EXHIBIT 4.5
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
1,000,000 UNITS
OF
VICEROY ACQUISITION CORPORATION
TABLE OF CONTENTS
Page
1. PURCHASE OPTION...........................................................1
2. EXERCISE..................................................................2
2.1 Exercise Form......................................................2
2.2 Legend.............................................................2
2.3 Cashless Exercise..................................................2
2.3.1 Determination of Amount....................................2
2.3.2 Mechanics of Cashless Exercise.............................3
3. TRANSFER..................................................................3
3.1 General Restrictions...............................................3
3.2 Restrictions Imposed by the Act....................................3
4. NEW PURCHASE OPTIONS TO BE ISSUED.........................................3
4.1 Partial Exercise or Transfer.......................................3
4.2 Lost Certificate...................................................3
5. REGISTRATION RIGHTS.......................................................4
5.1 Demand Registration................................................4
5.1.1 Grant of Right.............................................4
5.1.2 Terms......................................................4
5.2 "Piggy-Back" Registration..........................................4
5.2.1 Grant of Right.............................................4
5.2.2 Terms......................................................4
5.3 Damages............................................................5
5.4 General Terms......................................................5
5.4.1 Indemnification............................................5
5.4.2 Exercise of Purchase Options...............................5
5.4.3 Documents Delivered to Holders.............................5
5.4.4 Underwriting Agreement.....................................6
5.4.5 Rule 144 Sale..............................................6
5.4.6 Supplemental Prospectus....................................6
6. ADJUSTMENTS...............................................................6
6.1 Adjustments to Exercise Price and Number of Securities.............6
6.1.1 Stock Dividends - Split-Ups................................7
6.1.2 Aggregation of Shares......................................7
6.1.3 Replacement of Securities upon Reorganization, etc.........7
6.1.4 Changes in Form of Purchase Option.........................7
6.2 [Intentionally Omitted]............................................7
6.3 Substitute Purchase Option.........................................7
6.4 Elimination of Fractional Interests................................8
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7. RESERVATION AND LISTING...................................................8
8. CERTAIN NOTICE REQUIREMENTS...............................................8
8.1 Holder's Right to Receive Notice...................................8
8.2 Events Requiring Notice............................................8
8.3 Notice of Change in Exercise Price.................................8
8.4 Transmittal of Notices.............................................9
9. MISCELLANEOUS.............................................................9
9.1 Amendments.........................................................9
9.2 Headings...........................................................9
10. ENTIRE AGREEMENT..........................................................9
10.1 Binding Effect.....................................................9
10.2 Governing Law; Submission to Jurisdiction..........................9
10.3 Waiver, Etc........................................................9
10.4 Execution in Counterparts.........................................10
10.5 Exchange Agreement................................................10
10.6 Underlying Warrants...............................................10
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THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) THE SHEMANO GROUP, INC. ("SHEMANO") OR AN UNDERWRITER OR A SELECTED
DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER
OF SHEMANO OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I)
______________, 2006 AND (II) THE CONSUMMATION BY VICEROY ACQUISITION
CORPORATION ("COMPANY") OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET ACQUISITION
OR OTHER SIMILAR BUSINESS COMBINATION ("BUSINESS COMBINATION") (AS DESCRIBED
MORE FULLY IN THE COMPANY'S REGISTRATION STATEMENT (DEFINED HEREIN)). THIS
PURCHASE OPTION SHALL BE VOID AFTER 5:00 P.M EASTERN TIME, _____________, 2010.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
1,000,000 UNITS
OF
VICEROY ACQUISITION CORPORATION
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on behalf
of The Shemano Group, Inc. ("Shemano"), as registered owner of this Purchase
Option (the "Purchase Option"), to Viceroy Acquisition Corporation ("Company"),
Shemano is entitled, at any time or from time to time upon the later of (i)
___________, 2006 and (ii) the consummation of a Business Combination
("Commencement Date"), and at or before 5:00 p.m., Eastern Time, _____________,
2010 ("Expiration Date"), but not thereafter, to subscribe for, purchase and
receive, in whole or in part, up to One Million (1,000,000) units ("Units") of
the Company, each Unit consisting of one share of common stock of the Company,
par value $.0001 per share ("Common Stock"), and one warrant ("Warrant(s)")
expiring four years from the effective date ("Effective Date") of the
registration statement ("Registration Statement") pursuant to which Units are
offered for sale to the public ("Offering"). Each Warrant is the same as the
warrants included in the Units being registered for sale to the public by way of
the Registration Statement ("Public Warrants") except that the Warrants
underlying the Units comprising this Purchase Option have an exercise price of
$7.50 per share. If the Expiration Date is a day on which banking institutions
are authorized by law to close, then this Purchase Option may be exercised on
the next succeeding day which is not such a day in accordance with the terms
herein. During the period ending on the Expiration Date, the Company agrees not
to take any action that would terminate the Purchase Option. This Purchase
Option is initially exercisable at $10.00 per Unit so purchased; provided,
however, that upon the occurrence of any of the events specified in Section 6
hereof, the rights granted by this Purchase Option, including the exercise price
per Unit and the number of Units (and 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.
The term "Holder" shall mean, as of any date, Shemano and/or any
transferee who acquired the Purchase Option(s) in accordance with section 3.1
hereof.
The term "Business Day" shall mean any day, except a Saturday, Sunday or
legal holiday on which the banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Units being purchased payable in cash or by certified check or
official bank check. If the subscription rights represented hereby shall not be
exercised at or before 5:00 p.m., 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 Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act") or
applicable state law. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption
from registration under the Act and applicable state law."
2.3 Cashless Exercise.
2.3.1 Determination of Amount. In lieu of the payment of the
Exercise Price multiplied by the number of Units for which this Purchase Option
is exercisable (and in lieu of being entitled to receive Common Stock and
Warrants) in the manner required by Section 2.1, the Holder shall have the right
(but not the obligation) to convert any exercisable but unexercised portion of
this Purchase Option into Units ("Conversion Right") as follows: upon exercise
of the Conversion Right, the Company shall deliver to the Holder (without
payment by the Holder of any of the Exercise Price in cash) that number of Units
(or that number of shares of Common Stock and Warrants comprising that number of
Units) equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of the Purchase Option being converted by (y) the Current
Market Value (as defined below). The "Value" of the portion of the Purchase
Option being converted shall equal the remainder derived from subtracting (a)
(i) the Exercise Price multiplied by (ii) the number of Units underlying the
portion of this Purchase Option being converted from (b) the Current Market
Value of a Unit multiplied by the number of Units underlying the portion of the
Purchase Option being converted. As used herein, the term "Current Market Value"
per Unit at any date means: (A) in the event that neither the Units nor Warrants
are still trading, the remainder derived from subtracting (x) the exercise price
of the Warrants multiplied by the number of shares of Common Stock issuable upon
exercise of the Warrants underlying one Unit from (y) (i) the Current Market
Price of the Common Stock multiplied by (ii) the number of shares of Common
Stock underlying one Unit, which shall include the shares of Common Stock
underlying the Warrants included in such Unit; (B) in the event that the Units,
Common Stock and Warrants are still trading, (i) if the Units are listed on a
national securities exchange or quoted on the Nasdaq National Market, Nasdaq
SmallCap Market or NASD OTC Bulletin Board (or successor such as the Bulletin
Board Exchange), the last sale price of the Units in the principal trading
market for the Units as reported by the exchange, Nasdaq or the NASD, as the
case may be, on the last trading day preceding the date in question; or (ii) if
the Units are not listed on a national securities exchange or quoted on the
Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board
(or successor exchange), but is traded in the residual over-the-counter market,
the closing bid price for Units on the last trading day preceding the date in
question for which such quotations are reported by the Pink Sheets, LLC or
similar publisher of such quotations; and (C) in the event that the Units are
not still trading but the Common Stock and Warrants underlying the Units are
still trading, the Current Market Price of the Common Stock plus the product of
(x) the Current Market Price of the Warrants and (y) the number of shares of
Common Stock underlying the Warrants included in one Unit. The "Current Market
Price" shall mean (i) if the Common Stock (or Warrants, as the case may be) is
listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor such as
the Bulletin Board Exchange), the last sale price of the Common Stock (or
Warrants) in the principal trading market for the Common Stock as reported by
the exchange, Nasdaq or the NASD, as the case may be, on the last trading day
preceding the date in question; (ii) if the Common Stock (or Warrants, as the
case may be) is not listed on a national securities exchange or quoted on the
Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board
(or successor exchange), but is traded in the residual over-the-counter market,
the closing bid price for the Common Stock (or Warrants) on the last trading day
preceding the date in question for which such quotations are reported by the
Pink Sheets, LLC or similar publisher of such quotations; and (iii) if the fair
market value of the Common Stock cannot be determined pursuant to clause (i) or
(ii) above, such price as the Board of Directors of the Company shall determine,
in good faith.
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2.3.2 Mechanics of Cashless Exercise. The Cashless Exercise Right
may be exercised by the Holder on any business day on or after the Commencement
Date and not later than the Expiration Date by delivering the Purchase Option
with the duly executed exercise form attached hereto with the cashless exercise
section completed to the Company, exercising the Cashless Exercise Right and
specifying the total number of Units the Holder will purchase pursuant to such
Cashless Exercise Right.
2.3.3 Warrant Exercise. Any Warrants underlying the Units shall be
issued pursuant to and subject to the terms and conditions set forth in the
Warrant Agreement, entered into by and between the Company and Continental Stock
Transfer & Trust Company, dated as of _____, 2005; provided, that, the exercise
price of the Warrants shall be as set forth herein.
3. Transfer.
3.1 General Restrictions. The registered Holder of this Purchase Option,
by its acceptance hereof, agrees that it will not sell, transfer, assign, pledge
or hypothecate this Purchase Option for a period of one year following the
Effective Date to anyone other than (i) Shemano or an underwriter or a selected
dealer in connection with the Offering, or (ii) a bona fide officer, partner,
subsidiary or other affiliate of Shemano or of any such underwriter or selected
dealer. On and after the first anniversary of the Effective Date, this Purchase
Option may be sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of, in whole or in part, subject to compliance with or exemptions from
applicable securities laws. In order to make any permitted assignment, the
Holder must deliver to the Company the assignment form attached hereto duly
executed and completed, together with the Purchase Option and payment of all
transfer taxes, if any, payable in connection therewith. The Company shall
within five business days transfer this Purchase Option on the books of the
Company and shall execute and deliver a new Purchase Option or Purchase Options
of like tenor to the appropriate assignee(s) expressly evidencing the right to
purchase the aggregate number of Units purchasable hereunder or such portion of
such number as shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Act. The securities evidenced by this
Purchase Option shall not be transferred unless and until (i) the Company has
received the opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the Act and
applicable state securities laws, the availability of which is established to
the reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion of Blank Rome LLP shall be deemed satisfactory evidence of the
availability of an exemption), or (ii) a registration statement or a
post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the
Securities and Exchange Commission and compliance with applicable state
securities law has been established.
4. New Purchase Options to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in Section
3 hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Purchase Option for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any Exercise Price
(except to the extent the Holder elects to exercise this Purchase Option by
means of cashless exercise as provided by Section 2.3 above) and/or transfer
tax, the Company shall cause to be delivered to the Holder without charge a new
Purchase Option of like tenor to this Purchase Option in the name of the Holder
evidencing the right of the Holder to purchase the number of Units purchasable
hereunder as to which this Purchase Option has not been exercised or assigned.
In addition, the Company shall cause to be delivered to any permitted transferee
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of such transferee evidencing the right of such transferee to purchase
the number of Units purchasable hereunder as to which this Purchase Option has
been transferred to such transferee.
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4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification or the posting of
a bond, the Company shall execute and deliver a new Purchase Option of like
tenor and date. Any such new Purchase Option executed and delivered as a result
of such loss, theft, mutilation or destruction shall constitute a substitute
contractual obligation on the part of the Company.
5. Registration Rights.
5.1 Demand Registration.
5.1.1 Grant of Right. The Company, upon written demand ("Initial
Demand Notice") of the Holder(s) of at least 51% of the Purchase Options and/or
the underlying Units and/or the underlying securities ("Majority Holders"),
agrees to register on one occasion, all or any portion of the Purchase Options
requested by the Majority Holders in the Initial Demand Notice and all of the
securities underlying such Purchase Options, including the Units, Common 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. The demand for registration may be made at any time during a period
of five years beginning on the Effective Date. The Company covenants and agrees
to give written notice of its receipt of any Initial Demand Notice by any
Holder(s) to all other registered Holders of the Purchase Options and/or the
Registrable Securities within ten days from the date of the receipt of any such
Initial Demand Notice.
5.1.2 Terms. The Company shall bear all fees and expenses attendant
to registering the Registrable Securities, including the fees and expenses of
one legal counsel selected by the Majority Holders to represent them in
connection with the sale of the Registrable Securities, but the Majority Holders
shall pay any and all underwriting commissions. The Company agrees to use its
reasonable best efforts to qualify or register the Registrable Securities in
such States as are reasonably requested by the Majority Holder(s); provided,
however, that in no event shall the Company be required to register the
Registrable Securities in a State in which such registration would cause (i) the
Company to be obligated to qualify to do business in such State, or would
subject the Company to taxation as a foreign corporation doing business in such
jurisdiction or (ii) the principal 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
twelve 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 seven years commencing on 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); provided, however,
that if, in the written opinion of the Company's managing underwriter or
underwriters, if any, for such offering, the inclusion of the Registrable
Securities, when added to the securities being registered by the Company or the
selling stockholder(s), will exceed the maximum amount of the Company's
securities which can be marketed (i) at a price reasonably related to their then
current market value, and (ii) without materially and adversely affecting the
entire offering, then the Company will still be required to include the
Registrable Securities, but may require the Holders to agree, in writing, to
delay the sale of all or any portion of the Registrable Securities for a period
of 90 days from the effective date of the offering, provided, further, that if
the sale of any Registrable Securities is so delayed, then the number of
securities to be sold by all stockholders in such public offering during such 90
day period shall be apportioned pro rata among all such selling stockholders,
including all holders of the Registrable Securities, according to the total
amount of securities of the Company owned by said selling stockholders,
including all holders of the Registrable Securities.
5.2.2 Terms. The Company shall bear all fees and expenses attendant
to registering the Registrable Securities, including the fees and expenses of
one legal counsel selected by the Majority Holders to represent them in
connection with the sale of the Registrable Securities but the Majority Holders
shall pay any and all underwriting commissions related to the Registrable
Securities. In the event of such a proposed registration, the Company shall
4
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 Damages. Should the registration or the effectiveness thereof
required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, 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), including, but not limited to, the loss of any profits that might
have been received by the holder upon the sale of shares of Common Stock or
Warrants (and shares of Common Stock underlying the Warrants) underlying this
Purchase Option.
5.4 General Terms.
5.4.1 Indemnification. The Company shall indemnify the Holder(s) of
the Registrable Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Holders within the meaning
of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of
1934, as amended ("Exchange Act"), against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against litigation,
commenced or threatened, or any claim whatsoever whether arising out of any
action between the underwriter and the Company or between the underwriter and
any third party or otherwise) to which any of them may become subject under the
Act, the Exchange Act or otherwise, arising from such registration statement but
only to the same extent and with the same effect as the provisions pursuant to
which the Company has agreed to indemnify the underwriters contained in Section
5 of the Underwriting Agreement between the Company, Shemano and the other
underwriters named therein dated the Effective Date. The Holder(s) of the
Registrable Securities to be sold pursuant to such registration statement, and
their successors and assigns, shall severally, and not jointly, indemnify the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage, expense or liability (including
all reasonable attorneys' fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
5 of the Underwriting Agreement pursuant to which the underwriters have agreed
to indemnify the Company.
5.4.2 Exercise of Purchase Options. Nothing contained in this
Purchase Option shall be construed as requiring the Holder(s) to exercise their
Purchase Options or Warrants underlying such Purchase Options prior to or after
the initial filing of any registration statement or the effectiveness thereof.
5.4.3 Documents Delivered to Holders. The Company shall furnish
Shemano, 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
underwriters in underwritten public offerings of securities. The Company shall
also deliver promptly to Shemano, as representative of the Holders participating
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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 Shemano, 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 Shemano, as representative of the Holders,
shall reasonably request. The Company shall not be required to disclose any
confidential information or other records to Shemano, as representative of the
Holders, or to any other person, until and unless such persons shall have
entered into reasonable confidentiality agreements (in form and substance
reasonably satisfactory to the Company), with the Company with respect thereto.
5.4.4 Underwriting Agreement. The Company shall enter into an
underwriting agreement with the managing underwriter(s), if any, selected by any
Holders whose Registrable Securities are being registered pursuant to this
Section 5, which managing underwriter shall be reasonably acceptable to the
Company. Such agreement shall be reasonably satisfactory in form and substance
to the Company, each Holder and such managing underwriters, and shall contain
such representations, warranties and covenants by the Company and such other
terms as are customarily contained in agreements of that type used by the
managing underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Registrable Securities and may, at
their option, require that any or all the representations, warranties and
covenants of the Company to or for the benefit of such underwriters shall also
be made to and for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Holders and their
intended methods of distribution. Such Holders, however, shall agree to such
covenants and indemnification and contribution obligations for selling
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 disposition of such securities as shall be
reasonably required to effect the registration of the Registrable Securities.
5.4.5 Rule 144 Sale. Notwithstanding anything contained in this
Section 5 to the contrary, the Company shall have no obligation pursuant to
Sections 5.1 or 5.2 for the registration of Registrable Securities held by any
Holder (i) where such Holder would then be entitled to sell under Rule 144
promulgated under the Act ("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).
5.4.6 Supplemental Prospectus. Each Holder agrees, that upon receipt
of any notice from the Company of the happening of any event as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, such Holder will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such 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:
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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 date thereof, the number of shares of Common Stock underlying
each of the Units purchasable hereunder shall be increased in proportion to such
increase in outstanding shares. In such case, the number of shares of Common
Stock, and the exercise price applicable thereto, underlying the Warrants
underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants. For example, if the Company declares
a two-for-one stock dividend and at the time of such dividend this Purchase
Option is for the purchase of one Unit at $10.00 per whole Unit (each Warrant
underlying the Units is exercisable for $7.50 per share), upon effectiveness of
the dividend, this Purchase Option will be adjusted to allow for the purchase of
one Unit at $10.00 per Unit, each Unit entitling the holder to receive two
shares of Common Stock and two Warrants (each Warrant exercisable for $3.75 per
share).
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 shares of Common Stock underlying each of the Units purchasable
hereunder shall be decreased in proportion to such decrease in outstanding
shares. In such case, the number of shares of Common Stock, and the exercise
price applicable thereto, underlying the Warrants underlying each of the Units
purchasable hereunder shall be adjusted in accordance with the terms of the
Warrants.
6.1.3 Replacement of Securities upon Reorganization, etc. In case of
any reclassification or reorganization of the outstanding shares of Common Stock
other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of shares of
Common Stock of the Company obtainable upon exercise of this Purchase Option and
the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3 The provisions of this Section 6.1.3 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
6.1.4 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.
7
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 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 underlying the
Purchase Option, 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 exercise 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) Units and shares of Common Stock issuable upon exercise of the Purchase
Options, (iii) Warrants issuable upon exercise of the Purchase Options and (iv)
shares of Common Stock issuable upon exercise of the Warrants included in the
Units issuable upon exercise of the Purchase Option to be listed (subject to
official notice of issuance) on all securities exchanges (or, if applicable on
the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or any successor
trading market) on which the Units, 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 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. Notwithstanding the foregoing, the Company shall deliver to
each Holder a copy of each notice given to the other stockholders of the Company
at the same time and in the same manner that such notice is given to the
stockholders.
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.
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 Chief Executive Officer and Chief Financial Officer.
8
8.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made when hand delivered, or mailed by express mail or
private courier service: (i) If to the registered Holder of the Purchase Option,
to the address of such Holder as shown on the books of the Company, or (ii) if
to the Company, to the following address or to such other address as the Company
may designate by notice to the Holders:
Viceroy Acquisition Corporation
8235 Forsyth Boulevard, Suite 400
Clayton, MO 63105
Attn: Chief Executive Officer
9. Miscellaneous.
9.1 Amendments. The Company and Shemano may from time to time supplement
or amend this Purchase Option without the approval of any of the Holders in
order to cure any ambiguity, to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
or to make any other provisions in regard to matters or questions arising
hereunder that the Company and Shemano may deem necessary or desirable and that
the Company and Shemano 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 Delaware, without giving effect to conflict of laws. The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts of the State of California or of the United States of America for the
Northern District of California, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The Company and the
Holder agree that the prevailing party(ies) in any such action shall be entitled
to recover from the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
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.
9
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.
10.5 Exchange Agreement. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and Shemano
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding Purchase Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.
10.6 Underlying Warrants. At any time after exercise by the Holder of
this Purchase Option, the Holder may exchange his Warrants (with a $7.50
exercise price) for Public Warrants (with a $6.00 exercise price) upon payment
to the Company of the difference between the exercise price of his Warrant and
the exercise price of the Public Warrants.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ____ day of , 2005.
VICEROY ACQUISITION CORPORATION
By:______________________________
Name: Lee E. Mikles
Title: Chief Executive Officer
11
Form to be used to exercise Purchase Option:
Viceroy Acquisition Corporation
8235 Forsyth Boulevard, Suite 400
Clayton, MO 63105
Date:_________________, 200__
The undersigned hereby elects irrevocably to exercise all or a portion of the
within Purchase Option and to purchase ____ Units of Viceroy Acquisition
Corporation 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 its right to
purchase _________ Units purchasable under the within Purchase Option by
surrender of the unexercised portion of the attached Purchase Option (with a
"Value" of $_______ based on a "Market Price" of $_______). Please issue the
securities comprising the Units as to which this Purchase Option is exercised in
accordance with the instructions given below.
_________________________________
Signature
_________________________________
Signature Guaranteed
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, 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.
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 Viceroy Acquisition Corporation ("Company")
evidenced by the within Purchase Option and does hereby authorize the Company to
transfer such right on the books of the Company.
Dated:___________________, 200_
_________________________________
Signature
_________________________________
Signature Guaranteed
NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A
BANK, OTHER THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING
MEMBERSHIP ON A REGISTERED NATIONAL SECURITIES EXCHANGE.