Exhibit 1.1
14,375,000 Units
TAILWIND FINANCIAL INC.
UNDERWRITING AGREEMENT
[__], 2007
Deutsche Bank Securities Inc.
As Representative of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tailwind Financial Inc., a Delaware corporation (the "Company"), proposes
to sell to the several underwriters (the "Underwriters") named in Schedule I
hereto for whom you are acting as representative (the "Representative") an
aggregate of twelve million five hundred thousand (12,500,000) units of the
Company (the "Firm Units"), with each unit consisting of one share of the
Company's common stock, $0.001 par value per share (the "Common Stock"), and one
warrant (collectively, the "Warrants") to purchase one share of Common Stock.
The respective amounts of the Firm Units to be so purchased by the several
Underwriters are set forth opposite their names in Schedule I hereto. The
Company also proposes to sell at the Underwriters' option (the "Over-allotment
Option") an aggregate of up to one million, eight hundred seventy-five thousand
(1,875,000) additional units of the Company (the "Option Units") as set forth
below. The terms of the Warrants are provided for in the form of Warrant
Agreement (defined below).
As the Representative, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Units set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Units
if you elect to exercise the Over-allotment Option in whole or in part for the
accounts of the several Underwriters. The Firm Units and the Option Units (to
the extent the aforementioned option is exercised) are herein collectively
called 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 collectively referred to as the "Securities."
Deutsche Bank Securities Inc. ("DBSI") has agreed to reserve up to 500,000
of the Units to be purchased by it under this Agreement for sale to the
Company's directors, officers, employees and business associates and other
parties related to the Company (collectively, "Participants"), as set forth in
the Prospectus (as defined below) under the heading
"Underwriting" (the "Directed Unit Program"). The Units to be sold by DBSI and
its affiliates pursuant to the Directed Unit Program are referred to hereinafter
as the "Directed Units." Any Directed Units not orally confirmed for purchase by
any Participants by the end of the business day on which this Agreement is
executed will be offered to the public by the Underwriters as set forth in the
Prospectus.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Underwriters as
follows:
(a) A registration statement on Form S-1 (File No. 333-135790) with
respect to the Securities and the Representative's Securities (as defined below)
has been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. Copies of such
registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations) contained
therein and the exhibits, financial statements and schedules, as finally amended
and revised, have heretofore been delivered by the Company to you. Such
registration statement, together with any registration statement filed by the
Company pursuant to Rule 462(b) under the Act, is herein referred to as the
"Registration Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rules 430A, 430B or 430C under the Act and
contained in the Prospectus referred to below, has become effective under the
Act and no post-effective amendment to the Registration Statement has been filed
as of the date of this Agreement. "Prospectus" means the form of prospectus
first filed with the Commission pursuant to and within the time limits described
in Rule 424(b) under the Act. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein referred
to as a "Preliminary Prospectus." Any reference herein to the Registration
Statement, any Preliminary Prospectus or to the Prospectus or to any amendment
or supplement to any of the foregoing documents shall be deemed to refer to and
include any documents incorporated by reference therein, and, in the case of any
reference herein to the Prospectus, also shall be deemed to include any
documents incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the Prospectus
under Rule 424(b) under the Act, and prior to the termination of the offering of
the Units by the Underwriters.
The Company has filed with the Commission a Form 8-A (File Number
001-33385) providing for the registration under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), of the Securities and the
Representative's Securities. The Units, the Warrants and the Common Stock have
been duly listed, and admitted and authorized for trading, subject only to
official notice of issuance, on the American Stock Exchange, and the Company
knows of no reason or set of facts which is likely to adversely affect such
approval. Neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or has
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instituted or, to the Company's knowledge, threatened to institute any
proceedings with respect to such an order. Neither the Commission nor any state
regulatory authority has issued any order preventing or suspending the
effectiveness of the Registration Statement and no proceeding for that purpose
or pursuant to Section 8A of the Act has been instituted or is pending or, to
the Company's knowledge, is contemplated or threatened by the Commission.
(b) As of the Applicable Time (as defined below) and as of the Closing
Date or the Option Closing Date (each as defined below), as the case may be, the
Statutory Prospectus (as defined below) and the information included on Schedule
II hereto, considered together (collectively, the "General Disclosure Package")
did not and will not include any untrue statement of a material fact and did not
and will not omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As used in this subsection and elsewhere in this
Agreement:
"Applicable Time" means [_______] [a/p]m (New York time) on the date
of this Agreement or such other time as agreed to by the Company and the
Representative.
"Statutory Prospectus" as of any time means the Preliminary Prospectus
relating to the Securities or the Representative's Securities that is included
in the Registration Statement immediately prior to that time.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to (i) own or lease its properties and conduct its
business as described in the Registration Statement, the General Disclosure
Package and the Prospectus and (ii) enter into this Agreement and the Warrant
Agreement (as defined below), the Representative's Purchase Option (as defined
below), the Trust Agreement (as defined below), the Services Agreement (as
defined below) and the Escrow Agreement (as defined below) and to carry out the
transactions contemplated herein and therein. The Company does not own an
interest in any corporation, partnership, limited liability company, joint
venture, trust or other business entity. The Company is duly qualified to
transact business in all jurisdictions in which the conduct of its business
requires such qualification, 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 purpose as described in the Registration Statement, the General
Disclosure Package and the Prospectus.
(d) 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 offers and sales of the outstanding Common Stock and warrants 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.
(e) The shares of Common Stock that constitute the Securities and
Representative's Securities have been duly authorized, and when issued and paid
for in
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accordance with the terms hereof and in accordance with the Securities and the
Representative's Securities, will be validly issued, fully paid and
non-assessable; the holders of such shares of Common Stock are not and will not
be subject to personal liability by reason of being such holders; the Securities
and the Representative's Securities are not and will not be subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to
be taken for the authorization, issuance and sale of the Securities and the
Representative's Securities has been duly and validly taken.
(f) When issued, the Representative's Purchase Option, the
Representative's Warrants and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor in accordance with the terms thereof,
the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative's Purchase Option,
Representative's Warrants and Warrants are enforceable against the Company in
accordance with their respective terms, except: (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws; and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(g) Except as set forth in the Registration Statement, the General
Disclosure Package 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.
(h) The information set forth under the caption "Capitalization" in
the Registration Statement and the Prospectus (and any similar section or
information contained in the General Disclosure Package) is true and correct.
All of the Securities conform to the description thereof contained in the
Registration Statement, the General Disclosure Package and the Prospectus. The
form of certificates for the Common Stock conforms to the corporate law
requirements of the jurisdiction of the Company's incorporation and the
requirements of the American Stock Exchange. Except as set forth in, or
contemplated by, the Registration Statement, the General Disclosure Package and
the Prospectus, on the effective date of the Registration Statement (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.
(i) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus relating to the proposed
offering of the Securities and the Representative's Securities, and no
proceeding for that purpose or pursuant to Section 8A of the Act has been
instituted or, to the Company's knowledge, threatened by the Commission. The
Registration Statement contains, and the Prospectus and any amendments or
4
supplements thereto will contain, all statements which are required to be stated
therein by, and will conform to, the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do
not omit, and will not omit, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The Prospectus and any amendments and supplements thereto
do not contain, and will not contain, any untrue statement of a material fact;
and do not omit, and will not omit, to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter through the Representative,
specifically for use therein, it being understood and agreed that the only such
information is that described in Section 13 herein.
(j) The agreements and documents described in the Registration
Statement, the General Disclosure Package and the Prospectus conform in all
material respects to the descriptions thereof contained therein and there are no
agreements or other documents required to be described in the Registration
Statement, the General Disclosure Package or the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property or business
is or may be bound or affected and (i) that is referred to in the General
Disclosure Package or the Prospectus, or (ii) is material to the Company's
business, has been duly and validly executed by the Company, is in full force
and effect and is enforceable against the Company and, the other parties
thereto, in accordance with its terms, except (x) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (y) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (z) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought, and
none of such agreements or instruments has been assigned by the Company, and
neither the Company nor, any other party is in material breach or default
thereunder and no event has occurred that, with the lapse of time or the giving
of notice, or both, would constitute a material 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.
(k) No securities of the Company have been sold by the Company or by
or on behalf of, or for the benefit of, any person or persons controlling,
controlled by, or under common control with the Company within the three years
prior to the date hereof, except as disclosed in the Registration Statement.
(l) All information contained in the questionnaires completed by each
of the Company's stockholders listed in Schedule III (the "Initial
Stockholders") and provided to the
5
Underwriter as an exhibit to such Initial Stockholders' Insider Letter (as
defined below) is true and correct in all material respects 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 in any material respect.
(m) The Company has caused to be duly executed legally binding and
enforceable agreements (except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification, contribution or
noncompete provision may be limited under the federal and state securities laws,
and (iii) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought) the
agreements substantially in the form of Exhibits 10.7 through 10.15 to the
Registration Statement (the "Insider Letters").
(n) The Company has not, directly or indirectly, distributed and will
not distribute any offering material in connection with the offering and sale of
the Securities and the Representative's Securities other than any Preliminary
Prospectus, the Prospectus and other materials, if any, permitted under the Act
and consistent with Section 4(a)(B) below. The Company has satisfied or will
satisfy the conditions in Rule 433 under the Act to avoid a requirement to file
with the Commission any electronic road show.
(o) The financial statements of the Company, together with related
notes and schedules as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus, present fairly the financial position and
the results of operations and cash flows of the Company, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting ("GAAP"), consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary and
selected consolidated financial and statistical data included in the
Registration Statement, the General Disclosure Package and the Prospectus
present fairly the information shown therein and such data has been compiled on
a basis consistent with the financial statements presented therein and the books
and records of the Company. The Company does not have any material liabilities
or obligations, direct or contingent (including any off-balance sheet
obligations or any "variable interest entities" within the meaning of Financial
Accounting Standards Board Interpretation No. 46), not disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus. There
are no financial statements (historical or pro forma) that are required to be
included in the Registration Statement, the General Disclosure Package or the
Prospectus that are not included as required.
(p) BDO ▇▇▇▇▇▇▇, LLP, who has certified certain of the financial
statements filed with the Commission as part of the Registration Statement, the
General Disclosure Package and the Prospectus, is an independent registered
public accounting firm with respect to the Company within the meaning of the Act
and the applicable Rules and Regulations and the Public Company Accounting
Oversight Board (United States) (the "PCAOB").
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(q) Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company is not aware of (i) any
material weakness in its internal control over financial reporting or (ii)
change in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
(r) Solely to the extent that the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as
amended, and the rules and regulations promulgated by the Commission and the
American Stock Exchange thereunder (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act") has been
applicable to the Company, there is and has been no failure on the part of the
Company to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company has taken all necessary actions to ensure that
it is in compliance with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that are in
effect and with which the Company is required to comply and is actively taking
steps to ensure that it will be in compliance with other provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect or which will become applicable to
the Company.
(s) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company before any court or
administrative agency or otherwise which if determined adversely to the Company
would either (i) have, individually or in the aggregate, a material adverse
effect on the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company or
(ii) prevent the consummation of the transactions contemplated hereby (the
occurrence of any such effect or any such prevention described in the foregoing
clauses (i) and (ii) being referred to as a "Material Adverse Effect"), except
as set forth in the Registration Statement, the General Disclosure Package and
the Prospectus.
(t) On or prior to the Closing Date, the Company has entered into an
administrative services agreement with Tailwind Financial Corp. or an affiliate
(the "Services Agreement") substantially in the form of Exhibit 10.3 of the
Registration Statement.
(u) Since the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and the Prospectus, as
each may be amended or supplemented, there has not been any material adverse
change or any development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the Company,
whether or not occurring in the ordinary course of business, and there has not
been any material transaction entered into or any material transaction that is
probable of being entered into by the Company, other than transactions in the
ordinary course of business and changes and transactions described in the
Registration Statement, the General Disclosure Package and the Prospectus, as
each may be amended or supplemented. The Company has no material contingent
obligations which are not disclosed in the Company's financial statements which
are included in the Registration Statement, the General Disclosure Package and
the Prospectus.
(v) The Company is not, nor with the giving of notice or lapse of time
or both, will be, (i) in violation of its certificate of incorporation or
by-laws or (ii) in violation of or in default under any agreement, lease,
contract, indenture or other instrument or obligation to which
7
it is a party or by which it, or any of its properties, is bound and, solely
with respect to this clause (ii), which violation or default would have a
Material Adverse Effect. The execution, delivery, and performance by the Company
of this Agreement, the Warrant Agreement, the Representative's Purchase Option,
the Trust Agreement, the Services Agreement and the Escrow Agreement, the
consummation by the Company of the transactions herein and therein contemplated
and the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which the Company or any of its properties is
bound, or of the certificate of incorporation or by-laws of the Company or any
law, order, rule or regulation judgment, order, writ or decree applicable to the
Company of any court or of any government, regulatory body or administrative
agency or other governmental body having jurisdiction.
(w) This Agreement, the Warrant Agreement, the Trust Agreement, the
Services Agreement and the Escrow Agreement have been duly and validly
authorized by the Company and constitute, and the Representative's Purchase
Option, has been duly and validly authorized by the Company and, when executed
and delivered, will constitute, the valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (ii) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. This Agreement has been duly
executed and delivered by the Company.
(x) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement, the Warrant Agreement, the Representative's Purchase
Option, the Trust Agreement, the Services Agreement and the Escrow Agreement and
the consummation of the transactions herein and therein contemplated (except
such additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such additional steps as
may be necessary to qualify the Securities for public offering by the
Underwriters under state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
(y) Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a
finder's, consulting or origination fee by the Company or any Initial
Stockholder with respect to the sale of the Securities hereunder or any other
arrangements, agreements or understandings of the Company or any Initial
Stockholder that may affect the Underwriter's compensation, as determined by the
NASD.
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
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that has any direct or indirect affiliation or association with any NASD member
(other than the NASD or the Commission), in each case within the twelve months
prior to the Effective Date.
None of the net proceeds of the offering will be paid by the Company
to any participating NASD member or its affiliates, except as specifically
authorized herein and except as may be paid in connection with an initial
Business Combination (as defined below) and/or one or more other transactions
after the initial Business Combination, including without limitation in
connection with the payment of investment banking fees, fees in connection with
fairness opinions and the like.
(z) Except as disclosed in questionnaires completed by such persons
and provided to the Representatives, no officer, director or any beneficial
owner of the Company's unregistered securities has any direct or indirect
affiliation or association with any NASD member. The Company will advise the
Representative if it learns that any officer or director is or becomes an
affiliate or associated person of an NASD member participating in the offering.
(aa) Neither the Company nor any of its affiliates has taken or will
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Units.
(bb) The Company will not be, after giving effect to the offering and
sale of the Units contemplated hereunder and the application of the net proceeds
from such sale as described in the Prospectus, an "investment company" within
the meaning of such term under the Investment Company Act of 1940 as amended
(the "1940 Act"), and the rules and regulations of the Commission thereunder.
(cc) The statistical, industry-related and market-related data
included in the Registration Statement, the General Disclosure Package 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.
(dd) The Company has entered into a warrant agreement with respect to
the Warrants and the Representative's Warrants with American Stock Transfer &
Trust Company substantially in the form of Exhibit 4.5 to the Registration
Statement (the "Warrant Agreement").
(ee) The Company has caused the Initial Stockholders to enter into a
security escrow agreement (the "Escrow Agreement") with American Stock Transfer
& Trust Company (the "Escrow Agent") substantially in the form of Exhibit 4.6 to
the Registration Statement. The Escrow Agreement is enforceable against each of
the Initial Stockholders (except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought) and will not,
with or without the giving of notice or the lapse of time or both, result in a
breach
9
of, or conflict with any of the terms and provisions of, or constitute a default
under, any material agreement or instrument to which any of the Initial
Stockholders is a party.
(ff) The Company has entered into an investment management trust
agreement (the "Trust Agreement") with American Stock Transfer & Trust Company
with respect to certain proceeds of the offering, substantially in the form of
Exhibit 10.1 to the Registration Statement.
(gg) No Initial Stockholder, employee, officer or director of the
Company is subject to any non-competition or non-solicitation agreement with any
employer or prior employer which could materially affect his ability to be an
Initial Stockholder, employee, officer and/or director of the Company.
(hh) Upon delivery and payment for the Firm Units on the Closing Date,
the Company will not be subject to Rule 419 under the Act and none of the
Company's outstanding securities will be deemed to be a "▇▇▇▇▇ stock" as defined
in Rule 3a-51-1 under the Exchange Act.
(ii) The Company does not have any specific Business Combination under
consideration and the Company has not (nor has anyone on its behalf) contacted
any prospective acquisition candidate or had any discussions, formal or
otherwise, with respect to such a transaction.
(jj) The operations of the Company are and have been conducted at all
times in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the "Money Laundering Laws"), and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or threatened.
(kk) Neither the Company nor any director, officer, agent, employee or
affiliate of the Company is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department
("OFAC"); and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or entity, for the purpose
of financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
(ll) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is
10
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(mm) There are no relationships or related-party transactions
involving the Company or any other person required to be described in the
Prospectus which have not been described as required.
(nn) Neither the Company nor any of the Initial Stockholders nor any
person acting on behalf of the Company (other than the Underwriters) has made
any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law which violation is
required to be disclosed in the Prospectus.
(oo) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Units in any jurisdiction where the
Directed Units are being offered.
(pp) The Company has not offered, or caused DBSI or its affiliates to
offer, Units to any person pursuant to the Directed Unit Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(qq) There are no material contracts or documents that are required to
be described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto that have not been so described and filed as required.
2. PURCHASE, SALE AND DELIVERY OF THE UNITS.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $7.44 per Unit, the number of Firm Units
set forth opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Units to be sold hereunder is to be made in
Federal (same day) funds against delivery of certificates therefor to the
Representative for the several accounts of the Underwriters. Such payment and
delivery are to be made through the facilities of The Depository Trust Company,
New York, New York at 10:00 a.m., New York time, on the third business day after
the date of this Agreement or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and are not permitted by law or
executive order to be closed.) Payment for the Firm Units shall be made on the
Closing Date by wire transfer in Federal (same day) funds. One hundred million
dollars ($100,000,000) (without giving effect to the Over-allotment Option)
shall be deposited in the trust account established by the Company for the
benefit of the public securityholders as described in the Registration Statement
(the "Trust Fund") (including ninety-
11
two million, three hundred thousand dollars ($92,300,000) from the proceeds of
the Firm Units, three million dollars ($3,000,000) to be held as deferred
underwriting discount, which is to be paid to the Underwriters upon consummation
of the initial Business Combination, and four million seven hundred thousand
dollars ($4,700,000) of proceeds received by the Company as consideration for
the sale of 4,700,000 Warrants for $1.00 per Warrant in a private placement
prior to the Closing). 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 full business days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Units for
delivery, at least one full business day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender of
payment by the Representative for all the Firm Units.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Units at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representative of the several Underwriters, to the Company setting forth the
number of Option Units as to which the several Underwriters are exercising the
option and the time and date at which such certificates are to be delivered. The
time and date at which certificates for Option Units are to be delivered shall
be determined by the Representative but shall not be earlier than three nor
later than 10 full business days after the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein referred to as
the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Units to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Units being purchased as the number of Firm Units being purchased by such
Underwriter bears to the total number of Firm Units, adjusted by you in such
manner as to avoid fractional units. The option with respect to the Option Units
granted hereunder may be exercised only to cover over-allotments in the sale of
the Firm Units by the Underwriters. You, as Representative of the several
Underwriters, may cancel such option at any time prior to its expiration by
giving written notice of such cancellation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Units shall be made on
the Option Closing Date in Federal (same day funds) through the facilities of
The Depository Trust Company in New York, New York drawn to the order of the
Company. Payment for the Option Units shall be made on the Option Closing Date
by wire transfer in Federal (same day) funds. $7.68 per Option Unit sold shall
be deposited in the Trust Fund (including $0.24 per Option Unit to be held in
the Trust Fund as deferred underwriting discount, which is to be paid to the
Underwriters upon consummation of the initial Business Combination) upon
delivery to you of certificates (in form and substance satisfactory to the
Underwriters) representing the Option Units sold (or through the facilities of
DTC) for the account of the Underwriters. The Company shall not be obligated to
sell or deliver any Option Units except upon tender of payment by the
Representative for all such Option Units.
The Company hereby agrees to issue and sell to the Representative on
the Effective Date an option ("Representative's Purchase Option") for the
purchase of an aggregate of six hundred and twenty-five thousand (625,000) units
(the "Representative's Units") for an
12
aggregate purchase price of $100.00. Each of the Representative's Units is
identical to the Firm Units, except that the Warrants included in the
Representative's Units ("Representative's Warrants") have an exercise price of
seven dollars and twenty cents ($7.20), which is equal to one hundred and twenty
percent (120%) of the exercise price of warrants sold to the public. The
Representative's Purchase Option shall be exercisable, in whole or in part, at
an initial exercise price per Representative's Unit of nine dollars and sixty
cents ($9.60), which is equal to one hundred and twenty percent (120%) of the
initial public offering price of a Unit, commencing on the later of (i) the
consummation of the Company's initial acquisition of one or more assets or
operating businesses, through a merger, capital stock exchange, purchase, asset
acquisition exchangeable share transaction, stock or asset purchase or other
similar business combination ("Business Combination") or (ii) one year from the
Effective Date, and expiring on the four-year anniversary of the Effective Date
(or, if earlier, the date on which the Warrants shall have been redeemed). The
Representative's Purchase Option, the Representative's Units, the
Representative's Warrants and the shares of Common Stock issuable upon exercise
of the Representative's Warrants are hereinafter referred to collectively as the
"Representative's Securities." The Representative understands and agrees that
there are restrictions against transferring the Representative's Purchase
Option.
Delivery and payment for the Representative's Purchase Option shall be
made on the Closing Date. The Company shall deliver to the Underwriter, upon
payment therefor, certificates for the Representative's Purchase Option in the
name or names and in such authorized denominations as the Representative may
request.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Units as soon as the Representative deems it advisable to
do so. The Firm Units are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Units in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters that:
(a) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) under the Act a Prospectus in a form approved by the
Representative containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rules 430A, 430B or
430C under the Act, (B) not file any amendment to the Registration Statement or
distribute an amendment or supplement to the General Disclosure Package or the
Prospectus of which the Representative shall not previously have been advised
and furnished with a copy or to which the Representative shall have reasonably
objected in writing or which is not in compliance with the Rules and Regulations
and (C) file on a timely
13
basis all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the Units by the
Underwriters.
(b) The Company will advise the Representative promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have become
effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the General Disclosure Package or the Prospectus or for any
additional information, and (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or of the institution of any proceedings for that purpose or
pursuant to Section 8A of the Act. The Company will use its reasonable best
efforts to prevent the issuance of any such order and to obtain as soon as
possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representative in endeavoring
to qualify the Securities for sale under the securities laws of such
jurisdictions as the Representative may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representative may reasonably request for distribution of the Securities.
(d) The Company will deliver to, or upon the order of, the
Representative, from time to time, as many copies of any Preliminary Prospectus
as the Representative may reasonably request. The Company will deliver to, or
upon the order of, the Representative during the period when delivery of a
Prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under
the Act) is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representative may
reasonably request. The Company will deliver to the Representative at or before
the Closing Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representative such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), and of all amendments thereto, as the Representative
may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Units as contemplated in this Agreement and the Prospectus. If during the period
in which a prospectus (or, in lieu thereof, the notice referred to under Rule
173(a) under the Act) is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it becomes necessary
to amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company will use
its best efforts
14
promptly to prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus.
(f) If the General Disclosure Package is being used to solicit offers
to buy the Units at a time when the Prospectus is not yet available to
prospective purchasers and any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the General Disclosure Package in order
to make the statements therein, in the light of the circumstances, not
misleading, or to make the statements therein not conflict with the information
contained in the Registration Statement then on file, or if it is necessary at
any time to amend or supplement the General Disclosure Package to comply with
any law, the Company will use its best efforts promptly to prepare, file with
the Commission (if required) and furnish to the Underwriters and any dealers an
appropriate amendment or supplement to the General Disclosure Package.
(g) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the Effective Date, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months beginning
after the Effective Date, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 under the Act and will
advise the Representative in writing when such statement has been so made
available.
(h) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
(i) The Company will use its reasonable best efforts to effect and
maintain the listing of the Securities on the AMEX.
(j) The Company shall apply the net proceeds of its sale of the
Securities as set forth in the Registration Statement, General Disclosure
Package and the Prospectus and shall file such reports with the Commission with
respect to the sale of the Securities and the application of the proceeds
therefrom as may be required in accordance with Rule 463 under the Act.
(k) The Company shall cause the proceeds of the offering to be held in
the Trust Fund to be invested only in "government securities" (as defined in the
Trust Agreement) with specific maturity dates as set forth in the Trust
Agreement and disclosed in the Prospectus. The Company will otherwise use its
reasonable best efforts to conduct its business (both prior to and after the
consummation of an initial Business Combination) in a manner so that it will not
become subject to the Investment Company Act.
(l) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
15
(m) The Company will comply with all applicable securities and other
applicable laws, rules and regulations in each jurisdiction in which the
Directed Units are offered in connection with the Directed Unit Program.
(n) For a period of five years from the Effective Date, or such
earlier time upon which the Company is required to be liquidated, the Company
will use its reasonable best efforts to maintain the registration of the
Securities and the Representative's Securities under the provisions of the
Exchange Act. For a period of five years from the Effective Date, or such
earlier time upon which the Company is required to be liquidated or the
Representative shall no longer hold the Representative's Purchase Option, the
Company will not deregister the Units under the Exchange Act without the prior
written consent of the Representative.
(o) For a period of five years from the Effective Date, or until such
earlier date upon which the Company is required to be liquidated, the Company,
at its expense, shall cause its regularly engaged independent registered public
accounting firm 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 and the filing of the Company's Form 10-Q quarterly
reports.
(p) The Company will not consummate a Business Combination with any
entity which is affiliated with any Initial Stockholder. The Company shall not
pay any Initial Stockholder or any of their affiliates or family members any
fees or compensation from the Company, for services rendered to the Company
prior to, or in connection with, the consummation of an initial Business
Combination; provided that the Initial Stockholders shall be entitled to
reimbursement from the Company for their reasonable out-of-pocket expenses
incurred in connection with seeking and consummating an initial Business
Combination.
(q) 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,
upon request from the Representative, will furnish to the Representative (Attn:
Syndicate Manager with a copy to: General 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 securities, and promptly
furnish to the Representative: (i) a copy of such registration statements,
financial statements and periodic and special reports as the Company shall be
required to file with the Commission and from time to time furnishes generally
to holders of any such class of its securities; and (ii) 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, all subject to the execution of a confidentiality agreement
reasonably satisfactory to the Company.
(r) For a period of five years from the date hereof or until such
earlier time upon which the Company is required to be liquidated, the Company
will not take any action or actions which may prevent or disqualify the
Company's use of Form S-1 (or other appropriate form) for the registration of
the Warrants and the Representative's Warrants under the Act.
16
(s) The Company will maintain a transfer agent, warrant agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Units, Common Stock and Warrants.
(t) In the event any person or entity (excluding attorneys,
accountants, engineers, environmental or labor consultants, investigatory firms,
technology consultants and specialists and similar service providers that are
not affiliated or associated with the NASD and are not brokers or finders) is
engaged, in writing, to assist the issuer in finding or evaluating a merger
candidate, the Company will provide the following to the NASD and the
Representative prior to consummation of an initial Business Combination: (i)
copies of agreements governing said services (which details or agreements may be
appropriately redacted to account for privilege or confidentiality concerns),
and (ii) a justification as to why the person or entity providing the merger and
acquisition services should not be considered an "underwriter or related person"
with respect to the Company's initial public offering as such term is defined in
Rule 2710(a)(6) of the NASD 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.
(u) 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.
(v) The Company shall, on the date hereof, retain its independent
public accountants to audit the financial statements of the Company as of the
Closing Date (the "Audited Financial Statements") reflecting the receipt by the
Company of the proceeds of the initial public offering. As soon as the Audited
Financial Statements become available, the Company shall promptly file a Current
Report on Form 8-K with the Commission, which Report shall contain the Company's
Audited Financial Statements.
(w) The Company shall advise the NASD if it is aware that any 5% or
greater stockholder of the Company (other than the Representative or its
affiliates) becomes an affiliate or associated person of an NASD member
participating in the distribution of the Securities.
(x) The Company hereby agrees that the Company shall not issue (ii)
any shares of Common Stock or any options or other securities convertible into
Common Stock other than in connection with a Business Combination as described
in the Prospectus, or (ii) 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.
(y) The Company hereby agrees that prior to commencing its due
diligence investigation of any operating business or financial services industry
assets which the Company seeks to acquire ("Target Business") or obtaining the
services of any vendor or service provider
17
it will use its reasonable best efforts to attempt to cause the Target Business
or the vendor or service provider to execute a waiver letter in the form
attached hereto as Exhibit A and B, respectively. It is understood that the
Company may not be able to obtain such letters in some or all circumstances and
that, nonetheless, the Company may still proceed with such due diligence
investigations and enter into agreements with such parties or obtaining of
services, as applicable. Prior to the Closing Date, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ shall execute a waiver letter in the form attached hereto as Exhibit
C, each other officer and director of the Company shall execute a waiver letter
in the form attached hereto as Exhibit D and JovFunds Management Inc. shall
execute a waiver in the form attached hereto as Exhibit E.
(z) The Company shall not take any action or omit to take any action
that would cause the Company to be in material breach or violation of its
certificate of incorporation or by-laws.
(aa) The Company agrees: (i) that, prior to the consummation of any
Business Combination, it will submit such transaction to the Company's
stockholders for their approval ("Initial Transaction Vote") even if the nature
of the acquisition is such as would not ordinarily require stockholder approval
under applicable state law; and (ii) that, in the event that the Company does
not effect a Business Combination within 18 months from the Closing Date
(subject to extension for an additional six-month period, as described in the
Prospectus), the Company will be liquidated as described in the Prospectus. With
respect to the Initial Transaction Vote, the Company shall use its best efforts
to cause all of the Initial Stockholders to vote the shares of Common Stock
owned by them immediately prior to this offering (the "Initial Shares") in
accordance with the vote of the holders of a majority of the IPO Shares (as
defined below) present, in person or by proxy, at a meeting of the Company's
stockholders called for the Initial Transaction Vote. At the time the Company
seeks approval of any potential Business Combination, the Company will offer
each of the holders of the Company's Common Stock underlying the Firm Units
issued in this offering (the "IPO Shares") the right to convert such holder's
IPO Shares at a per share price (the "Conversion Price") equal to the amount in
the Trust Fund (inclusive of any interest income therein net of income taxes
payable on the interest income and exclusive of the amount representing the
deferred underwriting discount to be paid to the Underwriters) on the record
date for determination of stockholders entitled to vote upon the proposal to
approve such Business Combination, divided by the total number of IPO Shares. If
the Company approves and consummates a Business Combination, it will convert
shares, based upon the Conversion Price, from those holders of IPO Shares who
affirmatively requested such conversion and who voted against the initial
Business Combination. If (i) holders of a majority in interest of the IPO Shares
voted are not voted in favor of any initial Business Combination or (ii) the
holders of 30% or more in interest of the IPO Shares vote against approval of
any potential initial Business Combination and exercise their conversion rights,
the Company will not proceed with such initial Business Combination and will not
convert such shares.
(bb) The Company agrees that it will use its reasonable 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 reasonable 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.
18
(cc) The Company agrees that the initial Target Business(es) that it
acquires must have an aggregate fair market value equal to at least 80% of the
Company's net assets (excluding the amount held in the Trust Fund representing
the underwriters' discount) at the time of such acquisition. The fair market
value of such business(es) must be determined by the Board of Directors of the
Company based upon standards the Board reasonably believes are generally
accepted by the financial community. If the Board of Directors of the Company is
not able to independently determine that the Target Business(es) have an
aggregate fair market value of at least 80% of the Company's net assets
(excluding the amount held in the Trust Fund representing the underwriters'
discount) at the time of such acquisition or a conflict of interest exists with
respect to the transaction, the Company will obtain an opinion from an
unaffiliated, independent third party appraiser, which may or may not be an
investment banking firm that 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 of a Target
Business(es) if the Company's Board of Directors independently determines that
the Target Business(es) does have sufficient fair market value.
(dd) Within five days of the earlier to occur of the expiration or
termination of the Underwriters Over-allotment Option, the Company shall redeem
shares of Common Stock from TFC Holdings Ltd. at no cost, in an aggregate amount
equal to the number of shares of Common Stock determined by multiplying (a)
468,750 by (b) a fraction, (i) the numerator of which is 1,875,000 minus the
number of shares of Common Stock purchased by the Underwriters upon the exercise
of their Over-allotment Option, and (ii) the denominator of which is 1,875,000.
For the avoidance of doubt, if the Underwriters exercise the Over-allotment
Option in full, the Company shall not be required to redeem any shares of Common
Stock pursuant to this subsection.
(ee) The Company agrees that, prior to the consummation of a Business
Combination, it will not take any action to amend or modify, and will not
support, directly or indirectly, or in any way endorse or recommend that
stockholders approve any amendment or modification to, the provisions of its
certificate of incorporation set forth in the Prospectus under the subheading
"Amended and Restated Certificate of Incorporation" under the caption "Proposed
Business".
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, the Underwriters' Invitation
Letter, the Listing Application, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements) incident to securing any
required review by the NASD of the terms of the sale of the Units; the Listing
Fee of the American Stock Exchange; the costs and expenses (including without
limitation any damages or other amounts payable in connection with legal or
contractual liability) associated with the reforming of any contracts for sale
of the Units made by the Underwriters
19
caused by a breach of a representation; and the expenses, including the
reasonable fees and disbursements of one counsel for the Underwriters, incurred
in connection with the qualification of the Securities under state securities or
blue sky laws. The Company agrees to pay all costs and expenses of the
Underwriters, including the reasonable fees and disbursements of one counsel for
the Underwriters, incident to the offer and sale of Directed Units by the
Underwriters to employees and persons having business relationships with the
Company and the Subsidiaries. The Company shall not, however, be required to pay
for any of the Underwriter's expenses (other than those related to qualification
under NASD regulation and State securities or Blue Sky laws) except that, if
this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Representative pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure, refusal or inability is
due primarily to the default or omission of any Underwriter, the Company shall
reimburse the several Underwriters for reasonable out-of-pocket expenses,
including reasonable fees and disbursements of one counsel, reasonably incurred
in connection with investigating, marketing and proposing to market the Units or
in contemplation of performing their obligations hereunder; but the Company
shall not in any event be liable to any of the several Underwriters for damages
on account of loss of anticipated profits from the sale by them of the Units.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Units
on the Closing Date and the Option Units, if any, on the Option Closing Date are
subject to the accuracy, as of the Applicable Time, the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company contained herein, and to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and the Prospectus shall have been filed as
required by Rules 424, 430A, or 430C under the Act, as applicable, within the
time period prescribed by, and in compliance with, the Rules and Regulations,
and any request of the Commission for additional information (to be included in
the Registration Statement or otherwise) shall have been disclosed to the
Representative and complied with to its reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose or pursuant
to Section 8A under the Act shall have been taken or, to the knowledge of the
Company, shall be contemplated or threatened by the Commission and no
injunction, restraining order or order of any nature by a Federal or state court
of competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Units.
(b) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters and in form and substance
satisfactory to the Underwriters.
20
(c) The Representative shall have received an opinion and statement of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, dated
the Closing Date or the Option Closing Date, as the case may be, with respect to
such matters as the Representative may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(d) The Representative shall have received at or prior to the Closing
Date from Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP a memorandum or summary, in
form and substance satisfactory to the Representative, with respect to the
qualification for offering and sale by the Underwriters of the Securities under
the State securities or Blue Sky laws of such jurisdictions as the
Representative may reasonably have designated to the Company.
(e) The Representative shall have received, on each of the date
hereof, the Closing Date and, if applicable, the Option Closing Date, a letter
dated the date hereof, the Closing Date or the Option Closing Date, as the case
may be, in form and substance satisfactory to the Representative, of BDO
▇▇▇▇▇▇▇, LLP confirming that it is an independent registered public accounting
firm with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations and the PCAOB and stating that in their opinion
the financial statements and schedules examined by it and included in the
Registration Statement, the General Disclosure Package and the Prospectus comply
in form in all material respects with the applicable accounting requirements of
the Act and the related Rules and Regulations; and containing such other
statements and information as is ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and certain
financial and statistical information contained in the Registration Statement,
the General Disclosure Package and the Prospectus.
(f) The Representative shall have received on the Closing Date and,
if applicable, the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Assistant Secretary of
the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act
and no stop order suspending the effectiveness of the Registration Statement or
no order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus has been issued, and no proceedings for such purpose or pursuant to
Section 8A of the Act have been taken or are, to his or her knowledge,
contemplated or threatened by the Commission;
(ii) The representations and warranties of the Company contained
in Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules
424, 430A, 430B or 430C under the Act have been made as and when required by
such rules;
(iv) He or she has carefully examined the General Disclosure
Package and, in his or her opinion, as of the Applicable Time, the statements
contained in the General
21
Disclosure Package did not contain any untrue statement of a material fact, and
such General Disclosure Package did not omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(v) He or she has carefully examined the Registration Statement
and, in his or her opinion, as of the effective date of the Registration
Statement, the Registration Statement and any amendments thereto did not contain
any untrue statement of a material fact and did not omit to state a material
fact necessary in order to make the statements therein not misleading, in light
of the circumstances under which they were made and since the Effective Date, no
event has occurred which should have been set forth in a supplement to or an
amendment of the Prospectus which has not been so set forth in such supplement
or amendment;
(vi) He or she has carefully examined the Prospectus and, in his
or her opinion, as of its date and the Closing Date or the Option Closing Date,
as the case may be, the Prospectus and any amendments and supplements thereto
did not contain any untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
(vii) Since the respective dates as of which information is given
in the Registration Statement, the General Disclosure Package and the
Prospectus, there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or not arising in the ordinary
course of business.
(g) The Company shall have furnished to the Representative such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Representative may reasonably have requested.
(h) The Firm Units and Option Units, if any, shall have been duly
listed, subject to notice of issuance, on the American Stock Exchange.
(i) The Company shall have delivered to the Representative executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreement, the
Services Agreement and each of the Insider Letters.
(j) On the Closing Date, the Company shall have delivered to the
Representative executed copies of the Representative's Purchase Option.
(k) The Company shall have deposited into the Trust Fund the four
million seven hundred thousand dollars ($4,700,000) in proceeds received by the
Company as consideration for the sale of 4,700,000 Warrants for $1.00 per
Warrant in a private placement prior to the Closing Date.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to
22
the Representative and to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representative by notifying the Company of such termination in writing at or
prior to the Closing Date or the Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of the
Securities and the Representative's Securities required to be delivered as and
when specified in this Agreement are subject to the conditions that at the
Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which such Underwriter or any such
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made
in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representative specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in Section 13 herein; and
(2) to reimburse each Underwriter and each such controlling person
upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena
23
or governmental inquiry related to the offering of the Securities, whether
or not such Underwriter or controlling person is a party to any action or
proceeding. In the event that it is finally judicially determined that the
Underwriters were not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Underwriters will promptly
return all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer, or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representative
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in Section 13 herein. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (d) shall be available to any party who shall fail to give notice
as provided in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a), (b) or (d). In case
any such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party and shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the
24
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel acceptable to the indemnified
party within a reasonable period of time after notice of commencement of the
action. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a), (b) or (d) and by the Company
in the case of parties indemnified pursuant to Section 8(c). The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not, without
the prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding of which indemnification may be sought hereunder (whether or not
any indemnified party is an actual or potential party to such claim, action or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding.
(d) The Company, agrees to indemnify and hold harmless DBSI and its
affiliates and each person, if any, who controls DBSI or its affiliates within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) (i) caused
by any untrue statement or alleged untrue statement of a material fact contained
in any material prepared by or with the consent of the Company for distribution
to Participants in connection with the Directed Unit Program, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of
Directed Units that the Participant has agreed to purchase; or (iii) related to,
arising out of, or in connection with the Directed Unit Program other than
losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross
negligence of DBSI.
(e) To the extent the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (d) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
25
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(f) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(f). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 8(f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (f), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the
Securities purchased by such Underwriter and (ii) no person guilty of 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.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon it by any other contributing party and consents to the service of such
process and agrees that any other contributing party may join it as an
additional defendant in any such proceeding in which such other contributing
party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Units and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or any person controlling any Underwriter, or to the Company, its
directors or officers, or any
26
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Units
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), the
Representative of the Underwriters, shall use its reasonable efforts to procure
within 36 hours thereafter one or more of the other Underwriters, or any others,
to purchase from the Company such amounts as may be agreed upon and upon the
terms set forth herein, the Units which the defaulting Underwriter or
Underwriters failed to purchase. If during such 36 hours the Representative,
shall not have procured such other Underwriters, or any others, to purchase the
Units agreed to be purchased by the defaulting Underwriter or Underwriters, then
(a) if the aggregate number of shares with respect to which such default shall
occur does not exceed 10% of the Units to be purchased on the Closing Date or
the Option Closing date, as the case may be, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Units which
they are obligated to purchase hereunder, to purchase the Units which such
defaulting Underwriter or Underwriters failed to purchase, or (b) if the
aggregate number of Units with respect to which such default shall occur exceeds
10% of the Units to be purchased on the Closing Date or the Option Closing Date,
as the case may be, the Company or the Representative will have the right, by
written notice given within the next 36-hour period to the parties to this
Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or of the Company except to the extent provided in
Sections 5 and 8 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as the Representative, may determine in order that the required changes in
the Registration Statement, the General Disclosure Package or in the Prospectus
or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to Deutsche Bank Securities
Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇; Attention: Syndicate
Manager, with a copy to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; if to the Company, to Tailwind
Financial Inc., BCE Place, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇, Attention: Chief Executive Officer, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
27
11. TERMINATION.
This Agreement may be terminated by the Representative by notice to
the Company (a) at any time prior to the Closing Date or any Option Closing Date
(if different from the Closing Date and then only as to Option Units) if any of
the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company, whether or not arising in
the ordinary course of business, (ii) any outbreak or escalation of hostilities
or declaration of war or national emergency or other national or international
calamity or crisis (including, without limitation, an act of terrorism) if the
effect of such outbreak, escalation, declaration, emergency, calamity or crisis
on the financial markets of the United States would, in the Representative's
judgment, materially impair the investment quality of the Securities, (iii) any
material change in economic or political conditions if the effect of such change
on the financial markets of the United States would, in the Representative's
judgment, materially impair the investment quality of the Securities, (iv)
suspension of trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (v) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in the Representative's opinion materially
and adversely affects or may materially and adversely affect the business or
operations of the Company, (vi) the declaration of a banking moratorium by
United States or New York State authorities, (vii) the suspension of trading of
the Company's Units by the American Stock Exchange, the Commission, or any other
governmental authority or, (viii) the taking of any action by any governmental
body or agency in respect of its monetary or fiscal affairs which in the
Representative's reasonable opinion has a material adverse effect on the
securities markets in the United States; or (b) as provided in Sections 6 and 9
of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Units from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus consists of the information set forth in the third, twelfth and
thirteenth paragraphs under the caption "Underwriting" in the Prospectus.
28
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, and (c) delivery of and payment for the Units under
this Agreement.
The Company acknowledges and agrees that each Underwriter in providing
investment banking services to the Company in connection with the offering,
including in acting pursuant to the terms of this Agreement, has acted and is
acting as an independent contractor and not as a fiduciary and the Company does
not intend such Underwriter to act in any capacity other than as an independent
contractor, including as a fiduciary or in any other position of higher trust.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the law of the State of New York, including, without limitation, Section 5-1401
of the New York General Obligations Law.
The Company agrees that any suit, action or proceeding against it
brought by any Underwriter, the directors, officers, employees, affiliates and
agents of any Underwriter, or by any person who controls any Underwriter,
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any State court or U.S. federal court in The City of
New York and County of New York, and waives any objection which it may now or
hereafter have to the laying of venue of any such proceeding, and irrevocably
submits to the non-exclusive jurisdiction of such courts in any suit, action or
proceeding.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
29
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
TAILWIND FINANCIAL INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
DEUTSCHE BANK SECURITIES INC.
As Representative of the several
Underwriters listed on Schedule I
By: Deutsche Bank Securities Inc.
By:
---------------------------------
Authorized Officer
By: ---------------------------------
Authorized Officer
30
SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF FIRM UNITS
UNDERWRITER TO BE PURCHASED
----------------------------- --------------------
Deutsche Bank Securities Inc. [ ]
Legend Merchant Group, Inc. [ ]
Maxim Group LLC [ ]
GunnAllen Financial, Inc. [ ]
--------------------
Total 12,500,000
S-I-1
SCHEDULE II
None.
SCHEDULE III
SCHEDULE OF INITIAL STOCKHOLDERS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ Penteliuk
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
TFC Holdings Ltd.
Parkwood Holdings Ltd.
JovFunds Management Inc.
S-III-1
EXHIBIT A
Tailwind Financial Inc.
Gentlemen:
Reference is made to the final prospectus of Tailwind Financial Inc. (the
"Company"), dated __________, 2007 (the "Prospectus"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
We have read the Prospectus and understand that the Company has established
a trust account at ▇▇ ▇▇▇▇▇▇ Chase, maintained by American Stock Transfer and
Trust Company, acting as Trustee, as described in the Prospectus (the "Trust
Fund"), initially in an amount of $[100,000,000] for the benefit of the public
stockholders and that Company may disburse monies from the Trust Fund only (i)
to the public stockholders in the event of the conversion of their shares or the
liquidation of the Company or (ii) to the Company after it consummates an
initial Business Combination.
For and in consideration of the Company agreeing to evaluate the
undersigned for purposes of consummating an initial 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.
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Print Name of Target Business
----------------------------------------
Authorized Signature of Target Business
A-1
EXHIBIT B
Tailwind Financial Inc.
Gentlemen:
Reference is made to the final prospectus of Tailwind Financial Inc. (the
"Company"), dated ___________, 2007 (the "Prospectus"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
We have read the Prospectus and understand that the Company has established
a trust account at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, maintained by American Stock Transfer and
Trust Company, acting as Trustee, as described in the Prospectus (the "Trust
Fund"), initially in an amount of $[100,000,000] for the benefit of the public
stockholders and that the Company may disburse monies from the Trust Fund only:
(i) to the public stockholders in the event of the conversion of their shares or
the liquidation of the Company; or (ii) to the Company after it consummates an
initial 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 negotiations, contracts or agreements with the Company
and will not seek recourse against the Trust Fund for any reason whatsoever.
----------------------------------------
Print Name of Vendor Or Service Provider
----------------------------------------
Authorized Signature of Vendor Or
Service Provider
B-1
EXHIBIT C
Tailwind Financial Inc.
Gentlemen:
Reference is made to the final prospectus of Tailwind Financial Inc. (the
"Company"), dated __________, 2007 (the "Prospectus"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
The undersigned hereby acknowledges that the Company has established a
trust account at ▇▇ ▇▇▇▇▇▇ Chase, maintained by American Stock Transfer and
Trust Company, acting as Trustee, as described in the Prospectus (the "Trust
Fund"), initially in an amount of $[100,000,000] for the benefit of the public
stockholders in accordance with and subject to the terms of this letter.
The undersigned hereby waives any right, title, interest or claim of any
kind on or to any monies in the Trust Fund (the "Claim") the undersigned 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, except to the extent the undersigned is entitled to
be indemnified by the Company pursuant to the Company's certificate of
incorporation.
The undersigned agrees to indemnify and hold harmless the Company against
any and all loss, liability, claims, 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, whether pending or
threatened, or any claim whatsoever) which the Company may become subject to as
a result of any claim by (i) any vendor or service provider that is owed money
by the Company for services rendered or products sold to the Company prior to
the initial Business Combination and (ii) prospective target businesses for fees
and expenses of third parties that the Company agreed in writing to pay in the
event the Company does not consummate a Business Combination with such business;
but, in each case, only to the extent necessary to ensure that the amount in the
Trust Fund is not reduced. Nothing contained in this paragraph shall be
construed to suggest that the undersigned may be held personally liable for any
loss, liability claims, damage or expense which the Company may become subject
to other than as set forth in the preceding sentence.
----------------------------------------
Print Name of Officer/Director
----------------------------------------
Authorized Signature of Officer/Director
C-1
EXHIBIT D
Tailwind Financial Inc.
Gentlemen:
Reference is made to the final prospectus of Tailwind Financial Inc. (the
"Company"), dated __________, 2007 (the "Prospectus"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
The undersigned officer or director of the Company hereby acknowledges that
the Company has established a trust account at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, maintained by
American Stock Transfer and Trust Company, acting as Trustee, as described in
the Prospectus (the "Trust Fund"), initially in an amount of $[100,000,000] for
the benefit of the public stockholders in accordance with and subject to the
terms of this letter.
The undersigned hereby waives any right, title, interest or claim of any
kind on or to any monies in the Trust Fund (the "Claim") the undersigned 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, except to the extent the undersigned is entitled to
be indemnified by the Company pursuant to the Company's certificate of
incorporation.
----------------------------------------
Print Name of Officer/Director
----------------------------------------
Authorized Signature of Officer/Director
D-1
EXHIBIT E
Tailwind Financial Inc.
Gentlemen:
Reference is made to the final prospectus of Tailwind Financial Inc. (the
"Company"), dated __________, 2007 (the "Prospectus"). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
JovFunds Management Inc. ("JovFunds") hereby acknowledges that the Company
has established a trust account at ▇▇ ▇▇▇▇▇▇ Chase, maintained by American Stock
Transfer and Trust Company, acting as Trustee, as described in the Prospectus
(the "Trust Fund"), initially in an amount of $[100,000,000] for the benefit of
the public stockholders in accordance with and subject to the terms of this
letter.
JovFunds hereby waives any right, title, interest or claim of any kind on
or to any monies in the Trust Fund (the "Claim") JovFunds 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.
JovFunds agrees to indemnify and hold harmless the Company against any and
all loss, liability, claims, 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, whether pending or
threatened, or any claim whatsoever) which the Company may become subject to as
a result of any claim by (i) any vendor or service provider that is owed money
by the Company for services rendered or products sold to the Company prior to
the initial Business Combination and (ii) prospective target businesses for fees
and expenses of third parties that the Company agreed in writing to pay in the
event the Company does not consummate a Business Combination with such business;
but, in each case, only to the extent necessary to ensure that the amount in the
Trust Fund is not reduced. Nothing contained in this paragraph shall be
construed to suggest that JovFunds may be held personally liable for any loss,
liability claims, damage or expense which the Company may become subject to
other than as set forth in the preceding sentence.
JOVFUNDS MANAGEMENT INC.
By:
------------------------------------
Name:
Title:
E-1