12,500,000 Units
▇▇▇▇▇▇▇▇▇ Ventures Ltd.
UNDERWRITING AGREEMENT
----------------------
New York, New York
____________, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇▇ Ventures Ltd., a Delaware corporation (the "Company"),
proposes to sell to Banc of America Securities LLC (the "Underwriter") an
aggregate of 12,500,000 units (the "Units"), with each unit consisting of one
share of the Company's common stock, $.001 par value (the "Common Stock"), and
one warrant (the "Warrants") to purchase Common Stock (the "Firm Units"). The
Company also proposes to sell at the Underwriter's option an aggregate of up to
1,250,000 additional units of the Company (the "Option Units" and together with
the Firm Units, the "Units") as set forth below. The terms of the Warrants are
provided for in the form of the Warrant Agreement (defined herein). The Units,
the Common Stock, the Warrants and the Common Stock underlying the Warrants are
herein collectively called the "Securities."
The shares of Common Stock and the Warrants included in the Units
will not be separately transferable until five business days following the
earlier of the expiration or termination of the Underwriter's over-allotment
option (as described below) or the exercise in full of such option, subject to
(a) 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 such
audited balance sheet with the Securities and Exchange Commission (the
"Commission") on a Form 8-K or similar form by the Company which includes such
balance sheet and (b) the Company issuing a press release announcing when such
separate trading will begin. Each Warrant entitles its holder, upon exercise, to
purchase one share of Common Stock for $6.00 during the period commencing on the
later of the consummation by the Company of its "Business Combination" or one
year from the Effective Date of the Registration Statement and terminating on
the four-year anniversary of the Effective Date. As used herein, the term
"Business Combination" (as described more fully in the Registration Statement)
shall mean the Company's initial acquisition of one or more operating businesses
through a merger, capital stock exchange, stock purchase, asset acquisition or
other similar business combination in the communications, media or technology
industries.
The Underwriter has agreed to reserve up to 600,000 of the Units
to be purchased by it under this Agreement for sale to persons who are friends,
directors or officers of the Company (collectively, "Participants"), as set
forth in the Prospectus (as defined below) under the heading "Underwriting" (the
"Directed Unit Program"). The Units to be sold by the Underwriter pursuant to
the Directed Unit Program are referred to hereinafter as the "Directed Units."
Any Directed Unit not orally confirmed for purchase by any Participant by the
end of the business day on which this Agreement is executed will be offered to
the public by the Underwriter as set forth in the Prospectus.
The Company has entered into an Investment Management Trust
Agreement, dated as of the date hereof, with JPMorgan Chase Bank, NA (the
"Trustee"), as trustee, in substantially the form filed as an exhibit to the
Registration Statement (the "Trust Agreement"), pursuant to which certain
proceeds of the offering of the Securities will be deposited and held in a trust
account (the "Trust Account") for the benefit of the Company and holders of the
Firm Units and the Option Units, if and when issued.
The Company has entered into a Warrant Agreement, dated as of the
date hereof, with respect to the Warrants with Continental Stock Transfer &
Trust Company (the "Warrant Agent"), as warrant agent, in substantially the form
filed as an exhibit to the Registration Statement (the "Warrant Agreement"),
pursuant to which the Warrant Agent will act as warrant agent in connection with
the issuance, registration, transfer, exchange, redemption and exercise of the
Warrants and the Private Placement Warrants.
The Company has entered into Amended and Restated Subscription
Agreements, effective as of July 6, 2006 (the "Subscription Agreements"), with
▇▇▇▇▇▇▇▇▇ Capital Partners LLC ("CCP"), ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ (the "Initial Stockholders"), pursuant to which the Initial
Stockholders have purchased an aggregate of 3,125,000 shares of Common Stock
(the "Founder Shares") at an aggregate price of $15,625.
The Company has entered into a Warrant Purchase Agreement, dated
as of September 5, 2006, and a Supplemental Warrant Purchase Agreement, dated as
of February 9, 2007 (collectively, the "Warrant Purchase Agreement"), with CCP,
pursuant to which CCP has agreed to purchase an aggregate of 5,000,000 Warrants
(the "Private Placement Warrants") for a price per Warrant of $1.00, for a total
of $5,000,000, in a private placement to be completed prior to the offering of
the Units (the "Private Placement"). The Private Placement Warrants possess
terms identical to the Warrants underlying the Units sold to the public in the
offering except with respect to the redemption thereof and certain transfer
restrictions applicable thereto, as set forth in the Warrant Purchase Agreement.
The Company has entered into an agreement (the "Services
Agreement") with CCP, the Company's principal stockholder, pursuant to which the
Company will pay an aggregate monthly fee of $7,500 for general and
administrative services, including office space, utilities and secretarial
support for a period of up to twenty-four (24) months following the Effective
Date, terminating upon the completion of a Business Combination.
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The Company has entered into a Registration Rights Agreement,
dated as of the date hereof, in substantially the form filed as an exhibit to
the Registration Statement (the "Registration Rights Agreement"), pursuant to
which the Company has granted certain registration rights in respect of the
Founder Shares, the Private Placement Warrants and the Common Stock underlying
the Private Placement Warrants.
The Company has caused to be duly executed and delivered letters
by each Initial Stockholder and each of the Company's directors, officers and
special advisors, filed as exhibits to the Registration Statement (as the same
may be amended or supplemented from time to time, the "Insider Letters"),
pursuant to which each of the Initial Stockholders and each of the Company's
directors, officers and special advisors agrees to certain matters, including
but not limited to, certain matters relating to the voting of shares of Common
Stock owned by them, if any, and certain other matters described as being agreed
to by them under the "Proposed Business" section of the Statutory Prospectus (as
defined below) and the Prospectus.
In consideration of the mutual agreements contained herein and of
the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Underwriter as follows:
(a) A registration statement on Form S-1 (File No.
333-135741) with respect to the Securities has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and has been
filed with the Commission. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore been
delivered by the Company to the Underwriter. Such registration statement,
together with any registration statement filed by the Company pursuant to Rule
462(b) under the Act, is herein referred to as the "Registration Statement,"
which shall be deemed to include all information omitted therefrom in reliance
upon Rules 430A or 430C under the Act and contained in the Prospectus referred
to below, has become effective under the Act and no post-effective amendment to
the Registration Statement has been filed as of the date of this Agreement.
"Prospectus" means the form of prospectus first filed with the Commission
pursuant to and within the time limits described in Rule 424(b) under the Act.
Each preliminary prospectus included in the Registration Statement prior to the
time it becomes effective is herein referred to as a "Preliminary Prospectus."
Any reference herein to the Registration Statement, any Preliminary Prospectus
or to the Prospectus or to any amendment or supplement to any of the foregoing
documents shall be deemed to refer to and include any documents incorporated by
reference therein, and, in the case of any reference herein to the Prospectus,
also shall be deemed to include any documents incorporated by reference therein,
and any supplements or amendments thereto, filed with the Commission after the
date of filing of the Prospectus under Rule 424(b) under the Act, and prior to
the termination of the offering of the Securities by the
3
Underwriter. The Company has filed with the Commission a Form 8-A (File Number
001-____) providing for the registration under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), of the Securities.
(b) The Units, the Warrants and the Common Stock have
been duly listed, and admitted and authorized for trading, subject only to
official notice of issuance, on the American Stock Exchange, and the Company
knows of no reason or set of facts which is likely to adversely affect such
approval. Neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus relating to the proposed offering of the Securities or has instituted
or, to the Company's knowledge, threatened to institute any proceedings with
respect to such an order. Neither the Commission nor any state regulatory
authority has issued any order preventing or suspending the effectiveness of the
Registration Statement and no proceeding for that purpose or pursuant to Section
8A of the Act has been instituted or is pending or is contemplated or threatened
by the Commission.
(c) As of the Applicable Time (as defined below) and as
of the Closing Date or the Option Closing Date (each such term as defined
below), as the case may be, the Statutory Prospectus (as defined below) and the
information included in Schedule I hereto all included together (collectively,
the "General Disclosure Package") did not and will not include any untrue
statement of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from the General Disclosure Package, in reliance upon,
and in conformity with, written information furnished to the Company by or on
behalf of the Underwriter, specifically for use therein, it being understood and
agreed that the only such information is that described in Section 12 herein. As
used in this subsection and elsewhere in this Agreement:
(i) "Applicable Time" means ______ [a/p]m (New
York time) on the date of this Agreement or such other time as
agreed to by the Company and the Underwriter.
(ii) "Statutory Prospectus" as of any time means
the Preliminary Prospectus relating to the Securities that is
included in the Registration Statement immediately prior to that
time.
(d) The agreements and documents described in the
Registration Statement, the Statutory Prospectus and the Prospectus conform, to
the extent described therein, in all material respects to the descriptions
thereof contained therein. There is no franchise, contract or other document of
a character required to be described in the Registration Statement, Statutory
Prospectus or Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required (and the Statutory Prospectus contains in all
material respects the same description of the foregoing matters contained in the
Prospectus); and the statements in the Statutory Prospectus and the Prospectus
under the headings "Principal Stockholders," "Certain
4
Relationships and Related Transactions," "Description of Securities" and "Legal
Matters" insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings.
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus. The Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such qualification.
The Company has no subsidiaries, direct or indirect.
(f) The information set forth under the caption
"Capitalization" in the Registration Statement and the Prospectus is true and
correct. All of the Securities conform to the description thereof contained in
the Registration Statement and the Prospectus. The form of certificates for the
Securities are in valid and sufficient form.
(g) All issued and outstanding shares of Common Stock
have been duly and validly authorized and issued and are fully paid and
nonassessable. The offers and sales of the outstanding Common Stock were at all
relevant times either registered under the Act, the applicable state securities
and Blue Sky laws or, based in part on the representations and warranties of the
purchasers of such shares of Common Stock, exempt from such registration
requirements. The holders of outstanding shares of capital stock of the Company
are not entitled to preemptive or other rights to subscribe for securities; and,
except as set forth in the Statutory Prospectus and the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are outstanding.
(h) The Common Stock included in the Units has been duly
authorized and, when executed by the Company and countersigned, and issued and
delivered against payment therefor by the Underwriter pursuant to this
Agreement, will be validly issued, fully paid and non-assessable. The holders of
such Common Stock are not and will not be subject to personal liability by
reason of being such holders; such Common Stock is not and will not be subject
to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance
and sale of such Common Stock (other than such execution, countersignature and
delivery at the time of issuance) has been duly and validly taken.
(i) The Warrants included in the Units, when executed,
authenticated, issued and delivered in the manner set forth in the Warrant
Agreement against payment therefor by the Underwriter pursuant to this
Agreement, will be duly authorized, duly executed, authenticated, issued and
delivered, and will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws
affecting
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creditors' rights generally from time to time in effect and by equitable
principles of general applicability.
(j) The shares of Common Stock issuable upon exercise of
the Warrants included in the Units have been duly authorized and, when executed
by the Company and countersigned and issued and delivered against payment
therefor pursuant to the Warrants and the Warrant Agreement, will be validly
issued, fully paid and non-assessable. The holders of such Common Stock are not
and will not be subject to personal liability by reason of being such holders;
such Common Stock is not and will not be subject to any preemptive or other
similar contractual rights granted by the Company; and all corporate action
required to be taken for the authorization, issuance and sale of such Common
Stock (other than such execution, countersignature and delivery at the time of
issuance) has been duly and validly taken.
(k) The Initial Stockholders have waived any and all
rights and claims they may have with respect to the Founder Shares to
participate in any distributions occurring upon the Company's failure to
consummate a Business Combination.
(l) The execution and delivery of, and the performance
by the Company of its obligations under, this Agreement has been duly and
validly authorized by all necessary corporate action on the part of the Company,
and this Agreement has been duly executed and delivered by the Company.
(m) The Trust Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally from time to time in effect
and by equitable principles of general applicability.
(n) The Warrant Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally from time to time in effect
and by equitable principles of general applicability.
(o) The Warrant Purchase Agreement has been duly
authorized, executed and delivered by the Company and CCP, and is a valid and
binding agreement of the Company and CCP, enforceable against the Company and
CCP in accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally from time to time in effect and by equitable principles of general
applicability. The entire $5,000,000 of proceeds from the sale of the Private
Placement Warrants has been deposited in the Trust Account in accordance with
the terms of the Warrant Purchase Agreement.
(p) Each Subscription Agreement has been duly
authorized, executed and delivered by the Company and the Initial Stockholders,
and is a valid and binding agreement
6
of the Company and the Initial Stockholders, enforceable against the Company and
the Initial Stockholders in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally from time to time in effect and by
equitable principles of general applicability.
(q) The Services Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally from time to time in effect
and by equitable principles of general applicability.
(r) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally from time to
time in effect and by equitable principles of general applicability.
(s) Each of the Insider Letters has been duly
authorized, executed and delivered by each of the individuals party thereto and
is a valid and binding agreement of each of such parties, enforceable against
each of them in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally from time to time in effect and by equitable principles of
general applicability.
(t) The Registration Statement contains, and the
Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform to, the
requirements of the Act and the Rules and Regulations. Neither the Commission
nor any state regulatory authority has issued an order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus relating to the proposed
offering of the Units, and no proceeding for that purpose or pursuant to Section
8A of the Act has been instituted or to the Company's knowledge, threatened by
the Commission or any state regulatory authority. Neither the Commission nor any
state regulatory authority has issued any order preventing or suspending the
effectiveness of the Registration Statement and no proceeding for that purpose
or pursuant to Section 8A of the Act has been instituted or is pending or is
contemplated or threatened by the Commission. The Registration Statement and any
amendment thereto do not contain, and will not contain, any untrue statement of
a material fact and do not omit, and will not omit, to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendments and supplements thereto do not
contain, and will not contain, any untrue statement of a material fact; and do
not omit, and will not omit, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement,
in reliance upon, and in conformity with, written information furnished to the
7
Company by or on behalf of the Underwriter, specifically for use therein, it
being understood and agreed that the only such information is that described in
Section 12 herein.
(u) The Company has not, directly or indirectly,
distributed and will not distribute any offering material in connection with the
offering and sale of the Units other than any Preliminary Prospectus and the
Prospectus.
(v) The financial statements of the Company, together
with related notes and schedules as set forth in the Registration Statement and
the Prospectus, present fairly the financial position and the results of
operations and cash flows of the Company at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting
("GAAP"), consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected financial and
statistical data included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein and
such data has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company. The pro forma
financial statements and other pro forma financial information included in the
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein. The Company does not have any material
liabilities or obligations, direct or contingent (including any off balance
sheet obligations or any "variable interest entities" within the meaning of
Financial Accounting Standards Board Interpretation No. 46), not disclosed in
the Registration Statement and the Prospectus. There are no financial statements
(historical or pro forma) that are required to be included in the Registration
Statement or the Prospectus that are not included as required.
(w) ▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇"), who has certified the
financial statements that are filed with the Commission as part of the
Registration Statement and the Prospectus, is an independent registered public
accounting firm with respect to the Company within the meaning of the Act and
the applicable Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the "PCAOB"). ▇▇▇▇▇▇ has not, during the periods covered
by the financial statements included in 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.
(x) The Company is not aware of (i) any material
weakness in its internal control over financial reporting or (ii) change in
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
(y) Solely to the extent that the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, as amended, and the rules and regulations promulgated by the Commission
and the American Stock
8
Exchange thereunder (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act") is applicable to the Company,
there is and has been no failure on the part of the Company to comply in all
material respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company has
taken all necessary actions to ensure that it is in compliance with all
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that are in effect and with which the
Company is required to comply and is actively taking steps to ensure that it
will be in compliance with other provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not
currently in effect or which will become applicable to the Company.
(z) The Company has good and marketable title to all of
the properties and assets reflected in the financial statements hereinabove
described or described in the Registration Statement and the Prospectus, subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements or described in the Registration
Statement and the Prospectus or which are not material in amount. The Company
occupies its leased properties under valid and binding leases.
(aa) The Company has filed all Federal, State, local and
foreign tax returns which have been required to be filed and have paid all taxes
indicated by such returns and all assessments received by it to the extent that
such taxes have become due. All tax liabilities have been adequately provided
for in the financial statements of the Company, and the Company does not know of
any actual or proposed additional material tax assessments.
(bb) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, as each may be
amended or supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or affecting the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise), or prospects of the Company, whether or not
occurring in the ordinary course of business, and there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Company, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement and the Prospectus, as each may be amended or supplemented. The
Company has no material contingent obligations which are not disclosed in the
Company's financial statements which are included in the Registration Statement
and the Prospectus.
(cc) There is no action, suit, claim or proceeding
pending, or to the knowledge of the Company threatened, against the Company or,
pending, or to the knowledge of the Company threatened, against any of the
Company's stockholders immediately prior to the offering of the Units, before
any court or administrative agency or otherwise which if determined adversely to
the Company would either (i) have, individually or in the aggregate, a material
adverse effect on the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company or (ii) prevent the consummation of the transactions contemplated hereby
(the occurrence of any such effect or any such prevention described in the
foregoing clauses (i) and (ii) being referred to as a "Material Adverse
Effect"), except as set forth in the Registration Statement and the Prospectus.
9
(dd) The Company is not, nor with the giving of notice or
lapse of time or both, will it be, (i) in violation of its certificate of
incorporation, by-laws or other organizational documents or (ii) in violation of
or in default under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any of its
properties, is bound and, solely with respect to this clause (ii), which
violation or default would have a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party or by which the Company or any of its properties
is bound, or of the certificate of incorporation or by-laws of the Company or
any law, order, rule or regulation judgment, order, writ or decree applicable to
the Company of any court or of any government, regulatory body or administrative
agency or other governmental body having jurisdiction.
(ee) The Company possesses all licenses, certificates,
permits and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its business, and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
(ff) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement, the Trust Agreement, the Warrant Agreement,
the Subscription Agreements, the Warrant Purchase Agreement, the Registration
Rights Agreement, the Services Agreement and the Insider Letters and the
consummation of the transactions herein contemplated (except such additional
steps as may be required by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD"), or such additional steps as may be
necessary to qualify the Securities for public offering by the Underwriter under
state securities or Blue Sky laws) has been obtained or made and is in full
force and effect.
(gg) Neither the Company nor any of its affiliates, has
taken or may take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Securities.
(hh) The Company is not nor, after giving effect to the
offering and sale of the Securities contemplated hereunder and the application
of the net proceeds from such sale as described in the Prospectus, will not be
an "investment company" within the meaning of such term under the Investment
Company Act of 1940 as amended (the "1940 Act"), and the rules and regulations
of the Commission thereunder.
(ii) The Company maintains 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 to permit preparation
of financial statements in conformity with GAAP and to maintain
10
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.
(jj) The Company has established and maintains
"disclosure controls and procedures" (as defined in Rules 13a-14(c) and
15d-14(c) under the Exchange Act); the Company's "disclosure controls and
procedures" are reasonably designed to ensure that all information (both
financial and non-financial) required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and
regulations of the Exchange Act, and that all such information is accumulated
and communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the
Chairman and Chief Financial Officer of the Company required under the Exchange
Act with respect to such reports.
(kk) The statistical, industry-related and market-related
data included in the Registration Statement, the General Disclosure Package and
the Prospectus are based on or derived from sources which the Company reasonably
and in good faith believes are reliable and accurate, and such data agree with
the sources from which they are derived.
(ll) The operations of the Company are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the "Money Laundering Laws"),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the Company's knowledge, threatened.
(mm) Neither the Company nor any director, officer,
agent, employee or affiliate of the Company is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department ("OFAC"); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(nn) The Company carries, or is covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for companies
engaged in similar businesses.
(oo) The Securities have been approved for listing
subject to notice of issuance on the American Stock Exchange.
11
(pp) There are no relationships or related-party
transactions involving the Company or any other person required to be described
in the Prospectus which have not been described as required.
(qq) The Company has not made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law which violation is required to be disclosed in
the Prospectus.
(rr) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those obtained,
is required in connection with the offering of the Directed Units in any
jurisdiction where the Directed Units are being offered.
(ss) The Company has not offered, or caused the
Underwriter or its affiliates to offer, Units to any person pursuant to the
Directed Unit Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's level
or type of business with the Company, or (ii) a trade journalist or publication
to write or publish favorable information about the Company or its products.
(tt) The execution, delivery, and performance by the
Company of this Agreement, the Warrant Agreement, the Trust Agreement, the
Subscription Agreements, the Warrant Purchase Agreement, the Registration Rights
Agreement and the Services Agreement, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under,
or result in the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to the
terms of any agreement or instrument to which the Company is a party except
pursuant to the Trust Agreement; (ii) result in any violation of the provisions
of the certificate of incorporation or the by-laws of the Company; or (iii)
violate any existing applicable law, rule, regulation, judgment, order or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or business.
(uu) All information contained in the questionnaires
completed by the Initial Stockholders and the directors, officer and special
advisors and provided to the Underwriter as an exhibit to his or her Insider
Letter is true and correct in all material respects and the Company has not
become aware of any information which would cause the information disclosed in
the questionnaires completed by each Initial Stockholder, director, officer and
special advisor to become inaccurate and incorrect in any material respect.
(vv) Except as described in the Statutory Prospectus and
the Prospectus, there are no claims, payments, arrangements, contracts,
agreements or understandings relating to the payment of a brokerage commission
or finder's, consulting, origination or similar fee by the Company or any
Initial Stockholder with respect to the sale of the Securities hereunder or any
other arrangements, agreements or understandings of the Company or any Initial
Stockholder
12
that may affect the Underwriter's compensation, as determined by the National
Association of Securities Dealers, Inc. (the "NASD").
(ww) Except as disclosed in the Registration Statement
and the Prospectus, no Initial Stockholder, employee, officer or director of the
Company is subject to any non-competition or non-solicitation agreement with any
employer or prior employer which could materially adversely affect his ability
to be an Initial Stockholder, employee, officer and/or director of the Company.
(xx) The Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any person, as a finder's
fee, consulting fee or otherwise, in consideration of such person raising
capital for the Company or introducing to the Company persons who raised or
provided capital to the Company; (ii) to any NASD member; or (iii) to any person
or entity that has any direct or indirect affiliation or association with any
NASD member, within the 12 months prior to the Effective Date.
(yy) None of the net proceeds of the offering will be
paid by the Company to any participating NASD member or its affiliates, except
as specifically authorized herein or except as may be paid in connection with an
initial Business Combination and/or one or more other transactions after the
initial Business Combination, including without limitation in connection with
the payment of investment banking fees, fees in connection with fairness
opinions and the like.
(zz) Based on questionnaires distributed to such persons,
no officer, director or any beneficial owner of the Company's unregistered
securities has any direct or indirect affiliation or association with any NASD
member. The Company will advise the Underwriter if it learns that any officer or
director is or becomes an affiliate or associated person of an NASD member
participating in the offering.
(aaa) There are no business relationships or related party
transactions involving the Company or any other person required to be described
in the Registration Statement and the Prospectus that have not been described as
required.
(bbb) Upon delivery and payment for the Firm Units on the
Closing Date, the Company will not be subject to Rule 419 under the Act and none
of the Company's outstanding securities will be deemed to be a "▇▇▇▇▇ stock" as
defined in Rule 3a-51-1 under the Exchange Act.
(ccc) The Company does not have any specific Business
Combination under consideration and the Company does not (nor has anyone on its
behalf) contacted any prospective acquisition candidate or had any discussions,
formal or otherwise, with respect to such a transaction.
13
(ddd) The Company has not prepared or used an Issuer Free
Writing Prospectus, as such term is defined in Rule 433 under the Act in
connection with the offering of the Units.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SECURITIES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriter and the Underwriter agrees to
purchase, at a price of $7.72 per unit (including $0.28 per Option Unit to be
held in the Trust Account as deferred discount to be paid to the Underwriter
upon consummation of the initial Business Combination), the number of Firm Units
subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Units to be sold hereunder is
to be made in Federal (same day) funds against delivery of certificates therefor
to the Underwriter. Such payment and delivery are to be made through the
facilities of The Depository Trust Company, New York, New York ("DTC") at 10:00
a.m., New York time, on the third business day after the date of this Agreement
(or the fourth business day following the date of this Agreement, if the
Registration Statement is declared effective after 4:30 p.m., New York time) or
at such other time and date not later than five business days thereafter as the
Underwriter and the Company shall agree upon, such time and date being herein
referred to as the "Closing Date." (As used herein, "business day" means a day
on which the New York Stock Exchange is open for trading and on which banks in
New York are open for business and are not permitted by law or executive order
to be closed.) Payment for the Firm Units shall be made on the Closing Date by
wire transfer in Federal (same day) funds, as follows: ninety-five million
dollars ($95,000,000) (without giving effect to the over-allotment option) of
the proceeds received by the Company for the Firm Units shall be deposited in
the Trust Account (including three million five hundred thousand dollars
($3,500,000) of which to be held in the Trust Account as deferred discount to be
paid to the Underwriter upon consummation of the initial Business Combination)
and the remaining one million five hundred thousand dollars ($1,500,000)
(representing $950,000 of the proceeds not required to be held in the trust
account and $550,000 of offering expenses) of the proceeds shall be paid to the
Company upon delivery to the Underwriter of certificates (in form and substance
satisfactory to the Underwriter) representing the Firm Units (or through the
facilities of DTC) for the account of the Underwriter. The Firm Units shall be
registered in such name or names and in such authorized denominations as the
Underwriter may request in writing at least two full business days prior to the
Closing Date. The Company will permit the Underwriter to examine and package the
Firm Units for delivery at least one full business day prior to the Closing
Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriter to purchase the
Option Units at the price per unit as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) [ONLY
ONCE] thereafter within 30 days after the date of this Agreement, by the
Underwriter, to the Company
14
setting forth the number of Option Units as to which the Underwriter is
exercising the option and the time and date at which such certificates are to be
delivered. The time and date at which certificates for Option Units are to be
delivered shall be determined by the Underwriter but shall not be earlier than
three nor later than 10 full business days after the exercise of such option,
nor in any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of the option
is three or more days before the Closing Date, the notice of exercise shall set
the Closing Date as the Option Closing Date. The option with respect to the
Option Units granted hereunder may be exercised only to cover over-allotments in
the sale of the Firm Units by the Underwriter. The Underwriter may cancel such
option at any time prior to its expiration by giving written notice of such
cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Units shall be made on the Option Closing Date
in Federal (same day funds) through the facilities of DTC drawn to the order of
the Company. Payment for the Option Units shall be made on the Option Closing
Date by wire transfer in Federal (same day) funds, as follows: $7.72 per Option
Unit sold shall be deposited in the Trust Account pursuant to the Trust
Agreement (including $0.28 per Option Unit to be held in the Trust Account as
deferred discount to be paid to the Underwriter upon consummation of the initial
Business Combination) upon delivery to the Underwriter of certificates (in form
and substance satisfactory to the Underwriter) representing the Option Units
sold (or through the facilities of DTC) for the account of the Underwriter.
3. OFFERING BY THE UNDERWRITER.
It is understood that the Underwriter is to make a public offering
of the Firm Units as soon as the Underwriter deems it advisable to do so. The
Firm Units are to be initially offered to the public at the initial public
offering price set forth in the Prospectus. The Underwriter may from time to
time thereafter change the public offering price and other selling terms.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Underwriter that:
(a) The Company will (A) prepare and timely file with
the Commission under Rule 424(b) under the Act a Prospectus in a form approved
by the Underwriter containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rules 430A and 430C
under the Act, and (B) not file any amendment to the Registration Statement or
distribute an amendment or supplement to the Prospectus of which the Underwriter
shall not previously have been advised and furnished with a copy or to which the
Underwriter shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Securities by the Underwriter.
15
(b) The Company will advise the Underwriter promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, and (D) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the institution of any
proceedings for that purpose or pursuant to Section 8A of the Act. The Company
will use its best efforts to prevent the issuance of any such order and to
obtain as soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Underwriter in
endeavoring to qualify the Securities for sale under the securities laws of such
jurisdictions as the Underwriter may reasonably have designated in writing and
will make such applications, file such documents, and furnish such information
as may be reasonably required for that purpose, provided the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent. The Company will, from time to time, prepare
and file such statements, reports, and other documents, as are or may be
required to continue such qualifications in effect for so long a period as the
Underwriter may reasonably request for distribution of the Securities.
(d) The Company will deliver to, or upon the order of,
the Underwriter, from time to time, as many copies of any Preliminary Prospectus
as the Underwriter may reasonably request. The Company will deliver to, or upon
the order of, the Underwriter during the period when delivery of a Prospectus
(or, in lieu thereof, the notice referred to under Rule 173(a) under the Act)
(the "Prospectus Delivery Period") is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as the
Underwriter may reasonably request. The Company will deliver to the Underwriter
at or before the Closing Date, four signed copies of the Registration Statement
and all amendments thereto including all exhibits filed therewith, and will
deliver to the Underwriter such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), and of all amendments thereto, as the Underwriter may
reasonably request.
(e) The Company will comply with the Act and the Rules
and Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Units as contemplated in this Agreement and the Prospectus. If during the period
in which a prospectus (or, in lieu thereof, the notice referred to under Rule
173(a) under the Act) is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriter, it becomes necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or,
if it is necessary at any time to amend or supplement the Prospectus to comply
with any law, the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
16
Prospectus so that the Prospectus as so amended or supplemented will not be
misleading, or so that the Prospectus will comply with the law.
(f) If the General Disclosure Package is being used to
solicit offers to buy the Units at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of the
Underwriter, it becomes necessary to amend or supplement the General Disclosure
Package in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to make the
statements therein not conflict with the information contained in the
Registration Statement then on file, or if it is necessary at any time to amend
or supplement the General Disclosure Package to comply with any law, the Company
promptly will prepare, file with the Commission (if required) and furnish to the
Underwriter and any dealers an appropriate amendment or supplement to the
General Disclosure Package.
(g) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 under the Act and will
advise the Underwriter in writing when such statement has been so made
available.
(h) Prior to the Closing Date, the Company will furnish
to the Underwriter, as soon as they have been prepared by or are available to
the Company, a copy of any unaudited interim financial statements of the Company
for any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
(i) The Company hereby agrees that until the Company
consummates a Business Combination, it shall not issue any shares of Common
Stock or any options or other securities convertible into Common Stock, or any
shares of preferred stock which participate in any manner in the Trust Account
or which vote as a class with the Common Stock on the Business Combination.
(j) The Company will use its best efforts to effect and
maintain the listing of the Securities on the American Stock Exchange. For a
period of at least four years from the Effective Date, or until such earlier
time upon which the Company is required to be liquidated, the Company will use
its best efforts to maintain the registration of the Units, Common Stock and
Warrants under the provisions of the Exchange Act. The Company will not
deregister the Units under the Exchange Act without the prior written consent of
the Underwriter.
(k) The Company shall apply the net proceeds of its sale
of the Securities as set forth in the Registration Statement and the Prospectus
and shall file such reports
17
with the Commission with respect to the sale of the Securities and the
application of the proceeds therefrom as may be required in accordance with Rule
463 under the Act.
(l) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in such a
manner as would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.
(m) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.
(n) The Company will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.
(o) The Company will comply with all applicable
securities and other applicable laws, rules and regulations in each jurisdiction
in which the Directed Securities are offered in connection with the Directed
Unit Program.
(p) In no event will the fees payable under the Services
Agreement be more than $7,500 per month in the aggregate.
(q) Except as set forth in this paragraph 4(q), the
Company shall not pay any Initial Stockholder or any of their affiliates any
fees or compensation from the Company, for services rendered to the Company
prior to, or in connection with, the consummation of a Business Combination;
provided that the Initial Stockholders shall be entitled to reimbursement from
the Company for their out-of-pocket expenses incurred in connection with seeking
and consummating a Business Combination.
(r) The Company will reserve and keep available that
maximum number of its authorized but unissued securities which are issuable upon
exercise of any of the Securities outstanding from time to time.
(s) Prior to the consummation of a Business Combination
or the liquidation of the Trust Account, the Company shall not issue any shares
of Common Stock, Warrants or any options or other securities convertible into
Common Stock, or any shares of preferred stock which participate in any manner
in the Trust Account or which vote as a class with the Common Stock on a
Business Combination.
(t) 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.
(u) The Company hereby agrees that prior to commencing
its due diligence investigation of any operating business which the Company
seeks to acquire for its initial Business Combination ("Target Business") or
obtaining the services of any vendor or service provider or other entity, it
will use its best efforts to cause the Target Business or vendor
18
or service provider or other entity with which the Company executes an agreement
to execute a waiver letter in the form attached hereto as Exhibit A and Exhibit
B. It is understood that the Company may not be able to obtain such letters in
some or all circumstances and that, nonetheless, the Company may still proceed
with such due diligence investigations and enter into agreements with such
parties or obtaining of services, as applicable. In the event that a vendor or
Target Business refuses to enter into such a waiver letter, the Company may
engage such vendor or commence due diligence investigations of, or enter into
discussions with, such Target Business, provided the Company determines that it
would be unable to obtain, on reasonable terms, substantially similar services
or opportunities from another entity willing to enter into such a waiver.
(v) Prior to the consummation of the initial Business
Combination, the Company will submit such transaction to the Company's
stockholders for their approval ("Business Combination Vote") even if the nature
of the acquisition is such as would not ordinarily require stockholder approval
under applicable state law; and in the event that the Company does not effect a
Business Combination within 18 months from the consummation of this offering
(subject to extension for an additional six-month period, as described in the
Statutory Prospectus and the Prospectus), the Company will promptly adopt a plan
of distribution of its assets and initiate procedures for its dissolution. Upon
the approval of the stockholders of the Company's dissolution and plan of
distribution of assets, the Company will distribute to all holders of the Common
Stock issued as part of the Units in this offering ("IPO Shares") an aggregate
sum equal to the Company's "Liquidation Value." The Company's "Liquidation
Value" shall mean the amount of funds in the Trust Account (including (a) the
proceeds held in the Trust Account from this Offering and the Private Placement,
(b) the amount held in the Trust Account representing the Deferred Underwriting
Discount and (c) any interest income earned on the funds held in the Trust
Account, net of taxes payable). Only holders of IPO Shares shall be entitled to
receive liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of capital stock of the Company.
With respect to the initial Business Combination Vote, the Company shall cause
the Initial Stockholders to vote all their IPO Shares and any other shares of
Common Stock held by them, whenever and however acquired, in accordance with the
vote of a majority of the Public Stockholders (as defined below). At the time
the Company seeks approval of the initial Business Combination, the Company will
offer to each holder of IPO Shares other than the Initial Stockholders (the
"Public Stockholders") the right to convert their IPO Shares at a per share
conversion price (the "Conversion Price"), calculated as of two business days
prior to the consummation of such proposed Business Combination, equal to (A)
the amount in the Trust Account inclusive of (x) the proceeds from this Offering
and the Private Placement held in trust and (y) any interest income earned on
the funds held in the Trust Account but exclusive of (1) taxes payable on any
amount in the Trust Account, (2) $1.35 million of interest earned on the Trust
Account which may be released to the Company to cover a portion of its operating
expenses and (3) the Deferred Underwriting Discount divided by (B) the total
number of IPO Shares. If a majority of the shares voted by the holders of IPO
Shares are voted to approve the initial Business Combination, and if holders of
less than 20% in interest of the IPO Shares vote against such approval of a
Business Combination and elect to convert their IPO Shares, the Company may, but
will not be
19
required to, proceed with such Business Combination. If the Company elects to so
proceed, it will convert shares, based upon the Conversion Price, from those
holders of IPO Shares who affirmatively requested such conversion and who voted
against the Business Combination. Only Public Stockholders shall be entitled to
receive distributions from the Trust Account in connection with the approval of
an initial Business Combination, and the Company shall pay no distributions with
respect to any other holders or shares of capital stock of the Company. If
holders of 20% or more in interest of the IPO Shares vote against approval of a
potential Business Combination and elect to convert their IPO Shares, the
Company will not proceed with such Business Combination and will not convert
such shares.
(w) The Company agrees that the initial Target Business
that it acquires in a Business Combination must have a fair market value equal
to at least 80% of the Company's net assets (all of the Company's assets,
including the amount in the Trust Account excluding the Deferred Underwriting
Discount (including any portion of the discount that relates to the Option
Units) less the Company's liabilities), at the time of such acquisition. The
fair market value of such business must be determined by the Board of Directors
of the Company based upon standards generally accepted by the financial
community, such as actual and potential sales, earnings and cash flow and book
value. If the Board of Directors of the Company is not able to independently
determine that the Target Business has a fair market value of at least 80% of
the Company's net assets (all of the Company's assets, including the amount in
the Trust Account excluding the Deferred Underwriting Discount (including any
portion of the discount that relates to the Option Units) less the Company's
liabilities) at the time of such Business Combination, the Company will obtain
an opinion from an unaffiliated, independent investment banking firm which is a
member of the NASD with respect to the satisfaction of such criteria. The
Company is not required to obtain an opinion from an investment banking firm as
to the fair market value of the target business if the Company's Board of
Directors independently determines that the target business does have sufficient
fair market value.
(x) Upon the consummation of the initial Business
Combination, the Company will pay to the Underwriter, the Deferred Underwriting
Discount. Payment of the Deferred Underwriting Discount will be made out of the
proceeds of this offering held in the Trust Account. The Underwriter shall have
no claim to payment of any interest earned on the portion of the proceeds held
in the Trust Account representing the Deferred Underwriting Discount. If the
Company fails to consummate its initial Business Combination within the required
time period set forth in the Registration Statement, the Deferred Underwriting
Discount will not be paid to the Underwriter and will, instead, be included in
the liquidation distribution of the proceeds held in the Trust Account made to
the holders of the IPO Shares (as defined in Section 4(v) above). In connection
with any such liquidation distribution, the Underwriter will forfeit any rights
or claims to the Deferred Underwriting Discount, including any accrued interest
thereon.
(y) In the event any person or entity (regardless of any
NASD affiliation or association) is engaged to assist the Company in its search
for a merger candidate or to provide any other merger and acquisition services,
the Company will provide the following to the NASD and the Underwriter prior to
the consummation of the Business Combination:
20
(i) complete details of all services and copies of agreements governing such
services; and (ii) justification as to why the person or entity providing the
merger and acquisition services should not be considered an "underwriter and
related person" with respect to the Company's initial public offering, as such
term is defined in Rule 2710 of the NASD's Conduct Rules. The Company also
agrees that proper disclosure of such arrangement or potential arrangement will
be made in the proxy statement which the Company will file for purposes of
soliciting stockholder approval for the Business Combination.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriter copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Listing Application; the filing fees of the Commission; the
filing fees and expenses (including legal fees and disbursements) incident to
securing any required review by the NASD of the terms of the sale of the Units;
the Listing Fee of the American Stock Exchange; the costs and expenses
(including without limitation any damages or other amounts payable in connection
with legal or contractual liability) associated with the reforming of any
contracts for sale of the Units made by the Underwriter caused by a breach of
the representation in Section 1(c). The Company shall not, however, be required
to pay for any of the Underwriter's expenses (other than those related to
qualification under NASD regulation) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Underwriter pursuant to Section 10
hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on its part to be performed, unless such
failure, refusal or inability is due primarily to the default or omission of the
Underwriter, the Company shall reimburse the Underwriter for reasonable
out-of-pocket expenses, including fees and disbursements of counsel, reasonably
incurred in connection with investigating, marketing and proposing to market the
Units or in contemplation of performing their obligations hereunder; but the
Company shall not in any event be liable to the Underwriter for damages on
account of loss of anticipated profits from the sale by it of the Units.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
The obligation of the Underwriter to purchase the Firm Units on
the Closing Date and the Option Units, if any, on the Option Closing Date are
subject to the accuracy, as of the Applicable Time, the Closing Date or the
Option Closing Date, as the case may be, of the representations and warranties
of the Company contained herein, and to the performance by the Company of its
covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and the Prospectus shall have
been filed as required by Rules 424, 430A, 430C or 433 under the Act, as
applicable, within the time period prescribed by, and
21
in compliance with, the Rules and Regulations, and any request of the Commission
for additional information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Underwriter and complied with to its
reasonable satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose or pursuant to Section 8A under the Act shall
have been instituted or, to the knowledge of the Company, shall be contemplated
or threatened by the Commission and no injunction, restraining order or order of
any nature by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the Units.
(b) The Underwriter shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Reitler
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLC, counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriter (and
stating that it may be relied upon by counsel to the Underwriter) to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in corporate good standing under
the laws of the State of Delaware, and has the corporate power and
authority to own or lease, as the case may be, its property and to
conduct the business as described in the Prospectus, and to
execute, deliver and perform this Agreement, the Trust Agreement
and the Warrant Agreement. The Company is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions in which the conduct of its business requires such
qualifications.
(ii) This Agreement, the Trust Agreement, the
Registration Rights Agreement, the Warrant Purchase Agreement, the
Subscription Agreements and the Warrant Agreement have been duly
authorized, executed and delivered by the Company.
(iii) The authorized capital stock of the Company
consists of 250,000,000 shares of Common Stock and 25,000,000
shares of Preferred Stock, par value $.001 per share ("Preferred
Stock"). Immediately prior to the closing under this Agreement,
there are 3,125,000 shares of Common Stock outstanding of record
and no shares of Preferred Stock issued and outstanding. All of
such outstanding shares of Common Stock are duly authorized, have
been validly issued and are fully paid and non-assessable.
(iv) Except as described in or contemplated by the
Registration Statement and the Prospectus, there are no
outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase or subscribe for any
shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into
or evidencing the right to purchase or subscribe for any
22
shares of such stock; and except as described in the Registration
Statement and the Prospectus, no holder of any securities of the
Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Securities or the right
to have any Common Securities or other securities of the Company
included in the Registration Statement or the right, as a result
of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other
securities of the Company.
(v) The Common Stock included in the Firm Units
has been duly authorized and, when issued and paid for by the
Underwriter pursuant to this Agreement, will be validly issued,
fully paid and nonassessable. The shares of Common Stock issuable
upon exercise of the Warrants and the Private Placement Warrants
have been duly authorized and, when issued and paid for pursuant
to the Warrants or the Private Placement Warrants, as the case may
be, will be validly issued, fully paid and nonassessable.
(vi) The Warrants and the Private Placement
Warrants, when issued and paid for by the Underwriter pursuant to
this Agreement or the Warrant Purchase Agreement as applicable,
will constitute valid and binding agreements of the Company to
issue and sell, upon exercise thereof and payment therefor, the
number and type of securities of the Company called for thereby
and will be enforceable against the Company in accordance with
their terms. The form of certificate representing the Common Stock
filed as an exhibit to the Registration Statement is in due and
proper form, satisfying the applicable requirements of the DGCL,
the Certificate of Incorporation, By-laws and the applicable rules
of the American Stock Exchange.
(vii) The execution, delivery and performance of
the Warrants and the Private Placement Warrants have been duly
authorized by all necessary corporate action on the part of the
Company. The Warrants and the Private Placement Warrants have been
duly executed and delivered by the Company.
(viii) Each of the Warrant Agreement, the
Registration Rights Agreement, the Warrant Purchase Agreement, the
Subscription Agreements and the Trust Agreement constitutes a
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms. The holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive rights to subscribe for the Securities.
(ix) No consent, approval, authorization or order
of, or filing with, any governmental agency, public body or any
court of the State of New York, the State of Delaware or of the
United States of America is required under
23
New York Law, the DGCL or Federal Law for the execution, delivery
or performance of this Agreement, the Warrant Agreement, the
Warrants, the Private Placement Warrants or the Trust Agreement by
the Company, except (A) such as may be required under state
securities laws or (B) for the filing of the Registration
Statement with the Commission and the receipt of the order of the
Commission declaring such Registration Statement effective (as
noted in paragraph (xv) below, such counsel has been informed
orally by the Commission that it has declared the Registration
Statement effective).
(x) Upon delivery and payment of the Firm Units
on the Closing Date, the Company will not be subject to Rule 419
under the Act and none of the Company's outstanding securities
will be deemed to be a ▇▇▇▇▇ stock as defined in Rule 3a-51-1
under the Exchange Act.
(xi) To such counsel's knowledge, there is no
action, suit or proceeding by or before any court or other
governmental agency, authority or body or any arbitrator pending
or overtly threatened against the Company or its properties by a
third party of a character required to be disclosed in the
Prospectus that is not disclosed in the Prospectus as required by
the Act and the rules thereunder. To such counsel's knowledge,
there is no indenture, contract, lease, mortgage, deed of trust,
note agreement, loan or other agreement or instrument of a
character required to be filed as an exhibit to the Registration
Statement, which is not filed as required by the Act and the rules
thereunder.
(xii) The execution, delivery and performance by the
Company of this Agreement, the Warrant Agreement, the Registration
Rights Agreement, the Warrant Purchase Agreement, the Subscription
Agreements, the Warrants, the Private Placement Warrants or the
Trust Agreement and compliance by the Company with the provisions
thereof and the issuance and sale of the Securities pursuant to and
in accordance with the provisions of this Agreement will not (i)
result in a breach or default (or give rise to any right of
termination, cancellation or acceleration) under any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan or
other agreement to which the Company is a party or may be bound,
and (ii) will not result in a breach or violation of any of the
provisions of the Certificate of Incorporation or By-laws, the DCGL
or any Federal Law or New York Law, or, to such counsel's
knowledge, any judgment, order, writ, injunction or decree of any
court or other tribunal located in the State of New York or the
State of Delaware of which such counsel is are aware and that is
applicable to the Company.
(xiii) The Registration Statement, as of its
effective date, the Prospectus, as of its date, and the Statutory
Prospectus (other than the financial statements, the notes thereto
and the related schedules and other financial and statistical
information included therein or omitted therefrom, as to which
such counsel expresses no opinion) complied as to form in all
material respects with
24
the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(xiv) Such counsel does not know of any contracts
or documents required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or the
Prospectus which are not so filed or described as required, and
such contracts and documents as are summarized in the Registration
Statement or the Prospectus are fairly summarized in all material
respects.
(xv) Such counsel has been informed by the
Commission that the Registration Statement was declared effective
under the Securities Act as of [____] EST on [______], 2007 (the
"Time of Sale"). The Prospectus was filed with the Commission in
the manner and within the time period required by Rule 424(b)
under the Securities Act, on [______], 2007. To such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose or pursuant to Section 8A of the Act has been instituted
or is pending or threatened by the Commission.
(xvi) The statements in the Prospectus under the
captions "Description of Securities," "Federal Income and Estate
Tax Considerations," "Certain Relationships and Related
Transactions" and "Underwriting," insofar as such statements
constitute summaries of the legal matters or documents referred to
therein, are accurate descriptions or summaries in all material
respects.
(xvii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by
this Agreement, and application of the net proceeds therefrom as
described in the Prospectus, required to register as an investment
company under the 1940 Act.
In rendering such opinion Reitler ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLC may rely
as to matters governed by the laws of states other than New York or Federal laws
on local counsel in such jurisdictions, provided that in each case Reitler ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇▇ LLC shall state that they believe that they and the Underwriter are
justified in relying on such other counsel. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel which leads them to believe that (i)
the Registration Statement, at the time it became effective under the Act
(including the information deemed to be a part of the Registration Statement at
the time it became effective pursuant to Rules 430A and 430C under the Act) and
as of the Closing Date or the Option Closing Date, as the case may be, contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the General Disclosure Package, as of
the Applicable Time, contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
25
misleading, and (iii) the Prospectus, or any supplement thereto, on the date it
was filed pursuant to the Rules and Regulations and as of the Closing Date or
the Option Closing Date, as the case may be, contained or contains an untrue
statement of a material fact or omitted or omits 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, (except that such
counsel need express no view as to financial statements and schedules and other
financial data therein).
(c) The Underwriter shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriter, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, such opinion or opinions, dated the
Closing Date and addressed to the Underwriter, with respect to the issuance and
sale of the Securities, the Registration Statement, the Statutory Prospectus and
the Prospectus (together with any supplement thereto) and other related matters
as the Underwriter may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Underwriter shall have received, on each of the
date hereof, the Closing Date and, if applicable, the Option Closing Date, a
letter dated the date hereof, the Closing Date or the Option Closing Date, as
the case may be, in form and substance satisfactory to the Underwriter, of
▇▇▇▇▇▇ LLP confirming that they are an independent registered public accounting
firm with respect to the Company within the meaning of the Act and the
applicable Rules and Regulations and the PCAOB and stating that in their opinion
the financial statements and schedules examined by them and included in the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the Act and the related
Rules and Regulations; and containing such other statements and information as
is ordinarily included in accountants' "comfort letters" to the Underwriter with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and the Prospectus.
(e) The Underwriter shall have received on the Closing
Date and, if applicable, the Option Closing Date, as the case may be, a
certificate or certificates of the Chairman and the Chief Financial Officer of
the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become
effective under the Act and no stop order suspending the
effectiveness of the Registration Statement or no order preventing
or suspending the use of any Preliminary Prospectus or the
Prospectus has been issued, and no proceedings for such purpose or
pursuant to Section 8A of the Act have been instituted or are, to
his or her knowledge, contemplated or threatened by the
Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of
the Closing Date or the Option Closing Date, as the case may be;
26
(iii) All filings required to have been made
pursuant to Rules 424, 430A or 430C under the Act have been made
as and when required by such rules;
(iv) He or she has carefully examined the General
Disclosure Package and, in his or her opinion, as of the
Applicable Time, the statements contained in the General
Disclosure Package did not contain any untrue statement of a
material fact, and such General Disclosure Package did not omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(v) He or she has carefully examined the
Registration Statement and, in his or her opinion, as of the
effective date of the Registration Statement, the Registration
Statement and any amendments thereto did not contain any untrue
statement of a material fact and did not omit to state a material
fact necessary in order to make the statements therein not
misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment;
(vi) He or she has carefully examined the
Prospectus and, in his or her opinion, as of its date and the
Closing Date or the Option Closing Date, as the case may be, the
Prospectus and any amendments and supplements thereto did not
contain any untrue statement of a material fact and did not omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and
(vii) Since the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting
the business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company,
whether or not arising in the ordinary course of business.
(f) The Company shall have furnished to the Underwriter
such further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Underwriter may reasonably have requested.
(g) The Firm Units and Option Units, if any, have been
duly listed, subject to notice of issuance, on the American Stock Exchange.
(h) The NASD has not raised any objection with respect
to the fairness and reasonableness of the underwriting terms and arrangements.
27
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Underwriter and to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Underwriter.
If any of the conditions hereinabove provided for in this Section
6 shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriter hereunder may be terminated by the
Underwriter by notifying the Company of such termination in writing, by
telephone or facsimile at or prior to the Closing Date or the Option Closing
Date, as the case may be.
In such event, the Company and the Underwriter shall not be under
any obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of
the Units required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act, against any losses, claims, damages or
liabilities to which the Underwriter or any such controlling
person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the
Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission
or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the
Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by the Underwriter
consists of the information described as such in Section 12
herein; and
28
(2) to reimburse the Underwriter and each such
controlling person upon demand for any legal or other
out-of-pocket expenses reasonably incurred by the Underwriter or
such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Securities, whether or not the
Underwriter or controlling person is a party to any action or
proceeding. In the event that it is finally judicially determined
that the Underwriter was not entitled to receive payments for
legal and other expenses pursuant to this subparagraph, the
Underwriter will promptly return all sums that had been advanced
pursuant hereto.
(b) The Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities to
which the Company or any such director, officer, or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that the Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Underwriter specifically
for use therein, it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in
Section 12 herein. This indemnity agreement will be in addition to any liability
which the Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), (b) or (d) shall be available to
any party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a), (b) or (d). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate
29
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by the Underwriter in the case of parties indemnified
pursuant to Section 8(a) or 8(d) and by the Company in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) The Company agrees to indemnify and hold harmless
the Underwriter and its affiliates and each person, if any, who controls the
Underwriter or its affiliates within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the
Directed Unit Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of Directed Units that the Participant has agreed
to purchase; or (iii) related to, arising out of, or in connection with the
Directed Unit Program other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of the Underwriter.
30
(e) To the extent the indemnification provided for in
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a), (b) or (d) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriter on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriter agree that it would not be just
and equitable if contributions pursuant to this Section 8(e) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8(e).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) the Underwriter shall not be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Securities purchased by the Underwriter, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(f) In any proceeding relating to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join it
as an additional defendant in any such proceeding in which such other
contributing party is a party.
31
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of the Underwriter or any person controlling
the Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Securities and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to the
Underwriter, or any person controlling the Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
9. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered or telecopied and confirmed
as follows: if to the Underwriter, to Banc of America Securities LLC, ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: Syndicate Manager, with a copy
to Banc of America Securities LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
Attention: General Counsel; if to the Company, to ▇▇▇▇▇▇▇▇▇ Ventures Ltd., ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, with a copy to Reitler ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇ LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
10. TERMINATION.
This Agreement may be terminated by the Underwriter by notice to
the Company (a) at any time prior to the Closing Date or any Option Closing Date
(if different from the Closing Date and then only as to Option Units) if any of
the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company, whether or not arising in
the ordinary course of business, (ii) any outbreak or escalation of hostilities
or declaration of war or national emergency or other national or international
calamity or crisis if the effect of such outbreak, escalation, declaration,
emergency, calamity or crisis on the financial markets of the United States
would, in the Underwriter's judgment, make it impracticable or inadvisable to
market the Units or to enforce contracts for the sale of the Units, (iii) any
material change in economic or political conditions, if the effect of such
change on the financial markets of the United States would, in the Underwriter's
judgment, make it impracticable or inadvisable to market the Units or to enforce
contracts for the sale of the Units or (iv) suspension of trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange, (v) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in the
Underwriter's opinion materially and
32
adversely affects or may materially and adversely affect the business or
operations of the Company, (vi) the declaration of a banking moratorium by
United States or New York State authorities, (vii) any downgrading, or placement
on any watch list for possible downgrading, in the rating of any of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Exchange Act);
(viii) the suspension of trading of the Company's common stock by the American
Stock Exchange, the Commission, or any other governmental authority or, (ix) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs which in the Underwriter's reasonable opinion has a
material adverse effect on the securities markets in the United States; or
(b) as provided in Section 6 of this Agreement.
11. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriter and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Securities from the Underwriter
shall be deemed a successor or assign merely because of such purchase.
12. INFORMATION PROVIDED BY UNDERWRITER.
The Company and the Underwriter acknowledge and agree that the
only information furnished or to be furnished by the Underwriter to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus or the
Prospectus consists of the information set forth in the third and tenth
paragraphs under the caption "Underwriting" in the Prospectus.
13. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of the
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers, and (c) delivery of and payment for the Securities
under this Agreement.
The Company acknowledges and agrees that the Underwriter in
providing investment banking services to the Company in connection with the
offering, including in acting pursuant to the terms of this Agreement, has acted
and is acting as an independent contractor and not as a fiduciary and the
Company does not intend the Underwriter to act in any capacity other than as an
independent contractor, including as a fiduciary or in any other position of
higher trust.
33
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance
with, the law of the State of New York, including, without limitation, Section
5-1401 of the New York General Obligations Law.
34
If the foregoing letter is in accordance with your understanding
of our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
Underwriter in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇▇▇ VENTURES LTD.
By
--------------------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BANC OF AMERICA SECURITIES LLC
By: Banc of America Securities LLC
By
------------------------------------
Authorized Officer
By
------------------------------------
Authorized Officer
35
SCHEDULE I
----------
PRICE AND OTHER TERMS OF THE OFFERING CONVEYED ORALLY
36
EXHIBIT A
▇▇▇▇▇▇▇▇▇ Ventures Ltd.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Reference is made to the Final Prospectus of ▇▇▇▇▇▇▇▇▇ Ventures Ltd. (the
"Company"), dated ___, 2007 (the "Prospectus"). Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the
Prospectus.
We have read the Prospectus and understand that Company has established the
Trust Account, initially in an amount of $___ for the benefit of the Public
Stockholders and that Company may disburse monies from the Trust Account only
(i) to the Public Stockholders in the event of the redemption of their shares or
the liquidation of Company or (ii) to Company after it consummates an initial
Business Combination.
For and in consideration of Company agreeing to evaluate the undersigned for
purposes of consummating an initial Business Combination with it, the
undersigned hereby agrees that it does not have any right, title, interest or
claim of any kind in or to any monies in the Trust Account (the "Claim") and
hereby waives any Claim it may have in the future as a result of, or arising out
of, any negotiations, contracts or agreements with Company and will not seek
recourse against the Trust Account for any reason whatsoever.
--------------------------------------------
Print Name of Target Business
--------------------------------------------
Authorized Signature of Target Business
37
EXHIBIT B
▇▇▇▇▇▇▇▇▇ Ventures Ltd.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Reference is made to the Final Prospectus of ▇▇▇▇▇▇▇▇▇ Ventures Ltd. (the
"Company"), dated ___, 2007 (the "Prospectus"). Capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the
Prospectus.
We have read the Prospectus and understand that Company has established the
Trust Account, initially in an amount of $___ for the benefit of the Public
Stockholders and that Company may disburse monies from the Trust Account only:
(i) to the Public Stockholders in the event of the redemption of their shares or
the liquidation of Company; or (ii) to Company after it consummates an initial
Business Combination.
For and in consideration of Company engaging the services of the undersigned,
the undersigned hereby agrees that it does not have any right, title, interest
or claim of any kind in or to any monies in the Trust Account (the "Claim") and
hereby waives any Claim it may have in the future as a result of, or arising out
of, any negotiations, contracts or agreements with Company and will not seek
recourse against the Trust Account for any reason whatsoever.
--------------------------------------------
Print Name of Vendor
--------------------------------------------
Authorized Signature of Vendor
38