Beverage Acquisition Corporation FORM OF UNDERWRITING AGREEMENT
Beverage
Acquisition Corporation
FORM
OF
UNDERWRITING AGREEMENT
,
2006
▇▇▇▇▇▇
▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As
representatives of the several Underwriters
named
in
Schedule I hereto
The
undersigned, Beverage Acquisition Corporation, a Delaware corporation
("Company"),
hereby confirms its agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Inc. (being referred
to herein variously as "you,"
"▇▇▇▇▇▇
▇▇▇▇▇▇ & Co."
or the
"Representative")
and
with the other underwriters named on Schedule I hereto for which ▇▇▇▇▇▇ ▇▇▇▇▇▇
& Co. is acting as Representative (the Representative and the other
Underwriters being collectively called the "Underwriters"
or,
individually, an "Underwriter")
as
follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Purchase
of Firm Units.
On the
basis of the representations and warranties herein contained, but subject
to the
terms and conditions herein set forth, the Company agrees to issue and sell,
to
the several Underwriters, an aggregate of 4,500,000 units ("Firm
Units")
of the
Company, at a purchase price (net of discounts and commissions) of $7.44
per
Firm Unit. The Underwriters, severally and not jointly, agree to purchase
from
the Company the number of Firm Units set forth opposite their respective
names
on Schedule I attached hereto and made a part hereof at a purchase price
(net of
discounts and commissions) of $7.44 per Firm Unit. The Firm Units are to
be
offered initially to the public ("Offering")
at the
offering price of $8.00 per Firm Unit. Each Firm Unit consists of one share
of
the Company's common stock, par value $0.0001 per share ("Common
Stock"),
and
one warrant ("Warrant(s)").
The
shares of Common Stock and the Warrants included in the Firm Units will not
be
separately transferable until 90 days after the effective date of the
Registration Statement (as defined in Section 2.1.1 hereof) ("Effective
Date")
unless
the Representative informs the Company of its decision to allow earlier separate
trading, but in no event will the Representative allow separate trading until
the Company has filed with the Securities and Exchange Commission a Current
Report on Form 8-K which includes an audited balance sheet of the Company
reflecting receipt by the Company of the gross proceeds of the Offering.
The
audited balance sheet will reflect proceeds the Company receives from the
exercise of the Over-allotment Option (as defined in Section 1.2.1), if the
Over-allotment Option is exercised prior to the filing of such Form 8-K.
Each
Warrant entitles its holder to exercise it to purchase one share of Common
Stock
for $5.50 during the period commencing on the later of the consummation by
the
Company of its "Business Combination" or one year from the Effective Date
of the
Registration Statement and terminating on the four-year anniversary of the
Effective Date, unless earlier redeemed. "Business
Combination"
shall
mean any merger, capital stock exchange, asset acquisition, stock purchase
or
other similar business combination consummated by the Company with an operating
business (as described more fully in the Registration Statement (as defined
in
Section 2.1.1)).
1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 10:00 a.m., New
York
City local time, on the third business day following the effective date of
the
Registration Statement (or the fourth business day following the effective
date,
if the Registration Statement is declared effective after 4:30 p.m.) or at
such
earlier time as shall be agreed upon by the Representative and the Company
at
the offices of the Representative or at such other place as shall be agreed
upon
by the Representative and the Company. The hour and date of delivery and
payment
for the Firm Units are called "Closing
Date."
Payment for the Firm Units and Insider Warrants (as defined in Section 2.22.3
below) and $720,000 of the Deferred Fees (as described in Section 1.1.3 below)
shall be made on the Closing Date at the Representative's election by wire
transfer in Federal (same day) funds or by certified or bank cashier's check(s)
in New York Clearing House funds, payable as follows: $34,200,000 of the
proceeds received by the Company for the Firm Units shall be deposited in
the
trust fund established by the Company for the benefit of the public stockholders
as described in the Registration Statement ("Trust
Fund")
pursuant to the terms of an Investment Management Trust Agreement between
the
Company and Continental Stock Transfer and Trust Company ("Trust
Agreement")
and
the remaining proceeds shall be paid to the order of the Company upon delivery
to you of certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Units (or through the facilities of the Depository
Trust
Company ("DTC"))
for
the account of the Underwriters. The Firm Units shall be registered in such
name
or names and in such authorized denominations as the Representative may request
in writing at least two 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.
1
1.1.3 Deferral
of a Portion of Underwriters’ Discount.
On the
Closing Date and, if applicable, on any Option Closing Date (as defined in
Section 1.2.2), the Underwriters agree to deposit into the Trust Fund a portion
of the discount equal to $0.16 per Unit in the Offering and, if applicable,
a
portion of the discount equal to $0.16 per Option Unit (as defined in Section
1.2.1) (the “Deferred
Fees”")
until
the earlier of the completion of a Business Combination or the liquidation
of
the Trust Fund. Upon the consummation of a Business Combination, the
Representative shall promptly receive the Deferred Fees, but only with respect
to those units as to which the component shares have not been converted to
cash
by those stockholders who voted against the Business Combination and exercised
their conversion rights. In the event that the Company is unable to consummate
a
Business Combination and Continental Stock Transfer & Trust Company, the
trustee of the Trust Fund, commences liquidation of the Trust Fund, the
Underwriters hereby agree: (i) to forfeit any rights or claims to the Deferred
Fees; and (ii) that the Deferred Fees shall be distributed on a pro-rata
basis
among the holders of the Common Stock included in the Units sold in the Offering
along with any interest accrued thereon, net of taxes.
1.2 Over-Allotment
Option.
1.2.1 Option
Units.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Underwriters are hereby granted, severally and
not
jointly, an option to purchase up to an additional 675,000 units from the
Company ("Over-allotment
Option").
Such
additional 675,000 units, the net proceeds of which will be deposited in
the
Trust Fund, are hereinafter referred to as "Option
Units."
The
Firm Units and the Option Units are hereinafter collectively referred to
as the
"Units,"
and
the Units, the shares of Common Stock and the Warrants included in the Units
and
the shares of Common Stock issuable upon exercise of the Warrants are
hereinafter referred to collectively as the "Public
Securities."
The
purchase price to be paid for the Option Units will be the same price per
Option
Unit as the price per Firm Unit set forth in Section 1.1.1 hereof.
1.2.2 Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time)
of
the Option Units within 45 days after the Effective Date. The Underwriters
will
not be under any obligation to purchase any Option Units prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may
be
exercised by the giving of oral notice to the Company by the Representative,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Units to be purchased and the date and
time
for delivery of and payment for the Option Units (the "Option
Closing Date"),
which
will not be later than five full business days after the date of the notice
or
such other time as shall be agreed upon by the Company and the Representative,
at the offices of the Representative or at such other place as shall be agreed
upon by the Company and the Representative. Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters,
and,
subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Units specified in such
notice.
1.2.3 Payment
and Delivery.
Payment
for Option Units shall be made on the applicable Option Closing Date at the
Representative's election by wire transfer in Federal (same day) funds or
by
certified or bank cashier's check(s) in New York Clearing House funds, payable
as follows: $7.60 per Option Unit shall be deposited in the Trust Fund pursuant
to the Trust Agreement upon delivery to you of certificates (in form and
substance satisfactory to the Underwriters) representing the Option Units
(or
through the facilities of DTC) for the account of the Underwriters. The
certificates representing the Option Units to be delivered will be in such
denominations and registered in such names as the Representative requests
not
less than two full business days prior to the Closing Date or any Option
Closing
Date, as the case may be, and will be made available to the Representative
for
inspection, checking and packaging at the aforesaid office of the Company's
transfer agent or correspondent not less than one full business day prior
to
such Closing Date.
2
1.3 Representative's
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or its
designees) on the Effective Date an option ("Representative's
Purchase Option")
for
the purchase of an aggregate of 225,000 units ("Representative's
Units")
for an
aggregate purchase price of $100. Each of the Representative's Units is
identical to the Firm Units, including the Warrant exercise price of $5.50
("Representative's
Warrants").
The
Representative's Purchase Option shall be exercisable, in whole or in part,
commencing on the later of the consummation of a Business Combination or
one
year from the Effective Date and expiring on the five-year anniversary of
the
Effective Date at an initial exercise price per Representative's Unit of
$10.00,
which is equal to one hundred twenty-five percent (125%) of the initial public
offering price of a Unit. 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
Public Securities and the Representative's Securities are hereinafter referred
to collectively as the "Securities."
The
Representative understands and agrees that there are significant restrictions
against transferring the Representative's Purchase Option during the first
year
after the Effective Date, as set forth in Section 3 of the Representative's
Purchase Option.
1.3.2 Payment
and Delivery.
Delivery and payment for the Representative's Purchase Option shall be made
on
the Closing Date. The Company shall deliver to the Underwriters, 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.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriters as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Securities and Exchange Commission ("Commission")
a
registration statement and an amendment or amendments thereto, on Form S-1
(File
No. 333-136323), including any related preliminary prospectus ("Preliminary
Prospectus"),
for
the registration of the Securities under the Securities Act of 1933, as amended
("Act"),
which
registration statement and amendment or amendments have been prepared by
the
Company in conformity with the requirements of the Act, and the rules and
regulations ("Regulations")
of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time
the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to Rule 430A of the Regulations, is hereinafter called
the
"Registration
Statement,"
and
the form of the final prospectus dated the Effective Date included in the
Registration Statement (or, if applicable, the form of final prospectus filed
by
the Company with the Commission pursuant to Rule 424(b) at or after the time
of
effectiveness as allowed under Rule 430A of the Regulations), is hereinafter
called the "Prospectus."
For
purposes of this Agreement, "Time
of Sale,"
as
used in the Act, means [4:30 p.m.] New York City time, on the date of this
Agreement. Prior to the Time of Sale, the Company prepared a preliminary
prospectus dated _____, 2006, for distribution by the Underwriters (the
"Sale
Preliminary Prospectus").
If
the Company has filed, or is required pursuant to the terms hereof to file
a
registration statement pursuant to Rule 462(b) under the Act registering
additional Securities of any type (a "Rule
462(b) Registration Statement"),
then,
unless otherwise specified, any reference herein to the term "Registration
Statement"
shall
be deemed to include such Rule 462(b) Registration Statement. Other than
a Rule
462(b) Registration Statement, which if filed, becomes effective upon filing,
no
other document with respect to the Registration Statement has heretofore
been
filed with the Commission. All of the Securities have been registered under
the
Act pursuant to the Registration Statement or, if any Rule 462(b) Registration
Statement is filed, will be duly registered under the Act with the filing
of
such Rule 462(b) Registration Statement. The Registration Statement has been
declared effective by the Commission on the date hereof. If, subsequent to
the
date of this Agreement, the Company or the Representative has determined
that at
the Time of Sale the Sale Preliminary Prospectus includes an untrue statement
of
a material fact or omitted a statement of material fact necessary to make
the
statements therein not misleading and have agreed to provide an opportunity
to
purchasers of the Firm Units to terminate their old purchase contracts and
enter
into new purchase contracts, then the Sale Preliminary Prospectus will be
deemed
to include any additional information available to purchasers at the time
of
entry into the first such new purchase contract.
3
2.1.2 Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number
000- )
providing for the registration under the Securities Exchange Act of 1934,
as
amended ("Exchange
Act"),
of
the Units, the Common Stock and the Warrants. The registration of the Units,
Common Stock and Warrants under the Exchange Act has been declared effective
by
the Commission on the date hereof.
2.2 No
Stop Orders, Etc.
Neither
the Commission nor, to the best of the Company's knowledge, any state regulatory
authority has issued any order or, to the best of the Company's knowledge,
threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus or has instituted or, to the best of the Company's
knowledge, threatened to institute any proceedings with respect to such an
order.
2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
At the
time the Registration Statement became effective and at all times subsequent
thereto up to the Closing Date and any Option Closing Date, the Registration
Statement and the Prospectus will contain all material statements that are
required to be stated therein in accordance with the Act and the Regulations,
and will in all material respects conform to the requirements of the Act
and the
Regulations; and neither the Registration Statement, the Sale Preliminary
Prospectus nor the Prospectus, nor any amendment or supplement thereto, on
their
respective dates, nor the Sale Preliminary Prospectus as of the Time of Sale
did, does or will contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading. When the Sale Preliminary Prospectus or any Prospectus was
first
filed with the Commission (whether filed as part of the Registration Statement
for the registration of the Securities or any amendment thereto or pursuant
to
Rule 424(a) of the Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Sale Preliminary Prospectus
or
Prospectus (exclusive of any supplement or amendment thereto) complied or
will
comply in all material respects with the applicable provisions of the Act
and
the Regulations and did not and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The representation
and
warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement, Sale Preliminary Prospectus
or
Prospectus or any amendment thereof or supplement thereto.
2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement, Sale
Preliminary Prospectus and the Prospectus conform to the descriptions thereof
contained therein and there are no agreements or other documents required
to be
described in the Registration Statement, Sale Preliminary Prospectus or the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. 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 Sale Preliminary Prospectus 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,
to the Company's knowledge, the other parties thereto, in accordance with
its
terms, except (x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the Federal and state securities laws, and
(z)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and none
of
such agreements or instruments has been assigned by the Company, and neither
the
Company nor, to the best of the Company's knowledge, any other party is in
breach or default thereunder and, to the best of the Company's knowledge,
no
event has occurred that, with the lapse of time or the giving of notice,
or
both, would constitute a breach or default thereunder. To the best of the
Company's knowledge, performance by the Company of the material provisions
of
such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company
or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
4
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by,
or
under common control with the Company within the three years prior to the
date
hereof, except as disclosed in the Registration Statement, Sale Preliminary
Prospectus and Prospectus.
2.3.4 Regulations.
The
disclosures in the Registration Statement, Sale Preliminary Prospectus and
Prospectus concerning the effects of Federal, State and local regulation
on the
Company's business as currently contemplated are correct in all material
respects and do not omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not
misleading.
2.4 Changes
After Dates in Registration Statement.
2.4.1 No
Material Adverse Change.
Since
the respective dates as of which information is given in the Registration
Statement, Sale Preliminary Prospectus and Prospectus, (i) there has been
no
material adverse change in the condition, financial or otherwise, or business
prospects of the Company, (ii) there have been no material transactions entered
into by the Company, other than as contemplated pursuant to this Agreement,
and
(iii) no member of the Company's management has resigned from any position
with
the Company.
2.4.2 Recent
Securities Transactions, Etc.
Subsequent to the respective dates as of which information is given in the
Registration Statement, Sale Preliminary Prospectus and Prospectus, and except
as may otherwise be indicated or contemplated herein or therein, the Company
has
not (i) issued any securities or incurred any liability or obligation, direct
or
contingent, for borrowed money or (ii) declared or paid any dividend or made
any
other distribution on or in respect to its equity securities.
2.5 Independent
Accountants.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇"),
whose
report is filed with the Commission as part of the Registration Statement,
and
included in the Registration Statement, Sale Preliminary Prospectus and
Prospectus is an independent registered public accounting firm as required
by
the Act, the Regulations and the Public Company Accounting Oversight Board
(including the rules and regulations promulgated by such entity, the
"PCAOB").
▇▇▇▇▇▇▇▇▇ is duly registered and in good standing with the PCAOB. ▇▇▇▇▇▇▇▇▇
has
not, during the periods covered by the financial statements included in the
Registration Statement, Sale Preliminary Prospectus or Prospectus, provided
to
the Company any non-audit services, as such term is used in Section 10A(g)
of
the Exchange Act.
2.6 Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, Sale Preliminary Prospectus and
Prospectus fairly present the financial position, the results of operations
and
the cash flows of the Company at the dates and for the periods to which they
apply; such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The Registration
Statement and the Sale Preliminary Prospectus disclose all material off-balance
sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with unconsolidated
entities or other persons that may have a material current or future effect
on
the Company's financial condition, changes in financial condition, results
of
operations, liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses.
2.7 Authorized
Capital; Options; Etc.
The
Company had at the date or dates indicated in the Registration Statement,
Sale
Preliminary Prospectus and Prospectus a duly authorized, issued and outstanding
capitalization as set forth in the Registration Statement, Sale Preliminary
Prospectus and Prospectus. Based on the assumptions stated in the Registration
Statement, Sale Preliminary Prospectus and Prospectus, the Company will have
on
the Closing Date the adjusted stock capitalization set forth therein. Except
as
set forth in, or contemplated by, the Registration Statement, Sale Preliminary
Prospectus and Prospectus, on the Effective Date, the Closing Date and any
Option 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.
5
2.8 Valid
Issuance of Securities; Etc.
2.8.1 Outstanding
Securities.
All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof
have
no rights of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities was
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 authorized
Common Stock conforms to all statements relating thereto contained in the
Registration Statement, Sale Preliminary Prospectus and Prospectus. The offers
and sales of the outstanding Common Stock were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky
laws
or, based in part on the representations and warranties of the purchasers
of
such shares of Common Stock, exempt from such registration requirements.
2.8.2 Securities
Sold Pursuant to this Agreement.
The
Securities have been duly authorized and, when issued and paid for, will
be
validly issued, fully paid and non-assessable; the holders thereof are not
and
will not be subject to personal liability by reason of being such holders;
the
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements
with
respect thereto contained in the Registration Statement, Sale Preliminary
Prospectus and Prospectus. When issued, the Representative's Purchase Option,
the Representative's Warrant and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor, the number and type of securities
of
the Company called for thereby in accordance with the terms thereof and such
Representative's Purchase Option, the Representative's Warrants, and 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.
2.8.3 Insider
Warrants.
The
Insider Warrants (as defined in Section 2.22.3) constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor, the number and type of securities
of
the Company called for thereby in accordance with the terms thereof, and
such
Insider Warrants are enforceable against the Company in accordance with their
respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally: (ii) as enforceability of any indemnification or contribution
provision may be limited under Federal and state securities laws, and (iii)
that
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of
the
court before which any proceeding therefore may be brought. The shares of
Common
Stock issuable upon exercise of the Insider Warrants have been reserved for
issuance upon the exercise of the Insider Warrants and, when issued in
accordance with the terms of the Insider Warrants, will be duly and validly
authorized, validly issued, fully paid and non-assessable, and the holders
thereof are not and will not be subject to personal liability by reason of
being
such holders.
2.8.4 No
Integration.
Other
than with respect to the Insider Warrants, neither the Company nor any of
its
affiliates has, prior to the date hereof, made any offer or sale of any
securities which are required to be "integrated" pursuant to the Act or the
Regulations with the offer and sale of the Securities pursuant to the
Registration Statement.
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Registration Statement, Sale Preliminary Prospectus and
the
Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of
the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
6
2.10 Validity
and Binding Effect of Agreements.
This
Agreement, the Warrant Agreement (as defined in Section 2.21 hereof), the
Trust
Agreement, the Services Agreement (as defined in Section 3.7.2 hereof), the
Escrow Agreement (as defined in Section 2.22.2 hereof) and the Insider Warrant
Purchase Agreement (as defined in Section 2.22.3 hereof) have been duly and
validly authorized by the Company and constitute, and the Representative's
Purchase Option and the Subordinated Credit Agreement (as defined in Section
4.4
below) have 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.
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Representative's Purchase Option, the Warrant Agreement, the Trust Agreement,
the Services Agreement, the Escrow Agreement, the Subordinated Credit Agreement
and the Insider Warrant Purchase Agreement, the consummation by the Company
of
the transactions herein and therein contemplated and the compliance by the
Company with the terms hereof and thereof do not and will not, with or without
the giving of notice or the lapse of time or both (i) result in a breach
of, or
conflict with any of the terms and provisions of, or constitute a default
under,
or result in the creation, modification, termination or imposition of any
lien,
charge or encumbrance upon any property or assets of the Company pursuant
to the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement referred to in Section 2.23 hereof; (ii)
result
in any violation of the provisions of the Certificate of Incorporation or
the
Bylaws of the Company; or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant
or
condition of any material license, contract, indenture, mortgage, deed of
trust,
note, loan or credit agreement, or any other agreement or instrument evidencing
an obligation for borrowed money, or any other material agreement or instrument
to which the Company is a party or by which the Company may be bound or to
which
any of the properties or assets of the Company is subject. The Company is
not in
violation of any term or provision of its Certificate of Incorporation or
Bylaws
or in violation of any material franchise, license, permit, applicable law,
rule, regulation, judgment or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or businesses.
2.13 Corporate
Power; Licenses; Consents.
2.13.1 Conduct
of Business.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of
and
from all governmental regulatory officials and bodies that it needs as of
the
date hereof to conduct its business purpose as described in the Registration
Statement, Sale Preliminary Prospectus and the Prospectus. The disclosures
in
the Registration Statement, Sale Preliminary Prospectus and the Prospectus
concerning the effects of Federal, state and local regulation on this Offering
and the Company's business purpose as currently contemplated are correct
in all
material respects and do not omit to state a material fact required to be
stated
therein or necessary in order to make the statements therein, in light of
the
circumstances under which they were made, not misleading.
2.13.2 Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any
court,
government agency or other body is required for the valid issuance, sale
and
delivery of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the
Representative's Purchase Option, the Trust Agreement, the Escrow Agreement,
the
Insider Warrant Purchase Agreement and the Subordinated Credit Agreement
and as
contemplated by the Registration Statement, Sale Preliminary Prospectus and
Prospectus, except with respect to applicable Federal and state securities
laws
and the rules and regulations promulgated by the National Association of
Securities Dealers, Inc. (“NASD”).
7
2.14 D&O
Questionnaires.
To the
best of the Company's knowledge, all information contained in the questionnaires
("Questionnaires")
completed by each of the Company's stockholders prior to the Offering
("Initial
Stockholders")
and
provided to the Underwriters as an exhibit to his or her Insider Letter (as
defined in Section 2.22.1) is true and correct and the Company has not become
aware of any information which would cause the information disclosed in the
questionnaires completed by each Initial Stockholder to become inaccurate
and
incorrect.
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the best of the Company's
knowledge, threatened against, or involving the Company or, to the best of
the
Company's knowledge, any Initial Stockholder which has not been disclosed
in the
Registration Statement, Sale Preliminary Prospectus or the
Prospectus.
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation
and is
in good standing under the laws of its state of incorporation, and is duly
qualified to do business and is in good standing as a foreign corporation
in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify
would
not have a material adverse effect on the assets, business or operations
of the
Company.
2.17 Stop
Orders.
The
Commission has not issued any order preventing or suspending the use
of
any
Preliminary Prospectus or Prospectus or any part thereof and has not threatened
to issue any such order.
2.18 Transactions
Affecting Disclosure to NASD.
2.18.1 Finder's
Fees.
Except
as described in the Registration Statement, Sale Preliminary Prospectus 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 Underwriters'
compensation, as determined by the NASD.
2.18.2 Payments
Within Twelve Months.
The
Company has not made any direct or indirect payments (in cash, securities
or
otherwise) (i) to any person, as a finder's fee, consulting fee or otherwise,
in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company, (ii) to
any
NASD member or (iii) to any person or entity that has any direct or indirect
affiliation or association with any NASD member, within the twelve months
prior
to the Effective Date, other than payments to the Representative in connection
with this Offering.
2.18.3 Use
of
Proceeds.
None of
the net proceeds of the Offering and the Private Placement (as defined herein)
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 a Business Combination as contemplated by the Registration Statement,
Sale
Preliminary Prospectus and Prospectus.
2.18.4 Insiders'
NASD Affiliation.
Based
on questionnaires distributed to such persons, except as set forth on Schedule
2.18.4, 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, as determined in accordance with the rules and regulations
of the NASD. The Company will advise the Representative and its counsel if
it
learns that any officer, director or owner of at least 5% of the Company's
outstanding Common Shares is or becomes an affiliate or associated person
of an
NASD member participating in the offering.
8
2.19 Foreign
Corrupt Practices Act; Patriot Act.
2.19.1 Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political
party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist
it in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Sale Preliminary
Prospectus or Prospectus or (iii) if not continued in the future, might
adversely affect the assets, business, operations or prospects of the Company.
The Company's internal accounting controls and procedures are sufficient
to
cause the Company to comply with the Foreign Corrupt Practices Act of 1977,
as
amended.
2.19.2 Patriot
Act.
Neither
the Company nor any Company Affiliate has violated: (i) the Bank Secrecy
Act as
amended, (ii) the Money Laundering Control Act of 1986, as amended, or (iii)
the
Uniting and Strengthening of America by Providing Appropriate Tools Required
to
Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, and/or the
rules
and regulations promulgated under any such law, or any successor
law.
2.20 Officers'
Certificate.
Any
certificate signed by any duly authorized officer of the Company and delivered
to you or to your counsel shall be deemed a representation and warranty by
the
Company to the Underwriters as to the matters covered thereby.
2.21 Warrant
Agreement.
The
Company has entered into a warrant agreement with respect to the Warrants
and
the Representative's Warrants with Continental Stock Transfer & Trust
Company substantially in the form filed as an exhibit to the Registration
Statement ("Warrant
Agreement").
2.22 Agreements
With Initial Stockholders.
2.22.1 Insider
Letters.
The
Company has caused to be duly executed legally binding and enforceable
agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (ii) as enforceability of any indemnification 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), forms
of
which are annexed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8,
10.9, 10.10 and 10.11 to the Registration Statement (each, an "Insider
Letter"),
pursuant to which each of the Initial Stockholders of the Company agree to
certain matters, including but not limited to, certain matters described
as
being agreed to by them under the "Proposed Business" section of the Prospectus.
2.22.2 Escrow
Agreement.
The
Company has caused the Initial Stockholders to enter into an escrow agreement
("Escrow
Agreement")
with
Continental Stock Transfer & Trust Company ("Escrow
Agent"),
substantially in the form annexed as Exhibit 10.14 to the Registration
Statement, whereby the Common Stock owned by the Initial Stockholders will
be
held in escrow by the Escrow Agent, until the third anniversary of the Effective
Date. During such escrow period, the Initial Stockholders shall be prohibited
from selling or otherwise transferring such shares (except to spouses and
children of Initial Stockholders and trusts established for their benefit
and as
otherwise set forth in the Escrow Agreement) but will retain the right to
vote
such shares. To the Company's knowledge, the Escrow Agreement is enforceable
against each of the Initial Stockholders and will not, with or without the
giving of notice or the lapse of time or both, result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default
under,
any agreement or instrument to which any of the Initial Stockholders is a
party.
The Escrow Agreement shall not be amended, modified or otherwise changed
without
the prior written consent of the Representative.
2.22.3 Insider
Warrant Purchase Agreement.
Certain
of the Company's officers and directors (the "Insiders")
have
executed and delivered an agreement annexed as Exhibit 10.21 of the Registration
Statement (the "Insider
Warrant Purchase Agreement"),
pursuant to which such persons, among other things, have purchased an aggregate
of 1,041,667 warrants in a private placement intended to be exempt from
registration under the Act under Section 4(2) of the Act ("Private
Placement")
at a
purchase price of $1.20 per warrant ("Insider
Warrants").
The
Insiders and the Company have delivered executed copies of the Insiders'
Warrant
Purchase Agreement and the Insiders have delivered the purchase price on
or
before the Effective Date. Pursuant to the Warrant Purchase Agreement, (i)
the
$1,250,000 of proceeds from the sale of the Insider Warrants has been deposited
by the Company in the Trust Fund in accordance with the terms of the Trust
Agreement at least one business day prior to the Effective Date, and (ii)
the
purchasers of the Insider Warrants have waived any and all rights and claims
that they may have to any proceeds, and any interest thereon held in the
Trust
in respect of the Insider Warrants in the event that a Business Combination
is
not consummated and the Trust Fund is liquidated in accordance with the terms
of
the Trust Agreement.
9
2.23 Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering substantially in the form annexed as Exhibit 10.13 to the
Registration Statement.
2.24 Covenants
Not to Compete.
No
Initial Stockholder, employee, officer or director of the Company
is
subject to any noncompetition agreement or non-solicitation agreement with
any
employer or prior employer which could materially affect his ability to be
an
Initial Stockholder, employee, officer and/or director of the Company.
2.25 Investments.
No more
than 45% of the "value" (as defined in Section 2(a)(41) of the Investment
Company Act of 1940 ("Investment
Company Act"))
of
the Company's total assets consist of, and no more than 45% of the Company's
net
income after taxes is derived from, securities other than "Government
securities" (as defined in Section 2(a)(16) of the Investment Company Act).
2.26 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.27 Related
Party Transactions.
There
are no business relationships or related party transactions involving
the
Company or any other person required to be described in the Registration
Statement, Sale Preliminary Prospectus and the Prospectus that have not been
described as required.
2.28 Standard
& Poor's Application. Unless the Securities are listed on the
New
York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market
on the
Effective Date prior to the date hereof the Company has made application
with
Standard and Poor's to have information regarding the Company and the Securities
included in the Standard & Poor's Daily News and Corporation Records
Description so as to allow for secondary trading of the Securities in the
state
jurisdictions which allow for an exemption for non-issuer secondary
trading.
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement.
The
Company will deliver to the Representative, prior to filing, any amendment
or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to
which
the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a prospectus is required to be delivered under the Act, the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary
to
permit the continuance of sales of or dealings in the Securities in accordance
with the provisions hereof and the Prospectus. If at any time when a prospectus
relating to the Securities is required to be delivered under the Act, any
event
shall have occurred as a result of which, in the opinion of counsel for the
Company or counsel for the Underwriters, the Sale Preliminary Prospectus
or the
Prospectus, as then amended or supplemented, includes an untrue statement
of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under
which they were made, not misleading, or if it is necessary at any time to
amend
the Sale Preliminary Prospectus or the Prospectus to comply with the Act,
the
Company will notify the Representative promptly and prepare and file with
the
Commission, subject to Section 3.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
10
3.2.2 Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule
424 of
the Regulations.
3.2.3 Exchange
Act Registration.
For a
period of five years from the Effective Date, or until such earlier time
upon
which the Company is required to be liquidated, the Company will use its
best
efforts to maintain the registration of the Units, Common Stock and Warrants
under the provisions of the Exchange Act. For a period of five years from
the
Effective Date or until the Company is required to be liquidated, if earlier,
the Company will not deregister the Units, Common Stock and Warrants under
the
Exchange Act without the prior written consent of the Representative (except
in
connection with a going private transaction).
3.3 Blue
Sky Filing.
Unless
the Securities are listed or quoted, as the case may be, on the New York
Stock
Exchange, the American Stock Exchange or the Nasdaq National Market, the
Company
will endeavor in good faith, in cooperation with the Representative, at or
prior
to the time the Registration Statement
becomes
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Representative may reasonably designate,
provided that no such qualification shall be required in any jurisdiction
where,
as a result thereof, the Company would be subject to service of general process
or to taxation as a foreign corporation doing business in such jurisdiction.
In
each jurisdiction where such qualification shall be effected, the Company
will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements
or
reports at such times as are or may be required by the laws of such
jurisdiction. The Company shall pay all filings fees in connection with the
qualification of the Securities under the securities laws of such jurisdictions
as the Representative may reasonably designate.
3.4 Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge,
from
time to time during the period when a prospectus is required to be delivered
under
the Act
or the Exchange Act such number of copies of the Sale Preliminary Prospectus,
each Preliminary Prospectus and the Prospectus as such Underwriters may
reasonably request and, as soon as the Registration Statement or any amendment
or supplement thereto becomes effective, deliver to you two original executed
Registration Statements, including exhibits, and all post-effective amendments
thereto and copies of all exhibits filed therewith or incorporated therein
by
reference and all original executed consents of certified experts.
3.5 Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use its best efforts to cause the Registration Statement to
remain
effective and the Company will notify the Representative immediately and
confirm
the notice in writing (i) of the effectiveness of the Registration Statement
and
any amendment thereto, (ii) of the issuance by the Commission of any stop
order
or of the initiation, or the threatening, of any proceeding for that purpose,
(iii) of the issuance by any state securities commission of any proceedings
for
the suspension of the qualification of the Securities for offering or sale
in
any jurisdiction or of the initiation, or the threatening, of any proceeding
for
that purpose, (iv) of the mailing and delivery to the Commission for filing
of
any amendment or supplement to the Registration Statement or Prospectus,
(v) of
the receipt of any comments or request for any additional information from
the
Commission, and (vi) of the happening of any event during the period described
in Section 3.2.3 hereof that, in the judgment of the Company, makes any
statement of a material fact made in the Registration Statement, the Sale
Preliminary Prospectus or the Prospectus untrue or that requires the making
of
any changes in the Registration Statement, the Sale Preliminary Prospectus
or
the Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Commission
or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will make every reasonable effort
to
obtain promptly the lifting of such order.
3.6 Review
of Financial Statements.
For a
period of five years from the Effective Date, or until such earlier time
when
the Company is required to be liquidated, the Company, at its expense, shall
cause its regularly engaged registered independent 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, the filing of the Company's Form 10-Q quarterly report and the
mailing of quarterly financial information to stockholders.
11
3.7 Affiliated
Transactions.
3.7.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which
is
affiliated with any Initial Stockholder unless the Company obtains an opinion
from an independent investment banking firm that is a member of the NASD
that
the Business Combination is fair to the Company's stockholders from a financial
perspective. No Founder or any affiliate of a Founder shall receive any fees
of
any type (other than reimbursement of ordinary and customary expenses incurred
on behalf of the Company) in connection with any Business
Combination.
3.7.2 Administrative
Services.
The
Company has entered into an agreement ("Services
Agreement")
with
Beverage Marketing Corporation of New York ("BMC")
substantially in the form annexed as Exhibit 10.15 to the Registration Statement
pursuant to which BMC will make available to the Company administrative,
technology and secretarial services, as well as the use of certain limited
office space for $7,500 per month.
3.7.3 Compensation.
Except
as set forth above in this Section 3.7.2, the Company shall not pay any Initial
Stockholder or any of their affiliates any fees or compensation from the
Company, for services rendered to the Company prior to, or in connection
with,
the consummation of a Business Combination; provided that the Initial
Stockholders shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.
3.8 Secondary
Market Trading and Standard & Poor's.
The
Company will apply to be included in Standard & Poor's Daily News and
Corporation Records Corporate Descriptions for a period of five years from
the
consummation of a Business Combination. Promptly after the consummation of
the
Offering, the Company
shall
take such steps as may be necessary to obtain a secondary market trading
exemption for the Company's securities in the State of California. The Company
shall also take such other action as may be reasonably requested by the
Representative to obtain a secondary market trading exemption in such other
states as may be requested by the Representative.
3.9 Intentionally
Omitted.
3.10 Financial
Public Relations Firm.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall retain, at its expense, a financial public
relations firm reasonably acceptable to the Representative for a term to
be
agreed on by the Company and the Representative.
3.11 Reports
to the Representative.
3.11.1 Periodic
Reports, Etc.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish
to the
Representative (▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Attn: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇) and its
counsel copies of such financial statements and other periodic and special
reports as the Company from time to time furnishes generally to holders of
any
class of its securities, and promptly furnish to the Representative (i) a
copy
of each periodic report the Company shall be required to file with the
Commission, (ii) a copy of every press release and every news item and article
with respect to the Company or its affairs which was released by the Company,
(iii) a copy of each Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received
or
prepared by the Company, (iv) two (2) copies of each registration statement
filed by the Company with the Commission under the Securities Act, (v) a
copy of
monthly statements, if any, setting forth such information regarding the
Company's results of operations and financial position (including balance
sheet,
profit and loss statements and data regarding outstanding purchase orders)
as is
regularly prepared by management of the Company and (vi) such additional
documents and information with respect to the Company and the affairs of
any
future subsidiaries of the Company as the Representative may reasonably
request.
12
3.11.2 Transfer
Sheets.
For a
period of two years following the Effective Date or until such earlier time
upon
which the Company is required to be liquidated, the Company shall retain
a
transfer and warrant agent acceptable to the Representative ("Transfer
Agent")
and
will furnish to the Underwriters at the Company's sole cost and expense,
for a
period of one year following the Effective Date, such transfer sheets of
the
Company's securities as the Representative may request, including the daily
and
monthly consolidated transfer sheets of the Transfer Agent and DTC. The
Underwriters acknowledge that Continental Stock Transfer & Trust Company is
an acceptable Transfer Agent.
3.11.3 Secondary
Market Trading Survey.
Until
such time as the Securities are listed on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market, or until such earlier
time upon which the Company is required to be liquidated, the Company shall
maintain its listing in Standard & Poor's Daily News and Corporation Records
Corporate Descriptions at its cost and expense and at the beginning of each
fiscal quarter, prepare a written report detailing those states in which
the
Securities may be traded in non-issuer transactions under the Blue Sky laws
of
the fifty States ("Secondary
Market Trading Survey")].
3.11.4 Trading
Reports.
During
such time as any of the Securities are quoted on the NASD OTC Bulletin Board
(or
any successor trading market such as the Bulletin Board Exchange) or the
Pink
Sheets, LLC (or similar publisher of quotations) and no other automated
quotation system, the Company shall provide to the Representative, at its
expense, such reports published by the NASD or the Pink Sheets, LLC relating
to
price trading of the Securities, as the Representative shall reasonably request.
3.12 Disqualification
of Form S-1.
For a
period equal to four years from the date hereof, the Company will
not take
any action or actions which may prevent or disqualify the Company's use of
Form
S-1 (or other appropriate form) for the registration of the Warrants and
the
Insider Warrants under the Act (except in connection with a going-private
transaction).
3.13 Payment
of Expenses.
3.13.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and each Option
Closing
Date, if any, to the extent not paid at the Closing Date, all expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, the Sale Preliminary Prospectus, any Preliminary
and the
Final Prospectuses and the printing and mailing of this Agreement and related
documents, including the cost of all copies thereof and any amendments thereof
or supplements thereto supplied to the Underwriters in quantities as may
be
required by the Underwriters, (ii) the printing, engraving, issuance and
delivery of the Units, the shares of Common Stock and the Warrants included
in
the Units and the Representative's Purchase Option, including any transfer
or
other taxes payable thereon, (iii) filing fees, costs and expenses (including
disbursements for the Representative's counsel which shall not exceed $35,000
in
the aggregate) incurred in registering the Offering with the NASD and qualifying
the Public Securities under state or foreign securities or Blue Sky laws,
(iv)
fees, costs and expenses incurred in listing the Company on the Over the
Counter
Bulletin Board, (vi fees and disbursements of the transfer and warrant agent,
(vi) the Company’s expenses associated with “due diligence” and “road show”
meetings arranged by the Representative, (vii) the preparation, binding and
delivery of transaction “bibles,” in form and style reasonably satisfactory to
the Representative and transaction lucite cubes or similar commemorative
items
in a style and quantity as reasonably requested by the Representative and
(viii)
all other costs and expenses customarily borne by an issuer incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 3.13. The Company also agrees that, if requested
by
the Representative, it will engage an investigative search firm of the
Representative's choice to conduct an investigation of the principals of
the
Company as shall be mutually selected by the Representative and the Company.
The
Representative may deduct from the net proceeds of the Offering payable to
the
Company on the Closing Date, or any Option Closing Date, the expenses set
forth
in this Agreement to be paid by the Company to the Representative and others.
If
the Offering contemplated by this Agreement is not consummated for any reason
whatsoever then the Company shall reimburse the Underwriters in full for
their
out of pocket expenses in connection with this Agreement or the transactions
contemplated herein, including, without limitation, its legal fees and
disbursements and "road show" and due diligence expenses.
13
3.13.2 Expenses
Related to Business Combination.
The
Company further agrees that, in the event the Representative assists the
Company
in trying to obtain stockholder approval of a proposed Business Combination,
the
Company will reimburse the Representative for all reasonable out-of-pocket
expenses, including, but not limited to, "road-show" and due diligence expenses.
3.14 Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering and Private
Placement received by it in a manner consistent with the application described
under the caption "Use of Proceeds" in the Prospectus.
3.15 Delivery
of Earnings Statements to Security Holders.
The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month
following the Effective Date, an earnings statement (which need not be certified
by independent public or independent certified public accountants unless
required by the Act or the Regulations, but which shall satisfy the provisions
of Rule 158(a) under Section 11(a) of the Act) covering a period of at least
twelve consecutive months beginning after the Effective Date.
3.16 Notice
to NASD.
In the
event any person or entity (regardless of any NASD affiliation or association)
is engaged to assist the Company in its search for a merger candidate or
to
provide any other merger and acquisition services, the Company will provide
the
following to the NASD and to the Representative prior to the consummation
of the
Business Combination: (i) complete details of all services and copies of
agreements governing such services; and (ii) justification as to why the
person
or entity providing the merger and acquisition services should not be considered
an "underwriter and related person" with respect to the Company's initial
public
offering, as such term is defined in Rule 2710 of the NASD's Conduct Rules.
The
Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the proxy statement which the Company will file
for
purposes of soliciting stockholder approval for the Business Combination.
3.17 Intentionally
Omitted.
3.18 Internal
Controls.
The
Company will maintain a system of internal accounting controls sufficient
to
provide
reasonable assurances that: (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv)
the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.19 Accountants.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company shall retain
▇▇▇▇▇▇▇▇▇ or another independent registered public accounting firm reasonably
acceptable to the Representative.
3.20 Form
8-K.
The
Company shall, on the date hereof, retain its independent registered public
accounting
firm to
audit the financial statements of the Company as of the Closing Date
("Audited
Financial Statements")
that
reflect the receipt by the Company of the proceeds of the initial public
offering. As soon as the Audited Financial Statements become available, the
Company shall immediately file a Current Report on Form 8-K with the Commission,
which Report shall contain the Company's Audited Financial Statements.
3.21 NASD.
The
Company shall advise the NASD if it is aware that any 5% or greater stockholder
of the Company becomes an affiliate or associated person of an NASD member
participating in the distribution of the Company's Securities.
3.22 Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the Underwriters.
14
3.23 Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust
Fund to
be invested only in "government securities" with specific maturity dates
as set
forth in the Trust Agreement and disclosed in the Prospectus. The Company
will
otherwise conduct its business in a manner so that it will not become subject
to
the Investment Company Act. Furthermore, once the Company consummates a Business
Combination, it shall be engaged in a business other than that of investing,
reinvesting, owning, holding or trading securities.
3.24 Business
Combination Announcement.
Within
five business days following the consummation by the Company of a Business
Combination, the Company shall cause an announcement ("Business
Combination Announcement")
to be
placed, at its cost, in The Wall Street Journal. Such announcement shall
describe the consummation of the Business Combination and indicate that the
Representative was the managing underwriter in the Offering. The Company
shall
supply the Representative with a draft of the Business Combination Announcement
and provide the Representative with a reasonable opportunity to comment thereon.
The Company will not place the Business Combination Announcement without
the
final approval of the Representative, which such approval will not be
unreasonably withheld.
3.25 Colorado
Trust Filing.
In the
event the Securities are registered in the State of Colorado, the Company
will
cause a Colorado Form ES to be filed with the Commissioner of the State of
Colorado no less than 10 days prior to the distribution of the Trust Fund
in
connection with a Business Combination and will do all things necessary to
comply with Section ▇▇-▇▇-▇▇▇ and Rule 51-3.4 of the Colorado Securities
Act.
3.26 Private
Placement Proceeds.
Immediately upon establishment of the Trust Fund and prior to the Effective
Date, the Company shall deposit $1,250,000 of the proceeds from the Private
Placement in the Trust Fund and shall provide ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. with
evidence of the same.
4. Conditions
of Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Units,
as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and each Option Closing Date, if any, to the accuracy
of the statements of officers of the Company made pursuant to the provisions
hereof and to the performance by the Company of its obligations hereunder
and to
the following conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York City local time, on the date of this Agreement or such later date and
time
as shall be consented to in writing by you, and, at each of the Closing Date
and
each Option Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or contemplated by
the
Commission and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction
of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Underwriters
("Skadden").
4.1.2 NASD
Clearance.
By the
Effective Date, the Representative shall have received clearance from the
NASD
as to the amount of compensation allowable or payable to the Underwriters
as
described in the Registration Statement.
4.1.3 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by
you
pursuant to Section 3.3 hereof shall have been issued on either on the Closing
Date or any Option Closing Date, and no proceedings for that purpose shall
have
been instituted or shall be contemplated.
4.1.4 The
OTC Bulletin Board.
The
Securities shall have been admitted and approved for trading on the OTC Bulletin
Board.
15
4.2 Company
Counsel Matters.
4.2.1 Closing
Date and Option Closing Date Opinion of Counsel.
On each
of the Closing Date and any Option Closing Date, the Representative shall
have
received the favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇, dated the Closing Date or
the
Option Closing Date, as the case may be, addressed to the Representative
and in
form and substance reasonably satisfactory to Skadden, covering the matters
set
forth on Appendix A hereto.
4.2.2 Reliance.
In
rendering such opinion, such counsel may rely (i) as to matters involving
the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions
(in
form and substance reasonably satisfactory to Skadden) of other counsel
reasonably acceptable to Skadden, familiar with the applicable laws, and
(ii) as
to matters of fact, to the extent they deem proper, on certificates or other
written statements of officers of the Company and officers of departments
of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to the Underwriters' counsel
if
requested. The opinion of counsel for the Company and any opinion relied
upon by
such counsel for the Company shall include a statement to the effect that
it may
be relied upon by counsel for the Underwriters in its opinion delivered to
the
Underwriters.
4.3 Cold
Comfort Letter(i) .
At the
time this Agreement is executed, and at each of the Closing Date and any
Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative
and in
form and substance satisfactory in all respects (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
to you and to Skadden from ▇▇▇▇▇▇▇▇▇ dated, respectively, as of the date
of this
Agreement and as of the Closing Date and any Option Closing Date, covering
the
matters set forth on Appendix B hereto.
4.4 Subordinated
Credit Agreement.
On the
Closing Date, the Company and certain Insiders will execute and delivere
a
subordinated revolving line of credit agreement, in the form annexed as Exhibit
10.12 of the Registration Statement (the "Subordinated
Credit Agreement"),
pursuant to which such Insiders have agreed to make available to the Company
a
revolving line of credit to pay certain costs and expenses that may arise
prior
to a Business Combination or to pay costs, expenses and claims in connection
with the Company's dissolution and liquidation of the Trust Fund to its public
stockholders.
4.5 Officers'
Certificates.
4.5.1 Officers'
Certificate.
At each
of the Closing Date and any Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the President and the Secretary or Assistant Secretary of the Company,
dated the Closing Date or any Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants
and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or any
Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.6 hereof have been satisfied as of such date and that, as of the Closing
Date
and any Option Closing Date, as the case may be, the representations and
warranties of the Company set forth in Section 2 hereof are true and correct.
In
addition, the Representative will have received such other and further
certificates of officers of the Company as the Representative may reasonably
request.
4.5.2 Secretary's
Certificate.
At each
of the Closing Date and any Option Closing Date, the Representative shall
have
received a certificate of the Company signed by the Secretary or Assistant
Secretary of the Company, dated the Closing Date or the Option Closing Date,
as
the case may be, respectively, certifying (i) that the Bylaws and Certificate
of
Incorporation of the Company are true and complete, have not been modified
and
are in full force and effect, (ii) that the resolutions relating to the Offering
are in full force and effect and have not been modified, (iii) all
correspondence between the Company or its counsel and the Commission, and
(iv)
as to the incumbency of the officers of the Company. The documents referred
to
in such certificate shall be attached to such certificate.
4.6 No
Material Changes.
Prior
to and on each of the Closing Date and any Option Closing Date, (i) there
shall
have been no material adverse change or development involving a prospective
material adverse change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates
as of
which such condition is set forth in the Registration Statement, Sale
Preliminary Prospectus and Prospectus, (excluding any amendment or supplement
thereto) (ii) no action suit or proceeding, at law or in equity, shall have
been
pending or threatened against the Company or any Initial Stockholder before
or
by any court or Federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations, prospects or financial condition
or
income of the Company, except as set forth in the Registration Statement,
Sale
Preliminary Prospectus and Prospectus, (excluding any amendment or supplement
thereto) (iii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission,
and (iv) the Registration Statement, Sale Preliminary Prospectus and the
Prospectus (excluding any amendment or supplement thereto) thereto shall
contain
all material statements which are required to be stated therein in accordance
with the Act and the Regulations and shall conform in all material respects
to
the requirements of the Act and the Regulations, and none of the Registration
Statement, Sale Preliminary Prospectus or the Prospectus (excluding any
amendment or supplement thereto) nor any amendment or supplement thereto
shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
16
4.7 Delivery
of Agreements.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreement,
the
Insider Warrant Purchase Agreement, the Services Agreement, the Subordinated
Credit Agreement and all of the Insider Letters. On the Closing Date, the
Company shall have delivered to the Representative executed copies of the
Representative's Purchase Option.
4.8 Opinion
of Counsel for the Underwriters.
All
proceedings taken in connection with the authorization, issuance or sale
of the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to you and to Skadden and you shall have received from such counsel
a
favorable opinion, dated the Closing Date and any Option Closing Date, with
respect to such of these proceedings as you may reasonably require. On or
prior
to the Effective Date, the Closing Date and any Option Closing Date, as the
case
may be, Skadden shall have been furnished such documents, certificates and
opinions as they may reasonably require for the purpose of enabling them
to
review or pass upon the matters referred to in this Section 4.8, or in order
to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
4.9 Secondary
Market Trading Survey.
Unless
the Securities are listed or quoted, as the case may be on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market, the
Company
(a) will apply to be included in Standard & Poor's Daily News and
Corporation Records Corporate Descriptions for a period of five years from
the
consummation of a Business Combination, (b) shall take such steps as may
be
necessary to obtain a secondary market trading exemption for the Company's
securities in the State of California and (c) shall also take such other
action
as may be reasonably requested by the Representative to obtain a secondary
market trading exemption in such other states as may be requested by the
Representative.
5. Indemnification.
5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by you that
participates in the offer and sale of the Securities (each a "Selected
Dealer")
and
each of their respective directors, officers and employees and each person,
if
any, who controls any such Underwriter ("controlling person") within the
meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against any and
all loss, liability, claim, damage and expense whatsoever (including but
not
limited to any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriters and the Company or between any of the Underwriters
and
any third party or otherwise) to which they or any of them may become subject
under the Act, the Exchange Act or any other statute or at common law or
otherwise or under the laws of foreign countries, arising out of or based
upon
any untrue statement or alleged untrue statement of a material fact contained
in
(i) any Preliminary Prospectus, the Registration Statement, Sale Preliminary
Prospectus or the Prospectus (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments or any
new
registration statement and prospectus in which is included securities of
the
Company issued or issuable upon exercise of the Representative's Purchase
Option; (iii) any materials or information provided to investors by, or with
the
approval of, the Company in connection with the marketing of the offering
of the
Securities, including any "road show" or investor presentations made to
investors by the Company (whether in person or electronically); or (iv) any
application or other document or written communication (in this Section 5,
collectively called "application") executed by the Company or based upon
written
information furnished by the Company in any jurisdiction in order to qualify
the
Units under the securities laws thereof or filed with the Commission, any
state
securities commission or agency, Nasdaq or any securities exchange; or the
omission or alleged omission therefrom of a material fact required to be
stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
furnished to the Company with respect to an Underwriter by or on behalf of
such
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement, Sale Preliminary Prospectus or Prospectus, or any amendment or
supplement thereof, or in any application, as the case may be. The Company
agrees promptly to notify the Representative of the commencement of any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale of the Securities
or in connection with the Sale Preliminary Prospectus, Registration Statement
or
Prospectus.
17
5.1.2 Procedure.
If any
action is brought against an Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1, such Underwriter or Selected Dealer shall promptly notify
the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and fees of counsel
(subject to the reasonable approval of such Underwriter or Selected Dealer,
as
the case may be) and payment of actual expenses. Such Underwriter, Selected
Dealer or controlling person shall have the right to employ its or their
own
counsel in any such case, but the fees and expenses of such counsel shall
be at
the expense of such Underwriter, Selected Dealer or controlling person unless
(i) the employment of such counsel at the expense of the Company shall have
been
authorized in writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel to have charge
of
the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Company
(in
which case the Company shall not have the right to direct the defense of
such
action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional firm of
attorneys selected by the Underwriter, Selected Dealer and/or controlling
person
shall be borne by the Company. Notwithstanding anything to the contrary
contained herein, if the Underwriter, Selected Dealer or controlling person
shall assume the defense of such action as provided above, the Company shall
have the right to approve the terms of any settlement of such action which
approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control
the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in
such
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application. In case any action
shall be brought against the Company or any other person so indemnified based
on
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
5.3 Contribution.
5.3.1 Contribution
Rights.
In
order to provide for just and equitable contribution under the Act in any
case
in which (i) any person entitled to indemnification under this Section 5
makes
claim for indemnification pursuant hereto but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the
fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required
on the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of
the
Prospectus bears to the initial offering price appearing thereon and the
Company
is responsible for the balance; provided, that, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 5.3.1,
no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages that such Underwriter has otherwise been required to pay in respect
of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall
have
the same rights to contribution as the Underwriters or the Company, as
applicable.
18
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be
made
against another party ("contributing party"), notify the contributing party
of
the commencement thereof, but the omission to so notify the contributing
party
will not relieve it from any liability which it may have to any other party
other than for contribution hereunder. In case any such action, suit or
proceeding is brought against any party, and such party notifies a contributing
party or its representative of the commencement thereof within the aforesaid
fifteen days, the contributing party will be entitled to participate therein
with the notifying party and any other contributing party similarly notified.
Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party seeking contribution without the written consent of
such
contributing party. The contribution provisions contained in this Section
are
intended to supersede, to the extent permitted by law, any right to contribution
under the Act, the Exchange Act or otherwise available. The Underwriters'
obligations to contribute pursuant to this Section 5.3 are several and not
joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the Over-allotment Option
is
exercised, hereunder, and if the number of the Firm Units or Option Units
with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Units or Option Units.
In the
event that the default addressed in Section 6.1 above relates to more than
10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within
one
business day after such default relating to more than 10% of the Firm Units
or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one business
day within which to procure another party or parties satisfactory to you
to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arranges for the purchase of the Firm Units or
Option Units to which a default relates as provided in this Section 6, this
Agreement may be terminated by you or the Company without liability on the
part
of the Company (except as provided in Sections 3.13 and 5 hereof) or the
several
Underwriters (except as provided in Section 5 hereof); provided, however,
that
if such default occurs with respect to the Option Units, this Agreement will
not
terminate as to the Firm Units; and provided further that nothing herein
shall
relieve a defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default hereunder.
19
6.3 Postponement
of Closing Date.
In the
event that the Firm Units or Option Units to which the default relates are
to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or any Option Closing Date for a reasonable period,
but not in any event exceeding five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees
to
file promptly any amendment to the Registration Statement or the Prospectus
that
in the opinion of counsel for the Underwriters may thereby be made necessary.
The term "Underwriter"
as used
in this Agreement shall include any party substituted under this Section
6 with
like effect as if it had originally been a party to this Agreement with respect
to such Securities.
7. Right
to Appoint Observer.
Until
the consummation of a Business Combination, upon notice from the Representative
to the Company, the Representative shall have the right to send a representative
(who need not be the same individual from meeting to meeting) to observe
each
meeting of the Board of Directors of the Company; provided that such
representative shall sign a Regulation FD compliant confidentiality agreement
which is reasonably acceptable to the Representative and its counsel in
connection with such representative's attendance at meetings of the Board
of
Directors; and provided further that upon written notice to the Representative,
the Company may exclude the representative from meetings where, in the written
opinion of counsel for the Company, the representative's presence would destroy
the attorney-client privilege. The Company agrees to give the Representative
written notice of each such meeting and to provide the Representative with
an
agenda and minutes of the meeting no later than it gives such notice and
provides such items to the other directors and to reimburse the representative
of the Representative for its reasonable out-of-pocket expenses incurred
in
connection with its attendance at the meeting, including but not limited
to,
food, lodging and transportation.
8. Additional
Covenants.
8.1 Intentionally
Omitted.
8.2 Additional
Shares or Options.
The
Company hereby agrees that until the Company consummation of a Business
Combination, it shall not issue any shares of Common Stock or any options
or
other securities convertible into Common Stock, or any shares of Preferred
Stock
which participate in any manner in the Trust Fund or which vote as a class
with
the Common Stock on a Business Combination.
8.3 Trust
Fund Waiver Acknowledgment.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business which the Company seeks to acquire ("Target
Business")
or
obtain the services of any vendor unless and until such Target Business or
vendor acknowledges in writing, whether through a letter of intent, memorandum
of understanding or other similar document (and subsequently acknowledges
the
same in any definitive document replacing any of the foregoing), that (a)
it has
read the Prospectus and understands that the Company has established the
Trust
Fund, initially in an amount of $34,200,000 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
a
Business Combination and (b) for and in consideration of the Company (1)
agreeing to evaluate such Target Business for purposes of consummating a
Business Combination with it or (2) agreeing to engage the services of the
vendor, as the case may be, such Target Business or vendor agrees that it
does
not have any right, title, interest or claim of any kind in or to any monies
in
the Trust Fund ("Claim")
and
waives any Claim it may have in the future as a result of, or arising out
of,
any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever.
8.4 Insider
Letters.
The
Company shall not take any action or omit to take any action which would
cause a
breach of any of the Insider Letters executed between each Initial Stockholder,
officer and director and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. and will not allow any
amendments to, or waivers of, such Insider Letters without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.
8.5 Certificate
of Incorporation and Bylaws.
The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Certificate of Incorporation
or
Bylaws. Prior to the consummation of a Business Combination, the Company
will
not amend its Certificate of Incorporation without the prior written consent
of
the Representative.
20
8.6 Blue
Sky Requirements.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
8.7 Intentionally
Omitted.
8.8 Acquisition/Liquidation
Procedure.
The
Company agrees: (i) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company's stockholders for their approval
("Business
Combination Vote")
even
if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law; and (ii) that, in the event
that the Company does not effect a Business Combination within 18 months
from
the consummation of this Offering (subject to extension for an additional
six-month period, as described in the Prospectus), the Company will be
liquidated and will distribute to all holders of the Company's Common Stock
issued in this Offering ("IPO
Shares")
an
aggregate sum equal to the Company's "Liquidation Value." The Company's
"Liquidation
Value"
shall
mean the Company's book value, as determined by the Company and approved
by
▇▇▇▇▇▇▇▇▇. In no event, however, will the Company's Liquidation Value be
less
than the Trust Fund, inclusive of any net interest income thereon. Only holders
of IPO Shares shall be entitled to receive liquidating distributions and
the
Company shall pay no liquidating distributions with respect to any other
shares
of capital stock of the Company. With respect to the Business Combination
Vote,
the Company shall cause all of the Initial Stockholders to vote the shares
of
Common Stock owned by them immediately prior to this Offering in accordance
with
the vote of the holders of a majority of the IPO Shares present, in person
or by
proxy, at a meeting of the Company's stockholders called for such purpose.
At
the time the Company seeks approval of any potential Business Combination,
the
Company will offer each holder of IPO Shares the right to convert their IPO
Shares at a per share price ("Conversion
Price")
equal
to the pro rata portion of the Trust Fund represented by such IPO Shares
(inclusive of any interest income therein but net of taxes payable and before
payment of Deferred Fees) calculated as of two business days prior to the
consummation of the proposed Business Combination divided by the total number
of
IPO Shares. If holders of less than 20% in interest of the Company's IPO
Shares
elect to convert their IPO Shares, the Company may, but will not be required
to,
proceed with such Business Combination. If the Company elects to so proceed,
it
will convert shares, based upon the Conversion Price, from those holders
of IPO
Shares who affirmatively requested such conversion and who voted against
the
Business Combination. If holders of 20% or more in interest of the IPO Shares,
who vote against approval of any potential Business Combination, elect to
convert their IPO Shares, the Company will not proceed with such Business
Combination and will not convert such shares.
8.9 Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including but not limited to using its best efforts
to
prevent any of the Company's outstanding securities from being deemed to
be a
"▇▇▇▇▇ stock" as defined in Rule 3a-51-1 under the Exchange Act during such
period.
8.10 Affiliated
Transactions.
Except
as set forth on Schedule 8.10, the Company shall cause each of the officers
and
directors to agree that, in order to minimize potential conflicts of interest
which may arise from multiple affiliations, the officers will present to
the
Company for its consideration, prior to presentation to any other person
or
company, any suitable opportunity to acquire an operating business, until
the
earlier of the consummation by the Company of a Business Combination, the
liquidation of the Company or until such time as the officers or directors
cease
to be an officer or director of the Company, subject to any pre-existing
fiduciary obligations the officers or directors might have.
8.11 Target
Net Assets.
The
Company agrees that the initial Target Business that it acquires must have
a
fair market value equal to at least 80% of the Company's net assets at the
time
of such acquisition, including any amount held in the Trust Fund subject
to the
conversion rights. The fair market value of such business must be determined
by
the Board of Directors of the Company based upon standards generally accepted
by
the financial community, such as actual and potential sales, earnings and
cash
flow and book value. If the Board of Directors of the Company is not able
to
independently determine that the target business has a sufficient fair market
value, the Company will obtain an opinion from an unaffiliated, independent
investment banking firm which is a member of the NASD with respect to the
satisfaction of such criteria. The Company is not required to obtain an opinion
from an investment banking firm as to the fair market value if the Company's
Board of Directors independently determines that the Target Business does
have
sufficient fair market value.
21
9. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements as of the Closing Date or any Option Closing Date
and
such representations, warranties and agreements of the Underwriters and Company,
including the indemnity agreements contained in Section 5 hereof, shall remain
operative and in full force and effect regardless of any investigation made
by
or on behalf of any Underwriter, the Company or any controlling person, and
shall survive termination of this Agreement or the issuance and delivery
of the
Securities to the several Underwriters until the earlier of the expiration
of
any applicable statute of limitations and the seventh anniversary of the
later
of the Closing Date or any Option Closing Date, at which time the
representations, warranties and agreements shall terminate and be of no further
force and effect.
10. Effective
Date of This Agreement and Termination Thereof.
10.1 Effective
Date.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
10.2 Termination.
You
shall have the right to terminate this Agreement at any time prior to the
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq
Stock Market or on the NASD OTC Bulletin Board (or successor trading market)
shall have been suspended, or minimum or maximum prices for trading shall
have
been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the
NASD
OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or Federal authority, or
(v) if
a moratorium on foreign exchange trading has been declared which materially
and
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, explosion, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act
which,
whether or not such loss shall have been insured, will, in your opinion,
make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of
the
Company's representations, warranties or covenants hereunder are breached,
or
(viii) if the Representative shall have become aware after the date hereof
of
such a material adverse change in the conditions or prospects of the Company,
or
such adverse material change in general market conditions, including without
limitation as a result of terrorist activities after the date hereof, as
in the
Representative's judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made
by the
Underwriters for the sale of the Public Securities.
10.3 Expenses.
In the
event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the
terms
herein, the obligations of the Company to pay the out of pocket expenses
related
to the transactions contemplated herein shall be governed by Section 3.13
hereof.
10.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not
be in
any way affected by, such election or termination or failure to carry out
the
terms of this Agreement or any part hereof.
11. Miscellaneous.
11.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered or telecopied and confirmed
and shall be deemed given when so delivered or telecopied and confirmed or
if
mailed, two days after such mailing.
22
If
to the
Representative:
▇▇▇▇▇▇
▇▇▇▇▇▇ & Co. Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇
Copy
(which shall not constitute notice) to:
Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
If
to the
Company:
Beverage
Acquisition Corporation
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Chief
Executive Officer
Copy
(which shall not constitute notice) to:
Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq.
11.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of
any of
the terms or provisions of this Agreement.
11.3 Amendment.
This
Agreement may only be amended by a written instrument executed by each of
the
parties hereto.
11.4 Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof
and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
11.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon
the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall
have or
be construed to have any legal or equitable right, remedy or claim under
or in
respect of or by virtue of this Agreement or any provisions herein contained.
11.6 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflict of laws.
The
Company hereby agrees that any action, proceeding or claim against it arising
out of, relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of New York of the United States of America for the
Southern District of New York, and irrevocably submits to such exclusive
jurisdiction. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any such
process or summons to be served upon the Company may be served by transmitting
a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 11.1 hereof.
Such
mailing shall be deemed personal service and shall be legal and binding upon
the
Company in any action, proceeding or claim. The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from
the
other party(ies) all of its reasonable attorneys' fees and expenses relating
to
such action or proceeding and/or incurred in connection with the preparation
therefor.
23
11.7 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to
be an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
11.8 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way affect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
11.9 No
Fiduciary Relationship.
The
Company hereby acknowledges that the Underwriters are acting solely as
underwriters in connection with the offering of the Company's securities.
The
Company further acknowledges that the Underwriters are acting pursuant to
a
contractual relationship created solely by this Agreement entered into on
an
arm's length basis and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company, its management,
stockholders, creditors or any other person in connection with any activity
that
the Underwriters may undertake or have undertaken in furtherance of the offering
of the Company's securities, either before or after the date hereof. The
Underwriters hereby expressly disclaim any fiduciary or similar obligation
to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company
hereby
confirms its understanding and agreement to that effect. The Company and
the
underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any
opinions or views expressed by the Underwriters to the Company regarding
such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Company's securities, do not constitute advice
or
recommendations to the Company. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect o any breach or alleged breach of any fiduciary
or
similar duty to the Company in connection with the transactions contemplated
by
this Agreement or any matters leading up to such transactions.
24
If
the
foregoing correctly sets forth the understanding between the Underwriters
and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Very
truly yours,
BEVERAGE
ACQUISITION CORPORATION
By:
_______________________________
Name:
Title:
Name:
Title:
Accepted
on the date first above written.
▇▇▇▇▇▇
▇▇▇▇▇▇ & CO. INC.
By:
_______________________________
Name:
Title:
Name:
Title:
25
SCHEDULE
I
Beverage
Acquisition Corporation
4,800,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇ & Co. Inc.
|
26
EXHIBIT
A
Form
of
Opinion of Company Counsel
1. The
Company has been duly organized and is validly existing as a corporation
and is
in good standing under the laws of its state of incorporation. The Company
is
duly qualified and licensed and in good standing as a foreign corporation
in
each jurisdiction in which its ownership or leasing of any properties or
the
character of its operations requires such qualification or licensing, except
where the failure to qualify would not have a material adverse effect on
the
assets, business or operations of the Company.
2. The
Company has the corporate power and corporate authority to execute and deliver
the Underwriting Agreement, the Warrant Agreement, the Services Agreement,
the
Trust Agreement, the Representative's Purchase Option, the Escrow Agreement,
the
Insider Warrant Purchase Agreement and the Subordinated Credit Agreement
(the
"Transaction
Documents")
and to
consummate the transactions contemplated thereby.
3. All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof
are
not subject to personal liability by reason of being such holders; and none
of
such securities were issued in violation of the preemptive rights of any
stockholder of the Company arising by operation of law or under the Certificate
of Incorporation or Bylaws of the Company. The offers and sales of the
outstanding Common Stock were at all relevant times either registered under
the
Act or exempt from such registration requirements. The authorized and, to
such
counsel's knowledge, outstanding capital stock of the Company is as set forth
in
the Registration Statement, Sale Preliminary Prospectus and the
Prospectus.
4. The
Securities have been duly authorized and, when issued and paid for, will
be
validly issued, fully paid and non-assessable; the holders thereof are not
and
will not be subject to personal liability by reason of being such holders.
The
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company arising by operation of law or under
the
Certificate of Incorporation or Bylaws of the Company. 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 therefor, the number and type of securities
of
the Company called for thereby and such Warrants, the Representative's Purchase
Option, and the Representative's Warrants, when issued, in each case, are
enforceable against the Company in accordance with their respective terms,
except (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (b)
as
enforceability of any indemnification or contribution provision may be limited
under the Federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
5. The
Insider Warrants constitute valid and binding obligations of the Company
to
issue and sell, upon exercise thereof and payment therefor, the number and
type
of securities of the Company called for thereby, and such Insider Warrants
are
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may be limited
under federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. A sufficient number of shares of Common
Stock have been reserved for issuance upon exercise of the Insider Warrants.
The
shares of Common Stock underlying the Insider Warrants will, upon exercise
of
the Warrants and payment of the exercise price thereof, be duly and validly
issued, fully paid and non-assessable and will not have been issued in violation
of or subject to preemptive or, to such counsel’s knowledge, similar rights that
entitle or will entitle any person to acquire any securities from the Company
upon issuance thereof.
6. The
Company has an authorized capitalization as set forth in the Registration
Statement, Sale Preliminary Prospectus and the Prospectus and the authorized
capital stock of the Company conforms as to legal matters to the description
thereof contained in the Registration Statement, Sale Preliminary Prospectus
and
the Prospectus. The forms of certificates used to evidence the Securities
comply
in all material respects with the applicable requirements of the Company's
Charter and Bylaws and the DGCL. The statements in the Registration Statement,
Sale Preliminary Prospectus and the Prospectus under the captions "Description
of Securities" insofar as such statements purport to summarize certain
provisions of the Securities, fairly summarize such provisions in all material
respects.
27
7. The
Transaction Documents have each been duly and validly authorized and, when
executed and delivered by the Company, will constitute, the valid and binding
obligations of the Company, enforceable against the Company in accordance
with
their respective terms, except (a) as such enforceability may be limited
by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (b) as enforceability of any indemnification or contribution
provisions may be limited under the Federal and state securities laws, and
(c)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
8. The
execution, delivery and performance of each of the Transaction Documents
and
compliance by the Company with the terms and provisions thereof and the
consummation of the transactions contemplated thereby, and the issuance and
sale
of the Securities, do not and will not, with or without the giving of notice
or
the lapse of time, or both, (a) to such counsel's knowledge, conflict with,
or
result in a breach of, any of the terms or provisions of, or constitute a
default under, or result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to the terms of, any mortgage, deed of trust, note, indenture,
loan, contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the provisions
of
the Certificate of Incorporation or the Bylaws of the Company, or (c) to
such
counsel's knowledge, violate any United States statute or any judgment, order
or
decree, rule or regulation applicable to the Company of any court, United
States
Federal, state or other regulatory authority or other governmental body having
jurisdiction over the Company, its properties or assets.
9. No
Governmental Approval, which has not been obtained or taken and is not in
full
force and effect, is required to authorize, or is required for, the execution
or
delivery of each of the Transaction Documents by the Company or the consummation
by the Company of the transactions contemplated thereby.
10. The
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
and
any post-effective amendments or supplements thereto (other than the financial
statements included therein, as to which no opinion need be rendered) each
as of
their respective dates appeared on their face to comply as to form in all
material respects with the requirements of the Act and Regulations. The
Securities and all other securities issued or issuable by the Company conform
in
all material respects to the description thereof contained in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus. The descriptions
in the Registration Statement, the Sale Preliminary Prospectus and in the
Prospectus, insofar as such statements constitute a summary of statutes,
legal
matters, contracts, documents or proceedings referred to therein, fairly
present
in all material respects the information required to be shown with respect
to
such statutes, legal matters, contracts, documents and proceedings, and such
counsel does not know of any statutes or legal or governmental proceedings
required to be described in the Sale Preliminary Prospectus or the Prospectus
that are not described in the Registration Statement, the Sale Preliminary
Prospectus or the Prospectus or included as exhibits to the Registration
Statement that are not described or included as required.
11. The
Registration Statement is effective under the Act. To such counsel's knowledge,
no stop order suspending the effectiveness of the Registration Statement
has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
12. To
such
counsel's knowledge, there is no action, suit or proceeding before or by
any
court of governmental agency or body, domestic or foreign, now pending, or
threatened against the Company that is required to be described in the
Registration Statement.
28
The
opinion of counsel shall further include a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters and the independent registered public
accounting firm of the Company, at which conferences the contents of the
Registration Statement, Sale Preliminary Prospectus and the Prospectus contained
therein and related matters were discussed and, although such counsel is
not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, Sale Preliminary Prospectus and the Prospectus contained therein
(except as otherwise set forth in the foregoing opinion), solely on the basis
of
the foregoing without independent check and verification, no facts have come
to
the attention of such counsel which lead them to believe that (i) the
Registration Statement or any amendment thereto, at the time the Registration
Statement or amendment became effective, contained an untrue statement of
a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) the Sale
Preliminary Prospectus, at the Time of Sale, or (iii) the Prospectus or any
amendment or supplement thereto, at the time they were filed pursuant to
Rule
424(b), or at the date of such counsel's opinion, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading (except that such
counsel need express no opinion with respect to the financial information
included in the Registration Statement, Sale Preliminary Prospectus or the
Prospectus).
29