EXHIBIT 4.4
THE REGISTERED HOLDER OF THIS UNIT PURCHASE OPTION (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) LAZARD CAPITAL MARKETS
LLC ("LAZARD"), LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC. ("LADENBURG" AND LAZARD AND
LADENBURG TOGETHER REFERRED TO AS THE "CO-REPRESENTATIVES") OR AN UNDERWRITER OR
A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER
OR PARTNER OF THE CO-REPRESENTATIVES OR OF ANY SUCH UNDERWRITER OR SELECTED
DEALER.
THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION
BY MEDIA & ENTERTAINMENT HOLDINGS, INC. ("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)) OR _____________, 2007. VOID AFTER 5:00 P.M. NEW YORK CITY
LOCAL TIME, 30 DAYS AFTER THE DATE THE UNIT PURCHASE OPTION BECOMES EXERCISABLE.
FORM OF UNIT PURCHASE OPTION
FOR THE PURCHASE OF
540,000 UNITS
OF
MEDIA & ENTERTAINMENT HOLDINGS, INC.
1. PURCHASE OPTION.
THIS CERTIFIES THAT, in consideration of $100.00 duly paid by or on
behalf of __________ ("HOLDER"), as registered owner of this Purchase Option, to
Media & Entertainment Holdings, Inc. ("COMPANY"), ▇▇▇▇▇▇ is entitled, at any
time or from time to time upon the later of the consummation of a Business
Combination or _________, 2007 ("COMMENCEMENT DATE"), and at or before 5:00
p.m., New York City local time, 30 days after the Commencement Date ("EXPIRATION
DATE"), but not thereafter, to subscribe for, purchase and receive, in whole or
in part, up to Five Hundred Forty Thousand (540,000) 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
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 the Warrants issuable
hereby shall have an exercise price of $7.50 per share of Common Stock. 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.
2. EXERCISE.
2.1 EXERCISE FORM. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price for the Units being purchased payable in cash or by certified check or
official bank check. If the subscription rights represented hereby shall not be
exercised at or before 5:00 p.m., New York City local time, on the Expiration
Date this Purchase Option shall become and be void without further force or
effect, and all rights represented hereby shall cease and expire.
2.2 LEGEND. Each certificate for the securities purchased under this
Purchase Option shall bear a legend as follows unless such securities have been
registered under the Securities Act of 1933, as amended ("ACT"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act")
or applicable state law. The securities may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act, or pursuant to
an exemption from registration under the Act and applicable
state law."
2.3 CASHLESS EXERCISE.
2.3.1 DETERMINATION OF AMOUNT. In lieu of the payment of the Exercise Price
multiplied by the number of Units for which this Purchase Option is exercisable
(and in lieu of being entitled to receive Common 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
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Public 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 Public Warrants are still trading, (i) if the Units are
listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq Capital Market or NASD OTC Bulletin Board (or successor
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 Capital Market or the NASD OTC Bulletin Board (or successor
exchange), but are traded in the residual over-the-counter market, the closing
bid price for 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 Public 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 Public 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 Public Warrants, as the case may be) is listed
on a national securities exchange or quoted on the Nasdaq National Market,
Nasdaq Capital Market or NASD OTC Bulletin Board (or successor exchange), the
last sale price of the Common Stock (or Public 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 Public Warrants, as the case may be) is
not listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq Capital Market or the NASD OTC Bulletin Board (or successor
exchange), but is traded in the residual over-the-counter market, the closing
bid price for the Common Stock (or Public 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. In the event the Public Warrants have expired and are no longer
exercisable, no "Value" shall be attributed to the Warrants underlying this
Purchase Option. Additionally, in the event that this Purchase Option is
exercised pursuant to this Section 2.3 and the Public Warrants are still
trading, the "Value" shall be reduced by the difference between the Warrant
Exercise Price and the exercise price of the Public Warrants multiplied by the
number of Warrants underlying the Units included in the portion of this Purchase
Option being converted.
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 5:00 p.m., New York City local time on 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.
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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) the Co-Representatives or
an underwriter or a selected dealer in connection with the Offering, or (ii) a
bona fide officer or partner of the Co-Representatives or of any such
underwriter or selected dealer. On and after the first anniversary of the
Effective Date, transfers to others may be made subject to compliance with or
exemptions from applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with the Purchase Option and
payment of all transfer taxes, if any, payable in connection therewith. The
Company shall within five business days transfer this Purchase Option on the
books of the Company and shall execute and deliver a new Purchase Option or
Purchase Options of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the aggregate number of Units purchasable
hereunder or such portion of such number as shall be contemplated by any such
assignment.
3.2 RESTRICTIONS IMPOSED BY THE ACT. The securities evidenced by
this Purchase Option shall not be transferred unless and until (i) the Company
has received the opinion of counsel for the Holder that the securities may be
transferred pursuant to an exemption from registration under the Act and
applicable state securities laws, the availability of which is established to
the reasonable satisfaction of the Company (the Company hereby agreeing that the
opinion of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LLP shall be deemed
satisfactory evidence of the availability of an exemption), or (ii) a
registration statement or a post-effective amendment to the Registration
Statement relating to such securities has been filed by the Company and declared
effective by the Securities and Exchange Commission (the "COMMISSION") and
compliance with applicable state securities law has been established.
4. NEW PURCHASE OPTIONS TO BE ISSUED.
4.1 PARTIAL EXERCISE OR TRANSFER. Subject to the restrictions in
Section 3 hereof, this Purchase Option may be exercised or assigned in whole or
in part. In the event of the exercise or assignment hereof in part only, upon
surrender of this Purchase Option for cancellation, together with the duly
executed exercise or assignment form and funds sufficient to pay any Exercise
Price and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the number
of Units purchasable hereunder as to which this Purchase Option has not been
exercised or assigned.
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.
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5. MANDATORY REGISTRATION PROCEDURES.
5.1 MANDATORY REGISTRATION.
5.1.1 COMPANY OBLIGATION. The Company shall, as expeditiously
as possible following the Effective Date, use its best efforts to register under
the Act the Purchase Options 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 and
use its best efforts to have such registration statement or post-effective
amendment declared effective as soon as possible thereafter. In no event will
the Company be required to net cash settle the unit purchase option or the
underlying warrants.
5.1.2 TERMS. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, including the expenses of
any legal counsel selected by the Holders to represent them in connection with
the sale of the Registrable Securities, but the Holders shall pay any and all
underwriting commissions. The Company agrees to use its reasonable best efforts
to qualify or register the Registrable Securities in such states as are
reasonably requested by the Majority Holder(s); provided, however, that in no
event shall the Company be required to register the Registrable Securities in a
state in which such registration would cause (i) the Company to be obligated to
qualify to do business in such state, or would subject the Company to taxation
as a foreign corporation doing business in such jurisdiction or (ii) the
principal stockholders of the Company to be obligated to escrow their shares of
capital stock of the Company. The Company shall use its best efforts to cause
any registration statement or post-effective amendment filed pursuant to 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 GENERAL TERMS.
5.2.1 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, the
Co-Representatives 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
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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.
5.2.2 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.
5.2.3 DOCUMENTS DELIVERED TO HOLDERS. The Company shall
furnish the Co-Representatives, as representatives 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, prior to filing a registration statement or
prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders' legal counsel, copies of such registration statement as proposed to be
filed, each amendment and supplement to such registration statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders. The Company shall also deliver promptly to the
Co-Representatives, as representatives 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 the Co-Representatives, as
representatives 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 the Co-Representatives, as representatives
of the Holders, shall reasonably request. The Company shall not be required to
disclose any confidential information or other records to the
Co-Representatives, as representatives 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.
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5.2.4 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 co-managing underwriters 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.
5.2.5 RULE 144 SALE. Notwithstanding anything contained in
this Section 5 to the contrary, the Company shall have no obligation pursuant to
Sections 5.1 or 5.2 for the registration of Registrable Securities held by any
Holder (i) where such Holder would then be entitled to sell under Rule 144
within any three-month period (or such other period prescribed under Rule 144 as
may be provided by amendment thereof) all of the Registrable Securities then
held by such Holder, and (ii) where the number of Registrable Securities held by
such Holder is within the volume limitations under paragraph (e) of Rule 144
(calculated as if such Holder were an affiliate within the meaning of Rule 144).
5.2.6 AMENDMENTS AND SUPPLEMENTAL PROSPECTUS. The Company
shall prepare and file with the Commission such amendments, including
post-effective amendments, and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and in compliance with the provisions of the
Securities Act until all Registrable Securities and other securities covered by
such registration statement have been disposed of in accordance with the
intended method(s) of distribution set forth in such registration statement
(which period shall not exceed the sum of one hundred eighty (180) days plus any
period during which any such disposition is interfered with by any stop order or
injunction of the Commission or any governmental agency or court) or such
securities have been withdrawn. 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 ▇▇▇▇▇▇'s
receipt of the copies of a supplemental or
7
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 ▇▇▇▇▇▇'s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5.2.7 NOTIFICATION. After the filing of a registration
statement pursuant to Section 5 hereof, the Company shall promptly, and in no
event more than two (2) business days after such filing, notify the holders of
Registrable Securities included in such registration statement, and shall
further notify such holders promptly and confirm such advice in writing in all
events within two (2) business days of the occurrence of any of the following:
(i) when such registration statement becomes effective; (ii) when any
post-effective amendment to such registration statement becomes effective; (iii)
the issuance or threatened issuance by the Commission of any stop order (and the
Company shall take all actions required to prevent the entry of such stop order
or to remove it if entered); and (iv) any request by the Commission for any
amendment or supplement to such registration statement or any prospectus
relating thereto or for additional information or of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of the securities covered by
such registration statement, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
promptly make available to the holders of Registrable Securities included in
such registration statement any such supplement or amendment; except that before
filing with the Commission a registration statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included in
such registration statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity
to review such documents and comment thereon, and the Company shall not file any
registration statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall reasonably object.
5.2.8 STATE SECURITIES LAW COMPLIANCE. The Company shall use
its best efforts to (i) register or qualify the Registrable Securities covered
by any registration statement prepared pursuant to Section 5 hereof under such
securities or "blue sky" laws of such jurisdictions in the United States as the
holders of Registrable Securities included in such registration statement (in
light of their intended plan of distribution) may request and (ii) take such
action necessary to cause such Registrable Securities covered by the
registration statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included
in such registration statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the Company shall not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph or subject
itself to taxation in any such jurisdiction.
5.2.9 COOPERATION. The principal executive officer of the
Company, the principal financial officer of the Company, the principal
accounting officer of the Company and
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all other officers and members of the management of the Company shall cooperate
fully in any offering of Registrable Securities hereunder, which cooperation
shall include, without limitation, the preparation of the registration statement
with respect to such offering and all other offering materials and related
documents, and participation in meetings with underwriters, attorneys,
accountants and potential investors.
5.2.10 RECORDS. The Company shall make available for inspection
by the holders of Registrable Securities included in such registration
statement, any underwriter(s) participating in any disposition pursuant to such
registration statement and any attorney, accountant or other professional
retained by any holder of Registrable Securities included in such registration
statement or any underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Company, as shall be necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information requested
by any of them in connection with such registration statement.
5.2.11 LISTING. The Company shall use its best efforts to cause
all Registrable Securities included in any registration to be listed on such
exchanges or otherwise designated for trading in the same manner as similar
securities issued by the Company are then listed or designated or, if no such
similar securities are then listed or designated, in a manner satisfactory to
the holders of a majority of the Registrable Securities included in such
registration.
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 6.3 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 $8.00 per whole Unit
(each Warrant underlying the Units is exercisable for $5.00 per share), upon
effectiveness of the dividend, this Purchase Option will be adjusted to allow
for the purchase of one Unit at $8.00 per Unit, each Unit entitling the holder
to receive two shares of Common Stock and two Warrants (each Warrant exercisable
for $2.50 per share).
6.1.2 AGGREGATION OF SHARES. If after the date hereof, and
subject to the provisions of Section 6.3, 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
9
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 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 6.1. The above provision of this Section shall similarly apply to
successive consolidations or mergers.
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6.3 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, (ii) Warrants issuable upon exercise of the Purchase Options and (iii)
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, Capital 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
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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 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
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:
Media & Entertainment Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board and
Chief Executive Officer
9. MISCELLANEOUS.
9.1 AMENDMENTS. The Company and the Co-Representatives 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 the Co-Representatives may deem
necessary or desirable and that the Company and the Co-Representatives deem
shall not adversely affect the interest of the Holders. All other modifications
or amendments shall require the written consent of and be signed by the party
against whom enforcement of the modification or amendment is sought.
9.2 HEADINGS. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
9.3 ENTIRE AGREEMENT. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and
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supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
9.4 BINDING EFFECT. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representatives and assigns,
and no other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this Purchase
Option or any provisions herein contained.
9.5 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The Company and the
Holder agree that the prevailing party(ies) in any such action shall be entitled
to recover from the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
9.6 WAIVER, ETC. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Purchase Option shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non- fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non- fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach or non-compliance.
9.7 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.
9.8 EXCHANGE AGREEMENT. As a condition of the Holder's receipt and
acceptance of this Purchase Option, ▇▇▇▇▇▇ agrees that, at any time prior to the
complete exercise of this Purchase Option by Holder, if the Company and the
Co-Representatives 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.
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IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the ___ day of __________, 2006.
MEDIA & ENTERTAINMENT HOLDINGS, INC.
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
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Form to be used to exercise Purchase Option:
Media & Entertainment Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board and
Chief Executive Officer
Date:_________________, 200__
The undersigned hereby elects irrevocably to exercise all or a portion
of the within Purchase Option and to purchase ____ Units of Media &
Entertainment Holdings, Inc. 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" based 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
15
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.
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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 Media & Entertainment Holdings, Inc.
("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.
17