Harbor Acquisition Corporation Signs Definitive Agreement to Acquire Elmet Technologies, Inc.

  
    
  
  
    
      Harbor Acquisition Corp. (AMEX: HAC, HAC-U, HAC-WT) (“Harbor”) 
      and Elmet Technologies, Inc. (“Elmet”) 
      of Lewiston, Maine, announced today that they have signed a definitive 
      Stock Purchase Agreement for Harbor to acquire Elmet for a combination 
      of cash and Harbor stock. Elmet is a privately held, fully-integrated 
      manufacturer of custom designed and engineered Advanced Enabling 
      Materials* products. The acquisition will provide Elmet with access to 
      additional capital to meet the anticipated increased market demand for 
      Elmet’s molybdenum and tungsten-based 
      component solutions for high technology OEM applications. Elmet’s 
      Advanced Enabling Materials products are used in flat-panel displays, 
      medical imaging devices, MP3 players and DVRs, as well as lighting 
      products.
    
    
      Following consummation of the acquisition, Elmet’s 
      current management team, led by Jack Jensen, CEO, will continue to lead 
      the organization, with the company’s 
      operations remaining in Lewiston.
    
    
      John Carson, Chairman of Harbor stated, “We 
      are very excited about this transaction due to Elmet’s 
      strong management team and growth potential. Since its management 
      buy-out in 2004, Elmet has focused on providing high-tech solutions to 
      its customers and is well-positioned to capitalize on the growth of the 
      Advanced Enabling Materials market.”
    
    
      Jack Jensen, CEO of Elmet, remarked, “Our 
      rapid growth and successes since becoming an independent company 
      encouraged us to seek a sophisticated financial partner that would 
      appreciate and support our strong culture of design, quality, and 
      customer service. Having access to capital through the public markets 
      with Harbor, along with our skilled and dedicated workforce and a 
      singular focus on continuing to implement Elmet’s 
      growth plan, provides us with the optimal alternative for assuring the 
      Company’s continued success in serving its 
      world-class set of customers.”
    
    
      Summary of the Transaction
    
    
      Under the terms of the acquisition agreement, Harbor will purchase Elmet 
      for an initial payment of approximately 2.191 million shares of Harbor 
      common stock and approximately $108.9 million in cash, which includes 
      repayment of Elmet’s existing 
      indebtedness, subject to certain closing adjustments and escrow funding.
    
    
      The Elmet stockholders will also be entitled to receive a potential 
      earnout payment of up to $28 million based on Elmet achieving minimum 
      EBITDA (as defined in the Stock Purchase Agreement) thresholds, payable 
      60% in cash and 40% in shares of Harbor common stock:
    
    
      
        Target EBITDA for the earnout in 2007 is $21 million (100% payout of 
        earnout amount), $18 million (50% payout of earnout amount), between 
        $18 and $21 million, the earnout is prorated.
      
      
        In the event the earnout is not fully earned in 2007, target EBITDA 
        for 2007/2008 combined is $39 million (100% payout of remaining 
        earnout amount), $37 million (50% payout of remaining earnout amount), 
        between $37 and $39 million, the remaining earnout is prorated.
      
    
    
      Following the completion of the transaction, the Harbor board of 
      directors will consist of eight members, four members who are current 
      directors of Harbor, two members from Elmet and two members to be 
      designated by Elmet and subject to Harbor’s 
      acceptance.
    
    
      The closing of the acquisition is subject to customary closing 
      conditions, including approval of the acquisition agreement by the 
      stockholders of Harbor. In addition, the closing is conditioned on 
      holders of less than 20% of the shares of Harbor common stock voting 
      against the acquisition and electing to convert their Harbor common 
      stock into cash from the trust fund established in connection with Harbor’s 
      initial public offering.
    
    
      Elmet Technologies, Inc. Overview
    
    
      Originally founded in 1929, Elmet became an independent company in late 
      2003 when its current CEO Jack Jensen led the management buyout of Elmet 
      from its former parent, Philips Electronics North America Corporation. 
      Under Jensen and his management team, Elmet has enjoyed growth by 
      providing innovative refractory metal solutions to OEMs serving such 
      industries as data storage, semiconductor, medical, electronics and 
      lighting. Elmet now employs approximately 230 highly-skilled sales, 
      design, engineering, and production professionals at its Lewiston, Maine 
      headquarters. Elmet’s products are typically 
      custom-engineered components used in products such as medical imaging 
      devices, silicon wafer chip manufacturing equipment, and specialty 
      commercial and residential lighting applications.
    
    
      Since 2003, the Company has streamlined its operations, focused its 
      engineering team on new product development, invested in advanced 
      technological equipment and shifted its product focus to high-value “mission 
      critical” consumable components. Elmet is 
      among the select few companies with the fully-integrated capability to 
      transform tungsten and molybedenum into engineered materials, which have 
      emerged as crucial components for key end market customers. The need to 
      optimize the performance of high-growth product categories, such as flat 
      panel displays, data storage devices, and medical imaging devices, is 
      the key driver in demand for these highly specialized Advanced Enabling 
      Materials.
    
    
      About Harbor Acquisition Corporation
    
    
      Based in Boston, Harbor is a publicly traded, special purpose 
      acquisition company (“SPAC”) 
      formed to invest in or acquire a manufacturer of industrial or consumer 
      products. The contemplated transaction is subject to shareholder 
      approval, along with certain regulatory approvals including the filing 
      of a proxy statement with the Securities and Exchange Commission. Upon 
      completion of the transaction, Harbor intends to change its corporate 
      name to Elmet Technologies Holdings, Inc.
    
    
      Forward Looking Statements
    
    
      This press release includes forward-looking statements within the 
      meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities 
      Act”), and Section 21E of the Securities 
      Exchange Act of 1934, as amended (the “Exchange 
      Act”). These forward-looking statements are 
      based on current expectations and projections about future events and no 
      party assumes an obligation to update any such forward-looking 
      statements. These forward-looking statements are subject to known and 
      unknown risks, uncertainties and assumptions about Harbor and Elmet that 
      may cause actual results to be materially different from any future 
      results expressed or implied by such forward-looking statements. In some 
      cases, you can identify forward-looking statements by terminology such 
      as “may,” “should,” 
      “could,” “would,” 
      “expect,” “plan,” 
      “anticipate,” “believe,” 
      “estimate,” “continue,” 
      or the negative of such terms or other similar expressions. Factors that 
      might cause our future results to differ from those statements include, 
      but are not limited to, the failure of Harbor’s 
      stockholders to approve the acquisition and the transactions 
      contemplated thereby; the number and percentage of Harbor’s 
      stockholders voting against the acquisition and electing to exercise 
      their redemption rights; changing interpretations of generally accepted 
      accounting principles; costs associated with continued compliance with 
      government regulations; legislation or regulatory environments, 
      requirements or changes adversely affecting the businesses in which 
      Elmet is engaged; the continued ability of Elmet to successfully execute 
      its business plan involving the proper management of its human resources 
      and assets; demand for the products and services that Elmet provides; 
      continued availability of, and changes in pricing for, raw materials 
      used by Elmet; general economic conditions; geopolitical events and 
      regulatory changes; as well as other relevant risks detailed in Harbor’s 
      filings with the Securities and Exchange Commission.
    
    
      Additional Information
    
    
      This communication is being made in respect of the proposed transaction 
      involving Elmet, its stockholders and Harbor. In connection with the 
      proposed transaction, Harbor will file with the Securities and Exchange 
      Commission a proxy statement on Schedule 14A for the stockholders of 
      Harbor describing the proposed transaction. Harbor will be filing other 
      documents with the SEC as well. BEFORE MAKING ANY VOTING OR INVESTMENT 
      DECISIONS, INVESTORS ARE ADVISED TO READ, WHEN AVAILABLE, HARBOR’S 
      DEFINITIVE PROXY STATEMENT IN CONNECTION WITH THE SOLICITATION OF 
      PROXIES FOR THE SPECIAL MEETING BECAUSE THIS PROXY STATEMENT WILL 
      CONTAIN IMPORTANT INFORMATION.
    
    
      The definitive proxy statement will be mailed to stockholders as of a 
      record date to be established for voting on the proposed transaction. 
      Stockholders will also be able to obtain a copy of the definitive proxy 
      statement and other documents related to the transaction that are filed 
      with the SEC, without charge, once available, at the SEC’s 
      Internet site (http://www.sec.gov) or 
      by directing a request to Harbor Acquisition Corp. at One Boston Place, 
      Suite 3630, Boston , Massachusetts 02108. As a result of the review by 
      the SEC of the proxy statement, Harbor may be required to make changes 
      to its description of the acquired business or other financial or 
      statistical information contained in the proxy statement.
    
    
      Harbor and its directors and officers and other members of management 
      and employees may be deemed to be participants in the solicitation of 
      proxies in respect of the proposed transaction with Elmet and its 
      stockholders. Information regarding Harbor’s 
      directors and executive officers is set forth in Harbor’s 
      final prospectus dated April 27, 2006, and the proxy statement relating 
      to the proposed transaction with Elmet and its stockholders when it 
      becomes available.
    
    
      Harbor’s final prospectus also contains a 
      description of the security holdings of the Harbor officers and 
      directors and of Ferris Baker Watts, the managing underwriter of 
      Harbor’s initial public offering consummated 
      on May 1, 2006, and their respective interests in the successful 
      consummation of this business combination.
    
    
      *Source: Avinash Kant, Ph.D., Canaccord Adams
    
  
Harbor Acquisition Corp. (AMEX: HAC, HAC-U, HAC-WT) ("Harbor") and
Elmet Technologies, Inc. ("Elmet") of Lewiston, Maine, announced today
that they have signed a definitive Stock Purchase Agreement for Harbor
to acquire Elmet for a combination of cash and Harbor stock. Elmet is
a privately held, fully-integrated manufacturer of custom designed and
engineered Advanced Enabling Materials* products. The acquisition will
provide Elmet with access to additional capital to meet the
anticipated increased market demand for Elmet's molybdenum and
tungsten-based component solutions for high technology OEM
applications. Elmet's Advanced Enabling Materials products are used in
flat-panel displays, medical imaging devices, MP3 players and DVRs, as
well as lighting products.

   Following consummation of the acquisition, Elmet's current
management team, led by Jack Jensen, CEO, will continue to lead the
organization, with the company's operations remaining in Lewiston.

   John Carson, Chairman of Harbor stated, "We are very excited about
this transaction due to Elmet's strong management team and growth
potential. Since its management buy-out in 2004, Elmet has focused on
providing high-tech solutions to its customers and is well-positioned
to capitalize on the growth of the Advanced Enabling Materials
market."

   Jack Jensen, CEO of Elmet, remarked, "Our rapid growth and
successes since becoming an independent company encouraged us to seek
a sophisticated financial partner that would appreciate and support
our strong culture of design, quality, and customer service. Having
access to capital through the public markets with Harbor, along with
our skilled and dedicated workforce and a singular focus on continuing
to implement Elmet's growth plan, provides us with the optimal
alternative for assuring the Company's continued success in serving
its world-class set of customers."

   Summary of the Transaction

   Under the terms of the acquisition agreement, Harbor will purchase
Elmet for an initial payment of approximately 2.191 million shares of
Harbor common stock and approximately $108.9 million in cash, which
includes repayment of Elmet's existing indebtedness, subject to
certain closing adjustments and escrow funding.

   The Elmet stockholders will also be entitled to receive a
potential earnout payment of up to $28 million based on Elmet
achieving minimum EBITDA (as defined in the Stock Purchase Agreement)
thresholds, payable 60% in cash and 40% in shares of Harbor common
stock:

   --  Target EBITDA for the earnout in 2007 is $21 million (100%
        payout of earnout amount), $18 million (50% payout of earnout
        amount), between $18 and $21 million, the earnout is prorated.

   --  In the event the earnout is not fully earned in 2007, target
        EBITDA for 2007/2008 combined is $39 million (100% payout of
        remaining earnout amount), $37 million (50% payout of
        remaining earnout amount), between $37 and $39 million, the
        remaining earnout is prorated.

   Following the completion of the transaction, the Harbor board of
directors will consist of eight members, four members who are current
directors of Harbor, two members from Elmet and two members to be
designated by Elmet and subject to Harbor's acceptance.

   The closing of the acquisition is subject to customary closing
conditions, including approval of the acquisition agreement by the
stockholders of Harbor. In addition, the closing is conditioned on
holders of less than 20% of the shares of Harbor common stock voting
against the acquisition and electing to convert their Harbor common
stock into cash from the trust fund established in connection with
Harbor's initial public offering.

   Elmet Technologies, Inc. Overview

   Originally founded in 1929, Elmet became an independent company in
late 2003 when its current CEO Jack Jensen led the management buyout
of Elmet from its former parent, Philips Electronics North America
Corporation. Under Jensen and his management team, Elmet has enjoyed
growth by providing innovative refractory metal solutions to OEMs
serving such industries as data storage, semiconductor, medical,
electronics and lighting. Elmet now employs approximately 230
highly-skilled sales, design, engineering, and production
professionals at its Lewiston, Maine headquarters. Elmet's products
are typically custom-engineered components used in products such as
medical imaging devices, silicon wafer chip manufacturing equipment,
and specialty commercial and residential lighting applications.

   Since 2003, the Company has streamlined its operations, focused
its engineering team on new product development, invested in advanced
technological equipment and shifted its product focus to high-value
"mission critical" consumable components. Elmet is among the select
few companies with the fully-integrated capability to transform
tungsten and molybedenum into engineered materials, which have emerged
as crucial components for key end market customers. The need to
optimize the performance of high-growth product categories, such as
flat panel displays, data storage devices, and medical imaging
devices, is the key driver in demand for these highly specialized
Advanced Enabling Materials.

   About Harbor Acquisition Corporation

   Based in Boston, Harbor is a publicly traded, special purpose
acquisition company ("SPAC") formed to invest in or acquire a
manufacturer of industrial or consumer products. The contemplated
transaction is subject to shareholder approval, along with certain
regulatory approvals including the filing of a proxy statement with
the Securities and Exchange Commission. Upon completion of the
transaction, Harbor intends to change its corporate name to Elmet
Technologies Holdings, Inc.

   Forward Looking Statements

   This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). These forward-looking
statements are based on current expectations and projections about
future events and no party assumes an obligation to update any such
forward-looking statements. These forward-looking statements are
subject to known and unknown risks, uncertainties and assumptions
about Harbor and Elmet that may cause actual results to be materially
different from any future results expressed or implied by such
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may," "should,"
"could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause our future results to differ
from those statements include, but are not limited to, the failure of
Harbor's stockholders to approve the acquisition and the transactions
contemplated thereby; the number and percentage of Harbor's
stockholders voting against the acquisition and electing to exercise
their redemption rights; changing interpretations of generally
accepted accounting principles; costs associated with continued
compliance with government regulations; legislation or regulatory
environments, requirements or changes adversely affecting the
businesses in which Elmet is engaged; the continued ability of Elmet
to successfully execute its business plan involving the proper
management of its human resources and assets; demand for the products
and services that Elmet provides; continued availability of, and
changes in pricing for, raw materials used by Elmet; general economic
conditions; geopolitical events and regulatory changes; as well as
other relevant risks detailed in Harbor's filings with the Securities
and Exchange Commission.

   Additional Information

   This communication is being made in respect of the proposed
transaction involving Elmet, its stockholders and Harbor. In
connection with the proposed transaction, Harbor will file with the
Securities and Exchange Commission a proxy statement on Schedule 14A
for the stockholders of Harbor describing the proposed transaction.
Harbor will be filing other documents with the SEC as well. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS ARE ADVISED TO
READ, WHEN AVAILABLE, HARBOR'S DEFINITIVE PROXY STATEMENT IN
CONNECTION WITH THE SOLICITATION OF PROXIES FOR THE SPECIAL MEETING
BECAUSE THIS PROXY STATEMENT WILL CONTAIN IMPORTANT INFORMATION.

   The definitive proxy statement will be mailed to stockholders as
of a record date to be established for voting on the proposed
transaction. Stockholders will also be able to obtain a copy of the
definitive proxy statement and other documents related to the
transaction that are filed with the SEC, without charge, once
available, at the SEC's Internet site (http://www.sec.gov) or by
directing a request to Harbor Acquisition Corp. at One Boston Place,
Suite 3630, Boston , Massachusetts 02108. As a result of the review by
the SEC of the proxy statement, Harbor may be required to make changes
to its description of the acquired business or other financial or
statistical information contained in the proxy statement.

   Harbor and its directors and officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction with
Elmet and its stockholders. Information regarding Harbor's directors
and executive officers is set forth in Harbor's final prospectus dated
April 27, 2006, and the proxy statement relating to the proposed
transaction with Elmet and its stockholders when it becomes available.

   Harbor's final prospectus also contains a description of the
security holdings of the Harbor officers and directors and of Ferris
Baker Watts, the managing underwriter of Harbor's initial public
offering consummated on May 1, 2006, and their respective interests in
the successful consummation of this business combination.

   *Source: Avinash Kant, Ph.D., Canaccord Adams