Form of Letter Agreement among Cazador Acquisition Corporation Ltd., Arco Capital Management LLC, and Cazador Sub Holdings Ltd.]
EXHIBIT
10.1
[Form of
Letter Agreement among
Cazador
Acquisition Corporation Ltd., Arco Capital Management LLC,
and
Cazador Sub Holdings Ltd.]
[ ],
2010
Cazador
Acquisition Corporation Ltd.
c/o Arco
Capital Management LLC
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Co-Chief Executive Officer
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer
Re: Initial Public Offering of
Cazador Acquisition Corporation Ltd.
Ladies
and Gentlemen:
This
letter is being delivered to you in accordance with the Underwriting Agreement
dated as of
[ ],
2010 (the “Underwriting
Agreement”), by and between Cazador Acquisition Corporation Ltd., an
exempted company incorporated under the laws of the Cayman Islands with limited
liability (the “Company”), and ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC (“▇▇▇▇▇▇”) as
representative of the underwriters named in Schedule A thereto (the “Underwriters”),
relating to an underwritten initial public offering (the “Initial Public
Offering”) of the Company’s units (the “Units”), each
consisting of one ordinary share of the Company (an “Ordinary Share”), and
one warrant (a “Warrant”) entitling
the holder thereof to purchase one Ordinary Share.
The
undersigned, Cazador Sub Holdings Ltd., an exempted company incorporated under
the laws of the Cayman Islands with limited liability (the “Sponsor”) has
purchased from the Company 1,150,000 Ordinary Shares
(including 150,000 Ordinary Shares subject to forfeiture to the extent the
Underwriters’ over-allotment option is not exercised) (the “Sponsor Shares”)
pursuant to a Share Subscription Agreement dated as of [_______], and
immediately prior to the consummation of the Initial Public Offering, the
Sponsor has agreed to purchase 4,340,000 Warrants (the “Sponsor Warrants”)
pursuant to a Warrant Subscription Agreement dated as of [_____________].
The terms of the Warrants are set forth in the Warrant Agreement dated as of
[_____], 2010 (the “Warrant Agreement”),
by and between the Company and Continental Stock Transfer & Trust
Company.
The
undersigned, Arco Capital Management LLC, a Cayman Islands exempted company
incorporated with limited liability (“ARCO”), is an
affiliate of the Sponsor.
In order
to induce the Company and the Underwriters to enter into the Underwriting
Agreement and to proceed with the Initial Public Offering, and in recognition of
the benefit that such Initial Public Offering will confer upon the Sponsor as a
securityholder of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Sponsor hereby
agrees with the Company as follows:
1.
Approval of Initial Business
Combination. The Sponsor agrees that in connection with any vote of
the shareholders of the Company on a proposed Initial Business Combination, the
undersigned will vote the Sponsor Shares in accordance with the majority of
votes cast by the public shareholders of Ordinary Shares included in the Units
issued in the Initial Public Offering (the “IPO Shares”).
In addition, the undersigned agrees that in connection with any vote of the
shareholders of the Company on a proposed Initial Business Combination, the
undersigned will vote any Units or Ordinary Shares acquired by the Sponsor in
the Initial Public Offering or at any time thereafter that are owned directly or
indirectly by the Sponsor, for the Initial Business Combination. The
Sponsor also agrees to take all reasonable action within its power, in the event
the Company conducts the redemption of its Units (or Ordinary Shares underlying
the Units) pursuant to a tender offer, to cause the Company or its affiliates or
any advisors to the Company, (i) not to purchase or arrange to purchase shares
outside the tender offer while such tender offer is open or (ii) enter into any
agreement, understanding or arrangement with any other person in connection with
their purchase or arrangement to purchase shares outside the tender offer, when
such tender offer is open.
2.
Liquidation; Waiver of
Claims. (a) In the event that the Company fails to consummate an
Initial Business Combination within 18 months (or up to 24 months from the
consummation of this offering if a letter of intent, an agreement in principle,
or a definitive agreement to complete a business combination has been entered
into prior to [___________], 2011) after the date of the final prospectus
included in the Registration Statement on Form F-1 relating to the Initial
Public Offering (the “Registration
Statement”), the Company will notify its shareholders that it will
compulsorily redeem all IPO Shares and automatically liquidate the trust account
in accordance with the procedure in the Company’s Amended and Restated
Memorandum and Articles of Association (the “Liquidation”).
(b) The
Liquidation costs will be met from the Company’s remaining assets outside of the
trust account or from interest earned on the funds in the trust account that may
be released to the Company for working capital purposes. If such funds are
insufficient, the Sponsor and Arco hereby jointly and severally agree to advance
the Company the funds necessary to complete such Liquidation and agree not to
seek repayment for such advancement.
(c) The
Sponsor hereby waives any and all right, title, interest or claim of any kind in
or to any distributions as a result of the Liquidation with respect to the
Sponsor Shares and in the case of the Sponsor Shares subject to forfeiture,
agrees to forfeit such Sponsor Shares to the extent the Underwriters’
over-allotment option is not exercised. In addition, the Sponsor hereby
waives any right, title, interest or claim of any kind in respect of any monies
in the trust account the Sponsor may have in the future as a result of, or
arising out of, any contracts or agreements with the Company and will not seek
recourse or make any claim against the trust account for any reason whatsoever;
provided that
the foregoing waiver shall not apply (i) to the extent the Sponsor is entitled
to be indemnified by the Company pursuant to the Memorandum and Articles of
Association of the Company or applicable law or pursuant to any indemnification
agreement entered into with the Company or (ii) in respect of any rights or
claims the Sponsor may have as a result of holding Units, IPO Shares, Warrants
or other securities of the Company (other than the Sponsor Shares, the Sponsor
Warrants and the securities underlying or issuable upon exercise of such
securities).
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3.
Transfer
Restrictions.
(a) The
Sponsor will not assign, alienate, pledge, attach, sell or otherwise transfer or
encumber (each, a “transfer”), directly
or indirectly, any Sponsor Shares until one year following the date of the consummation of an Initial Business Combination, except to a
Permitted Transferee, or earlier (i) with respect to 50% of the Sponsor Shares,
when the closing price of the Ordinary Shares exceeds $11.50 per share for any
20 trading days within a 30-trading day period following the consummation of an
Initial Business Combination, or (ii) with respect to 50% of the Sponsor Shares,
when the closing price of the Ordinary Shares exceeds $15.00 per share for any
20 trading days within a 30-trading day period following the consummation of an
Initial Business Combination; provided, however, that all of the Sponsor Shares
shall no longer be restricted upon the first anniversary of the Initial Business
Combination, and in any case, if following a business combination, the Company
consummates a subsequent liquidation, merger, amalgamation, share capital
exchange, share purchase, reorganization or other similar business transaction
which results in all of the Company’s shareholders having the right to exchange
their Ordinary Shares for cash, securities or other property. Any
transfers of such securities to a Permitted Transferee will be made in
accordance with applicable securities laws. Any transfer of securities
pursuant to this Paragraph 3 after the date hereof will be subject to the
condition that the Permitted Transferee has agreed in writing to be bound by the
terms of Paragraphs 1, 2 and 3 hereof.
A
“Permitted Transferee” is a person or entity that receives such securities
pursuant to a transfer (i) to one or more of the Company’s officers, directors
or initial unitholders, (ii) to an affiliate or an affiliated entity under
common control with the transferor, (iii) to an entity’s beneficiaries upon its
liquidation or distribution, (iv) to relatives and trusts for estate planning
purposes, (v) by virtue of the laws of descent and distribution upon death, (vi)
by private sales with respect to up to 33% of the Sponsor Shares made at or
prior to the consummation of an Initial Business Combination at prices no
greater than the price at which the Sponsor Shares were originally purchased
(approximately $0.017 per share), or (vii) pursuant to a qualified domestic
relations order.
(b) The
Sponsor acknowledges that the Sponsor Warrants will be subject to the transfer
restrictions set forth in the Warrant Agreement until the consummation of an
Initial Business Combination.
4.
Limitation on
Compensation. (a) The Sponsor will not be entitled to receive and
will not accept, compensation of any kind (including a finder’s fee and
consulting fee or any other compensation) from the Company for services rendered
to the Company prior to or in connection with the consummation of an Initial
Business Combination, other than (i) by virtue of ownership of Sponsor Shares,
Sponsor Warrants or any securities included in or issuable upon exercise of such
securities and (ii) pursuant to the letter agreement dated as of the date
hereof, between the Company and Arco Capital Management LLC, relating to the
provision of administrative services to the Company.
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(b) The
Sponsor will not accept a finder’s fee, consulting fee or any other compensation
(other than by virtue of ownership of Sponsor Shares, Sponsor Warrants or any
securities included in or issuable upon exercise of such securities) or fees
from any other entity in connection with an Initial Business Combination, other
than compensation or fees that may be received for any services provided
following such Initial Business Combination.
5.
Indemnity. Each
of the Sponsor and Arco hereby agrees that it will be jointly and severally
liable, by means of direct payment to the trust account, to ensure that the
proceeds in the trust account are not reduced by the claims of target businesses
of the Initial Business Combination or claims of vendors or other entities that
are owed money by the Company for services rendered or contracted for or
products sold to the Company except that there will be no liability (1) as to
any claimed amounts owed to a third party who executed a legally enforceable
waiver or (2) as to any claims under the Company’s indemnity of the underwriters
of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
6.
Representations and
Warranties. The Sponsor represents and warrants that (a) Except as
described in the Registration Statement, there are no claims, payments,
arrangements, contracts, agreements or understandings relating to the payment of
a brokerage commission or finder’s, consulting, origination or
similar fees by the Sponsor with respect to the sale of the securities pursuant
to the Underwriting Agreement or any other arrangements, agreements or
understandings by the Sponsor that may affect the Underwriters’ compensation
pursuant to the Underwriting Agreement;
(b) It
is not subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act
or practice relating to the offering of securities in any
jurisdiction;
(c) It
has never been convicted of or pleaded guilty to any crime (i) involving any
fraud or (ii) relating to any financial transaction or handling of funds of
another person or (iii) pertaining to any dealings in any securities and the
Sponsor is not currently a defendant in any such criminal
proceeding;
(d) It
has never been suspended or expelled from membership in any securities or
commodities exchange or association or had a securities or commodities license
or registrations denied, suspended or revoked;
(e) Collectively
with Arco, it has sufficient capital to satisfy the indemnification obligation
set forth herein; and
(f)
It has full power, without violating any agreement by
which it is bound, to enter into this letter agreement.
7.
The Sponsor agrees that it
will not propose any amendment to Articles 47 of the Memorandum and Articles of
Association or support, endorse or recommend any proposal that shareholders
amend such provisions, other than in connection with a proposed Initial Business
Combination or a proposed extension of the time period within which the Company
must consummate an Initial Business Combination to up to 24 months, without the
affirmative vote of at least a majority of the Ordinary Shares voted by the
shareholders.
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The
Sponsor acknowledges and understands that the Company and the Underwriters will
rely upon the agreements, representations and warranties set forth herein in
proceeding with the Initial Public Offering. Nothing contained herein
shall be deemed to render the Underwriters a representative of, or a fiduciary
with respect to, the Company, its shareholders, or any creditor or vendor of the
Company with respect to the subject matter hereof.
This
letter agreement shall be binding on the Sponsor and such person’s successors
and assigns. This letter agreement shall terminate on the earlier of (i)
the consummation of an Initial Business Combination and (ii) the Liquidation;
provided that
such termination shall not relieve the Sponsor from liability for any breach of
this letter agreement prior to its termination, and provided further that
paragraph 2 of this letter agreement shall survive a termination pursuant to
clause (ii).
This
letter agreement constitutes the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings (whether written or oral) between the parties
relating to such subject matter. None of the parties shall be liable
or bound to any other party in any manner by any representations and warranties
or covenants relating to such subject matter except as specifically set forth
herein.
This
letter agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to the principles of conflicts of laws
thereof.
No term
or provision of this letter agreement may be amended, changed, waived, altered
or modified except by written instrument executed and delivered by the party
against whom such amendment, change, waiver, alteration or modification is to be
enforced.
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CAZADOR
SUB HOLDINGS LTD.
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By:
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Name:
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Title:
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ARCO
CAPITAL MANAGEMENT LLC
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(solely
with respect to paragraphs 2(b), 5 and 6(e))
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By:
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Name:
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Title:
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ACCEPTED
AND AGREED:
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CAZADOR
ACQUISITION CORPORATION LTD.
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By:
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Name:
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Title:
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▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
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By:
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Acknowledged
Signatory
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