INSIDER WARRANT PURCHASE AGREEMENT
INSIDER
WARRANT PURCHASE AGREEMENT
This
INSIDER WARRANT PURCHASE AGREEMENT (this “Agreement”)
is
made as of February 20, 2008 by and between Transformation Capital Corporation,
a Delaware corporation (the “Company”),
and
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WHEREAS,
the Company is proposing to file a registration statement (the “Registration
Statement”)
on
Form S-1 under the Securities Act of 1933, as amended (the “Securities
Act”)
with
the Securities and Exchange Commission in connection with a proposed initial
public offering (the “Initial
Public Offering”)
of
15,000,000 units (“Units”),
each
consisting of one share of common stock of the Company, par value $0.0001 per
share (“Common
Stock”),
and
one warrant to purchase one additional share of Common Stock for $7.50, and,
at
the election of the underwriters for the Initial Public Offering (the
“Underwriters”),
up to
an additional 2,250,000 Units to cover over-allotments, in each case subject
to
the terms and conditions set forth in the Registration Statement;
and
WHEREAS,
the Company desires to issue and sell, and the Founders desire to subscribe
for,
purchase and acquire an aggregate of 4,750,000 Warrants in a private placement
to occur on or prior to the effectiveness of the Initial Public Offering on
the
terms and conditions hereinafter set forth;
NOW,
THEREFORE, for and in consideration of the promises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Purchase
and Sale of the Insider Warrants. On
or prior to the date of effectiveness of the initial public offering, the
Company shall issue and sell to the Founders, and the Founders shall subscribe
for and purchase from the Company, the number of warrants (the “Insider
Warrants”)
set
forth opposite their respective names in Schedule I hereto at a purchase price
of $1.00 per Insider Warrant for an aggregate purchase price of
$4,750,000. The terms of the Insider Warrants shall be set forth in a
warrant agreement (the “Warrant
Agreement”)
to be
entered into by and between the Company and Continental Stock Transfer &
Trust Company or such other warrant agent as may be selected by the Company
(the
“Warrant
Agent”),
which
Warrant Agreement shall contain such provisions with regard to the Insider
Warrants as are contained in the Registration Statement and such other terms
as
are typical in warrant agreements of blank check companies.
2. Closing
of Purchase and Sale. The
closing of the purchase and sale of the Insider Warrants hereunder, including
payment for and delivery of the Insider Warrants, shall take place at the
offices of the Company or the Company’s legal counsel on or prior to the
effectiveness of the Initial Public Offering. At the closing, the
Company shall deliver to each Founder a certificate evidencing the Insider
Warrants purchased by such Founder, registered in such Founder’s name, upon the
payment of the aggregate purchase price therefor in immediately available funds
by delivery of a cashiers check or by wire transfer to an account designated
by
the Company.
3. Registration
Rights. At
the time of the closing of the Initial Public Offering, the Company and the
Founders shall enter into a registration rights agreement pursuant to which
the
Company will grant certain registration rights to the Founders relating to
the
Insider Warrants and the Common Stock issuable upon exercise of the Insider
Warrants.
4. Founder
Representations and Warranties. In
connection with the purchase of the Insider Warrants, each of the Founders,
severally and not jointly, represents and warrants to the Company the
following:
(a) Investment
Representations.
(i) Such
Founder is familiar with the Company’s business plans and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Insider Warrants. Such
Founder has been afforded the opportunity to ask questions of the executive
officers and directors of the Company. Such Founder understands that
its investment in the Insider Warrants involves a high degree of
risk. Such Founder has sought such accounting, legal and
tax
advice
as
it has considered necessary to make an informed investment decision with respect
to such Founder’s acquisition of the Insider Warrants. Such Founder
has such knowledge and expertise in financial and business matters, knows of
the
high degree of risk associated with investments generally and particularly
investments in the securities of companies in the development stage such as
the
Company, is capable of evaluating the merits and risks of an investment in
the
Insider Warrants, and is able to bear the economic risk of an investment in
the
Insider Warrants in the amount contemplated hereunder. Such Founder
understands that there presently is no public market for the Insider Warrants
and none is anticipated to develop in the foreseeable future. Such
Founder can afford a complete loss of its investment in the Insider
Warrants. Such Founder is purchasing the Insider Warrants for
investment for such Founder’s own account only and not with a view to, or for
resale in connection with, any “distribution” thereof within the meaning of the
Securities Act; provided,
however,
that
the Company acknowledges that certain of the Insider Warrants may ultimately
be
purchased by certain directors of the Company and certain other permitted
transferees identified by the Founders to the Company; but further provided
that
such directors and/or such permitted transferees shall make the same
representations and warranties as are contained in this Agreement and any
agreement with the directors and/or such permitted transferees shall include
the
same terms and conditions as are contained in this Agreement.
(ii) Such
Founder understands that the Insider Warrants have not been registered under
the
Securities Act or any state securities law by reason of a specific exemption
therefrom, and that the Company is relying on the truth and accuracy of, and
such Founder’s compliance with, the representations and warranties and
agreements of such Founder set forth herein to determine the availability of
such exemptions and the eligibility of such Founder to acquire such Insider
Warrants, including, but not limited to, the bona fide nature of such Founder’s
investment intent as expressed herein.
(iii) Such
Founder further acknowledges and understands that the Insider Warrants must
be
held indefinitely unless the Insider Warrants are subsequently registered under
the Securities Act or an exemption from such registration is
available. Such Founder understands that the certificates evidencing
the Insider Warrants will be imprinted with a legend that prohibits the transfer
of the Insider Warrants unless the Insider Warrants are registered or such
registration is not required in the opinion of counsel for the
Company.
(iv) Such
Founder represents that it is an “accredited
investor”
as
that
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act.
(b)
Power; Authorization; No Breach.
Such Founder has all necessary power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. This Agreement has
been
duly executed and delivered by such Founder. This Agreement
constitutes the valid, binding and enforceable obligation of such Founder,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter
in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or
in equity). The purchase by such Founder of the Insider Warrants does
not conflict with any material contract by which such Founder or its property
is
bound, or any laws or regulations or decree, ruling or judgment of any court
applicable to such Founder or its property.
(c) Such
Founder did not decide to enter into this Agreement as a result of any general
solicitation or general advertising within the meaning of Rule 502(c) of the
Securities Act.
(d) Such
Founder understands that no U.S. federal or state agency or any other government
or governmental agency has passed on or made any recommendation or endorsement
of the Insider Warrants or the fairness or suitability of the investment in
the
Insider Warrants, nor have such authorities passed upon or endorsed the merits
of the offering of the Insider Warrants.
5. Company
Representations and Warranties. In
connection with the issuance and sale of the Insider Warrants, the Company
hereby represents and warrants to the Founders the following:
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(a) Organization
and Corporate Power. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and the Company has all
necessary corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(b) Authorization;
No Breach. All
corporate action necessary to be taken by the Company to authorize the
execution, delivery and performance of this Agreement and all other agreements
and instruments delivered by the Company in connection with the transactions
contemplated hereby has been duly and validly taken and this Agreement has
been
duly executed and delivered by the Company. This Agreement
constitutes the valid, binding and enforceable obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter
in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or
in equity). The issuance and sale by the Company of the Insider
Warrants does not conflict with the certificate of incorporation or by-laws
of
the Company or any material contract by which the Company or its property is
bound, or any federal or state laws or regulations or decree, ruling or judgment
of any United States or state court applicable to the Company or its
property.
(c) Title
to Securities.
The Insider Warrants and the Common Stock issuable upon exercise of such Insider
Warrants will be duly authorized prior to issuance of such Insider Warrants.
Upon issuance and delivery in accordance with, and payment pursuant to, the
terms hereof and the Warrant Agreement, the Founders will have good title to
the
Insider Warrants and the Common Stock issuable upon exercise of such Insider
Warrants, free and clear of all liens, claims and encumbrances of any kind,
other than transfer restrictions hereunder and under the other agreements
contemplated hereby. Upon issuance of the Insider Warrants in accordance with,
and payment pursuant to, the terms hereof and the Warrant Agreement, the Common
Stock issuable upon exercise of the Insider Warrants will be duly and validly
issued, fully paid and nonassessable and will be free and clear of all liens
and
claims.
6. Survival
of Representations and Warranties. All
of the representations and warranties contained herein shall survive the closing
date of the purchase and sale of the Insider Warrants.
7. Transfer
and Redemption Restrictions.
(a) Transfer
Restrictions. Each
Founder hereby acknowledges and agrees to be bound by the transfer restrictions
set forth in the Warrant Agreement.
(b) Redemption. Each
of the Company and each of the Founders hereby acknowledges and agrees that,
notwithstanding any call for redemption of the Insider Warrants by the Company
in accordance with the terms of the Warrant Agreement, no Insider Warrants
held
by any Founder or any of their Permitted Transferees (as defined in the Warrant
Agreement) at the time of such call for redemption shall be redeemable by the
Company.
8. Miscellaneous.
(a) Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to the principles of conflicts of law
thereof.
(b) Further
Execution. The
parties agree to take all such further action as may reasonably be necessary
to
carry out and consummate this Agreement as soon as practicable, and to take
whatever steps may be necessary to obtain any governmental approval in
connection with or otherwise qualify the issuance of the Insider Warrants that
are the subject of this Agreement.
(c) Amendment. This
Agreement may not be amended, modified or waived, in whole or in part, except
by
an agreement in writing signed by each of the parties hereto.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
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COMPANY:
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TRANSFORMATION
CAPITAL CORPORATION
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By:
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Name:
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Title:
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President
and Chief Executive Officer
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PURCHASERS:
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SCHEDULE
I
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Purchaser
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Number
of Insider
Warrants
to be Purchased
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▇▇▇▇▇▇▇
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1,583,333
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1,583,333
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1,583,334
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Total
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4,750,000
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