Exhibit 4.4


 


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)
MORGAN JOSEPH & CO. INC. (“MORGAN JOSEPH”),
OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II)
A BONA FIDE OFFICER OR PARTNER OF MORGAN JOSEPH OR OF ANY SUCH UNDERWRITER OR
SELECTED DEALER.


 


THIS PURCHASE
OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION BY HD PARTNERS
ACQUISITION CORPORATION (“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 (DEFINED HEREIN))
OR                           ,
2007. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME,                       ,
2011.


 


UNIT PURCHASE OPTION


 


FOR THE PURCHASE OF


 


1,000,000 UNITS


 


OF


 


HD PARTNERS ACQUISITION CORPORATION


 


1.                                       Purchase Option.


 


THIS CERTIFIES
THAT, in consideration of $100.00 duly paid by or on behalf of Morgan Joseph or
its designee (“Holder”),
as registered owner of this Purchase Option, to HD Partners Acquisition
Corporation (“Company”), Holder is entitled,
at any time or from time to time upon the later of the consummation of a
Business Combination or               
    , 2007 (“Commencement Date”),
and at or before 5:00 p.m., New York City local time,               
    , 2011 (“Expiration Date”),
but not thereafter, to subscribe for, purchase and receive, in whole or in
part, up to One Million (1,000,000) units (“Units”)
of the Company, each Unit consisting of one share of common stock of the
Company, par value $0.001 per share (“Common Stock”),
and two warrants (“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 (“Offering”). Each Warrant is
the same as the warrants included in the Units being registered for sale to the
public by way of the Registration Statement (“Public
Warrants”), except that the warrants included in the option have
an exercise price of $6.25.  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 $7.50 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 local 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 (“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 except
pursuant to an effective registration statement under the Act, or pursuant to
an exemption from registration under the Act and applicable state law.”


 


2.3                                 Cashless
Exercise.


 


2.3.1                        Determination
of Amount. 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 (“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 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). 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 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) the Current Market Price of the
Common Stock multiplied by the number of shares of Common Stock underlying the
Warrants and the Common Stock issuable upon exercise of one Unit.


 


2





















 


The “Current
Market Price” of a share of Common Stock shall mean (i) if the Common
Stock is listed on a national securities exchange or quoted on the Nasdaq
National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or
successor such as the Bulletin Board Exchange), the last sale price on the
trading day preceding the date in question of the Common Stock in the principal
trading market for the Common Stock as reported by the exchange, Nasdaq or the
NASD, as the case may be; (ii) if the Common Stock is not listed on a
national securities exchange or quoted on the Nasdaq National Market, Nasdaq
SmallCap Market or the NASD OTC Bulletin Board (or successor such as the
Bulletin Board Exchange), but is traded in the residual over-the-counter
market, the closing bid price for the Common Stock 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.


 


2.3.2                        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.


 


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) Morgan Joseph or an underwriter or
a selected dealer in connection with the Offering, or (ii) a bona fide
officer or partner of Morgan Joseph 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
DLA Piper Rudnick Gray Cary US LLP 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


 


3





















 


effective by the Securities and Exchange Commission (the “Commission”) and compliance with
applicable state securities law has been established.


 


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 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 (“Initial
Demand Notice”) of the Holder(s) of at least 51% of the Purchase
Options and/or the underlying Units and/or the underlying securities (“Majority Holders”), agrees to
register (the “Demand Registration”)
under the Act 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 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, subject to Section 5.1.4.


 


4





















 


5.1.2                        Effective
Registration. A registration will not count as a Demand Registration until
the registration statement filed with the Commission with respect to such Demand
Registration has been declared effective and the Company has complied with all
of its obligations under this Agreement with respect thereto; provided,
however, that if, after such registration statement has been declared
effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the registration
statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until, (i) such stop order or
injunction is removed, rescinded or otherwise terminated, and (ii) a
majority-in-interest of the Demanding Holders thereafter elect to continue the
offering.


 


5.1.3                        Underwritten
Offering. If the Majority Holders so elect and such holders so advise the
Company as part of the Initial Demand Notice, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Majority
Holders.


 


5.1.4                        Reduction
of Offering. If the managing underwriter or underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the
Demanding Holders in writing that the dollar amount or number of shares of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other shares of Common Stock or other securities which the
Company desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other stockholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as
applicable, the “Maximum Number of Shares”),
then the Company shall include in such registration: (i) first, the
Registrable Securities as to which Demand Registration has been requested by
the Demanding Holders (pro rata in accordance with the number of shares that
each such Person has requested be included in such registration, regardless of
the number of shares held by each such Person (such proportion is referred to
herein as “Pro Rata”)) that can be sold
without exceeding the Maximum Number of Shares; (ii) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (i), 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; (iii) third, to the extent that the Maximum Number of Shares has
not been reached under the foregoing clauses (i) and (ii), the shares of
Common Stock or other securities registrable pursuant to the terms of the
Registration Rights Agreement between the Company and the initial investors in
the Company, dated as of               
    , 200   (the “Registration
Rights Agreement” and such registrable securities, the “Investor Securities”) as to which “piggy-back”
registration has been requested by the holders thereof, Pro Rata, that can be
sold without exceeding the Maximum Number of Shares; and (iv) fourth, to
the extent that the Maximum Number of Shares have not been reached under the
foregoing clauses


 


5





















 


(i), (ii), and (iii), the shares of Common Stock or other securities
for the account of other persons that the Company is obligated to register
pursuant to written contractual arrangements with such persons and that can be
sold without exceeding the Maximum Number of Shares.


 


5.1.5                        Withdrawal.
If a majority-in-interest of the Demanding Holders disapprove of the terms of
any underwriting or are not entitled to include all of their Registrable
Securities in any offering, such majority-in-interest of the Demanding Holders
may elect to withdraw from such offering by giving written notice to the
Company and the underwriter or underwriters of their request to withdraw prior
to the effectiveness of the registration statement filed with the Commission
with respect to such Demand Registration. If the majority-in-interest of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then such registration shall not count as a Demand Registration
provided for in Section 5.1.


 


5.1.6                        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 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 nine consecutive months from the effective
date of such registration statement or post-effective amendment.


 


5.2                                 Piggy-Back
Registration.


 


5.2.1                        Piggy-Back
Rights. If at any time during the seven year period commencing on the
Effective Date the Company proposes to file a registration statement under the
Act with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for stockholders of the
Company for their account (or by the Company and by stockholders of the Company
including, without limitation, pursuant to Section 5.1), other than a
registration statement (i) filed in connection with any employee stock
option or other benefit plan, (ii) for an exchange offer or offering of
securities solely to the Company’s existing stockholders, (iii) for an
offering of debt that is convertible into equity securities of the Company or (iv) for
a dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than ten (10) days before the anticipated
filing date, which notice shall describe the amount and type of securities to
be included in such offering, the intended method(s) of distribution, and the
name of the proposed managing underwriter or underwriters, if any, of the
offering, and (y) offer to the holders of Registrable Securities in such notice
the opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within five (5)


 


6





















 


days following receipt of such notice (a “Piggy-Back
Registration”). The Company shall cause such Registrable
Securities to be included in such registration and shall use its best efforts
to cause the managing underwriter or underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration on the same terms and conditions as any similar
securities of the Company and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method(s) of
distribution thereof. All holders of Registrable Securities proposing to
distribute their securities through a Piggy-Back Registration that involves an
underwriter or underwriters shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such Piggy-Back
Registration.


 


5.2.2                        Reduction
of Offering. If the managing underwriter or underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number
of shares of Common Stock which the Company desires to sell, taken together
with shares of Common Stock, if any, as to which registration has been demanded
pursuant to written contractual arrangements with persons other than the
holders of Registrable Securities hereunder, the Registrable Securities as to
which registration has been requested under this Section 5.2, and the
shares of Common Stock, if any, as to which registration has been requested
pursuant to the written contractual piggy-back registration rights of other
stockholders of the Company, exceeds the Maximum Number of Shares, then the
Company shall include in any such registration:


 


(a)                                  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 or other securities, if any,
comprised of Registrable Securities and Investor Securities, as to which
registration has been requested pursuant to the applicable written contractual
piggy-back registration rights of such security holders, Pro Rata, 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 shares of Common Stock or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual piggy-back registration rights with
such persons and that can be sold without exceeding the Maximum Number of
Shares;


 


(b)                                 If
the registration is a “demand” registration undertaken at the demand of holders
of Investor Securities, (A) first, the shares of Common Stock or other
securities for the account of the demanding persons, Pro Rata, 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; (C) third, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A) and (B), the shares of
Registrable Securities, Pro Rata, as to which registration has been requested
pursuant to the terms hereof, that can be sold without exceeding the Maximum
Number of Shares; 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 or other securities for the account of other persons
that the Company is


 


7





















 


obligated to register pursuant to written contractual arrangements with
such persons, that can be sold without exceeding the Maximum Number of Shares;
and


 


(c)                                  If
the registration is a “demand” registration undertaken at the demand of persons
other than either the holders of Registrable Securities or of Investor
Securities, (A) first, the shares of Common Stock or other securities 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; (C) third,
to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), collectively the shares of Common Stock or
other securities comprised of Registrable Securities and Investor Securities,
Pro Rata, as to which registration has been requested pursuant to the terms
hereof and of the Registration Rights Agreement, as applicable, that can be
sold without exceeding the Maximum Number of Shares; 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 or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual arrangements with such persons, that
can be sold without exceeding the Maximum Number of Shares.


 


5.2.3                        Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s
request for inclusion of Registrable Securities in any Piggy-Back Registration
by giving written notice to the Company of such request to withdraw prior to
the effectiveness of the registration statement. The Company (whether on its
own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses
incurred by the holders of Registrable Securities in connection with such
Piggy-Back Registration as provided in Section 5.2.4.


 


5.2.4                        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 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.


 


8





















 


5.3                                 Damages.
Should the registration or the effectiveness thereof required by Sections 5.1
and 5.2 hereof be delayed by the Company or the Company otherwise fails to
comply with such provisions, the Company shall, in addition to any other
equitable or other relief available to the Holder(s), be liable for any and all
incidental, special and consequential damages sustained by the Holder(s),
including, but not limited to, the loss of any profits that might have been
received by the holder upon the sale of shares of Common Stock or Warrants (and
shares of Common Stock underlying the Warrants) underlying this Purchase
Option.


 


5.4                                 General
Terms.


 


5.4.1                        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 (“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 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 5
of the Underwriting Agreement between the Company, Morgan Joseph 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.


 


5.4.2                        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.


 


5.4.3                        Documents Delivered to
Holders. The Company shall furnish Morgan Joseph, 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


 


9





















 


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 Morgan Joseph, 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 Morgan Joseph, 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. (“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 Morgan Joseph, as representative of the Holders, shall
reasonably request. The Company shall not be required to disclose any
confidential information or other records to Morgan Joseph, 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.


 


5.4.4                        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.


 


5.4.5                        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 for the
registration of Registrable Securities held by any Holder (i) where such
Holder would then be


 


10





















 


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 then 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).


 


5.4.6                        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 Holder’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.


 


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 $7.50 per whole Unit (each Warrant
underlying the Units is exercisable for $6.25 per share), upon effectiveness of
the dividend, this Purchase Option will be adjusted to allow for the purchase
of one Unit at $7.50 per Unit, each Unit entitling the holder to receive two
shares of Common Stock and four Warrants (each Warrant exercisable for $3.125
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


 


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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.


 


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.


 


6.1.5                        Adjustments
of Warrants. To the extent the price of the Warrants are lowered pursuant
to Section 3.1 of the Warrant
Agreement, dated               ,
200  , between the Company and American Stock Transfer & Trust
Company (the “Warrant Agreement”)
the price of the Warrants underlying the Purchase Option shall be reduced on
identical percentage terms, subject to any limitations and conditions
that may be imposed by NASD Corporate Financing Rule 2710.  To the extent the duration of the
Warrants is extended pursuant to Section 3.2 of the Warrant
Agreement, the duration of the Warrants underlying the Purchase Option shall be
extended on identical terms, subject to any limitations that may be imposed by
NASD Corporate Financing Rule 2710.


 


6.2                                 [Intentionally
Omitted]


 


6.3                                 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


 


12





















 


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.


 


6.4                                 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 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, (iii) Warrants issuable
upon exercise of the Purchase Options and (iv) 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 National
Market, SmallCap Market, OTC Bulletin Board or any successor trading market) on
which the Units, the Common Stock or the Public Warrants issued to the public
in connection herewith may then be listed and/or quoted.


 


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


 


13





















 


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 payable otherwise than in cash, or a
cash dividend or distribution payable otherwise than out of retained earnings,
as indicated by the accounting treatment of such dividend or distribution on
the books of the Company, 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 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 (“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, or mailed by express mail or private courier service:
(i) if to the registered Holder of the Purchase Option, to the address of
such Holder as shown on the books of the Company, or (ii) if to the
Company, to the following address or to such other address as the Company may
designate by notice to the Holders:


 


HD Partners
Acquisition Corporation


2610 Ocean
Park Boulevard, Suite 320


Santa Monica,
CA 90405


Attn:   Bruce
Lederman, Executive Vice President and Secretary


 


9.                                       Miscellaneous.


 


9.1                                 Amendments.
The Company and Morgan Joseph 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 Morgan Joseph may deem necessary or desirable and that the Company
and Morgan Joseph deem shall not adversely affect the interest of the Holders.
All other modifications or amendments shall require the written


 


14





















 


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.


 


9.3                                 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.


 


9.4                                 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.


 


9.5                                 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. The Company hereby agrees 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 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. The Company 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.


 


9.6                                 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 or non-compliance.


 


9.7                                 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


 


15





















 


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.


 


9.8                                 Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this
Purchase Option, Holder agrees that, at any time prior to the complete exercise
of this Purchase Option by Holder, if the Company and Morgan Joseph enter into
an agreement (“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.


 


IN WITNESS
WHEREOF, the Company has caused this Purchase Option to be signed by its duly
authorized officer as of the         
day of               
200  .


 


	
   

  	
  HD PARTNERS
  ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


16





















 


Form to be
used to exercise Purchase Option:


 


HD Partners
Acquisition Corporation


2610 Ocean
Park Boulevard, Suite 320


Santa Monica,
CA 90405


 


Date:                                  ,
200    


 


The
undersigned hereby elects irrevocably to exercise all or a portion of the
within Purchase Option and to purchase         
Units of HD Partners Acquisition Corporation 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” 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.


 


 


	
   

  	
   

  
	
   

  	
  NOTICE: The signature to this assignment must correspond with the
  name as written upon the face of the purchase option in every particular,
  without alteration or enlargement or any change whatever.

  



 


Signature(s)
Guaranteed:


 


	
   

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
  ELIGIBLE GUARANTOR

  INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT

  UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM,

  PURSUANT TO S.E.C. RULE 17Ad-15).

  



 


 


INSTRUCTIONS FOR REGISTRATION
OF SECURITIES


 


 


	
  Name

  
	
   

  	
   

  	
   

  



 


(Print in Block Letters)


 


	
  Address

  
	
   

  	
   

  	
   

  



 


17





















 


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 HD Partners Acquisition Corporation (“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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: The signature to this assignment must correspond with the
  name as written upon the face of the purchase option in every particular,
  without alteration or enlargement or any change whatever.

  
	
   

  	
   

  
	
  Signature(s) Guaranteed:

  
	
   

  	
   

  
	
  THE
  SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION

  (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH

  MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO

  S.E.C. RULE 17Ad-15).

  
				



 


18