Exhibit
A
Subscription
Agreement
Harris
& Harris Group, Inc.
111
West
57th Street, Suite 1100
New
York,
New York 10019
Ladies
and Gentlemen:
The
undersigned (the “Investor”)
hereby
confirms and agrees with you as follows:
1.
The
subscription terms set forth herein (this “Subscription”)
are
made as of the date set forth below between Harris & Harris Group, Inc., a
corporation organized and existing under the laws of the State of New York
(the
“Company”),
and
the Investor.
2.
As
of the
Closing (as defined below) and subject to the terms and conditions hereof,
the
Company and the Investor agree that the Investor will purchase from the Company,
and the Company will issue and sell to the Investor, such number of shares
of
common stock, par value $0.01 per share, of the Company (the “Common
Stock”)
as is
set forth on the signature page hereto (the “Signature
Page”)
for a
purchase price of $ per share (the “Shares”).
The
Investor acknowledges that the offering is not a firm commitment underwriting
and that there is no minimum offering amount.
3.
The
completion of the purchase and sale of the Shares shall occur at a closing
(the
“Closing”)
which
is expected to occur on or about June 20, 2007. At the Closing, (a) the Company
shall cause its transfer agent to release to the Investor the number of Shares
being purchased by the Investor and (b) the aggregate purchase price for the
Shares being purchased by the Investor will be delivered by or on behalf of
the
Investor to the Company.
The
provisions set forth in Exhibit
A
hereto
shall be incorporated herein by reference as if set forth fully
herein.
4.
The
offering and sale of the Shares are being made pursuant to the Registration
Statement and the Prospectus (as such terms are defined below). The Investor
acknowledges that the Company intends to enter into subscriptions in
substantially the same form as this Subscription with certain other investors
and intends to offer and sell (the “Offering”)
up to
an aggregate of shares of Common Stock
pursuant to the Registration Statement and Prospectus. The Company may accept
or
reject this Subscription or any one or more other subscriptions with other
investors in its sole discretion.
5.
The
Company has filed or shall file with the Securities and Exchange Commission
(the
“Commission”)
a
prospectus (the “Base
Prospectus”),
a
preliminary prospectus supplement (the “Preliminary
Prospectus”)
and a
final prospectus supplement (collectively, the “Prospectus")
with
respect to the registration statement (File No. 333-138996) (the “Registration
Statement”)
reflecting the Offering, including all amendments thereto, the exhibits and
any
schedules thereto, the documents otherwise deemed to be a part thereof or
included therein by the rules and regulations of the Commission (the
“Rules
and Regulations”)
in
conformity with the Securities Act of 1933, as amended (collectively with the
Rules and Regulations, the “Securities
Act”),
including Rule 497 thereunder. The Investor hereby confirms that it has had
full
access to the Registration Statement, the Base Prospectus, the Preliminary
Prospectus, and the Company’s periodic reports and other information
incorporated by reference therein, and was able to read, review, download,
and
print such materials.
6.
The
Company has entered into a Placement Agency Agreement (the “Placement
Agreement”),
dated
June 15, 2007, with Global Crown Capital, LLC (the “Placement
Agent”),
which
will act as the Company’s placement agent with respect to the Offering and
receive a fee in connection with the sale of the Shares. The Investor shall
be a
third party beneficiary to the representations, warranties and covenants as
set
forth in Sections 2 and 4 of the Placement Agreement. Capitalized terms used,
but not otherwise defined, herein shall have the meanings ascribed to such
terms
in the Placement Agreement.
7.
The
obligations of the Company and the Investor to complete the transactions
contemplated by this Subscription shall be subject to the following:
a.
The
Company’s obligation to issue and sell the Shares to the Investor shall be
subject to: (i) the acceptance by the Company of this Subscription (as may
be
indicated by the Company’s execution of the Signature Page hereto), (ii) the
receipt by the Company of the purchase price for the Shares being purchased
hereunder as set forth on the Signature Page, and (iii) the accuracy of the
representations and warranties made by the Investor and the fulfillment of
those
undertakings of the Investor to be fulfilled prior to the Closing Date.
b.
The
Investor’s obligation to purchase the Shares will be subject to the condition
that the Placement Agent shall not have: (i) terminated the Placement Agreement
pursuant to the terms thereof or (ii) determined that the conditions to closing
in the Placement Agreement have not been satisfied.
8.
The
Company hereby makes the following representations, warranties, and covenants
to
the Investor:
a.
The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Subscription and otherwise
to
carry out its obligations hereunder. The execution and delivery of this
Subscription by the Company and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary corporate
action on the part of the Company. This Subscription, when accepted by the
Company, shall have been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
b.
The
Company shall (i) before the opening of trading on the NASDAQ Global Market
on
the next trading day after the Pricing, file a Form 8-K, disclosing all material
aspects of the transactions contemplated hereby and (ii) make such other filings
and notices in the manner and time required by the Commission with respect
to
the transactions contemplated hereby. The Company shall not identify the
Investor by name in any press release or public filing, or otherwise publicly
disclose the Investor’s name, without the Investor’s prior written consent,
unless required by law or the rules and regulations of any self-regulatory
organization or governmental authority to which the Company or its securities
are subject.
9.
The
Investor hereby makes the following representations, warranties, and covenants
to the Company:
a.
The
Investor represents that (i) it has had full access to the Registration
Statement, the Base Prospectus, the Preliminary Prospectus, and the Company’s
periodic reports and other information incorporated by reference therein, prior
to or in connection with its receipt of this Subscription, (ii) it is
knowledgeable, sophisticated, and experienced in making, and is qualified to
make, decisions with respect to investments in securities representing an
investment decision like that involved in the purchase of the Shares, (iii)
it
does not have any agreement or understanding, directly or indirectly, with
any
person or entity to distribute any of the Shares, and (iv) it is not an
affiliate of the Company as that term is defined under Rule 501(b) of the
Securities Act.
b.
The
Investor has the requisite power and authority to enter into this Subscription
and to consummate the transactions contemplated hereby. The execution and
delivery of this Subscription by the Investor and the consummation by it of
the
transactions contemplated hereunder have been duly authorized by all necessary
action on the part of the Investor. This Subscription has been executed by
the
Investor and, when delivered in accordance with the terms hereof, will
constitute a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as such enforceability may
be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
c.
The
Investor understands that nothing in this Subscription or any other materials
presented to the Investor in connection with the purchase and sale of the Shares
constitutes legal, tax, or investment advice. The Investor has consulted such
legal, tax, and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Shares.
d.
Neither the Investor nor any Person acting on behalf of, or pursuant to any
understanding with or based upon any information received from, the Investor
has, directly or indirectly, engaged in any purchases or sales of the securities
of the Company (including, without limitation, any Short Sales involving the
Company’s securities) since the earlier to occur of (i) the time that the
Investor was first contacted by the Placement Agent or the Company with respect
to the transactions contemplated hereby and (ii) the date that is the tenth
(10th) trading day prior to the date the Investor executes this Subscription.
“Short Sales” include, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Securities Exchange Act of 1934,
as amended (the “Exchange
Act"),
whether or not against the box, and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps,
“put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers.
The
Investor covenants that neither it, nor any Person acting on behalf of, or
pursuant to any understanding with or based upon any information received from,
the Investor will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated
by
this Subscription are publicly disclosed.
e.
The
Investor represents that, except as set forth below, (i) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (ii) it is
not
a, and it has no direct or indirect affiliation or association with any, NASD
member or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the date the Investor
executes this Subscription, and (iii) neither it nor any group of investors
(as
identified in a public filing made with the Commission) of which it is a member,
acquired, or obtained the right to acquire, 20% or more of the Common Stock
(or
securities convertible or exercisable for Common Stock) or the voting power
of
the Company on a post-transaction basis. Exceptions:
(If
no
exceptions, write “none.” If left blank, response will be deemed to be “none.”)
f.
The
Investor, if outside the United States, will comply with all applicable laws
and
regulations in each foreign jurisdiction in which it purchases, offers, sells,
or delivers Shares or has in its possession or distributes any offering
material, in all cases at its own expense.
10.
Notwithstanding
any investigation made by any party to this Subscription, all covenants,
agreements, representations, and warranties made by the Company and the Investor
herein will survive the execution of this Subscription, the delivery to the
Investor of the Shares being purchased, and the payment therefor.
11.
This
Subscription may not be modified or amended except pursuant to an instrument
in
writing signed by the Company and the Investor.
12.
In
case
any provision contained in this Subscription should be invalid, illegal, or
unenforceable in any respect, the validity, legality, and enforceability of
the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
13.
This
Subscription will be governed by, and construed in accordance with, the internal
laws of the state of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.
14.
This
Subscription may be executed in one or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts
have
been signed by each party hereto and delivered to the other parties.
15.
The
Investor acknowledges and agrees that such Investor’s receipt of the Company’s
counterpart to this Subscription shall constitute written confirmation of the
Company’s sale of Shares to such Investor.
16.
In
the
event that the Placement Agreement is terminated by the Placement Agent pursuant
to the terms thereof, this Subscription shall terminate without any further
action on the part of the parties hereto.
INVESTOR
SIGNATURE PAGE
Number
of Shares:
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Purchase
Price Per Share:
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Aggregate
Purchase Price:
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Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
Dated
as
of: June ____, 2007
Name
in which Shares are to be registered:
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Mailing
Address:
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Taxpayer
Identification Number: |
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Agreed
and Accepted this ___day of June 2007:
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HARRIS
& HARRIS GROUP, INC.
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By:
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Title:
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The
sale of the shares purchased hereunder was made pursuant to a registration
statement or in a transaction in which a final prospectus would have been
required to have been delivered in the absence of Rule 172 promulgated under
the
Securities Act.
EXHIBIT
A
TO
BE COMPLETED BY INVESTOR
Delivery
by electronic book-entry at The Depository Trust Company (“DTC”),
registered in the Investor’s name and address as set forth on the Signature Page
of the Subscription to which this Exhibit
A
is
attached, and released by American Stock Transfer & Trust Company, the
Company’s transfer agent (the “Transfer
Agent”),
to
the Investor at the Closing.
Name
of DTC Participant (broker-dealer
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at
which the account or accounts to be
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credited
with the Shares are maintained)
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DTC
Participant Number
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Name
of Account at DTC Participant
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being
credited with the Shares
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Account
Number at DTC Participant
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being
credited with the Shares
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NO
LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE SUBSCRIPTION TO
WHICH
THIS EXHIBIT
A
IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR
SHALL:
(I) DIRECT
THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE
SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”)
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES, AND
(II) REMIT
BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE
PURCHASE
PRICE
FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT
:
Institution:
Citibank N.A.
260
California Street
San
Francisco, CA 94111
ABA
Routing Number:
Acct
Name: Global Crown Capital, LLC
Acct
No.
Such
funds shall be held in escrow pursuant to an escrow agreement entered into
between Citibank, N.A. (the “Escrow
Agent”)
and
the Placement Agent (the “Escrow
Agreement”)
until
the Closing and delivered by the Escrow Agent on behalf of the Investor to
the
Company upon the satisfaction, in the sole judgment of the Company, of the
conditions set forth in Section 7(b) of the Subscription to which this
Exhibit
A
is
attached. The Company and the Investor agree to indemnify and hold the Escrow
Agent harmless from and against any and all losses, costs, damages, expenses,
and claims (including, without limitation, court costs and reasonable attorneys
fees) (“Losses”)
with
respect to the funds held in escrow pursuant hereto or arising under the Escrow
Agreement, unless it is finally determined that such Losses resulted directly
from the willful misconduct or gross negligence of the Escrow Agent. Anything
in
this paragraph to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for any special, indirect, or consequential loss or damage
of
any kind whatsoever (including but not limited to lost profits), even if the
Escrow Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.