Exhibit 1.1
HEALTHCARE ACQUISITION CORP.
UNDERWRITING AGREEMENT
New York, New York
____, 2005
Maxim Group LLC
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As Representative of the Underwriters
named on Schedule A hereto
Ladies and Gentlemen:
The undersigned, Healthcare Acquisition Corp., a Delaware
corporation ("COMPANY"), hereby confirms its agreement with Maxim Group LLC
(hereinafter referred to as "YOU," "MAXIM" or the "REPRESENTATIVE") and with the
other underwriters named on Schedule A hereto for which Maxim is acting as
Representative (the Representative and the other Underwriters being collectively
referred to herein as 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 8,000,000 units (the
"FIRM UNITS") of the Company at a purchase price (net of discounts and
commissions) of $7.52 per Firm Unit. The Underwriters, severally and not
jointly, agree to purchase from the Company the number of Firm Units set forth
opposite their respective names on Schedule A attached hereto and made a part
hereof at a purchase price (net of discounts and commissions) of $7.52 per Firm
Unit. The Firm Units are to be offered initially to the public (the "OFFERING")
at the offering price of $8.00 per Firm Unit. Each Firm Unit consists of one
share of the Company's common stock, par value $.0001 per share (the "COMMON
STOCK"), and one warrant to purchase a share of Common Stock (the "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 (the
"EFFECTIVE DATE") of the Registration Statement (as defined in Section 2.1.1
hereof) unless Maxim informs the Company of its decision to allow earlier
separate trading (and thereafter shall trade only separately), but in no event
will Maxim 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 such audited balance sheet with the Commission (as
herein defined) on a Form 8-K or similar form by the Company which includes such
balance sheet. Each Warrant entitles its holder to purchase one share of Common
Stock for $6.00 during the period commencing on the later of (a) the
consummation by the Company of its "Business Combination" or (b) one year from
the Effective Date of the Registration Statement and terminating on the
four-year anniversary of the Effective Date. "BUSINESS COMBINATION" shall mean
any acquisition by merger, capital stock exchange, asset or stock acquisition or
other similar business combination consummated by the Company with a single
operating entity, or one or more related or unrelated entities in the healthcare
industry (as described more fully in the Registration Statement). The Company
has the right to redeem the Warrants upon not less than thirty (30) days written
notice at a price of $0.01 per Warrant at any time after the Warrants become
exercisable; so long as the last sales price of the Company's Common Stock has
been at least $11.50 for any twenty (20) trading days within a thirty (30)
trading day period ending on the third day prior to the day on which notice is
given.
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 the Effective Date of the Registration Statement (or the fourth
business day following the Effective Date, if the Registration Statement is
declared effective after 4:30 p.m.) or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of the Representative
or at such other place as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm Units is called
the "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: $57,600,000 ($7.20 per Firm Unit) 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 (the "TRUST FUND") pursuant to the terms
of an Investment Management Trust Agreement (the "TRUST AGREEMENT") and the
remaining proceeds (less commissions, expense allowance and actual expense
payments or other fees) shall be paid to the order of the Company upon delivery
to you of certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Units (or through the facilities of the Depository Trust
Company (the "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 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. As
used herein, the term "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any day on which national banks in New York, New York are not open for
business.
1.2 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 1,200,000 units from the Company (the
"OVER-ALLOTMENT OPTION"). Such additional 1,200,000 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.
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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 from 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, which will not be later than five 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. If such delivery
and payment for the Option Units does not occur on the Closing Date, the date
and time of the closing for such Option Units will be as set forth in the notice
(hereinafter the "OPTION CLOSING DATE"). Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters, and,
subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Units specified in such
notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall
be made on the Option Closing Date at the Representative's election by wire
transfer in Federal (same day) funds or by certified or bank cashier's check(s)
in New York Clearing House funds, payable as follows: $7.20 per Option Unit
shall be deposited in the Trust Fund pursuant to the Trust Agreement and the
remaining proceeds (less commissions, expense allowance and actual expense
payments or other fees) shall be paid to the order of the Company upon delivery
to you of certificates (in form and substance satisfactory to the Underwriters)
representing the 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 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 their designees) on the Effective Date an
option ("REPRESENTATIVE'S PURCHASE OPTION") for the purchase of an aggregate of
400,000 units (the "REPRESENTATIVE'S UNITS") for an aggregate purchase price of
$100.00. Each of the Representative's Units is identical to the Firm Units,
except that the Warrants included in the Representative's Units have an exercise
price of $7.50. The Representative's Purchase Option shall be exercisable, in
whole or in part, commencing on the later of the consummation of a Business
Combination or one year from the Effective Date and expiring on the five-year
anniversary of the Effective Date at an initial exercise price per
Representative's Unit of $10.00, which is equal to one hundred and ten percent
(110%) of the initial public offering price of a Unit. The Representative's
Purchase Option, the Representative's Units, the shares of Common Stock and the
Warrants included in the Representative's Units (the "REPRESENTATIVE'S
WARRANTS") and the shares of Common Stock issuable upon exercise of the
Representative's Warrants are hereinafter referred to collectively as the
"REPRESENTATIVE'S SECURITIES." The Public Securities and the Representative's
Securities are hereinafter referred to collectively as the "SECURITIES." The
Representative understands and agrees that there are significant restrictions
against transferring the Representative's Purchase Option during the first year
after the Effective Date, as set forth in Section 3 of the Representative's
Purchase Option.
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1.3.2 Delivery and Payment. Delivery and payment for the
Representative's Purchase Option shall be made on the Closing Date. The Company
shall deliver to the Underwriters, upon payment therefor, certificates for the
Representative's Purchase Option in the name or names and in such authorized
denominations as the Representative may request.
2. Representations and Warranties of the Company. The Company represents and
warrants to the Underwriters as follows:
2.1 Filing of Registration Statement.
2.1.1 Pursuant to the Act. The Company has filed with the
Securities and Exchange Commission (the "COMMISSION") a registration statement
and an amendment or amendments thereto, on Form S-1 (File No. 333-124712),
including any related preliminary prospectus (the "PRELIMINARY PROSPECTUS"), for
the registration of the Securities under the Securities Act of 1933, as amended
(the "ACT"), which registration statement and amendment or amendments have been
prepared by the Company in conformity with the requirements of the Act, and the
rules and regulations (the "REGULATIONS") of the Commission under the Act. The
conditions for use of Form S-1 to register the Offering under the Act, as set
forth in the General Instructions to such Form, have been satisfied. Except as
the context may otherwise require, such registration statement, as amended, on
file with the Commission at the time the registration statement becomes
effective (including the prospectus, financial statements, schedules, exhibits
and all other documents filed as a part thereof or incorporated therein and all
information deemed to be a part thereof as of such time pursuant to 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." If the Company has filed, or is required
pursuant to the terms hereof to file, a registration statement pursuant to Rule
462(b) under the Securities Act registering additional shares of Common Stock (a
"RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "REGISTRATION STATEMENT" shall be deemed to include
such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the
Commission. All of the Public Securities have been registered under the
Securities Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. The Registration
Statement has been declared effective by the Commission on the date hereof.
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2.1.2 Pursuant to the Exchange Act. The Company has filed with
the Commission a Form 8-A (File Number 000- ) providing for the registration
under the Securities Exchange Act of 1934, as amended (the "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 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 any Preliminary Prospectus or the Prospectus, nor any
amendment or supplement thereto, on such dates, did 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 the case of the
Prospectus, 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 have been corrected in the
Prospectus to 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. It is understood that the statements set forth in
the fifth, twelfth, thirteenth, fourteenth and sixteenth paragraphs in the
Prospectus under the heading "Underwriting - Underwriting Terms" constitute for
the purposes of this Agreement, information furnished by the Representative with
respect to the Underwriters.
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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 attached as an exhibit thereto, or (ii) is
material to the Company's business, has been duly and validly executed by the
Company, is in full force and effect in all material respects and is enforceable
against the Company and, to the Company's knowledge, the other parties thereto,
in accordance with its terms, except (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (z)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and none of
such agreements or instruments has been assigned by the Company, and neither the
Company nor, to the Company's knowledge, any other party is in breach or default
thereunder and, to the Company's knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a breach or
default thereunder. To the Company's knowledge, performance by the Company of
the material provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including,
without limitation, those relating to environmental laws and regulations.
2.3.3 Prior Securities Transactions. No securities of the
Company have been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by, or under common control
with the Company within the three years prior to the date hereof, except as
disclosed in the Registration Statement.
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 necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
2.4 Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement, any Preliminary
Prospectus and/or 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; (iii) no member of the Company's board
of directors or management has resigned from any position with the Company and
(iv) no event or occurrence has taken place which materially impairs, or would
likely materially impair, with the passage of time, the ability of the members
of the Company's board of directors or management to act in their capacities
with the Company as described in the Registration Statement and the Prospectus.
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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 capital stock.
2.5 Independent Accountants. LWBJ, LLP ("LWBJ"), whose report is filed
with the Commission as part of the Registration Statement, are independent
accountants as required by the Act and the Regulations and the Public Company
Accounting Oversight Board (including the rules and regulations promulgated by
such entity, the "PCAOB"). LWBJ is duly registered and in good standing with the
PCAOB. LWBJ 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; Statistical Data.
2.6.1 Financial Statements. The financial statements, including
the notes thereto and supporting schedules included in the Registration
Statement and Prospectus fairly present the financial position and the results
of operations of the Company at the dates and for the periods to which they
apply; and such financial statements have been prepared in conformity with
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. No other
financial statements or supporting schedules are required to be included or
incorporated by reference in the Registration Statement. 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. There are
no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement and the Prospectus in accordance with
Regulation S-X which have not been included as so required.
2.6.2 Statistical Data. The statistical, industry-related and
market-related data included in the Registration Statement and the Prospectus
are based on or derived from sources which the Company reasonably and in good
faith believes are reliable and accurate, and such data agree with the sources
from which they are derived.
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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.
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 Public Securities conform 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 reserved for issuance 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. The shares of Common Stock issuable upon exercise of the
Warrants and included in the Representative's Purchase Option (and the shares of
Common Stock issuable upon exercise of the Representative's Warrants) have been
reserved for issuance upon the exercise of the Warrants, the Representative's
Purchase Option and the Representative's Warrants and when issued in accordance
with the terms of such securities, will be duly and validly authorized, validly
issued, fully paid and non-assessable; the holders thereof are not and will not
be subject to personal liability by reason of being such holders.
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2.8.3 No Integration. Neither the Company nor any of its
affiliates has, prior to the date hereof, made any offer or sale of any
securities which are required to be "integrated" pursuant to the Act or the
Regulations with the offer and sale of the Public Securities pursuant to the
Registration Statement.
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 2.22 hereof), the Trust Agreement, the
Services Agreement (as defined in Section 3.7.2 hereof) and the Escrow Agreement
(as defined in Section 2.23.2 hereof) have been duly and validly authorized by
the Company and constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (ii) as
enforceability of any indemnification or contribution provision may be limited
under 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 Service Agreements 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 al 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 Amended and Restated Certificate of Incorporation or the
By-Laws of the Company; or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
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 Amended and Restated Certificate of
Incorporation or Bylaws or in violation of any material franchise, license,
permit, applicable law, rule, regulation, judgment or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or businesses.
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2.13 Corporate Power; Licenses; Consents.
2.13.1 Conduct of Business. The Company has all requisite
corporate power and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies that it needs as of the date hereof to conduct
its business for the purposes described in the 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 and to carry out the
provisions and conditions hereof, and all consents, authorizations, approvals
and orders required in connection therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery, of the
Securities and the consummation of the transactions and agreements contemplated
by this Agreement, the Warrant Agreement, the Representative's Purchase Option,
the Trust Agreement, the Services 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. All information contained in the
questionnaires (the "QUESTIONNAIRES") completed by each of the Company's
stockholders immediately prior to the Offering (the "INITIAL STOCKHOLDERS") and
provided to the Underwriters as an exhibit to his or her Insider Letter (as
defined in Section 2.23.1) 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.
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 Company.
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2.17 No Contemplation of a Business Combination. Prior to the date
hereof, neither the Company, its officers and directors nor the Initial
Stockholders had, and as of the Closing, the Company and such officers and
directors and Initial Stockholders will not have had: (a) any specific Business
Combination under consideration or contemplation or (b) any substantive
interactions or discussions with any target business regarding a possible
Business Combination.
2.18 Transactions Affecting Disclosure to NASD.
2.18.1 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
Company's knowledge, any Initial Stockholder that may affect the Underwriters'
compensation, as determined by the National Association of Securities Dealers,
Inc. (the "NASD").
2.18.2 The Company has not made any direct or indirect payments
(in cash, securities or otherwise) to: (i) any person, as a finder's fee,
consulting fee or otherwise, in consideration of such person raising capital for
the Company or introducing to the Company persons who raised or provided capital
to the Company; (ii) to any NASD member; or (iii) to any person or entity that
has any direct or indirect affiliation or association with any NASD member,
within the twelve months prior to the Effective Date, other than payments to
Maxim.
2.18.3 No officer, director, or beneficial owner of any class of
the Company's securities (whether debt or equity, registered or unregistered,
regardless of the time acquired or the source from which derived) (any such
individual or entity, a "COMPANY AFFILIATE") is a member, a person associated,
or affiliated with a member of the NASD.
2.18.4 No Company Affiliate is an owner of stock or other
securities of any member of the NASD (other than securities purchased on the
open market).
2.18.5 No Company Affiliate has made a subordinated loan to any
member of the NASD.
2.18.6 No proceeds from the sale of the Public Securities
(excluding underwriting compensation) will be paid to any NASD member, or any
persons associated or affiliated with a member of the NASD.
2.18.7 Except with respect to Maxim, the Company has not issued
any warrants or other securities, or granted any options, directly or indirectly
to anyone who is a potential underwriter in the Offering or a related person (as
defined by NASD rules) of such an underwriter within the 180-day period prior to
the initial filing date of the Registration Statement.
2.18.8 No person to whom securities of the Company have been
privately issued within the 180-day period prior to the initial filing date of
the Registration Statement has any relationship or affiliation or association
with any member of the NASD.
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2.18.9 No NASD member intending to participate in the Offering
has a conflict of interest with the Company. For this purpose, a "conflict of
interest" exists when a member of the NASD and/or its associated persons, parent
or affiliates in the aggregate beneficially own 10% or more of the Company's
outstanding subordinated debt or common equity, or 10% or more of the Company's
preferred equity. "Members participating in the Offering" include managing
agents, syndicate group members and all dealers which are members of the NASD.
2.18.10 Except with respect to Maxim, the Company has not entered
into any agreement or arrangement (including, without limitation, any consulting
agreement or any other type of agreement) during the 180-day period prior to the
initial filing date of the Registration Statement, which arrangement or
agreement provides for the receipt of any item of value and/or the transfer of
any warrants, options, or other securities from the Company to an NASD member,
any person associated with a member (as defined by NASD rules), any potential
underwriters in the Offering and/or any related persons.
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.
2.20 Patriot Act. Neither the Company nor any officer, director or
Initial Stockholder has violated: (a) the Bank Secrecy Act, as amended, (b) the
Money Laundering Control Act of 1986, as amended, or (c) the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and
regulations promulgated under any such law, or any successor law.
2.21. 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.
2.22 Warrant Agreement. The Company has entered into a warrant
agreement with respect to the Warrants and the Representative's Warrants with
Continental Stock Transfer & Trust Company substantially in the form filed as an
exhibit to the Registration Statement (the "WARRANT AGREEMENT"), providing for,
among other things, the payment of a warrant solicitation fee as contemplated by
Section 3.9 hereof.
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2.23 Agreements With Initial Stockholders.
2.23.1 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 10.1.1 through 10.1.5,
to the Registration Statement (the "INSIDER LETTER"), pursuant to which each of
the Initial Stockholders of the Company agree to certain matters, including but
not limited to, certain matters described as being agreed to by them under the
"Proposed Business" Section of the Prospectus.
2.23.2 Escrow Agreement. The Company has caused the Initial
Stockholders to enter into an escrow agreement (the "ESCROW AGREEMENT") with
Continental Stock Transfer & Trust Company (the "ESCROW AGENT") substantially in
the form filed as an exhibit to the Registration Statement whereby the Common
Stock owned by the Initial Stockholders will be held in escrow by the Escrow
Agent, until the third anniversary of the Effective Date. During such escrow
period, the Initial Stockholders shall be prohibited from selling or otherwise
transferring such shares (except (a) to spouses and children of Initial
Stockholders and trusts established for their benefit, (b) after a Business
Combination in a transaction whereby all the outstanding shares of the Company
are exchanged or converted into cash or another entity's securities and (c) as
otherwise set forth in the Escrow Agreement) unless approved by the Company's
public stockholders, but will retain the right to vote such shares. The Escrow
Agreement shall not be amended, modified or otherwise changed without the prior
written consent of Maxim.
2.24 Investment Management Trust Agreement. The Company has entered
into the Trust Agreement with respect to certain proceeds of the Offering
substantially in the form filed as an exhibit to the Registration Statement.
2.25 Covenants Not to Compete. No Initial Stockholder of the Company is
subject to any noncompetition agreement or non-solicitation agreement with any
employer or prior employer which could materially affect his ability to be an
Initial Stockholder, employee, officer and/or director of the Company.
2.26 Investments. No more than 45% of the "value" (as defined in
Section 2(a)(41) of the Investment Company Act of 1940 ("Investment Company
Act")) of the Company's total assets consist of, and no more than 45% of the
Company's net income after taxes is derived from, securities other than
"Government Securities" (as defined in Section 2(a)(16) of the Investment
Company Act).
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2.27 Subsidiaries. The Company does not own an interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business entity.
2.28 Related Party Transactions. No relationship, direct or indirect,
exists between or among any of the Company or any affiliate of the Company, on
the one hand, and any director, officer, shareholder, customer or supplier of
the Company or any affiliate of the Company, on the other hand, which is
required by the Act, the Exchange Act or the Regulations to be described in the
Registration Statement or the Prospectus which is not so described and described
as required. There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus. The Company has not
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director or
officer of the Company.
2.29 No Influence. The Company has not offered, or caused the
Underwriters to offer, the Firm Units to any person or entity with the intention
of unlawfully influencing: (a) a customer or supplier of the Company or any
affiliate of the Company to alter the customer's or supplier's level or type of
business with the Company or such affiliate or (b) a journalist or publication
to write or publish favorable information about the Company or any such
affiliate.
2.30 AMEX Rules. As of the effective date of the Registration
Statement, the Company's Board of Directors shall have validly appointed an
audit committee, nominating committee and compensation committee whose
composition satisfies the requirements of the rules and regulations of the
American Stock Exchange ("AMEX") and the Board of Directors and/or audit
committee and the nominating committee has each adopted a charter that satisfies
the requirements of AMEX. Neither the Board of Directors nor the audit committee
has been informed, nor is any director of the Company aware, of: (i) any
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting.
2.31 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ The Company is in material compliance with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated thereunder and related or similar rules and regulations promulgated
by AMEX or any other governmental or self regulatory entity or agency, except
for such violations which, singly or in the aggregate, would not have a material
adverse effect. Without limiting the generality of the foregoing, as of the
effective date of the Registration Statement: (i) all members of the Company's
Board of Directors who are required to be "independent" (as that term is defined
under applicable laws, rules and regulations), including, without limitation,
all members of the audit committee of the Company's Board of Directors, meet the
qualifications of independence as set forth under applicable laws, rules and
regulations and (ii) the audit committee of the Company's Board of Directors has
at least one member who is an "audit committee financial expert" (as that term
is defined under applicable laws, rules and regulations).
-14-
2.32 Listing of the Public Securities on AMEX. The Public Securities
have been authorized for listing on the AMEX.
2.33 Definition of "Knowledge." As used in herein, the term "KNOWLEDGE
OF THE COMPANY" (or similar language) shall mean the knowledge of the officers
and directors of the Company who are named in the Prospectus, with the
assumption that such officers and directors shall have made reasonable and
diligent inquiry of the matters presented.
3. Covenants of the Company. The Company covenants and agrees as follows:
3.1 Amendments to Registration Statement. The Company will deliver to
the Representative, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the Representative
shall reasonably object in writing.
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus is required
to be delivered under the Act, the Company will use all reasonable efforts to
comply with all requirements imposed upon it by the Act, the Regulations and the
Exchange Act and by the regulations under the Exchange Act, as from time to time
in force, so far as necessary to permit the continuance of sales of or dealings
in the Public Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a Prospectus relating to the Public Securities
is required to be delivered under the Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for the
Underwriters, the 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. For a period of five years from
the Effective Date, or until such earlier time upon which the Company is
required to be liquidated, the Company will use its best efforts to maintain the
registration of the Units, Common Stock and Warrants under the provisions of the
Exchange Act. The Company will not deregister the Units under the Exchange Act
without the prior written consent of Maxim.
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3.2.4 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Compliance. The Company shall take all
actions necessary to obtain and maintain material compliance with each
applicable provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated thereunder and related or similar rules and regulations
promulgated by any other governmental or self regulatory entity or agency with
jurisdiction over the Company.
3.3 Blue Sky Filing. The Company will endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Public Securities for offering and
sale under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction. In each jurisdiction where such qualification
shall be effected, the Company will, unless the Representative agrees that such
action is not at the time necessary or advisable, use all reasonable efforts to
file and make such statements or reports at such times as are or may be required
by the laws of such jurisdiction.
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 make every reasonable effort to
obtain promptly the lifting of such order.
-16-
3.6 Review of Financial Statements. Until the earlier of five years
from the Effective Date, or until such earlier 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.
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 Administrative Services. The Company has entered into
agreements (the "SERVICE AGREEMENTS") with each of Equity Dynamics, Inc. and The
Lan Group, (the "AFFILIATES") in the forms filed as exhibits to the Registration
Statement pursuant to which the Affiliates will make available to the Company
general and administrative services including office space, utilities and
secretarial support for the Company's use for $6,000 and $1,500, respectively,
per month.
3.7.3 Compensation. Except as set forth 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 out-of-pocket expenses incurred in connection with seeking
and consummating a Business Combination.
3.8 Secondary Market Trading and Standard & Poor's. In the event the
Public Securities are not listed on the New York Stock Exchange or AMEX or
quoted on the Nasdaq National Market, (a) the Company will apply to be included
in Standard and Poor's Daily News and Corporation Records Corporate Descriptions
for a period of five years from the consummation of a Business Combination, (b)
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
and (c) the Company shall also take such other action as may be reasonably
requested by the Representative to obtain a secondary market trading exemption
in such other states as may be requested by the Representative.
3.9 Warrant Solicitation Fees. The Company hereby engages Maxim, on a
non-exclusive basis, as its agent for the solicitation of the exercise of the
Warrants. The Company will (i) assist Maxim with respect to such solicitation,
if requested by Maxim, and (ii) at Maxim's request, provide Maxim, and direct
the Company's transfer and warrant agent to provide to Maxim, at the Company's
cost, lists of the record and, to the extent known, beneficial owners of, the
Warrants. Commencing one year from the Effective Date, the Company will pay
Maxim four percent (4%) of the cash proceeds received upon exercise of the
Warrants, payable on the date of such exercise, on the terms provided for in the
Warrant Agreement, only if permitted under the rules and regulations of the NASD
and only to the extent that an investor who exercises his Warrants specifically
designates, in writing, that Maxim solicited his exercise. Maxim may engage
sub-agents in its solicitation efforts. The Company agrees to disclose the
arrangement to pay such solicitation fees to Maxim in any prospectus used by the
Company in connection with the registration of the shares of Common Stock
underlying the Warrants.
-17-
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.
3.11.1 Periodic Reports, Etc. For a period of five years from the
Effective Date or until such earlier time upon which the Company is required to
be liquidated, the Company will furnish to the Representative (Attn: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Managing Director) 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; (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; provided that the Representative shall sign, if requested by
the Company, a Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representative and its counsel in connection with
the Representative's receipt of such information.
3.11.2 Transfer Sheets. For a period of five years following the
Effective Date or until such earlier time upon which the Company is required to
be liquidated, the Company shall retain a transfer and warrant agent acceptable
to the Representative (the "TRANSFER AGENT") and will furnish to the
Underwriters at the Company's sole cost and expense such transfer sheets of the
Company's securities as the Representative may request, including the daily and
monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental
Stock Transfer & Trust Company is acceptable to the Underwriters.
3.11.3 Secondary Market Trading Survey. In the event the Public
Securities are no longer listed or quoted, as the case may be, on the New York
Stock Exchange, AMEX or the Nasdaq National Market, or until such earlier time
upon which the Company is required to be liquidated, the Company shall engage
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC ("LOWENSTEIN"), for a one-time fee of $5,000, to deliver
and update to the Underwriters on a timely basis, but in any event at the
beginning of each fiscal quarter, a written report detailing those states in
which the Public Securities may be traded in non-issuer transaction under the
Blue Sky laws of the fifty States (the "SECONDARY MARKET TRADING SURVEY").
-18-
3.11.4 Trading Reports. During such time as the Public Securities
are quoted on the NASD OTC Bulletin Board (or any successor trading market such
as the Bulletin Board Exchange) or the Pink Sheets, LLC (or similar publisher of
quotations) and no other automated quotation system, the Company shall provide
to the Representative, at its expense, such reports published by the NASD or the
Pink Sheets, LLC relating to price trading of the Public Securities, as the
Representative shall reasonably request. In addition to the requirements of the
preceding sentence, for a period of two (2) years from the Closing Date, the
Company, at its expense, shall provide the Representative a subscription to the
Company's weekly Depository Transfer Company Security Position Reports.
3.12 Disqualification of Form S-1 and S-3. For a period equal to seven
years from the date hereof, the Company will not take any action or actions
which may prevent or disqualify the Company's use of Form S-1 or 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 fees and expenses incident to
the performance of the obligations of the Company under this Agreement,
including, but not limited to: (i) the preparation, printing, filing and mailing
(including the payment of postage with respect to such mailing) of the
Registration Statement, the 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 listing
of the Public Securities on AMEX; (iv) 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 for the
Representative's counsel retained for such purpose (such fees shall be capped at
$35,000 in the aggregate (of which $15,000 has previously been paid)), and a
one-time fee of $5,000 payable to the Representative's counsel for the
preparation of the Secondary Market Trading Survey, if required; (v) filing
fees, costs and expenses (including fees of Representative's counsel and
disbursements for the Representative's counsel) incurred in registering the
Offering with the NASD (including all COBRADesk fees); (vi) costs of placing
"tombstone" advertisements in The Wall Street Journal, The New York Times and a
third publication to be selected by the Representative not to exceed $__________
in the aggregate; (vii) fees and disbursements of the transfer and warrant
agent; (viii) the Company's expenses associated with "due diligence" meetings
arranged by the Representative; (ix) the preparation, binding and delivery of
leather bound volumes 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; (x) all costs
and expenses associated with "road show" marketing and "due diligence" trips for
the Company's management to meet with prospective investors, including without
limitation, all travel, food and lodging expenses associated with such trips;
and (xi) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 3.13.1. 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 above to be paid by the Company to the
Representative and others. 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 selected by the Representative. If the Offering is
successfully consummated, any amounts paid by the Company in connection with
such investigative search firm shall be credited against the non-accountable
expenses to be paid to the Representative pursuant to Section 3.13.2 hereof. If
the Offering is not consummated for any reason whatsoever, except as a result of
the Representatives or any Underwriter's breach or default with respect to any
of its obligations described in this Agreement, then the Company shall reimburse
the Representative in full for their out of pocket accountable expenses actually
incurred by the Representative, including, without limitation, its legal fees
(up to a maximum of $50,000, less any amounts previously paid).
-19-
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%) of the gross proceeds received by the Company from the sale
of the Firm Units (of which $50,000 has previously been paid) by deduction from
the proceeds of the Offering contemplated herein.
3.13.3 Fee on Business Combination. Upon consummation of a
Business Combination, the Company further agrees that in addition to the
expenses payable pursuant to Sections 3.13.1 and 3.13.2, it will pay to the
Representative an additional underwriting commission equal to one percent (1%)
of the gross proceeds received by the Company from the sale of the Firm Units
and the Option Units, if any.
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.
3.16.1 Business Combination. 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
Representative prior to the consummation of the Business Combination: (i)
complete details of all services and copies of agreements governing such
services; and (ii) justification as to why the person or entity providing the
merger and acquisition services should not be considered an "underwriter and
related person" with respect to the Company's initial public offering, as such
term is defined in Rule 2710 of the NASD's Conduct Rules. The Company also
agrees that proper disclosure of such arrangement or potential arrangement will
be made in the proxy statement which the Company will file for purposes of
soliciting stockholder approval for the Business Combination.
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3.16.2 Broker/Dealer. In the event the Company intends to
register as a broker/dealer, merge with or acquire a registered broker/dealer,
or otherwise become a member of NASD, it shall promptly notify the NASD.
3.17 Stabilization. Except with respect to the agreement among the
Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Representative annexed as Exhibit 10.8 to the
Registration Statement, neither the Company, nor, to its knowledge, any of its
employees, directors or stockholders (without the consent of Maxim) 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.
3.18 Internal Controls. The Company will maintain a system of internal
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.19 Accountants. For a period of five years from the Effective Date or
until such earlier time upon which the Company is required to be liquidated, the
Company shall retain LWBJ or other independent public accountants reasonably
acceptable to Maxim.
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 (the "AUDITED FINANCIAL STATEMENTS") reflecting the
receipt by the Company of the proceeds of the initial public offering. As soon
as the Audited Financial Statements become available, the Company shall
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.
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3.22 Corporate Proceedings. All corporate proceedings and other legal
matters necessary to carry out the provisions of this Agreement and the
transactions contemplated hereby shall have been done to the reasonable
satisfaction to counsel for the Underwriters.
3.23 Investment Company. The Company shall cause the proceeds of the
Offering to be held in the Trust Fund to be invested only in "government
securities" with specific maturity dates as set forth in the Trust Agreement and
disclosed in the Prospectus. The Company will otherwise conduct its business in
a manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates a Business Combination, it will be
engaged in a business other than that of investing, reinvesting, owning, holding
or trading securities.
3.24 Business Combination Announcement. Within five (5) 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 Maxim announcing the consummation of the Business
Combination and indicating that Maxim was the managing underwriter in the
Offering. The Company shall supply Maxim with a draft of the Business
Combination Announcement and provide Maxim with a reasonable advance opportunity
to comment thereon. The Company will not place the Business Combination
Announcement without the final approval of Maxim, which approval will not be
unreasonably withheld.
3.25 Press Releases. The Company agrees that it will not issue press
releases or engage in any other publicity, without Maxim's prior written consent
(not to be unreasonably withheld), for a period of forty (40) days after the
Closing Date.
3.26 Key-Man Insurance. Prior to the consummation of the Business
Combination, the Company will obtain key person life insurance with an insurer
rated at least AA or better in the most recent addition of "Best's Life Reports"
in the amount of $3,000,000 on the life of key management to be agreed upon by
the Company and Maxim prior to the Closing Date. Such insurance shall be
maintained in full force and effect for a period of three years from the
consummation of the Business Combination. The Company shall be the sole
beneficiary of such policy.
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3.27 Electronic Prospectus. The Company shall cause to be prepared and
delivered to the Representative, at its expense, within one (1) business day
from the effective date of this Agreement, an Electronic Prospectus to be used
by the Underwriters in connection with the Offering. As used herein, the term
"ELECTRONIC PROSPECTUS" means a form of prospectus, and any amendment or
supplement thereto, that meets each of the following conditions: (i) it shall be
encoded in an electronic format, satisfactory to the Representative, that may be
transmitted electronically by the other Underwriters to offerees and purchasers
of the Units for at least the period during which a Prospectus relating to the
Units is required to be delivered under the Securities Act; (ii) it shall
disclose the same information as the paper prospectus and prospectus filed
pursuant to ▇▇▇▇▇, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material
shall be replaced in the electronic prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Representative, that will allow
recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee
charged for subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the Prospectus
filed pursuant to ▇▇▇▇▇ or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative within the
period when a prospectus relating to the Units is required to be delivered under
the Securities Act, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Prospectus.
3.28 Reservation of Shares. The Company will reserve and keep
available that maximum number of its authorized but unissued securities which
are issuable upon exercise of the Warrants and the Representative's Purchase
Option and Representative's Warrants outstanding from time to time.
3.29 Additional Independent Directors. Within one (1) year of the
Closing Date, the Company shall have appointed at least two additional
independent directors to serve on the Company's Board of Directors and one
additional independent director to serve on each of the Company's audit
committee and nominating committee in compliance with the rules and regulations
of AMEX.
3.30 AMEX Listing. The Company will use its best efforts to maintain
the listing of the Public Securities on AMEX or other national securities
exchange acceptable to the Representative for a period of at least five (5)
years from the date of this Agreement.
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 ▇▇▇▇▇▇▇▇▇▇.
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.
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4.1.3 No Commission Stop Order. As of either on the Closing Date
or the Option Closing Date, the Commission has not issued any order or
threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus, the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such an
order.
4.1.4 No Blue Sky Stop Orders. No order suspending the sale of
the Units in any jurisdiction designated by 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.
4.1.5 AMEX Listing. The Public Securities shall have been
approved for listing on AMEX.
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 Ellenoff
▇▇▇▇▇▇▇▇ & Schole LLP ("EGS"), counsel to the Company, dated the Effective Date,
addressed to the Representative and in form and substance satisfactory to the
Representative 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, with full power and authority to own its properties and conduct
its business as described in the Registration Statement and the Prospectus. 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 Company.
(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 Amended and Restated 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 and the applicable state
securities or Blue Sky Laws or exempt from such registration requirements. The
authorized and outstanding capital stock of the Company is as set forth in the
Prospectus. The Units, the Common Stock and the Warrants conform to the
descriptions thereof contained in the Registration Statement and the Prospectus.
-24-
(iii) The Securities have been duly authorized and, when
issued and paid for, will be validly issued, fully paid and non-assessable; the
holders thereof are not and will not be subject to personal liability by reason
of being such holders. The Securities are not and will not be subject to the
preemptive rights of any holders of any security of the Company arising by
operation of law or under the Amended and Restated Certificate of Incorporation
or Bylaws of the Company or, to such counsel's knowledge, similar rights that
entitle or will entitle any person to acquire any security from the Company upon
issuance or sale thereof. When issued, the Representative's Purchase Option, the
Representative's Warrants and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
therefor, the number and type of securities of the Company called for thereby
and such Warrants, the Representative's Purchase Option, and the
Representative's Warrants, when issued, in each case, are enforceable against
the Company in accordance with their respective terms, except: (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally; (b) as enforceability of any
indemnification or contribution provision may be limited under the United States
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. A sufficient number of shares of Common Stock have been reserved
for issuance upon exercise of the Warrants and the Representative's Warrants.
The shares of Common Stock underlying the Warrants and the Representative's
Warrant will, upon exercise of the Warrants and the Representative's Warrant and
payment of the exercise price thereof, be duly and validly issued, fully paid
and non-assessable and will not have been issued in violation of or subject to
preemptive or, to such counsel's knowledge, similar rights that entitle or will
entitle any person to acquire any securities from the Company upon issuance
thereof.
(iv) The Company has full right, power and authority to
execute and deliver this Agreement, the Warrant Agreement, the Services
Agreements, the Trust Agreement, the Escrow Agreement and the Representative's
Purchase Option and to perform its obligations thereunder, and all corporate
action required to be taken for the due and proper authorization, execution and
delivery of this Agreement, the Warrant Agreement, the Services Agreements, the
Trust Agreement, the Escrow Agreement and the Representative's Purchase Option
and consummation of the transactions contemplated by the Underwriting Agreement,
the Registration Statement and the Prospectus and as described in the
Registration Statement and the Prospectus have been duly and validly taken.
(v) This Agreement, the Warrant Agreement, the Services
Agreements, the Trust Agreement and the Escrow Agreement 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 United States 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.
-25-
(vi) The execution, delivery and performance of this
Agreement, the Warrant Agreement, the Representative's Purchase Option, the
Escrow Agreement, the Trust Agreement and the Services Agreements, the issuance
and sale of the Securities, the consummation of the transactions contemplated
hereby and thereby, and compliance by the Company with the terms and provisions
hereof and thereof, 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 Amended and Restated Certificate of Incorporation or the By-Laws of the
Company, or (c) to such counsel's knowledge, violate any statute or any
judgment, order or decree, rule or regulation applicable to the Company of any
court, domestic or foreign, or of any federal, state or other regulatory
authority or other governmental body having jurisdiction over the Company, its
properties or assets.
(vii) The Registration Statement, each 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 complied as to form in all
material respects with the requirements of the Act and Regulations. The
Securities and each agreement filed as an exhibit to the Registration Statement
conform in all material respects to the description thereof contained in the
Registration Statement and the Prospectus. No United States or state statute or
regulation required to be described in the Prospectus is not described as
required (except as to the Blue Sky laws of the various states, as to which such
counsel expresses no opinions), nor are any contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement not so
described or filed as required (except for the contracts and documents described
in the "Underwriting" section of the Registration Statement, as to which such
counsel expresses no opinions).
(viii) 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.
(ix) 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.
(x) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any judicial,
regulatory or other legal or governmental agency or body is required for the
execution, delivery and performance of the Underwriting Agreement or
consummation of the transactions contemplated by the Underwriting Agreement, the
Registration Statement and the Prospectus, except for (1) such as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the Units by the Underwriters (as to which such counsel need
express no opinion), (2) such as have been made or obtained under the Securities
Act and (3) such as are required by the NASD.
-26-
(xi) The statements under the captions "Description of
Securities" and Item 14 of Part II of the Registration Statement, insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings.
(xii) The Shares are duly authorized for listing on AMEX.
The opinion of counsel shall further include a statement to
the effect that counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company and representatives of the Underwriters at which the
contents of the Registration Statement, the Prospectus 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 Prospectus (except as otherwise set
forth in this opinion), no facts have come to the attention of such counsel
which lead them to believe that either the Registration Statement or the
Prospectus or any amendment or supplement thereto, as of the date of such
opinion contained any 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, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial and
statistical data included in the Registration Statement or 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 EGS, dated the Closing Date or the
Option Closing Date, as the case may be set forth above, addressed to the
Representative and in form and substance reasonably satisfactory to the counsel
to the Representative, confirming as of the Closing Date and, if applicable, the
Option Closing Date, the statements made by EGS 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
the Representative) of other counsel reasonably acceptable to the
Representative, familiar with the applicable laws; and (ii) as to matters of
fact, to the extent they deem proper, on certificates or other written
statements of officers of the Company and officers of departments of various
jurisdiction having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to the Underwriters' counsel if requested. The
opinion of counsel for the Company and any opinion relied upon by such counsel
for the Company shall include a statement to the effect that it may be relied
upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
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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
▇▇▇▇▇▇▇▇▇▇ from LWBJ dated, respectively, as of the date of this Agreement and
as of the Closing Date and the Option Closing Date, if any:
(i) Confirming that they are independent accountants with
respect to the Company within the meaning of the Act and the applicable
Regulations and that they have not, during the periods covered by the financial
statements included in the 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 limited review which
included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest
available unaudited interim financial statements), a reading of the latest
available minutes of the 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, nothing has come to their attention
which would lead them to believe that: (a) the unaudited financial statements of
the Company included in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of the Act and
the Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
that of the audited financial statements of the Company included in the
Registration Statement; (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 any 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 , 2005 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, and (c) during the
period from , 2005 to a specified date not later than five days prior to the
Effective Date, Closing Date or Option Closing Date, as the case may be, there
was any decrease in revenues, net earnings or net earnings per share of Common
Stock, in each case as compared with the corresponding period in the preceding
year and as compared with the corresponding period in the preceding quarter,
other than as set forth in or contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount of such decrease;
(iv) Setting forth, at a date not later than five days prior
to the Effective Date, the amount of liabilities of the Company (including a
break-down of commercial papers and notes payable to banks);
-28-
(v) Stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the Prospectus in
each case to the extent that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records, including work
sheets, of the Company and excluding any questions requiring an interpretation
by legal counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted auditing
standards) set forth in the letter and found them to be in agreement;
(vi) Stating that they have not during the immediately
preceding five year period brought to the attention of the Company's management
any reportable condition related to internal structure, design or operation as
defined in the Statement on Auditing Standards No. 60 "Communication of Internal
Control Structure Related Matters Noted in an Audit," in the Company's internal
controls; and
(vii) 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 By-Laws and Amended and Restated
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; and (iv) as to the incumbency of the officers of the
Company. The documents referred to in such certificate shall be attached to such
certificate.
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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 the case of the Prospectus, in light of the circumstances under which they
were made), not misleading.
4.6 Delivery of Agreements.
4.6.1 Effective Date Deliveries. On the Effective Date, the
Company shall have delivered to the Representative executed copies of the Escrow
Agreement, the Trust Agreement, the Warrant Agreement, the Services Agreement
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 Secondary Market Trading Survey. In the event the Public Securities
are not listed on the New York Stock Exchange or AMEX or quoted on the Nasdaq
National Market, on the Closing Date, the Representative shall have received the
Secondary Market Trading Survey from ▇▇▇▇▇▇▇▇▇▇.
5. Indemnification.
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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 Units
(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
federal, state or local statute, law, rule, regulation or ordinance or at common
law or otherwise or under the laws, rules and regulation of foreign countries,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in (i) any Preliminary Prospectus, the Registration
Statement or the Prospectus (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments or any new
registration statement and prospectus 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 (in
this Section 5 collectively called "APPLICATION") executed by the Company or
based upon written information furnished by the Company in any jurisdiction in
order to qualify the Units under the securities laws thereof or filed with the
Commission, any state securities commission or agency, the OTC Bulletin Board or
Nasdaq or any securities exchange; or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon and in conformity with written information furnished to the Company with
respect to an Underwriter by or on behalf of such Underwriter expressly for use
in any Preliminary Prospectus, the Registration Statement or Prospectus, or any
amendment or supplement thereof, or in any application, as the case may be,
which furnished written information, it is expressly agreed, consists solely of
the information described in the last sentence of Section 2.3.1. With respect to
any untrue statement or omission or alleged untrue statement or omission made in
the Preliminary Prospectus, the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter to the extent that any loss,
liability, claim, damage or expense of such Underwriter results from the fact
that a copy of the Prospectus was not given or sent to the person asserting any
such loss, liability, claim or damage at or prior to the written confirmation of
sale of the Securities to such person as required by the Act and the
Regulations, and if the untrue statement or omission has been corrected in the
Prospectus, unless such failure to deliver the Prospectus was a result of
non-compliance by the Company with its obligations under Section 3.4 hereof. The
Company agrees promptly to notify the Representative of the commencement of any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale of the Securities
or in connection with the Registration Statement or Prospectus.
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5.1.2 Procedure. If any action is brought against an Underwriter
or controlling person in respect of which indemnity may be sought against the
Company pursuant to Section 5.1.1, such Underwriter shall promptly notify the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and fees of counsel
(subject to the reasonable approval of such Underwriter) and payment of actual
expenses. Such Underwriter or controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless: (i) the employment of such counsel at the expense of the Company shall
have been authorized in writing by the Company in connection with the defense of
such action; (ii) the Company shall not have employed counsel to have charge of
the defense of such action; or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Company (in
which case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional firm of
attorneys selected by the Underwriter and/or controlling person shall be borne
by the Company. Notwithstanding anything to the contrary contained herein, if
the Underwriter or controlling person shall assume the defense of such action as
provided above, the Company shall have the right to approve the terms of any
settlement of such action which approval shall not be unreasonably withheld.
5.2 Indemnification of the Company. Each Underwriter, severally and not
jointly, agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the foregoing indemnity
from the Company to the several Underwriters, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions
made in any Preliminary Prospectus, the Registration Statement or Prospectus or
any amendment or supplement thereto or in any application, in reliance upon, and
in strict conformity with, written information furnished to the Company with
respect to such Underwriter by or on behalf of the Underwriter expressly for use
in such Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application, which furnished
written information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. . In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement 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.
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5.3 Contribution.
5.3.1 Contribution Rights. In order to provide for just and
equitable contribution under the Act in any case in which (i) any person
entitled to indemnification under this Section 5 makes claim for indemnification
pursuant hereto but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the Act, the Exchange Act or otherwise may be required on the part of any
such person in circumstances for which indemnification is provided under this
Section 5, then, and in each such case, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Company and
the Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
offering price appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5.3.1, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Public Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section, each director,
officer and employee of an Underwriter or the Company, as applicable, and each
person, if any, who controls an Underwriter or the Company, as applicable,
within the meaning of Section 15 of the Act shall have the same rights to
contribution as the Underwriters or the Company, as applicable.
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.
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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 may be
terminated by you or the Company without liability on the part of the Company
(except as provided in Sections 3.15 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.
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 Company consummates a Business Combination (as such term is defined in the
Registration Statement), it shall not issue any shares of Common Stock or any
options or other securities convertible into Common Stock, or any shares of
Preferred Stock which participate in any manner in the Trust Fund or which vote
as a class with the Common Stock on a Business Combination.
7.2 Trust Fund Waiver Acknowledgments. 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,
initially in an amount of $57,600,000 (without giving effect to any exercise of
the Over-allotment Option) for the benefit of the Public Stockholders and that
the Company may disburse monies from the Trust Fund only (i) to the Public
Stockholders in the event of the conversion of their shares or the liquidation
of the Company or (ii) to the Company after it consummates a Business
Combination and (b) for and in consideration of the Company (1) agreeing to
evaluate such Target Business for purposes of consummating a Business
Combination with it or (2) agreeing to engage the services of the vendor, as the
case may be, such Target Business or vendor agrees that it does not have any
right, title, interest or claim of any kind in or to any monies of the Trust
Fund ("Claim") and waives any Claim it may have in the future as a result of, or
arising out of, any negotiations, contracts or agreements with the Company and
will not seek recourse against the Trust Fund for any reason whatsoever. The
foregoing letters shall substantially be in the form attached hereto as Exhibit
A and B, respectively. Furthermore, each officer and director of the Company
shall execute a waiver letter in the form attached hereto as Exhibit C.
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7.3 Insider Letters. The Company shall not take any action or omit to
take any action which would cause a breach of any of the Insider Letters
executed between each Initial Stockholder and Maxim and will not allow any
amendments to, or waivers of, such Insider Letters without the prior written
consent of Maxim.
7.4 Amended and Restated Certificate of Incorporation and By-Laws. The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Amended and Restated Certificate
of Incorporation or By-Laws. Prior to the consummation of a Business
Combination, the Company will not amend its Amended and Restated Certificate of
Incorporation without the prior written consent of Maxim.
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 18 months from the consummation of this Offering (subject to extension
for an additional six-month period, as described in the Prospectus), the Company
will be liquidated and will distribute to all holders of 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 audited by LWBJ. In no event, however, will the Company's
Liquidation Value be less than the amount contained in the Trust Fund at that
time, inclusive of any net interest income thereon. Only holders of IPO Shares
(as defined below) 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. At the time the
Company seeks approval of any potential Business Combination, the Company will
offer each of the holders of the Company's Common Stock issued in this Offering
(the "IPO SHARES") the right to convert their IPO Shares at a per share price
equal to (A) the amount in the Trust Fund (inclusive of any interest income
therein) on the record date (the "CONVERSION PRICE") for determination of
stockholders entitled to vote upon the proposal to approve such Business
Combination (the "RECORD DATE") divided by (B) the total number of IPO Shares.
If holders of less than 20% in interest of the Company's IPO Shares vote against
such approval of a Business Combination, 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 vote against approval of any potential Business Combination, the
Company will not proceed with such Business Combination and will not convert
such shares.
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7.7 Rule 419. The Company agrees that it will use its best efforts to
prevent the Company from becoming subject to Rule 419 under the Act prior to the
consummation of any Business Combination, including, but not limited to, using
its best efforts to prevent any of the Company's outstanding securities from
being deemed to be a "▇▇▇▇▇ stock" as defined in Rule 3a-51-1 under the Exchange
Act during such period.
7.8 Presentation of Potential Target Businesses. The Company shall
cause each of the 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 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 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.
7.10 Purchases by Maxim. Within three (3) months of the Warrants and
the Common Stock trading separately, and subject in all instances to the
requirements of applicable laws, rules and regulations, Maxim hereby agrees that
either it or certain of its principals, affiliates or designees, shall purchase
up to $500,000 of Warrants for its own account in the open market at a price not
to exceed $1.20 per Warrant.
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 the Option Closing Date, if any, 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.
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9. Effective Date of This Agreement and Termination Thereof.
9.1 Effective Date. This Agreement shall become effective on the
Effective Date at the time the Registration Statement is declared effective by
the Commission.
9.2 Termination. 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 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 Units.
9.3 Expenses. In the event that this Agreement shall not be carried out
for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms herein, the obligations of the Company to pay the
out of pocket expenses related to the transactions contemplated herein shall be
governed by Section 3.13 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 effected by, such election or termination or
failure to carry out the terms of this Agreement or any part hereof.
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10. Miscellaneous.
10.1 Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed, delivered by
hand or reputable overnight courier or delivered by facsimile transmission (with
printed confirmation of receipt) and confirmed and shall be deemed given when so
mailed, delivered or faxed (or if mailed, two days after such mailing):
If to the Representative:
Maxim Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director
Copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to the Company:
Healthcare Acquisition Corp.
2116 Financial Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Copy to:
Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
11.2 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
11.3 Amendment. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
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11.4 Entire Agreement. This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
11.5 Binding Effect. This Agreement shall inure solely to the benefit
of and shall be binding upon the Representative, the Underwriters, the Company
and the controlling persons, directors and officers referred to in Section 5
hereof, and their respective successors, legal representatives and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provisions herein contained.
11.6 Governing Law, Venue, etc.
11.6.1 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 the conflict of laws principles thereof. Each of the Representative
and the Company (and any individual signatory hereto): (i) agrees that any legal
suit, action or proceeding arising out of or relating to this engagement letter
and/or the transactions contemplated hereby shall be instituted exclusively in
New York Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York, (ii) waives any objection which
such party may have or hereafter to the venue of any such suit, action or
proceeding and (iii) irrevocably and exclusively consents to the jurisdiction of
the New York Supreme Court, County of New York, and the United States District
Court for the Southern District of New York in any such suit, action or
proceeding.
11.6.2 Each of the Representative and the Company (and any
individual signatory hereto) further agrees to accept and acknowledge service of
any and all process which may be served in any such suit, action or proceeding
in the New York Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York and agrees that service of
process upon the Company or any such individual mailed by certified mail to the
Company's address shall be deemed in every respect effective service of process
upon the Company or any such individual in any such suit, action or proceeding,
and service of process upon the Representative mailed by certified mail to the
Representative's address shall be deemed in every respect effective service
process upon the Representative, in any such suit, action or proceeding.
11.6.3 THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST
EXTENT PERMITTED BY LAW, ON BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
11.6.4 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.
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11.7 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto. Delivery of a signed
counterpart of this Agreement by fax or email/pdf transmission shall constitute
valid and sufficient delivery thereof.
11.8 Waiver, Etc. The failure of any of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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,
HEALTHCARE ACQUISITION CORP.
By:
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Accepted on the date first
above written.
MAXIM GROUP LLC
By:
----------------------------
Name:
Title:
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SCHEDULE A
HEALTHCARE ACQUISITION CORP.
8,000,000 UNITS
NUMBER OF FIRM UNITS
UNDERWRITER TO BE PURCHASED
----------------------------------------------------- -----------------------
Maxim Group LLC
-----------------------
8,000,000
------------------------------------------------------------------------------
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EXHIBIT A
FORM OF TARGET BUSINESS LETTER
Healthcare Acquisition Corp.
2116 Financial Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Gentlemen:
Reference is made to the Final Prospectus of Healthcare Acquisition
Corporation ("HAC"), dated , 2005 (the "PROSPECTUS"). Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
We have read the Prospectus and understand that HAC has established the
Trust Fund, initially in an amount of at least $57,600,000 for the benefit of
the Public Stockholders and that HAC may disburse monies from the Trust Fund
only (i) to the Public Stockholders in the event of the redemption of their
shares or the liquidation of HAC or (ii) to HAC after it consummates a Business
Combination.
For and in consideration of HAC agreeing to evaluate the undersigned
for purposes of consummating a Business Combination with it, the undersigned
hereby agrees that it does not have any right, title, interest or claim of any
kind in or to any monies in the Trust Fund (the "CLAIM") and hereby waives any
Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with HAC and will not seek recourse
against the Trust Fund for any reason whatsoever.
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Print Name of Target Business
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Authorized Signature of Target Business
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EXHIBIT B
FORM OF VENDOR LETTER
Healthcare Acquisition Corp.
2116 Financial Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Gentlemen:
Reference is made to the Final Prospectus of Healthcare Acquisition
Corporation ("HAC"), dated , 2005 (the "PROSPECTUS"). Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to them in
Prospectus.
We have read the Prospectus and understand that HAC has established the
Trust Fund, initially in an amount of at least $57,600,000 for the benefit of
the Public Stockholders and that HAC may disburse monies from the Trust Fund
only (i) to the Public Stockholders in the event of the redemption of their
shares or the liquidation of HAC or (ii) to HAC after it consummates a Business
Combination.
For and in consideration of HAC agreeing to evaluate the undersigned
for purposes of consummating a Business Combination with it, the undersigned
hereby agrees that it does not have any right, title, interest or claim of any
kind in or to any monies in the Trust Fund (the "CLAIM") and hereby waives any
Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with HAC and will not seek recourse
against the Trust Fund for any reason whatsoever.
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Print Name of Vendor
---------------------------------
Authorized Signature of Vendor
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EXHIBIT C
FORM OF DIRECTOR/OFFICER LETTER
Healthcare Acquisition Corp.
2116 Financial Center
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▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Gentlemen:
The undersigned officer or director of Healthcare Acquisition
Corporation ("HAC") hereby acknowledges that HAC has established the Trust Fund,
initially in an amount of at least $57,600,000 for the benefit of the Public
Stockholders and that HAC may disburse monies from the Trust Fund only (i) to
the Public Stockholders in the event of the redemption of their shares or the
liquidation of HAC or (ii) to HAC after it consummates a Business Combination.
The undersigned hereby agrees that it does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund (the
"CLAIM") and hereby waives any Claim it may have in the future as a result of,
or arising out of, any contracts or agreements with HAC and will not seek
recourse against the Trust Fund for any reason whatsoever.
Notwithstanding the foregoing, such waiver shall not apply to any
shares acquired by the undersigned in the public market.
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Print Name of Officer/Director
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Authorized Signature of Officer/Director
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