4,000,000 Units INDUSTRIAL SERVICES ACQUISITION CORP. UNDERWRITING AGREEMENT
4,000,000
Units
_______
__, 2007
Maxim
Group LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
As
Representative of the Underwriters
named
on Schedule A hereto
Ladies
and Gentlemen:
The
undersigned, Industrial Services Acquisition Corp., a Delaware corporation
(“Company”),
hereby confirms its agreement with Maxim Group LLC (hereinafter referred to
as
“you,” “Maxim”
or
the
“Representative”)
and
with the other underwriters named on Schedule
A hereto
for which Maxim is acting as Representative (the Representative and the other
Underwriters being collectively referred to herein as the “Underwriters” or,
individually, an “Underwriter”)
as
follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Purchase
of Firm Units.
On the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of
4,000,000 units (the “Firm
Units”)
of the
Company at a purchase price (net of discounts and commissions) of $7.68 per
Firm
Unit. The Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Units set forth opposite their respective names
on
Schedule A attached hereto and made a part hereof at a purchase price (net
of
discounts and commissions) of $7.68 per Firm Unit. The Firm Units are to be
offered initially to the public (the “Offering”)
at the
offering price of $8.00 per Firm Unit. Each Firm Unit consists of one share
of
the Company’s common stock, par value $.0001 per share (the “Common Stock”),
and
one warrant to purchase a share of Common Stock (the “Warrant(s)”).
The
shares of Common Stock and the Warrants included in the Firm Units will not
be
separately transferable until 90 days after the effective date (the
“Effective
Date”)
of the
Registration Statement (as defined in Section 2.1.1 hereof) unless Maxim informs
the Company of its decision to allow earlier separate trading based on their
assessment of the relative strengths of the securities markets and small
capitalization companies in general, and the trading pattern of, and demand
for,
the Company’s securities in particular. Maxim may decide to allow continued
trading of the Units following such separation. In no event will Maxim allow
separate trading until (i) the preparation of an audited balance sheet of the
Company reflecting receipt by the Company of the proceeds of the Offering and
the filing of such audited balance sheet with the Commission (as herein defined)
on a Form 8-K or similar form by the Company which includes such balance sheet;
(ii) the Company files a Form 8-K and issues a press release announcing when
such separate trading will begin; and (iii) the Business Day (defined below)
following the earliest to occur of the expiration of the Over-allotment Option
(defined below) or the exercise of the Over-allotment Option in full. Each
Warrant entitles its holder to purchase one share of Common Stock for $5.00
per
share during the period commencing on the later of (a) the consummation by
the
Company of its “Business
Combination”
or
(b)
one year from the Effective Date of the Registration Statement and terminating
on the four-year anniversary of the Effective Date. As used herein, the term
“Business Combination” shall mean any acquisition by merger, capital stock
exchange, asset or stock acquisition or other similar business combination
consummated by the Company with a single operating entity, or one or more
related or unrelated entities in the publishing industry located in the United
States (as described more fully in the Registration Statement). The Company
has
the right to redeem the Warrants (including the Representative’s Warrants) upon
not less than thirty (30) days written notice at a price of $0.01 per Warrant
at
any time after the Warrants become exercisable; so long as the average closing
sales price of the Company’s Common Stock has been at least $11.50 for any
twenty (20) trading days within a thirty (30) trading day period ending on
the
third day prior to the day on which notice is given.
1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York
time, on the third Business Day following the Effective Date of the Registration
Statement (or the fourth Business Day following the Effective Date, if the
Registration Statement is declared effective after 4:30 p.m.) or at such earlier
time as shall be agreed upon by the Representative and the Company at the
offices of the Representative or at such other place as shall be agreed upon
by
the Representative and the Company. The hour and date of delivery and payment
for the Firm Units is called the “Closing
Date.”
Payment for the Firm Units shall be made on the Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds.
$32,000,000 ($8.00 per unit; $36,608,000 if the Over-allotment Option (as
defined in Section 1.2) is exercised in full, which represents approximately
$7.96 per unit) of the proceeds received by the Company for the Firm Units
and
from the Private Placement (as defined in Section 1.4) shall be deposited in
the
trust fund established by the Company for the benefit of the public stockholders
as described in the Registration Statement (the “Trust
Fund”)
pursuant to the terms of an Investment Management Trust Agreement (the
“Trust
Agreement”),
which
amount includes up to $960,000 ($0.24 per Firm Unit; $1,104,000 if the
Over-allotment Option is exercised in full) payable to the Representative as
contingent compensation upon consummation of a Business Combination. Any
remaining proceeds (less commissions, expense allowance and actual expense
payments or other fees payable pursuant to this Agreement) shall be paid to
the
order of the Company upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Firm Units (or through the
facilities of the Depository Trust Company (the “DTC”))
for
the account of the Underwriters. The Firm Units shall be registered in such
name
or names and in such authorized denominations as the Representative may request
in writing at least two Business Days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Units for
delivery, at least one full Business Day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender
of
payment by the Representative for all the Firm Units. As used herein, the term
“Business Day” shall mean any day other than a Saturday, Sunday or any day on
which national banks in New York, New York are not open for
business.
-2-
1.2 Over-Allotment
Option.
1.2.1 Option
Units.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Underwriters are hereby granted, severally and
not
jointly, an option to purchase up to an additional 600,000 units from the
Company (the “Over-allotment
Option”).
Such
additional 600,000 units shall be identical in all respects to the Firm Units
and are hereinafter referred to as “Option
Units.”
The
Firm Units and the Option Units are hereinafter collectively referred to as
the
“Units,”
and
the Units, the shares of Common Stock and the Warrants included in the Units
and
the shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the “Public Securities.” The purchase
price to be paid for the Option Units (net of discounts and commissions) will
be
$7.68 per Option Unit. The Option Units are to be offered initially to the
public at the offering price of $8.00 per Option Unit.
1.2.2 Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time)
of
the Option Units within 45 days after the Effective Date. The Underwriters
will
not be under any obligation to purchase any Option Units prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may
be
exercised by the giving of oral notice to the Company from the Representative,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Units to be purchased and the date and time
for delivery of and payment for the Option Units, which will not be later than
five Business Days after the date of the notice or such other time as shall
be
agreed upon by the Company and the Representative, at the offices of the
Representative or at such other place as shall be agreed upon by the Company
and
the Representative. If such delivery and payment for the Option Units does
not
occur on the Closing Date, the date and time of the closing for such Option
Units will be as set forth in the notice (hereinafter the “Option
Closing Date”).
Upon
exercise of the Over-allotment Option, the Company will become obligated to
convey to the Underwriters, and, subject to the terms and conditions set forth
herein, the Underwriters will become obligated to purchase, the number of Option
Units specified in such notice.
1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, by
deposit of the sum of $7.68 per Option Unit in the Trust Fund pursuant to the
Trust Agreement upon delivery to you of certificates (in form and substance
satisfactory to the Underwriters) representing the Option Units (or through
the
facilities of DTC) for the account of the Underwriters. The certificates
representing the Option Units to be delivered will be in such denominations
and
registered in such names as the Representative requests not less than two
Business Days prior to the Closing Date or the Option Closing Date, as the
case
may be, and will be made available to the Representative for inspection,
checking and packaging at the aforesaid office of the Company’s transfer agent
or correspondent not less than one full Business Day prior to such Closing
Date
or Option Closing Date.
-3-
1.3 Representative’s
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or its
designees), on the Effective Date, an option (“Representative’s
Purchase Option”)
for
the purchase of an aggregate of 200,000 units (the “Representative’s
Units”)
for an
aggregate purchase price of $100.00. Each of the Representative’s Units is
identical to the Firm Units and the Warrants included in the Representative’s
Units have an exercise price of $5.00. The Representative’s Purchase Option
shall be exercisable, in whole or in part, commencing on the later of the
consummation of a Business Combination or one year from the Effective Date
and
expiring on the five-year anniversary of the Effective Date at an initial
exercise price per Representative’s Unit of $10.00, which is equal to one
hundred and twenty-five percent (125%) of the initial public offering price
of a
Unit. The Representative’s Purchase Option, the Representative’s Units, the
shares of Common Stock and the Warrants included in the Representative’s Units
(the “Representative’s
Warrants”)
and
the shares of Common Stock issuable upon exercise of the Representative’s
Warrants are hereinafter referred to collectively as the “Representative’s
Securities.”
The
Public Securities and the Representative’s Securities are hereinafter referred
to collectively as the “Securities.” The Representative understands and agrees
that there are significant restrictions against transferring the
Representative’s Purchase Option during the first year after the Effective Date,
as set forth in Section 3 of the Representative’s Purchase Option.
1.3.2 Delivery
and Payment.
Delivery and payment for the Representative’s Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Representative and its
designees, upon payment therefor, certificates for the Representative’s Purchase
Option in the name or names and in such authorized denominations as the
Representative may request.
1.4 Private
Placement to Officers and Directors and Designees.
Certain
officers and directors of the Company purchased from the Company, pursuant
to
the Placement Unit Purchase Agreement (as defined in Section 2.23.2 hereof),
an
aggregate of 292,660 units identical to the Firm Units (the “Placement
Units”)
at a
purchase price of $8.00 per Placement Unit in a private placement that occurred
immediately prior to the entering into of this agreement (the “Private
Placement”).
The
Placement Units shall have the same terms as the Units, except that (i) subject
to certain limited exceptions, none of the Placement Units will be transferable
or salable until the consummation of a Business Combination; (ii) the Common
Stock included in the Placement Units will not have any rights to liquidation
distributions in the event the Company fails to consummate a Business
Combination; (iii) the holders of the Placement Units may not exercise
conversion rights with respect to the shares of Common Stock included in the
Placement Units; (iv) the shares of Common Stock included in the Placement
Units
must be voted in favor of any proposed Business Combination; and (v) the
Warrants included in the Placement Units (the “Placement
Warrants”)
are
not subject to redemption if held by the initial holders thereof or their
permitted transferees and may be exercised on a “cashless basis.” The Placement
Units, the shares of Common Stock included in the Placement Units, the Placement
Warrants and the shares of Common Stock issuable upon exercise of the Placement
Warrants are hereinafter referred to collectively as the “Placement
Securities.”
Maxim
acted as placement agent in the Private Placement and shall be entitled to
a
placement fee equal to four percent (4%) of the gross proceeds received by
the
Company from the sale of the Placement Securities. The net proceeds of the
Private Placement shall be deposited in the Trust Fund pursuant to Section
1.1.2.
-4-
1.5 Incentive
Warrants.
Immediately prior to the Private Placement, the Company issued to the Initial
Stockholders incentive warrants (the “Incentive
Warrants”)
to
purchase up to an aggregate of 690,000 shares of Common Stock (the “Incentive
Warrant Shares”).
The
Incentive Warrants are similar to the public Warrants and will be exercisable
for $0.01 per share, except that: (i) they are not exercisable until three
months after the Company completes a Business Combination, and then they will
vest in three installments, with the first 345,000 shares vesting on the date
that is six (6) months from the consummation of a Business Combination, the
second 172,500 shares vesting on the date that is nine (9) months from such
initial Business Combination, and the last 172,500 shares vesting on the date
that is one (1) year from the date of such initial Business Combination; (ii)
they will expire five years from the date of the Prospectus (as defined in
Section 2.1.1 hereof); and (iii) they are not redeemable so long as they are
held by the initial holder thereof (or any of its permitted
transferees).
2. Representations
and Warranties of the Company. The Company represents and warrants to the
Underwriters as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement and an amendment or amendments thereto, on Form S-1
(File
No. 333-127753), including any related preliminary prospectus (the “Preliminary
Prospectus”,
including any prospectus that is included in the Registration Statement
immediately prior to the effectiveness of the Registration Statement), for
the
registration of the Securities under the Securities Act of 1933, as amended
(the
“Act”),
which
registration statement and amendment or amendments have been prepared by the
Company in conformity with the requirements of the Act, and the rules and
regulations (the “Regulations”)
of the
Commission under the Act. The conditions for use of Form S-1 to register the
Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time
the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to Rule 430A of the Regulations), is hereinafter called
the
“Registration
Statement,”
and
the form of the final prospectus dated the Effective Date included in the
Registration Statement (or, if applicable, the form of final prospectus
containing information permitted to be omitted at the time of effectiveness
by
Rule 430A of the Regulations filed with the Commission pursuant to Rule 424
of
the Regulations), is hereinafter called the “Prospectus.”
If
the
Company has filed, or is required pursuant to the terms hereof to file, a
registration statement pursuant to Rule 462(b) under the Securities Act
registering additional shares of Common Stock (a “Rule
462(b) Registration Statement”),
then,
unless otherwise specified, any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462(b) Registration Statement.
Other than a Rule 462(b) Registration Statement, which, if filed, becomes
effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. All of the Public
Securities have been registered under the Securities Act pursuant to the
Registration Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. The Registration Statement has been declared
effective by the Commission on the date hereof.
-5-
2.1.2 Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number 000-______)
providing for the registration under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”),
of
the Units, the Common Stock and the Warrants. The registration of the Units,
Common Stock and Warrants under the Exchange Act has been declared effective
by
the Commission on the date hereof.
2.2 No
Stop Orders, Etc.
Neither
the Commission nor, to the best of the Company’s knowledge, any state regulatory
authority has issued any order or threatened to issue any order preventing
or
suspending the use of any Preliminary Prospectus or has instituted or, to the
best of the Company’s knowledge, threatened to institute any proceedings with
respect to such an order.
2.3 Disclosures
in
Registration Statement.
2.3.1 10b-5
Representation.
At the
time the Registration Statement became effective, upon the filing or first
use
(within the meaning of the Regulations) of the Prospectus and at the Closing
Date and the Option Closing Date, if any, the Registration Statement and the
Prospectus contained or will contain all material statements that are required
to be stated therein in accordance with the Act and the Regulations, and did
or
will in all material respects conform to the requirements of the Act and the
Regulations; neither the Registration Statement nor any Preliminary Prospectus
or the Prospectus, nor any amendment or supplement thereto, on such dates,
did
or will contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Preliminary Prospectus and the Prospectus, in light
of the circumstances under which they were made), not misleading. When any
Preliminary Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement for the registration of the Securities or
any
amendment thereto or pursuant to Rule 424(a) of the Regulations) or first used
(within the meaning of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission or first used (within
the
meaning of the Regulations), such Preliminary Prospectus and any amendments
thereof and supplements thereto complied or will have been corrected in the
Prospectus to comply in all material respects with the applicable provisions
of
the Act and the Regulations and did not and will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The representation
and
warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement or Prospectus or any amendment
thereof or supplement thereto. It is understood that the statements set forth
in
paragraphs _____ in the Prospectus under the heading “Underwriting -
Underwriting Terms” constitute for the purposes of this Agreement, information
furnished by the Representative with respect to the Underwriters.
-6-
2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement, the
Preliminary Prospectus and the Prospectus conform to the descriptions thereof
contained therein and there are no agreements or other documents required to
be
described in the Registration Statement, the Preliminary Prospectus or the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a party
or by which its property or business is or may be bound or affected and (i)
that
is referred to in the Preliminary Prospectus and/or the Prospectus or attached
as an exhibit thereto, or (ii) is material to the Company’s business, has been
duly and validly executed by the Company, is in full force and effect in all
material respects and is enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms, except
(x)
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (z) that the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and none of such agreements or instruments has been assigned
by
the Company, and neither the Company nor, to the Company’s knowledge, any other
party is in breach or default thereunder and, to the Company’s knowledge, no
event has occurred that, with the lapse of time or the giving of notice, or
both, would constitute a breach or default thereunder. To the Company’s
knowledge, performance by the Company of the material provisions of such
agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company
or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company within the three years prior to the date
hereof, except as disclosed in the Registration Statement.
2.3.4 Regulations.
The
disclosures in the Registration Statement, the Preliminary Prospectus and/or
the
Prospectus concerning the effects of Federal, State and local regulation on
the
Company’s business as currently contemplated are correct in all material
respects and do not omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not
misleading.
2.4 Changes
After Dates in Registration Statement.
-7-
2.4.1 No
Material Adverse Change.
Since
the respective dates as of which information is given in the Registration
Statement, any Preliminary Prospectus and/or the Prospectus, except as otherwise
specifically stated therein: (i) there has been no material adverse change
in
the condition, financial or otherwise, or business prospects of the Company;
(ii) there have been no material transactions entered into by the Company,
other
than as contemplated pursuant to this Agreement; (iii) no member of the
Company’s board of directors or management has resigned from any position with
the Company and (iv) no event or occurrence has taken place which materially
impairs, or would likely materially impair, with the passage of time, the
ability of the members of the Company’s board of directors or management to act
in their capacities with the Company as described in the Registration Statement
and the Prospectus.
2.4.2 Recent
Securities Transactions, Etc.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as may otherwise be
indicated or contemplated herein or therein, the Company has not: (i) issued
any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock.
2.5 Independent
Accountants.
BDO
▇▇▇▇▇▇▇ (“BDO”),
whose
report is filed with the Commission as part of the Registration Statement and
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, are independent accountants as required by the Act and the
Regulations and the Public Company Accounting Oversight Board (including the
rules and regulations promulgated by such entity, the “PCAOB”).
BDO
is duly registered and in good standing with the PCAOB. BDO has not, during
the
periods covered by the financial statements included in the Registration
Statement and the Prospectus, provided to the Company any non-audit services,
as
such term is used in Section 10A(g) of the Exchange Act.
2.6 Financial
Statements; Statistical Data.
2.6.1 Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such
financial statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods involved;
and
the supporting schedules included in the Registration Statement present fairly
the information required to be stated therein. No other financial statements
or
supporting schedules are required to be included or incorporated by reference
in
the Registration Statement, the Preliminary Prospectus or the Prospectus. The
Registration Statement, the Preliminary Prospectus and the Prospectus disclose
all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company
with
unconsolidated entities or other persons that may have a material current or
future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. There are no
pro
forma or as adjusted financial statements which are required to be included
in
the Registration Statement and the Prospectus in accordance with Regulation
S-X
which have not been included as so required.
-8-
2.6.2 Statistical
Data.
The
statistical, industry-related and market-related data included in the
Registration Statement, the Preliminary Prospectus and/or the Prospectus are
based on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
2.7 Authorized
Capital; Options, Etc.
The
Company had at the date or dates indicated in the Registration Statement, the
Preliminary Prospectus and/or the Prospectus, as the case may be, duly
authorized, issued and outstanding capitalization as set forth in the
Registration Statement, the Preliminary Prospectus and/or the Prospectus. Based
on the assumptions stated in the Registration Statement, the Preliminary
Prospectus and/or the Prospectus, the Company will have on the Closing Date
the
adjusted stock capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Preliminary Prospectus and/or
the Prospectus, on the Effective Date, upon the filing or first use (within
the
meaning of the Regulations) of the Preliminary Prospectus or Prospectus and
on
the Closing Date and the Option Closing Date, if any, there will be no options,
warrants, or other rights to purchase or otherwise acquire any authorized,
but
unissued shares of Common Stock of the Company or any security convertible
into
shares of Common Stock of the Company, or any contracts or commitments to issue
or sell shares of Common Stock or any such options, warrants, rights or
convertible securities.
2.8 Valid
Issuance of Securities, Etc.
2.8.1 Outstanding
Securities.
All
issued and outstanding securities of the Company (including, without limitation,
the Placement Securities) have been duly authorized and validly issued and
are
fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in violation of
the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The Public Securities, the Placement
Securities, the Incentive Warrants and the Representative’s Unit Purchase Option
conform to all statements relating thereto contained in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus. Subject to the
disclosure contained in the Registration Statement, the Preliminary Prospectus
and/or the Prospectus with respect to the Placement Securities, the offers
and
sales of the outstanding Common Stock, the Placement Securities and the
Incentive Warrants were at all relevant times either registered under the Act
and the applicable state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such shares of Common Stock,
exempt from such registration requirements.
-9-
2.8.2 Securities
Sold Pursuant to this Agreement.
The
Securities have been duly authorized and reserved for issuance and when issued
and paid for, will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by reason of
being
such holders; the Securities are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken
for
the authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements with
respect thereto contained in the Registration Statement, the Preliminary
Prospectus and/or the Prospectus, as the case may be. When issued, the
Representative’s Purchase Option, the Representative’s Warrants and the Warrants
will constitute valid and binding obligations of the Company to issue and sell,
upon exercise thereof and payment of the respective exercise prices therefor,
the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s Purchase Option, the
Representative’s Warrants and the Warrants are enforceable against the Company
in accordance with their respective terms, except: (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally; (ii) as enforceability of any
indemnification or contribution provision may be limited under the federal
and
state securities laws; and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. The shares of Common Stock issuable upon exercise of the
Warrants and included in the Representative’s Purchase Option (and the shares of
Common Stock issuable upon exercise of the Representative’s Warrants) have been
reserved for issuance upon the exercise of the Warrants, the Representative’s
Purchase Option and the Representative’s Warrants and when issued in accordance
with the terms of such securities, will be duly and validly authorized, validly
issued, fully paid and non-assessable; the holders thereof are not and will
not
be subject to personal liability by reason of being such holders. The Contingent
Shares (as defined in Section 3.13.3) have been duly authorized and reserved
for
issuance and when issued and paid for, will be validly issued, fully paid and
non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Contingent Shares are not and
will not be subject to the preemptive rights of any holders of any security
of
the Company or similar contractual rights granted by the Company; and all
corporate action required to be taken for the authorization and issuance of
the
Contingent Shares has been duly and validly taken.
2.8.3 Placement
Securities.
The
Placement Securities have been duly authorized and, when issued and paid for
in
accordance with the Placement Unit Purchase Agreement, will be validly issued,
fully paid and non-assessable; the holders thereof are not and will not be
subject to personal liability by reason of being such holders; the Placement
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Placement Securities has been duly
and
validly taken. The shares of Common Stock issuable upon exercise of the
Placement Units and the Placement Warrants have been reserved for issuance
upon
the exercise of the Placement Units and the Placement Warrants and, when issued
in accordance with the terms of the Placement Units and the Placement Warrants,
will be duly and validly authorized, validly issued, fully paid and
non-assessable, and the holders thereof are not and will not be subject to
personal liability by reason of being such holders.
-10-
2.8.4 Incentive
Warrants.
The
Incentive Warrants have been duly authorized and validly issued, fully paid
and
non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders; the Inventive Warrant Shares are
not
and will not be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the Company; and all
corporate action required to be taken for the authorization, issuance and sale
of the Incentive Warrants has been duly and validly taken. The shares of Common
Stock issuable upon exercise of the Incentive Warrants have been reserved for
issuance upon the exercise of the Incentive Warrants and, when issued in
accordance with the terms of the Incentive Warrants, will be duly and validly
authorized, validly issued, fully paid and non-assessable, and the holders
thereof are not and will not be subject to personal liability by reason of
being
such holders.
2.8.5 No
Integration.
Subject
to the disclosure contained in the Registration Statement, the Preliminary
Prospectus and/or the Prospectus with respect to the Placement Securities,
neither the Company nor any of its affiliates has, prior to the date hereof,
made any offer or sale of any securities which are required to be “integrated”
pursuant to the Act or the Regulations with the offer and sale of the Public
Securities pursuant to the Registration Statement.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Registration Statement, the Preliminary Prospectus and/or
the Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity
and Binding Effect of Agreements.
This
Agreement, the Warrant Agreement (as defined in Section 2.22 hereof), the Trust
Agreement, the Services Agreement (as defined in Section 3.7.2 hereof), the
Placement Unit Purchase Agreement (as defined in Section 2.23.2 hereof), the
Escrow Agreement (as defined in Section 2.23.3 hereof) and the Incentive
Warrants have been duly and validly authorized by the Company and constitute
valid and binding agreements of the Company, enforceable against the Company
in
accordance with their respective terms, except: (i) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws; and (iii) that the remedy of specific performance and injunctive and
other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Representative’s Purchase Option, the Trust Agreement,
the Service Agreement, the Placement Unit Purchase Agreement, the Escrow
Agreement, the Incentive Warrants, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to
the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement; (ii) result in any violation of the provisions
of the Amended and Restated Certificate of Incorporation or the By-Laws of
the
Company; or (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
business.
-11-
2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its Amended
and Restated Certificate of Incorporation or Bylaws or in violation of any
material franchise, license, permit, applicable law, rule, regulation, judgment
or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or
businesses.
2.13 Corporate
Power; Licenses; Consents.
2.13.1 Conduct
of Business.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business for the purposes described in the
Registration Statement, the Preliminary Prospectus and/or the Prospectus. The
disclosures in the Registration Statement and/or the Prospectus concerning
the
effects of federal, state and local regulation on this offering and the
Company’s business purpose as currently contemplated are correct in all material
respects and do not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since its formation,
the Company has conducted no business and has incurred no liabilities other
than
in connection with and in furtherance of the Offering.
2.13.2 Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Representative’s Purchase Option, the Trust Agreement, the Services Agreement,
the Placement Unit Purchase Agreement, the Escrow Agreement and the Incentive
Warrants and as contemplated by the Prospectus, except with respect to
applicable federal and state securities laws.
2.14 D&O
Questionnaires.
All
information contained in the questionnaires (the “Questionnaires”)
completed by each of the Company’s stockholders immediately prior to the
Offering (the “Initial
Stockholders”)
and
provided to the Underwriters as an exhibit to his or her Insider Letter (as
defined in Section 2.23.1) is true and correct and the Company has not become
aware of any information which would cause the information disclosed in the
questionnaires completed by each Initial Stockholder to become inaccurate and
incorrect.
-12-
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge,
threatened against, or involving the Company or, to the best of the Company’s
knowledge, any Initial Stockholder which has not been disclosed in the
Registration Statement, the Questionnaires, the Preliminary Prospectus and/or
the Prospectus.
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its state of incorporation and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the Company.
2.17 No
Contemplation of a Business Combination.
Prior
to the date hereof, neither the Company, its officers and directors nor the
Initial Stockholders had, and as of the Closing, the Company and such officers
and directors and Initial Stockholders will not have had: (a) any specific
Business Combination under consideration or contemplation or (b) any substantive
interactions or discussions with any target business regarding a possible
Business Combination.
2.18 Transactions
Affecting Disclosure to NASD.
2.18.1 Except
as
described in the Preliminary Prospectus and/or the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the
payment of a finder’s, consulting or origination fee by the Company or any
Initial Stockholder with respect to the sale of the Securities hereunder or
any
other arrangements, agreements or understandings of the Company or, to the
Company’s knowledge, any Initial Stockholder that may affect the Underwriters’
compensation, as determined by the National Association of Securities Dealers,
Inc. (the “NASD”).
2.18.2 The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise,
in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii)
to
any NASD member; or (iii) to any person or entity that has any direct or
indirect affiliation or association with any NASD member, within the twelve
months prior to the Effective Date, other than payments to Maxim.
2.18.3 No
officer, director, or beneficial owner of any class of the Company’s securities
(whether debt or equity, registered or unregistered, regardless of the time
acquired or the source from which derived) (any such individual or entity,
a
“Company
Affiliate”)
is a
member, a person associated, or affiliated with a member of the NASD.
-13-
2.18.4 No
Company Affiliate is an owner of stock or other securities of any member of
the
NASD (other than securities purchased on the open market).
2.18.5 No
Company Affiliate has made a subordinated loan to any member of the
NASD.
2.18.6 No
proceeds from the sale of the Public Securities (excluding underwriting
compensation) or the Placement Securities will be paid to any NASD member,
or
any persons associated or affiliated with a member of the NASD, except as
specifically authorized herein and in the Placement Unit Purchase Agreement.
2.18.7 Except
with respect to Maxim, the Company has not issued any warrants or other
securities, or granted any options, directly or indirectly to anyone who is
a
potential underwriter in the Offering or a related person (as defined by NASD
rules) of such an underwriter within the 180-day period prior to the initial
filing date of the Registration Statement.
2.18.8 No
person
to whom securities of the Company have been privately issued within the 180-day
period prior to the initial filing date of the Registration Statement has any
relationship or affiliation or association with any member of the NASD.
2.18.9 No
NASD
member intending to participate in the Offering has a conflict of interest
with
the Company. For this purpose, a “conflict of interest” exists when a member of
the NASD and/or its associated persons, parent or affiliates in the aggregate
beneficially own 10% or more of the Company’s outstanding subordinated debt or
common equity, or 10% or more of the Company’s preferred equity. “Members
participating in the Offering” include managing agents, syndicate group members
and all dealers which are members of the NASD.
2.18.10 Except
with respect to Maxim in connection with the Offering and the Private Placement,
the Company has not entered into any agreement or arrangement (including,
without limitation, any consulting agreement or any other type of agreement)
during the 180-day period prior to the initial filing date of the Registration
Statement, which arrangement or agreement provides for the receipt of any item
of value and/or the transfer of any warrants, options, or other securities
from
the Company to an NASD member, any person associated with a member (as defined
by NASD rules), any potential underwriters in the Offering and/or any related
persons.
2.19 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist it
in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus or (iii) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company. The Company’s internal accounting controls and
procedures are sufficient to cause the Company to comply with the Foreign
Corrupt Practices Act of 1977, as amended.
-14-
2.20 Patriot
Act.
Neither
the Company nor any officer, director or Initial Stockholder has violated:
(i)
the Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of
1986,
as amended, or (iii) the Uniting and Strengthening of America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT)
Act of 2001, and/or the rules and regulations promulgated under any such law,
or
any successor law.
2.21 Officers’
Certificate.
Any
certificate signed by any duly authorized officer of the Company and delivered
to you or to your counsel shall be deemed a representation and warranty by
the
Company to the Underwriters as to the matters covered thereby.
2.22 Warrant
Agreement.
The
Company has entered into a warrant agreement with respect to the Warrants,
the
Representative’s Warrants and the Placement Warrants with Continental Stock
Transfer & Trust Company substantially in the form filed as an exhibit to
the Registration Statement (the “Warrant
Agreement”),
providing for, among other things, the payment of a warrant solicitation fee
as
contemplated by Section 3.9 hereof.
2.23 Agreements
With Initial Stockholders.
2.23.1 Insider
Letters.
The
Company has caused to be duly executed legally binding and enforceable
agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification, contribution or
noncompete provision may be limited under the federal and state securities
laws,
and (iii) that the remedy of specific performance and injunctive and other
forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought)
annexed as Exhibits 10.1.1 through 10.1.10, to the Registration Statement (the
“Insider
Letter”),
pursuant to which each of the Initial Stockholders of the Company agree to
certain matters, including but not limited to, certain matters described as
being agreed to by them under the “Proposed Business” Section of the
Prospectus.
2.23.2 Placement
Unit Purchase Agreement.
Certain
of the Company’s officers and directors and their designees have executed and
delivered an agreement, annexed as an exhibit to the Registration Statement
(the
“Placement
Unit Purchase Agreement”),
pursuant to which such persons, among other things, have purchased an aggregate
of 292,660 Placement Units in the Private Placement. Pursuant to the Placement
Unit Purchase Agreement, (i) $2,247,629 of the proceeds from the sale of the
Placement Units will be deposited by the Company in the Trust Fund in accordance
with the terms of the Trust Agreement prior to the Closing, and (ii) the
purchasers of the Placement Units have waived any and all rights and claims
that
they may have to any proceeds, and any interest thereon, held in the Trust
in
respect of the shares of Common Stock included in such Placement Units in the
event that a Business Combination is not consummated and the Trust Fund is
liquidated in accordance with the terms of the Trust Agreement.
-15-
2.23.3 Escrow
Agreement.
The
Company has caused the Initial Stockholders to enter into an escrow agreement
(the “Escrow
Agreement”)
with
Continental Stock Transfer & Trust Company (the “Escrow
Agent”)
substantially in the form filed as an exhibit to the Registration Statement
whereby the Common Stock owned by the Initial Stockholders will be held in
escrow by the Escrow Agent, until the third anniversary of the Effective Date.
During such escrow period, the Initial Stockholders shall be prohibited from
selling or otherwise transferring such shares (except (a) to spouses and
children of Initial Stockholders and trusts established for their benefit,
(b)
after a Business Combination in a transaction whereby all the outstanding shares
of the Company are exchanged or converted into cash or another entity’s
securities and (c) as otherwise set forth in the Escrow Agreement) unless
approved by the Company’s public stockholders, but will retain the right to vote
such shares. The Escrow Agreement shall not be amended, modified or otherwise
changed without the prior written consent of Maxim, such consent not to be
unreasonably withheld.
2.24 Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering substantially in the form filed as an exhibit to the Registration
Statement.
2.25 Covenants
Not to Compete.
No
Initial Stockholder of the Company is subject to any noncompetition agreement
or
non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be an Initial Stockholder, employee, officer
and/or
2.26 Investments.
No more
than 45% of the “value” (as defined in Section 2(a)(41) of the Investment
Company Act of 1940 (“Investment
Company Act”))
of
the Company’s total assets consist of, and no more than 45% of the Company’s net
income after taxes is derived from, securities other than “Government
Securities”
(as
defined in Section 2(a)(16) of the Investment Company Act).
2.27 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.28 Related
Party Transactions.
No
relationship, direct or indirect, exists between or among any of the Company
or
any affiliate of the Company, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any affiliate of the
Company, on the other hand, which is required by the Act, the Exchange Act
or
the Regulations to be described in the Registration Statement, the Preliminary
Prospectus and/or the Prospectus which is not so described and described as
required. There are no outstanding loans, advances (except normal advances
for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except
as
disclosed in the Registration Statement, the Preliminary Prospectus and/or
the
Prospectus. The Company has not extended or maintained credit, arranged for
the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or officer of the Company.
-16-
2.29 No
Influence.
The
Company has not offered, or caused the Underwriters to offer, the Firm Units
to
any person or entity with the intention of unlawfully influencing: (a) a
customer or supplier of the Company or any affiliate of the Company to alter
the
customer’s or supplier’s level or type of business with the Company or such
affiliate or (b) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
2.30 Definition
of “Knowledge”.
As used
in herein, the term “knowledge of the Company” (or similar language) shall mean
the knowledge of the officers and directors of the Company who are named in
the
Prospectus, with the assumption that such officers and directors shall have
made
reasonable and diligent inquiry of the matters presented.
3. Covenants
of the Company. The Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement. The Company will deliver to the Representative,
prior
to filing, any amendment or supplement to the Registration Statement or
Prospectus proposed to be filed after the Effective Date and not file any such
amendment or supplement to which the Representative shall reasonably object
in
writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a Prospectus is required to be delivered under the Act, the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary
to
permit the continuance of sales of or dealings in the Public Securities in
accordance with the provisions hereof and the Prospectus. If at any time when
a
Prospectus relating to the Public Securities is required to be delivered under
the Act, any event shall have occurred as a result of which, in the opinion
of
counsel for the Company or counsel for the Underwriters, the Prospectus, as
then
amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, or if it is necessary during such period to amend the
Registration Statement or amend or supplement the Prospectus to comply with
the
Act, the Company will notify the Representative promptly and prepare and file
with the Commission, subject to Section 3.1 hereof, an appropriate amendment
to
the Registration Statement or amendment or supplement to the Prospectus (at
the
expense of the Company) so as to correct such statement or omission or effect
such compliance.
-17-
3.2.2 Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424
of
the Regulations.
3.2.3 Exchange
Act Registration.
For a
period of five years from the Effective Date, or until such earlier time upon
which the Company is required to be liquidated, the Company will use its best
efforts to maintain the registration of the Units, Common Stock and Warrants
under the provisions of the Exchange Act. The Company will not deregister the
Units under the Exchange Act without the prior written consent of
Maxim.
3.2.4 ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
As soon
as it is legally required to do so, the Company shall take all actions necessary
to obtain and thereafter maintain material compliance with each applicable
provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated thereunder and related or similar rules and regulations promulgated
by any other governmental or self regulatory entity or agency with jurisdiction
over the Company.
3.3 Blue
Sky Filing.
The
Company will endeavor in good faith, in cooperation with the Representative,
at
or prior to the time the Registration Statement becomes effective, to qualify
the Public Securities for offering and sale under the securities laws of such
jurisdictions as the Representative may reasonably designate, provided that
no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
3.4 Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act such number of copies of each Preliminary
Prospectus and Prospectus and all amendments and supplements to such documents
as such Underwriters may reasonably request and, as soon as the Registration
Statement or any amendment or supplement thereto becomes effective, deliver
to
you two original executed Registration Statements, including exhibits, and
all
post-effective amendments thereto and copies of all exhibits filed therewith
or
incorporated therein by reference and all original executed consents of
certified experts.
-18-
3.5 Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use its best efforts to cause the Registration Statement to remain
effective and will notify the Representative immediately and confirm the notice
in writing: (i) of the effectiveness of the Registration Statement and any
amendment thereto; (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or of the initiation, or the
threatening, of any proceeding for that purpose; (iii) of the issuance by any
state securities commission of any proceedings for the suspension of the
qualification of the Public Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus; (v) of the receipt
of
any comments or request for any additional information from the Commission;
and
(vi) of the happening of any event during the period described in Section 3.4
hereof that, in the judgment of the Company, makes any statement of a material
fact made in the Registration Statement, the Preliminary Prospectus and/or
the
Prospectus untrue or that requires the making of any changes in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus in order to make
the
statements therein, (with respect to the Prospectus in light of the
circumstances under which they were made), not misleading. If the Commission
or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will make every reasonable effort to
obtain promptly the lifting of such order.
3.6 Review
of Financial Statements.
Until
the earlier of five years from the Effective Date, or until such earlier upon
which the Company is required to be liquidated, the Company, at its expense,
shall cause its regularly engaged independent certified public accountants
to
review (but not audit) the Company’s financial statements for each of the first
three fiscal quarters prior to the announcement of quarterly financial
information, the filing of the Company’s Form 10-Q quarterly report and the
mailing of quarterly financial information to stockholders.
3.7 Affiliated
Transactions.
3.7.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which is
affiliated with any Initial Stockholder unless the Company obtains an opinion
from an independent investment banking firm that the Business Combination is
fair to the Company’s stockholders from a financial perspective.
3.7.2 Administrative
Services.
The
Company has entered into an agreement (the “Service Agreement”) with AMCO
Distribution Services, Inc., (the “Affiliate”) in the form filed as an exhibit
to the Registration Statement pursuant to which the Affiliate will make
available to the Company general and administrative services including office
space, utilities, receptionist and secretarial support for the Company’s use for
$7,500 per month.
3.7.3 Compensation.
Except
as set forth in this Section 3.7, the Company shall not pay any Initial
Stockholder or any of their affiliates any fees or compensation from the
Company, for services rendered to the Company prior to, or in connection with,
this Offering or the consummation of a Business Combination; provided that
the
Initial Stockholders shall be entitled to reimbursement from the Company for
their out-of-pocket expenses incurred on the Company’s behalf, which includes an
aggregate of $77,500 in loans which were made to the Company prior to the
effective date of the Registration Statement and expenses incurred by them
in
connection with seeking and consummating a Business Combination.
3.8 Secondary
Market Trading and Standard & Poor’s.
The
Company will apply to be included in Standard and Poor’s Daily News and
Corporation Records Corporate Descriptions for a period of five years from
the
consummation of a Business Combination. Promptly after the consummation of
the
Offering, the Company shall take such steps as may be necessary to obtain a
secondary market trading exemption for the Company’s securities in the State of
California. The Company shall also take such other action as may be reasonably
requested by the Representative to obtain a secondary market trading exemption
in such other states as may be requested by the Representative.
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3.9 Warrant
Solicitation Fees.
The
Company hereby engages Maxim, on a non-exclusive basis, as its agent for the
solicitation of the exercise of the Warrants. The Company will (i) assist Maxim
with respect to such solicitation, if requested by Maxim, and (ii) at Maxim’s
request, provide Maxim, and direct the Company’s transfer and warrant agent to
provide to Maxim, at the Company’s cost, lists of the record and, to the extent
known, beneficial owners of, the Warrants. Commencing one year from the
Effective Date, the Company will pay Maxim five percent (5%) of the exercise
price of the Warrants, payable on the date of such exercise, on the terms
provided for in the Warrant Agreement, only if permitted under the rules and
regulations of the NASD and only to the extent that an investor who exercises
his Warrants specifically designates, in writing, that Maxim solicited his
exercise. Maxim may engage sub-agents in its solicitation efforts. The Company
agrees to disclose the arrangement to pay such solicitation fees to Maxim in
any
prospectus used by the Company in connection with the registration of the shares
of Common Stock underlying the Warrants.
3.10 Financial
Public Relations Firm.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall retain a financial public relations firm
reasonably acceptable to the Representative for a term to be agreed upon by
the
Company and the Representative.
3.11 Reports
to the Representative.
3.11.1 Periodic
Reports, Etc.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish to
the
Representative (Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director) and its counsel copies
of such financial statements and other periodic and special reports as the
Company from time to time furnishes generally to holders of any class of its
securities, and promptly furnish to the Representative: (i) a copy of each
periodic report the Company shall be required to file with the Commission;
(ii)
a copy of every press release and every news item and article with respect
to
the Company or its affairs which was released by the Company; (iii) a copy
of
each Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by
the
Company; (iv) five copies of each Registration Statement; (v) a copy of monthly
statements, if any, setting forth such information regarding the Company’s
results of operations and financial position (including balance sheet, profit
and loss statements and data regarding outstanding purchase orders) as is
regularly prepared by management of the Company; and (vi) such additional
documents and information with respect to the Company and the affairs of any
future subsidiaries of the Company as the Representative may from time to time
reasonably request; provided that the Representative shall sign, if requested
by
the Company, a Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representative and its counsel in connection with
the Representative’s receipt of such information.
-20-
3.11.2 Transfer
Sheets.
For a
period of five years following the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
a
transfer and warrant agent acceptable to the Representative (the “Transfer
Agent”)
and
during the two (2) year period following the Closing Date, will furnish to
the
Underwriters at the Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Representative may request, including the daily and
monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental
Stock Transfer & Trust Company is acceptable to the
Underwriters.
3.11.3 Secondary
Market Trading Survey.
Until
such time as the Public Securities are listed or quoted, as the case may be,
on
the New York Stock Exchange, the American Stock Exchange or quoted on the Nasdaq
National Market, or until such earlier time upon which the Company is required
to be liquidated, the Company shall engage ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC (“Lowenstein”),
for a
one-time fee of $5,000 payable on the Closing Date, to deliver and update to
the
Underwriters on a timely basis, but in any event on the Effective Date and
at
the beginning of each fiscal quarter, a written report detailing those states
in
which the Public Securities may be traded in non-issuer transaction under the
Blue Sky laws of the fifty States (the “Secondary Market Trading
Survey”).
3.11.4 Trading
Reports.
During
such time as the Public Securities are quoted on the NASD OTC Bulletin Board
(or
any successor trading market such as the Bulletin Board Exchange) or the Pink
Sheets, LLC (or similar publisher of quotations) and no other automated
quotation system, the Company shall provide to the Representative, at its
expense, such reports published by the NASD or the Pink Sheets, LLC relating
to
price trading of the Public Securities, as the Representative shall reasonably
request. In addition to the requirements of the preceding sentence, for a period
of two (2) years from the Closing Date, the Company, at its expense, shall
provide the Representative a subscription to the Company’s weekly Depository
Transfer Company Security Position Reports.
3.12 Disqualification
of Form S-1.
For a
period equal to seven years from the date hereof, the Company will not take
any
action or actions which may prevent or disqualify the Company’s use of Form S-1
(or other appropriate form) for the registration of the Warrants and the
Representative’s Warrants under the Act.
3.13 Payment
of Expenses.
-21-
3.13.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at Closing Date, all expenses incident
to
the performance of the obligations of the Company under this Agreement,
including, but not limited to: (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, the Preliminary Prospectus and/or the final Prospectus
and the printing and mailing of this Agreement and related documents, including
the cost of all copies thereof and any amendments thereof or supplements thereto
supplied to the Underwriters in quantities as may be required by the
Underwriters; (ii) the printing, engraving, issuance and delivery of the Units,
the shares of Common Stock and the Warrants included in the Units and the
Representative’s Purchase Option, including any transfer or other taxes payable
thereon; (iii) the qualification of the Public Securities under state or foreign
securities or Blue Sky laws, including the costs of printing and mailing the
“Preliminary Blue Sky Memorandum,” and all amendments and supplements thereto,
fees and disbursements for the Representative’s counsel retained for such
purpose (such fees shall be capped at $35,000 in the aggregate, not including
disbursements), and a one-time fee of $5,000 payable to the Representative’s
counsel for the preparation of the Secondary Market Trading Survey; (iv) filing
fees, costs and expenses incurred in registering the Offering with the NASD
(including all COBRADesk fees); (v) costs of placing “tombstone” advertisements
in The
Wall Street Journal,
The
New York Times
and a
third publication to be selected by the Representative not to exceed $25,000
in
the aggregate; (vi) fees and disbursements of the transfer and warrant agent;
(vii) the Company’s expenses associated with “due diligence” meetings arranged
by the Representative; (viii) the preparation, binding and delivery of leather
bound volumes in form and style reasonably satisfactory to the Representative
and transaction lucite cubes or similar commemorative items in a style and
quantity as reasonably requested by the Representative; (ix) all costs and
expenses associated with “road show” marketing and “due diligence” trips for the
Company’s management to meet with prospective investors, including without
limitation, all travel, food and lodging expenses associated with such trips;
and (x) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in
this
Section 3.13.1. The Representative may deduct from the net proceeds of the
Offering payable to the Company on the Closing Date, or the Option Closing
Date,
if any, the expenses set forth above to be paid by the Company to the
Representative and others. The Company also agrees that, if requested by the
Representative, it will engage and pay for an investigative search firm of
the
Representative’s choice to conduct an investigation of the principals of the
Company as shall be selected by the Representative (such investigation to cost
no more than $3,000 per person), which amounts will be paid by the Company.
If
the Offering is not consummated for any reason whatsoever, except as a result
of
the Representatives or any Underwriter’s breach or default with respect to any
of its obligations described in this Agreement, then the Company shall reimburse
the Representative in full for their out of pocket accountable expenses actually
incurred by the Representative, including, without limitation, its legal
fees.
3.13.2 Nonaccountable
Expenses.
The
Company further agrees that in addition to the expenses payable pursuant to
Section 3.13.1, on the Closing Date, it will pay to the Representative a
nonaccountable expense allowance equal to one percent (1%) of the gross proceeds
received by the Company from the sale of the Firm Units (of which $10,000 has
previously been paid) by deduction from the proceeds of the Offering
contemplated herein. In addition, the Company shall pay to the Representative
a
nonaccountable expense allowance equal to one percent (1%) of the gross proceeds
received by the Company from the sale of the Placement Securities.
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3.13.3 Fee
on
Business Combination.
The
Representative agrees that three percent (3%) of the gross proceeds from the
sale of the Firm Units ($960,000) (an additional $144,000 if the over-allotment
option is exercised in full) (the “Contingent
Discount”)
will
be deposited in and held in the Trust Fund. Upon consummation of a Business
Combination, the Company and the Underwriters further agree that in addition
to
the expenses payable pursuant to Sections 3.13.1 and 3.13.2, the Company will
pay to the Representative an additional underwriting commission equal to three
percent (3%) of the gross proceeds received by the Company from the sale of
the
Firm Units and in each case in respect to any IPO Shares (defined in Section
7.6) which are not redeemed pursuant to Section 7.6 hereof. The Representative
agrees that the Representative shall forfeit any rights or claims to the
Contingent Discount in respect of any IPO Shares that are redeemed pursuant
to
Section 7.6 hereof. In addition, in the event that the Company is unable to
consummate a Business Combination and Continental Stock Transfer & Trust
Company (“Continental”),
the
trustee of the Trust Fund, commences liquidation of the Trust Fund as provided
in the Trust Agreement, the Representative agrees that (i) the Representative
shall forfeit any rights or claims to the Contingent Discount; and (ii) the
Contingent Discount, together with all other amounts on deposit in the Trust
Fund, and any accrued interest thereon (net of taxes payable), shall be
distributed on a pro-rata basis among the holders of the shares of Common Stock
included in the Units sold in the Offering. In addition, the Representative
shall receive 36,000 shares of Common Stock of the Company upon the consummation
of a Business Combination (the “Contingent
Shares”).
3.14 Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering received by it in a manner
consistent with the application described under the caption “Use of Proceeds” in
the Prospectus.
3.15 Delivery
of Earnings Statements to Security Holders. The Company will make generally
available to its security holders as soon as practicable, but not later than
the
first day of the fifteenth full calendar month following the Effective Date,
an
earnings statement (which need not be certified by independent public or
independent certified public accountants unless required by the Act or the
Regulations, but which shall satisfy the provisions of Rule 158(a) under Section
11(a) of the Act) covering a period of at least twelve consecutive months
beginning after the Effective Date.
3.16 Notice
to NASD.
3.16.1 Business
Combination.
In the
event any person or entity (regardless of any NASD affiliation or association)
is engaged to assist the Company in its search for a merger candidate or to
provide any other merger and acquisition services, the Company will provide
the
following to the NASD and Representative prior to the consummation of the
Business Combination: (i) complete details of all services and copies of
agreements governing such services; and (ii) justification as to why the person
or entity providing the merger and acquisition services should not be considered
an “underwriter and related person” with respect to the Company’s initial public
offering, as such term is defined in Rule 2710 of the NASD’s Conduct Rules. The
Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the proxy statement which the Company will file
for
purposes of soliciting stockholder approval for the Business
Combination.
-23-
3.16.2 Broker/Dealer.
In the
event the Company intends to register as a broker/dealer, merge with or acquire
a registered broker/dealer, or otherwise become a member of NASD, it shall
promptly notify the NASD.
3.17 Stabilization.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of Maxim) has taken or will take, directly
or
indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Units.
3.18 Internal
Controls.
The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary in order to permit preparation of financial statements
in
accordance with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.19 Accountants.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company shall retain BDO
or
other independent public accountants reasonably acceptable to
Maxim.
3.20 Form
8-K.
The
Company shall, on the date hereof, retain its independent public accountants
to
audit the financial statements of the Company as of the Closing Date (the
“Audited Financial Statements”) reflecting the receipt by the Company of the
proceeds of the initial public offering. As soon as the Audited Financial
Statements become available, the Company shall immediately file a Current Report
on Form 8-K with the Commission, which Report shall contain the Company’s
Audited Financial Statements.
3.21 NASD.
The
Company shall advise the NASD if it is aware that any 5% or greater stockholder
of the Company becomes an affiliate or associated person of an NASD member
participating in the distribution of the Company’s Public
Securities.
3.22 Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
-24-
3.23 Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust Fund
to
be invested only in “government securities” with specific maturity dates or in
money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act as set forth in the Trust Agreement and disclosed
in
the Prospectus. The Company will otherwise conduct its business in a manner
so
that it will not become subject to the Investment Company Act. Furthermore,
once
the Company consummates a Business Combination, it will be engaged in a business
other than that of investing, reinvesting, owning, holding or trading
securities.
3.24 Business
Combination Announcement.
Within
five (5) Business Days following the consummation by the Company of a Business
Combination, the Company shall cause an announcement (“Business Combination
Announcement”) to be placed, at its cost, in The Wall Street Journal, The New
York Times and a third publication to be selected by Maxim announcing the
consummation of the Business Combination and indicating that Maxim was the
managing underwriter in the Offering (subject to an aggregate maximum amount
of
$30,000). The Company shall supply Maxim with a draft of the Business
Combination Announcement and provide Maxim with a reasonable advance opportunity
to comment thereon. The Company will not place the Business Combination
Announcement without the final approval of Maxim, which approval will not be
unreasonably withheld.
3.25 Colorado
Trust Filing.
In the
event the Securities are registered in the State of Colorado, the Company will
cause a Colorado Form ES to be filed with the Commissioner of the State of
Colorado no less than 10 days prior to the distribution of the Trust Fund in
connection with a Business Combination and will do all things necessary to
comply with Section ▇▇-▇▇-▇▇▇ and Rule 51-3.4 of the Colorado Securities
Act.
3.26 Press
Releases.
The
Company agrees that it will not issue press releases or engage in any other
publicity, without Maxim’s prior written consent (not to be unreasonably
withheld), for a period of forty (40) days after the Closing Date.
3.27 Key-Man
Insurance.
Prior
to the consummation of the Business Combination, the Company will obtain key
person life insurance with an insurer rated at least AA or better in the most
recent addition of “Best’s Life Reports” in the aggregate amount of $2,000,000
on the lives of ▇▇. ▇▇▇▇▇▇▇▇ or other key management to be agreed upon by the
Company and Maxim prior to the Closing Date. Such insurance shall be maintained
in full force and effect for a period of three years from the consummation
of
the Business Combination. The Company shall be the sole beneficiary of such
policy.
-25-
3.28 Electronic
Prospectus.
The
Company shall cause to be prepared and delivered to the Representative, at
its
expense, within one (1) Business Day from the effective date of this Agreement,
an Electronic Prospectus to be used by the Underwriters in connection with
the
Offering. As used herein, the term “Electronic Prospectus” means a form of
prospectus, and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representative, that may be transmitted electronically
by
the other Underwriters to offerees and purchasers of the Units for at least
the
period during which a Prospectus relating to the Units is required to be
delivered under the Securities Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to ▇▇▇▇▇, except to the
extent that graphic and image material cannot be disseminated electronically,
in
which case such graphic and image material shall be replaced in the electronic
prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to the
Representative, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to ▇▇▇▇▇ or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt of a request by an investor
or his or her representative within the period when a prospectus relating to
the
Units is required to be delivered under the Securities Act, the Company shall
transmit or cause to be transmitted promptly, without charge, a paper copy
of
the Prospectus.
3.29 Reservation
of Shares.
The
Company will reserve and keep available that maximum number of its authorized
but unissued securities which are issuable (i) upon exercise of the Warrants
and
the Representative’s Purchase Option, Representative’s Warrants, the Placement
Warrants and the Placement Warrants outstanding from time to time and (ii)
upon
the consummation of a Business Combination.
3.30 Board
Advisor.
The
Company agrees that it will, upon completion of the proposed public offering
contemplated herein, for a period of no less than two (2) years, engage a
designee of the Representative as an advisor (“Advisor”)
to its
Board of Directors where such Advisor shall attend meetings of the Board,
receive all notices and other correspondence and communications sent by the
Company to members of its Board of Directors provided, that such Advisor shall
not be entitled to any compensation, other than reimbursement for all costs
incurred in attending such meetings including, food, lodging, and
transportation. The Company further agrees that, during said two (2) year
period, it shall schedule no less than four (4) formal and “in person” meetings
of its Board of Directors in each such year at which meetings such Advisor
shall
be permitted to attend as set forth herein; said meetings shall be held
quarterly each year and ten (10) days advance notice of such meetings shall
be
given to the Advisor. Further, during such two (2) year period, the Company
shall give notice to the Representative with respect to any proposed
acquisitions, mergers, reorganizations or other similar transactions. The
Company shall indemnify and hold such Advisor harmless against any and all
claims, actions, damages, costs and expenses, and judgments arising solely
out
of the attendance and participation of such Advisor at any such meeting
described herein, and, if the Company maintains a liability insurance policy
affording coverage for the acts of its officers and directors, it shall, if
possible, include such Advisor as an insured under such policy.
3.31 Private
Placement Proceeds.
Immediately upon establishment of the Trust Fund and prior to the Closing,
the
Company shall deposit $960,000 of the proceeds from the Private Placement in
the
Trust Fund and shall provide Maxim with evidence of the same.
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3.32 No
Amendment to Charter.
(i) The
Company covenants and agrees, that it will not seek to amend or modify
provisions [(A) - (E) of Article Sixth] of its Amended and Restated Certificate
of Incorporation.
(ii) The
Company acknowledges that the purchasers of the Firm Units in this Offering
shall be deemed to be third party beneficiaries of Section 3.32 of this
Agreement.
(iii) The
Underwriters specifically acknowledge that they may not waive this Section
3.32
under any circumstances.
4. Conditions
of Underwriters’ Obligations. The obligations of the several Underwriters to
purchase and pay for the Units, as provided herein, shall be subject to the
continuing accuracy of the representations and warranties of the Company as
of
the date hereof and as of each of the Closing Date and the Option Closing Date,
if any, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof and to the performance by the Company of
its
obligations hereunder and to the following conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall have
been instituted or shall be pending or contemplated by the Commission and any
request on the part of the Commission for additional information shall have
been
complied with to the reasonable satisfaction of ▇▇▇▇▇▇▇▇▇▇.
4.1.2 NASD
Clearance.
By the
Effective Date, the Representative shall have received clearance from the NASD
as to the amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3 No
Commission Stop Order.
At each
of the Closing Date and the Option Closing Date, the Commission has not issued
any order or threatened to issue any order preventing or suspending the use
of
any Preliminary Prospectus or the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such
an
order.
4.1.4 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by you
pursuant to Section 3.3 hereof shall have been issued on either the Closing
Date
or the Option Closing Date, and no proceedings for that purpose shall have
been
instituted or shall be contemplated.
-27-
4.2 Company
Counsel Matters.
4.2.1 Effective
Date Opinion of Counsel.
On the
Effective Date, the Representative shall have received the favorable opinion
of
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ P.C. (“▇▇▇▇▇”),
counsel to the Company, dated the Effective Date, addressed to the
Representative and in form and substance satisfactory to the Representative
to
the effect that:
(i) The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its state of incorporation, with full power
and authority to own its properties and conduct its business as described in
the
Registration Statement, the Preliminary Prospectus and the Prospectus. The
Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which its ownership or leasing of any
properties or the character of its operations requires such qualification or
licensing, except where the failure to qualify would not have a material adverse
effect on the Company.
(ii) All
issued and outstanding securities of the Company (including, without limitation,
the Placement Securities) have been duly authorized and validly issued and
are
fully paid and non-assessable; the holders thereof are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any stockholder of the Company
arising by operation of law or under the Amended and Restated Certificate of
Incorporation or Bylaws of the Company. The offers and sales of the outstanding
Common Stock were at all relevant times either registered under the Act and
the
applicable state securities or Blue Sky Laws or exempt from such registration
requirements. The authorized and outstanding capital stock of the Company is
as
set forth in the Preliminary Prospectus and the Prospectus. The Units, the
Common Stock and the Warrants conform to the descriptions thereof contained
in
the Registration Statement, the Preliminary Prospectus and the
Prospectus.
(iii) The
Securities, the Placement Securities and the Incentive Warrants have been duly
authorized and, when issued and paid for, will be validly issued, fully paid
and
non-assessable; the holders thereof are not and will not be subject to personal
liability by reason of being such holders. The Securities, the Placement
Securities and the Incentive Warrants are not and will not be subject to the
preemptive rights of any holders of any security of the Company arising by
operation of law or under the Amended and Restated Certificate of Incorporation
or Bylaws of the Company or, to such counsel’s knowledge, similar rights that
entitle or will entitle any person to acquire any security from the Company
upon
issuance or sale thereof. When issued, the Representative’s Purchase Option, the
Representative’s Warrants, the Warrants, the Incentive Warrants, the Placement
Units and the Placement Warrants will constitute valid and binding obligations
of the Company to issue and sell, upon exercise thereof and payment therefor,
the number and type of securities of the Company called for thereby and such
Warrants, the Representative’s Purchase Option, and the Representative’s
Warrants, when issued, in each case, are enforceable against the Company in
accordance with their respective terms, except: (a) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (b) as enforceability of any indemnification or
contribution provision may be limited under the United States and state
securities laws; and (c) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses
and
to the discretion of the court before which any proceeding therefor may be
brought. The certificates representing the Securities are in due and proper
form. A sufficient number of shares of Common Stock have been reserved for
issuance upon exercise of the Placement Units, Placement Warrants, Warrants,
the
Representative’s Purchase Option, the Representative’s Warrants and the
Incentive Warrants. The shares of Common Stock underlying the Warrants, the
Representative’s Warrant and the Incentive Warrants will, upon exercise of the
Warrants, the Representative’s Warrant and the Incentive Warrants and payment of
the exercise price thereof, and the Contingent Shares will upon issuance
thereof, be duly and validly issued, fully paid and non-assessable and will
not
have been issued in violation of or subject to preemptive or, to such counsel’s
knowledge, similar rights that entitle or will entitle any person to acquire
any
securities from the Company upon issuance thereof.
-28-
(iv) The
Company has full right, power and authority to execute and deliver this
Agreement, the Warrant Agreement, the Services Agreements, the Trust Agreement,
the Placement Unit Purchase Agreement, the Escrow Agreement, the Incentive
Warrants, and the Representative’s Purchase Option and to perform its
obligations thereunder, and all corporate action required to be taken for the
due and proper authorization, execution and delivery of this Agreement, the
Warrant Agreement, the Services Agreements, the Trust Agreement, the Placement
Unit Purchase Agreement, the Escrow Agreement, the Incentive Warrants and the
Representative’s Purchase Option and consummation of the transactions
contemplated by the Underwriting Agreement, the Registration Statement and
the
Prospectus and as described in the Registration Statement and the Prospectus
have been duly and validly taken.
(v) The
Insider Letters, the Placement Unit Purchase Agreement and the Escrow Agreement
have been duly authorized, executed and delivered by the Initial Stockholders
(or, if applicable, their affiliates) party thereto and constitute the valid
and
binding obligations of such Initial Stockholders enforceable against them in
accordance with their respective terms, except: (a) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (b) as enforceability of any indemnification or
contribution provisions may be limited under the federal and state securities
laws; and (c) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(vi) This
Agreement, the Warrant Agreement, the Services Agreements, the Trust Agreement,
the Placement Unit Purchase Agreement and the Escrow Agreement have each been
duly and validly authorized and, when executed and delivered by the Company,
constitute, and the Representative’s Purchase Option has been duly and validly
authorized by the Company and, when executed and delivered, will constitute,
the
valid and binding obligations of the Company, enforceable against the Company
in
accordance with their respective terms, except: (a) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (b) as enforceability of any indemnification or
contribution provisions may be limited under the United States and state
securities laws; and (c) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses
and
to the discretion of the court before which any proceeding therefor may be
brought.
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(vii) The
execution, delivery and performance of this Agreement, the Warrant Agreement,
the Representative’s Purchase Option, the Escrow Agreement, the Trust Agreement,
the Placement Unit Purchase Agreement, the Incentive Warrants and the Services
Agreements, the issuance and sale of the Securities, the consummation of the
transactions contemplated hereby and thereby, and compliance by the Company
with
the terms and provisions hereof and thereof, do not and will not, with or
without the giving of notice or the lapse of time, or both, (a) to such
counsel’s knowledge, conflict with, or result in a breach of, any of the terms
or provisions of, or constitute a default under, or result in the creation
or
modification of any lien, security interest, charge or encumbrance upon any
of
the properties or assets of the Company pursuant to the terms of, any mortgage,
deed of trust, note, indenture, loan, contract, commitment or other agreement
or
instrument filed as an exhibit to the Registration Statement, (b) result in
any
violation of the provisions of the Amended and Restated Certificate of
Incorporation or the By-Laws of the Company, or (c) to such counsel’s knowledge,
violate any statute or any judgment, order or decree, rule or regulation
applicable to the Company of any court, domestic or foreign, or of any federal,
state or other regulatory authority or other governmental body having
jurisdiction over the Company, its properties or assets.
(viii) The
Registration Statement, each Preliminary Prospectus and the Prospectus and
any
post-effective amendments or supplements thereto (other than the financial
statements included therein, as to which no opinion need be rendered) each
as of
their respective dates complied as to form in all material respects with the
requirements of the Act and Regulations. The Securities and each agreement
filed
as an exhibit to the Registration Statement conform in all material respects
to
the description thereof contained in the Registration Statement, the Preliminary
Prospectus and the Prospectus. No United States or state statute or regulation
required to be described in the Preliminary Prospectus and/or Prospectus is
not
described as required (except as to the Blue Sky laws of the various states,
as
to which such counsel expresses no opinions), nor are any contracts or documents
of a character required to be described in the Registration Statement,
Preliminary Prospectus or the Prospectus or to be filed as exhibits to the
Registration Statement not so described or filed as required (except for the
contracts and documents described in the “Underwriting” section of the
Registration Statement, as to which such counsel expresses no
opinions).
(ix) The
Registration Statement is effective under the Act. To such counsel’s knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
(x) To
such
counsel’s knowledge, there is no action, suit or proceeding before or by any
court of governmental agency or body, domestic or foreign, now pending, or
threatened against the Company that is required to be described in the
Registration Statement.
(xi) No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any judicial, regulatory or other
legal or governmental agency or body is required for the execution, delivery
and
performance of the Underwriting Agreement or consummation of the transactions
contemplated by the Underwriting Agreement, the Registration Statement,
Preliminary Prospectus and the Prospectus, except for (1) such as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the Units by the Underwriters (as to which such counsel
need
express no opinion), (2) such as have been made or obtained under the Securities
Act and (3) such as are required by the NASD.
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(xii) The
statements under the captions “Description of Securities” and Item 14 of Part II
of the Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters, documents
and proceedings.
The
opinion of counsel shall further include a statement to the effect that counsel
has participated in conferences with officers and other representatives of
the
Company, representatives of the independent public accountants for the Company
and representatives of the Underwriters at which the contents of the
Registration Statement, Preliminary Prospectus, the Prospectus and related
matters were discussed and although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of
the
statements contained in the Registration Statement, Preliminary Prospectus
and
the Prospectus (except as otherwise set forth in this opinion), no facts have
come to the attention of such counsel which lead them to believe that either
the
Registration Statement, Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, as of the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement, Preliminary Prospectus or the
Prospectus).
4.2.2 Closing
Date and Option Closing Date Opinion of Counsel.
On each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received the favorable opinion of ▇▇▇▇▇, dated the Closing Date
or
the Option Closing Date, as the case may be set forth above, addressed to the
Representative and in form and substance reasonably satisfactory to the counsel
to the Representative, confirming as of the Closing Date and, if applicable,
the
Option Closing Date, the statements made by ▇▇▇▇▇ in its opinion delivered
on
the Effective Date.
4.2.3 Reliance.
In
rendering such opinion, such counsel may rely: (i) as to matters involving
the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to the Representative) of other
counsel reasonably acceptable to the Representative, familiar with the
applicable laws; and (ii) as to matters of fact, to the extent they deem proper,
on certificates or other written statements of officers of the Company and
officers of departments of various jurisdiction having custody of documents
respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to the
Underwriters’ counsel if requested. The opinion of counsel for the Company and
any opinion relied upon by such counsel for the Company shall include a
statement to the effect that it may be relied upon by counsel for the
Underwriters in its opinion delivered to the Underwriters.
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4.3 Cold
Comfort Letter.
At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to ▇▇▇▇▇▇▇▇▇▇ from BDO dated, respectively,
as of
the date of this Agreement and as of the Closing Date and the Option Closing
Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during
the periods covered by the financial statements included in the Registration
Statement, the Preliminary Prospectus and the Prospectus, provided to the
Company any non-audit services, as such term is used in Section 10A(g) of the
Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement, the Preliminary Prospectus and the Prospectus comply
as
to form in all material respects with the applicable accounting requirements
of
the Act and the published Regulations thereunder;
(iii) Stating
that, on the basis of a limited review which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the stockholders
and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible
for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that:
(a)
the unaudited financial statements of the Company included in the Registration
Statement, the Preliminary Prospectus and the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of
the
Act and the Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent
with
that of the audited financial statements of the Company included in the
Registration Statement, Preliminary Prospectus and the Prospectus; (b) at a
date
not later than five days prior to the Effective Date, Closing Date or Option
Closing Date, as the case may be, there was any change in the capital stock
or
long-term debt of the Company, or any decrease in the stockholders’ equity of
the Company as compared with amounts shown in the __________ balance sheet
included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, other than as set forth in or contemplated by the Registration
Statement, the Preliminary Prospectus and the Prospectus, or, if there was
any
decrease, setting forth the amount of such decrease, and (c) during the period
from __________ to a specified date not later than five days prior to the
Effective Date, Closing Date or Option Closing Date, as the case may be, there
was any decrease in revenues, net earnings or net earnings per share of Common
Stock, in each case as compared with the corresponding period in the preceding
year and as compared with the corresponding period in the preceding quarter,
other than as set forth in or contemplated by the Registration Statement, the
Preliminary Prospectus and the Prospectus, or, if there was any such decrease,
setting forth the amount of such decrease;
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(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company (including a break-down of commercial
papers and notes payable to banks);
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Preliminary
Prospectus and the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not during the immediately preceding five year period brought
to
the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
(vii) Statements
as to such other matters incident to the transaction contemplated hereby as
you
may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the President and the Secretary or Assistant Secretary of the Company,
dated the Closing Date or the Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.5 hereof have been satisfied as of such date and that, as of Closing Date
and
the Option Closing Date, as the case may be, the representations and warranties
of the Company set forth in Section 2 hereof are true and correct. In addition,
the Representative will have received such other and further certificates of
officers of the Company as the Representative may reasonably
request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or
Assistant Secretary of the Company, dated the Closing Date or the Option Date,
as the case may be, respectively, certifying: (i) that the By-Laws and Amended
and Restated Certificate of Incorporation of the Company are true and complete,
have not been modified and are in full force and effect; (ii) that the
resolutions relating to the public offering contemplated by this Agreement
are
in full force and effect and have not been modified; (iii) all correspondence
between the Company or its counsel and the Commission; and (iv) as to the
incumbency of the officers of the Company. The documents referred to in such
certificate shall be attached to such certificate.
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4.5 No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any: (i)
there shall have been no material adverse change or development involving a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement
and
Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have
been pending or threatened against the Company or any Initial Stockholder before
or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations, prospects or financial condition
or
income of the Company, except as set forth in the Registration Statement, the
Preliminary Prospectus and Prospectus; (iii) no stop order shall have been
issued under the Act and no proceedings therefor shall have been initiated
or
threatened by the Commission; and (iv) the Registration Statement, the
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto shall contain all material statements which are required to be stated
therein in accordance with the Act and the Regulations and shall conform in
all
material respects to the requirements of the Act and the Regulations, and
neither the Registration Statement, the Preliminary Prospectus nor the
Prospectus nor any amendment or supplement thereto shall contain any untrue
statement of a material fact or omits to state any material fact required to
be
stated therein or necessary to make the statements therein (in the case of
the
Prospectus, in light of the circumstances under which they were made), not
misleading.
4.6 Delivery
of Agreements.
4.6.1 Effective
Date Deliveries.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreement,
the
Services Agreement, all of the Insider Letters and the Placement Unit Purchase
Agreement.
4.6.2 Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representative and/or
its
designees executed copies of the Representative’s Purchase Option.
4.7 Secondary
Market Trading Survey.
On the
Closing Date, the Representative shall have received the Secondary Market
Trading Survey from ▇▇▇▇▇▇▇▇▇▇.
5. Indemnification.
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5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters and each dealer selected by you that
participates in the offer and sale of the Units (each a “Selected
Dealer”)
and
each of their respective directors, officers and employees and each person,
if
any, who controls any such Underwriter (“controlling person”) within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against any
and
all loss, liability, claim, damage and expense whatsoever (including but not
limited to any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriters and the Company or between any of the Underwriters
and
any third party or otherwise) to which they or any of them may become subject
under the Act, the Exchange Act or any other federal, state or local statute,
law, rule, regulation or ordinance or at common law or otherwise or under the
laws, rules and regulation of foreign countries, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in
(i) any Preliminary Prospectus, the Registration Statement, or the Prospectus
(as from time to time each may be amended and supplemented); (ii) in any
post-effective amendment or amendments or any new registration statement and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Representative’s Purchase Option; or (iii) any application
or other document or written communication (in this Section 5 collectively
called “application”) executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Units
under
the securities laws thereof or filed with the Commission, any state securities
commission or agency, the OTC Bulletin Board or Nasdaq or any securities
exchange; or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein,
in
the light of the circumstances under which they were made, not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to an Underwriter
by or on behalf of such Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment
or
supplement thereof, or in any application, as the case may be, which furnished
written information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. With respect to any untrue
statement or omission or alleged untrue statement or omission made in the
Preliminary Prospectus, the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter to the extent that any loss,
liability, claim, damage or expense of such Underwriter results from the fact
that a copy of the Prospectus was not given or sent to the person asserting
any
such loss, liability, claim or damage at or prior to the written confirmation
of
sale of the Securities to such person as required by the Act and the
Regulations, and if the untrue statement or omission has been corrected in
the
Prospectus, unless such failure to deliver the Prospectus was a result of
non-compliance by the Company with its obligations under Section 3.4 hereof.
The
Company agrees promptly to notify the Representative of the commencement of
any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale of the Securities
or in connection with the Preliminary Prospectus, the Registration Statement,
or
the Prospectus.
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5.1.2 Procedure.
If any
action is brought against an Underwriter or controlling person in respect of
which indemnity may be sought against the Company pursuant to Section 5.1.1,
such Underwriter shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action,
including the employment and fees of counsel (subject to the reasonable approval
of such Underwriter) and payment of actual expenses. Such Underwriter or
controlling person shall have the right to employ its or their own counsel
in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless: (i) the employment of
such counsel at the expense of the Company shall have been authorized in writing
by the Company in connection with the defense of such action; (ii) the Company
shall not have employed counsel to have charge of the defense of such action;
or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the
Underwriter and/or controlling person shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if the Underwriter
or
controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment
or
supplement thereto, or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto or in any such application, which furnished
written information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
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5.3 Contribution.
5.3.1 Contribution
Rights.
In
order to provide for just and equitable contribution under the Act in any case
in which (i) any person entitled to indemnification under this Section 5 makes
claim for indemnification pursuant hereto but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required on
the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company
is responsible for the balance; provided, that, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 5.3.1, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages that such Underwriter has otherwise been required to pay in respect
of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Underwriters or the Company, as
applicable.
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing
party”),
notify the contributing party of the commencement thereof, but the omission
to
so notify the contributing party will not relieve it from any liability which
it
may have to any other party other than for contribution hereunder. In case
any
such action, suit or proceeding is brought against any party, and such party
notifies a contributing party or its representative of the commencement thereof
within the aforesaid fifteen days, the contributing party will be entitled
to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any
party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section are intended to supersede,
to
the extent permitted by law, any right to contribution under the Act, the
Exchange Act or otherwise available. The Underwriters’ obligations to contribute
pursuant to this Section 5.3 are several and not joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
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6.2 Default
Exceeding 10% of Firm Units or Option Units.
In the
event that the default addressed in Section 6.1 above relates to more than
10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within
one
Business Day after such default relating to more than 10% of the Firm Units
or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one Business
Day within which to procure another party or parties satisfactory to you to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
may be terminated by you or the Company without liability on the part of the
Company (except as provided in Sections 3.15 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that
if such default occurs with respect to the Option Units, this Agreement will
not
terminate as to the Firm Units; and provided further that nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default
hereunder.
6.3 Postponement
of Closing Date.
In the
event that the Firm Units or Option Units to which the default relates are
to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Option Closing Date for a reasonable period, but
not in any event exceeding five Business Days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement, the
Preliminary Prospectus and/or the Prospectus, as the case may be, or in any
other documents and arrangements, and the Company agrees to file promptly any
amendment to, or to supplement, the Registration Statement, the Preliminary
Prospectus and/or the Prospectus, as the case may be, that in the opinion of
counsel for the Underwriters may thereby be made necessary. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party
to
this Agreement with respect to such Securities.
7. Additional
Covenants.
7.1 Additional
Shares or Options.
The
Company hereby agrees that until the Company consummates a Business Combination,
it shall not issue any shares of Common Stock or any options or other securities
convertible into Common Stock, or any shares of Preferred Stock which
participate in any manner in the Trust Fund or which vote as a class with the
Common Stock on a Business Combination.
-38-
7.2 Trust
Fund Waiver Acknowledgments.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business or businesses which the Company seeks to acquire
(each, a “Target
Business”)
or
obtain the services of any vendor unless and until such Target Business or
vendor acknowledges in writing, whether through a letter of intent, memorandum
of understanding or other similar document (and subsequently acknowledges the
same in any definitive document replacing any of the foregoing), that (a) it
has
read the Prospectus and understands that the Company has established the Trust
Fund, initially in an amount of $32,000,000 (without giving effect to any
exercise of the Over-allotment Option) for the benefit of the Public
Stockholders and that, except for a portion of the interest earned on the
amounts held in the Trust Fund as set forth in the Trust Agreement, the Company
may disburse monies from the Trust Fund only (i) to the Public Stockholders
in
the event of the conversion of their shares or the dissolution and liquidation
of the Trust Fund as part of the Company’s plan of dissolution and liquidation
or (ii) to the Company after it consummates a Business Combination and (b)
for
and in consideration of the Company (1) agreeing to evaluate such Target
Business for purposes of consummating a Business Combination with it or (2)
agreeing to engage the services of the vendor, as the case may be, such Target
Business or vendor agrees that it does not have any right, title, interest
or
claim of any kind in or to any monies of the Trust Fund (“Claim”)
and
waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever. The foregoing letters
shall substantially be in the form attached hereto as Exhibit A and B,
respectively. Furthermore, each officer and director of the Company shall
execute a waiver letter in the form attached hereto as Exhibit C.
7.3 Insider
Letters.
The
Company shall not take any action or omit to take any action which would cause
a
breach of any of the Insider Letters executed between each Initial Stockholder
and Maxim or the Placement Unit Purchase Agreement and will not allow any
amendments to, or waivers of, such Insider Letters or the Placement Unit
Purchase Agreement without the prior written consent of Maxim.
7.4 Amended
and Restated Certificate of Incorporation and By-Laws.
The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Amended and Restated Certificate
of Incorporation or By-Laws. Prior to the consummation of a Business
Combination, the Company will not amend its Amended and Restated Certificate
of
Incorporation, without the prior written consent of Maxim.
7.5 Blue
Sky Requirements.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
-39-
7.6 Acquisition/Liquidation
Procedure.
(a) The
Company agrees: (i) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company’s stockholders for their approval
(“Business
Combination Vote”)
even
if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law; and (ii) that, in the event
that the Company does not effect a Business Combination within 18 months from
the consummation of this Offering (subject to extension for an additional
six-month period, as described in the Prospectus)(the “Termination
Date”),
the
Company shall take all action necessary to dissolve the Corporation and
liquidate the Trust Account to holders of IPO Shares as soon as reasonably
practicable, and after approval of the Company’s stockholders and subject to the
requirements of the Delaware General Corporation Law (the “GCL”), including the
adoption of a resolution by the Company’s Board of Directors, prior to such
Termination Date, pursuant to Section 275(a) of the GCL, which shall deem the
dissolution of the Company advisable and cause to be prepared such notices
as
are required by Section 275(a) of the GCL as promptly thereafter as possible.
If
the Company does not consummate a Business Combination by the Termination Date,
the Company shall, with respect to any plan of dissolution and liquidation,
cause the Company’s Board of Directors to convene, adopt a plan of dissolution
and liquidation and promptly prepare and file a proxy statement with the
Securities and Exchange Commission setting out the plan of dissolution and
liquidation. If the Company seeks approval from its stockholders to consummate
a
Business Combination within 90 days of the expiration of 24 months from the
Effective Date, the proxy statement related to such Business Combination will
also seek stockholder approval for the plan of dissolution and liquidation
in
the event the stockholders do not approve the Business Combination. If no proxy
statement seeking the approval of the stockholders for a Business Combination
has been filed within 30 days prior to the date which is 24 months from the
Effective Date, the Company shall cause its Board of Directors, prior to such
date, to convene and adopt a plan of dissolution and liquidation and on such
date file a proxy statement with the Securities and Exchange Commission seeking
stockholder approval for such plan. Upon liquidation of the Trust Account,
the
Company will distribute to all holders of IPO Shares (defined below) an
aggregate sum equal to the Company’s “Liquidation
Value.”
The
Company’s “Liquidation Value” shall mean the Company’s book value, as determined
by the Company and audited by BDO. In no event, however, will the Company’s
Liquidation Value be less than the amount contained in the Trust Fund at that
time, inclusive of any net interest income thereon less any amounts previously
distributed to the Company out of the interest earned on the Trust Account
pursuant to the terms of the Trust Agreement. Only holders of IPO Shares (as
defined below) shall be entitled to receive liquidating distributions and the
Company shall pay no liquidating distributions with respect to any other shares
of capital stock of the Company, including the shares of Common Stock underlying
the Placement Units, the Placement Warrants and the Incentive Warrants. With
respect to any vote for any plan of dissolution and liquidation recommended
by
the Company’s Board of Directors, the Company shall cause all of the Initial
Stockholders and the purchasers of the Placement Securities to vote the shares
of Common Stock owned by them immediately prior to this Offering in favor of
such plan of dissolution and liquidation.
(b)
With
respect to the Business Combination Vote, the Company shall cause all of the
Initial Stockholders to vote the shares of Common Stock owned by them
immediately prior to this Offering and the Private Placement in accordance
with
the majority of the IPO Shares voted by the holders of the IPO Shares in
connection with the Business Combination Vote. In addition, the Company shall
cause the holders, including the Initial Stockholders, of the Placement Warrants
to vote such shares in favor of the Business Combination. At the time the
Company seeks approval of any potential Business Combination, the Company will
offer each of the holders of the Company’s Common Stock issued in this Offering
(the “IPO
Shares”)
the
right to convert their IPO Shares at a per share price equal to $8.00 (the
“Conversion
Price”).
If
holders of less than 29.99% in interest of the Company’s IPO Shares vote against
such approval of a Business Combination, the Company may, but will not be
required to, proceed with such Business Combination. If the Company elects
to so
proceed, it will convert shares, based upon the Conversion Price, from those
holders of IPO Shares who affirmatively requested such conversion and who voted
against the Business Combination. If holders of 29.99% or more in interest
of
the IPO Shares vote against approval of any potential Business Combination,
the
Company will not proceed with such Business Combination and will not convert
such shares. Only holders of IPO Shares shall be entitled to receive liquidating
distributions and the Company shall pay no liquidating distributions with
respect to any other shares of capital stock of the Company.
-40-
7.7 Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including, but not limited to, using its best efforts
to
prevent any of the Company’s outstanding securities from being deemed to be a
“▇▇▇▇▇ stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8 Presentation
of Potential Target Businesses.
The
Company shall cause each of the Initial Stockholders to agree that, in order
to
minimize potential conflicts of interest which may arise from multiple
affiliations, the Initial Stockholders will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire an operating business, until the earlier of
the
consummation by the Company of a Business Combination, the liquidation of the
Company or until such time as the Initial Stockholders cease to be an officer
or
director of the Company, subject to any pre-existing fiduciary obligations
the
Initial Stockholders might have.
7.9 Target
Net Assets.
The
Company agrees that the initial Target Business that it acquires must have
a
fair market value equal to at least 80% of the Company’s net assets at the time
of such acquisition. The fair market value of such business must be determined
by the Board of Directors of the Company based upon standards generally accepted
by the financial community, such as actual and potential sales, earnings and
cash flow and book value. If the Board of Directors of the Company is not able
to independently determine that the Target Business has a fair market value
of
at least 80% of the Company’s net assets at the time of such acquisition, the
Company will obtain an opinion from an unaffiliated, independent investment
banking firm which is a member of the NASD with respect to the satisfaction
of
such criteria. The Company is not required to obtain an opinion from an
investment banking firm as to the fair market value if the Company’s Board of
Directors independently determines that the Target Business does have sufficient
fair market value.
8. Representations
and Agreements to Survive Delivery. Except as the context otherwise
requires, all representations, warranties and agreements contained in this
Agreement shall be deemed to be representations, warranties and agreements
at
the Closing Date or the Option Closing Date, if any, and such representations,
warranties and agreements of the Underwriters and Company, including the
indemnity agreements contained in Section 5 hereof, shall remain operative
and
in full force and effect regardless of any investigation made by or on behalf
of
any Underwriter, the Company or any controlling person, and shall survive
termination of this Agreement or the issuance and delivery of the Securities
to
the several Underwriters until the earlier of the expiration of any applicable
statute of limitations and the seventh anniversary of the later of the Closing
Date or the Option Closing Date, if any, at which time the representations,
warranties and agreements shall terminate and be of no further force and
effect.
-41-
9. Effective
Date of This Agreement and Termination Thereof.
9.1 Effective
Date.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
9.2 Termination.
You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the Boston
Stock Exchange or on the NASD OTC Bulletin Board (or successor trading market)
shall have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the
NASD
OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or (v)
if
a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether
or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of the
Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof
of
such a material adverse change in the conditions or prospects of the Company,
or
such adverse material change in general market conditions, including, without
limitation, as a result of terrorist activities after the date hereof, as in
the
Representative’s judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by
the
Underwriters for the sale of the Units.
9.3 Expenses.
In the
event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the
terms
herein, the obligations of the Company to pay the out of pocket expenses related
to the transactions contemplated herein shall be governed by Section 3.13
hereof.
9.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be
in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
10. Miscellaneous.
-42-
10.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered by hand or reputable
overnight courier or delivered by facsimile transmission (with printed
confirmation of receipt) and confirmed and shall be deemed given when so mailed,
delivered or faxed (or if mailed, two days after such mailing):
If
to the
Representative:
Maxim
Group LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Managing Director
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Copy
to:
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ PC
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
If
to the
Company:
▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Copy
to:
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
10.2 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 Agreement.
10.3 Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
-43-
10.4 Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives 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 Agreement or any provisions herein
contained.
10.6 Governing
Law, Venue, etc.
10.6.1 This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to the conflict of laws
principles thereof. Each of the Representative and the Company (and any
individual signatory hereto): (i) agrees that any legal suit, action or
proceeding arising out of or relating to this agreement and/or the transactions
contemplated hereby shall be instituted exclusively in New York Supreme Court,
County of New York, or in the United States District Court for the Southern
District of New York, (ii) waives any objection which such party may have or
hereafter to the venue of any such suit, action or proceeding and (iii)
irrevocably and exclusively consents to the jurisdiction of the New York Supreme
Court, County of New York, and the United States District Court for the Southern
District of New York in any such suit, action or proceeding.
10.6.2 Each
of
the Representative and the Company (and any individual signatory hereto) further
agrees to accept and acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the New York Supreme Court,
County of New York, or in the United States District Court for the Southern
District of New York and agrees that service of process upon the Company or
any
such individual mailed by certified mail to the Company’s address shall be
deemed in every respect effective service of process upon the Company or any
such individual in any such suit, action or proceeding, and service of process
upon the Representative mailed by certified mail to the Representative’s address
shall be deemed in every respect effective service process upon the
Representative, in any such suit, action or proceeding.
10.6.3 THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVE ANY RIGHT TO A TRIAL
BY
JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.4 The
Company agrees 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.
-44-
10.7 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be 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. Delivery of a signed counterpart of this Agreement by fax or email/pdf
transmission shall constitute valid and sufficient delivery
thereof.
10.8 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
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,
non-compliance or non-fulfillment.
10.9 No
Fiduciary Relationship.
The
Company hereby acknowledges that the Underwriters are acting solely as
underwriters in connection with the offering of the Company’s securities. The
Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an
arm’s length basis and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company, its management,
stockholders, creditors or any other person in connection with any activity
that
the Underwriters may undertake or have undertaken in furtherance of the offering
of the Company’s securities, either before or after the date hereof. The
Underwriters hereby expressly disclaim any fiduciary or similar obligations
to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-45-
If
the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
|
Very
truly yours,
|
||
|
INDUSTRIAL
SERVICES
|
||
|
ACQUISITION
CORP.
|
||
|
By:
|
|
|
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
Title:
Chief Executive Officer
|
||
Accepted
on the date first
above
written.
|
MAXIM
GROUP LLC
|
||
|
By:
|
|
|
|
|
Name:
▇▇▇▇ ▇▇▇▇▇▇
|
|
|
|
Title:
Managing Director
|
|
-46-
SCHEDULE
A
4,000,000
Units
|
Underwriter
|
Number
of Firm
Units
to
be Purchased
|
|
|
Maxim
Group LLC
|
||
|
4,000,000
|
||
-47-
EXHIBIT
A
Form
of Target Business Letter
▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Gentlemen:
Reference
is made to the Final Prospectus of Industrial Services Acquisition Corp.,
(“ISA”),
dated
________ __, 2007 (the “Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that ISA has established the Trust Fund,
initially in an amount of at least $32,000,000 for the benefit of the Public
Stockholders and the underwriters of ISA’s initial public offering (the
“Underwriters”)
and
that, except for a portion of the interest earned on the amounts held in the
Trust Fund, ISA may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event of the redemption of their shares or the dissolution
and liquidation of ISA or (ii) to ISA and the Underwriters after it consummates
a Business Combination.
For
and
in consideration of ISA agreeing to evaluate the undersigned for purposes of
consummating a Business Combination with it, the undersigned hereby agrees
that
it does not have any right, title, interest or claim of any kind in or to any
monies in the Trust Fund (the “Claim”)
and
hereby waives any Claim it may have in the future as a result of, or arising
out
of, any negotiations, contracts or agreements with ISA and will not seek
recourse against the Trust Fund for any reason whatsoever.
|
___________________________________
|
|
|
Print
Name of Target Business
|
|
|
___________________________________
|
|
|
Authorized
Signature of Target Business
|
-48-
EXHIBIT
B
Form
of Vendor Letter
▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Gentlemen:
Reference
is made to the Final Prospectus of Industrial Services Acquisition Corp.
(“ISA”),
dated
____ __, 2007 (the “Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that ISA has established the Trust Fund,
initially in an amount of at least $32,000,000 for the benefit of the Public
Stockholders and the underwriters of ISA’s initial public offering (the
“Underwriters”)
and
that, except for a portion of the interest earned on the amounts held in the
Trust Fund, ISA may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event of the redemption of their shares or the dissolution
and liquidation of ISA or (ii) to ISA and the Underwriters after it consummates
a Business Combination.
For
and
in consideration of ISA agreeing to evaluate the undersigned for purposes of
consummating a Business Combination with it, the undersigned hereby agrees
that
it does not have any right, title, interest or claim of any kind in or to any
monies in the Trust Fund (the “Claim”)
and
hereby waives any Claim it may have in the future as a result of, or arising
out
of, any negotiations, contracts or agreements with ISA and will not seek
recourse against the Trust Fund for any reason whatsoever.
|
___________________________________
|
|
|
Print
Name of Vendor
|
|
|
___________________________________
|
|
|
Authorized
Signature of Vendor
|
-49-
EXHIBIT
C
Form
of Director/Officer Letter
▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Gentlemen:
The
undersigned officer or director of Industrial Services Acquisition Corp.
(“ISA”)
hereby
acknowledges that ISA has established the Trust Fund, initially in an amount
of
at least $32,000,000 for the benefit of the Public Stockholders and the
underwriters of ISA’s initial public offering (the “Underwriters”)
and
that ISA may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event of the redemption of their shares or the dissolution
and liquidation of ISA or (ii) to ISA and the Underwriters after it consummates
a Business Combination.
The
undersigned hereby agrees that it does not have any right, title, interest
or
claim of any kind in or to any monies in the Trust Fund (the “Claim”)
and
hereby waives any Claim it may have in the future as a result of, or arising
out
of, any contracts or agreements with ISA and will not seek recourse against
the
Trust Fund for any reason whatsoever.
Notwithstanding
the foregoing, such waiver shall not apply to any shares acquired by the
undersigned in the public market.
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___________________________________
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Print
Name of Officer/Director
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___________________________________
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Authorized
Signature of Officer/Director
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