57th Street General Acquisition Corp. New York, New York 10022
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General Acquisition Corp.
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October
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▇▇▇▇▇▇ GAC Holdings LLC
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Ladies
and Gentlemen:
We are
pleased to accept the offer 57th Street GAC Holdings LLC (the “Subscriber”) has
made to purchase 638,889 shares (the “Shares”) of common stock, $0.0001 par
value per share (the “Common Stock”) up to 83,333 of which Shares are subject to
complete or partial forfeiture (the “forfeiture”) by you if the underwriters of
the initial public offering (“IPO”) of ▇▇▇▇ ▇▇▇▇▇▇
General Acquisition Corp., a Delaware corporation (the “Company”) do not fully
exercise their over-allotment option (the “Over-allotment
Option”). The terms on which the Company is willing to sell the
Shares to the Subscriber, and the Company and the Subscriber’s agreements
regarding such Shares, are as follows:
1.
Purchase of
Shares. For the sum of $25,000 (the “Purchase Price”),
which the Company acknowledges receiving in cash, the Company hereby sells and
issues the Shares to the Subscriber, and the Subscriber hereby purchases the
Shares from the Company, subject to forfeiture, on the terms and subject to the
conditions set forth in this Agreement. Concurrently with the
Subscriber’s execution of this Agreement, the Company is delivering to the
Subscriber a certificate registered in the Subscriber’s name representing the
Shares, receipt of which the Subscriber hereby acknowledges.
2.
Representations,
Warranties and Agreements.
2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the
Company to issue the Shares to the Subscriber, the Subscriber hereby represents
and warrants to the Company and agrees with the Company as follows:
2.1.1. No Government Recommendation
or Approval. The Subscriber understands that no United States
federal or state agency or similar agency of any other country has passed upon
or made any recommendation or endorsement of the offering of the
Shares.
2.1.2. No Conflicts. The
execution, delivery and performance of this Agreement and the consummation by
the Subscriber of the transactions contemplated hereby do not violate, conflict
with or constitute a default under (i) the Subscriber Certificate of
Formation or Operating Agreement (if not an individual), (ii) any
agreement, indenture or instrument to which the Subscriber is a party or (iii)
any law, statute, rule or regulation to which the Subscriber is subject, or any
agreement, order, judgment or decree to which the Subscriber is
subject.
2.1.3. Organization and
Authority. If not an individual, the Subscriber is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware and possesses all requisite power and
authority necessary to carry out the transactions contemplated by this
Agreement.
2.1.4 Experience, Financial
Capability and Suitability. The Subscriber is sufficiently
experienced in financial and business matters to be capable of evaluating the
merits and risks of this investment and to make an informed decision relating
thereto. The Subscriber is aware its investment in the Company is a speculative
investment that has limited liquidity, because there may never be an established
market for the Company’s securities. The Subscriber has the financial
capability for making the investment and the investment is a suitable one for
the Subscriber. The Subscriber can, without impairing its financial
condition, hold the Shares for an indefinite period of time and can afford a
complete loss of the investment. The Subscriber acknowledges that the Company
has urged the Subscriber to seek independent advice from professional advisors
relating to the suitability of an investment in the Company and in connection
with this Agreement, and that the Subscriber has sought and received such
independent professional advice with respect to such investment and this
Agreement or, after careful consideration, the Subscriber has determined to
waive its right to seek and/or receive such independent professional
advice.
2.1.5.
Access to
Information. Prior to the execution of this Agreement,
the Subscriber has had the opportunity to ask questions of and receive answers
from representatives of the Company concerning an investment in the Company, as
well as the finances, operations, business and prospects of the Company, and the
opportunity to obtain additional information to verify the accuracy of all
information so obtained.
2.1.6. Regulation D
Offering. Subscriber represents that it is an “accredited
investor” as such term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the
sale contemplated hereby is being made in reliance on a private placement
exemption to “Accredited Investors” within the meaning of Section 501(a) of
Regulation D under the Securities Act or similar exemptions under state law;
and, accordingly, such securities will be “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, and therefore may not be
offered, pledged or sold by Subscriber, directly or indirectly, in the United
States without registration under United States federal and state securities
laws and Subscriber understands the certificates representing such securities
will contain a legend in respect of such restrictions. The Subscriber
did not decide to enter into the Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502 under the
Securities Act.
2.1.7 Investment
Purposes. Subscriber is purchasing the Shares solely for
investment purposes, for the Subscriber’s own account and not for the account or
benefit of any U.S. Person, and not with a view towards the distribution thereof
and Subscriber has no present arrangement to sell the Shares to or through any
person or entity. Subscriber shall not engage in hedging transactions with
regard to the Shares unless in compliance with the Securities
Act.
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2.1.8. Restrictions on
Transfer. Subscriber understands the Shares are being offered in a
transaction not involving a public offering within the meaning of the Securities
Act. The Shares have not been registered under the Securities Act, and, if in
the future the Subscriber decides to offer, resell, pledge or otherwise transfer
the Shares, such Shares may be offered, resold, pledged or otherwise transferred
only (A) pursuant to an effective registration statement filed under the
Securities Act, (B) pursuant to an exemption from registration under Rule 144
promulgated under the Securities Act, if available, or (C) pursuant to any other
exemption from the registration requirements of the Securities Act, and in each
case in accordance with any applicable securities laws of any state or any other
jurisdiction. Subscriber agrees that if any transfer of its Shares or
any interest therein is proposed to be made, as a condition precedent to any
such transfer, Subscriber may be required to deliver to the Company an opinion
of counsel satisfactory to the Company. Absent registration or
another exemption from registration, the Subscriber agrees that he will not
resell the Shares. Subscriber further acknowledges that because the
Company is a shell company and Rule 144 may not be available to the Subscriber
for the resale of the Shares until one year after following consummation of the
initial business combination of the Company, despite technical compliance with
the requirements of Rule 144 and the release or waiver of any contractual
transfer restrictions.
2.2 Company’s Representations,
Warranties and Agreements. To induce the Subscriber to
purchase the Shares, the Company hereby represents and warrants to the
Subscriber and agrees with the Subscriber as follows:
2.2.1 Organization and Corporate
Power. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is qualified to do
business in every jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on the financial
condition, operating results or assets of the Company. The Company possesses all
requisite corporate power and authority necessary to carry out the transactions
contemplated by this Agreement.
2.2.2. No Conflicts. The
execution, delivery and performance of this Agreement and the consummation by
the Company of the transactions contemplated hereby do not violate, conflict
with or constitute a default under (i) the Certificate of Incorporation of
the Company or the bylaws of the Company, (ii) any agreement, indenture or
instrument to which the Company is a party or (iii) any law, statute, rule or
regulation to which the Company is subject, or any agreement, order, judgment or
decree to which the Company is subject.
2.2.3. Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof, the
Shares will be duly and validly issued, fully paid and nonassessable. Upon
issuance in accordance with, and payment pursuant to, the terms hereof the
Subscriber will have or receive good title to the Shares, free and clear of all
liens, claims and encumbrances of any kind, other than (a) transfer restrictions
hereunder and under the other agreements contemplated hereby, (b) transfer
restrictions under federal and state securities laws, and (c) liens, claims or
encumbrances imposed due to the actions of the Subscriber.
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3.
Forfeiture of Shares; Escrow
of Shares.
3.1. Failure to Consummate
Business Combination; Partial or No Exercise of the Over-allotment
Option. In the event the Over-allotment Option granted
to the representative of the underwriters of the Company’s IPO is not exercised
in full, the Subscriber acknowledges and agrees that it shall forfeit any and
all rights to such number of Shares (up to an aggregate of 83,333 Shares and pro
rata based upon the percentage of the Over-allotment Option exercised) such that
immediately following such forfeiture, the Subscriber and all other initial
stockholders prior to the IPO will own an aggregate number of shares of Common
Stock (not including shares of common stock issuable upon exercise of any
warrants or any shares purchased by Subscriber in the Company’s IPO or in the
aftermarket) equal to 10% of the issued and outstanding shares of Common Stock
of the Company immediately following the IPO.
3.2. Termination of Rights as
Stockholder. If any of the Shares are forfeited in accordance
with this Section 3, then after such time the Subscriber (or successor in
interest), shall no longer have any rights as a holder of such Shares, and the
Company shall take such action as is appropriate to cancel such
Shares. In addition, the Subscriber hereby irrevocably grants the
Company a limited power of attorney for the purpose of effectuating the
foregoing and agrees to take any and all action reasonably requested by the
Company necessary to effect any adjustment in this Section 3.
3.3. Escrow. Upon
consummation of the IPO, the Subscriber, and its designees, shall enter into a
securities escrow agreement (the “Escrow Agreement”) with Continental Stock
Transfer & Trust Company (the “Escrow Agent”), whereby the Shares (and any
Shares of Common Stock which may be issued as a dividend as a result of a stock
split) shall be held in escrow until one year following consummation of a
Business Combination, subject to certain exceptions and restrictions as set
forth in the Escrow Agreement.
4. Waiver of Liquidation
Distributions; Redemption Rights. In connection with the
Shares purchased pursuant to this Agreement and any other Company securities
purchased on a private placement basis, the Subscriber hereby waives any and all
right, title, interest or claim of any kind in or to any distributions by the
Company from the Trust Account (as such term is defined in the Investment
Management Trust Agreement to be entered by and between the Company and the
trustee thereunder), in the event of a liquidation of the Company upon the
Company’s failure to timely complete a Business Combination. For
purposes of clarity, in the event the Subscriber purchases shares of Common
Stock in the IPO or in the aftermarket, any additional shares so purchased shall
be eligible to receive any liquidating distributions by the
Company. However, in no event will the Subscriber have the right to
redeem any Shares into funds held in the Trust Account with the Escrow Agent
upon the successful completion of a Business Combination.
5.
Restrictions on
Transfer.
5.1. Securities Law
Restrictions. In addition to the restrictions contained in the
Escrow Agreement, Subscriber agrees not to sell, transfer, pledge, hypothecate
or otherwise dispose of all or any part of the Shares unless, prior thereto (a)
a registration statement on the appropriate form under the Securities Act and
applicable state securities laws with respect to the Shares proposed to be
transferred shall then be effective or (b) the Company shall have received an
opinion from counsel reasonably satisfactory to the Company, that such
registration is not required because such transaction is exempt from
registration under the Securities Act and the rules promulgated by the
Securities and Exchange Commission (“SEC”) thereunder and with all applicable
state securities laws.
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5.2 Restrictive
Legends. All certificates representing the Shares shall have
endorsed thereon legends substantially as follows:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN A STOCK ESCROW AGREEMENT (THE “ESCROW AGREEMENT”) AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE
TERM OF THE ESCROW PERIOD (AS DEFINED IN THE ESCROW AGREEMENT).”
5.3. Additional Shares or
Substituted Securities. In the event of the declaration
of a stock dividend, the declaration of an extraordinary dividend payable in a
form other than stock, a spin-off, a stock split, an adjustment in conversion
ratio, a recapitalization or a similar transaction affecting the Company’s
outstanding capital stock without receipt of consideration, any new, substituted
or additional securities or other property which are by reason of such
transaction distributed with respect to any Shares subject to this Section 5 or
into which such Shares thereby become convertible shall immediately be subject
to this Section 5 and Section 3.3. Appropriate adjustments to reflect
the distribution of such securities or property shall be made to the number
and/or class of Shares subject to this Section 5 and Section 3.3.
5.5
Registration Rights.
Subscriber acknowledges that the Shares are being purchased pursuant to an
exemption from the registration requirements of the Securities Act and will
become freely tradable only after they are registered pursuant to a Registration
Rights Agreement. Subscriber is entitled to make up to two demands
that Company registers the Shares pursuant to the terms and restrictions as set
forth in the Registration Rights Agreement to be entered into with the Company
prior to the closing of the IPO.
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6.
Other
Agreements.
6.1. Further
Assurances. Subscriber agrees to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
6.2
No
Obligation as to Employment. The
Company is not by reason of this Agreement obligated to employ, or continue to
employ, the Subscriber in any capacity.
6.3. Notices. All
notices, requests, consents and other communications hereunder shall be in
writing, shall be addressed to the receiving party’s address set forth on the
first page of this Agreement or to such other address as a party may designate
by notice hereunder, and shall be either (a) delivered by hand, (b) sent by
overnight courier, or (c) sent by certified mail, return receipt requested,
postage prepaid. All notices, requests, consents and other
communications hereunder shall be deemed to have been given either (i) if by
hand, at the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii) if sent by overnight courier, on the next
business day following the day such notice is delivered to the courier service,
or (iii) if sent by certified mail, on the (5th)
business day following the day such mailing is made.
6.4. Entire
Agreement. This Agreement, together with that certain letter
agreement between Subscriber and the Company, substantially in the form filed as
an exhibit to the Registration Statement, embodies the entire agreement and
understanding between the Subscriber and the Company with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
6.5. Modifications and
Amendments. The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by all parties
hereto.
6.6. Waivers and
Consents. The terms and provisions of this Agreement may
be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of
this Agreement, whether or not similar. Each such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given, and shall not constitute a continuing waiver or
consent.
6.7. Assignment. The
rights and obligations under this Agreement may not be assigned by either party
hereto without the prior written consent of the other party.
6.8. Benefit. All
statements, representations, warranties, covenants and agreements in this
Agreement shall be binding on the parties hereto and shall inure to the benefit
of the respective successors and permitted assigns of each party
hereto. Nothing in this Agreement shall be construed to create any
rights or obligations except among the parties hereto, and no person or entity
shall be regarded as a third-party beneficiary of this
Agreement.
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6.9. Governing
Law. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed by
the law of State of New York, without giving effect to the conflict of law
principles thereof.
6.10. Severability. In
the event that any court of competent jurisdiction shall determine that any
provision, or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it reasonable and
enforceable, and as so limited shall remain in full force and
effect. In the event that such court shall deem any such provision,
or portion thereof, wholly unenforceable, the remaining provisions of this
Agreement shall nevertheless remain in full force and effect.
6.11. No Waiver of Rights, Powers
and Remedies. No failure or delay by a party hereto in
exercising any right, power or remedy under this Agreement, and no course of
dealing between the parties hereto, shall operate as a waiver of any such right,
power or remedy of such party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The
election of any remedy by a party hereto shall not constitute a waiver of the
right of such party to pursue other available remedies. No notice to
or demand on a party not expressly required under this Agreement shall entitle
the party receiving such notice or demand to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the party giving such notice or demand to any other or further action in any
circumstances without such notice or demand.
6.12. Survival of Representations
and Warranties. All representations and warranties made
by the parties hereto in this Agreement or in any other agreement, certificate
or instrument provided for or contemplated hereby, shall survive the execution
and delivery hereof and any investigations made by or on behalf of the
parties.
6.13. No Broker or
Finder. Each of the parties hereto represents and
warrants to the other that no broker, finder or other financial consultant has
acted on its behalf in connection with this Agreement or the transactions
contemplated hereby in such a way as to create any liability on the
other. Each of the parties hereto agrees to indemnify and save the
other harmless from any claim or demand for commission or other compensation by
any broker, finder, financial consultant or similar agent claiming to have been
employed by or on behalf of such party and to bear the cost of legal expenses
incurred in defending against any such claim.
6.14. Headings and
Captions. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms or
provisions hereof.
6.15. Counterparts. This
Agreement may be executed in one or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
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7.
Voting of
Shares.
Subscriber
agrees to vote the Shares as well as the Common Stock acquired in the IPO or the
aftermarket in favor of a Business Combination that the Company negotiates and
presents for approval to the Company’s stockholders.
8.
Indemnification. Each
party shall indemnify the other and the underwriters of the IPO against any
loss, cost or damages (including reasonable attorney’s fees and expenses)
incurred as a result of such party’s breach of any representation, warranty,
covenant or agreement in this Agreement.
If the
foregoing accurately sets forth our understanding and agreement, please sign the
enclosed copy of this agreement and return it to us.
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Very
truly yours,
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▇▇▇▇
▇▇▇▇▇▇ GENERAL ACQUISITION CORP.
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By:
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇
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Title:
Chief Executive Officer
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Accepted
and agreed this
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October
30, ▇▇▇▇
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▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ HOLDINGS LLC
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By:
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |
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Name: ▇▇▇▇
▇. ▇▇▇▇▇
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Title:
Managing Member
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