EXHIBIT 10.2
October 12, 2007
FTN MIDWEST SECURITIES CORP.
Great Point Partners LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Dear Sirs:
By this letter agreement (this "Agreement"), for good and valuable
consideration, subject to the terms and conditions set forth herein, the
undersigned grants you (which term as used herein shall mean the addressee and
any affiliated funds) an option to acquire 1,666,666 warrants, as adjusted to
account for stock splits, reclassifications and similar events, (the "Warrants")
to acquire shares of common stock, par value $0.0001 per share (the "Common
Stock") of HAPC, Inc. (the "Company") for an aggregate purchase price of $1.00
(the "Option"). The undersigned has the right to acquire the Warrants pursuant
to the exercise of its Unit Purchase Option dated April 11, 2006, as amended
(the "Unit Purchase Option"), for 833,333 units comprised of one share of Common
Stock and two Warrants each, issued to the undersigned in connection with the
Company's initial public offering and the undersigned covenants with you to
exercise such Unit Purchase Option promptly upon receipt of notice from you of
the exercise of the Option.
CONDITIONS PRECEDENT TO EXERCISE OF OPTION
You shall be entitled to exercise the Option upon the satisfaction of
all of the following conditions:
(i) On October 12, 2007, you shall have placed a buy order (the
"Buy Order") with us or Broadband Capital Management LLC to
purchase up to 3,000,000 shares of the Company's Common Stock
at a price of no more than $5.97 per share and keep such order
open for four trading days.
(ii) The Company's acquisition of InfuSystem, Inc. shall be ap-
proved by the requisite vote of the holders of Common Stock
and such acquisition shall be consummated.
(iii) The trading price for a share of Common Stock equals or
exceeds $8.00 for any 20 out of 30 consecutive trading days.
(iv) The representations and warranties set forth below under
"Optionee's Representations and Warranties" shall be true and
correct in all material respects.
EXERCISE OF OPTION
The Option may be exercised for the Option Amount (as defined below) in
whole, but not in part, for a number of Warrants equal to (A) the sum of (i) the
number of shares of Common Stock purchased pursuant to the Buy Order (whether or
not you receive the proxy materials with respect to such shares in sufficient
time to enable you to vote such shares at the Company's special annual meeting
that convened on September 26, 2007 and currently adjourned until October 19,
2007 (as it may be further adjourned, the "Annual Meeting")) (the "Purchased
Shares"), less (ii) the number of such Purchased Shares, if any, with respect to
which you vote against the Company's acquisition of InfuSystem, Inc. at the time
of the Annual Meeting, times (B) the quotient of 1,666,666 divided by 3,000,000,
but in no event more than 1,666,666 Warrants (in each case, as adjusted to
account for stock splits, reclassifications and similar events), on any day
after the conditions precedent set forth above have been satisfied.
In order to exercise the Option, you shall deliver written notice to
the undersigned c/o FTN Midwest Securities Corp., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attn: Xxxxx Xxxxxx, setting forth your intention to exercise the
Option and the proposed closing date (the "Closing Date") which shall be at
least seven business days subsequent to the date of such notice. On such Closing
Date, the undersigned shall deliver to you certificates representing the
Warrants subject to the Option, together with appropriate transfer forms and you
shall deliver full payment for such Warrants by such payment means as may be
agreed. The undersigned shall be responsible for all transfer taxes payable in
connection with the exercise of the Options.
FTN may satisfy its obligations hereunder by delivering the Warrants to
you at any time in advance of your exercise of the Option.
REGISTRATION RIGHTS
The undersigned hereby assigns to you, effective as of the Closing
Date, all of undersigned's registration rights pursuant to the Unit Purchase
Option with respect to the Warrants and the shares of Common Stock underlying
such Warrants purchased by you pursuant to the Option.
REPRESENTATIONS AND WARRANTIES
The undersigned represents and warrants to you as of the date of this
Agreement and the Closing Date the following:
(i) on the Closing Date, the undersigned will be the record and
beneficial owner of and have good and valid title to the
Warrants subject to the Option, free and clear of any and
liens, claims or encumbrances; or the like; except with
respect to the rights granted under this Agreement, the
undersigned is not a party to, and the Warrants and shares of
Common Stock underlying the Warrants are not subject
2
to, any option, warrant, contract, call, pledge, put, right of
first refusal, tag-along, drag-along or other agreement or
commitment providing for or relating to the disposition or
acquisition of the Warrants or the Common Stock underlying the
Warrants;
(ii) the undersigned is the record and beneficial owner of and has
good and valid title to the Unit Purchase Option, and has the
right, power and authority to enter into this Agreement and on
the Closing Date, the undersigned will have the right, power
and authority to sell, assign and transfer the Warrants
subject to the Option;
(iii) the entry into the Agreement and the sale of the Warrants do
not (A) conflict with, violate, result in any breach of, or
constitute a default under any contract or agreement to which
the undersigned is a party or to which the Warrants subject to
the Option are subject to, or (B) violate any law, order,
decree, judgment, injunction or other action;
(iv) the Warrants and the Shares of Common Stock underlying the
Warrants are not subject to any voting agreements, voting
trusts or similar arrangements; and
(v) the Unit Purchase Option has been amended to provide that
Section 3.2 and 2.4.4 thereof shall not apply to the transfer
of Warrants to you pursuant to your exercise of the Option.
Additionally, the undersigned hereby acknowledges to you that it is
sophisticated and knowledgeable with respect to the transactions contemplated by
this Agreement and has such information as it deems appropriate under the
circumstances to make an informed decision regarding the transactions
contemplated by this Agreement. The undersigned hereby agrees that it has made
its own independent analysis and decision to enter into the transactions
contemplated by this Agreement, based on such information as the undersigned has
deemed appropriate under the circumstances, and without reliance on you (except
for reliance on any express representation made by you in this Agreement).
OPTIONEE'S REPRESENTATIONS AND WARRANTIES
You hereby represent and warrant to the undersigned as follows:
(i) You are an "accredited investor" within the meaning of Rule 501
under the Securities Act of 1933, as amended (the "Securities Act").
(ii) You understand and acknowledge that the Option, the Warrants and
the Common Stock underlying the Warrants have not been registered under the
Securities Act or the securities laws of any state of the United States and are
being offered only in a transaction not involving any public offering pursuant
to exemptions from registration for transactions not involving any public
offering in the United States within the meaning of the Securities Act and in
compliance with applicable local laws and regulations, and are therefore
"restricted securities" within the meaning of Rule 144 under the Securities Act.
3
(iii) The Option, the Warrants and the Common Stock underlying the
Warrants are being purchased for your own investment and you have not offered or
sold any portion of the Option being acquired, nor do you have any present
intention of selling, distributing or otherwise disposing of the Option, the
Warrants or Common Stock underlying the Warrants, either currently or after the
passage of a fixed or determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or circumstance in violation of the
Securities Act.
(iv) In the normal course of your business, you invest in or purchase
securities similar to the Option, the Warrants and the Common Stock underlying
the Warrants and have such knowledge and experience in financial and business
matters that you are capable of evaluating the merits and risks of investing in
the Option.
(v) You are aware that you may be required to bear the economic risk of
an investment in the Common Stock underlying the Warrants for an indefinite
period of time and you are able to bear such risk for an indefinite period.
(vi) You understand and agree that the certificates evidencing the
Warrants and the Common Stock underlying the Warrants will, unless otherwise
agreed by the Company, bear a legend substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS EVIDENCED
BY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE STATE AND OTHER SECURITIES LAWS."
FURTHER ASSURANCES
Each of the parties hereto shall execute such documents and other
instruments and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and their intent and to consummate
the transactions contemplated by this Agreement.
MISCELLANEOUS
You and the undersigned hereby agree that:
(i) You agree and acknowledge that the terms of this Option Agreement
and of the transactions contemplated hereby will be disclosed by the Company in
a supplement to its Proxy Statement in respect of its Annual Meeting. The
undersigned will cause the Company to provide
4
you a reasonable opportunity to review such disclosure in advance of its filing
with the SEC and distribution to the Company's stockholders.
(ii) Neither this Agreement, the Option, nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated by
any party hereto, in whole or in part, by operation of law or otherwise;
provided, however, that you may assign or delegate, in whole or in part, this
Agreement to any one or more of your affiliated funds.
(iii) This Agreement and all disputes or controversies arising out of
or relating to this Agreement or the transactions contemplated hereby, shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without regard to the laws of any other jurisdiction that might be
applied because of the conflicts of laws principles of the State of New York.
(iv) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one instrument.
5
Please acknowledge your agreement to the terms set forth herein by
executing this Agreement where indicated.
Very truly yours,
FTN MIDWEST SECURITIES CORP.
By: /s/ Xxxxxx Xxxx
----------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
ACCEPTED AND AGREED:
GREAT POINT PARTNERS LLC
By: /s/ XXXXX XXX
------------------------------------
Name: Xxxxx Xxx
Title: Principal
6
