4,000,000 Units LONE OAK ACQUISITION CORPORATION UNDERWRITING AGREEMENT
4,000,000
Units
LONE
OAK ACQUISITION CORPORATION
______________,
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As
Representative of the Underwriters
named
on Schedule A
hereto
Ladies
and Gentlemen:
Lone Oak
Acquisition Corporation, a Cayman Islands company with limited liability (the
“Company”), hereby
confirms its agreement with EarlyBirdCapital, Inc. (the “Representative”) and with the
other underwriters named on Schedule
A hereto, for which the Representative is acting as representative (the
Representative, with such other underwriters being collectively referred to
herein as the “Underwriters” or,
individually, an “Underwriter”) as
follows:
1.
Purchase and Sale of
Securities.
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1.1.
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Firm
Securities.
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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, severally and not jointly,
an aggregate of 4,000,000 units (the “Firm Units”) of the Company at
a purchase price (net of discounts and commissions) of $7.72 per Firm
Unit. The Underwriters, severally and not jointly, agree to purchase
from the Company the number of Firm Units set forth opposite their respective
names on Schedule
A.
1.1.2. The
Firm Units are to be offered initially to the public (the “Offering”) at the offering
price of $8.00 per Firm Unit. Each Firm Unit consists of one ordinary
share of the Company, par value $0.001 per share (the “Ordinary Shares”), and one
warrant to purchase one Ordinary Share (the “Warrant(s)”). The
Ordinary Shares and the Warrants included in the Firm Units will not be
separately transferable until 90 days after the effective date (“Effective
Date”) of the Registration Statement (as defined in Section 2.1.1 hereof) 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 preparation of an audited balance sheet of the Company reflecting receipt by
the Company of the proceeds of the Offering and the filing of a Report of
Foreign Private Issuer on Form 6-K by the Company with the Securities and
Exchange Commission (the “Commission”) which includes
such balance sheet. The Company will file the Report of Foreign
Private Issuer on Form 6-K promptly upon, but in no event more than four (4)
days following, the consummation of the Offering.
EarlyBirdCapital,
Inc.
____________,
2011
Page 2
of 45
1.1.3. Each
Warrant shall entitle its holder to purchase one Ordinary Share for $5.00 per
share during the period commencing on the later of the consummation by the
Company of its Business Combination (as defined below) and one year from the
Effective Date and terminating on the earlier of (i) the three-year anniversary
of the consummation of a Business Combination, (ii) the liquidation of the Trust
Account (defined below) if the Company is unable
to consummate a Business Combination by the Termination Date (as defined in
Section 7.6.1) or (iii) upon redemption of the Warrants. As used herein, the
term “Business
Combination” shall mean a merger, share exchange, asset acquisition, plan
of arrangement, recapitalization, reorganization or similar business combination
involving one or more entities, whether or not related, or the acquisition of
such entity or entities through the use of contractual
arrangements. The Company has the right to redeem the Warrants, in
whole but not in part, upon not less than thirty (30) days’ prior written notice
at a price of $0.01 per Warrant at any time while the Warrants are exercisable;
provided, however, that the last sale price of the Ordinary Shares has been at
least $10.50 for any twenty (20) trading days within a thirty (30) trading day
period ending on the third (3rd)
Business Day (defined below) prior to the day on which notice is
delivered. As used herein, the term “Business Day” shall mean any
day other than a Saturday, Sunday or any day on which national banks in New
York, New York are not open for business.
1.1.4. Payment and
Delivery. Delivery and payment for the Firm Units shall be made at
10:00 A.M., New York time, on the third (3rd)
Business Day following the commencement of trading of the Firm Units, 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 closing of the Offering is
referred to herein as the “Closing” and the hour and date
of delivery and payment for the Firm Units is referred to herein as the “Closing Date.” Payment
for the Firm Units shall be made on the Closing Date through the facilities of
Depository Trust Company (“DTC”) by wire transfer in
Federal (same day) funds. The Company shall receive an aggregate of
$30,880,000 of proceeds from the sale of the Firm Units, of which $30,330,000
shall be deposited into the trust account (the “Trust Account”) established by
the Company for the benefit of the Public Shareholders (as defined below), as
described in the Registration Statement and pursuant to the terms of an
Investment Management Trust Agreement (the “Trust Agreement”) between the
Company and Continental Stock Transfer & Trust Company (“CST&T”). The
remaining proceeds (less commissions and actual expense payments or other fees
payable pursuant to this Agreement) shall be paid to the order of the Company
upon delivery of certificates (in form and substance reasonably satisfactory to
the Representative) representing the Firm Units (or through the facilities of
the DTC for the account of the Representative). 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 (2) 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 (1) full Business Day prior
to the Closing Date. The Company shall not be obligated to sell or deliver
the Firm Units except upon tender of payment by the Representative for all the
Firm Units. As used herein, the term “Public Shareholders” means the
holders of Ordinary Shares sold as part of the Units in the Offering or acquired
in the aftermarket, including any of the Insider Shareholders (as defined in
Section 1.4.1 herein) to the extent they acquire such Ordinary Shares in the
Offering or in the aftermarket (and solely with respect to such Ordinary
Shares).
EarlyBirdCapital,
Inc.
____________,
2011
Page 3
of 45
1.2.
Over-Allotment
Option
1.2.1. The
Representative shall have the option (the “Over-Allotment Option”) to
purchase all or less than all of the additional 600,000 units (the “Option Units”) for the
purposes of covering any over-allotments in connection with the distribution and
sale of the Firm Units. Such Option Units shall, at the
Representative’s election, be purchased for each account of the several
Underwriters in the same proportion as the number of Firm Units set forth
opposite such Underwriter’s name on Schedule A hereto bears to the total number
of units of Firm Units (subject to adjustment by the Representative to eliminate
fractions). Such Option Units shall be identical in all respects to
the Firm Units. The Firm Units and the Option Units are hereinafter
collectively referred to as the “Units,” and the Units, the
Ordinary Shares and the Warrants included in the Units and the Ordinary Shares
issuable upon exercise of the Warrants are hereinafter referred to collectively
as the “Public
Securities.” No Option Units shall be sold or delivered unless the
Firm Units previously have been, or simultaneously are, sold and
delivered. The right to purchase the Option Units, or any portion
thereof, may be exercised from time to time and to the extent not previously
exercised may be surrendered and terminated at any time upon notice by the
Representative to the Company. The purchase price to be paid for each Option
Unit (net of discounts and commissions) will be $7.72 per Option
Unit.
1.2.2. Exercise of
Option. The Over-Allotment Option granted pursuant to Section
1.2.1 hereof may be exercised by the Representative as to all (at any time) or
any part (from time to time) of the Option Units within 45 days after the
Effective Date. The Representative 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 accordance with Section 10.1 herein 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 (5) 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 Representative, and, subject to the terms and conditions set forth
herein, the Representative will become obligated to purchase, the number of
Option Units specified in such notice.
EarlyBirdCapital,
Inc.
____________,
2011
Page 4
of 45
1.2.3. Payment and
Delivery. Payment for the Option Units shall be made on the
Option Closing Date at the Representative’s election by wire transfer in Federal
(same day) funds or by certified or bank cashier’s check(s) in New York Clearing
House funds, payable as follows: $7.72 per Option Unit shall be
deposited in the Trust Fund pursuant to the Trust Agreement upon delivery of
certificates (in form and substance satisfactory to the Representative)
representing the Option Units (or through the facilities of DTC) for the account
of the Representative). 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 the Option Closing Date, as the case may be, and will be made
available to the Representative for inspection, checking and packaging at the
aforesaid office of the Company’s transfer agent or correspondent not less than
one full business day prior to such Closing Date.
1.3. Representative’s Purchase
Option. The Company hereby agrees to issue and sell to the
Representative (and/or its designees) on the Closing Date an option (“Representative’s Purchase
Option”) to purchase up to an aggregate of 400,000 units (the “Representative’s Units”) for
an aggregate purchase price of $100.00. The Representative’s Purchase
Option shall be exercisable whether for cash or on a cashless basis, 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
$8.80, which is equal to one hundred ten percent (110%) of the initial public
offering price of a Unit. On the Closing Date, the Company shall deliver
to the Representative, upon payment therefor, certificates for the
Representative’s Purchase Option in the name or names and in such denominations
as the Representative may request. The Representative’s Purchase
Option, the Representative’s Units, the Ordinary Shares (the “Representative’s Shares”) and
the Warrants (the “Representative’s Warrants”)
included in the Representative’s Units and the Ordinary Shares 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.” Delivery
and payment for the Representative’s Purchase Option shall be made on the
Closing Date. The Company shall deliver to the Representative, upon
payment therefor, certificates for the Representative’s Purchase Option in the
name or names and in such authorized denominations as the Representative may
request.
1.4. Private
Placement.
1.4.1. The Company issued to certain persons and entities
referenced in Part II, Item 7 of the Registration Statement (collectively, the
“Insider Shareholders”), for aggregate consideration of $25,000, 1,150,000
(the “Insider
Shares”) in a private placement intended to
be exempt from registration under Section 4(2) of the Securities Act of 1933, as
amended (the “Act”). No underwriting discounts, commissions or
placement fees have been or will be payable in connection with the sale of the
Insider Shares. Except for certain limited exceptions, 50% of the
Insider Shares may be sold, assigned or
transferred by the Insider Shareholders six months following the consummation of
the Business Combination or the liquidation of the Trust Account (if the Company
is unable to consummate a Business Combination by the Termination
Date) and the remaining 50% of the Insider
Shares may be sold, assigned or transferred by the Insider Shareholders twelve
months following the consummation of the Business Combination or the liquidation
of the Trust Account (if the Company is unable to consummate a Business
Combination by the Termination Date). The Insider Shareholders shall
have no right to any liquidation distributions with respect to any portion of
the Insider Shares in the event the Company fails to consummate a Business
Combination. The Insider Shareholders shall not have redemption
rights with respect to the Insider Shares (whether the Company engages in a
proxy solicitation to approve a Business Combination or whether the Company
engages in a tender offer).
EarlyBirdCapital,
Inc.
____________,
2011
Page 5
of 45
1.4.2. Simultaneously with the Closing Date, certain directors
and officers of the Company and their affiliates (collectively, the
“Private
Investors”) will purchase from the Company
pursuant to the Subscription Agreements (as defined in Section 2.25.2 hereof),
an aggregate of 6,600,000 warrants (the “Private Warrants”) at a purchase price of $0.35 per Placement Warrant in
a private placement (the “Private Placement”) intended to be exempt from registration under the
Act. The Private Warrants and Ordinary Shares issuable upon exercise
of the Private Warrants are hereinafter referred to collectively as the
“Private
Securities.” No underwriting
discounts, commissions or placement fees have been or will be payable in
connection with the Private Placement. None of the Private Securities
may be sold, assigned or transferred (except to their permitted transferees) by
the Private Investors until the consummation of a Business Combination or the
liquidation of the Trust Account (if the Company is unable to consummate a
Business Combination by the Termination Date).
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1.5.
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Working Capital; Trust
Account Proceeds.
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1.5.1. Working
Capital. Upon consummation of the Offering, $250,000 of the
proceeds from the sale of the Firm Units will be released to the Company to fund
the working capital requirements of the Company.
1.5.2. Trust Account
Proceeds. Prior to the liquidation of the Trust Account in the event the
Company has not completed a Business Combination by the Termination Date, (i)
funds may be released to the Company from the Trust Account in accordance with
the Trust Agreement to purchase Ordinary Shares in accordance with Section 3.32
hereof, (ii) interest income on the funds held in the Trust Account may be
released to the Company from the Trust Account to pay any taxes incurred by the
Company and (iii) interest income on the funds held in the Trust Account may be
released to the Company from the Trust Account to fund the Company’s working
capital and general corporate requirements, all as more fully described in the
Prospectus.
2. Representations and
Warranties of the Company. The Company represents and warrants to
the Underwriters as follows:
EarlyBirdCapital,
Inc.
____________,
2011
Page 6
of 45
2.1. Filing of Registration
Statement.
2.1.1. Pursuant to the
Act. The Company has filed with the Commission a registration
statement and an amendment or amendments thereto, on Form F-1 (File No.
333-_______), including any related preliminary prospectus (the “Preliminary Prospectus”,
including any prospectus that is included in the Registration Statement
immediately prior to the effectiveness of the Registration Statement), for the
registration of the Public Securities and the Representative’s Securities under
the Act, which registration statement and amendment or amendments have been
prepared by the Company in conformity with the requirements of the Act, and the
rules and regulations (the “Regulations”) of the
Commission under the Act. The conditions for use of Form F-1 to register
the Offering under the Act, as set forth in the General Instructions to such
Form, have been satisfied. Except as the context may otherwise
require, such registration statement, as amended, on file with the Commission at
the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein and all information deemed to be a part
thereof as of such time pursuant to Rule 430A of the Regulations), is
hereinafter called the “Registration Statement,” and
the form of the final prospectus dated the Effective Date included in the
Registration Statement (or, if applicable, the form of final prospectus
containing information permitted to be omitted at the time of effectiveness by
Rule 430A of the Regulations filed with the Commission pursuant to Rule 424 of
the Regulations), is hereinafter called the “Prospectus.” For
purposes of this Agreement, “Time of Sale”, as used in the
Act, means 5:00 p.m., New York City time, on the date of this
Agreement. Prior to the Time of Sale, the Company prepared
preliminary prospectuses, dated __________, 2011, for distribution by the
Underwriters (together the “Statutory
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 Public 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 Securities
Act with the filing of such Rule 462(b) Registration Statement. The
Registration Statement has been declared effective by the Commission on the date
hereof. If, subsequent to the date of this
Agreement, the Company or the Representative has determined that at the Time of
Sale the Statutory Prospectus included an untrue statement of a material fact or
omitted a statement of material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, 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 Statutory Prospectus will be deemed to include any additional
information available to purchasers at the time of entry into the first such new
purchase contract.
2.1.2. Pursuant to the Exchange
Act. The Company has filed with the Commission a Registration
Statement on Form 8-A (File Number 000-______) providing for the registration
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Units,
the Ordinary Shares and the Warrants. The registration of the Units,
Ordinary Shares and Warrants under the Exchange Act has been declared effective
by the Commission on the date hereof.
EarlyBirdCapital,
Inc.
____________,
2011
Page 7
of 45
2.2. No Stop Orders,
etc. Neither the Commission nor, to the Company’s knowledge, any
foreign or state regulatory authority has issued any order or threatened to
issue any order preventing or suspending the use of any Statutory Prospectus or
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 of effectiveness of the Registration
Statement (or at the time any post-effective amendment to the Registration
Statement) and at all times subsequent thereto up to the Closing Date, the
Registration Statement, the Statutory Prospectus and the Prospectus contained or
will contain all material statements that are required to be stated therein in
accordance with the Act and the Regulations, and did or will, in all material
respects, conform to the requirements of the Act and the
Regulations. On the Effective Date and at the Time of Sale, the
Registration Statement did not, and on the Closing Date it will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplement thereto) will not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the Time of
Sale, the Statutory Prospectus does not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that 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 by the Underwriter expressly for use in the Registration Statement, the
Statutory Prospectus or Prospectus or any amendment thereof or supplement
thereto, which information, it is agreed, shall consist solely of the
subsections captioned “Quotation of Securities,” “Pricing of Securities” and
“Canada” contained in the section of the Prospectus entitled
“Underwriting.”
EarlyBirdCapital,
Inc.
____________,
2011
Page 8
of 45
2.3.2. Disclosure of
Agreements. The agreements and documents described in the
Registration Statement, the Statutory Prospectus and the Prospectus conform to
the descriptions thereof contained therein and there are no agreements or other
documents required to be described in the Registration Statement, the Statutory
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 Registration Statement or attached
as an exhibit thereto, or (ii) is material to the Company’s business, has been
duly and validly executed by the Company, is in full force and effect in all
material respects and is enforceable against the Company and, to the Company’s
knowledge, the other parties thereto, in accordance with its terms, except (x)
as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under the foreign,
federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in breach or default thereunder and, to the
Company’s knowledge, no event has occurred that, with the lapse of time or the
giving of notice, or both, would constitute a breach or default
thereunder. To the Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including,
without limitation, those relating to environmental laws and
regulations.
2.3.3. Prior Securities
Transactions. No securities of the Company have been sold by the
Company or by or on behalf of, or for the benefit of, any person or persons
controlling, controlled by, or under common control with the Company since the
date of the Company’s formation, except as disclosed in the Registration
Statement.
2.3.4. Regulations. The
disclosures in the Registration Statement, the Statutory Prospectus and the
Prospectus concerning the effects of foreign, 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, the Statutory Prospectus and the Prospectus,
except as otherwise specifically stated therein: (i) there has been no material
adverse change in the condition, financial or otherwise, or business prospects
of the Company; (ii) there have been no material transactions entered into by
the Company, other than as contemplated pursuant to this Agreement and as
discussed in the Registration Statement, the Statutory Prospectus and the
Prospectus; (iii) no member of the Company’s board of directors or management
has resigned from any position with the Company and (iv) no event or occurrence
has taken place which materially impairs, or would likely materially impair,
with the passage of time, the ability of the members of the Company’s board of
directors or management to act in their capacities with the Company as described
in the Registration Statement, the Statutory Prospectus and the
Prospectus.
2.4.2. Recent Securities
Transactions, etc. Subsequent to the respective dates as of
which information is given in the Registration Statement, the Statutory
Prospectus and the Prospectus and except as may otherwise be indicated or
contemplated herein or therein, the Company has not: (i) issued any securities
or incurred any liability or obligation, direct or contingent, for borrowed
money; or (ii) declared or paid any dividend or made any other distribution
on or in respect to its capital stock.
EarlyBirdCapital,
Inc.
____________,
2011
Page 9
of 45
2.5. Independent
Accountants. ▇▇▇▇▇▇ LLP (“▇▇▇▇▇▇”), whose report is
filed with the Commission as part of the Registration Statement and included in
the Registration Statement, the Statutory Prospectus and the Prospectus, are
independent registered public accountants as required by the Act, the
Regulations and the Public Company Accounting Oversight Board (the “PCAOB”), including the rules
and regulations promulgated by such entity. To the Company’s
knowledge, ▇▇▇▇▇▇ 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, the Statutory Prospectus and
the Prospectus, provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
2.6. Financial Statements;
Statistical Data.
2.6.1. Financial
Statements. The financial statements, including the notes
thereto and supporting schedules included in the Registration Statement, the
Statutory Prospectus and the Prospectus, fairly present the financial position
and the results of operations of the Company at the dates and for the periods to
which they apply; and such financial statements have been prepared in conformity
with United States 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 in conformity with the Regulations. No other financial
statements or supporting schedules are required to be included or incorporated
by reference in the Registration Statement, the Statutory Prospectus or the
Prospectus. The Registration Statement, the Statutory Prospectus and
the Prospectus disclose all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and other
relationships of the Company with unconsolidated entities or other persons that
may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues
or expenses. There are no pro forma or as adjusted financial
statements which are required to be included in the Registration Statement, the
Statutory Prospectus or the Prospectus in accordance with Regulation S-X of the
Regulations which have not been included as so required.
2.6.2. Statistical
Data. The statistical, industry-related and market-related
data included in the Registration Statement, the Statutory Prospectus and/or the
Prospectus are based on or derived from sources which the Company reasonably and
in good faith believes are reliable and accurate, and such data agree with the
sources from which they are derived.
EarlyBirdCapital,
Inc.
____________,
2011
Page 10
of 45
2.7. Authorized Capital; Options,
etc. The Company had at the date or dates indicated in each of the
Registration Statement, the Statutory Prospectus and the Prospectus, as the case
may be, duly authorized, issued and outstanding capitalization as set forth in
the Registration Statement, the Statutory Prospectus and the Prospectus.
Based on the assumptions stated in the Registration Statement, the Statutory
Prospectus and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth
in, or contemplated by, the Registration Statement, the Statutory Prospectus and
the Prospectus, on the Effective Date and on the Closing Date, there will be no
options, warrants, or other rights to purchase or otherwise acquire any
authorized, but unissued Ordinary Shares or any security convertible into
Ordinary Shares, or any contracts or commitments to issue or sell Ordinary
Shares or any such options, warrants, rights or convertible
securities.
2.8. Valid Issuance of
Securities, etc.
2.8.1. Outstanding
Securities. All issued and outstanding Ordinary Shares of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company. The outstanding Ordinary Shares
conform to the descriptions thereof contained in the Registration Statement, the
Statutory Prospectus and the Prospectus. All offers, sales and any transfers of
the outstanding Ordinary Shares of the Company were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky laws or
exempt from such registration requirements.
2.8.2. Securities Sold Pursuant to
this Agreement. The Securities have been duly authorized and
reserved for issuance and when issued and paid for in accordance with this
Agreement, will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by reason of being
such holders; the 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 the descriptions
thereof contained in the Registration Statement, the Statutory Prospectus and
the Prospectus, as the case may be. When issued, the Representative’s
Purchase Option, the Representative’s Warrants, the Private Warrants and the
Warrants will constitute valid and binding obligations of the Company to issue
and sell, upon exercise thereof and payment of the respective exercise prices
therefor, the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s Purchase Option,
Representative’s Warrants, Private 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 foreign,
federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The Ordinary Shares issuable upon
exercise of the Representative’s Purchase Option, the Representative’s Warrants,
the Private Warrants and the Warrants have been reserved for issuance upon the
exercise of the Warrant upon payment of the consideration therefore, and when
issued in accordance with the terms thereof, will be duly and validly
authorized, validly issued, fully paid and non-assessable; the holders thereof
are not and will not be subject to personal liability by reason of being such
holders.
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2.8.3. No
Integration. Neither the Company nor any of its affiliates
has, prior to the date hereof, made any offer or sale of any securities which
are required to be “integrated” pursuant to the Act or the Regulations with the
offer and sale of the Securities pursuant to the Registration
Statement.
2.9. Registration Rights of Third
Parties. Except as set forth in the Registration Statement, the
Statutory Prospectus and the Prospectus, no holders of any securities of the
Company or any rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to register any
such securities of the Company under the Act or to include any such securities
in a registration statement to be filed by the Company.
2.10. Validity and Binding Effect
of Agreements. This Agreement, the Warrant Agreement (as defined in
Section 2.24 hereof), the Trust Agreement, the Subscription Agreements (as
defined in Section 2.25.2 hereof), the Services Agreement (as defined in Section
2.25.5), the Representative’s Purchase Option, the Escrow Agreement (as defined
in Section 2.25.3 hereof) and the Registration Rights Agreement (as defined
in Section 2.25.7) have been duly and validly authorized by the Company and,
when executed and delivered by the Company and will constitute valid and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under foreign, federal and state securities laws; and
(iii) that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
2.11. No Conflicts,
etc. The execution, delivery, and performance by the Company of
this Agreement, the Warrant Agreement, the Trust Agreement, the Subscription
Agreements, the Services Agreement, the Representative’s Purchase Option, the
Escrow Agreement and the Registration Rights 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 or violation 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, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which its
property is subject except pursuant to the Trust Agreement; (ii) result in any
violation of the provisions of the Amended and Restated Memorandum and Articles
of Association of the Company; or (iii) violate any existing applicable statute,
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, business or assets.
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2.12. No Defaults;
Violations. No material default or violation exists in the due
performance and observance of any term, covenant or condition of any material
license, contract, indenture, mortgage, deed of trust, note, loan or credit
agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not in violation
of any term or provision of its Amended and Restated Memorandum and Articles of
Association or in violation of any material franchise, license, permit,
applicable law, rule, regulation, judgment or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any of
its properties or businesses.
2.13. Corporate Power; Licenses;
Consents.
2.13.1. Conduct of
Business. The Company has all requisite corporate power and
authority, and has all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and
bodies that it needs as of the date hereof to conduct its business for the
purposes described in the Registration Statement, the Statutory Prospectus and
the Prospectus. The disclosures in the Registration Statement, the
Statutory Prospectus and the Prospectus concerning the effects of foreign,
federal, state and local regulation on this Offering and the Company’s business
purpose as currently contemplated are correct in all material respects and do
not omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Since its formation, the Company has
conducted no business and has incurred no liabilities other than in connection
with and in furtherance of the Offering.
2.13.2. Transactions Contemplated
Herein. The Company has all corporate power and authority to enter
into this Agreement and to carry out the provisions and conditions hereof, and
all consents, authorizations, approvals and orders required in connection
therewith have been obtained. No consent, authorization or order of, and
no filing with, any court, government agency or other body, foreign or domestic,
is required for the valid issuance, sale and delivery, of the Securities and the
consummation of the transactions and agreements contemplated by this Agreement,
the Warrant Agreement, the Trust Agreement, the Subscription Agreements, the
Services Agreement, the Representative’s Purchase Option, the Registration
Rights Agreement and the Escrow Agreement and as contemplated by the
Registration Statement, the Statutory Prospectus and Prospectus, except with
respect to applicable foreign, federal and state securities laws and the rules
and regulations promulgated by the Financial Industry Regulatory Authority, Inc.
(“FINRA”).
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2.14. D&O
Questionnaires. To the Company’s knowledge, all information
contained in the questionnaires (the “Questionnaires”) completed by
each of the Company’s officers and directors (the “Directors/Officers”)
immediately prior to the Offering and provided to the Representative, as such
Questionnaires may have been updated from time to time and confirmed by each of
the Directors/Officers, is true and correct and the Company has not become aware
of any information which would cause the information disclosed in the
Questionnaires to become inaccurate and incorrect.
2.15. Litigation; Governmental
Proceedings. There is no action, suit, proceeding, inquiry,
arbitration, investigation, litigation or governmental proceeding pending or, to
the Company’s knowledge, threatened against, or involving the Company or, to the
Company’s knowledge, any of the Directors/Officers or any of the Insider
Shareholders, which has not been disclosed in the Registration Statement, the
Questionnaires, the Statutory Prospectus and 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 jurisdiction 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 condition (financial or
otherwise), prospects, earnings, business or properties of the Company, whether
or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Statutory Prospectus and the Prospectus
(exclusive of any supplement thereto) (a “Material Adverse
Effect”).
2.17. No Contemplation of a
Business Combination. Prior to the date hereof, no Company
Affiliate (as hereinafter defined) has, and as of the Closing, the Company and
such Company Affiliates will not have: (a) had any specific Business Combination
under consideration or contemplation; (b) directly or indirectly, contacted any
potential operating assets, business or businesses which the Company may seek to
acquire (each, a “Target
Business”) or any owner, officer, director, manager, agent or
representative thereof or had any substantive discussions, formal or otherwise,
with respect to effecting any potential Business Combination with the Company or
taken any measure, directly or indirectly to locate a Target Business; or (c)
engaged or retained any agent or other representative to identify or locate any
Target Business for the Company.
2.18. Transactions Affecting
Disclosure to FINRA.
2.18.1. Except
as described in the Registration Statement, the Statutory 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 Company Affiliate with respect to the sale of the
Securities hereunder or any other arrangements, agreements or understandings of
the Company or, to the Company’s knowledge, any Initial Shareholder that may
affect the Underwriters’ compensation, as determined by FINRA.
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2.18.2. The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise,
in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii) to
any FINRA member; or (iii) to any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within the twelve
months prior to the Effective Date, other than payments to the Representative in
connection with the Offering.
2.18.3. To
the Company’s knowledge, no officer or director or any direct or indirect
beneficial owner of any class of the Company’s securities, including the Insider
Shareholders and holders of securities to be purchased in the Private Placement
(whether debt or equity, registered or unregistered, regardless of the time
acquired or the source from which derived) (any such individual or entity, a
“Company Affiliate”) is
a member, a person associated, or affiliated with a member of
FINRA.
2.18.4. To the Company’s
knowledge, no Company Affiliate is an owner of stock or other securities of any
member of FINRA (other than securities purchased on the open
market).
2.18.5. To the Company’s
knowledge, no Company Affiliate has made a subordinated loan to any member of
FINRA.
2.18.6. No proceeds from
the sale of the Public Securities (excluding underwriting compensation), the
Representative’s Securities, the Private Securities or the Insider Shares will
be paid to any FINRA member, or any persons associated or affiliated with a
member of FINRA, except as specifically authorized herein.
2.18.7. Except as
contemplated herein with respect to the Representative, the Company has not
issued any warrants or other securities, or granted any options, directly or
indirectly to anyone who is a potential underwriter in the Offering or a related
person (as defined by FINRA rules) of such an underwriter within the 180-day
period prior to the initial filing date of the Registration
Statement.
2.18.8. To the Company’s
knowledge no person to whom securities of the Company have been privately issued
within the 180-day period prior to the initial filing date of the Registration
Statement has any relationship or affiliation or association with any member of
FINRA.
2.18.9. To
the Company’s knowledge, no FINRA member intending to participate in the
Offering has a conflict of interest (as defined by FINRA rules) with the
Company.
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2.18.10. Except
with respect to the Representative in connection with the Offering, the Company
has not entered into any agreement or arrangement (including, without
limitation, any consulting agreement or any other type of agreement) during the
180-day period prior to the initial filing date of the Registration Statement,
which arrangement or agreement provides for the receipt of any item of value
and/or the transfer or issuance of any warrants, options, or other securities
from the Company to a FINRA member, any person associated with a member (as
defined by FINRA rules), any potential underwriters in the Offering and/or any
related persons.
2.19. Taxes.
2.19.1. There are no transfer taxes or other similar fees or
charges under Cayman Islands law, U.S. federal law or the laws of any U.S. state
or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company
of the Securities.
2.19.2. The Company has filed all non-U.S., U.S. federal, state
and local tax returns that are required to be a filed or has requested
extensions thereof, except in any case in which the failure to so file would not
have a Material Adverse Effect, and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing in due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as would not have a
Material Adverse Effect.
2.19.3. As of the date of this Agreement, Company is not a
Passive Foreign Investment Company for Federal income tax
purposes.
2.20. Foreign Corrupt Practices
Act. Neither the Company nor any of the Company Affiliates or any
other person acting on behalf of the Company is aware of or has taken any
action, directly or indirectly, that: (i) would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder (the “FCPA”) or otherwise subject
the Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding; (ii) if not done in the past, might have had a
Material Adverse Effect or (iii) if not continued in the future, might adversely
affect the assets, business or operations of the Company, including, without
limitation, 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). 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.
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2.21. Currency and Foreign
Transactions Reporting Act. The operations of the Company are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transaction
Reporting Act of 1970, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
2.22. Bank Secrecy Act; Money
Laundering; Patriot Act. Neither the Company, nor to the
Company’s knowledge, any Company Affiliate, has violated: (i) the Bank Secrecy
Act, as amended, (ii) the Money Laundering Laws 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.
2.23. Officers’
Certificate. Any certificate signed by any duly authorized officer
of the Company and delivered to the Representative or to its counsel shall be
deemed a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.
2.24. Warrant
Agreement. The Company has entered into a warrant agreement with
respect to the Warrants, Representatives’ Warrants and Private Warrants with
CST&T substantially in the form filed as an exhibit to the Registration
Statement (the “Warrant
Agreement”).
2.25. Agreements With Company
Affiliates.
2.25.1. Insider
Letters. The Company has caused to be duly executed legally binding
and enforceable agreements (except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (ii) as enforceability of any indemnification, contribution or
non-compete provision may be limited under foreign, federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought)
annexed as exhibits to the Registration Statement (the “Insider Letters”), pursuant to
which each of the Company Affiliates agrees to certain matters, including but
not limited to, the voting of Ordinary Shares held by them and
certain matters described as being agreed to by them under the “Proposed
Business” section of the Registration Statement, the Statutory Prospectus
and Prospectus.
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2.25.2. Subscription
Agreements. The Private Investors have executed and delivered
subscription agreements, the form of which is annexed as an exhibit to the
Registration Statement (the “Subscription Agreements”), pursuant to which the Private Investors have agreed,
among other things, to purchase on the Closing Date an aggregate of 6,600,000
Private Warrants in the Private Placement. Pursuant to the
Subscription Agreements, the Private Investors have waived any and all rights
and claims they may have to any proceeds, and any interest thereon, held in the
Trust Account in respect of the Private Securities in the event that a Business
Combination is not consummated and the Trust Account is liquidated in accordance
with the terms of the Trust Agreement. The Private Securities have
been duly authorized and, when issued and paid for in accordance with the
Subscription Agreements, 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 Private 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 Private
Securities has been duly and validly taken.
2.25.3. Escrow
Agreement. The Company has caused the Insider Shareholders to enter
into an escrow agreement (the “Escrow Agreement”) with
CST&T substantially in the form filed as an exhibit to the Registration
Statement whereby the Insider Shares owned by such parties prior to the Offering
will be held in escrow by CST&T for a period (the “Escrow Period”) commencing on
the Effective Date and expiring six months after the consummation of the
Business Combination with respect to 50% of the Insider Shares and one year
after the consummation of the Business Combination
or, in each case, the earlier liquidation of the Trust Account if the Company is
unable to consummate a Business Combination by the Termination
Date. During the Escrow Period, such parties shall be
prohibited from selling or otherwise transferring such Insider Shares, except in
certain limited circumstances set forth in the Escrow Agreement. To
the Company’s knowledge, the Escrow Agreement is enforceable against each of the
Insider Shareholders 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, an agreement or instrument to
which any of the Insider Shareholders is a party. The Escrow
Agreement shall not be amended, modified or otherwise changed without the prior
written consent of the Representative, such consent not to be unreasonably
withheld.
2.25.4. Non-Competition/Solicitation. No
Directors/Officers are subject to any non-competition agreement or
non-solicitation agreement with any employer or prior employer which could
materially affect each Director’s/Officer’s ability to be and act in the
capacity of a Director/Officer of the Company.
2.25.5. Administrative
Services. The Company has entered into an agreement (“Services Agreement”) with BBS
Capital Fund, LP and Rampant Dragon, LLC (collectively, the “Affiliates”) substantially in
the form annexed as an exhibit to the Registration Statement pursuant to which
the Affiliates will make available to the Company general and administrative
services including office space, utilities and secretarial support for the
Company’s use for $7,500 per month.
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2.25.6. Loans. BBS
Capital Fund, LP and ▇▇▇▇▇▇ Holdings, LLC have made loans to the Company in the
aggregate amount of $150,000 (the “Insider Loans”) pursuant to
promissory notes substantially in the form annexed as an exhibit to the
Registration Statement. The Insider Loans do not bear any interest
and are repayable by the Company on the consummation of the
Offering.
2.25.7. Registration Rights
Agreement. The Company and the Insider Shareholders have entered into a
registration rights agreement (“Registration Rights
Agreement”) substantially in the form annexed as an exhibit to the
Registration Statement, whereby the Insider Shareholders will be entitled to
certain registration rights as set forth in such Registration Rights Agreement
and described more fully in the Registration Statement.
2.26. Investment Management Trust
Agreement. The Company has entered into the Trust Agreement with
respect to certain proceeds of the Offering and the Private Placement
substantially in the form filed as an exhibit to the Registration Statement,
pursuant to which the funds held in the Trust Account may be released under
limited circumstances.
2.27. 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 (exclusive of cash items and “Government Securities,”
as defined in Section 2(a)(16) of the Investment Company Act) consist of, and no
more than 45% of the Company’s net income after taxes is derived from,
securities other than Government Securities.
2.28. Investment Company
Act. The Company is not required, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be required, to
register as an “investment company” under the Investment Company
Act.
2.29. Subsidiaries.
The Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.30. Related Party
Transactions. No relationship, direct or indirect, exists between
or among any of the Company or any Company Affiliate, on the one hand, and any
director, officer, shareholder, customer or supplier of the Company or any
Company Affiliate, on the other hand, which is required by the Act, the Exchange
Act or the Regulations to be described in the Registration Statement, the
Statutory Prospectus and the Prospectus which is not so described as
required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus. The Company has not extended or maintained credit,
arranged for the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any director or officer of the
Company.
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2.31. No
Influence. The Company has not offered, or caused the
Underwriters to offer, the Firm Units to any person or entity with the intention
of unlawfully influencing: (a) a customer or supplier of the Company or any
affiliate of the Company to alter the customer’s or supplier’s level or type of
business with the Company or such affiliate or (b) a journalist or publication
to write or publish favorable information about the Company or any such
affiliate.
2.32. ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The
Company is in material compliance with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002, as amended (“SOX”), and the rules and
regulations promulgated thereunder and related or similar rules and regulations
promulgated by any governmental or self regulatory entity or agency, that are
applicable to it as of the date hereof.
2.33. Quotation of the Public
Securities on the OTC Bulletin Board. As of the Closing Date,
the Public Securities will have been authorized for quotation on the OTC
Bulletin Board and, to the Company’s knowledge, no proceedings have been
instituted or threatened which would effect, and no event or circumstance has
occurred as of the Effective Date which is reasonably likely to effect, the
quotation of the Public Securities on the OTC Bulletin Board.
2.34. Definition of
“Knowledge”. As used in herein, the term “knowledge of the Company” (or
similar language) shall mean the knowledge of the Company’s Directors/Officers,
with the assumption that such officers and directors shall have made reasonable
and diligent inquiry of the matters presented.
3. Covenants of the
Company. The Company covenants and agrees as follows:
3.1. Amendments to Registration
Statement. The Company will deliver to the Representative, prior to
filing, any amendment or supplement to the Registration Statement or Prospectus
proposed to be filed after the Effective Date and shall not file any such
amendment or supplement to which the Representative shall reasonably object in
writing.
3.2. Federal Securities
Laws.
3.2.1. Compliance.
During the time when a prospectus is required to be delivered under the Act, the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Public Securities in
accordance with the provisions hereof and the Prospectus. If at any time
when a Prospectus relating to the Public Securities is required to be delivered
under the Act, any event shall have occurred as a result of which, in the
opinion of counsel for the Company or counsel for the Underwriters, the
Statutory Prospectus and the Prospectus, as then amended or supplemented
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or if
it is necessary during such period to amend the Registration Statement or amend
or supplement the Statutory Prospectus and Prospectus to comply with the Act,
the Company will notify the Representative promptly and prepare and file with
the Commission, subject to Section 3.1 hereof, an appropriate amendment to
the Registration Statement or amendment or supplement to the Statutory
Prospectus and Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
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3.2.2. Filing of Final
Prospectus. The Company will file the Prospectus (in form and
substance satisfactory to the Representative) with the Commission pursuant to
the requirements of Rule 424 of the Regulations.
3.2.3. Exchange Act
Registration. For a period of five years from the Effective Date
(except in connection with a going private transaction), or until such earlier
time upon which the Trust Account is to be liquidated if a Business Combination
has not been consummated by the Termination Date, the Company will use its best
efforts to maintain the registration of the Units, Ordinary Shares and Warrants
(in the case of the Units and the Warrants, until the Warrants expire and are no
longer exercisable or have been exercised in full) under the provisions of the
Exchange Act. The Company will not deregister the Units, Ordinary Shares
or Warrants under the Exchange Act without the prior written consent of the
Representative.
3.2.4. Exchange Act
Filings. From the Effective Date until the earlier of five
years after the consummation of the Company’s initial Business Combination, or
the liquidation of the Trust Account if a Business Combination is not
consummated by the Termination Date, the Company shall timely file with the
Commission via the Electronic Data Gathering, Analysis and Retrieval System
(“▇▇▇▇▇”) such
statements and reports as are required to be filed by a company registered under
Section 12(g) of the Exchange Act, as if the Company were a company incorporated
in the United States (it being agreed, however, that with respect to quarterly
and annual financial information, the Company may furnish such information on
Form 6-K or Form 20-F, as the case may be, and with respect to proxy
solicitation materials a preliminary proxy statement shall not be required to be
filed with the Commission or delivered to the Company’s
shareholders).
3.2.5. ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance. As soon as it is legally required to do so, the
Company shall take all actions necessary to obtain and thereafter maintain
material compliance with each applicable provision of SOX and the rules and
regulations promulgated thereunder and related or similar rules and regulations
promulgated by any other governmental or self regulatory entity or agency with
jurisdiction over the Company.
3.3. Blue Sky
Filing. Unless the Securities are listed or quoted, as the case may
be, on the New York Stock Exchange, the Nasdaq Stock Market or the NYSE Amex
(“AMEX”), the Company
will endeavor in good faith, in cooperation with the Representative, at or prior
to the time the Registration Statement becomes effective, to qualify the Public
Securities for offering and sale under the securities laws of such jurisdictions
as the Representative may reasonably designate, provided that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or to taxation as a
foreign corporation doing business in such jurisdiction. All blue sky work
shall be undertaken by counsel of the Representative’s choice. 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.
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3.4. Delivery of Materials to
Underwriters. The Company will deliver to each of the several
Underwriters, without charge and from time to time during the period when a
prospectus is required to be delivered under the Act or the Exchange Act, such
number of copies of each Statutory Prospectus, the Prospectus and all amendments
and supplements to such documents as such Underwriters may reasonably request
and, as soon as the Registration Statement or any amendment or supplement
thereto becomes effective, deliver to the Representative two manually 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 manually 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 until the
Company announces its initial Business Combination and will notify the
Representative immediately and confirm the notice in writing: (i) of the
effectiveness of the Registration Statement and any amendment thereto; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, or any post-effective amendment thereto or
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or of the initiation, or the threatening, of any proceeding for that purpose;
(iii) of the issuance by any foreign or state securities commission of any
proceedings for the suspension of the qualification of the Public Securities for
offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose; (iv) of the mailing and delivery to the
Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for any
additional information from the Commission; and (vi) of the happening of any
event during the period described in Section 3.4 hereof that, in the
judgment of the Company or its counsel, makes any statement of a material fact
made in the Registration Statement, the Statutory Prospectus or the Prospectus
untrue or that requires the making of any changes in the Registration Statement,
the Statutory Prospectus and Prospectus in order to make the statements therein,
(with respect to the Prospectus and the Statutory Prospectus and in light of the
circumstances under which they were made), not misleading. If the
Commission or any foreign or state securities commission shall enter a stop
order or suspend such qualification at any time, the Company will make every
reasonable effort to obtain promptly the lifting of such order.
3.6. Review of Financial
Statements. Until the earlier of five years from the Effective
Date, or until the liquidation of the Trust Account if a Business Combination is
not consummated by the Termination Date, the Company, at its expense, shall
cause its regularly engaged independent certified public accountants to review
(but not audit) the Company’s financial statements for each of the first three
fiscal quarters prior to the announcement of quarterly financial information and
the filing of the Company’s Report of Foreign Private Issuer on Form 6-K with
respect to its quarterly results.
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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 Company Affiliate
unless the Company obtains an opinion from an independent investment banking
firm reasonably acceptable to the Representative that the Business Combination
is fair to the Company’s shareholders from a financial perspective.
3.7.2. Services. The
Company has entered into the Services Agreement with Affiliate pursuant to which
the Affiliate will make available to the Company general and administrative
services including office space, utilities and secretarial support for the
Company’s use for $7,500 per month. The Company shall not enter into
any other arrangement for the provision of such services that will require the
Company to pay in excess of $7,500 per month for such services.
3.7.3. Compensation.
Except as otherwise set forth in this Section 3.7, the Company shall not
pay any Initial Shareholder or Company Affiliate or any of their affiliates any
fees or compensation from the Company, for services rendered to the Company
prior to, or in connection with, this Offering or the consummation of a Business
Combination; provided
that payments may be made pursuant to the Services Agreement, the Insider
Loans may be repaid and the Company’s directors and officers shall be entitled
to reimbursement from the Company for their out-of-pocket expenses incurred on
the Company’s behalf, and other expenses incurred by them in connection with
seeking and consummating a Business Combination.
3.8. Secondary Market Trading and
Standard & Poor’s. The Company will apply to be included
in Standard & Poor’s Daily News and Corporation Records Corporate
Descriptions for a period of five years from the consummation of a Business
Combination. Additionally, the Company shall take such steps as may
be necessary to obtain a secondary market trading exemption for the Company’s
securities in such jurisdictions as may be requested by the Representative;
provided, however, no 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. 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. Investor Relations
Firm. Promptly after the execution of a definitive agreement
for a Business Combination, the Company shall retain an investor relations firm
with the expertise necessary to assist the Company both before and after the
consummation of the Business Combination for a term to be agreed upon by the
Company and the Representative.
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3.10. Reports to the
Representative.
3.10.1. 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 and
dissolved, the Company will furnish to the Representative 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 Report of Foreign Private Issuer on Form 6-K or Schedules 13D, 13G,
14D-1 or 13E-4 received or prepared by the Company; (iv) five copies of each
registration statement filed by the Company with the Commission under the
Securities Act; and (v) such additional documents and information with
respect to the Company and the affairs of any future subsidiaries of the Company
as the Representative may from time to time reasonably request; provided that
the Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representative and its counsel in connection with the Representative’s receipt
of such information. Documents filed with the Commission pursuant to
▇▇▇▇▇ shall be deemed to have been delivered to the Representative pursuant to
this section.
3.10.2. For
a period of five years following the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain a
transfer and warrant agent acceptable to the
Representative. CST&T is acceptable to the
Underwriters.
3.10.3. Secondary Market Trading
Survey. The Company shall engage ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (“GM”) for a one-time fee of
$5,000 payable on the Closing Date to deliver to and update the Underwriters on
a timely basis, but in any event on the Effective Date, a written report
detailing those states in which the Public Securities may be traded in
non-issuer transactions under the Blue Sky laws of the fifty States (the “Secondary Market Trading
Survey”).
3.11. Disqualification of Form F-1
and F-3 and/or S-1 and S-3. Until the earlier of seven years from the
date hereof or until the Warrants have expired and are no longer exercisable,
the Company will not take any action or actions which may prevent or disqualify
the Company’s use of Form F-1 or F-3 and/or Form S-1 and S-3 (or other
appropriate form) for the registration of the Warrants under the
Act.
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3.12. Payment of
Expenses. The Company hereby agrees to pay on each of the Closing
Date and the Option Closing Date, if any, to the extent not paid at Closing
Date, all fees and 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 Statutory
Prospectus, and the final Prospectus 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 Ordinary Shares and the Warrants included in the
Units, including any transfer or other taxes payable thereon; (iii) the
qualification of the Public Securities under state or foreign securities or Blue
Sky laws, including the costs of printing and mailing “Preliminary Blue Sky
Memorandum,” and all amendments and supplements thereto, fees and disbursements
for the Representative’s counsel retained for such purpose (such fees shall be
$35,000 in the aggregate (of which $15,000 has previously been paid)), and a
one-time fee of $5,000 payable to the Representative’s counsel for the
preparation of the Secondary Market Trading Survey; (iv) filing fees, costs and
expenses (including fees and disbursements of the Representative’s counsel)
incurred in registering the Offering with FINRA; (v) fees and disbursements of
the transfer and warrant agent; (vi) the preparation and delivery of transaction
lucite cubes or similar commemorative items in a style and quantity as
reasonably requested by the Representative; (vii) all costs and expenses of the
Company associated with “road show” marketing and “due diligence” trips for the
Company’s management to meet with prospective investors, including without
limitation, all travel, food and lodging expenses associated with such trips
incurred by the Company or such management; 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 3.12. The Representative may deduct from the net
proceeds of the Offering payable to the Company on the Closing Date the expenses
set forth above (which shall be mutually agreed upon between the Company and the
Representative prior to Closing) to be paid by the Company to the Representative
and others. If the Offering is not consummated for any reason
whatsoever, then the Company shall reimburse the Representative in full for
their respective out of pocket accountable expenses actually incurred through
such date, including, without limitation, fees of counsel to the Representative
(which legal fees shall not exceed $75,000).
3.13. Agreements with
Representative.
3.13.1. The
Company hereby grants the Representative an option to act as co-manager or
co-placement agent with at least 20% of the economics for any public or private
sale of debt or equity securities (excluding sales to employees) of the Company
or any subsidiary or successor of the Company (“Proposed Financing”) for a
period of three (3) years from the Effective Date. If the
Representative fails to accept in writing any proposal for any such Proposed
Financing within thirty (30) days after receipt of a written notice from the
Company containing such proposal, then the Representative shall have the right
and shall be given the opportunity to participate in the underwriting syndicate
for the Proposed Financing at a level immediately below the co-manager(s)
or co-placement agent(s) or at such other level below the co-manager(s) or
co-placement agent(s) as the Representative shall select. If the
Representative receives a fee of $250,000 or more in connection with any
Proposed Financing, the Representative will agree to purchase, at its expense,
independent research coverage for the Company, or, at the Representative’s sole
option, reduce its fee by $25,000 for the Company to purchase independent
research coverage.
3.13.2. The
Company and the Representative have entered into a separate merger and
investment banking agreement (“M&A Agreement”)
substantially in the form annexed as an exhibit to the Registration
Statement.
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3.14. Application of Net
Proceeds. The Company will apply the net proceeds from this
Offering received by it in a manner substantially 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
FINRA.
3.16.1. Business
Combination. For a period of ninety days following the
Effective Date, in the event any person or entity (regardless of any FINRA
affiliation or association) is engaged to assist the Company in its search for a
Business Combination candidate or to provide any similar Business
Combination-related services, the Company will provide the following information
(the “Business Combination
Information”) to FINRA and the Representative: (i) complete
details of all services and copies of agreements governing such services (which
details or agreements may be appropriately redacted to account for privilege or
confidentiality concerns); and (ii) justification as to why the person or
entity providing the Business Combination-related 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 5110 of FINRA’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 shareholder approval for the
Business Combination. Upon the Company’s delivery of the Business
Combination Information to the Representative, the Company hereby expressly
authorizes the Representative to provide such information directly to FINRA as a
result of representations the Representative have made to FINRA in connection
with the Offering.
3.16.2. Broker/Dealer. In
the event the Company intends to register as a broker/dealer, merge with or
acquire a registered broker/dealer, or otherwise become a member of FINRA, it
shall promptly notify FINRA.
3.17.
Stabilization. Neither
the Company, nor, to its knowledge, any of its employees, directors or
shareholders (without the consent of the Representative) has taken or will take,
directly or indirectly, any action designed to or that has constituted or that
might reasonably be expected to cause or result in, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Units.
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3.18. Internal
Controls. From and after the Closing Date, 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 Trust Account is required to be liquidated, the Company shall
retain ▇▇▇▇▇▇ or other independent public accountants reasonably acceptable to
the Representative.
3.20. Form 6-K’s. The
Company has retained ▇▇▇▇▇▇ to audit the financial statements of the Company as
of the Closing Date (the “Audited Financial Statements”)
reflecting the receipt by the Company of the proceeds of the Offering.
Within four (4) Business Days of the Closing Date, the Company shall file a
Report of Foreign Private Issuer on Form 6-K with the Commission, which Report
shall contain the Company’s Audited Financial Statements. If the
Over-Allotment Option has not been exercised on the Effective Date, the Company
will also file an amendment to the Report of Foreign Private Issuer on Form 6-K,
or a new Report of Foreign Private Issuer on Form 6-K, to provide updated
financial information of the Company to reflect the exercise and consummation of
the Over-Allotment Option.
3.21. FINRA. The
Company shall advise FINRA if it is aware that any 5% or greater shareholder of
the Company becomes an affiliate or associated person of a FINRA member
participating in the distribution of the 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.
3.23. Investment Company.
The Company shall cause the proceeds of the Offering to be held in the Trust
Account to be invested only in “government securities” with specific maturity
dates or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act as set forth in the Trust Agreement
and disclosed in the Prospectus. The Company will otherwise conduct its business
in a manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates a Business Combination, it will be
engaged in a business other than that of investing, reinvesting, owning, holding
or trading securities.
3.24. Press
Releases. The Company agrees that it will not issue press
releases or engage in any other publicity, without the Representative’s prior
written consent (not to be unreasonably withheld), for a period of ninety (90)
days after the Closing Date; provided that in no event shall the Company be
prohibited from issuing any press release or engaging in any other publicity
required by law.
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3.25. Insurance. The
Company will maintain directors’ and officers’ insurance (including insurance
covering the Company, its directors and officers for liabilities or losses
arising in connection with this Offering, including, without limitation,
liabilities or losses arising under the Act, the Exchange Act, the Rules and
Regulations and applicable foreign securities laws).
3.26. Electronic
Prospectus. The Company shall cause to be prepared and delivered to
the Representative, at its expense, promptly, but in no event later than two (2)
Business Days from the effective date of this Agreement, an Electronic Prospectus to be used by the Underwriters in
connection with the Offering. As used herein, the term “Electronic Prospectus” means a
form of prospectus, and any amendment or supplement thereto, that meets each of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representative, that may be transmitted electronically by
the other Underwriters to offerees and purchasers of the Units for at least the
period during which a Prospectus relating to the Units is required to be
delivered under the Securities Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to ▇▇▇▇▇, except to the
extent that graphic and image material cannot be disseminated electronically, in
which case such graphic and image material shall be replaced in the electronic
prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to the
Representative, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it
has included or will include in the Prospectus filed pursuant to ▇▇▇▇▇ or
otherwise with the Commission and in the Registration Statement at the time it
was declared effective an undertaking that, upon receipt of a request by an investor or his or her
representative within the period when a prospectus relating to the Units is
required to be delivered under the Securities Act, the Company shall transmit or
cause to be transmitted promptly, without charge, a paper copy of the
Prospectus.
3.27. Reservation of
Shares. The Company will reserve and keep available that
maximum number of its authorized but unissued securities which are issuable upon
exercise of the Warrants and the Representative’s Securities outstanding from
time to time.
3.28. Warrants held by
Insiders. The Company hereby acknowledges and agrees that the
Private Warrants, as well as any Warrants purchased in the open market after the
Offering, shall be exercisable on a cashless basis and shall not be redeemable
by the Company, in each event so long as such warrants are held by the Inside
Shareholders or their affiliates or permitted transferees.
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3.29. Content of Business
Combination Notice. In connection with seeking the approval by vote of
Public Shareholders for a proposed Business Combination as contemplated by the
Prospectus, the Company will furnish to all Public Shareholders all notices of
such vote required by Cayman Islands law and all other applicable laws, rules
and regulations. Such notice shall contain, among other matters: (i) a
description of the operations and management of the Target Business, (ii) the
regulatory environment in which such Target Business operates, (iii) a
recitation of risk factors associated with the Target Business and the proposed
Business Combination and (iv) audited or unaudited, as appropriate, historical
financial statements of the Target Business. Such notice and all such
information shall be presented in a manner substantially similar in form and
content to notices and proxy statements that would be provided to Public
Shareholders if the Company was not a foreign private issuer but still had a
class of equity securities registered under Section 12 of the Exchange Act. For
the period commencing with the date of the Prospectus and ending on the
consummation of an initial Business Combination or liquidation of the Trust
Account, the Company will comply with the rules and regulations under the
Exchange Act prescribing the requirements and filing deadlines for Current
Reports on Form 8-K and will file Reports of Foreign Private Issuer on Form 6-K
that comply with the rules and regulations applicable to a Current Report on
Form 8-K.
3.30. Future Financings.
The Company agrees that neither it, nor any successor or subsidiary of the
Company, will consummate any public or private equity or debt financing prior to
or in connection with the consummation of a Business Combination, unless all
investors in such financing expressly waive, in writing, any rights in or claims
against the Trust Account.
3.31. Quotation on the OTC
Bulletin Board. The Company will use its best efforts to maintain the
quotation of the Public Securities on the OTC Bulletin Board or a national
securities exchange until the earlier of five (5) years from the date of this
Agreement or until the Company’s securities are no longer registered under the
Exchange Act.
3.32. Share
Repurchases. The Company has entered into a 10b5-1 plan (the
“Plan”) pursuant to
which the Company is required to maintain a limit order to purchase up to
2,000,000 Ordinary Shares (or 2,300,000 Ordinary Shares if the Over-Allotment
Option is exercised in full) using funds held in the Trust Account at any time
commencing 61 days after the Effective Date and ending on the date immediately
prior to the vote held to approve a Business Combination. If the Company
repurchases any Ordinary Shares prior to the vote held to approve a Business
Combination, such repurchases shall (i) be made only in accordance with the Plan
and (ii) comply with the technical requirements of Rule 10b-18 under the
Exchange Act (even if such repurchases cannot actually be effectuated under Rule
10b-18).
3.33. Business Combination
Announcement. Within five business days following the consummation by the
Company of a Business Combination, the Company shall cause an announcement
(“Business Combination
Announcement”) to be placed, at its cost, in The Wall Street Journal, The
New York Times and a third publication to be selected by the Representative
announcing the consummation of the Business Combination and indicating that the
Representative was the managing underwriter in the Offering and the Company’s
investment banker on the Business Combination. 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.
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3.34. 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 Account 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.
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 the Closing Date to the accuracy of the statements of officers
of the Company made pursuant to the provisions hereof and to the performance by
the Company of its obligations hereunder and to the following
conditions:
4.1. Regulatory
Matters.
4.1.1. Effectiveness of
Registration Statement. The Registration Statement shall have become
effective not later than 5:00 p.m., New York time, on the date of this Agreement
or such later date and time as shall be consented to in writing by the
Representative, and, at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for the purpose shall have been instituted or shall be pending or
contemplated by the Commission and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of GM.
4.1.2. FINRA Clearance. By
the Effective Date, the Representative shall have received clearance from FINRA
as to the amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3. No Commission Stop
Order. At the Closing Date, the Commission has not issued any order or
threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any part thereof, and has not
instituted or, to the Company’s knowledge, threatened to institute any
proceedings with respect to such an order.
4.1.4. No Blue Sky Stop
Orders. No order suspending the sale of the Units in any jurisdiction
designated by the Representative pursuant to Section 3.3 hereof shall have been
issued on the Closing Date, and no proceedings for that purpose shall have been
instituted or shall be contemplated.
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4.1.5. OTC Bulletin Board
Quotation. The Public Securities shall have been approved for quotation
on the OTC Bulletin Board.
4.2. Company Counsel
Matters.
4.2.1. Closing Date Opinion of
Counsel. On the Closing Date, the Representative shall have received the
favorable opinions of Loeb & Loeb LLP and ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, each
dated as of the Closing Date, addressed to the Representative as representative
for the several Underwriters and in forms attached as Exhibits
A and B
hereto, respectively.
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 the Representative) of other
counsel reasonably acceptable to the Representative, familiar with the
applicable laws; and (ii) as to matters of fact, to the extent they deem proper,
on certificates or other written statements of officers of the Company and
officers of departments of various jurisdiction having custody of documents
respecting the corporate existence or good standing of the Company, provided
that copies of any such statements or certificates shall be delivered to the
Underwriters’ counsel if requested. The opinion of counsel for the Company and
any opinion relied upon by such counsel for the Company shall include a
statement to the effect that it may be relied upon by counsel for the
Underwriters in its opinion delivered to the Underwriters.
4.3. Cold Comfort Letter.
At the time this Agreement is executed, and at the Closing Date, the
Representative shall have received a letter, addressed to the Representative as
representative for the several Underwriters and in form and substance
satisfactory in all respects (including the non-material nature of the changes
or decreases, if any, referred to in clause (iii) below) to the Representative
and to GM from ▇▇▇▇▇▇ dated, respectively, as of the date of this Agreement and
as of the Closing Date:
(i)
Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during
the periods covered by the financial statements included in the Registration
Statement, the Statutory Prospectus and the Prospectus, provided to the Company
any non-audit services, as such term is used in Section 10A(g) of the Exchange
Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published Regulations thereunder;
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(iii) Stating
that, on the basis of a limited review which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the shareholders and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that: (a)
the unaudited financial statements of the Company included in the Registration
Statement, the Statutory Prospectus and the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements of the Act
and the Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements of the Company included in the
Registration Statement, the Statutory Prospectus and the Prospectus; or (b) at a
date not later than five days prior to the Effective Date or Closing Date, as
the case may be, there was any change in the capital stock or long-term debt of
the Company, or any decrease in the shareholders’ equity of the Company as
compared with amounts shown in the October 4, 2010 balance sheet included in the
Registration Statement, the Statutory Prospectus and the Prospectus, other than
as set forth in or contemplated by the Registration Statement, the Statutory
Prospectus and the Prospectus, or, if there was any decrease, setting forth the
amount of such decrease, and (c) during the period from October 4, 2010 to a
specified date not later than two (2) days prior to the Effective Date or
Closing Date, as the case may be, there was any decrease in revenues, net
earnings or net earnings per Ordinary Share, in each case as compared with the
corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement and the Prospectus, or, if there was
any such decrease, setting forth the amount of such decrease;
(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company;
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Statutory Prospectus
and the Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not during the immediately preceding five year period brought to
the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
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(vii) Statements
as to such other matters incident to the transaction contemplated hereby as the
Representative may reasonably request.
4.4. Officers’
Certificates.
4.4.1. Officers’
Certificate. As of the Closing Date, 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 (in their
capacities as such), 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
and that the conditions set forth in Section 4.5 hereof have been satisfied as
of such date and that, as of Closing Date, the representations and warranties of
the Company set forth in Section 2 hereof are true and correct. In addition, the
Representative will have received such other and further certificates of
officers of the Company as the Representative may reasonably
request.
4.4.2. Secretary’s
Certificate. As of the Closing Date, the Representative shall have
received a certificate of the Company signed by the Secretary or Assistant
Secretary of the Company, respectively, certifying: (i) that the Amended and
Restated Memorandum and Articles of Association 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.
4.5. No Material Changes.
Prior to the Closing Date: (i) there shall have been no material adverse change
or development involving a material adverse change in the condition or prospects
or the business activities, financial or otherwise, of the Company from the
latest dates as of which such condition is set forth in the Registration
Statement, the Statutory Prospectus and Prospectus; (ii) no action suit or
proceeding, at law or in equity, shall have been pending or threatened against
the Company or any Company Affiliate before or by any court or foreign, federal
or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except as
set forth in the Registration Statement, the Statutory Prospectus and
Prospectus; (iii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission;
and (iv) the Registration Statement, the Statutory Prospectus and the Prospectus
and any amendments or supplements thereto shall contain all material statements
which are required to be stated therein in accordance with the Act and the
Regulations and shall conform in all material respects to the requirements of
the Act and the Regulations, and none of the Registration Statement, the
Statutory Prospectus or the Prospectus, or any amendment or supplement thereto
shall contain any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Statutory Prospectus and Prospectus, in light of the
circumstances under which they were made), not misleading.
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4.6. Delivery of
Agreements.
4.6.1. Effective Date
Deliveries. On the Effective Date, the Company shall have delivered to
the Representative executed copies of the Escrow Agreement, the Trust Agreement,
the Services Agreement, the Warrant Agreement, the Subscription Agreements, the
Registration Rights Agreements and all of the Insider Letters.
4.6.2. Closing Date
Deliveries. On the Closing Date, the Company shall have delivered to the
Representative, the Representative’s Purchase Option and the Secondary Market
Trading Survey from GM.
4.7. Private Warrants. On
the Closing Date, the Private Investors shall have purchased the Private
Warrants and the purchase price for such Private Warrants shall be deposited
into the Trust Account.
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, to the fullest extent permitted by applicable law, each of the
Underwriters and each dealer selected by the Representative that participates in
the offer and sale of the Units (each a “Selected Dealer”) and each of
their respective directors, officers and employees and each person, if any, who
controls any such Underwriter or Selected Dealer (“Controlling Person”) within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
counsel, 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 foreign,
federal, state or local statute, law, rule, regulation or ordinance or at common
law or otherwise or under the laws, rules and regulation of foreign countries,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in (i) any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments or any new
registration statement and prospectus relating to any the securities of the
Company described herein; or (iii) any application or other document or written
communication (in this Section 5 collectively called “application”) executed by the
Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Units under the securities laws thereof or
filed with the Commission, any foreign or state securities commission or agency,
NASDAQ, the Amex, the OTC Bulletin Board 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 the Prospectus or any amendment or supplement thereof, or in any
application, as the case may be, which furnished written information, it is
expressly agreed, consists solely of the information described in the last
sentence of Section 2.3.1. With respect to any untrue statement or omission or
alleged untrue statement or omission made in the Preliminary Prospectus, the
indemnity agreement contained in this paragraph shall not inure to the benefit
of any Underwriter to the extent that any loss, liability, claim, damage or
expense of such Underwriter results from the fact that a copy of the Prospectus
was not given or sent to the person asserting any such loss, liability, claim or
damage at or prior to the written confirmation of sale of the Securities to such
person as required by the Act and the Regulations, and if the untrue statement
or omission has been corrected in the Prospectus, unless such failure to deliver
the Prospectus was a result of non-compliance by the Company with its
obligations under Section 3.4 hereof. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against the
Company or any of its officers, directors or controlling persons in connection
with the issue and sale of the Securities or in connection with the Preliminary
Prospectus, the Registration Statement or the Prospectus.
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5.1.2. Procedure. If any
action is brought against an Underwriter or controlling person in respect of
which indemnity may be sought against the Company pursuant to Section 5.1.1,
such Underwriter shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action,
including the employment and fees of counsel (subject to the reasonable approval
of such Underwriter) and payment of actual expenses. Such Underwriter or
controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless: (i) the employment of
such counsel at the expense of the Company shall have been authorized in writing
by the Company in connection with the defense of such action; (ii) the Company
shall not have employed counsel to have charge of the defense of such action; or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the
Underwriter and/or controlling person shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if the Underwriter or
controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of such
action which approval shall not be unreasonably withheld.
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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, and its counsel, 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 the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or in any application, in reliance upon, and in
strict conformity with, written information furnished to the Company with
respect to such Underwriter by or on behalf of the Underwriter expressly for use
in such Registration Statement, Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or in any such application, which furnished
written information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement, the Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
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5.3. Contribution.
5.3.1. Contribution Rights.
In order to provide for just and equitable contribution under the Act in any
case in which (i) any person entitled to indemnification under this Section 5
makes claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case notwithstanding the
fact that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required on the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company
is responsible for the balance; provided, that, no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 5.3.1, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay in respect of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Underwriters or the Company, as
applicable.
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5.3.2. Contribution
Procedure. Within fifteen days after receipt by any party to this
Agreement (or its representatives) 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 representatives of the commencement thereof
within the aforesaid fifteen days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section are intended to supersede, to
the extent permitted by law, any right to contribution under the Act, the
Exchange Act or otherwise available. The Underwriters’ obligations to contribute
pursuant to this Section 5.3 are several and not joint.
6. Default by an
Underwriter.
6.1. Default Not Exceeding 10% of
Firm Units. If any Underwriter or Underwriters shall default in its or
their obligations to purchase the Firm Units and if the number of the Firm Units
with respect to which such default relates does not exceed in the aggregate 10%
of the number of Firm Units that all Underwriters have agreed to purchase
hereunder, then such Firm 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. In the event that the default addressed in Section 6.1 above
relates to more than 10% of the Firm Units, the Representative may, in their
discretion, arrange for the Representative or for another party or parties to
purchase such Firm Units to which such default relates on the terms contained
herein. If within one (1) Business Day after such default relating to more than
10% of the Firm Units the Representative do not arrange for the purchase of such
Firm Units, then the Company shall be entitled to a further period of one (1)
Business Day within which to procure another party or parties satisfactory to
the Representative to purchase said Firm Units on such terms. In the event that
neither the Representative nor the Company arrange for the purchase of the Firm
Units to which a default relates as provided in this Section 6, this Agreement
may be terminated by the Representative or the Company without liability on the
part of the Company (except as provided in Sections 3.12 and 5 hereof) or the
several Underwriters (except as provided in Section 5 hereof); provided 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.
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6.3. Postponement of Closing
Date. In the event that the Firm Units to which the default relates are
to be purchased by the non-defaulting Underwriters, or are to be purchased by
another party or parties as aforesaid, the Representative or the Company shall
have the right to postpone the Closing Date for a reasonable period, but not in
any event exceeding five (5) Business Days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement and/or the
Prospectus, as the case may be, or in any other documents and arrangements, and
the Company agrees to file promptly any amendment to, or to supplement, the
Registration Statement and/or the Prospectus, as the case may be, that in the
opinion of counsel for the Underwriters may thereby be made necessary. The term
“Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Securities.
7. Additional
Covenants.
7.1. Additional Shares or
Options. The Company hereby agrees that until the Company consummates a
Business Combination, it shall not issue any Ordinary Shares or any options or
other securities convertible into Ordinary Shares or any shares of Preferred
Stock which participate in any manner in the Trust Account or which vote as a
class with the Ordinary Shares on a Business Combination.
7.2. Trust Account Waiver
Acknowledgments. The Company hereby agrees that it will not commence its
due diligence investigation of any 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 Account, initially in an
amount of $32,640,000 for the benefit of the Public Shareholders and that,
except for the interest earned on the amounts held in the Trust Account, the
Company may disburse monies from the Trust Account only: (i) to the Public
Shareholders in the event of the conversion of their shares or the dissolution
and liquidation of the Trust Account as part of the Company’s plan of
dissolution and liquidation, (ii) to purchase Ordinary Shares prior to the
consummation of a Business Combination in accordance with the Trust Agreement or
(iii) to the Company after it consummates a Business Combination, and (b) for
and in consideration of the Company (1) agreeing to evaluate such Target
Business for purposes of consummating a Business Combination with it or (2)
agreeing to engage the services of the vendor, as the case may be, such Target
Business or vendor agrees that it does not have any right, title, interest or
claim of any kind in or to any monies of the Trust Account (“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 Account for any reason whatsoever. The foregoing letters shall
substantially be in the form attached hereto as Exhibit
D and E,
respectively.
7.3. Insider Letters. The
Company shall not take any action or omit to take any action which would cause a
breach of any of the Insider Letters executed between each Company Affiliate and
the Representative and will not allow any amendments to, or waivers of, such
Insider Letters without the prior written consent of the
Representative.
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7.4. Amended and Restated
Memorandum and Articles of Association. The Company shall not take any
action or omit to take any action that would cause the Company to be in breach
or violation of its Amended and Restated Memorandum and Articles of
Association.
7.5. Tender Offer, Proxy and
Other Information. The Company shall provide the Representative with
copies of all proxy or tender offer documentation and other information and all
related material sent to Public Shareholders in connection with a Business
Combination. In addition, the Company shall furnish any other state in which the
Offering was registered, such information as may be requested by such
state.
7.6. Acquisition/Liquidation of
Trust Account Procedure. The Company agrees that it will comply with
Articles ___ through ___ of its Amended and Restated Memorandum and Articles of
Association in connection with the consummation of a Business Combination or the
failure to consummate a Business Combination within 18 months from the Effective
Date (subject to extension for an additional six-month period, as described in
the Prospectus) (either such date being referred to as the “Termination
Date”).
7.7. Rule 419. The Company
agrees that it will use its best efforts to prevent the Company from becoming
subject to Rule 419 under the Act prior to the consummation of any Business
Combination, including, but not limited to, using its best efforts to prevent
any of the Company’s outstanding securities from being deemed to be a “▇▇▇▇▇
stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8. Presentation of Potential
Target Businesses. The Company shall cause each of the Company Affiliates
to agree that, in order to minimize potential conflicts of interest which may
arise from multiple affiliations, the Company Affiliates 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 Trust Account or until such time as the Company Affiliates
cease to be affiliates of the Company, subject to any pre-existing fiduciary
obligations the Company Affiliates might have.
8. Representations and
Agreements to Survive Delivery. Except as the context otherwise requires,
all representations, warranties and agreements contained in this Agreement shall
be deemed to be representations, warranties and agreements at the Closing Date
or Option Closing Date, as applicable, 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 (7th) anniversary of the later of the Closing Date,
at which time the representations, warranties and agreements shall terminate and
be of no further force and effect.
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9. Effective Date of This
Agreement and Termination Thereof.
9.1. Effective Date. This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
9.2. Termination. The
Representative shall have the right to terminate this Agreement at any time
prior to any Closing Date: (i) if any domestic or international event or act or
occurrence has materially disrupted or, in the Representative’s sole 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 Amex,
NASDAQ or on the 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 OTC Bulletin
Board or by order of the Commission or any other government authority having
jurisdiction, or (iii) if the United States shall have become involved in a war
or an increase in existing major hostilities, or (iv) if a banking moratorium
has been declared by a New York State or federal authority, or (v) if a
moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or
not such loss shall have been insured, will, in the Representative’s sole
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 a Material Adverse Effect on 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 sole
judgment would make it impracticable to proceed with the offering, sale and/or
delivery of the Units or to enforce contracts made by the Underwriters for the
sale of the Units.
9.3. Expenses. In the
event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the terms
herein, the obligations of the Company to pay the out of pocket expenses related
to the transactions contemplated herein shall be governed by Section 3.12
hereof.
9.4. Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
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10. Miscellaneous.
10.1. Notices. All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered by hand or reputable
overnight courier, delivered by facsimile transmission (with printed
confirmation of receipt) and confirmed, or by electronic transmission via PDF
and shall be deemed given when so mailed, delivered, or faxed or transmitted (or
if mailed, two days after such mailing):
If to the
Representative:
EarlyBirdCapital,
Inc.
▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax No.:
___________
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
With a
copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
If to the
Company, to:
Lone Oak
Acquisition Corporation
▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇
Fax No.:
___________
Attn:
▇▇▇▇▇ ▇▇▇▇▇
Email:
With a copy (which shall not constitute
notice) to:
Loeb
& Loeb, LLP
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Email:
▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
EarlyBirdCapital,
Inc.
____________,
2011
Page 42
of 45
10.2. Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.
10.3. Amendment. This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
10.4. Entire Agreement.
This Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
10.5. Binding Effect. This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provisions herein
contained.
10.6. Governing Law, Venue,
etc.
10.6.1. In
connection with Section 5-1401 of the General Obligations Law of the State of
New York, this Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to principles of conflicts of
law that would result in the application of the substantive law of another
jurisdiction. The parties hereto agree that any action, proceeding or claim
arising out of or relating in any way to this Agreement shall be resolved
through final and biding arbitration in accordance with the International
Arbitration Rules of the American Arbitration Association (“AAA”). The
arbitration shall be brought before the AAA International Center for Dispute
Resolution’s offices in New York City, New York, will be conducted in English
and will be decided by a panel of three arbitrators selected from the AAA
Commercial Disputes Panel and that the arbitrator panel’s decision shall be
final and enforceable by any court having jurisdiction over the party from whom
enforcement is sought. The cost of such arbitrators and arbitration services,
together with the prevailing party’s legal fees and expenses, shall be borne by
the non-prevailing party or as otherwise directed by the arbitrators. The
Company hereby appoints, without power of revocation, Loeb & Loeb, LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq., as their respective agent to accept and acknowledge on its behalf
service of any and all process which may be served in any arbitration, action,
proceeding or counterclaim in any way relating to or arising out of this
Agreement. The Company further agrees to take any and all action as may be
necessary to maintain such designation and appointment of such agent in full
force and effect for a period of seven years from the date of the Effective
Date.
EarlyBirdCapital,
Inc.
____________,
2011
Page 43
of 45
10.6.2. THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.3. 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.
10.7. Execution in
Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement, and shall become effective when one or
more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto. Delivery of a signed counterpart of this
Agreement by fax or email/.pdf transmission shall constitute valid and
sufficient delivery thereof.
10.8. Waiver, etc. The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver of
any such provision, nor to in any way effect the validity of this Agreement or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought; and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
10.9. No Fiduciary
Relationship. The Company hereby acknowledges that the Underwriters are
acting solely as underwriters in connection with the offering of the Company's
securities. The Company further acknowledges that the Underwriters are acting
pursuant to a contractual relationship created solely by this Agreement entered
into on an arm's length basis and in no event do the parties intend that the
Underwriters act or be responsible as a fiduciary to the Company, its
management, shareholders, creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance
of the offering of the Company's securities, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or similar
obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that effect.
The Company and the Underwriters agree that they are each responsible for making
their own independent judgments with respect to any such transactions, and that
any opinions or views expressed by the Underwriters to the Company regarding
such transactions, including but not limited to any opinions or views with
respect to the price or market for the Company's securities, do not constitute
advice or recommendations to the Company. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Underwriters with respect to any breach or alleged breach
of any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such
transactions.
[Signature
Page Follows]
EarlyBirdCapital,
Inc.
____________,
2011
Page 44
of 45
If the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
|
Very
Truly Yours,
|
||
|
LONE
OAK ACQUISITION CORPORATION
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Agreed
to and accepted
as
of the date first written above:
EARLYBIRDCAPITAL, INC., as
Representative of the several Underwriters
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
[Signature
Page to Underwriting Agreement, dated ____________, 2011]
SCHEDULE
A
LONE
OAK ACQUISITION CORPORATION
4,000,000
Units
|
Underwriter
|
Number of Firm Units
to be Purchased
|
|
|
TOTAL
|
4,000,000
|