Exhibit 4.5
THE REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION, EXCEPT AS HEREIN
PROVIDED, AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) X.X. XXXXXXXXXX & CO., INC. AND ITS AFFILIATES ("X.X. XXXXXXXXXX") OR
AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED
HEREIN), OR (II) A BONA FIDE OFFICER, PARTNER OR EMPLOYEE OF X.X. XXXXXXXXXX OR
OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF (I) THE
CONSUMMATION BY HARBOR BUSINESS ACQUISITION CORP. ("COMPANY") OF A MERGER,
CAPITAL STOCK EXCHANGE, ASSET OR STOCK ACQUISITION OR OTHER SIMILAR BUSINESS
COMBINATION ("BUSINESS COMBINATION") (AS DESCRIBED MORE FULLY IN THE COMPANY'S
REGISTRATION STATEMENT (DEFINED HEREIN)) AND (II) ______________, 2007. THIS
PURCHASE OPTION SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME, _____________, 2011.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
250,000 UNITS
OF
HARBOR BUSINESS ACQUISITION CORP.
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $100 duly paid by or
on behalf of X.X. Xxxxxxxxxx & Co., Inc. (collectively, with its successors and
permitted assigns and/or transferees, the "Holder"), as registered owner of this
Purchase Option, to Harbor Business Acquisition Corp. (the "Company"), Holder is
entitled, at any time or from time to time upon the later of (i) the
consummation of a Business Combination and (ii) ____________, 2007
("Commencement Date"), and at or before 5:00 p.m., Eastern Time, ____________,
2011 ("Expiration Date"), but not thereafter, to subscribe for, purchase and
receive, in whole or in part, up to Two Hundred and Fifty Thousand (250,000)
units (the "Units") of the Company, each Unit consisting of one share of common
stock of the Company, par value $0.001 per share (the "Common Stock"), and two
warrants (the "Warrant(s)") expiring four years from the effective date
("Effective Date") of the registration statement ("Registration Statement")
pursuant to which Units are offered for sale to the public (the "Offering").
Each Warrant contains the same terms and conditions as the warrants included in
the Units being registered for sale to the public by way of the Registration
Statement (the "Public Warrants"), including that the Warrants underlying the
Units comprising this Purchase Option have an exercise price of $5.00 per share.
If the Expiration Date is a day on which banking institutions are authorized by
law to close, then this Purchase Option may be exercised on the next succeeding
day which is not such a day in accordance with the terms herein. During the
period ending on the Expiration Date, the Company agrees not to take any action
that would terminate the Purchase Option. This Purchase Option is initially
exercisable at $6.60 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 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 (the "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, in whole or in part, 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-
2.3 Cashless Exercise. 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 (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 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) of the portion of the Purchase Option being converted. The "Value" of the
portion of the Purchase Option being converted shall equal the remainder derived
from subtracting (a) (i) the Exercise Price multiplied by (ii) the number of
Units underlying the portion of this Purchase Option being converted from (b)
the Current Market Value of a Unit multiplied by the number of Units underlying
the portion of the Purchase Option being converted. As used herein, the term
"Current Market Value" per Unit at any date means: (A) in the event that neither
the Units nor Warrants are still trading, the remainder derived from subtracting
(x) the exercise price of the Warrants multiplied by the number of shares of
Common Stock issuable upon exercise of the Warrants underlying one Unit from (y)
(i) the Current Market Price of the Common Stock multiplied by (ii) the number
of shares of Common Stock underlying one Unit, which shall include the shares of
Common Stock underlying the Warrants included in such Unit; (B) in the event
that the Units, Common Stock and Public Warrants are still trading, (i) if the
Units are listed on a national securities exchange or quoted on the Nasdaq
Global Market, Nasdaq Capital Market or NASD OTC Bulletin Board (or successor
such as the Bulletin Board Exchange), the last sale price of the Units in the
principal trading market for the Units as reported by the exchange, Nasdaq or
the NASD, as the case may be, on the last trading day preceding the date in
question; or (ii) if the Units are not listed on a national securities exchange
or quoted on the Nasdaq Global 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 Units on the last trading day
preceding the date in question for which such quotations are reported by the
Pink Sheets, LLC or similar publisher of such quotations; and (C) in the event
that the Units are not still trading but the Common Stock and Warrants
underlying the Units are still trading, the Current Market Price of the Common
Stock plus the product of (x) the Current Market Price of the Warrants and (y)
the number of shares of Common Stock underlying the Warrants included in one
Unit. The "Current Market Price" shall mean (i) if the Common Stock (or
Warrants, as the case may be) is listed on a national securities exchange or
quoted on the Nasdaq Global Market, Nasdaq Capital Market or NASD OTC Bulletin
Board (or successor such as the Bulletin Board Exchange), the last sale price of
the Common Stock (or Warrants) in the principal trading market for the Common
Stock as reported by the exchange, Nasdaq or the NASD, as the case may be, on
the last trading day preceding the date in question; (ii) if the Common Stock
(or Warrants, as the case may be) is not listed on a national securities
exchange or quoted on the Nasdaq Global 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
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.
-3-
2.4 Mechanics of Cashless Exercise. The Cashless Exercise
Right may be exercised by the Holder on any business day on or after the
Commencement Date and not later than the Expiration Date by delivering the
Purchase Option with the duly executed exercise form attached hereto with the
cashless exercise section completed to the Company, exercising the Cashless
Exercise Right and specifying the total number of Units the Holder will purchase
pursuant to such Cashless Exercise Right.
2.5 Net Cash Settlements. 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, regardless of whether any or all of the
Registrable Securities have been registered by the Company pursuant to an
effective registration statement. 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.
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) X.X. Xxxxxxxxxx or an
underwriter or a selected dealer in connection with the Offering, or (ii) a bona
fide officer or partner of X.X. Xxxxxxxxxx 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 Xxxxxxxxxx Xxxxxxx PC shall be deemed satisfactory evidence of the
availability of an exemption), or (ii) a registration statement or a
post-effective amendment to the Registration Statement relating to such
securities has been filed by the Company and declared effective by the
Securities and Exchange Commission and compliance with applicable state
securities law has been established.
-4-
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, except in the case of an exercise of
this Purchase Option contemplated by Section 2.3 hereof, 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.
5. Registration Rights.
5.1 Demand Registration.
5.1.1 Grant of Right. The Company, upon written
demand (an "Initial Demand Notice") of the holder(s) of at least an aggregate of
51% of all outstanding Purchase Options issued by the Company and/or the
underlying Units and/or the underlying securities (the "Majority Holders"),
agrees to use its best efforts to register on one occasion, all or any portion
of the Purchase Options requested by the Majority Holders in the Initial Demand
Notice and all of the securities underlying such Purchase Options, including the
Units, Common Stock, the Warrants and the Common Stock underlying the Warrants
(collectively, the "Registrable Securities"). On such occasion, the Company will
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.
-5-
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 the demand rights granted under Section 5.1.1 to remain
effective for a period of two (2) years from the effective date of such
registration statement or post-effective amendment.
5.2 "Piggy-Back" Registration.
5.2.1 Grant of Right. In addition to the demand right
of registration, the Holders of the Purchase Options shall have the right for a
period of seven years commencing on the Effective Date, to include the
Registrable Securities as part of any other registration of securities filed by
the Company (other than in connection with a transaction contemplated by Rule
145(a) promulgated under the Act or pursuant to Form S-8); provided, however,
that if, in the written opinion of the Company's managing underwriter or
underwriters, if any, for such offering, the inclusion of the Registrable
Securities, when added to the securities being registered by the Company or the
selling stockholder(s), will exceed the maximum amount of the Company's
securities (the "Maximum Number of Shares") which can be marketed (i) at a price
reasonably related to their then current market value, and (ii) without
materially and adversely affecting the entire offering, then the Company shall
include in any such registration:
(i) If the registration is undertaken for the
Company's account: (A) first, the shares of Common Stock 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 shares of Common Stock,
if any, including the Registrable Securities, as to which registration has been
requested pursuant to written contractual piggy-back registration rights of
security holders (pro rata in accordance with the number of shares of Common
Stock which each such person has actually requested to be included in such
registration, regardless of the number of shares of Common Stock with respect to
which such persons have the right to request such inclusion) that can be sold
without exceeding the Maximum Number of Shares; and
(ii) If the registration is a "demand" registration
undertaken at the demand of persons other than the holders of Registrable
Securities pursuant to written contractual arrangements with such persons, (A)
first, the shares of Common Stock 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 shares of Common Stock or other securities that the
Company desires to sell 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 Registrable Securities
as to which registration has been requested under this Section 5.2 (pro rata in
accordance with the number of shares of Registrable Securities held by each such
holder); 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 shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders desire to
sell that can be sold without exceeding the Maximum Number of Shares.
-6-
5.2.2 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 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 nine months from the date
that the Holders of the Registrable Securities are first given the opportunity
to sell all of such securities. The Company agrees, at its sole expenses, 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.
5.3 General Terms.
5.3.1 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 (the "Exchange Act"), and any of
their respective heirs, successors, permitted assigns and transfers, and agents
and representatives, 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 6 of the
Underwriting Agreement between the Company, X.X. Xxxxxxxxxx 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.
-7-
5.3.2 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.
5.3.3 Documents Delivered to Holders. The Company
shall furnish X.X. Xxxxxxxxxx, as representative of the Holders participating in
any of the foregoing offerings, a signed counterpart, addressed to the
participating Holders, of (i) an opinion of counsel to the Company, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under any underwriting agreement related thereto), and (ii) a "cold
comfort" letter dated the effective date of such registration statement (and, if
such registration includes an underwritten public offering, a letter dated the
date of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities. The Company shall also deliver promptly to X.X. Xxxxxxxxxx, 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 X.X. Xxxxxxxxxx, as representative of the Holders, to do
such investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. (the "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 X.X. Xxxxxxxxxx,
as representative of the Holders, shall reasonably request. The Company shall
not be required to disclose any confidential information or other records to
X.X. Xxxxxxxxxx, 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.
-8-
5.3.4 Underwriting Agreement. The Company shall enter
into an underwriting agreement with the managing underwriter(s), if any,
selected by any Holders whose Registrable Securities are being registered
pursuant to this Section 5, which managing underwriter shall be reasonably
acceptable to the Company. Such agreement shall be reasonably satisfactory in
form and substance to the Company, each Holder and such managing underwriters,
and shall contain such representations, warranties and covenants by the Company
and such other terms as are customarily contained in agreements of that type
used by the managing underwriter. The Holders shall be parties to any
underwriting agreement relating to an underwritten sale of their Registrable
Securities and may, at their option, require that any or all the
representations, warranties and covenants of the Company to or for the benefit
of such underwriters shall also be made to and for the benefit of such Holders.
Such Holders shall not be required to make any representations or warranties to
or agreements with the Company or the underwriters except as they may relate to
such Holders and their intended methods of distribution. Such Holders, however,
shall agree to such covenants and indemnification and contribution obligations
for selling stockholders as are customarily contained in agreements of that type
used by the managing underwriter. Further, such Holders shall execute
appropriate custody agreements and otherwise cooperate fully in the preparation
of the registration statement and other documents relating to any offering in
which they include securities pursuant to this Section 5. Each Holder shall also
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be reasonably required to effect the registration of the Registrable
Securities.
5.3.5 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 (or
such other period prescribed under Rule 144 as may be provided by amendment
thereof) all of the Registrable Securities 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).
5.3.6 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 Xxxxxx'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.
-9-
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 6.4 below, the number of
outstanding shares of Common Stock is increased by a stock dividend payable in
shares of Common Stock or by a split-up of shares of Common Stock or other
similar event, then, on the effective date thereof, the number of shares of
Common Stock underlying each of the Units purchasable hereunder shall be
increased in proportion to such increase in outstanding shares. In such case,
the number of shares of Common Stock, and the exercise price applicable thereto,
underlying the Warrants underlying each of the Units purchasable hereunder shall
be adjusted in accordance with the terms of the Warrants. For example, if the
Company declares a two-for-one stock dividend and at the time of such dividend
this Purchase Option is for the purchase of one Unit at $6.60 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 $6.60 per Unit, each Unit entitling the holder
to receive two shares of Common Stock and four 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 6.4, the number of outstanding
shares of Common Stock is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares of Common Stock underlying each of
the Units purchasable hereunder shall be decreased in proportion to such
decrease in outstanding shares. In such case, the number of shares of Common
Stock, and the exercise price applicable thereto, underlying the Warrants
underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants.
6.1.3 Replacement of Securities upon Reorganization,
etc. In case of any reclassification or reorganization of the outstanding shares
of Common Stock other than a change covered by Section 6.1.1 or 6.1.2 hereof or
that solely affects the par value of such shares of Common Stock, or in the case
of any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of shares of
Common Stock of the Company obtainable upon exercise of this Purchase Option and
the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.
-10-
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. The above provision of this Section shall similarly apply to
successive consolidations or mergers.
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 or down 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 Global Market, Capital Market, OTC Bulletin Board or any successor
trading market) on which the Units, the Common Stock or the Warrants may then be
listed and/or quoted.
-11-
8. Certain Notice Requirements.
8.1 Holder's Right to Receive Notice. Nothing herein shall be
construed as conferring upon the Holders the right to vote or consent as a
stockholder for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Purchase Options and their exercise, any of the
events described in Section 8.2 shall occur, then, in one or more of said
events, the Company shall give written notice of such event at least fifteen
days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be. Notwithstanding the
foregoing, the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company at the same time and in the same manner
that such notice is given to the stockholders.
8.2 Events Requiring Notice. The Company shall be required to
give the notice described in this Section 8 upon one or more of the following
events: (i) if the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution, 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 or a merger of the Company wherein the separate existence of
the Company shall cease 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 (a "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, mailed by express
mail or private courier service, or sent by facsimile transmission, with
confirmation of receipt: (i) If to the registered Holder of the Purchase Option,
to the address and/or fax number of such Holder as shown on the books of the
Company, or (ii) if to the Company, to the following address or fax number or to
such other address or and fax number as the Company may designate by notice to
the Holders:
-12-
Harbor Business Acquisition Corp.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attn: X. Xxxxxxx Xxxxxxxx, Chief Executive Officer
Fax No.: ________________
9. Miscellaneous.
9.1 Amendments. The Company and X.X. Xxxxxxxxxx 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 X.X. Xxxxxxxxxx may xxxx
necessary or desirable and that the Company and X.X. Xxxxxxxxxx xxxx shall not
adversely affect the interest of the Holders. All other modifications or
amendments shall require the written consent of and be signed by the party
against whom enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this Purchase
Option.
10. Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
10.1 Binding Effect. This Purchase Option shall inure solely
to the benefit of and shall be binding upon, the Holder and the Company and
their permitted assignees, respective successors, legal representative and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Purchase Option or any provisions herein contained.
10.2 Governing Law; Submission to Jurisdiction. This Purchase
Option shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to conflict of laws. Each
of the Company and X.X. Xxxxxxxxxx agree 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 located in New
York County 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. Each of the Company and X.X. Xxxxxxxxxx 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.
-13-
10.3 Waiver, Etc. The failure of the Company or the Holder to
at any time enforce any of the provisions of this Purchase Option shall not be
deemed or construed to be a waiver of any such provision, nor to in any way
affect the validity of this Purchase Option or any provision hereof or the right
of the Company or any Holder to thereafter enforce each and every provision of
this Purchase Option. No waiver of any breach, non-compliance or non-fulfillment
of any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
10.4 Execution in Counterparts. This Purchase Option may be
executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts has been signed by each of the
parties hereto and delivered to each of the other parties hereto.
10.5 Exchange Agreement. As a condition of the Holder's
receipt and acceptance of this Purchase Option, Xxxxxx agrees that, at any time
prior to the complete exercise of this Purchase Option by Holder, if the Company
and X.X. Xxxxxxxxxx enter into an agreement (an "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.
[Remainder of Page Intentionally Left Blank]
-14-
IN WITNESS WHEREOF, the Company has caused this Purchase
Option to be signed by its duly authorized officer as of the ___ day of
__________, 2006.
HARBOR BUSINESS ACQUISITION CORP.
By:______________________________
Name: X. Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer
-15-
Form to be used to exercise Purchase Option
Harbor Business Acquisition Corp.
--------------------------------
--------------------------------
Date:_________________, 200__
The undersigned hereby elects irrevocably to exercise all or a
portion of the within Purchase Option and to purchase ____ Units of Harbor
Business Acquisition Corp. 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__________________________________________________________
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.
-16-
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 Harbor Business Acquisition Corp. (the
"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-
