EXHIBIT 10.1
October 12, 2007
Great Point Partners LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
By this letter agreement (this "Agreement"), for good and valuable
consideration, subject to the terms and conditions set forth herein, each of the
undersigned severally and not jointly grants you (which term as used herein
shall mean the addressee and any affiliated funds) an option to acquire up to
the number of shares of Common Stock, par value $.0001 per share (the "Common
Stock") of HAPC, Inc. (the "Company") set forth below the undersigned's name
below, for an aggregate purchase price of $1.00 (the "Options").
CONDITIONS PRECEDENT TO EXERCISE OF OPTIONS
You shall be entitled to exercise the Options upon the satisfaction of
each of the following conditions:
(i) On October 12, 2007, you shall have placed a buy order (the
"Buy Order") with FTN Midwest Securities Corp. ("FTN") 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
approved by the requisite vote of the holders of Common Stock
and such acquisition shall be consummated.
(iii) 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 Options may be exercised in whole, but not in part, for a number of
shares of Common Stock 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 Annual Meeting,
times (B) 0.5. on any day after the conditions precedent set forth above have
been satisfied. In order to exercise the Options, you shall deliver written
notice to the undersigned c/o FTN Midwest Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, setting forth the number of Options to
be exercised and the proposed closing date (the "Closing Date") which shall be
at least three business days subsequent to the date of such notice. On such
Closing Date, the undersigned shall deliver to you certificates representing the
shares of Common Stock subject to the Options, together with appropriate stock
transfer forms and you shall deliver full payment for such shares 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.
In the event the number of shares of Common Stock subject to the
Options is less than 1,500,000, the shares subject to the Options of each of the
undersigned shall be reduced pro rata. In no event, however, shall you be
entitled to receive more than 1,500,000 shares of Common Stock upon your
exercise of the Options.
The obligations of the undersigned to you under this Agreement are
several and not joint. In the event one or more of the undersigned fails to
deliver to you certificates representing the appropriate number of shares of
Common Stock subject to the Options, together with appropriate stock transfer
forms, upon the Closing Date, none of the other undersigned parties hereto shall
be in any way be responsible for or liable to you for such default hereunder.
REGISTRATION RIGHTS
By this Agreement, each of the undersigned hereby assigns to you,
effective as of the Closing Date, all of undersigned's rights pursuant to the
Registration Rights Agreement, dated as of April 11, 2006 with the Company, with
respect to the shares of Common Stock to be purchased by you pursuant to the
Options.
Each of the undersigned undertakes to cause the Registration Rights
Agreement to be amended no later than October 17, 2007 to provide that:
(i) you shall be a named party thereto and both the Common Stock
acquired by you pursuant to the Options, the warrants (the
"Warrants') and the Common Stock to be acquired by you upon
the exercise of the warrants transferred to you by FTN
pursuant to your agreement with FTN dated the date hereof (the
"Warrant Shares") shall be Registrable Securities thereunder;
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(ii) you shall be entitled to one demand right, which may be
exercised at any time immediately after the exercise of the
Options with respect to the registration of the shares of
Common Stock subject to the Options, and to one demand right
with respect to the registration of the Warrants and the
Warrant Shares;
(iii) notwithstanding the fact that you own less than 50% of the
Registrable Securities, the Company shall be required to honor
your demand rights with respect to Registrable Securities;
(iv) the Company will use its commercially reasonable efforts to
have each registration statement filed pursuant to your demand
declared effective within 90 days of the demand, if not
reviewed by the U.S. Securities and Exchange Commission (the
"SEC") or within 180 days of the demand (in the event of a
full review by the SEC);
(v) you shall have priority over the undersigned with respect to
any underwriter cutbacks;
(vi) the Company will keep each registration statement filed
pursuant to your demand effective for 3 years; and
(vii) provide for any other amendments thereto necessary to effect
the intent of the foregoing.
REPRESENTATIONS AND WARRANTIES
Each of the undersigned, severally and not jointly, represents and
warrants to you as of the date of this Agreement and the Closing Date the
following:
(i) On the date hereof (except in the case of Messrs. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇) each of the undersigned is, and on the Closing Date
each of the undersigned will be, the record and beneficial
owner of and has or will have good and valid title to the
shares of Common Stock 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 shares of Common Stock
subject to the Option are not subject 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 Common Stock subject to the Option;
(ii) Each of the undersigned has the right, power and authority to
enter into this Agreement, and on the Closing Date each will
have the right, power and authority and to sell, assign and
transfer the shares of Common Stock subject to the Option;
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(iii) the entry into this Agreement and the sale of the Common Stock
subject to the Option 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 shares of Common Stock subject to the Option are
subject to, or (B) violate any law, order, decree, judgment,
injunction or other action; and
(iv) the shares of Common Stock subject to the Option are not
subject to any voting agreements, voting trusts or similar
arrangements.
Additionally, each of the undersigned hereby acknowledges to you that he is
sophisticated and knowledgeable with respect to the transactions contemplated by
this Agreement and has such information as he deems appropriate under the
circumstances to make an informed decision regarding the transactions
contemplated by this Agreement. Each of the undersigned hereby agrees that he
has made his own independent analysis and decision to enter into the
transactions contemplated by this Agreement, based on such information as each
of 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).
LOCK-UP AGREEMENT
Concurrently with the execution and delivery hereof, ▇▇▇▇ ▇▇▇▇▇▇▇▇ has
delivered to you a lock-up agreement duly executed by him. Such lock-up
agreement, however, shall not become effective until the Closing Date. ▇▇.
▇▇▇▇▇▇▇▇ further represents and warrants to you that he has all requisite right,
authority and power to execute such lock-up agreement and that upon its
effectiveness such agreement will be a valid and binding agreement enforceable
against him in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditor's rights in general and by general principles of equity.
BOARD REPRESENTATION AGREEMENT
Concurrently with the execution and delivery hereof, the undersigned
has delivered to you an agreement of the Company providing you the right to
designate one nominee for the Board of Directors of the Company, and to have
observation rights prior to such designation. Such agreement, however, shall not
become effective until the Closing Date.
OPTIONEE'S REPRESENTATIONS AND WARRANTIES
You hereby represent and warrant to each of 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 Options and the Common
Stock underlying the Options 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
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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.
(iii) The Options and the Common Stock underlying the Options are being
purchased for your own investment and you have not offered or sold any portion
of the Options being acquired, nor do you have any present intention of selling,
distributing or otherwise disposing of the Options or Common Stock underlying
the Options, 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 Options and the Common Stock underlying the Options
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 Options.
(v) You are aware that you may be required to bear the economic risk of
an investment in the Common Stock underlying the Options 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
Common Stock underlying the Options 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."
VOTING INTENT
You hereby represent and warrant to each of the undersigned that it is
your present intention, as of the date hereof, to vote, or cause to be voted,
all Purchased Shares in favor of the Company's acquisition of InfuSystem, Inc.
at the Annual Meeting. However, the undersigned acknowledge that you reserve the
right to vote, or cause to be voted, all Purchased Shares against the Company's
acquisition of InfuSystem, Inc. at the Annual Meeting.
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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 you a reasonable opportunity to
review such disclosure in advance of its filing with the SEC and distribution to
the Company's stockholders.
(ii) ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be responsible for the reasonable
out-of-pocket fees and expenses incurred by you in connection with the
transactions contemplated hereby in an amount not to exceed $200,000. You shall
provide documentary support for all reimbursable expenses.
(iii) Neither this Agreement, the Options, 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.
(iv) 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.
(v) 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.
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Please acknowledge your agreement to the terms set forth herein by
executing this Agreement where indicated.
Very truly yours,
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
765,956 shares of Common Stock
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇▇
159,575 shares of Common Stock
/s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇
255,319 shares of Common Stock
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
159,575 shares of Common Stock
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
159,575 shares of Common Stock
ACCEPTED AND AGREED:
GREAT POINT PARTNERS LLC
By:/s/ ▇▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇
Title: Principal
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