20,000,000 Units STAR MARITIME ACQUISITION CORP. UNDERWRITING AGREEMENT
20,000,000
Units
,
2005
Maxim
Group LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
As
Representative of the Underwriters
named
on Schedule
A
hereto
Dear
Sirs:
The
undersigned, Star Maritime Acquisition Corp., a Delaware corporation
(“Company”),
along
with the individuals whose names appear on the signature page hereto (but
solely
with respect to the Sections hereof indicated thereon), hereby confirms its
agreement with Maxim Group LLC (“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,
to
the several Underwriters, an aggregate of 20,000,000 units of securities
of the
Company (the “Firm
Units”),
and
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 $9.40 per Unit. The Firm Units are to be offered initially
to
the public (the “Offering”)
at the
offering price of $10.00 per Firm Unit. Each Unit consists of one share of
the
Company’s common stock, par value $.001 per share (the “Common
Stock”),
and
one warrant to purchase one share of Common Stock (the “Warrant(s)”).
The
shares of Common Stock and the Warrants included in the Firm Units will trade
separately on the 20th
trading
day after the earlier to occur of the expiration of the Over-allotment Option
(as hereinafter defined) or its exercise in full, but in no event will Maxim
allow separate trading until the preparation of an audited balance sheet
of the
Company reflecting receipt by the Company of the proceeds of the Offering
and
the filing by the Company with the Securities and Exchange Commission (the
“Commission”)
of a
Current Report on Form 8-K which includes such balance sheet. Each Warrant
entitles its holder, upon exercise, to purchase one share of Common Stock
for
$8.00 during the period commencing on the later of the consummation by the
Company of its “Business Combination” or one year from the effective date (the
“Effective Date”) of the Registration Statement and terminating on the four-year
anniversary of the Effective Date, unless earlier redeemed as provided in
the
Warrant Agreement (as defined in Section 2.21 hereof). As used herein, the
term
“Business
Combination”
shall
mean the acquisition by the Company, whether by merger, capital stock exchange,
asset or stock acquisition or other similar type of transaction, or a
combination of the foregoing, one or more entities with agreements
to
acquire vessels or an operating business in the shipping industry
(as
described more fully in the Registration Statement).
Maxim
Group LLC
_____________,
2005
Page
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44
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 and in such a manner as shall be agreed upon by the
Representative and the Company. The hour and date of delivery and payment
for
the Firm Units is herein 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, payable
as follows: $184,675,000
(approximately $9.23 per Unit) of the proceeds received by the Company for
the
Firm Units shall be deposited in the trust fund established by the Company
for
the benefit of the public stockholders as described in the Registration
Statement (“Trust
Fund”)
pursuant to the terms of an Investment Management Trust Agreement (the
“Trust
Agreement”)
and
the remaining proceeds (less commissions, expense allowances and actual expense
payments or other fees) shall be paid to the order of the Company upon delivery
to the Representative of certificates (in form and substance satisfactory
to the
Underwriters) representing the Firm Units (or through the facilities of the
Depository Trust Company (“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 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.
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 an option to
purchase up to an additional 3,000,000 units from the Company (the “Over-allotment
Option”).
Such
additional 3,000,000 units shall be identical in all respects to the Firm
Units
and are hereinafter referred to as the “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 “Securities.”
The
purchase price to be paid for each Option Unit will be the same as the price
per
Firm Unit set forth in Section 1.1.1 hereof.
Maxim
Group LLC
_____________,
2005
Page
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44
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 $9.40 per Option Unit in the Trust Fund pursuant to
the
Trust Agreement upon delivery to the Representative 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 Business Day prior to such Closing Date or Option Closing
Date.
1.3. Contingent
Portion of Underwriters’ Discount.
The
Representative, on behalf of itself and the other Underwriters, agrees that
2%
of the gross proceeds from the sale of the Firm Units ($4,000,000) and 4%
of the
gross proceeds from the sale of any Option Units (an additional $1,200,000
if
the over-allotment option is exercised in full) (the “Contingent
Discount”)
will
be deposited in and held in the Trust Fund and payable to the Underwriters,
along with any interest accrued thereon (net of taxes payable), in respect
of
any IPO Shares (defined in Section 8.7 hereof) which are not redeemed pursuant
to Section 8.7 hereof, upon the consummation of a Business Combination. The
Representative, on behalf of itself and the other Underwriters, agrees that
the
several Underwriters shall forfeit any rights or claims to the Contingent
Discount and any interest accrued thereon (net of taxes payable) in respect
of
any IPO Shares that are redeemed pursuant to Section 8.7 hereof. In addition,
in
the event that the Company is unable to consummate a Business Combination
and
American Stock Transfer & Trust Company (“AST”),
the
trustee of the Trust Fund, commences liquidation of the Trust Fund as provided
in the Trust Agreement, the Representative, on behalf of itself and the other
Underwriters, agrees that (i) the several Underwriters shall forfeit any
rights
or claims to the Contingent Discount and any interest accrued thereon (net
of
taxes payable); and (ii) the Contingent Discount, together with the 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 (other
than the 1,132,000 shares of Common Stock included in the Units to be purchased
by certain officers and directors of the Company and their affiliates as
provided in the Insider Purchase Agreement (as hereinafter defined) along
with
any interest accrued thereon.
Maxim
Group LLC
_____________,
2005
Page
4
of
44
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 Commission a registration statement on Form S-1
(File
No.
333-125662),
and
one or more amendments thereto, and related preliminary prospectuses for
the
registration under the Securities Act of 1933, as amended (the “Act”),
of
the offering and sale of the Securities, which registration statement, as
so
amended (including post-effective amendments, if any), has been declared
effective by the Commission and copies of which have heretofore been delivered
to the Underwriters. 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. The registration statement, as amended at the time it became
effective, including the prospectus, financial statements, schedules, exhibits
and other information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the “Registration
Statement.”
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 Securities of any type (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. The offering and
sale
of all of the 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 Act with the filing of such Rule
462(b)
Registration Statement. The Company, if required by the Securities Act and
the
rules and regulations of the Commission (the “Regulations”),
proposes to file the Prospectus with the Commission pursuant to Rule 424(b)
under the Securities Act (“Rule
424(b)”).
The
prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b), or, if the prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the “Prospectus,”
except
that if any revised prospectus or prospectus supplement shall be provided
to the
Underwriters by the Company for use in connection with the Offering which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to
Rule
424(b)), the term “Prospectus” shall also refer to such revised prospectus or
prospectus supplement, as the case may be, from and after the time it is
first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or
filed
with the Commission pursuant to Rule 424 under the Act (including, without
limitation, the Sale Preliminary Prospectus (as hereinafter defined)) is
hereafter called a “Preliminary
Prospectus.”
The
prospectus subject to completion, dated November 23, 2005, is hereafter referred
to as the "Sale Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall
be
deemed to refer to and include the exhibits and other documents (if any)
incorporated by reference therein pursuant to the Regulations on or before
the
effective date of the Registration Statement, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be. Any reference
herein to the terms “amend”, “amendment” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall
be
deemed to refer to and include: (i) the filing of any document under the
Securities Exchange Act of 1934, as amended (together with the Rules and
Regulations promulgated thereunder (the “Exchange
Act”)),
after the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may be,
which
is incorporated therein by reference, and (ii) any such document so filed.
All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing shall be deemed to include
any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System (“▇▇▇▇▇”).
Maxim
Group LLC
_____________,
2005
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2.1.2. Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number ___________)
providing for the registration under the Exchange Act of the Units, the Common
Stock and the Warrants, which has been declared effective by the Commission
on
the date hereof.
2.2. No
Stop Orders, etc.
Neither
the Commission nor, to 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, the Prospectus or any part thereof,
or
has instituted or, to 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 of effectiveness of the Registration Statement (or
the
time of any post-effective amendment to the Registration Statement)
and at
all times subsequent thereto up to the Closing Date and the Option Closing
Date,
if any, the Registration Statement and the Prospectus will contain all material
statements that are required to be stated therein in accordance with the
Act and
the Regulations, and will, in all material respects, conform to the requirements
of the Act and the Regulations. Neither the Registration Statement nor any
Preliminary Prospectus or final Prospectus contained therein, nor any amendment
or supplement thereto, on their respective dates, nor the Sale Preliminary
Prospectus as of the time of sale (including, without limitation, a contract
of
sale), 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 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) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied or will have been corrected
in the Sale Preliminary Prospectus and 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 information furnished in writing to the Company by the
Representative or its representatives with respect to the Underwriters expressly
for use in the Registration Statement, the Sale Preliminary Prospectus or
Prospectus or any amendment thereof or supplement thereto, which information,
it
is agreed, shall consist solely of the names of the several Underwriters
and the
information with respect to dealers’ concessions and reallowances contained in
the section of the Prospectus entitled “Underwriting,”
and the
identity of counsel to the Underwriters contained in the section of the
Prospectus entitled “Legal Matters.”
Maxim
Group LLC
_____________,
2005
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2.3.2. Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement, the
Sale 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 Sale
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.
The Company is not a party to, and none of the Company’s property or assets are
bound by, any agreement or instrument other than those (i) filed as exhibits
to
the Registration Statement, (ii) referred to in Section 2.10 of this Agreement,
or (iii) entered into with venders and service providers in connections with
the
Offering. Each such agreement or other instrument (however characterized
or
described) described in clauses (i) and (iii) of the immediately preceding
sentence has been duly and validly authorized, executed and delivered by
the
Company, is in full force and effect and is enforceable against the Company
and,
to the Company’s knowledge, the other parties thereto, in accordance with its
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 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, 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. 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, except as disclosed in the Registration
Statement.
Maxim
Group LLC
_____________,
2005
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2.3.4. Regulations.
The
disclosures in the Registration Statement concerning the effects of Federal,
State, local and foreign 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.
2.4.1. No
Material Adverse Change.
Since
the respective dates as of which information is given in the Registration
Statement, the Sale Preliminary Prospectus and 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, the Sale Preliminary Prospectus 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, the Sale Preliminary Prospectus 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.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP (“GGK”),
whose
report is filed with the Commission as part of the Registration Statement,
are
independent registered public accountants as required by the Act, the
Regulations and the Public Company Accounting Oversight Board (including
the
rules and regulations promulgated by such entity, the “PCAOB”).
GGK
is duly registered and in good standing with the PCAOB. GGK has not, during
the
periods covered by the financial statements included in the Prospectus, provided
to the Company any non-audit services, as such term is used in Section 10A(g)
of
the Exchange Act.
Maxim
Group LLC
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2005
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2.6. Financial
Statements; Statistical Data.
2.6.1. The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, the Sale 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.
Such financial statements have been prepared in conformity with generally
accepted accounting principles of the United States, 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
in the
Registration Statement.
The
Registration Statement discloses 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, the Sale Preliminary Prospectus and
the
Prospectus in accordance with Regulation
S-X which have not been included as so required.
2.6.2. The
statistical, industry-related and market-related data included in the
Registration Statement, the Sale Preliminary Prospectus and 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 each of the Sale Preliminary
Prospectus and the Prospectus, duly authorized, issued and outstanding
capitalization as set forth in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus. Based on the assumptions stated in
the
Registration Statement, the Sale Preliminary Prospectus and
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 Sale Preliminary Prospectus and the
Prospectus, on the Effective Date and on the Closing Date, 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 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
Securities conform to the descriptions thereof contained in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus. 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, based in part on the representations and warranties of the purchasers
of such shares of Common Stock, exempt from such registration
requirements.
Maxim
Group LLC
_____________,
2005
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2.8.2. Securities
Sold Pursuant to this Agreement.
The
Securities have been duly authorized and, when issued and paid for, will
be
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.
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. 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. When issued, 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 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 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 have been reserved
for issuance upon the exercise of the Warrants and, when issued in accordance
with the terms of the 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.
2.8.3. No
Integration.
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 Securities pursuant
to the Registration Statement.
2.9. Registration
Rights of Third Parties.
Except
as set forth in each of the Sale Preliminary Prospectus and 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) and
the
Escrow Agreement (as defined in Section 2.23.2 hereof) have been duly and
validly authorized, executed and delivered by the Company and constitute
the
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 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.
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2.11. No
Conflicts; Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Trust Agreement, the Services Agreement and the Escrow
Agreement, 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 (other than the Trust Agreement
);
(ii) result in any violation of the provisions of the Certificate of
Incorporation (the “Company
Certificate”)
or the
Bylaws (the “Bylaws”)
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.
2.12. Violations.
The
Company is not in violation of any term or provision of the Company Certificate
or the 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 as described in the Sale Preliminary
Prospectus and the Prospectus. 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. The disclosures in the Registration Statement
concerning the effects of federal, state, local and foreign 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.
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, licenses 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 Trust Agreement, the Services
Agreement and the Escrow Agreement and as contemplated by the Sale Preliminary
Prospectus and the Prospectus, except with respect to applicable federal
and
state securities laws and the National Association of Securities Dealers,
Inc.
(the ”NASD”).
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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.
2.15. Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the Company’s knowledge, threatened
against, or involving the Company or, to the Company’s knowledge, any Initial
Stockholder which has not been disclosed in the Registration Statement or
the
Questionnaires.
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: (i) any specific
Business Combination under consideration or contemplation; or (ii) any
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 Sale Preliminary Prospectus and the Prospectus, there are
no
claims, payments, arrangements, contracts, agreements or understandings relating
to the payment of a brokerage commission or finder’s, consulting, origination or
similar 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 any Initial Stockholder that may affect
the
Underwriters’ compensation, as determined by 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 in connection
with the Offering.
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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 of or a person associated or affiliated with a member of, the NASD.
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 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 except as may be paid in connection with
a
Business Combination as contemplated by the Sale Preliminary Prospectus and
the
Prospectus.
2.18.7. 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. 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, other than the arrangements the Company has entered into with Maxim
in
connection with the Offering.
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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 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 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.
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 the Representative or its 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
with
AST 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 each of the Initial Stockholders to execute and deliver
letter agreements, annexed as Exhibits10.1 through 10.7, to the Registration
Statement (the “Insider
Letters”),
pursuant to which each such Initial Stockholder has agreed 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, which agreements
have been duly executed and are 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 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).
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Group LLC
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2.23.2. Insider
Purchase Agreement.
The
Company has caused certain of the Initial Stockholders or their affiliates
to
execute and deliver a letter agreement, annexed as Exhibit 10.14 of the
Registration Statement (the “Insider Purchase Agreement”), pursuant to which
such persons have agreed, among other things, to purchase an aggregate of
1,132,000 Units in the Offering and to forfeit any rights or 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 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.
2.23.3. Escrow
Agreement.
The
Company has caused the Initial Stockholders to enter into an escrow agreement
(the “Escrow
Agreement”)
with
AST, as escrow agent, in substantially the form annexed as Exhibit 10.9 to
the
Registration Statement, pursuant to which the Common Stock owned by the Initial
Stockholders will be held in escrow by CST 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 to
spouses
and children of Initial Stockholders and trusts established for their benefit
and as otherwise set forth in the Escrow Agreement), but will retain the
right
to vote such shares. To the Company’s knowledge, the Escrow Agreement is
enforceable against each of the Initial Stockholders and will not, with or
without the giving of notice or the lapse of time or both, result in a breach
of, or conflict with any of the terms and provisions of, or constitute a
default
under, any agreement or instrument to which any of the Initial Stockholders
is a
party. The Company warrants that the Escrow Agreement shall not be amended,
modified or otherwise changed without the prior written consent of
Maxim.
2.23.4. Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering in substantially the form filed as an exhibit to the Registration
Statement.
2.23.5. 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 and act in the capacity of an Initial
Stockholder, employee, officer and/or director of the Company.
2.24. 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).
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Group LLC
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2.25. Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other entity.
2.26. 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 Sale
Preliminary Prospectus 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 Sale Preliminary
Prospectus and 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.
2.27. 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: (i) 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 (ii) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
2.28. 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 Sale Preliminary Prospectus and the Prospectus,
with the assumption that such officers and directors shall have made reasonable
and diligent inquiry of the matters presented.
2.29. American
Stock Exchange Eligibility.
As of
the Effective Date, the Securities have been approved for listing on the
American Stock Exchange (“AMEX”).
3. Covenants
and Additional Agreements 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 Securities in accordance
with the provisions hereof and the Prospectus. If at any time when a prospectus
relating to the 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 at any time to amend 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 or supplement in accordance with Section 10 of the
Act.
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Group LLC
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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 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 a prospectus is required to be
delivered under the Act or the Exchange Act such number of copies of each
Preliminary Prospectus and the Prospectus as such Underwriters may reasonably
request and, as soon as the Registration Statement or any amendment or
supplement thereto becomes effective, deliver to the Representative 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.
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Group LLC
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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
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 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 or its counsel,
makes
any statement of a material fact made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, 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.
For a
period of five years from the Effective Date, or until such earlier time
that
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. Transactions.
3.7.1. Affiliate
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. Services.
The
Company has entered into an agreement (the “Services
Agreement”)
with
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C., pursuant to which the Company will pay up
to
$7,500 for general and administrative services, including office space,
utilities and secretarial support. In no event will such fees be more than
$7,500 per month in the aggregate and all such arrangements will be arm’s-length
transactions.
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Group LLC
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3.7.3. Affiliate
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, 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 in connection with seeking and
consummating a Business Combination.
3.8. Secondary
Market Trading and Standard & Poor’s.
If the
Company does not maintain the listing of the Securities on the AMEX or another
national securities exchange or the National Market of The Nasdaq Stock Market,
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.
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 a commission of 5% of the cash
proceeds received upon exercise of the Warrants for each Warrant exercised,
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 (but in no event less than two
years).
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 (Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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) if
requested by the Representative, 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. Documents filed
with
the Commission via ▇▇▇▇▇ shall be deemed to have been delivered to the
Representative pursuant to this Section 3.11.1.
Maxim
Group LLC
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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
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. AST is acceptable to the Underwriters.
3.11.3. Trading
Reports.
During
such time as the 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 the
Company’s expense, such reports published by the NASD or the Pink Sheets, LLC
relating to price trading of the Securities, as the Representative shall
reasonably request. In
addition to the requirements of the preceding sentence, for a period of two
years from the Closing Date, the Company, at the Company’s 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 of 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 under the
Act.
3.13. Payment
of Expenses.
3.13.1. General
Expenses Related to the Offering.
The
Company hereby agrees to pay on or prior to 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:
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(i) Company
legal and accounting fees and disbursements;
(ii) the
cost
of an investigative search firm of the Representatives’ choice to conduct an
investigation of the Company’s principals (which cost shall be applied against
the non-accountable expense allowance described in Section 3.13.2 of the
Offering is consummated.
(iii) the
preparation, printing, filing and mailing (including the payment of postage
with
respect to such mailing) of the Registration Statement, the Preliminary and
final Prospectuses 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 and all “▇▇▇▇▇” preparation and filing
costs;
(iv) the
printing, engraving, issuance and delivery of the Units, the shares of Common
Stock and the Warrants included in the Units, including any transfer or other
taxes payable thereon;
(v) the
qualification of the 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 (not
including disbursements) shall be capped at $35,000 in the aggregate of which
$15,000 has previously been paid);
(vi)
filing
fees, costs and expenses (including fees of Representative’s counsel and
disbursements for the Representative’s counsel) incurred in registering the
Offering with the NASD;
(vii)
all
Company 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;
(viii) costs
of
placing “tombstone” advertisements in
The
Wall Street Journal, The New York Times
and a
third publication to be selected by the Representative;
(ix) fees
and
disbursements of AST, whether it is acting in the capacity of transfer or
warrant agent or as trustee of the Trust Account or otherwise;
(x) the
preparation, binding and delivery of transaction closing “bibles” and the
preparation and delivery of transaction Lucite cubes or similar commemorative
items, in each case in a form, style and quantity as reasonably requested
by the
Representative; and
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(xi) 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 herein to be paid by the Company to the Representative and others.
If
the
Offering contemplated by this Agreement is not consummated for any reason
whatsoever, except to the extent such event is demonstrated by a court of
competent jurisdiction to have occurred directly and primarily as a result
of a
material breach or default by the Representative or any Underwriter of their
respective 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 and disbursements and “road show”
and due diligence expenses.
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 Maxim a nonaccountable
expense allowance equal to 1% of the gross proceeds received by the Company
from
the sale of the Firm Units (less amounts previously advanced by the Company
in
respect thereof) by deduction from the proceeds of the Offering contemplated
herein.
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.
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 candidate for a Business
Combination 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.
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3.17. Stabilization.
Except
with respect to the certain agreements between Maxim and certain Company
Affiliates (which agreements have been filed as exhibits to the Registration
Statement), 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 Securities.
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
GGK 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 Offering.
As soon
as the Audited Financial Statements become available, the Company shall
immediately file a Current Report on Form8-K with the Commission, which
Report
shall contain the Company’s Audited Financial Statements.
3.21. Press
Releases.
The
Company will not issue press releases or engage in any other publicity, without
Maxim’s prior written consent, for a period ending at 5:00 p.m., New York City
time, on the first Business Day following the fortieth (40th) day following
the
Closing Date.
3.22. 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 Securities.
3.23. 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.
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3.24. 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 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.
3.25. Business
Combination Announcement.
Within
five 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. 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.
3.26. 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.
3.27. Electronic
Prospectus.
The
Company shall cause to be prepared and delivered to the Representative, at
the
Company’s expense, within one 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 Underwriters to offerees and purchasers
of
the Securities for at least the period during which a prospectus relating
to the Securities 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 Securities 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.
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3.28. Reservation
of Shares.
The
Company will reserve and keep available that maximum number of its authorized
but unissued securities which are issuable upon exercise of any of the
Securities outstanding from time to time.
3.29. AMEX
Listing.
Until
the consummation of a Business Combination, the Company will use commercially
reasonable efforts to maintain the listing by AMEX of the
Securities.
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 the Representative, 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 Underwriters’
counsel.
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.
As of
either on the Closing Date or 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, 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 preventing or suspending the sale of the Units in any jurisdiction
designated by the Representative pursuant to Section 3.3 hereof shall have
been
issued and in effect on either the Closing Date or the Option Closing Date,
and
no proceedings for that purpose shall have been instituted or shall have
been
threatened.
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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
Loeb & Loeb LLP (“Loeb
& Loeb”),
counsel to the Company, dated the Effective Date, addressed to the several
Underwriters and in form and substance reasonably satisfactory to the
Representative and Underwriters’ counsel 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 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 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 Company
Certificate or Bylaws. 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 described in
the
Sale Preliminary Prospectus and the Prospectus. The Securities conform to
the
descriptions thereof contained in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus.
(iii) The
Securities 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 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
Company Certificate or Bylaws or, to such counsel’s knowledge, under similar
rights that entitle or will entitle any person to acquire any security from
the
Company upon issuance or sale thereof.
When
issued, the 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, when issued, 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 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. 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 Warrants. The
shares
of Common Stock underlying the Warrants will, upon exercise of the Warrants
and
payment of the exercise price 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.
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(iv) The
Company has full right, power and authority to execute and deliver this
Agreement, the Warrant Agreement, the Services Agreements, the Trust Agreement
and the Escrow Agreement 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 and the Escrow Agreement and consummation
of the
transactions contemplated by the Underwriting Agreement, the Registration
Statement and the Prospectus and as described in the Registration Statement,
the
Sale Preliminary Prospectus and the Prospectus have been duly and
validly
taken.
(v) This
Agreement, the Warrant Agreement, the Services Agreement, the Trust Agreement
and the Escrow Agreement have each been duly and validly authorized executed
and
delivered by the Company and 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 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) The
Insider Letters, the Insider 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.
(vii) The
execution, delivery and performance of this Agreement, the Warrant Agreement,
the Escrow Agreement, the Trust Agreement and the Services Agreements, the
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and sale of the Securities) 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 Company Certificate or By-Laws;
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.
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(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 Sale
Preliminary Prospectus and the Prospectus. No United States,
state or
foreign statute or regulation required to be described in the 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, the
Sale Preliminary Prospectus or the Prospectus or to be filed
as
exhibits to the Registration Statement not so described or filed as
required.
(ix) 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.
(x) 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, the
Sale
Preliminary Prospectus and the Prospectus, except for; (a) 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); (b) such as have been made or obtained under the Securities
Act; and (c) such as are required by the NASD.
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(xi) 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.
(xii) The
statements contained in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus relating to matters of maritime law
and
taxation have been reviewed by such counsel and fairly present the information
contained therein.
(xiii) The
opinion of counsel shall further include a statement to the effect that such
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, the Sale 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, the Sale
Preliminary Prospectus and Prospectus (except as otherwise set forth
in the
opinion), no facts have come to the attention of such counsel which leads
it to
believe that either the Registration Statement, the Sale 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, the
Sale
Preliminary Prospectus or 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 Loeb & Loeb, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the several
Underwriters and in form and substance reasonably satisfactory to the
Representative and Underwriters’ counsel, confirming as of the Closing Date and,
if applicable, the Option Closing Date, the statements made by Loeb & Loeb
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 and
Underwriters’ counsel) of other counsel reasonably acceptable to the
Representative and Underwriters’ counsel, 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 jurisdictions 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 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 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, the Representative shall have received a letter, addressed
to the several Underwriters 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 the Representative and Underwriters’
counsel from GGK 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 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 Sale 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 Sale 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, the Sale Preliminary Prospectus and the Prospectus; or (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 Sale Preliminary Prospectus and the Prospectus,
other than as set forth in or contemplated by the Registration Statement,
the
Sale Preliminary Prospectus and the Prospectus, or, if there was any 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;
(v)
Stating
that they have compared specific dollar amounts, numbers of shares, statements
and other financial information pertaining to the Company set forth in the
Sale
Prospectus and the Prospectus in each case to the extent that such amounts,
numbers, 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 period of their engagement by the Company 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 the
Representative 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 Company Certificate
and By-Laws 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; (iv) all correspondence between the Company or its counsel
and AMEX relating to the listing of the Securities on AMEX; and (v) 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,
the
Sale Preliminary Prospctus and the 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 Sale Preliminary
Prospectus and the 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 Sale
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 Sale Preliminary
Prospectus nor the Prospectus nor any amendment or supplement thereto
shall
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 light of the circumstances under which they were made, not
misleading.
4.6. Delivery
of Agreements.
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 Insider Purchase
Agreement.
5. Indemnification.
5.1. Indemnification
of Underwriters.
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5.1.1. General.
Subject
to the conditions set forth below, each of the Company and Prokopios (Akis)
N.
Tsirigakis (the
“Company
Indemnitors”),
jointly
and severally, agrees to indemnify and hold harmless each of the Underwriters,
each dealer selected by the Representative that participates in the offer
and
sale of the Units (each a “Selected
Dealer”)
and
each of their respective directors, officers, partners, members, managers,
employees, agents and representatives, 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
(collectively, including all controlling persons, the “Indemnitees”),
against any and all loss, liability, claim, charge, 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 Indemnitee 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 regulations of foreign countries or political subdivisions
thereof, arising out of or based upon (i) any breach by the Company of any
representation or warranty contained in this Agreement or any failure of
the
Company to comply with any covenant or agreement contained herein or in any
other agreement entered into by the Company in connection with the transactions
contemplated hereby, or (ii) any untrue statement or alleged untrue statement
of
a material fact contained in: (a) any Preliminary Prospectus, the Registration
Statement or the Prospectus (as from time to time each may be amended and
supplemented); or (b) 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 Securities under the
securities laws thereof or filed with the Commission, any state securities
commission or agency, the NASD or OTC Bulletin Board, AMEX or any
other
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 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 name
of the
Underwriter and the information with respect to dealers’ concessions and
reallowances contained in the section of the Prospectus entitled “Underwriting,”
and the identity of counsel to the Underwriters contained in the section
of the
Prospectus entitled “Legal Matters.” 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 Indemnitee to the extent that any loss, liability,
claim,
damage or expense of such Indemnitee 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 Registration Statement, any Preliminary Propsectus or
the
Prospectus.
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5.1.2. Procedure.
If any
action is brought against an Indemnitee in respect of which indemnity may
be
sought against the Company Indemnitors pursuant to Section 5.1.1, such
Indemnitee shall promptly notify the Company Indemnitors in writing of the
institution of such action and the Company Indemnitors shall assume the defense
of such action, including the employment and fees of counsel (subject to
the
reasonable approval of the applicable Indemnitee) and payment of actual
expenses. Such Indemnitee 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 Indemnitee unless: (i) the employment of such counsel
at the
expense of the Company Indemnitors shall have been authorized in writing
by the
applicable Company Indemnitor in connection with the defense of such action;
(ii) the Company Indemnitors shall not have employed counsel to have charge
of
the defense of such action; or (iii) such Indemnitee(s) 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 Indemnitors (in which
case
the Company Indemnitors shall not have the right to direct the defense of
such
action on behalf of the applicable Indemnittees), in any of which events
the
reasonable fees and expenses of not more than one additional firm of attorneys
selected by the applicable Indemnitee shall be borne by the Company Indemnitors.
Notwithstanding anything to the contrary contained herein, if the applicable
Indemnitee shall assume the defense of such action as provided above, the
Company Indemnitors 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
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
Prospectus or any amendment or supplement thereto or in any such application,
which furnished written information, it is expressly agreed, consists solely
of
the name of the Underwriter and the information with respect to dealers’
concessions and reallowances contained in the section of the Prospectus entitled
“Underwriting,” and the identity of counsel to the Underwriters contained in the
section of the Prospectus entitled “Legal Matters.” 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 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.
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, each of the Company
Indemnitors,
on the
one hand,
and the
Underwriters, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the applicable parties, as incurred, in such
proportions as is appropriate to reflect (i) the relative benefits received
by
the indemnifying party or parties on the one hand and the indemnified party
on
the other, from the Offering, or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties,
on
the one hand, and the indemnified party, on the other hand, in connection
with
the statements or omissions or alleged statements or omissions that resulted
in
such losses, claims, damages or liabilities (or actions in respect thereof).
The
relative benefit received by the Company Indemnitors, on the one hand, and
the
Underwriters, on the other hand, shall be deemed to be in the same proportion
as
the total proceeds from the Offering (including underwriting discounts and
commissions received by the Underwriters; 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 discounts and commissions received by such
Underwriter in respect of the Securities underwritten by it and distributed
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, partner,
member,
manager, employee, agent or representative of an Underwriter or Selected
Dealer
or each officer, director, employee or agent of the Company, as applicable,
and
each person, if any, who controls an Underwriter, Selected Dealer or the
Company, as applicable, within the meaning of Section 15 of the Act or Section
20 of the Exchange Act shall have the same rights to contribution as the
Underwriters or the Company, as applicable. 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.
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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.
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, the Representative may, in its discretion,
arrange for the Representative 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, the Representative does 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 the Representative to purchase said Firm Units or
Option
Units on such terms. In the event that neither the Representative or the
Company
can arrange for the purchase of the Firm Units or Option Units to which a
default relates as provided in this Section 6, this Agreement will be terminated
by the Representative 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, the Representative 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
or
the Prospectus or in any other documents and arrangements, and the Company
agrees to file promptly any amendment to the Registration Statement or the
Prospectus 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. Right
to Appoint Observer.
For a
period of no less than two years from the Effective Date, upon notice from
Maxim
to the Company, Maxim shall have the right to send a representative (who
need
not be the same individual from meeting to meeting) to observe each meeting
of
the Board of Directors of the Company; provided
that
such representative shall sign a Regulation FD compliant confidentiality
agreement which is reasonably acceptable to Maxim and its counsel in connection
with such representative’s attendance at meetings of the Board of Directors;
and
provided further
that
upon written notice to Maxim, the Company may exclude the representative
from
meetings where, in the written opinion of counsel for the Company, the
representative’s presence would destroy the attorney-client privilege. The
Company agrees to give Maxim written notice of each such meeting and to provide
Maxim with an agenda and minutes of the meeting no later than it gives such
notice and provides such items to the other directors, and reimburse the
representative of Maxim for its reasonable out-of-pocket expenses incurred
in
connection with its attendance at the meeting, including, but not limited
to,
food, lodging and transportation. The
Company further agrees that, during such period, it shall schedule no less
than
one meeting of its Board of Directors in each quarter of each such year at
which
meetings a representative of Maxim shall be permitted to attend or otherwise
participate as set forth herein, and to give Maxim at least 10 days’ advance
notice of each such meeting. Further, during such period, the Company shall
give
prompt written notice to Maxim of any proposed Business Combinations or other
acquisitions, mergers, reorganizations or similar transactions.
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8. Additional
Covenants and Agreements.
8.1. 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.
8.2. Trust
Fund Waiver Letters.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business with which the Company seeks to effect a Business
Combination (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: (i)
it
has read the Prospectus and understands that the Company has established
the
Trust Fund, initially in an amount of $188,675,000 (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, the Company may disburse monies from the
Trust
Fund only (a) to the Public Stockholders in the event of the conversion of
their
shares or the liquidation of the Company, or (b) to the Company and the
Underwriters after it consummates a Business Combination; and (ii) for and
in
consideration of the Company (1) agreeing to evaluate such Target Business
or
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 in 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.
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8.3. Compliance
with Agreements.
The
Company shall comply in all material respects with all of its covenants and
agreements contained in, and shall perform all of its obligation ▇▇▇▇▇▇,
the
Warrant Agreement, the Trust Agreement and the Escrow Agreement.
8.4. 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 or the Insider Purchase Agreement and
will
not allow any amendments to, or waivers of, such Insider Letters or Insider
Purchase Agreement without the prior written consent of Maxim.
8.5. 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 the Company Certificate or the
By-Laws. Prior to the consummation of a Business Combination, the Company
will
not amend the Company Certificate or Bylaws without the prior written consent
of
Maxim.
8.6. Information
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.
8.7. Acquisition/Liquidation
Procedure.
The
Company agrees that: (i) 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) 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 Company will be liquidated and
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 (including for
this purpose only the Contingent Discount and any interest earned thereon,
net
of taxes payable), as determined by the Company and audited by GGK. In no
event,
however, will the Company’s Liquidation Value be less than the Trust Fund,
inclusive of any net interest income thereon. 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
in accordance with the vote of the holders of a majority of the shares of
Common
Stock issued on the Offering (the “IPO
Shares”).
At
the time the Company seeks approval of any potential Business Combination,
the
Company will offer each holder of the IPO Shares the right to redeem their
IPO
Shares at a per share price equal to $10 per share plus such holder’s pro rata
share of the accrued interest earned on the Trust Fund (net of taxes payable)
not previously released to the Company pursuant to the Trust Agreement or
payable to the Underwriters, calculated as of two business days prior to
the
consummation of the Business Combination (the “Redemption
Price”).
If
holders of less than 33% 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 redeem shares, based upon the Redemption Price, from those
holders of IPO Shares who affirmatively requested such redemption and who
voted
against the Business Combination. If holders of 33% 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 redeem
such
shares, but rather shall be liquidated and will distribute to all holders
of IPO
Shares an aggregate sum equal to the Company’s Liquidation Value. 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.
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8.8. 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.
8.9. 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, such Initial Stockholder will present to the Company for its
consideration, prior to presentation to any other person or entity, any suitable
opportunity to acquire a Target 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 Stockholder ceases to be an officer or director
of the Company, subject to any pre-existing fiduciary obligations such Initial
Stockholders might have.
8.10. 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 (exclusive of the Contingent Discount and accrued interest
thereon). 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 (exclusive
of the Contingent Discount and accrued interest thereon), 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.
8.11. Redemption
of Warrants.
In
accordance with the terms of the Warrant Agreement, the Company shall have
the
right to call the Warrants, with Maxim’s prior written consent, for a redemption
price of $.01 per Warrant at any time if notice of not less than 30 days
is
given and the last sale price of the Common Stock has been at least $14.25
for
any 20 trading days within a 30 trading day period ending on the third day
prior
to the day on which notice is given.
Maxim
Group LLC
_____________,
2005
Page
39
of
44
8.12. Key
Man Insurance.
Prior
to the closing of a Business Combination, the Company shall obtain key person
life insurance of life of Prokopios (Akis) Tsirigakis, in the amount of
$2,000,000, which policy shall: (i) be underwritten by an insurer rated AA
or
better in the most recent addition of “Best’s Life Reports”; (ii) name the
Company as the sole beneficiary; and (iii) be maintained in full force and
effect for a period of at least three years.
8.13. Offerings
Following a Business Combination.
For a
period of 18 months from the closing of a Business Combination, the Company
or
any successor to or subsidiary of the Company shall not undertake any public
or
private offerings of any equity securities of the Company (including
equity-linked securities) without the prior written consent of Maxim, which
consent shall not be reasonably withheld.
9. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties, covenants
and agreements contained in this Agreement shall be deemed to be
representations, warranties, covenants and agreements at the Closing Date
or the
Option Closing Date, if any, and such representations, warranties, covenants
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 other 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.
10. Effective
Date of This Agreement and Termination Thereof.
10.1. Effective
Date.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
10.2. Termination.
Maxim
shall have the right to terminate this Agreement at any time prior to any
Closing Date if: (i) any domestic or international event or act or occurrence
has materially disrupted, or in the Representative’s sole opinion will, in the
immediate future, materially disrupt, general securities markets in the United
States; (ii) 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 required on the NASD OTC Bulletin Board or by
order
of the Commission or any other government authority having jurisdiction;
(iii)
the United States shall have become involved in a new war or an increase
in
major hostilities; (iv) a banking moratorium has been declared by a New York
State or federal authority; (v) a moratorium on foreign exchange trading
has
been declared which materially adversely impacts the United States securities
markets; (vi) 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 the
Representative’s sole opinion, make it inadvisable to proceed with the delivery
of the Units; (vii) any of the Company’s representations, warranties, covenants
or agreements hereunder are breached; or (viii) any Underwriter 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 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.
Maxim
Group LLC
_____________,
2005
Page
40
of
44
10.3. 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.
10.4. 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.
11. Miscellaneous.
11.1. 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 and confirmed, or if mailed, two days after such
mailing:
If
to the
Representative:
Maxim
Group LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy (which shall not constitute notice) to:
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Fax
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Maxim
Group LLC
_____________,
2005
Page
41
of
44
If
to the
Company:
Star
Maritime
c/▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Prokopios (Akis) Tsirigakis, Chief Executive Officer
With
a
copy (which shall not constitute notice) to:
Loeb
& Loeb LLP
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax
No.:
(▇▇▇) ▇▇▇-▇▇▇▇
and
if to
other party(ies) signature hereto, at their respective addresses set forth
under
their names on the signature page hereof.
11.2. 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.
11.3. Amendment.
This
Agreement may only be amended by a written instrument executed by each of
the
parties hereto.
11.4. 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.
11.5. Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon
the
Representative, the Underwriters, the Company and the persons entitled to
indemnification pursuant to 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.
Maxim
Group LLC
_____________,
2005
Page
42
of
44
11.6. Governing
Law; Venue; Etc.
11.6.1. 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 now or may hereafter have 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.
11.6.2. 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 such party mailed
by certified mail to its address as set forth in Section 11.1 of this Agreement
shall be deemed in every respect effective service of process upon such in
any
such suit, action or proceeding.
11.6.3. THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW,
ON
BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES 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.
11.6.4. 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.
11.7. 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 facsimile or e-mail/.pdf
transmission shall constitute valid and sufficient delivery
thereof.
11.8. 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.
Maxim
Group LLC
_____________,
2005
Page
43
of
44
11.9. Time
is of the Essence.
Time
shall be of the essence of this Agreement.
[Signature
Page Follows]
Maxim
Group LLC
_____________,
2005
Page
44
of
44
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,
By:
________________________________________
Name:
Title:
Agreed
to and accepted
as
of the date first written above:
MAXIM
GROUP LLC, as Representative
of
the
several Underwriters
By:
________________________________________
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Managing Director
________________________________
Prokopios
(Akis) Tsirigakis
________________________________
Address: ________________________
________________________
________________________
SCHEDULE
A
_________________
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
Maxim
Group LLC
|
||
| Early Bird Capital, Inc. | ||
|
_________________
|
Form
of Target Business Letter
Star
Maritime Acquisition Corporation
c/▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Prokopios (Akis) Tsirigakis, Chief Executive Officer
Gentlemen:
Reference
is made to the Final Prospectus of Star
Maritime Acquisition Corp. (the
“Company”),
dated
____________, 2005 (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 the Company
has
established the Trust Fund, initially in an amount of [$188,675,000] for
the
benefit of the Public Stockholders and the underwriters of the Company’s initial
public offering (the “Underwriters”) and that, except for a portion of the
interest earned on the amounts held in the Trust Fund, the Company may disburse
monies from the Trust Fund only: (i) to the Public Stockholders in the event
of
the redemption of their shares or the liquidation of the
Company;
or (ii)
to the
Company and the Underwriters after
consummation of a Business Combination.
For
and
in consideration of the
Company 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 the
Company and
will
not seek recourse against the Trust Fund for any reason whatsoever.
|
Print
Name of Target Business
|
|
|
Authorized
Signature of Target Business
|
Form
of Vendor Letter
Star
Maritime Acquisition Corporation
c/▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
Prokopios (Akis) Tsirigakis, Chief Executive Officer
Gentlemen:
Reference
is made to the Final Prospectus of Star
Maritime Acquisition Corp.
(the
“Company”),
dated
_________________, 2005 (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 the Company has established the Trust
Fund, initially in an amount of [$188,675,000] for the benefit of the Public
Stockholders and the underwriters of the Company’s initial public offering (the
“Underwriters”) and that, except for a portion of the interest earned on the
amounts held in the Trust Fund, the Company may disburse monies from the
Trust
Fund only: (i) to the Public Stockholders in the event of the redemption
of
their shares or the liquidation of the Company; or (ii) to the Company and
the
Underwriters after consummation of a Business Combination.
For
and
in consideration of the Company engaging the services of the undersigned,
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 the Company and will not seek recourse
against the Trust Fund for any reason whatsoever.
|
Print
Name of Vendor
|
|
|
Authorized
Signature of Vendor
|
Form
of Director/Officer Letter
Star
Maritime Acquisition Corporation
c/▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
Prokopios (Akis) Tsirigakis, Chief Executive Officer
Gentlemen:
The
undersigned officer or director of Star
Maritime Acquisition Corp.
(the
“Company”)
hereby
acknowledges that the Company has established the Trust Fund, initially in
an
amount of [$188,675,000] for the benefit of the Public Stockholders and the
underwriters (the “Underwriters”) of the Company’s initial public offering (the
“IPO”)and
that the Company may disburse monies from the Trust Fund only: (i) to the
Public
Stockholders in the event of the redemption of their shares or the liquidation
of the Company; or (ii) to the Company and the Underwriters after consummation
of 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 the Company and will not seek recourse
against the Trust Fund for any reason whatsoever.
Notwithstanding
the foregoing, such waiver shall apply to the shares underlying the units
acquired by the undersigned or any of its affiliates in the IPO, but shall
not
apply to any shares subsequently acquired by the undersigned in the public
market.
|
Print
Name of Officer/Director
|
|
|
Authorized
Signature of
Officer/Director
|