Document:

f12011ex10ix_bgs.htm

Exhibit 10.9

 

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 SIX MONTHS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) THE PRINCE RIDGE GROUP LLC (“PRINCERIDGE”) OR AN UNDERWRITER OR SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF PRINCERIDGE OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION OF THE COMPANY'S BUSINESS COMBINATION AND [___________], [______] AND WILL BE VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, [___________], [______].

 

UNIT PURCHASE OPTION

 

FOR THE PURCHASE OF

 

450,000 UNITS

 

OF

 

BGS ACQUISITION CORP.

 

1. Purchase Option.

 

THIS CERTIFIES THAT, in consideration of $100 duly paid by or on behalf of The PrinceRidge Group LLC (“Initial Holder”), as registered owner of this Purchase Option, to BGS Acquisition Corp. (“Company”), Holder is entitled, at any time or from time to time upon the later of the consummation of a Business Combination (as defined below) or [________], [_____] (“Commencement Date”), and at or before 5:00 p.m., New York City local time, [________], [_____] (“Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to four hundred fifty thousand (450,000) units (“Units”) of the Company, each Unit consisting of one ordinary share, no par value, of the Company (“Ordinary Shares”), and one warrant (“Warrant(s)”) to purchase one Ordinary Share expiring five years from the date on which we consummate the Business Combination. Each Warrant is identical to the warrants included in the Units being registered for sale to the public (“Public Warrants”) by way of the Registration Statement.  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 $15.00 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 number of Ordinary Shares 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, the Initial Holder and/or any transferee who acquires this Purchase Option (in whole or in part) in accordance with Section 3.1 hereof. The term “Registration Statement” refers to registration statement pursuant to which the Units are offered for sale to the public. The “Offering” means the offering of the Units for sale to the public. The term “Business Combination” shall have the meaning ascribed to the term “business combination” in the Registration Statement.

 

  

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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 Units 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 (the "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 equal to the quotient obtained by dividing (x) the "Value" (as defined below) of the portion of this Purchase Option being converted by (y) the "Current Market Price" (as defined below) of the portion of the Purchase Option being converted. The "Value" of the portion of this Purchase Option being converted shall equal the remainder derived from subtracting (a) the product of (i) the Exercise Price multiplied by (ii) the number of Units underlying the portion of this Purchase Option being converted from (b) the product of (i) Current Market Price of a Unit multiplied by (ii) the number of Units underlying the portion of 

 

  

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this Purchase Option being converted. The "Current Market Price" of a Unit at any day shall mean (i) if the Units are listed on a national securities exchange (including, without limitation, the NYSE Euronext and the NASDAQ Stock Market) or quoted on the Over-the-Counter Bulletin Board (or any successor electronic inter-dealer quotation system), the average closing price of a Unit for the thirty (30) trading days immediately preceding the date of determination of the Current Market Price in the principal trading market for the Units as reported by the exchange or the quotation system, as the case may be; (ii) if the Units are not listed on a national securities exchange or quoted on Over-the-Counter Bulletin Board (or any successor electronic inter-dealer quotation system), but are traded in the residual over-the-counter market, the average closing bid price of a Unit for the thirty (30) trading days immediately preceding the date of determination 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 Units cannot be determined pursuant to clause (i) or (ii) above, such price as the independent members of the Board of Directors of the Company shall determine, in good faith.

 

2.3.2           Mechanics of Cashless Exercise. The Conversion Right described in this Section 2.3 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 this Purchase Option, with the duly executed exercise form attached hereto and with the cashless exercise section completed, specifying the total number of Units the Holder will purchase pursuant to such Conversion Right, to the Company.

 

2.4 No Obligation to Net Cash Settle. Notwithstanding anything to the contrary contained in this Purchase Option, in no event will the Company be required to net cash settle the exercise of the Purchase Option or the Warrants underlying the Purchase Option. The holder of the Purchase Option and the Warrants underlying the Purchase Option will not be entitled to exercise the Purchase Option or the Warrants underlying such Purchase Option unless a registration statement is effective, or an exemption from the registration requirements is available at such time and, if the holder is not able to exercise the Purchase Option or underlying Warrants, the Purchase Option and/or the underlying Warrants, as applicable, will expire worthless.

 

2.5 Warrant Exercise. Any Warrants underlying the Units shall be issued pursuant and subject to the terms and conditions set forth in the Warrant Agreement, dated [_________], [_____], by and between the Company and Continental Stock Transfer & Trust Company (the “Warrant Agreement”).  Such Warrants shall not be redeemable by the Company until same are issued pursuant to this Purchase Option.

 

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 (or the Ordinary Shares and Warrants underlying this Purchase Option) for a period of six (6) months (including a period of 180 days pursuant to Rule 5110(g)(1)) of the Financial Industry Regulatory Authority, Inc. (“FINRA”) following the effective date of the Registration Statement (“Effective Date”) to anyone other than (i) PrinceRidge or an underwriter or selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of PrinceRidge 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.

 

  

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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, 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”), a current prospectus is available 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 a 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, upon surrender of the original Purchase Option at the offices of the Company, together with evidence reasonably satisfactory to the Company in its sole discretion of the transfer thereof, 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.

 

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. 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 use its best efforts to register (the “Demand Registration”) under the Act 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, Ordinary Shares, the Warrants and the Ordinary Shares underlying the Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will use its best efforts to 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 Initial Demand Notice shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will notify all holders of the Purchase Options and/or Registrable Securities of the demand within ten days from the date of the receipt of any such Initial Demand Notice. Each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “Demanding Holder”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 5.1.4.

 

5.1.2 Effective Registration. A registration will not count as a Demand Registration until the registration statement (or post-effective amendment) filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto.

 

5.1.3 Underwritten Offering. If the Majority Holders so elect and such holders so advise the Company as part of the Initial Demand Notice, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Majority Holders.

 

  

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5.1.4 Reduction of Offering. If the managing underwriter or underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell, taken together with all other Ordinary Shares or other securities which the Company desires to sell and the Ordinary Shares or other securities, if any, as to which registration has been requested pursuant to written contractual “piggy-back” registration rights held by other securityholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of Ordinary Shares or other securities that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of Ordinary Shares or other securities, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with the number of Ordinary Shares or other securities that each such Person has requested be included in such registration, regardless of the number Ordinary Shares or other securities held by each such Person (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the Ordinary Shares or other securities registrable pursuant to the terms of the Registration Rights Agreement between the Company and the initial investors in the Company, dated as of [__________], [_____] (the “Registration Rights Agreement” and such registrable securities, the “Investor Securities”) as to which “piggy-back” registration has been requested by the holders thereof, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares have not been reached under the foregoing clauses (i), (ii), and (iii), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares.

 

5.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the underwriter or underwriters of their request to withdraw prior to the effectiveness of the registration statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then the Company does not have to continue its obligations under Section 5.1 with respect to such proposed offering.

 

5.1.6 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 (not to exceed $10,000) 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 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.

 

  

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5.2 Piggy-Back Registration.

 

5.2.1 Piggy-Back Rights. If at any time during the seven year period commencing on the Effective Date the Company proposes to file a registration statement under the Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities by the Company, for its own account or for stockholders of the Company for their account (or by the Company and by stockholders of the Company including, without limitation, pursuant to Section 5.1), other than a registration statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, or (iii) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an underwriter or underwriters shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such Piggy-Back Registration.

 

5.2.2 Reduction of Offering. If the managing underwriter or underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the holders of Registrable Securities in writing that the dollar amount or number of Ordinary Shares or other securities which the Company desires to sell, taken together with the Ordinary Shares or other securities, if any, as to which registration has been demanded pursuant to written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as to which registration has been requested under this Section 5.2, and the Ordinary Shares or other securities, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:

 

  

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(a) If the registration is undertaken for the Company’s account: (A) first, the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities, if any, comprised of  Registrable Securities and Investor Securities, as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such security holders, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of shares has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons and that can be sold without exceeding the Maximum Number of Shares;

 

(b) If the registration is a “demand” registration undertaken at the demand of holders of Investor Securities, (A) first, the Ordinary Shares or other securities for the account of the demanding persons, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the Ordinary Shares or other securities, if any, comprised of  Registrable Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Shares; and

 

(c) If the registration is a “demand” registration undertaken at the demand of persons other than either the holders of Registrable Securities or of Investor Securities, (A) first, the Ordinary Shares or other securities for the account of the demanding persons that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the Ordinary Shares or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), collectively the Ordinary Shares or other securities comprised of Registrable Securities and Investor Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof and of the Registration Rights Agreement, as applicable, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Shares.

 

  

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5.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the registration statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a registration statement at any time prior to the effectiveness of the registration statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 5.2.4.

 

5.2.4 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 (not to exceed $10,000) to represent them in connection with the sale of the Registrable Securities but the Holders shall pay any and all underwriting commissions related to the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than fifteen days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each applicable registration statement filed (during the period in which the Purchase Option is exercisable) by the Company until such time as all of the Registrable Securities have been registered and sold. The Holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice, within ten days of the receipt of the Company’s notice of its intention to file a registration statement. The Company shall use its best efforts to cause any registration statement filed pursuant to the above “piggyback” rights to remain effective for at least twelve months from the date that the Holders of the Registrable Securities are first given the opportunity to sell all of such securities.

 

5.3 Intentionally Omitted.

 

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, PrinceRidge 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.

 

  

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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 PrinceRidge, 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 (which opinion shall include the negative assurance statement of such counsel) dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date and closing date of such registration statement (if such registration includes an underwritten public offering), 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 PrinceRidge, as representative of the Holders participating in the offering, the correspondence and memoranda described below and copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit PrinceRidge, 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 FINRA. 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 PrinceRidge, as representative of the Holders, shall reasonably request. The Company shall not be required to disclose any confidential information or other records to PrinceRidge, 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, 

 

  

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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 to use its best efforts to obtain 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 from such date of determination (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 Ordinary Shares is increased by a stock dividend payable in Ordinary Shares or by a split-up of Ordinary Shares or other similar event, then, on the effective date thereof, the number of Ordinary Shares underlying each of the Units purchasable hereunder shall be increased in proportion to such increase in outstanding shares. In such case, the number of Ordinary Shares, 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 $15.00 per whole Unit (each Warrant underlying the Units is exercisable for $11.50 per share), upon effectiveness of the dividend, this Purchase Option will be adjusted to allow for the purchase of one Unit at $15.00 per Unit, each Unit entitling the holder to receive two Ordinary Shares and two Warrants (each Warrant exercisable for $5.75 per Ordinary Shares).

 

6.1.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 6.4, the number of outstanding Ordinary Shares is decreased by a consolidation, combination or reclassification of the Ordinary Shares or other similar event, then, on the effective date thereof, the number of Ordinary Shares underlying each of the Units purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares. In such case, the number of Ordinary Shares, 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 Warrant Agreement.

 

6.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Ordinary Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Ordinary Shares, 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 Ordinary Shares), 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 Ordinary Shares 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 Ordinary Shares 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.

 

  

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6.1.5 Adjustments of Warrants. To the extent the exercise price of the Warrants are changed pursuant to Section 4 of the Warrant Agreement, either due to the anti-dilution provisions thereof or otherwise, the exercise price of the Warrants underlying this Purchase Option shall be proportionately changed.

 

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 Ordinary Shares), 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 Ordinary Shares 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. In the event of a merger or consolidation as described in this Section 6, the Warrants underlying the Units shall be adjusted in accordance with and as set forth in Section 11 of the Warrant Agreement.

 

6.4 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of an Ordinary Share or Warrant 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, Ordinary Shares 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, solely for the purpose of issuance upon exercise of the Purchase Options or the Warrants underlying the Purchase Option, such number of Ordinary Shares 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 Ordinary Shares 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 Ordinary Shares 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 Ordinary Shares issuable upon exercise of the Purchase Options, (iii) Warrants issuable upon exercise of the Purchase Options and (iv) Ordinary Shares issuable upon exercise of the Warrants included in the Units issuable upon exercise of the Purchase Option to be listed or quoted, as the case may be (subject to official notice of issuance), on all securities exchanges (or, if applicable, on the Nasdaq Global Market, Nasdaq Capital Market, Over-the-Counter Bulletin Board or any successor trading market) on which the Units, the Ordinary Shares or the Public Warrants issued to the public in connection herewith may then be listed and/or quoted.

 

  

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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 Ordinary Shares 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 Ordinary Shares 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 each of 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:

 

BGS Acquisition Corp.

Olazbal 1150

Cuidad Autonoma de Buenos Aires

Argentina 1428

Attn:    Chief Executive Officer

  

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9. Miscellaneous.

 

9.1 Amendments. The Company and PrinceRidge 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 PrinceRidge may deem necessary or desirable and that the Company and PrinceRidge 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 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 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.

 

9.5 Governing Law. 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.

 

9.6 Waiver of Immunity. To the extent that the Company may be entitled in any jurisdiction in which judicial proceedings may at any time be commenced hereunder, to claim for itself or its revenues or assets any immunity, including sovereign immunity, from suit, jurisdiction, attachment in aid of execution of a judgment or prior to a judgment, execution of a judgment or any other legal process with respect to its obligations hereunder and to the extent that in any such jurisdiction there may be attributed to the Company such an immunity (whether or not claimed), the Company hereby irrevocably agrees not to claim and irrevocably waives such immunity to the maximum extent permitted by law.

 

  

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9.7 Submission to Jurisdiction; Appointment of Agent for Service. The Company irrevocably submits to the nonexclusive jurisdiction of any New York State or United States Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Purchase Option. The Company irrevocably waives, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Any such 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 hereby irrevocably appoints [______________________] as its agent for service of process in any suit, action or proceeding described in the preceding paragraph and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as its agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect. Notwithstanding the foregoing, any action based on this Agreement may be instituted by the Holder in any competent court in the British Virgin Islands. The Company agrees 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.

 

9.8 Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Holder could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to any Holder or any person controlling any Holder shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Holder or controlling person of any sum in such other currency, and only to the extent that such Holder or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Holder or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Holder or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Holder or controlling person hereunder, such Holder or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Holder or controlling person hereunder.

 

9.9 Taxes. (a) All payments made by the Company under this Purchase Option, if any will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature, and all interest, penalties and similar liabilities with respect thereto, imposed or levied by or on behalf of the British Virgin Islands or any political subdivision or any taxing authority thereof or therein unless the Company is or becomes required by law to withhold or deduct such taxes, duties, assessments or other governmental charges, and all interest, penalties and similar liabilities with respect thereto. In such event, the Company will pay such additional amounts as will result, after such withholding or deduction, in the receipt by any Holder and each person controlling such Holder, as the case may be, of the amounts that would otherwise have been receivable in respect thereof, except to the extent such taxes, duties, assessments or other governmental charges, and all interest, penalties and similar liabilities with respect thereto, if any, are imposed or levied by reason of such Holder’s or controlling person’s being connected with the British Virgin Islands other than by reason of its being a Holder or a person controlling any Holder under this Purchase Option.

 

  

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(b)           All amounts payable by the Company under this Purchase Option are exclusive of any value added tax or any similar taxes (“VAT”). If the transactions described in this Purchase Option are subject to VAT, the Holder shall provide the Company with a valid invoice that complies with all relevant tax regulations and that specifically states the applicable VAT. Provided the Holder has stated the applicable VAT on the invoice, the Company will pay the Holder the applicable VAT. The Company reserves the right to withhold payment of any VAT to the Holder until the Holder has provided the Company with a valid invoice that complies with all relevant tax regulations and that specifically states the applicable VAT. If the Holder has incorrectly determined the applicable VAT and, as a result thereof, the Company has overpaid the Holder, the Holder will repay the overpaid amount plus interest to the Company upon the Company’s written request. If the Holder has incorrectly determined the applicable VAT and, as a result thereof, the Company has underpaid the Holder, the Company shall pay the outstanding amount to the Holder upon receipt of a valid invoice that complies with all relevant tax regulations and that specifically states the applicable VAT, as corrected.

 

9.10 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.

 

9.11 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.

 

  

17

  

 

IN WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by its duly authorized officer as of the [__] day of [________], [_____].

 

 

	 	BGS ACQUISITION CORP.	 
	 	 	 	 
	 	
By: 

	 	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

 

  

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Form to be used to exercise Purchase Option:

 

BGS Acquisition Corp.

Olazbal 1150

Cuidad Autonoma de Buenos Aires

Argentina 1428

Attn:           Chief Executive Officer

 

Date:_________________, 201__

 

The undersigned hereby elects irrevocably to exercise all or a portion of the within Purchase Option and to purchase ____ Units of BGS Acquisition Corp. and hereby makes payment of $____________ (at the rate of $_________ per Unit) in payment of the Exercise Price pursuant thereto. Please issue the Ordinary Shares 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.

 

 

	 	 	 
	 	 	
NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the purchase option in every particular, without alteration or enlargement or any change whatever.

Signature(s) Guaranteed:

________________________________________________________________________

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

 

  

19

  

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

Name

 

(Print in Block Letters)

 

Address

 

  

20

  

 

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 BGS Acquisition Corp. (“Company”) evidenced by the within Purchase Option and does hereby authorize the Company to transfer such right on the books of the Company.

 

Dated:___________________, 201_

 

	 	 	 
	 	 	Signature
	 	 	 
	 	 	 
	 	 	 
	 	 	NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the purchase option in every particular, without alteration or enlargement or any change whatever.

 

Signature(s) Guaranteed:

________________________________________________________________________

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

 

 

 

21Exhibit 10.1

 

 

THIS REVOLVING PROMISSORY NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE,
AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.

______________________________________________________________________________

 

 

$150,000.00December 14, 2011

Woodland Hills, California

 

 

REVOLVING PROMISSORY NOTE

 

In consideration of such
advances (hereinafter “Advance” or “Advances”) as W-NET FUND I, L.P., a Delaware limited
partnership, or its assigns (collectively, “Holder”), from time to time may make hereon to or for the benefit
of PHOTOTRON HOLDINGS, INC., a Delaware corporation (the “Company”), pursuant to the Revolving Credit
Commitment (as defined below), including the Advance of Thirty Thousand Dollars ($30,000) made by Holder to the Company on or about
November 8, 2011, the Company hereby promises to pay to Holder the principal amount of all Advances, together with accrued interest
thereon from the date of such Advances, all subject to the terms and conditions set forth below.

 

1.Revolving
Credit Commitment.

 

1.1Advances.
The Holder agrees to make Advances to the Company from time to time during the Revolving Credit Commitment Period (as defined below),
at its sole discretion, in an aggregate principal amount at any one time outstanding which does not exceed One Hundred and Fifty
Thousand Dollars ($150,000.00) (the “Revolving Credit Commitment”). During the Revolving Credit Commitment Period,
the Company may use the Revolving Credit Commitment by borrowing, prepaying any Advances in whole or in part, and re-borrowing,
all in accordance with the terms and conditions hereof.

 

1.2Interest.
Interest shall accrue from the date of any Advances on any principal amount withdrawn, and on accrued and unpaid interest thereon,
at the rate of twelve percent (12%) per annum (calculated on the basis of a three hundred sixty-five (365) day year for the actual
number of days elapsed), compounded annually.

 

    	-1-

    	 

    

2.Revolving
Credit Commitment Period. The revolving credit commitment period (the “Revolving Credit Commitment Period”)
shall commence as of the date hereof and shall expire on December 31, 2012 (the “Expiration Date”).

 

3.Procedure for Revolving Credit Advances.

 

3.1Advance
Request. The Company may request Advances under the Revolving Credit Commitment during the Revolving Credit Commitment Period
on any day of the week, Monday through Friday, 9:00 a.m. through 5:00 p.m., Pacific Time, (hereinafter referred to as any “Business
Day” or “Business Days”), provided that the Company shall give Holder irrevocable notice (which
notice must be received by Holder prior to 12:00 p.m., Pacific Time) one (1) Business Day prior to the requested Advance date,
specifying (i) the amount of the Advance, and (ii) the requested Advance date. Each Advance under the Revolving Credit Commitment
shall be in an amount equal to $5,000 or a whole multiple of $5,000 in excess thereof. Upon receipt of any such notice from the
Company, Holder may (but shall not be required to), at Holder’s sole discretion, make the amount of the Advance available
prior to 12:00 p.m., Pacific Time, on the Advance date requested by the Company in funds immediately available to the Company.

 

3.2Account
Evidencing Indebtedness. Holder shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness
of the Company to Holder resulting from each Advance from time to time, including the amounts of principal and interest payable
and paid to the Holder from time to time under this Revolving Promissory Note (“Note”).

 

4.Repayment Procedure.

 

4.1General.
Repayment on any Advances shall be made in lawful tender of the United States. Any payments on this Note made during the Revolving
Credit Commitment Period shall be credited first to any interest due and the remainder to principal.

 

4.2Repayment of
Principal and Interest. All outstanding and unpaid principal, and all outstanding and accrued unpaid interest, shall become
due and payable on and as of the Expiration Date.

 

4.3Optional Prepayment.
The Company may, at any time and from time to time and without penalty, prepay all or any portion of the accrued and unpaid interest
on this Note and any outstanding principle amount of this Note.

 

5.Transfers.

 

5.1General.
Holder acknowledges that this Note has not been registered under the Securities Act of 1933, as amended, or any state securities
laws, and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Note in the absence of
(i) an effective registration statement under the Securities Act as to this Note and registration or qualification of this Note
under any applicable state securities laws then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.

 

    	-2-

    	 

    

5.2Transferability.
Subject to the provisions of Section 5.1 hereof, this Note and all rights hereunder are transferable, in whole or in part,
upon surrender of the Note with a properly executed assignment, in the form prescribed by the Company, at the principal office
of the Company; provided, however, that this Note may not be transferred in whole or in part without the prior written consent
of the Company.

 

5.3Registered
Holder. Until any transfer of this Note is made in the Note register, the Company may treat the registered Holder of this Note
as the absolute owner hereof for all purposes; provided, however, that if and when this Note is properly assigned in blank,
the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding
any notice to the contrary.

 

5.4Note
Register. The Company will maintain a register containing the name and address of the registered Holder of this Note. Any registered
Holder may change such registered Holder’s address as shown on the Note register by written notice to the Company requesting
such change.

 

5.5Transferee
Agreement. In the discretion of the Company, the Company may condition any transfer of all or any portion of this Note (other
than a disposition satisfying the conditions set forth in clause (i) of Section 5.1 above) upon the transferee’s delivery
to the Company of a written agreement, in form and substance satisfactory to the Company, whereby the transferee agrees to be bound
by the transfer restrictions set forth in this Section 5.

 

6.Events
of Default.

 

6.1Events
of Default. The occurrence of any or all of the following events shall constitute an event of default (each, an “Event
of Default”) by the Company under this Note:

 

(i)Default by the Company
in any payment on this Note after any such payment becomes due and payable; or

 

(ii)Breach by the Company
of any material provisions of any agreement between the Company and the Holder; or

 

(iii)The Company shall
file a voluntary petition in bankruptcy or any petition or answer seeking for itself any reorganization, readjustment, arrangement,
composition or similar relief; or shall commence a voluntary case under the federal bankruptcy laws; or shall admit in writing
its insolvency or its inability to pay its debts as they become due; or shall make an assignment for the benefit of creditors;
or shall apply for, consent to, or acquiesce in the appointment of, or the taking of possession by, a trustee, receiver, custodian
or similar official or agent of the Company or of substantially all of its property and shall not be discharged within sixty (60)
days; or a petition seeking reorganization, readjustment, arrangement, composition or other similar relief as to the Company under
the federal bankruptcy laws or any similar law for the relief of debtors shall be brought against the Company and shall be consented
to by it or shall remain un-dismissed for sixty (60) days.

 

    	-3-

    	 

    

6.2Consequence
of Default. Upon the occurrence of any Event of Default, this Note shall immediately become due and payable upon written notice
from the Holder, and, from the time of the Company’s receipt of such written notice until this Note shall be paid in full,
the unpaid outstanding principal balance of this Note shall bear interest at the rate of fifteen percent (15%) per annum (calculated
on the basis of a three hundred sixty-five (365) day year for the actual number of days elapsed), compounded annually (the “Default
Rate”). Moreover, after the occurrence of any Event of Default, the Holder may proceed to protect and enforce its rights,
at law, in equity or otherwise, against the Company.

 

6.3Payment
of Costs and Expenses. In the event that this Note is placed in the hands of any attorney for collection, or any suit or proceeding
is brought for the recovery or protection of the indebtedness hereunder, then and in any such events, the Company shall pay on
demand all reasonable costs and expenses of such suit or proceedings incurred by Holder, including reasonable attorneys’
fees.

 

7.Miscellaneous.

 

7.1Delay.
No extension of time for payment of any amount owing hereunder shall affect the liability of the Company for payment of the indebtedness
evidenced hereby. No delay by the Holder or any holder hereof in exercising any power or right hereunder shall operate as a waiver
of any power or right hereunder.

 

7.2Waiver
and Amendment. No waiver or modification of the terms of this Note shall be valid without the written consent of the Holder.

 

7.3Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of California without regard to
conflict of law principles thereof.

 

7.4Severability.
In case any provision contained herein (or part thereof) shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or other unenforceability shall not affect any other provision (or the remaining part
of the affected provision) hereof, but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or
part thereof) had never been contained herein, but only to the extent that such provision is invalid, illegal, or unenforceable.

 

7.5Notice.
All notices and other communications among the parties shall be in writing with a copy sent by electronic mail and shall be deemed
to have been duly given when (i) delivered in person, or (ii) five (5) days after posting in the U.S. mail as registered mail or
certified mail, return receipt requested, or (iii) one (1) business day when delivered by confirmed facsimile, addressed as follows:

 

If to the Company, to:Phototron
Holdings, Inc.

20259 Ventura Boulevard

Woodland Hills, CA 91364

Attention: CFO

Facsimile: (818) 992-0202

 

If to the Holder,
to:Woodman Management Corporation

12400 Ventura Boulevard, Suite 327

Studio City, CA 91604

Attention: Chief Executive Officer

Facsimile: (818) 474-7589

 

    	-4-

    	 

    

7.6Entire
Agreement. This Note contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings with respect thereto.

 

7.7Excessive Interest
Rate. This Note is hereby expressly limited so that the interest rate charged hereunder shall at no time exceed the maximum
rate permitted by applicable law. If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted
by applicable law, the interest rate shall be reduced to the maximum rate permitted.

 

 

[Signature Page Follows]

 

    	-5-

    	 

    

IN WITNESS WHEREOF, the
Company has caused this Revolving Promissory Note to be duly executed and delivered by its authorized officer as of the date first
above written.

 

 

PHOTOTRON HOLDINS, INC.

 

 

 

By:/s/ BRIAN SAGHEB

Brian B. Sagheb,
CFO

 

 

 

ACKNOWLEDGED:

 

 

W-NET FUND I, L.P.

 

By: W-Net Fund GP I, LLC

Its: General Partner

 

 

By:/s/ DAVID WEINER

David Weiner, Manager

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