a smaller
number of shares, then, in such event, the then applicable Exercise Price per
Unit purchasable pursuant to this Option in effect at the time of such action
shall be increased proportionately and the number of Common Shares and Warrants
at that time purchasable pursuant to this Option proportionately shall be
decreased. Any dividend paid or distributed upon the Common Shares in shares of
any other class of the Company or securities convertible into Common Shares
shall be treated as a divided paid in Common Shares to the extent that the
Common Shares are issuable upon the conversion thereof.
(b) In the event, prior to the expiration of this Option by exercise
or by its terms, the Company shall be recapitalized by reclassifying its
outstanding Common Shares (other than into shares with a different par value, or
by changing its outstanding Common Shares to Shares without par value), or in
the event the Company or a successor corporation shall consolidate or merge with
or convey all or substantially all of its, or of any successor corporation's
property and assets to any other corporation or corporations (any such other
corporation being included within the meaning of the term "successor
corporation" hereinbefore used in the context of any consolidation or merger of
any other corporation with, or the sale of all or substantially all of the
property of any such other corporation to, another corporation or corporations),
or in the event of any other material change in the capital structure of the
Company or of any successor corporation by reason of any reclassification,
reorganization, recapitalization, consolidation, merger, conveyance or
otherwise, then, as a condition of any such reclassification, reorganization,
recapitalization, consolidation, merger or conveyance, a prompt, proportionate,
equitable, lawful and adequate provision shall be made whereby the Holder of
this Option shall thereafter have the right to purchase, upon the basis and the
terms and conditions specified in this Option, in lieu of the securities of the
Company theretofore purchasable upon the exercise of this Option, such shares,
securities or assets as may be issued or payable with respect to or in exchange
for the number of securities of the Company theretofore purchasable upon the
exercise of this Option had such reclassification, reorganization,
recapitalization, consolidation, merger or
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conveyance not taken place; and in any such event, the rights of the Holder of
this Option to any adjustment in the number of Common Shares or Warrants
purchasable upon exercise of this Option, as hereinbefore provided, shall
continue and be preserved in respect of any shares, securities or assets which
the Holder becomes entitled to purchase. Notwithstanding anything herein to the
contrary, the provisions of this paragraph (b) shall not apply to a merger with
a subsidiary provided the Company is the continuing corporation and provided
further such merger does not result in any reclassification, capital
reorganization or other change of the securities issuable under this Option.
The foregoing provisions of this paragraph (b) shall apply to successive
reclassifications, capital reorganizations and changes of securities and to
successive consolidation, mergers, sales or conveyances.
(c) In the event the Company, at any time while this Option shall
remain unexpired and unexercised, shall sell all or substantially all of its
property, or dissolves, liquidates, or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made as part
of the terms of any such sale, dissolution, liquidation, or winding up such
that the Holder of this Option may thereafter receive, upon exercise hereof, in
lieu of the securities of the Company which it would have been entitled to
receive, the same kind and amount of any shares, securities or assets as may be
issuable, distributable or payable upon any such sale, dissolution, liquidation
or winding up with respect to each Common Share of the Company; provided,
however, that in the event of any such sale, dissolution, liquidation or
winding up, the right to exercise this Option shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than 5:00 p.m., Eastern
Time, on the 45th day next succeeding the date on which notice of such
termination of the right to exercise this Option has been given by mail to the
Holder of this Option at such Holder's address as it appears on the books of
the Company.
(d) If the Company should at any time or from time to time hereafter
issue or sell any Common Shares (other than the Common Shares which may be
purchased under this Option) without consideration or for a consideration per
share less than the portion of the Exercise Price allocable per Common Share
therein in effect immediately prior to the time of such issue or sale, then
forthwith upon such issue or sale, the Exercise Price shall be adjusted to a
price (computed to the nearest cent) determined by dividing the sum of (i) the
number of Common Shares outstanding immediately prior to such issue or sale
multiplied by the portion of the Exercise Price attributable to a Common Share
in each Unit in effect immediately prior to such issue or sale, and (ii) the
consideration, if any, received by the Company upon such issue or sale, by the
total number of Common Shares outstanding immediately after such issue or sale.
For purposes of this paragraph (d), the following provisions (1) to (5) shall
also be applicable.
(1) In case at any time hereafter the Company shall in any manner
grant any right to subscribe for or to purchase, any option for the
purchase of Common Shares or any stock or other securities convertible
into or exchangeable for Common Shares (such convertible or exchangeable
stock or securities being hereinafter referred to as "Convertible
Securities") other than those comprising a portion of this Option, and
the minimum price per share for the Common Shares, pursuant to such
rights or option or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any,
received or
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receivable by the Company as consideration for the granting of such rights or
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 conversion or exchange thereof, by (ii)
the total maximum number of Common Shares issuable pursuant to such rights or
options or upon the conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon exercise of such rights or options) shall
be less than the Exercise Price in effect immediately prior to the time of the
granting of such rights or options, then the total maximum number of Common
Shares issuable pursuant to such rights or options or upon conversion or
exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights and options shall (as of the date of granting
of such rights or options) be deemed to be outstanding and to have been issued
for said price per share as so determined; provided that no further adjustment
of the Exercise Price shall be made upon the actual issue of Common Shares so
deemed to have been issued; and further provided, that, upon the expiration of
such rights (including rights to convert or exchange) or options, (A) the
number of Common Shares deemed to have been issued and outstanding by reason of
the fact that they were issuable pursuant to such rights or options (including
rights to convert or exchange) were not exercised, shall no longer be deemed to
be issued and outstanding; and (B) the Exercise Price shall forthwith be
adjusted to the price which would have prevailed had all adjustments been made
on the basis of the issue only of the Common Shares actually issued upon the
exercise of such rights or options or upon conversion or exchange of such
Convertible Securities.
(2) In case the Company shall in any manner issue or sell any
Convertible Securities, and the minimum price per share for which such Common
Shares are issuable upon conversion or exchange of such Convertible Securities
(determined by dividing (i) the total amount received or receivable by the
Corporation 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 the conversion or exchange of all such
Convertible Securities by (ii) the total maximum number of Common Shares
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Exercise Price in effect immediately prior to the time
of such issue or sale, then the total maximum number of Common Shares issuable
upon conversion or exchange of all such Convertible Securities shall (as of the
date of the issue or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued for said price per share as so determined;
provided, that no further adjustment of the Exercise Price shall be made upon
the actual issue of Common Shares so deemed to have been issued; and, further
provided, that if any such issue or sale of such Convertible Securities is made
upon exercise of any right to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which an adjustment of the
Exercise Price has been or is to be made pursuant to other provisions of this
paragraph (d) no further adjustment of the Exercise Price shall be made by
reason of such issue or sale; and, further provided, that, upon the termination
of the right to convert or to exchange such Convertible Securities for Common
Shares, (A) the number of Common Shares deemed to
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have been issued and outstanding by reason of the fact that they were
issuable upon conversion or exchange of any such Convertible Securities,
which were not so converted or exchanged, shall no longer be deemed to
be issued and outstanding, and (B) the Exercise Price shall forthwith be
adjusted to the price which would have prevailed had all adjustments
been made on the basis of the issue only of the number of Common Shares
actually issued upon conversion or exchange of such Convertible
Securities.
(3) In case any Common Shares or Convertible Securities or any
rights or options to purchase any such stock or securities shall be
issued solely for cash, the consideration received therefor, after
deducting therefrom any commission or other expenses paid or incurred by
the Company for any underwriting of, or otherwise in connection with,
the issuance thereof, shall be deemed to be the amount received by the
Company therefor. In case any Common Shares or Convertible Securities or
any rights or options to purchase any such stock or securities shall be
issued for a consideration part or all of which shall be other than
cash, then, for the purpose of this paragraph (d), the Board of
Directors of the Company shall determine the fair value of such
consideration, which is not cash, irrespective of accounting treatment,
and such Common Shares, Convertible Securities, rights or options shall
be deemed to have been issued for an amount of cash equal to the value
of such consideration other than cash so determined by the Board of
Directors plus any cash received therefor. The reclassification of
securities other than Common Shares into securities including Common
Shares shall be deemed to involve the issuance for a consideration other
than cash of such Common Shares immediately prior to the close of
business on the date fixed for the determination of security holders
entitled to receive such Common Shares. In case any Common Shares or
Convertible Securities or any rights or options to purchase any such
stock or other securities shall be issued together with other stock or
securities or other assets of the Company for a consideration which
includes both, the Board of Directors of the Company shall determine
what part of the consideration so received is to be deemed to be
consideration for the issue of such Common Shares, Convertible
Securities, rights or options.
(4) For purposes of paragraphs (a) and (d), in case the Company
shall take a record of the holders of any Common Shares for the purpose
of entitling them (i) to receive a dividend or other distribution
payable in Common Shares or in Convertible Securities, or (ii) to
subscribe for or purchase Common Shares or Convertible Securities, then
such record date shall be deemed to be the date of the issue or sale of
the Common Shares 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 granting of such right of subscription or purchase, as
the case may be.
(5) For the purpose of this paragraph (d), Common Shares at any
relevant time owned or held by, or for the account of, the Company shall
not be deemed outstanding.
Anything in this paragraph (d) or paragraph (a), above, to the contrary
notwithstanding. The Company shall not be required to give effect to any
adjustment in the Exercise Price of less than one
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cent, but when the cumulative net effect of more than one adjustment so
determined shall be to change the actual Exercise Price by at least one cent,
such change in the Exercise Price shall thereupon be given effect.
(e) Upon any exercise of this Option by the Holder, the Company shall
not be required to deliver fractions of any securities, but prompt,
proportionate, equitable, lawful and adequate adjustment in the Exercise Price
payable by the Holder shall be made in respect of any such fraction of any
securities on the basis of the Exercise Price per Unit then applicable upon the
exercise of this Option.
(f) In the event, prior to the expiration of this Option by exercise or
by its terms, the Company shall determine to take a record of its securities
holders for the purpose of determining securities holders entitled to receive
any share dividend, distribution or other right which will cause any change or
adjustment in the number, amount, price or nature of the Common Shares or other
shares, Warrants, securities or assets deliverable upon the exercise of this
Option pursuant to the foregoing provisions, the Company shall specify the date
as of which such record is to be taken; the purpose for which such record is to
be taken; and the number, amount, price and nature of the Common Shares or
other shares, Warrants, securities or assets which will be deliverable upon
exercise of this Option after the action for which such record will be taken
has been consummated.
(g) The Company may deem and treat the registered Holder of this Option
at any time as the absolute owner hereof for all purposes, and the Company
shall not be affected by any notice to the contrary.
(h) Whenever the Exercise Price shall be adjusted as required by the
provisions of paragraphs (a) or (d) hereof, the Company shall forthwith file in
the custody of its Secretary or Assistant Secretary at its principal office,
and with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided and setting forth in
reasonable detail the facts requiring such adjustment. Each such officer's
certificate shall be made available at all reasonable times for inspection by
the Holder and the Company shall, forthwith after each such adjustment, deliver
a copy of such certificate to the Holder. Such certificate shall be conclusive
as to the correctness of such adjustment.
(i) This Option shall not entitle the Holder hereof to any of the
rights of shareholders or to any dividend declared upon the Common Shares
unless the Holder shall have exercised this Option and purchased the Common
Shares prior to the record date fixed by the Board of Directors of the Company
for the determination of holders of Common Shares entitled to such dividend or
other right.
(j) This Option is subject in all respects to the terms and provisions
of that certain Underwriting Agreement dated ____________, 1996, by and between
the Company and Joseph Roberts & Co., Inc., the Representative of the several
underwriters therein and the initial Holder hereof, relating to a public
offering of the Company's shares of Common Stock and Common Stock Purchase
Warrants.
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FORM TO BE USED TO EXERCISE OPTION:
AMERICAN PROFESSIONAL BILLIARDS, INC.
1700 EAST DESERT INN ROAD
SUITE 108
LAS VEGAS, NEVADA 89109
Date: ____________, 19__
The Undersigned hereby elects irrevocably to exercise the Option
granted to it by that certain Purchase Option dated ______________, 1996
and to purchase _____ Units of American Professional Billiards, Inc. called
for thereby, and hereby makes payment of $ _____________________ (at the
rate of $____________ per Unit) in payment of the Exercise Price pursuant
thereto or the surrender herewith of the Purchase Option to purchase
______ Units in consideration of the Cashless Exercise Price pursuant thereto,
as the case may be. Please issue the Units as to which this Option is exercised
in accordance with the instructions given below.
________________________________
Signature
________________________________
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF COMMON SHARES AND WARRANTS
Name ____________________________________________________________
(Print in Block Letters)
Address _________________________________________________________
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FORM TO BE USED TO ASSIGN OPTION:
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Option:)
FOR VALUE RECEIVED, _________________________________ does hereby sell,
assign and transfer unto ______________________ the right to purchase _________
Units of American Professional Billiards, Inc. evidenced by that certain
Purchase Option dated __________________________ and does hereby irrevocably
constitute and appoint ____________________________ attorney to transfer such
right on the books of such Company with full power of substitution in the
premises.
Dated: __________________, 19__.
_________________________
Signature
_________________________
Signature Guaranteed
NOTICE: The signature to the form to exercise or form to assign must
correspond with the name as written upon the face of the within Option in every
particular without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities exchange.
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TO: Joseph Roberts & Co., Inc.
416 East Atlantic Boulevard
Pompano Beach, Florida 33060.
We hereby subscribe for Units of American Professional
Billiards, Inc. in accordance with the terms and conditions stated in the
foregoing letter. We hereby acknowledge receipt of the Prospectus referred to
in the first paragraph thereof relating to said Units. We further state that in
purchasing said Units we have relied upon said Prospectus and upon no other
statement whatsoever, whether written or oral. We confirm that we are a dealer
actually engaged in the investment banking or securities business and that we
are either (i) a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") or (ii) a dealer with its principal place
of business located outside the United States, its territories and possessions
and not registered under the Act of 1934, as amended, who hereby agrees not to
make any sales within the United States, its territories and possessions or to
persons who are nationals thereof or residents therein. We hereby agree to
comply with the provisions of Section 24 of Article III of the Rules of Fair
Practice of NASD, and if we are a foreign dealer and not a member of the NASD,
we also agree to comply with the NASD's interpretation with respect to
free-riding and withholding, to comply, as though we were a member of the NASD,
with the provisions of Sections 8 and 36 of Article III thereof as that Section
applies to non-member foreign dealers.
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By:
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Address:
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Dated: , 1996
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