Common use of Option Transaction Clause in Contracts

Option Transaction. The Option may be exercised only if (a) the Company is engaged in or proposes to engage in a transaction in which any shares, notes, or other securities will be issued to such Holder in a transaction constituting a "sale" within the meaning of Section 2(3) of the Securities Act (whether through a merger, consolidation, exchange, or purchase), (b) the Holder is not an Accredited Investor at the time of the respective transaction (an "Unaccredited Holder"), (c) no security holder (except for such Unaccredited Holder or any other person granting a similar option to HMTF) of the Company involved in the respective transaction fails at the time of such transaction to qualify as an Accredited Investor, and (d) the issuer of the shares, notes, or other securities involved in such transaction (as conclusively evidenced by any notice signed in good faith by an executive officer or other authorized representative of HMTF) has not prepared and is not expected to prepare in connection with such transaction appropriate disclosure documents that are sufficient to register such shares, notes, or other securities under the Securities Act or to exempt such registration in accordance with Regulation D. Each transaction for which the Option may be exercised as provided in this Section 6.2.2 is herein referred to as an "Option Transaction."