UNDERWRITING AGREEMENT between ALYST ACQUISITION CORP. and JESUP & LAMONT SECURITIES CORPORATION Dated: __________, 2007
Exhibit
1.1
between
and
JESUP
& ▇▇▇▇▇▇ SECURITIES CORPORATION
Dated:
__________, 2007
__________,
2007
Jesup
& ▇▇▇▇▇▇ Securities Corporation
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear
Sirs:
The
undersigned, Alyst Acquisition Corp., a Delaware corporation (“Company”), hereby
confirms its agreement with Jesup & ▇▇▇▇▇▇ Securities Corporation (being
referred to herein variously as “you,” “Jesup & ▇▇▇▇▇▇” or the
“Representative”) and with the other underwriters named on Schedule I hereto for
which Jesup & ▇▇▇▇▇▇ is acting as Representative (the Representative and the
other Underwriters being collectively called the “Underwriters” or,
individually, an “Underwriter”) as follows:
1. Purchase
and Sale of Securities.
1.1 Firm
Securities.
1.1.1 Purchase
of Firm Units.
On the
basis of the representations and warranties herein contained, but subject
to the
terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of
7,000,000 units (“Firm Units”) of the Company at a purchase price (net of
discounts and commissions) of $7.44 per Firm Unit (including discounts and
commissions of $0.32 (or approximately $0.33 if the Over-allotment Option
(defined in Section 1.2.1) is exercised in full) (referred to hereinafter
as the
“Deferred Commissions”) that will be paid to the Underwriters only upon
consummation of a Business Combination (as defined below) by the Company).
The
Underwriters, severally and not jointly, agree that they will not seek payment
of the Deferred Commissions unless and until a Business Combination
has been consummated by the Company, and the Company agrees that it shall
pay
such discounts and commissions only upon consummation of such Business
Combination. The Underwriters, severally and not jointly, agree to purchase
from
the Company the number of Firm Units set forth opposite their respective
names
on Schedule I attached hereto and made a part hereof at a purchase price
(net of
discounts and commissions) of $7.44 per Firm Unit. The Firm Units are to
be
offered initially to the public (“Offering”) at the offering price of $8.00 per
Firm Unit. Each Firm Unit consists of one share of the Company’s common stock,
par value $.0001 per share (“Common Stock”), and one warrant (“Warrant(s)”). The
shares of Common Stock and the Warrants included in the Firm Units will not
be
separately transferable until 90 days after the effective date (“Effective
Date”) of the Registration Statement (as defined in Section 2.1.1 hereof) unless
Jesup & ▇▇▇▇▇▇ informs the Company of its decision to allow earlier separate
trading, but in no event will Jesup & ▇▇▇▇▇▇ allow separate trading until
the preparation of an audited balance sheet of the Company reflecting receipt
by
the Company of the proceeds of the Offering and the filing of a Current Report
on Form 8-K with the Securities and Exchange Commission (the “Commission”) by
the Company which includes such balance sheet. Each Warrant entitles its
holder
to exercise it to purchase one share of Common Stock for $5.00 during the
period
commencing on the later of the consummation by the Company of its “Business
Combination” or one year from the Effective Date and terminating on the
four-year anniversary of the Effective Date. “Business Combination” shall mean
any merger, capital stock exchange, asset acquisition or other similar business
combination consummated by the Company with an operating business (as described
more fully in the Registration Statement).
1.1.2 Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 10:00 A.M., New
York
time, on the third business day following commencement of trading of the
Firm
Units or at such earlier time as shall be agreed upon by the Representative
and
the Company at the offices of the Representative or at such other place as
shall
be agreed upon by the Representative and the Company. The hour and date of
delivery and payment for the Firm Units are called “Closing Date.” Payment for
the Firm Units shall be made on the Closing Date at the Representative’s
election by wire transfer in Federal (same day) funds or by certified or
bank
cashier’s check(s) in New York Clearing House funds, payable as follows:
$53,135,000 of the proceeds received by the Company for the Firm Units shall
be
deposited in the trust fund established by the Company for the benefit of
the
public stockholders as described in the Registration Statement (“Trust Fund”)
pursuant to the terms of an Investment Management Trust Agreement (“Trust
Agreement”) and the remaining proceeds shall be paid (subject to Section 3.13
hereof) to the order of the Company upon delivery to you of certificates
(in
form and substance satisfactory to the Underwriters) representing the Firm
Units
(or through the facilities of the Depository Trust Company (“DTC”)) for the
account of the Underwriters. The Firm Units shall be registered in such name
or
names and in such authorized denominations as the Representative may request
in
writing at least two full business days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Units for
delivery, at least one full business day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender
of
payment by the Representative for all the Firm Units.
1.2 Over-Allotment
Option.
1.2.1 Option
Units.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Underwriters are hereby granted, severally and
not
jointly, an option to purchase up to an additional 1,050,000 units from the
Company (“Over-allotment Option”). Such additional 1,050,000 units are
hereinafter referred to as “Option Units.” The Firm Units and the Option Units
are hereinafter collectively referred to as the “Units,” and the Units, the
shares of Common Stock and the Warrants included in the Units and the shares
of
Common Stock issuable upon exercise of the Warrants are hereinafter referred
to
collectively as the “Public Securities.” The purchase price to be paid for the
Option Units will be the same price per Option Unit as the price per Firm
Unit
set forth in Section 1.1.1 hereof.
1.2.2 Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time)
of
the Option Units within 45 days after the Effective Date. The Underwriters
will
not be under any obligation to purchase any Option Units prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may
be
exercised by the giving of oral notice to the Company by the Representative,
which must be confirmed in writing by overnight mail or facsimile transmission
setting forth the number of Option Units to be purchased and the date and
time
for delivery of and payment for the Option Units (the “Option Closing Date”),
which will not be later than five full business days after the date of the
notice or such other time as shall be agreed upon by the Company and the
Representative, at the offices of the Representative or at such other place
as
shall be agreed upon by the Company and the Representative. Upon exercise
of the
Over-allotment Option, the Company will become obligated to convey to the
Underwriters, and, subject to the terms and conditions set forth herein,
the
Underwriters will become obligated to purchase, the number of Option Units
specified in such notice.
2
1.2.3 Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, payable
as follows: approximately $7.85 per Option Unit shall be deposited in the
Trust
Fund (including the Deferred Commissions that will be paid to the
Underwriters only upon consummation of a Business Combination by the Company)
pursuant to the Trust Agreement upon delivery to you of certificates (in
form
and substance satisfactory to the Underwriters) representing the Option Units
(or through the facilities of DTC) for the account of the Underwriters. The
certificates representing the Option Units to be delivered will be in such
denominations and registered in such names as the Representative requests
not
less than two full business days prior to the Closing Date or the Option
Closing
Date, as the case may be, and will be made available to the Representative
for
inspection, checking and packaging at the aforesaid office of the Company’s
transfer agent or correspondent not less than one full business day prior
to
such Closing Date.
1.3 Representative’s
Purchase Option.
1.3.1 Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or its
designees) on the Effective Date an option (“Representative’s Purchase Option”)
for the purchase of an aggregate of __________ units (“Representative’s Units”)
for an aggregate purchase price of $100. Each of the Representative’s Units is
identical to the Firm Units. The Representative’s Purchase Option shall be
exercisable, in whole or in part, commencing on the later of the consummation
of
a Business Combination and one year from the Effective Date and expiring
on the
five-year anniversary of the Effective Date at an initial exercise price
per
Representative’s Unit of $____ (___% of the initial public offering price of a
Unit). The Representative’s Purchase Option, the Representative’s Units, the
Warrants included in the Representative’s Units (“Representative’s Warrants”)
and the shares of Common Stock issuable upon exercise of the Representative’s
Warrants are hereinafter referred to collectively as the “Representative’s
Securities.” The Public Securities and the Representative’s Securities are
hereinafter referred to collectively as the “Securities.” The Representative
understands and agrees that there are significant restrictions against
transferring the Representative’s Purchase Option during the first year after
the Effective Date, as set forth in Section 3 of the Representative’s Purchase
Option.
3
1.3.2 Payment
and Delivery.
Delivery and payment for the Representative’s Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Representative, upon payment
therefor, certificates for the Representative’s Purchase Option in the name or
names and in such authorized denominations as the Representative may
request.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriters as follows:
2.1 Filing
of Registration Statement.
2.1.1 Pursuant
to the Act.
The
Company has filed with the Commission a registration statement and an amendment
or amendments thereto, on Form S-1 (File No. 333-138699), including any related
preliminary prospectus (“Preliminary Prospectus”), for the registration of the
Public Securities under the Securities Act of 1933, as amended (“Act”), which
registration statement and amendment or amendments have been prepared by
the
Company in conformity with the requirements of the Act, and the rules and
regulations (“Regulations”) of the Commission under the Act. Except as the
context may otherwise require, such registration statement, as amended, on
file
with the Commission at the time the registration statement becomes effective
(including the prospectus, financial statements, schedules, exhibits and
all
other documents filed as a part thereof or incorporated therein and all
information deemed to be a part thereof as of such time pursuant to paragraph
(b) of Rule 430A of the Regulations), is hereinafter called the “Registration
Statement,” and the form of the final prospectus dated the Effective Date
included in the Registration Statement (or, if applicable, the form of final
prospectus filed with the Commission pursuant to Rule 424 of the Regulations),
is hereinafter called the “Prospectus.” The Registration Statement has been
declared effective by the Commission on the date hereof.
2.1.2 Pursuant
to the Exchange Act.
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 (“Exchange Act”), of the Units, the Common Stock and the Warrants. The
registration of the Units, Common Stock and Warrants under the Exchange Act
has
been declared effective by the Commission on the date hereof.
2.2 No
Stop Orders, Etc.
Neither
the Commission nor, to the best of the Company’s knowledge, any state regulatory
authority has issued any order or threatened to issue any order preventing
or
suspending the use of any Preliminary Prospectus or has instituted or, to
the
best of the Company’s knowledge, threatened to institute any proceedings with
respect to such an order.
2.3 Disclosures
in Registration Statement.
2.3.1 10b-5
Representation.
At the
time the Registration Statement became effective and at all times subsequent
thereto up to the Closing Date and the Option Closing Date, if any, the
Registration Statement and the Prospectus does and will contain all material
statements that are required to be stated therein in accordance with the
Act and
the Regulations, and will in all material respects conform to the requirements
of the Act and the Regulations; neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, on such dates, does
or will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
When
any Preliminary Prospectus was first filed with the Commission (whether filed
as
part of the Registration Statement for the registration of the Securities
or any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied or will comply in all material respects with the applicable provisions
of the Act and the Regulations and did not and will not contain an untrue
statement of a material fact or omit to state any material fact required
to be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. The representation
and warranty made in this Section 2.3.1 does not apply to statements made
or
statements omitted in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement or Prospectus or any amendment
thereof or supplement thereto.
4
2.3.2 Disclosure
of Agreements.
The
agreements and documents described in the Registration Statement and the
Prospectus conform to the descriptions thereof contained therein and there
are
no agreements or other documents required to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as exhibits
to
the Registration Statement, that have not been so described or filed. Each
agreement or other instrument (however characterized or described) to which
the
Company is a party or by which its property or business is or may be bound
or
affected and (i) that is referred to in the Prospectus, or (ii) is material
to
the Company’s business, has been duly and validly executed by the Company, is in
full force and effect and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the best
of
the Company’s knowledge, any other party is in breach or default thereunder and,
to the best of the Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a breach
or
default thereunder. To the best of the Company’s knowledge, performance by the
Company of the material provisions of such agreements or instruments will
not
result in a violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental
laws
and regulations.
2.3.3 Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by,
or
under common control with the Company since the Company’s formation, except as
disclosed in the Registration Statement.
5
2.3.4 Regulations.
The
disclosures in the Registration Statement concerning the effects of Federal,
State and local regulation on the Company’s business as currently contemplated
are correct in all material respects and do not omit to state a material
fact.
2.4 Changes
After Dates in Registration Statement.
2.4.1 No
Material Adverse Change.
Since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise specifically stated therein,
(i) there has been no material adverse change in the condition, financial
or
otherwise, or business prospects of the Company, (ii) there have been no
material transactions entered into by the Company, other than as contemplated
pursuant to this Agreement, and (iii) no member of the Company’s management has
resigned from any position with the Company.
2.4.2 Recent
Securities Transactions, Etc.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as may otherwise be
indicated or contemplated herein or therein, the Company has not (i) issued
any
securities or incurred any liability or obligation, direct or contingent,
for
borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its equity securities.
2.5 Independent
Accountants.
▇▇▇▇▇▇
& Kliegman LLP (“M&K”), whose report is filed with the Commission as
part of the Registration Statement, are independent accountants as required
by
the Act and the Regulations. M&K has not, during the periods covered by the
financial statements included in the Prospectus, provided to the Company
any
non-audit services, as such term is used in Section 10A(g) of the Exchange
Act.
2.6 Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement and Prospectus fairly present the
financial position, the results of operations and the cash flows of the Company
at the dates and for the periods to which they apply; and such financial
statements have been prepared in conformity with generally accepted accounting
principles, consistently applied throughout the periods involved; and the
supporting schedules included in the Registration Statement present fairly
the
information required to be stated therein. The summary financial data included
in the Registration Statement and the Prospectus present fairly the information
shown thereon and have been compiled on a basis consistent with the audited
financial statements presented therein. No other financial statements or
schedules are required to be included in the Registration Statement or the
Prospectus. The Registration Statement discloses all material off-balance
sheet
transactions, arrangements, obligations (including contingent obligations),
and
other relationships of the Company with unconsolidated entities or other
persons
that may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues
or expenses.
2.7 Authorized
Capital; Options; Etc.
The
Company had at the date or dates indicated in the Prospectus duly authorized,
issued and outstanding capitalization as set forth in the Registration Statement
and the Prospectus. Based on the assumptions stated in the Registration
Statement and the Prospectus, the Company will have on the Closing Date the
adjusted stock capitalization set forth therein. Except as set forth in,
or
contemplated by, the Registration Statement and the Prospectus, on the Effective
Date and on the Closing Date, there will be no options, warrants, or other
rights to purchase or otherwise acquire any authorized but unissued shares
of
Common Stock of the Company or any security convertible into shares of Common
Stock of the Company, or any contracts or commitments to issue or sell shares
of
Common Stock or any such options, warrants, rights or convertible
securities.
6
2.8 Valid
Issuance of Securities; Etc.
2.8.1 Outstanding
Securities.
All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof
have
no rights of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security
of
the Company or similar contractual rights granted by the Company. The authorized
Common Stock conforms to all statements relating thereto contained in the
Registration Statement and the Prospectus. The offers and sales of the
outstanding Common Stock were at all relevant times either registered under
the
Act and the applicable state securities or Blue Sky laws or, based in part
on
the representations and warranties of the purchasers of such shares of Common
Stock, exempt from such registration requirements.
2.8.2 Securities
Sold Pursuant to this Agreement.
The
Securities have been duly authorized and, when issued and paid for, will
be
validly issued, fully paid and non-assessable; the holders thereof are not
and
will not be subject to personal liability by reason of being such holders;
the
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements
with
respect thereto contained in the Registration Statement. When issued, the
Representative’s Purchase Option, the Representative’s Warrants and the Warrants
will constitute valid and binding obligations of the Company to issue and
sell,
upon exercise thereof and payment of the respective exercise prices therefor,
the number and type of securities of the Company called for thereby in
accordance with the terms thereof and such Representative’s Purchase Option, the
Representative’s Warrants and the Warrants are enforceable against the Company
in accordance with their respective terms, except (i) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and
other
forms of equitable relief may be subject to the equitable defenses and to
the
discretion of the court before which any proceeding therefor may be
brought.
2.8.3 Insider
Warrants.
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ Realty Group, Inc. Profit Sharing Plan
(LCPSP), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Insider
Purchasers”), ten of the Company’s stockholders immediately prior to the
Offering (all of which stockholders are referred to as the “Initial
Stockholders”), have committed to purchase an aggregate of 1,820,000 Warrants
(“Insider Warrants” and together with the shares of Common Stock underlying the
Insider Warrants, collectively referred to as the “Insider Securities”) at $1.00
per Warrant (for an aggregate purchase price of $1,820,000.00) from the Company
upon consummation of the Offering. The Insider Securities have been duly
authorized and, when issued and paid for in accordance with the subscription
agreements (“Subscription Agreements”) and the Insider Warrants, will be validly
issued, fully paid and non-assessable; the holders thereof are not and will
not
be subject to personal liability by reason of being such holders; the Insider
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Insider Securities has been duly
and
validly taken.
7
2.9 Registration
Rights of Third Parties.
Except
as set forth in the Prospectus, no holders of any securities of the Company
or
any rights exercisable for or convertible or exchangeable into securities
of the
Company have the right to require the Company to register any such securities
of
the Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity
and Binding Effect of Agreements.
This
Agreement, the Warrant Agreement (as defined in Section 2.21 hereof), the
Trust
Agreement, the Subscription Agreements, the Escrow Agreements (as defined
in
Section 2.22.2 hereof) and the Registration Rights Agreement (as defined
in
Section 2.22.4 hereof) have been duly and validly authorized by the Company
and
constitute, and the Representative’s Purchase Option, has been duly and validly
authorized by the Company and, when executed and delivered, will constitute,
the
valid and binding agreements of the Company, enforceable against the Company
in
accordance with their respective terms, except (i) as such enforceability
may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and
other
forms of equitable relief may be subject to the equitable defenses and to
the
discretion of the court before which any proceeding therefor may be
brought.
2.11 No
Conflicts, Etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreement, the Representative’s Purchase Option, the Trust Agreement,
the Subscription Agreement, and the Escrow Agreement, the consummation by
the
Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms hereof and thereof do not and will not, with
or
without the giving of notice or the lapse of time or both (i) result in a
breach
of, or conflict with any of the terms and provisions of, or constitute a
default
under, or result in the creation, modification, termination or imposition
of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which the Company is a party
except pursuant to the Trust Agreement referred to in Section 2.23 hereof;
(ii)
result in any violation of the provisions of the Certificate of Incorporation
or
the Bylaws of the Company; or (iii) violate any existing applicable law,
rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
8
2.12 No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its
Certificate of Incorporation or Bylaws or in violation of any material
franchise, license, permit, applicable law, rule, regulation, judgment or
decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any of its properties, businesses or assets.
2.13 Corporate
Power; Licenses; Consents.
2.13.1 Conduct
of Business.
The
Company has all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of
and
from all governmental regulatory officials and bodies that it needs as of
the
date hereof to conduct its business purpose as described in the Prospectus.
The
disclosures in the Registration Statement concerning the effects of federal,
state and local regulation on this offering and the Company’s business purpose
as currently contemplated are correct in all material respects and do not
omit
to state a material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
2.13.2 Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement,
the
Warrant Agreement, the Representative’s Purchase Option, the Trust Agreement,
the Registration Rights Agreement and the Escrow Agreements and to carry
out the
provisions and conditions hereof and thereof, and all consents, authorizations,
approvals, licenses, certifications, permits and orders required in connection
therewith have been obtained. No consent, authorization or order of, and
no
filing with, any court, government agency or other body is required for the
valid issuance, sale and delivery, of the Securities and the consummation
of the
transactions and agreements contemplated by this Agreement, the Warrant
Agreement, the Representative’s Purchase Option, the Trust Agreement and the
Escrow Agreement and as contemplated by the Prospectus, except with respect
to
applicable federal and state securities laws.
2.14 D&O
Questionnaires.
To the
best of the Company’s knowledge, all information contained in the questionnaires
(“Questionnaires”) completed by each of the Initial Stockholders and provided to
the Underwriters as an exhibit to his, her or its Insider Letter (as defined
in
Section 2.22.1) is true and correct and the Company has not become aware
of any
information which would cause the information disclosed in the questionnaires
completed by each Initial Stockholder to become inaccurate and
incorrect.
2.15 Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge,
threatened against, or involving the Company or, to the best of the Company’s
knowledge, any Initial Stockholder, which has not been disclosed in the
Registration Statement or the Questionnaires.
9
2.16 Good
Standing.
The
Company has been duly organized and is validly existing as a corporation
and is
in good standing under the laws of its state of incorporation, and is duly
qualified to do business and is in good standing as a foreign corporation
in
each jurisdiction in which its ownership or lease of property or the conduct
of
business requires such qualification, except where the failure to qualify
would
not have a material adverse effect on the assets, business or operations
of the
Company.
2.17 Stop
Orders.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or any part thereof and has not threatened
to issue any such order.
2.18 Transactions
Affecting Disclosure to NASD.
2.18.1 Finder’s
Fees.
Except
as described in the Prospectus, there are no claims, payments, arrangements,
agreements or understandings relating to the payment of a finder’s, consulting
or origination fee by the Company or any Initial Stockholder with respect
to the
sale of the Securities hereunder or any other arrangements, agreements or
understandings of the Company or, to the best of the Company’s knowledge, any
Initial Stockholder that may affect the Underwriters’ compensation, as
determined by the National Association of Securities Dealers, Inc.
(“NASD”).
2.18.2 Payments
Within Twelve Months.
Other
than payments to Jesup & ▇▇▇▇▇▇, the Company has not within the twelve
months prior to the Effective Date made any direct or indirect payments (in
cash, securities or otherwise) (i) to any person, as a finder’s fee, consulting
fee or otherwise, in consideration of such person raising capital for the
Company or introducing to the Company persons who raised or provided capital
to
the Company, (ii) to any NASD member or (iii) to any person or entity that
has
any direct or indirect affiliation or association with any NASD
member.
2.18.3 Use
of
Proceeds.
None of
the net proceeds of the Offering will be paid by the Company to any
participating NASD member or its affiliates, except as specifically authorized
herein and except as may be paid in connection with a Business Combination
as
contemplated by the Prospectus.
2.18.4 Insiders’
NASD Affiliation.
Based
on the Questionnaires, except as set forth on Schedule 2.18.4, no officer,
director or any beneficial owner of the Company’s unregistered securities has
any direct or indirect affiliation or association with any NASD member. The
Company will advise the Representative and its counsel if it learns that
any
officer, director or owner of at least 5% of the Company’s outstanding Common
Stock is or becomes an affiliate or associated person of an NASD member
participating in the offering.
2.19 Foreign
Corrupt Practices Act.
Neither
the Company nor any of the Initial Stockholders or any other person acting
on
behalf of the Company has, directly or indirectly, given or agreed to give
any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
agent
of a customer or supplier, or official or employee of any governmental agency
or
instrumentality of any government (domestic or foreign) or any political
party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or
may
be in a position to help or hinder the business of the Company (or assist
it in
connection with any actual or proposed transaction) that (i) might subject
the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company
as
reflected in any of the financial statements contained in the Prospectus
or
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company’s internal
accounting controls and procedures are sufficient to cause the Company to
comply
with the Foreign Corrupt Practices Act of 1977, as amended.
10
2.20 Officers’
Certificate.
Any
certificate signed by any duly authorized officer of the Company and delivered
to you or to your counsel shall be deemed a representation and warranty by
the
Company to the Underwriters as to the matters covered thereby.
2.21 Warrant
Agreement.
The
Company has entered into a warrant agreement with respect to the Warrants,
the
Insider Warrants and the Representative’s Warrants with Continental Stock
Transfer & Trust Company substantially in the form annexed as Exhibit 4.5 to
the Registration Statement (“Warrant Agreement”).
2.22 Agreements
With Initial Stockholders.
2.22.1 Insider
Letters.
The
Company has caused to be duly executed legally binding and enforceable
agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification, contribution or
noncompete provision may be limited under the federal and state securities
laws,
and (iii) that the remedy of specific performance and injunctive and other
forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought)
annexed as Exhibits 10.1 through 10.11 to the Registration Statement (“Insider
Letters”), pursuant to which each of the Initial Stockholders of the Company
agrees to certain matters, including but not limited to, certain matters
described as being agreed to by them under the “Proposed Business” section of
the Prospectus.
2.22.2 Escrow
Agreements.
(i) The
Company has caused the Initial Stockholders to enter into an escrow agreement
(“Escrow Agreement”) with Continental Stock Transfer & Trust Company
(“Initial Share Escrow Agent”) substantially in the form annexed as Exhibit
10.13 to the Registration Statement, whereby the Common Stock owned by the
Initial Stockholders will be held in escrow by the Escrow Agent, until the
first
anniversary of the consummation of a Business Combination. During such escrow
period, the Initial Stockholders shall be prohibited from selling or otherwise
transferring such shares (except to spouses and children of Initial Stockholders
and trusts established for their benefit and as otherwise set forth in the
Initial Share Escrow Agreement) but will retain the right to vote such shares.
To the Company’s knowledge, the Initial Share Escrow Agreement is enforceable
against each of the Initial Stockholders and will not, with or without the
giving of notice or the lapse of time or both, result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default
under,
any agreement or instrument to which any of the Initial Stockholders is a
party.
The Initial Share Escrow Agreement shall not be amended, modified or otherwise
changed without the prior written consent of Jesup & ▇▇▇▇▇▇.
11
(ii) The
Company and the Insider Purchasers have entered into an escrow agreement
(“Insider Warrant Escrow Agreement” and together with the Initial Share Escrow
Agreement, the “Escrow Agreements”) with the Escrow Agent substantially in the
form annexed as Exhibit 10.14 to the Registration Statement, whereby the
Insider
Warrants owned by the Insider Purchaser will be held in escrow by the Escrow
Agent, until 30 days after the consummation of a Business Combination. During
such escrow period, the Insider Purchaser shall be prohibited from selling
or
otherwise transferring such Insider Warrants (except for certain exceptions
set
forth in the Insider Warrant Escrow Agreement). To the Company’s knowledge, the
Insider Warrant Escrow Agreement is enforceable against the Insider Purchasers
and will not, with or without the giving of notice or the lapse of time or
both,
result in a breach of, or conflict with any of the terms and provisions of,
or
constitute a default under, any agreement or instrument to which the Insider
Purchaser is a party. The Insider Warrant Escrow Agreement shall not be amended,
modified or otherwise changed without the prior written consent of Jesup
&
▇▇▇▇▇▇.
2.22.3 Subscription
Agreements.
The
Company has entered into the Subscription Agreements substantially in the
form
annexed as Exhibit 10.17 to the Registration Statement with the Insider
Purchasers to purchase the Insider Securities. Pursuant to the Subscription
Agreement, the Insider Purchasers have placed the purchase price for the
Insider
Securities in escrow prior to the date hereof. Simultaneously with the
consummation of the Offering, such purchase price shall be deposited into
the
Trust Fund pursuant to the Trust Agreement.
2.22.4 Registration
Rights Agreement.
The
Company and the Initial Stockholders have entered into a registration rights
agreement (“Registration Rights Agreement”) substantially in the form annexed as
Exhibit 10.16 to the Registration Statement, whereby the Initial Stockholders
will be entitled to certain registration rights as set forth in such
Registration Rights Agreement and described more fully in the Registration
Statement.
2.23 Investment
Management Trust Agreement.
The
Company has entered into the Trust Agreement with respect to certain proceeds
of
the Offering substantially in the form annexed as Exhibit 10.12 to the
Registration Statement. The Trust Agreement will provide that there may be
released to the Company (i) up to $1,680,000 of interest earned on the funds
held pursuant to the Trust Agreement to fund expenses related to investigating
and selecting a target business and the Company’s other working capital
requirements and (ii) any amounts the Company may need to pay its income
or
other tax obligations.
2.24 Covenants
Not to Compete.
No
Initial Stockholder, employee, officer or director of the Company is subject
to
any noncompetition agreement or non-solicitation agreement with any employer
or
prior employer which could materially affect his ability to be an Initial
Stockholder, employee, officer and/or director of the Company.
12
2.25 Investment
Company Act; Investments.
The
Company has been advised concerning the Investment Company Act of 1940, as
amended (the “Investment Company Act”), and the rules and regulations thereunder
and has in the past conducted, and intends in the future to conduct, its
affairs
in such a manner as to ensure that it will not become an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act and such rules and regulations. The Company is not,
nor
will the Company become upon the sale of the Units and the application of
the
proceeds therefore as described in the Prospectus under the caption “Use of
Proceeds”, an “investment company” or a person controlled by an “investment
company” within the meaning of the Investment Company Act. No more than 45% of
the “value” (as defined in Section 2(a)(41) of the Investment Company Act) of
the Company’s total assets (exclusive of cash items and “Government Securities”
(as defined in Section 2(a)(16) of the Investment Company Act) consist of,
and
no more than 45% of the Company’s net income after taxes is derived from,
securities other than the Government Securities.
2.26 Subsidiaries.
The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.27 Related
Party Transactions.
There
are no business relationships or related party transactions involving the
Company or any other person required to be described in the Prospectus that
have
not been described as required. There are no outstanding loans, advances
(except
normal advances for business expenses in the ordinary course of business)
or
guarantees of indebtedness by the Company to or for the benefit of any of
the
officers or directors or Initial Stockholders of the Company or any of the
members of the families of any of them, except as disclosed in the Registration
Statement and the Prospectus.
2.28 No
Distribution of Offering Material.
The
Company has not distributed and will not distribute prior to the Closing
Date
any offering material in connection with the offering and sale of the Units
other than any Preliminary Prospectuses, the Prospectus, the Registration
Statement and other materials, if any, permitted by the Act.
2.29 Title
to Assets.
Except
as set forth in the Registration Statement and Prospectus, the Company has
good
and marketable title to all properties and assets described in the Registration
Statement and Prospectus as owned by it, free and clear of any pledge, lien,
security interest, encumbrances, claim or equitable interest, other than
such as
would not have a material adverse effect on the financial condition, earnings,
operations, business or business prospects of the Company.
2.30 Taxes.
The
Company has timely filed all necessary federal, state and foreign income
and
franchise tax returns and has paid all taxes shown thereon as due, and there
is
no tax deficiency that has been or, to the best of the Company’s knowledge,
might be asserted against the Company that might have a material adverse
effect
on the financial condition, earnings, operations, business or business prospects
of the Company, and all material tax liabilities are adequately provided
for on
the books of the Company.
2.31 Loans.
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
have made loans to the Company in the aggregate amount of $150,000 (the
“Insider
Loans”
substantially in the form annexed as Exhibit 10.15 to the Registration
Statement). The Insider Loans do not bear any interest and are repayable
by the
Company on the earlier to occur of (i) September 1, 2007 or (ii) the
date on which the Company consummates an initial public offering of its
securities.
13
2.32 American
Stock Exchange Eligibility. As
of the
Effective Date, the Public Securities have been approved for listing on the
American Stock Exchange (“AMEX”).
There
is and has been no failure on the part of the Company or any of the Company's
directors or officers, in their capacities as such, to comply with (as and
when
applicable), and immediately following the effectiveness of the Registration
Statement the Company will be in compliance with, Part 8 of the American
Stock
Exchange’s Company Guide, as amended.
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1 Amendments
to Registration Statement.
The
Company will deliver to the Representative, prior to filing, any amendment
or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to
which
the Representative shall reasonably object in writing.
3.2 Federal
Securities Laws.
3.2.1 Compliance.
During
the time when a Prospectus is required to be delivered under the Act, the
Company will use its best efforts to comply with all requirements imposed
upon
it by the Act, the Regulations and the Exchange Act and by the regulations
under
the Exchange Act, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Public Securities in accordance
with the provisions hereof and the Prospectus. If at any time when a Prospectus
relating to the Public Securities is required to be delivered under the Act,
any
event shall have occurred as a result of which, in the opinion of counsel
for
the Company or counsel for the Underwriters, the Prospectus, as then amended
or
supplemented, includes an untrue statement of a material fact or omits to
state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the Prospectus
to
comply with the Act, the Company will notify the Representative promptly
and
prepare and file with the Commission, subject to Section 3.1 hereof, an
appropriate amendment or supplement in accordance with Section 10 of the
Act.
3.2.2 Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule
424 of
the Regulations.
3.2.3 Exchange
Act Registration.
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 (except
in
connection with a going private transaction) for a period of five years from
the
Effective Date, or until the Company is required to be liquidated, if earlier
or, in the case of the Warrants, until the Warrants expire and are no longer
exercisable. The Company will not deregister the Units, the Common Stock
or the
Warrants under the Exchange Act without the prior written consent of Jesup
&
▇▇▇▇▇▇.
14
3.2.4 Ineligible
Issuer.
At the
time of filing the Registration Statement and at the date hereof, the Company
was and is an “ineligible issuer,” as defined in Rule 405 under the Securities
Act. The Company has not made and will not make any offer relating to the
Public
Securities that would constitute an “issuer free writing prospectus,” as defined
in Rule 433, or that would otherwise constitute a “free writing prospectus,” as
defined in Rule 405.
3.3 Blue
Sky Filings.
The
Company will use its best efforts, in cooperation with the Representative,
at or
prior to the time the Registration Statement becomes effective, to qualify
the
Public Securities for offering and sale under the securities laws of such
jurisdictions as the Representative may reasonably designate, provided that
no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In
each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use its best efforts to file and make such statements or reports
at such times as are or may be required by the laws of such
jurisdiction.
3.4 Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge,
from
time to time during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act, such number of copies of each Preliminary
Prospectus and the Prospectus as such Underwriters may reasonably request
and,
as soon as the Registration Statement or any amendment or supplement thereto
becomes effective, deliver to you two original executed Registration Statements,
including exhibits, and all post-effective amendments thereto and copies
of all
exhibits filed therewith or incorporated therein by reference and all original
executed consents of certified experts.
3.5 Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use its best efforts to cause the Registration Statement to
remain
effective and will notify the Representative immediately and confirm the
notice
in writing (i) of the effectiveness of the Registration Statement and any
amendment thereto, (ii) of the issuance by the Commission of any stop order
or
of the initiation, or the threatening, of any proceeding for that purpose,
(iii)
of the issuance by any state securities commission of any proceedings for
the
suspension of the qualification of the Public Securities for offering or
sale in
any jurisdiction or of the initiation, or the threatening, of any proceeding
for
that purpose, (iv) of the mailing and delivery to the Commission for filing
of
any amendment or supplement to the Registration Statement or Prospectus,
(v) of
the receipt of any comments or request for any additional information from
the
Commission, and (vi) of the happening of any event during the period described
in Section 3.4 hereof that, in the judgment of the Company, makes any statement
of a material fact made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration Statement
or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Commission
or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will use commercially reasonable effort
to obtain promptly the lifting of such order.
3.6 Review
of Financial Statements.
Until
the earlier of five years from the Effective Date, or until such earlier
time
upon which the Company is required to be liquidated, the Company, at its
expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) the Company’s financial statements for
each of the first three fiscal quarters prior to the announcement of quarterly
financial information, the filing of the Company’s Form 10-Q quarterly report
and the mailing of quarterly financial information to stockholders.
15
3.7 Affiliated
Transactions.
3.7.1 Business
Combinations.
The
Company will not consummate a Business Combination with any entity which
is
affiliated with any Initial Stockholder unless the Company obtains an opinion
from an independent investment banking firm that the Business Combination
is
fair to the Company’s stockholders from a financial perspective.
3.7.2 Compensation.
Except
as set forth above in this Section 3.7, the Company shall not pay any Initial
Stockholder or any of their affiliates any fees or compensation from the
Company, for services rendered to the Company prior to, or in connection
with,
the consummation of a Business Combination; provided that the Initial
Stockholders shall be entitled to reimbursement from the Company for their
reasonable out-of-pocket expenses incurred in connection with seeking and
consummating a Business Combination.
3.8 Secondary
Market Trading and Standard & Poor’s.
If the
Company does not maintain the listing of the Public Securities on the AMEX
or
another national securities exchange, the Company will apply to be included
in
Standard & Poor’s Daily News and Corporation Records Corporate
Descriptions for a period of five years from the consummation of a Business
Combination. Promptly after the consummation of the Offering, the Company
shall
take such steps as may be necessary to obtain a secondary market trading
exemption for the Company’s securities in the State of California. The Company
shall also take such other action as may be reasonably requested by the
Representative to obtain a secondary market trading exemption in such other
states as may be requested by the Representative. The Company will apply
to be
included in Standard & Poor’s Daily News and Corporation Records Corporate
Descriptions for a period of five years from the consummation of a Business
Combination.
3.10 Financial
Public Relations Firm.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall retain a financial public relations firm
reasonably acceptable to the Representative for a term to be agreed upon
by the
Company and the Representative.
3.11 Reports
to the Representative.
For a
period of five years from the Effective Date or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish
to the
Representative (Attn: Chief Executive Officer) and its counsel copies of
such
financial statements and other periodic and special reports as the Company
from
time to time furnishes generally to holders of any class of its securities,
and
promptly furnish to the Representative (i) a copy of each periodic report
the
Company shall be required to file with the Commission, (ii) a copy of every
press release and every news item and article with respect to the Company
or its
affairs which was released by the Company, (iii) a copy of each Form 8-K
or
Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company, (iv)
five copies of each registration statement filed by the Company with the
Commission under the Securities Act, (v) a copy of monthly statements, if
any,
setting forth such information regarding the Company’s results of operations and
financial position (including balance sheet, profit and loss statements and
data
regarding outstanding purchase orders) as is regularly prepared by management
of
the Company and (vi) such additional documents and information with respect
to
the Company and the affairs of any future subsidiaries of the Company as
the
Representative may from time to time reasonably request.
16
3.12 Disqualification
of Form S-3.
Until
the earlier of seven years from the date hereof or until the Warrants have
expired and are no longer exercisable, the Company will not take any action
or
actions which may prevent or disqualify the Company’s use of Form S-3 (or other
appropriate form) for the registration of the Warrants and the Representative’s
Warrants under the Act.
3.13 Payment
of Expenses.
3.13.1 General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at Closing Date, all expenses incident
to
the performance of the obligations of the Company under this Agreement,
including but not limited to (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, the Preliminary and Final Prospectuses and the printing
and mailing of this Agreement and related documents, including the cost of
all
copies thereof and any amendments thereof or supplements thereto supplied
to the
Underwriters in quantities as may be required by the Underwriters, (ii) the
printing, engraving, issuance and delivery of the Units, the shares of Common
Stock and the Warrants included in the Units and the Representative’s Purchase
Option, including any transfer or other taxes payable thereon, (iii) the
qualification of the Public Securities under state or foreign securities
or Blue
Sky laws, including the costs of printing and mailing the “Preliminary Blue Sky
Memorandum,” and all amendments and supplements thereto, fees and disbursements
of GM (such fees shall be $________ in the aggregate (of which $_____ has
previously been paid), (iv) filing fees, costs and expenses (including
disbursements for the Representative’s counsel) incurred in registering the
Offering with the NASD, (v) fees and disbursements of the transfer and warrant
agent, (vi) the Company’s expenses associated with “due diligence” meetings
arranged by the Representative, (vii) the preparation, binding and delivery
of
transaction “bibles,” in form and style reasonably satisfactory to the
Representative and transaction lucite cubes or similar commemorative items
in a
style and quantity as reasonably requested by the Representative and (viii)
all
other costs and expenses customarily borne by an issuer incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 3.13.1. The Company also agrees that, if requested
by the Representative, it will engage and pay for an investigative search
firm
of the Representative’s choice to conduct an investigation of the principals of
the Company as shall be mutually selected by the Representative and the Company.
If the Offering is successfully consummated, any such amounts paid by the
Company pursuant to the immediately preceding sentence shall be credited
against
the Representative’s nonaccountable expense allowance (described below in
Section 3.13.2). The Representative may deduct from the net proceeds of the
Offering payable to the Company on the Closing Date, or the Option Closing
Date,
if any, the expenses set forth in this Agreement to be paid by the Company
to
the Representative and others. If the Offering contemplated by this Agreement
is
not consummated for any reason whatsoever then the Company shall reimburse
the
Underwriters in full for their out of pocket expenses, including, without
limitation, its legal fees and disbursements and “road show” and due diligence
expenses. The Representative shall retain such part of the nonaccountable
expense allowance previously paid as shall equal its actual out-of-pocket
expenses and refund the balance. If the amount previously paid is insufficient
to cover such actual out-of-pocket expenses, the Company shall remain liable
for
and promptly pay any other actual out-of-pocket expenses.
17
3.13.2 Nonaccountable
Expenses.
The
Company further agrees that, in addition to the expenses payable pursuant
to
Section 3.13.1, on the Closing Date, it will pay to the Representative a
nonaccountable expense allowance equal to one percent (1.0%) of the gross
proceeds received by the Company from the sale of the Firm Units (of which
$25,000 has previously been paid), by deduction from the proceeds of the
Offering contemplated herein.
3.13.3 Deferred
Compensation.
Upon
the consummation of a Business Combination, the Company shall pay the
Underwriters the Deferred Commissions. This payment shall be made by wire
transfer to an account designated by the Representative on the closing date
of
the Business Combination.
3.14 Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering received by it in a
manner
consistent with the application described under the caption “Use Of Proceeds” in
the Prospectus.
3.15 Delivery
of Earnings Statements to Security Holders.
The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Effective Date, an earnings statement (which need not
be
certified by independent public or independent certified public accountants
unless required by the Act or the Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Act) covering a period
of
at least twelve consecutive months beginning after the Effective
Date.
3.16 Notice
to NASD.
For a
period of ninety days following the Effective Date, 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
Jesup & ▇▇▇▇▇▇ prior to the consummation of the Business Combination: (i)
complete details of all services and copies of agreements governing such
services (which details or agreements may be appropriately redacted to account
for privilege or confidentiality concerns); and (ii) justification as to
why the
person or entity providing the merger and acquisition services should not
be
considered an “underwriter and related person” with respect to the Company’s
initial public offering, as such term is defined in Rule 2710 of the NASD’s
Conduct Rules. The Company also agrees that proper disclosure of such
arrangement or potential arrangement will be made in the proxy statement
which
the Company will file for purposes of soliciting stockholder approval for
the
Business Combination.
3.17 Stabilization.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of Jesup & ▇▇▇▇▇▇) has taken or will take,
directly or indirectly, any action designed to or that has constituted or
that
might reasonably be expected to cause or result in, under the Exchange Act,
or
otherwise, stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Units.
18
3.18 Internal
Controls.
The
Company will maintain a system of internal accounting controls sufficient
to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization, (ii) transactions are
recorded as necessary in order to permit preparation of financial statements
in
accordance with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.19 Accountants.
Until
the earlier of five years from the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
M&K or another independent registered public accountant.
3.20 Form
8-K.
The
Company shall, on the date hereof, retain its independent public accountants
to
audit the financial statements of the Company as of the Closing Date (“Audited
Financial Statements”) reflecting the receipt by the Company of the proceeds of
the initial public offering. As soon as the Audited Financial Statements
become
available, the Company shall immediately file a Current Report on Form 8-K
with
the Commission, which Report shall contain the Company’s Audited Financial
Statements.
3.21 NASD.
The
Company shall advise the NASD if it is aware that any 5% or greater stockholder
of the Company becomes an affiliate or associated person of an NASD member
participating in the distribution of the Company’s Public
Securities.
3.22 Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
3.23 Investment
Company.
The
Company shall cause a portion of the proceeds of the Offering to be held
in the
Trust Fund to be invested only as set forth in the Trust Agreement and as
more
fully described in the Prospectus. The Company will otherwise conduct its
business in a manner so that it will not become subject to the Investment
Company Act. Furthermore, once the Company consummates a Business Combination,
it will be engaged in a business other than that of investing, reinvesting,
owning, holding or trading securities.
3.24 Business
Combination Announcement.
Within
five business days following the consummation by the Company of a Business
Combination, the Company shall cause an announcement (“Business Combination
Announcement”) to be placed, at its cost, in The
Wall Street Journal,
The
New York Times
and a
third publication to be selected by the Representative announcing the
consummation of the Business Combination and indicating that Jesup & ▇▇▇▇▇▇
was the managing underwriter in the Offering. The Company shall supply the
Representative with a draft of the Business Combination Announcement and
provide
the Representative with a reasonable opportunity to comment thereon. The
Company
will not place the Business Combination Announcement without the final approval
of the Representative, which such approval will not be unreasonably
withheld.
19
3.25 Insider
Warrants.
3.25.1 Insider
Warrant Purchase Price.
Simultaneously with the consummation of the Offering, the purchase price
for the
Insider Warrants shall be deposited in the Trust Fund.
3.25.2 Insider
Warrant Exercises.
The
Company hereby acknowledges and agrees that, if the Warrants are called for
redemption, so long as the Insider Warrants are held by the Insider Purchasers
or their affiliates, such Warrants shall be exercisable by the holder by
surrendering such Warrants for that number of shares of Common Stock equal
to
the quotient obtained by dividing (x) the product of the number of shares
of
Common Stock underlying the Warrants, multiplied by the difference between
the
Warrant Price and the “Fair Market Value” (defined below) by (y) the Fair Market
Value. The “Fair Market Value” shall mean the average reported last sale price
of the Common Stock for the 10 trading days ending on the third business
day
prior to the date on which the notice of redemption is sent to holders of
Warrants.
3.26 AMEX
Maintenance Until
the
consummation of a Business Combination, the Company will use commercially
reasonable efforts to maintain the listing by the AMEX of the Securities.
4. Conditions
of Underwriters’ Obligations.
The
obligations of the several Underwriters to purchase and pay for the Units,
as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and the Option Closing Date, if any, to the accuracy
of
the statements of officers of the Company made pursuant to the provisions
hereof
and to the performance by the Company of its obligations hereunder and to
the
following conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
New
York time, on the date of this Agreement or such later date and time as shall
be
consented to in writing by you, and, at each of the Closing Date and the
Option
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall
have
been instituted or shall be pending or contemplated by the Commission and
any
request on the part of the Commission for additional information shall have
been
complied with to the reasonable satisfaction of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, counsel
to the Underwriters (“GT”).
4.1.2 NASD
Clearance.
By the
Effective Date, the Representative shall have received clearance from the
NASD
as to the amount of compensation allowable or payable to the Underwriters
as
described in the Registration Statement.
4.1.3 No
Blue Sky Stop Orders.
No
order suspending the sale of the Units in any jurisdiction designated by
you
pursuant to Section 3.3 hereof shall have been issued on either on the Closing
Date or the Option Closing Date, and no proceedings for that purpose shall
have
been instituted or shall be contemplated.
20
4.2 Company
Counsel Matters.
4.2.1 Effective
Date Opinion of Counsel.
On the
Effective Date, the Representative shall have received the favorable opinion
of
GM, counsel to the Company, dated the Effective Date, addressed to the
Representative and in form and substance satisfactory to GT to the effect
that:
(i) The
Company has been duly organized and is validly existing as a corporation
and is
in good standing under the laws of its state of incorporation. The Company
is
duly qualified and licensed and in good standing as a foreign corporation
in
each jurisdiction in which its ownership or leasing of any properties or
the
character of its operations requires such qualification or licensing, except
where the failure to qualify would not have a material adverse effect on
the
assets, business or operations of the Company. To such counsel’s knowledge, the
Company is not in violation of any term or provision of its Certificate of
Incorporation or Bylaws.
(ii) All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof
are
not subject to personal liability by reason of being such holders; and none
of
such securities were issued in violation of the preemptive rights of any
stockholder of the Company arising by operation of law or under the Certificate
of Incorporation or Bylaws of the Company. The offers and sales of the
outstanding Common Stock were at all relevant times either registered under
the
Act or exempt from such registration requirements. The authorized and, to
such
counsel’s knowledge, outstanding capital stock of the Company is as set forth in
the Prospectus.
(iii) The
Securities and Insider Securities have been duly authorized and, when issued
and
paid for, will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by reason of
being
such holders. The Securities and Insider Securities are not and will not
be
subject to the preemptive rights of any holders of any security of the Company
arising by operation of law or under the Certificate of Incorporation or
Bylaws
of the Company. When issued, the Representative’s Purchase Option, the
Representative’s Warrants, the Insider Warrants and the Warrants will constitute
valid and binding obligations of the Company to issue and sell, upon exercise
thereof and payment therefor, the number and type of securities of the Company
called for thereby and such Warrants, the Insider Warrants, the Representative’s
Purchase Option, and the Representative’s Warrants, when issued, in each case,
are enforceable against the Company in accordance with their respective terms,
except (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (b) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The certificates representing the Securities
are in due and proper form.
(iv) This
Agreement, the Warrant Agreement, the Trust Agreement, the Registration Rights
Agreement, the Subscription Agreements and the Escrow Agreements have each
been
duly and validly authorized and, when executed and delivered by the Company,
constitute, and the Representative’s Purchase Option has been duly and validly
authorized by the Company and, when executed and delivered, will constitute,
the
valid and binding obligations of the Company, enforceable against the Company
in
accordance with their respective terms, except (a) as such enforceability
may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (b) as enforceability of any indemnification or
contribution provisions may be limited under the federal and state securities
laws, and (c) that the remedy of specific performance and injunctive and
other
forms of equitable relief may be subject to the equitable defenses and to
the
discretion of the court before which any proceeding therefor may be
brought.
21
(v) The
execution, delivery and performance of this Agreement, the Warrant Agreement,
the Representative’s Purchase Option, the Escrow Agreements, the Trust
Agreement, the Registration Rights Agreement and the Subscription Agreements
and
compliance by the Company with the terms and provisions thereof and the
consummation of the transactions contemplated thereby, and the issuance and
sale
of the Securities, do not and will not, with or without the giving of notice
or
the lapse of time, or both, (a) to such counsel’s knowledge, conflict with, or
result in a breach of, any of the terms or provisions of, or constitute a
default under, or result in the creation or modification of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company pursuant to the terms of, any mortgage, deed of trust, note, indenture,
loan, contract, commitment or other agreement or instrument filed as an exhibit
to the Registration Statement, (b) result in any violation of the provisions
of
the Certificate of Incorporation or the Bylaws of the Company, or (c) to
such
counsel’s knowledge, violate any United States statute or any judgment, order or
decree, rule or regulation applicable to the Company of any court, United
States
federal, state or other regulatory authority or other governmental body having
jurisdiction over the Company, its properties or assets.
(vi) The
Registration Statement, the Preliminary Prospectus and the Prospectus and
any
post-effective amendments or supplements thereto (other than the financial
statements included therein, as to which no opinion need be rendered) each
as of
their respective dates appeared on their face to comply as to form in all
material respects with the requirements of the Act and Regulations. The
Securities and all other securities issued or issuable by the Company conform
in
all material respects to the description thereof contained in the Registration
Statement and the Prospectus. The descriptions in the Registration Statement
and
in the Prospectus, insofar as such statements constitute a summary of statutes,
legal matters, contracts, documents or proceedings referred to therein, fairly
present in all material respects the information required to be shown with
respect to such statutes, legal matters, contracts, documents and proceedings,
and such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not described
in
the Registration Statement or the Prospectus or included as exhibits to the
Registration Statement that are not described or included as
required.
(vii) The
Registration Statement is effective under the Act. To such counsel’s knowledge,
no stop order suspending the effectiveness of the Registration Statement
has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
22
(viii) To
such
counsel’s knowledge, there is no action, suit or proceeding before or by any
court of governmental agency or body, domestic or foreign, now pending, or
threatened against the Company that is required to be described in the
Registration Statement.
The
opinion of counsel shall further include a statement to the effect that such
counsel has participated in conferences with officers and other representatives
of the Company, the Underwriters and the independent public accountants of
the
Company, at which conferences the contents of the Registration Statement
and the
Prospectus contained therein and related matters were discussed and, although
such counsel is not passing upon and does not assume any responsibility for
the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus contained therein (except as otherwise
set forth in the foregoing opinion), solely on the basis of the foregoing
without independent check and verification, no facts have come to the attention
of such counsel which lead them to believe that the Registration Statement
or
any amendment thereto, at the time the Registration Statement or amendment
became effective, contained an untrue statement of a material fact or omitted
to
state a material fact required to be stated therein or necessary to make
the
statements therein not misleading or the Prospectus or any amendment or
supplement thereto, at the time they were filed pursuant to Rule 424(b) or
at
the date of such counsel’s opinion, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statement therein, in light of the circumstances under
which they were made, not misleading (except that such counsel need express
no
opinion with respect to the financial statements and related notes and schedules
thereto and other financial and statistical data and information included
in the
Registration Statement or the Prospectus).
4.2.2 Closing
Date and Option Closing Date Opinion of Counsel.
On each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received the favorable opinion of GM, dated the Closing Date or
the
Option Closing Date, as the case may be, addressed to the Representative
and in
form and substance reasonably satisfactory to GT, confirming as of the Closing
Date and, if applicable, the Option Closing Date, the statements made by
GM in
its opinion delivered on the Effective Date.
4.2.3 Reliance.
In
rendering such opinion, such counsel may rely (i) as to matters involving
the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to
the
extent specified in such opinion, if at all, upon an opinion or opinions
(in
form and substance reasonably satisfactory to GT) of other counsel reasonably
acceptable to GT, familiar with the applicable laws, and (ii) as to matters
of
fact, to the extent they deem proper, on certificates or other written
statements of officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate existence
or
good standing of the Company, provided that copies of any such statements
or
certificates shall be delivered to the Underwriters’ counsel if requested. The
opinion of counsel for the Company and any opinion relied upon by such counsel
for the Company shall include a statement to the effect that it may be relied
upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
4.3 Cold
Comfort Letter.
At the
time this Agreement is executed, and at each of the Closing Date and the
Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to
in
clause (iii) below) to you and to GT from M&K dated, respectively, as of the
date of this Agreement and as of the Closing Date and the Option Closing
Date,
if any:
23
(i) Confirming
that they are an independent registered public accounting firm with respect
to
the Company within the meaning of the Act and the applicable Regulations
and
that they have not, during the periods covered by the financial statements
included in the Prospectus, provided to the Company any non-audit services,
as
such term is used in Section 10A(g) of the Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in
the
Registration Statement and Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and the published
Regulations thereunder;
(iii) Stating
that, on the basis of a reading of the latest available unaudited interim
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
latest available minutes of the stockholders and board of directors and the
various committees of the board of directors, consultations with officers
and
other employees of the Company responsible for financial and accounting matters
and other specified procedures and inquiries, they have been advised by the
Company officials that (a) the unaudited financial statements of the Company
included in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations or are fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of
the audited financial statements of the Company included in the Registration
Statement and (b) at a date not later than five days prior to the Effective
Date, Closing Date or Option Closing Date, as the case may be, there was
no
change in the capital stock or long-term debt of the Company, or any decrease
in
the stockholders’ equity of the Company as compared with amounts shown in the
October 13, 2006 balance sheet included in the Registration Statement, other
than as set forth in or contemplated by the Registration Statement, or, if
there
was any decrease, setting forth the amount of such decrease;
(iv) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Prospectus in each case to the extent that
such
amounts, numbers, percentages, statements and information may be derived
from
the general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel, with
the
results obtained from the application of specified readings, inquiries and
other
appropriate procedures (which procedures do not constitute an examination
in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(v) Stating
that they have not provided the Company’s management with any written
communication in accordance with Statement on Auditing Standards No. 60
“Communication of Internal Control Structure Related Matters Noted in an Audit;”
and
24
(vi) Statements
as to such other matters incident to the transaction contemplated hereby
as you
may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board or the President and the Secretary or Assistant Secretary of the Company,
dated the Closing Date or the Option Closing Date, as the case may be,
respectively, to the effect that the Company has performed all covenants
and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to and as of the Closing Date, or the
Option
Closing Date, as the case may be, and that the conditions set forth in Section
4.5 hereof have been satisfied as of such date and that, as of Closing Date
and
the Option Closing Date, as the case may be, the representations and warranties
of the Company set forth in Section 2 hereof are true and correct. In addition,
the Representative will have received such other and further certificates
of
officers of the Company as the Representative may reasonably
request.
4.4.2 Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary
or
Assistant Secretary of the Company, dated the Closing Date or the Option
Date,
as the case may be, respectively, certifying (i) that the Bylaws and Certificate
of Incorporation of the Company are true and complete, have not been modified
and are in full force and effect, (ii) that the resolutions relating to the
public offering contemplated by this Agreement are in full force and effect
and
have not been modified, (iii) all correspondence between the Company or its
counsel and the Commission, (iv) all correspondence between the Company or
its
counsel and AMEX concerning the listing of the Securities on AMEX and (v)
as to
the incumbency of the officers of the Company. The documents referred to
in such
certificate shall be attached to such certificate.
4.5 No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any, (i)
there shall have been no material adverse change or development involving
a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement
and
Prospectus, (ii) no action suit or proceeding, at law or in equity, shall
have
been pending or threatened against the Company or any Initial Stockholder
before
or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations, prospects or financial condition
or
income of the Company, except as set forth in the Registration Statement
and
Prospectus, (iii) no stop order shall have been issued under the Act and
no
proceedings therefor shall have been initiated or threatened by the Commission,
and (iv) the Registration Statement and the Prospectus and any amendments
or
supplements thereto shall contain all material statements which are required
to
be stated therein in accordance with the Act and the Regulations and shall
conform in all material respects to the requirements of the Act and the
Regulations, and neither the Registration Statement nor the Prospectus nor
any
amendment or supplement thereto shall contain any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
25
4.6 Delivery
of Agreements.
4.6.1 Effective
Date Deliveries.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of the Escrow Agreements, the Trust Agreement, the Warrant Agreement,
all
of the Subscription Agreements and all of the Insider Letters.
4.6.2 Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representative executed
copies of the Representative’s Purchase Option.
4.7 Opinion
of Counsel for the Underwriters.
All
proceedings taken in connection with the authorization, issuance or sale
of the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to you and to GT and you shall have received from such counsel
a
favorable opinion, dated the Closing Date and the Option Closing Date, if
any,
with respect to such of these proceedings as you may reasonably require.
On or
prior to the Effective Date, the Closing Date and the Option Closing Date,
as
the case may be, counsel for the Underwriters shall have been furnished such
documents, certificates and opinions as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this
Section 4.7, or in order to evidence the accuracy, completeness or satisfaction
of any of the representations, warranties or conditions herein
contained.
4.8 Insider
Warrants.
On the
Closing Date, the Insider Purchasers shall have purchased the Insider Warrants
and the purchase price for such Insider Warrants shall be deposited into
the
Trust Fund.
5. Indemnification.
5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by you that
participates in the offer and sale of the Securities (each a “Selected Dealer”)
and each of their respective directors, officers and employees and each person,
if any, who controls any such Underwriter (“controlling person”) within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any and all loss, liability, claim, damage and expense whatsoever (including
but
not limited to any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, whether arising out of any action between
any of the Underwriters and the Company or between any of the Underwriters
and
any third party or otherwise) to which they or any of them may become subject
under the Act, the Exchange Act or any other statute or at common law or
otherwise or under the laws of foreign countries, arising out of or based
upon
any untrue statement or alleged untrue statement of a material fact contained
in
(i) any Preliminary Prospectus, the Registration Statement or the Prospectus
(as
from time to time each may be amended and supplemented); (ii) in any
post-effective amendment or amendments or any new registration statement
and
prospectus in which is included securities of the Company issued or issuable
upon exercise of the Representative’s Purchase Option; or (iii) any application
or other document or written communication (whether in person or electronically)
(in this Section 5 collectively called “application”) executed by the Company or
based upon written information furnished by the Company in any jurisdiction
in
order to qualify the Securities under the securities laws thereof or filed
with
the Commission, any state securities commission or agency, Nasdaq, AMEX or
any
other securities exchange; or the omission or alleged omission therefrom
of a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission was made in reliance upon and
in
conformity with written information furnished to the Company with respect
to an
Underwriter by or on behalf of such Underwriter expressly for use in any
Preliminary Prospectus, the Registration Statement or Prospectus, or any
amendment or supplement thereof, or in any application, as the case may be.
With
respect to any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Prospectus, the indemnity agreement contained
in this paragraph shall not inure to the benefit of any Underwriter to the
extent that any loss, liability, claim, damage or expense of such Underwriter
results from the fact that a copy of the Prospectus was not given or sent
to the
person asserting any such loss, liability, claim or damage at or prior to
the
written confirmation of sale of the Securities to such person as required
by the
Act and the Regulations, and if the untrue statement or omission has been
corrected in the Prospectus, unless such failure to deliver the Prospectus
was a
result of non-compliance by the Company with its obligations under Section
3.4
hereof. The Company agrees promptly to notify the Representative of the
commencement of any litigation or proceedings against the Company or any
of its
officers, directors or controlling persons in connection with the issue and
sale
of the Securities or in connection with the Registration Statement or
Prospectus.
26
5.1.2 Procedure.
If any
action is brought against an Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5.1.1, such Underwriter or Selected Dealer shall promptly notify
the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and fees of counsel
(subject to the reasonable approval of such Underwriter or Selected Dealer,
as
the case may be) and payment of actual expenses. Such Underwriter, Selected
Dealer or controlling person shall have the right to employ its or their
own
counsel in any such case, but the fees and expenses of such counsel shall
be at
the expense of such Underwriter, Selected Dealer or controlling person unless
(i) the employment of such counsel at the expense of the Company shall have
been
authorized in writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel reasonably
acceptable to the Underwriter or Selected Dealer, as the case may be, to
have
charge of the defense of such action, or (iii) such indemnified party or
parties
shall have reasonably concluded that there may be defenses available to it
or
them which are different from or additional to those available to the Company
(in which case the Company shall not have the right to direct the defense
of
such action on behalf of the indemnified party or parties), in any of which
events the reasonable fees and expenses of not more than one additional firm
of
attorneys selected by the Underwriter, Selected Dealer and/or controlling
person
shall be borne by the Company. Notwithstanding anything to the contrary
contained herein, if the Underwriter, Selected Dealer or controlling person
shall assume the defense of such action as provided above, the Company shall
have the right to approve the terms of any settlement of such action which
approval shall not be unreasonably withheld. This Indemnification provided
for
in this Section 5.1 shall not be available to any party who shall fail to
give
notice as provided in this Section 5.1.2 if the Company was unaware of the
proceeding to which such notice would have related and was actually prejudiced
by the failure to give such notice; provided, however, that indemnification
shall only be limited to the extent of such prejudice; provided, further,
that,
the omission so to notify the Company will not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
5.1. The Company shall not without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been sought hereunder by
such
indemnified party, unless such settlement includes an unconditional release
of
such indemnified party from all liability on claims that are the subject
matter
of such proceedings.
27
5.2 Indemnification
of the Company. Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers and employees and agents who control
the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any and all loss, liability, claim, damage and expense
described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions made in any Preliminary Prospectus, the Registration Statement
or
Prospectus or any amendment or supplement thereto or in any application,
in
reliance upon, and in strict conformity with, written information furnished
to
the Company with respect to such Underwriter by or on behalf of the Underwriter
expressly for use in such Preliminary Prospectus, the Registration Statement
or
Prospectus or any amendment or supplement thereto or in any such application.
In
case any action shall be brought against the Company or any other person
so
indemnified based on any Preliminary Prospectus, the Registration Statement
or
Prospectus or any amendment or supplement thereto or any application, and
in
respect of which indemnity may be sought against any Underwriter, such
Underwriter shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the several Underwriters by the provisions of Section
5.1.2.
5.3 Contribution.
5.3.1 Contribution
Rights.
In
order to provide for just and equitable contribution under the Act in any
case
in which (i) any person entitled to indemnification under this Section 5
makes
claim for indemnification pursuant hereto but it is judicially determined
(by
the entry of a final judgment or decree by a court of competent jurisdiction
and
the expiration of time to appeal or the denial of the last right of appeal)
that
such indemnification may not be enforced in such case notwithstanding the
fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Act, the Exchange Act or otherwise may be required
on the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters and the Company are responsible for; provided, that,
no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions
of
this Section 5.3.1, no Underwriter shall be required to contribute any amount
in
excess of the amount by which the total price at which the Public Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay in respect of such losses, liabilities, claims, damages and
expenses. For purposes of this Section, each director, officer and employee
of
an Underwriter or the Company, as applicable, and each person, if any, who
controls an Underwriter or the Company, as applicable, within the meaning
of
Section 15 of the Act shall have the same rights to contribution as the
Underwriters or the Company, as applicable.
28
5.3.2 Contribution
Procedure.
Within
fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be
made
against another party (“contributing party”), notify the contributing party of
the commencement thereof, but the omission to so notify the contributing
party
will not relieve it from any liability which it may have to any other party
other than for contribution hereunder. In case any such action, suit or
proceeding is brought against any party, and such party notifies a contributing
party or its representative of the commencement thereof within the aforesaid
fifteen days, the contributing party will be entitled to participate therein
with the notifying party and any other contributing party similarly notified.
Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party seeking contribution on account of any settlement
of any
claim, action or proceeding effected by such party seeking contribution without
the written consent of such contributing party. The contribution provisions
contained in this Section are intended to supersede, to the extent permitted
by
law, any right to contribution under the Act, the Exchange Act or otherwise
available. The Underwriters’ obligations to contribute pursuant to this Section
5.3 are several and not joint.
6. Default
by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option
is
exercised, hereunder, and if the number of the Firm Units or Option Units
with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Units or Option Units.
In the
event that the default addressed in Section 6.1 above relates to more than
10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within
one
business day after such default relating to more than 10% of the Firm Units
or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one business
day within which to procure another party or parties satisfactory to you
to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or
Option
Units to which a default relates as provided in this Section 6, this Agreement
will be terminated without liability on the part of the Company (except as
provided in Sections 3.11 and 5 hereof) or the several Underwriters (except
as
provided in Section 5 hereof); provided, however, that if such default occurs
with respect to the Option Units, this Agreement will not terminate as to
the
Firm Units; and provided further that nothing herein shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters and
to
the Company for damages occasioned by its default hereunder.
29
6.3 Postponement
of Closing Date.
In the
event that the Firm Units or Option Units to which the default relates are
to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date or Option Closing Date for a reasonable period,
but
not in any event exceeding five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees
to
file promptly any amendment to the Registration Statement or the Prospectus
that
in the opinion of counsel for the Underwriters may thereby be made necessary.
The term “Underwriter” as used in this Agreement shall include any party
substituted under this Section 6 with like effect as if it had originally
been a
party to this Agreement with respect to such Securities.
7. Additional
Covenants.
7.1 Additional
Shares or Options.
The
Company hereby agrees that until the consummation of a Business Combination,
it
shall not issue any shares of Common Stock or any options or other securities
convertible or exercisable or exchangeable into Common Stock, or any shares
of
Preferred Stock which participate in any manner in the Trust Fund or which
vote
as a class with the Common Stock on a Business Combination.
7.2 Trust
Fund Waiver Acknowledgment.
(a) Underwriters/Representative.
Except
with respect to the Deferred Commissions due to the Underwriters only
upon successful consummation of a Business Combination, each of the Underwriters
and the Representative hereby agree that it does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund (“Claim”)
and waive any Claim it may have in the future as a result of, or arising
out of,
any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever.
(b) Target
Businesses and Vendors.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business which the Company seeks to acquire (each a “Target
Business”) or obtain the services of any vendor unless and until such Target
Business or vendor acknowledges in writing, whether through a letter of intent,
memorandum of understanding or other similar document (and subsequently
acknowledges the same in any definitive document replacing any of the
foregoing), that (a) it has read the Prospectus and understands that the
Company
has established the Trust Fund for the benefit of the public stockholders
and
that the Company may disburse monies from the Trust Fund only (i) to the
public stockholders in the event they elect to convert their IPO Shares (as
defined below in Section 7.6), (ii) to the public stockholders upon the
liquidation of the Company if the Company fails to consummate a Business
Combination or (iii) to the Company after, or concurrently with, the
consummation of a Business Combination and (b) for and in consideration of
the
Company (1) agreeing to evaluate such Target Business for purposes of
consummating a Business Combination with it or (2) agreeing to engage the
services of the vendor, as the case may be, such Target Business or vendor
agrees that it does not have any Claim of any kind in or to any monies in
the
Trust Fund and waives any Claim it may have in the future as a result of,
or
arising out of, any negotiations, contracts or agreements with the Company
and
will not seek recourse against the Trust Fund for any reason
whatsoever.
30
7.3 Insider
Letters.
The
Company shall not take any action or omit to take any action which would
cause a
breach of any of the Insider Letters and will not allow any amendments to,
or
waivers of, such Insider Letters without the prior written consent of Jesup
& ▇▇▇▇▇▇.
7.4 Certificate
of Incorporation and Bylaws.
The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Certificate of Incorporation
or
Bylaws. Prior to the consummation of a Business Combination, the Company
will
not amend its Certificate of Incorporation without the prior written consent
of
Jesup and ▇▇▇▇▇▇.
7.5 Blue
Sky Requirements.
The
Company shall provide counsel to the Representative with ten copies of all
proxy
information and all related material filed with the Commission in connection
with a Business Combination concurrently with such filing with the Commission.
In addition, the Company shall furnish any other state in which its initial
public offering was registered, such information as may be requested by such
state.
7.6 Acquisition/Liquidation
Procedure.
The
Company agrees: (i) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company’s stockholders for their approval
(“Business Combination Vote”) even if the nature of the acquisition is such as
would not ordinarily require stockholder approval under applicable state
law;
and (ii) that, in the event that the Company does not effect a Business
Combination within 24 months from the Effective Date, the Company will be
liquidated and will distribute to all holders of IPO Shares (defined below)
an
aggregate sum equal to the Company’s “Liquidation Value.” The Company’s
“Liquidation Value” shall mean the Company’s book value, as determined by the
Company and approved by M&K. In no event, however, will the Company’s
Liquidation Value be less than the Trust Fund, inclusive of any net interest
income thereon after any permitted distributions to the Company as set forth
in
Section 2.23 hereof. Only holders of IPO Shares shall be entitled to receive
liquidating distributions and the Company shall pay no liquidating distributions
with respect to any other shares of capital stock of the Company. With respect
to the Business Combination Vote, the Company shall cause all of the Initial
Stockholders to vote the shares of Common Stock owned by them immediately
prior
to this Offering in accordance with the vote of the holders of a majority
of the
IPO Shares present, in person or by proxy, at a meeting of the Company’s
stockholders called for such purpose. At the time the Company seeks approval
of
any potential Business Combination, the Company will offer each holder of
Common
Stock issued in this Offering (“IPO Shares”) the right to convert their IPO
Shares at a per share price (“Conversion Price”) equal to the amount in the
Trust Fund (inclusive of any interest income therein after any permitted
distributions to the Company as set forth in Section 2.23 hereof) calculated
as
of two business days prior to the consummation of the proposed Business
Combination divided by the total number of IPO Shares. If a majority of the
holders of IPO Shares present and entitled to vote on the Business Combination
vote in favor of such Business Combination and holders of less than 20% in
interest of the Company’s IPO Shares elect to convert their IPO Shares, the
Company may, but will not be required to, proceed with such Business
Combination. If the Company elects to so proceed, it will convert shares,
based
upon the Conversion Price, from those holders of IPO Shares who affirmatively
requested such conversion and who voted against the Business Combination.
If
holders of 20% or more in interest of the IPO Shares, who vote against approval
of any potential Business Combination, elect to convert their IPO Shares,
the
Company will not proceed with such Business Combination and will not convert
such shares. The provisions of this Section 7.6 may not be modified, amended
or
deleted under any circumstances.
31
7.7 Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including but not limited to using its best efforts
to
prevent any of the Company’s outstanding securities from being deemed to be a
“▇▇▇▇▇ stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8 Affiliated
Transactions.
The
Company shall cause each of the Initial Stockholders to agree that, in order
to
minimize potential conflicts of interest which may arise from multiple
affiliations, the Initial Stockholders will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire an operating business, until the earlier
of the
consummation by the Company of a Business Combination, the liquidation of
the
Company or until such time as the Initial Stockholders cease to be an officer
or
director of the Company, subject to any pre-existing fiduciary or contractual
obligations the Initial Stockholders might have.
7.9 Target
Net Assets.
The
Company agrees that the initial Target Business that it acquires must have
a
fair market value equal to at least 80% of the Company’s net assets (all of the
Company’s assets, including the funds held in the Trust Fund, 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 at
the time of such acquisition, the Company will obtain an opinion from an
unaffiliated, independent investment banking firm which is a member of the
NASD
with respect to the satisfaction of such criteria. The Company is not required
to obtain an opinion from an investment banking firm as to the fair market
value
if the Company’s Board of Directors independently determines that the Target
Business does have sufficient fair market value.
8. Representations
and Agreements to Survive Delivery.
Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date or Option Closing Date and
such
representations, warranties and agreements of the Underwriters and Company,
including the indemnity agreements contained in Section 5 hereof, shall remain
operative and in full force and effect regardless of any investigation made
by
or on behalf of any Underwriter, the Company or any controlling person, and
shall survive termination of this Agreement or the issuance and delivery
of the
Securities to the several Underwriters until the earlier of the expiration
of
any applicable statute of limitations and the seventh anniversary of the
later
of the Closing Date or the Option Closing Date, if any, at which time the
representations, warranties and agreements shall terminate and be of no further
force and effect.
32
9. Effective
Date of This Agreement and Termination Thereof.
9.1 Effective
Date.
This
Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
9.2 Termination.
You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or occurrence
has materially disrupted, or in your opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii)
if
trading on the New York Stock Exchange, the American Stock Exchange, the
Boston
Stock Exchange or on the NASD OTC Bulletin Board (or successor trading market)
shall have been suspended, or minimum or maximum prices for trading shall
have
been fixed, or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities shall have been required on the
NASD
OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or
(v) if
a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether
or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of
the
Company’s representations, warranties or covenants hereunder are breached, or
(viii) if the Representative shall have become aware after the date hereof
of
such a material adverse change in the conditions or prospects of the Company,
or
such adverse material change in general market conditions, including without
limitation as a result of terrorist activities after the date hereof, as
in the
Representative’s judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made
by the
Underwriters for the sale of the Securities.
9.3 Expenses.
In the
event that this Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant to the
terms
herein, the obligations of the Company to pay the out of pocket expenses
related
to the transactions contemplated herein shall be governed by Section 3.13
hereof.
9.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not
be in
any way affected by, such election or termination or failure to carry out
the
terms of this Agreement or any part hereof.
33
10. Miscellaneous.
10.1 Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered or telecopied and confirmed
and shall be deemed given when so delivered or telecopied and confirmed or
if
mailed, two days after such mailing
If
to the
Representative:
Jesup
& ▇▇▇▇▇▇ Securities Corp.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Executive Officer
Copy
to:
▇▇▇▇▇▇▇▇▇
Traurig, LLP
MetLife
Building
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇. Annex, Esq.
If
to the
Company:
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
#▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Copy
to:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
The
Chrysler Building
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Esq.
10.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of
any of
the terms or provisions of this Agreement.
10.3 Amendment.
Except
for Section 7.6 (which may not be amended under any circumstances), this
Agreement may only be amended by a written instrument executed by each of
the
parties hereto.
10.4 Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof
and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
34
10.5 Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon
the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall
have or
be construed to have any legal or equitable right, remedy or claim under
or in
respect of or by virtue of this Agreement or any provisions herein
contained.
10.6 Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction. The Company hereby agrees that any action, proceeding
or
claim against it arising out of, or relating in any way to this Agreement
shall
be brought and enforced in the courts of the State of New York of the United
States of America for the Southern District of New York, and irrevocably
submits
to such jurisdiction, which jurisdiction shall be exclusive. The Company
hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served
upon
the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it
at
the address set forth in Section 10 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company agrees that the prevailing party(ies) in
any
such action shall be entitled to recover from the other party(ies) all of
its
reasonable attorneys’ fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
10.7 Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to
be an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. Facsimile signatures will be binding and effective as
originals.
10.8 Waiver,
Etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
10.9 No
Fiduciary Duty.
The
Company acknowledges and agrees that neither the Representative, the
Underwriters nor the controlling persons of any of them shall have any fiduciary
or advisory duty to the Company or any of its controlling persons arising
out
of, or in connection with, this Agreement or the offer and sale of the
Securities.
35
If
the
foregoing correctly sets forth the understanding between the Underwriters
and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
| Very truly yours, | ||
| ALYST ACQUISITION CORP. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
Accepted
on the date first
above
written.
JESUP
& ▇▇▇▇▇▇ SECURITIES CORPORATION
| By: | ||||
|
Name:
Title:
|
|
36
SCHEDULE
I
7,000,000
Units
|
Underwriter
|
Number
of Firm Units
to
be Purchased
|
|
|
7,000,000
|