Exhibit 4.5
WARRANT AGREEMENT
Agreement made as of
, 2006 between Rhapsody Acquisition Corp., a Delaware corporation,
with offices at 10 East 53 rd Street, 35 th Floor, New York, New York 10022
(“Company”), and Continental Stock Transfer &
Trust Company, a New York corporation, with offices at 17 Battery
Place, New York, New York 10004 (“Warrant
Agent”).
WHEREAS, the Company has received
binding commitments from Eric S. Rosenfeld, Leonard B. Schlemm, Jon
Bauer, Colin D. Watson and Gotham Capital V (collectively, the
“Insiders”) to purchase an aggregate of 1,136,364
warrants (“Insider Warrants”); and
WHEREAS, the Company is engaged in a
public offering (“Public Offering”) of units
(“Units”) and, in connection therewith, has determined
to issue and deliver up to (i) 5,175,000 Warrants
(“Public Warrants”) to the public investors, and
(ii) 450,000 Warrants to EarlyBirdCapital, Inc.
(“EBC”) or its designees (“Representative’s
Warrants” and, together with the Public Warrants and Insider
Warrants, the “Warrants”), each of such Warrants
evidencing the right of the holder thereof to purchase one share of
the Company’s common stock, par value $.0001 per share
(“Common Stock”), for $6.00, subject to adjustment as
described herein; and
WHEREAS, the Company has filed with
the Securities and Exchange Commission a Registration Statement on
Form S-1, No. 333-
(“Registration Statement”), for the registration, under
the Securities Act of 1933, as amended (“Act”) of,
among other securities, the Warrants and the Common Stock issuable
upon exercise of the Warrants; and
WHEREAS, the Company desires the
Warrant Agent to act on behalf of the Company, and the Warrant
Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to
provide for the form and provisions of the Warrants, the terms upon
which they shall be issued and exercised, and the respective
rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have
been done and performed which are necessary to make the Warrants,
when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding
and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of
the mutual agreements herein contained, the parties hereto agree as
follows:
1. Appointment of Warrant
Agent . The Company hereby appoints the Warrant Agent to act as
agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this
Agreement.
2. Warrants .
2.1. Form of Warrant . Each
Warrant shall be issued in registered form only, shall be in
substantially the form of Exhibit A hereto, the provisions of which
are incorporated herein and shall be signed by, or bear the
facsimile signature of, the Chairman of the Board or President and
Treasurer, Secretary or Assistant Secretary of the Company and
shall bear a facsimile of the Company’s seal. In the event
the person whose facsimile signature has been placed upon any
Warrant shall have ceased to serve in the capacity in which such
person signed the Warrant before such Warrant is issued, it may be
issued with the same effect as if he or she had not ceased to be
such at the date of issuance.
2.2. Effect of
Countersignature . Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be
invalid and of no effect and may not be exercised by the holder
thereof.
2.3. Registration
.
2.3.1. Warrant Register . The
Warrant Agent shall maintain books (“Warrant
Register”), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance
of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective holders thereof in such
denominations and otherwise in accordance with instructions
delivered to the Warrant Agent by the Company.
2.3.2. Registered Holder .
Prior to due presentment for registration of transfer of any
Warrant, the Company and the Warrant Agent may deem and treat the
person in whose name such Warrant shall be registered upon the
Warrant Register (“registered holder”), as the absolute
owner of such Warrant
and of each Warrant represented thereby
(notwithstanding any notation of ownership or other writing on the
Warrant Certificate made by anyone other than the Company or the
Warrant Agent), for the purpose of any exercise thereof, and for
all other purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.
2.4. Detachability of
Warrants . The securities comprising the Units will not be
separately transferable until 90 days after the date hereof unless
EBC informs the Company of its decision to allow earlier separate
trading, but in no event will EBC allow separate trading of the
securities comprising the Units until the Company files a Current
Report on Form 8-K which includes an audited balance sheet
reflecting the receipt by the Company of the gross proceeds of the
Public Offering including the proceeds received by the Company from
the exercise of the Underwriter’s over-allotment option, if
the over-allotment option is exercised prior to the filing of the
Form 8-K.
2.5 Warrant Attributes . The
Insider Warrants and Representative’s Warrants shall have the
same terms and be in the same form as the Public
Warrants.
3. Terms and Exercise of
Warrants
3.1. Warrant Price . Each
Warrant shall, when countersigned by the Warrant Agent, entitle the
registered holder thereof, subject to the provisions of such
Warrant and of this Warrant Agreement, to purchase from the Company
the number of shares of Common Stock stated therein, at the price
of $6.00 per whole share, subject to the adjustments provided in
Section 4 hereof and in the last sentence of this
Section 3.1. The term “Warrant Price” as used in
this Warrant Agreement refers to the price per share at which
Common Stock may be purchased at the time a Warrant is exercised.
The Company in its sole discretion may lower the Warrant Price at
any time prior to the Expiration Date.
3.2. Duration of Warrants . A
Warrant may be exercised only during the period (“Exercise
Period”) commencing on the later of (i) the consummation
by the Company of a merger, capital stock exchange, asset
acquisition or other similar business combination (“Business
Combination”) (as described more fully in the Company’s
Registration Statement) and (ii)
, 2007, and terminating at 5:00 p.m., New York City time on the
earlier to occur of (i)
, 2010 or (ii) the date fixed for redemption of the Warrants
as provided in Section 6 of this Agreement (“Expiration
Date”). Except with respect to the right to receive the
Redemption Price (as set forth in Section 6 hereunder), each
Warrant not exercised on or before the Expiration Date shall become
void, and all rights thereunder and all rights in respect thereof
under this Agreement shall cease at the close of business on the
Expiration Date. The Company in its sole discretion may extend the
duration of the Warrants by delaying the Expiration
Date.
3.3. Exercise of Warrants
.
3.3.1. Payment . Subject to
the provisions of the Warrant and this Warrant Agreement, a
Warrant, when countersigned by the Warrant Agent, may be exercised
by the registered holder thereof by surrendering it, at the office
of the Warrant Agent, or at the office of its successor as Warrant
Agent, in the Borough of Manhattan, City and State of New York,
with the subscription form, as set forth in the Warrant, duly
executed, and by paying in full the Warrant Price for each full
share of Common Stock as to which the Warrant is exercised and any
and all applicable taxes due in connection with the exercise of the
Warrant, as follows:
(a) in cash, good certified check or
good bank draft payable to the order of the Company (or as
otherwise agreed to by the Company);
(b) in the event of redemption
pursuant to Section 6 hereof in which the Company’s
management has elected to force all holders of Warrants to exercise
such Warrants on a “cashless basis,” by surrendering
the Warrants for that number of shares of Common Stock equal to the
quotient obtained by dividing (x) the product of the number of
shares of Common Stock underlying the Warrants, multiplied by the
difference between the Warrant Price and the “Fair Market
Value” (defined below) by (y) the Fair Market Value.
Solely for purposes of this Section 3.3.1, the “Fair
Market Value” shall mean the average reported last sale price
of the Common Stock for the 10 trading days ending on the third
trading day prior to the date on which the notice of redemption is
sent to holders of Warrant pursuant to Section 6 hereof;
or
(c) with respect to any Insider
Warrants, in the event of redemption pursuant to Section 6
hereof other than as set forth in the above Section 3.3.1(b)
and so long as such Insider Warrants are held by the Insiders or
their affiliates, by surrendering such Insider Warrants for that
number of shares of Common Stock equal to the quotient obtained by
dividing (x) the product of the number of shares of Common
Stock underlying the Warrants, multiplied by the difference between
the exercise price of the Warrants and the “Fair Market
Value” by (y) the Fair Market Value.
3.3.2. Issuance of
Certificates . As soon as practicable after the exercise of any
Warrant and the clearance of the funds in payment of the Warrant
Price, the Company shall issue to the registered holder of such
Warrant a certificate or certificates for the number of full shares
of Common Stock to which he is entitled, registered in such name or
names as may be directed by him, her or it, and if such Warrant
shall not have been exercised in full, a new countersigned Warrant
for the number of shares as to which such Warrant shall not have
been exercised. Notwithstanding the foregoing, the Company shall
not be obligated to deliver any securities pursuant to the exercise
of a Warrant unless a registration statement under the Act with
respect to the Common Stock is effective. Warrants may not be
exercised by, or securities issued to, any registered holder in any
state in which such exercise would be unlawful.
3.3.3. Valid Issuance . All
shares of Common Stock issued upon the proper exercise of a Warrant
in conformity with this Agreement shall be validly issued, fully
paid and nonassessable.
3.3.4. Date of Issuance .
Each person in whose name any such certificate for shares of Common
Stock is issued shall for all purposes be deemed to have become the
holder of record of such shares on the date on which the Warrant
was surrendered and payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except
that, if the date of such surrender and payment is a date when the
stock transfer books of the Company are closed, such person shall
be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer
books are open.
3.3.5. Intentionally
Omitted.
4. Adjustments .
4.1. Stock Dividends -
Split-Ups . If after the date hereof, and subject to the
provisions of Section 4.6 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 of such stock
dividend, split-up or similar event, the number of shares of Common
Stock issuable on exercise of each Warrant shall be increased in
proportion to such increase in outstanding shares of Common
Stock.
4.2. Aggregation of Shares .
If after the date hereof, and subject to the provisions of Section
4.6, the number of outstanding shares of Common Stock is decreased
by a consolidation, combination, reverse
stock split or reclassification of shares of
Common Stock or other similar event, then, on the effective date of
such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common
Stock issuable on exercise of each Warrant shall be decreased in
proportion to such decrease in outstanding shares of Common
Stock.
4.3 Adjustments in Exercise
Price . Whenever the number of shares of Common Stock
purchasable upon the exercise of the Warrants is adjusted, as
provided in Section 4.1 and 4.2 above, the Warrant Price shall
be adjusted (to the nearest cent) by multiplying such Warrant Price
immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock
purchasable upon the exercise of the Warrants immediately prior to
such adjustment, and (y) the denominator of which shall be the
number of shares of Common Stock so purchasable immediately
thereafter.
4.4. 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 4.1 or 4.2 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 assets or other property of
the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the Warrant holders
shall thereafter have the right to purchase and receive, upon the
basis and upon the terms and conditions specified in the Warrants
and in lieu of the shares of Common Stock of the Compa
