MIDDLE KINGDOM ALLIANCE CORP. UNDERWRITING AGREEMENT
Exhibit
1.1
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______________,
2006
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Newbridge
Securities Corporation
I-Bankers
Securities Incorporated
Westminster
Securities Corporation
As
Representatives of the several
Underwriters
named in Schedule I hereto
c/o
Newbridge Securities Corporation
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear
Sirs:
Middle
Kingdom Alliance Corp., a Delaware corporation (the “Company”) proposes, subject
to the terms and conditions contained herein, to sell to Newbridge Securities
Corporation ("Newbridge"), I-Bankers Securities Incorporated ("I-Bankers"),
and
Westminster Securities Corporation (“Westminster”) and the other underwriters
named on Schedule I to this Agreement (the “Underwriters”) for whom Newbridge,
I-Bankers, and Westminster are acting as Representatives (the
“Representatives”):
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(i)
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an
aggregate of 180,000 Series A Units of the Company (the “Series A Units”).
Each Series A Unit consists of one share of common stock of the Company,
par value $0.001 per share (“Common Stock”), and four Class A warrants
that entitle the holder to purchase one share of common stock at
a
purchase price of $5.00 per share (the "Class A Warrants");
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(ii)
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an
aggregate of 3,000,000 Series B Units of the Company (the "Series
B
Units). Each Series B Unit consists of one share of Class B common
stock,
par value $0.001 (the "Class B Common Stock") and one redeemable
Class B
warrant to purchase one share of common stock at a purchase price
of $6.00
per share (the "Class B Warrants"); and
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(iii)
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options
to purchase an additional 27,000 Series A Units and 450,000 Series
B Units
to cover over-allotments (the "Over-Allotment Option").
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Each
Class A Warrant and Class B Warrant entitles its holder to purchase one share
of
common stock for $5.00 and $6.00, respectively, during the period commencing
on
the later of the completion by the Company of a business combination, as
described more fully in the Registration Statement (“Business Combination”) or
one year from the date the Registration Statement becomes effective (the
“Effective Date”) and terminating on the five-year anniversary of the Effective
Date or earlier upon redemption.
The
Series A Units and Series B Units (excluding the units that may be issued in
the
Over-Allotment Option), together, to be hereinafter referred to as the "Firm
Units". The Firm Units are to be offered initially to the public (the
“Offering”) at a purchase price (net of discounts and commissions, and net of a
non-accountable expense allowance in the amount of $.08 per Firm Unit) of $8.00
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 I attached hereto and made a part hereof at a purchase price
(net of discounts and commissions, and net of a non-accountable expense
allowance of $.08 per Firm Unit) of $7.36 per Firm Unit.
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The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and the published
rules and regulations thereunder (the “Rules”) adopted by the Securities and
Exchange Commission (the “Commission”) a Registration Statement (as hereinafter
defined) on Form S-1 (No. 333-133475) including a Preliminary Prospectus
(as hereinafter defined) relating to the Securities, and such amendments thereof
as may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related
Preliminary Prospectus
have
heretofore been delivered by the Company to you. The term “Preliminary
Prospectus” means any preliminary prospectus included at any time as a part of
the Registration Statement or filed with the Commission by the Company pursuant
to Rule 424(a) of the Rules. The term “Registration Statement” as used in this
Agreement means the initial registration statement (including all exhibits,
financial schedules and all documents and information deemed to be a part of
the
Registration Statement through incorporation by reference or otherwise), as
amended at the time and on the date it becomes effective, including the
information (if any) contained in the form of final Prospectus
filed
with the Commission pursuant to Rule 424(b) of the Rules and deemed to be part
thereof at the time of effectiveness pursuant to Rule 430A of the Rules. If
the
Company has filed an abbreviated registration statement to register additional
Series A Units or Series B Units pursuant to Rule 462(b) under the Rules (the
“462(b) Registration Statement”), then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration Statement.
The term “Prospectus” as used in this Agreement means the Prospectus
in the
form included in the Registration Statement at the time of effectiveness or,
if
Rule 430A of the Rules is relied on, the term Prospectus shall also include
the
final Prospectus
filed
with the Commission pursuant to Rule 424(b) of the Rules.
The
Firm
Units are expected to begin trading on or promptly after the Effective Date
of
the Prospectus. Each of the Common Stock, Class B Common Stock, Class A Warrants
and Class B Warrants may trade separately on the 90th day after the Effective
Date of the Prospectus unless the Representatives of the underwriters determines
that an earlier date is acceptable. In no event will the Representatives of
the
underwriters allow separate trading of the Common stock, Class B Common Stock,
Class A Warrants and Class B Warrants until the preparation of an audited
balance sheet of the Company reflecting receipt by the Company of the gross
proceeds of the Offering and the filing of a Form 8-K by the Company, including
an audited balance sheet, with the Commission as soon as practicable after
the
consummation of the Offering. The audited balance sheet will reflect proceeds
we
receive from the exercise of the over-allotment option if the over-allotment
option is exercised prior to the filing of the Form 8-K.
The
Company understands that the Underwriters propose to make a public offering
of
the Units, as set forth in and pursuant to the Prospectus, as soon as
practicable after the Effective Date and the date of this Agreement. The Company
hereby confirms that the Underwriters and dealers have been authorized to
distribute or cause to be distributed each Preliminary Prospectus and are
authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to
the
Underwriters) as follows:
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1)
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SALE,
PURCHASE, DELIVERY AND PAYMENT FOR THE
SECURITIES
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On
the
basis of the representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
a) Initial
Price.
The
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at
a purchase price of $8.00 per Unit ($7.36 net of discounts and commissions,
and
net of a non-accountable expense allowance of $.08 per Firm Unit) (the “Initial
Price”), the number of Firm Units set forth opposite the name of such
Underwriter under the column “Number of Firm Units to be Purchased” on
Schedule
I
to this
Agreement, subject to adjustment in accordance with Section 6
hereof.
b) Over-Allotment
Option.
i) For
the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Company hereby grants to the Underwriters, severally
and not jointly, an option to purchase up to an additional 27,000 Series A
Units
and 450,000 Series B Units from the Company (together, the “Over-allotment
Option”). Such additional 27,000 Series A Units and 450,000 Series B 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, Class B Common Stock, Class A Warrants and Class B
Warrants included in the Units and the shares of common stock issuable upon
exercise of the Class A and Class B 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(a) hereof.
ii) The
Over-allotment Option granted pursuant to Section 1(b)(i) hereof may be
exercised by the Representatives as to all (at any time) or any part (from
time
to time) of the Option Units within 45 days after the Effective Date. The
Underwriters will not be under any obligation to purchase any Option Units
prior
to the exercise of the Over-allotment Option. The Over-allotment Option granted
hereby may be exercised by the giving of oral notice to the Company by the
Representatives, which must be confirmed in writing by overnight mail or
facsimile transmission setting forth the number of Option Units to be purchased
and the date and time for delivery of and payment for the Option Units (the
“Option Closing Date”), which will not be later than five full business days nor
earlier than two full business days after the date of the notice or such other
time as shall be agreed upon by the Company and the Representatives, at the
offices of the I-Bankers Securities Incorporated (“I-Bankers”) or at such other
place as shall be agreed upon by the Company and the Representatives. 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.
c) Closing
and Payment Instructions.
i) Payment
of the purchase price for, and delivery of the certificates for, the Firm Units
shall be made at 10:00 A.M., New York time, on ________________, 2006, or such
other date, not later than the fifth business day thereafter, or at such earlier
time as shall be agreed upon by the Representatives and the Company at the
offices of Newbridge or at such other place as shall be agreed upon by the
Representative and the Company. The hour and date of delivery and payment for
the Firm Units are hereinafter referred to as the “Closing Date.”
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ii) Payment
for the Firm Units shall be made on the Closing Date at the Representatives'
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:
$24,168,000 of net proceeds will be placed in a trust fund at Wachovia
Securities, LLC maintained by Continental Stock Transfer & Trust Company,
New York, New York, as trustee for the benefit of the public stockholders (the
"Trust Fund") and shall not be released from the Trust Fund until the earlier
of
the completion of a Business Combination or liquidation of the Company. The
remaining proceeds shall be paid (1) to the order of the Company upon delivery
to Newbridge of certificates, in form and substance satisfactory to the
Underwriters, representing the Firm Units; or (2) through the facilities of
the
Depository Trust Company (“DTC”) for the account of the Underwriters. The Firm
Units shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least two full
business days prior to the Closing Date. The Company will permit the
Representatives 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
Representatives for all the Firm Units.
iii) In
addition, in the event that any or all of the Option Units are purchased by
the
Underwriters, payment of the purchase price, and delivery of the certificates
for, the Option Units shall be made on the Option Closing Date at the
Representatives’ 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
to the Trust Fund at the offices of Newbridge or at such other place as shall
be
agreed upon by the Representatives and the Company upon delivery to you of
certificates representing such securities (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 Representatives request not less than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be, and will be made
available to the Representatives 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.
d) Representatives’
Purchase Option.
(i) The
Company hereby agrees to issue and sell to the Representatives (and/or their
designees) on the Effective Date an option (“Representatives’ Purchase Option”)
for the purchase of one unit for the purchase price of $100 (the
“Representatives’ Unit”). The Representatives' Unit consists of up to a total of
18,000 Series A Units at a per-unit price of $8.80 and/or up to a total of
300,000 Series B Units at a per-unit price of $8.80. The Series A Units and
Series B Units that would be issued upon the exercise of the Representatives’
Purchase Option are identical to the Firm Units.
(ii)
The
Representatives’ Purchase Option shall be exercisable, in whole or in part,
commencing on the Effective Date and expiring on the five-year anniversary
of
the Effective Date at an initial exercise price per Representatives’ Unit of
$8.80, which is equal to one hundred ten percent (110%) of the initial public
offering price of a Firm Unit.
(iii)
The
Representatives’ Purchase Option, the Representatives’ Unit, the
Representatives’ Class A and Class B Warrants and the shares of Common Stock
issuable upon exercise of the Representatives’ Class A and Class B Warrants are
hereinafter referred to collectively as the “Representatives’ Securities.” The
Representatives' Securities will be identical to those offered to the public
except that the Representatives' Class A and Class B Warrants shall have an
exercise price of $8.80, which is equal to one hundred ten percent (110%) of
the
exercise price of the warrants included in the Firm Units. The Public Securities
and the Representatives’ Securities are hereinafter referred to collectively as
the “Securities.”
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(iv)
The
Representatives understand and agree that there are significant restrictions
against transferring the Representatives’ Purchase Option during the first three
hundred sixty-five (365) days after the Effective Date, as set forth in Section
3 of the Representatives’ Purchase Option. Payment of the purchase price of, and
delivery of the certificates for, the Representatives’ Purchase Option shall be
made on the Closing Date. The Company shall deliver to the Representatives,
upon
payment therefor, certificates for the Representatives’ Purchase Option in the
name or names and in such authorized denominations as the Representatives may
request.
e) Deferred
Compensation.
On the
Closing Date, the Underwriters agree to deposit into the Trust Fund two percent
(2.0%) of the gross proceeds from the Units sold in the Offering (the “Deferred
Discount”) until the earlier of the completion of a Business Combination or the
liquidation of the Trust Fund. Upon the consummation, if any, of the Business
Combination the Company will pay to the Representative, on behalf of the
Underwriters, the Deferred Discount in an amount equal to (i) 2.0% of the gross
proceeds (before giving effect to any discounts or commissions) received by
the
Company from the sale of the Firm Units plus 2.0% of the gross proceeds (before
giving effect to any discounts or commissions) received by the Company from
the
Units sold pursuant to the Over-allotment Option, if any, less (ii) $0.16 per
share of Class B Common Stock converted to cash in connection with the Business
Combination. Payment of the Deferred Discount will be made out of the proceeds
of this Offering held in the Trust Account. If the Company fails to consummate
its initial Business Combination within the required time period set forth
in
the Registration Statement, the Deferred Discount will not be paid to the
Representative and the Underwriters will forfeit any rights or claims to the
Deferred Discount, including any accrued interest thereon.
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2)
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REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY
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The
Company represents and warrants to each Underwriter, as of the date hereof,
as
of the Closing Date and as of the Option Closing Date (if any), as
follows:
a) 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 the
Prospectus, nor any amendment or supplement thereto, on such dates, will contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not misleading. When
any
Preliminary Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement for the registration of the Securities or
any
amendment thereto or pursuant to Rule 424(a) of the Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied or will comply in all material respects with the applicable provisions
of the Act and the Regulations and did not and will not contain an untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. The representation
and warranty made in this Section 2(a) 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 directly by the
Representatives expressly for use in the Registration Statement or Prospectus
or
any amendment thereof or supplement thereto.
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b) The
Company has filed with the Commission a Form 8-A registration statement
providing for the registration under the Securities Exchange Act of 1934, as
amended (“Exchange Act”), of the Firm Units, the Common Stock, the Class B
Common Stock and the Class A and Class B Warrants, which registration statement
complies in all material respects with the Exchange Act. The registration of
the
Firm Units, Common Stock, Class B Common Stock and Class A and Class B Warrants
under the Exchange Act has been declared effective by the Commission on the
date
hereof. 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.
c) A
market
maker (the "Market Maker") reasonably acceptable to the Representatives has
submitted a Form 211 to the OTC Compliance Unit and the Company has used its
best efforts to receive approval as expeditiously as possible for the quotation
of the Securities on the Over-the-Counter Bulletin Board ("OTC Bulletin Board")
administered by the National Association of Securities Dealers, Inc.
("NASD").
d) The
agreements and documents described in the Registration Statement and the
Prospectus conform to the descriptions thereof contained therein and there
are
no agreements or other documents required to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as exhibits
to
the Registration Statement that have not been so described or filed. Each
agreement or other instrument (however characterized or described) to which
the
Company is a party or by which its property or business is or may be bound
or
affected and (i) that is referred to in the Prospectus; or (ii) is material
to
the Company’s business, has been duly and validly executed by the Company, is in
full force and effect and is enforceable against the Company and, to the
Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; (y) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the best
of
the Company’s knowledge, any other party is in breach or default thereunder and,
to the best of the Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a breach or
default thereunder. To the best of the Company’s knowledge, performance by the
Company of the material provisions of such agreements or instruments will not
result in a violation of any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental
laws
and regulations.
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e) 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.
f) The
disclosures in the Registration Statement summarizing the effects of Federal,
State, foreign, and local regulation on the Company’s business as currently
contemplated are correct summaries in all material respects and do not omit
to
state a material fact.
g) The
statistical and related data included in the Registration Statement are based
on
or derived from sources that the Company believes to be reliable and
accurate.
h) Since
the
respective dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise specifically stated therein (i) there
has been no material adverse change in the condition, financial or otherwise,
or
business of the Company; (ii) there have been no material transactions entered
into by the Company, other than as contemplated pursuant to this Agreement;
and
(iii) no member of the Company’s management has resigned from any position with
the Company.
i) Subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not (i) issued any securities
or
incurred any liability or obligation, direct or contingent, for borrowed money;
or (ii) declared or paid any dividend or made any other distribution on or
in
respect to its equity securities.
j) ▇▇▇▇▇▇
LLP (“▇▇▇▇▇▇”), 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 such accountants, in the performance of their work for
the
Company, are not in violation of the auditor independence requirements of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002. ▇▇▇▇▇▇ 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.
There are no material off-balance sheet transactions, arrangements, obligations
(including contingent obligations) or any other relationships with
unconsolidated entities or other persons, that may have a material current
or,
to the Company’s knowledge, a material 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.
k) The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement and Prospectus fairly present in all
material respects the financial position, the results of operations and the
cash
flows of the Company at the dates and for the periods to which they apply;
and
such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration Statement
present fairly in all material respects the information required to be stated
therein. 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.
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l) 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.
m) All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; except as described in
or
expressly contemplated by the Registration Statement, there are no outstanding
rights (including, without limitation, pre-emptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any shares
of
capital stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to
the
issuance of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options. The authorized
shares of common stock conform in all material respects 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.
n) The
Securities have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable; the holders thereof are not
and
will not be subject to personal liability by reason of being such holders;
the
Securities are not and will not be subject to the preemptive rights of any
holders of any security of the Company or similar contractual rights granted
by
the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements with
respect thereto contained in the Registration Statement. When issued, the
Representatives’ Purchase Option, the Representatives’ Class A and Class B
Warrants and the Class A and Class B 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
Representatives’ Purchase Option, the Representatives’ Class A and Class B
Warrants and the Class A and Class B 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.
o) 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.
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p) To
the
best of the Company’s knowledge, all information contained in the questionnaires
(“Questionnaires”) completed by each of the Company’s officers, directors, and
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(q), is true and correct in all material respects and the
Company has not become aware of any information which would cause the
information disclosed in the Questionnaires completed by each Initial
Stockholder to become inaccurate and incorrect in all material
respects.
q) Reserved.
r) The
Company has caused the Initial Stockholders to enter into an escrow agreement
(“Escrow Agreement”) with Continental Stock Transfer & Trust Company
(“Escrow Agent”) in form and substance satisfactory to the Underwriters, whereby
the shares of Common Stock owned by the Initial Stockholders will be held in
escrow by the Escrow Agent, until the third anniversary of the Effective Date
unless released earlier as provided for in the Escrow Agreement. During such
escrow period, the Initial Stockholders shall be prohibited from selling or
otherwise transferring such shares (except to spouses and children of Initial
Stockholders, trusts established for their benefit, family partnerships, to
a
transferee that does not affect beneficial ownership and as otherwise set forth
in the Escrow Agreement) but will retain the right to vote such shares. To
the
Company’s knowledge, the Escrow Agreement is enforceable against each of the
Initial Stockholders and will not, with or without the giving of notice or
the
lapse of time or both, result in a breach of, or conflict with any of the terms
and provisions of, or constitute a default under, any agreement or instrument
to
which any of the Initial Stockholders is a party.
s) The
Company has entered into warrant agreements with respect to the Class A and
Class B Warrants and the Representatives’ Class A and Class B Warrants with
Continental Stock Transfer & Trust Company substantially in the forms filed
as exhibits to the Registration Statement (“Warrant Agreements”). The Warrant
Agreements, provide for, among other things, the payment of a warrant
solicitation fee as contemplated by Section 3(m) hereof.
t) The
Company has established the Trust Fund to be held at Wachovia Securities, LLC
and has entered into a trust agreement with Continental Stock Transfer &
Trust Company with respect to certain proceeds of the Offering in form and
substance satisfactory to the Representatives (the "Trust
Agreement").
u) This
Agreement, the Warrant Agreements, the Trust Agreement and the Escrow Agreement
have been duly and validly authorized by the Company and constitute, and the
Representatives’ Purchase Option has been duly and validly authorized by the
Company and, when executed and delivered, will constitute, the valid and binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
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9 of
38
v) The
execution, delivery, and performance by the Company of this Agreement, the
Warrant Agreements, the Representatives’ Purchase Option, the Trust Agreement
and the Escrow Agreement, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company with the
terms
hereof and thereof do not and will not, with or without the giving of notice
or
the lapse of time or both (i) result in a breach of, or conflict with any of
the
terms and provisions of, or constitute a default under, or result in the
creation, modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms
of
any agreement or instrument to which the Company is a party except pursuant
to
the Trust Agreement referred to in Section 2(t) hereof; (ii) result in any
violation of the provisions of the Certificate of Incorporation, as amended,
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.
w) No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its
Certificate of Incorporation, as amended, 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.
x) 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 as described in the Prospectus. The
disclosures in the Registration Statement concerning the effects of foreign,
federal, state and local regulation on this offering and the Company’s business
purpose as currently contemplated are correct in all material respects and
do
not omit to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
y) 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 Agreements, the
Representatives’ Purchase Option, the Trust Agreement and the Escrow Agreement
and as contemplated by the Prospectus, except with respect to applicable federal
and state securities laws.
z) 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.
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aa) The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of business requires such qualification, except where the failure to qualify
would not have a material adverse effect on the Company.
bb) The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or any part thereof.
cc) Except
as
described in the Prospectus, there are no claims, payments, arrangements,
agreements or understandings relating to the payment of a finder’s, consulting
or origination fee by the Company or any Initial Stockholder with respect to
the
sale of the Securities hereunder or any other arrangements, agreements or
understandings of the Company or, to the best of the Company’s knowledge, any
Initial Stockholder that may affect the Underwriters’ compensation, as
determined by the NASD.
dd) The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) (i) to any person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company; (ii) to
any
NASD member; or (iii) to any person or entity that has any direct or indirect
affiliation or association with any NASD member, within the 12 months prior
to
the date on which the Registration Statement was filed with the Commission
or
thereafter, other than payments to the Representatives.
ee) None
of
the net proceeds of the Offering will be paid by the Company to any
participating NASD member or its affiliates, except as specifically authorized
herein and except as may be paid in connection with a Business Combination
as
contemplated by the Prospectus.
ff) Based
on
the Questionnaires, except as set forth on Schedule 2(ff), no officer, director
or any beneficial owner of the Company’s unregistered securities has any direct
or indirect affiliation or association with any NASD member. The Company will
promptly advise the Representatives and their counsel, if it learns that any
officer, director or owner of at least 5% of the Company’s outstanding voting
capital stock is or becomes an affiliate or associated person of an NASD member
participating in the offering.
gg) 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.
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of 38
hh) 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.
ii)
No
Initial Stockholder, employee, officer or director of the Company is subject
to
any noncompetition agreement or non-solicitation agreement with any employer
or
prior employer which could materially affect his ability to be an Initial
Stockholder, employee, officer and/or director of the Company.
jj)
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).
kk) The
Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
ll)
There
are
no business relationships or related party transactions involving the Company
or
any other person required to be described in the Prospectus that have not been
described as required.
|
3)
|
COVENANTS
OF THE COMPANY
|
The
Company covenants and agrees as follows:
a) The
Company will use its best efforts to cause the Registration Statement, if not
effective at the time of execution of this Agreement, and any amendments
thereto, to become effective as promptly as possible. The Company shall prepare
the Prospectus in a form approved by the Representatives and file such
Prospectus pursuant to Rule 424(b) under the Securities Act no later than the
Commission’s close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by the Rules.
b) The
Company shall promptly advise the Representatives in writing (i) when any
post-effective amendment to the Registration Statement shall have become
effective; (ii) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the institution or
threatening of any proceeding for that purchase; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening
of
any proceeding for such purpose; and (v) of the occurrence of any event during
the period described in Section 3(c) 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. The Company shall not file any amendment of the Registration
Statement or supplement to the Prospectus or any document incorporated by
reference in the Registration Statement unless the Company has furnished the
Representatives a copy for review prior to filing and shall not file any such
proposed amendment or supplement to which the Representatives reasonably object.
The Company shall use its best efforts to prevent the issuance of any such
stop
order and, if issued, to obtain as soon as possible the withdrawal
thereof.
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c) During
the time when a Prospectus is required to be delivered under the Act, or the
Exchange 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, or the Exchange 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 Representatives promptly and prepare and file with
the
Commission, subject to Section 3(b) hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
d) The
Company will use its best efforts to receive approval as expeditiously as
possible for the quotation of the Securities on the OTC Bulletin
Board.
e) 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 Firm Units, Common Stock, Class
B
Common Stock and Class A and Class B Warrants under the provisions of the
Exchange Act. The Company will not deregister the Firm Units, Common Stock,
Class B Common Stock and Class A and Class B Warrants under the Exchange Act
without the prior written consent of the Representatives.
f) The
Company will endeavor in good faith, in cooperation with the Representatives,
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
Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Maryland,
New
York and Rhode Island and such jurisdictions as the Representatives may
reasonably designate within the United States, provided that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject 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 Representatives agree 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. In New York and Hawaii, the Company may rely on
exemptions from the state registration requirements for transactions between
an
issuer and an underwriter involving a firm-commitment underwritten offering.
In
the other states, the Company has applied to have the Firm Units registered
for
sale and will not sell the Firm Units in any state until such registration
is
effective.
g) 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.
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h) For
a
period of five years from the Effective Date, or until such earlier date 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 8-K or quarterly reports and the
mailing of quarterly financial information to stockholders.
i) 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.
j) The
Company has entered into a letter agreement regarding administrative support
with Primus Capital LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇, MTP Holdings LLC and ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇
pursuant to which the above entities and individuals shall make available to
the
Company certain office and secretarial services as may be required by the
Company from time to time for $7,500 per month in the aggregate.
k) Except
as
set forth above in Section 3(j), the Company shall not pay any Initial
Stockholder or any of their affiliates any fees or compensation from the Company
for services rendered to the Company prior to, or in connection with, the
consummation of a Business Combination; provided that the Initial Stockholders
shall be entitled to reimbursement from the Company for their reasonable
out-of-pocket expenses incurred in connection with seeking and consummating
a
Business Combination; and provided, further, that such persons shall be entitled
to receive, in accordance with applicable law, upon consummation of a Business
Combination, commissions for monies raised by them for the Company in connection
with such Business Combination, at rates which are no less favorable to the
Company than those which the Company would pay to unaffiliated third
parties.
l) The
Company will apply to be included in Standard & Poor’s Daily News and
Corporation Records Corporate Descriptions for a period of five years from
the
consummation of a Business Combination. Promptly after the consummation of
the
Offering, the Company shall take such steps as may be necessary to obtain a
secondary market trading exemption for the Company’s securities in the State of
California. The Company shall also take such other action as may be reasonably
requested by the Representatives to obtain a secondary market trading exemption
in such other states as may be reasonably requested by the
Representatives.
m) The
Company hereby engages the Representatives, on a non-exclusive basis, as its
agents for the solicitation of the exercise of the Class A and Class B Warrants.
The Company will (i) assist the Representatives with respect to such
solicitation, if requested by the Representatives; and (ii) at the
Representatives’ request, provide the Representatives, and direct the Company’s
transfer and warrant agent to provide to the Representatives, at the Company’s
cost, lists of the record and, to the extent known, beneficial owners of, the
Class A and Class B Warrants. Commencing one year from the Effective Date,
the
Company will pay the Representatives a commission of 5% of the exercise price
of
the Class A and Class B Warrants for each Warrant exercised, 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 the Exchange Act,
and
only to the extent that an investor who exercises his Warrants specifically
designates, in writing, that the Representatives solicited his exercise. The
Representatives may engage sub-agents in their solicitation efforts. The Company
agrees to disclose the arrangement to pay such solicitation fees to the
Representatives in any Prospectus used by the Company in connection with the
registration of the shares of Common Stock underlying the Warrants.
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of 38
n) 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 Representatives for a term to be agreed upon by the Company and the
Representatives.
o) For
a
period of five years from the Effective Date or until such earlier time at
which
the Company is liquidated, the Company will furnish to the Representatives
and
their counsel, if requested, copies (which may be electronic 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 Representatives, if requested (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, l3G, 14D-l or 13E-4 received or prepared by
the
Company; (iv) five copies of each registration statement filed by the Company
with the Commission under the Securities Act; (v) a copy of monthly statements,
if any, setting forth such information regarding the Company’s results of
operations and financial position (including balance sheet, profit and loss
statements and data regarding outstanding purchase orders) as is regularly
prepared by management of the Company; and (vi) such additional documents and
information with respect to the Company and the affairs of any future
subsidiaries of the Company as the Representatives may from time to time
reasonably request.
p) For
a
period of five years following the Effective Date or until such earlier time
at
which the Company is liquidated, the Company shall retain a transfer and warrant
agent acceptable to the Representatives (“Transfer Agent”) and will furnish to
the Representatives at the Company’s sole cost and expense such transfer sheets
of the Company’s securities as the Representatives may request, including the
daily and monthly consolidated transfer sheets of the Transfer Agent and DTC.
The Representatives acknowledge that Continental Stock Transfer & Trust
Company is an acceptable Transfer Agent.
q) During
such time as the Public Securities are quoted on the 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 Representatives, at its
expense, such reports published by the NASD or the Pink Sheets, LLC relating
to
price trading of the Public Securities, as the Representatives shall reasonably
request.
r) For
a
period equal to five 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 other appropriate form) for the registration of the Class A and Class B
Warrants and the Representatives’ Class A and Class B Warrants under the
Act.
s) The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid on the Closing Date, all expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to:
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15
of 38
i) the
preparation, printing, filing and mailing (including the payment of postage
with
respect to such mailing) of the Registration Statement and exhibits thereto,
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 Firm Units, the shares of
Common Stock, Class B Common Stock , the Class A and Class B Warrants included
in the Firm Units and the Representatives' Purchase Option, including any
transfer or other taxes payable thereon;
iii)
the
qualification of the Public Securities under state or foreign securities or
Blue
Sky laws, including the costs of printing and mailing the Preliminary and Final
Blue Sky Memoranda and all amendments and supplements thereto, fees and
disbursements of underwriter’s counsel retained for such purpose; (iv) filing
fees, costs and expenses incurred in registering the Offering with the
NASD;
iv)
fees
of
counsel and accountants for the Company;
v) costs
of
preparing and delivering to the Representatives and their counsel, bound volumes
containing copies of all documents and appropriate correspondence filed with
or
received from the Commission and the NASD and all closing
documents;
vi)
fees
and
disbursements of the transfer and warrant agent for the Company's
securities;
vii)
fees
and
disbursements to the Escrow Agent and trustee under the terms and conditions
of
the Trust Agreement;
viii)
the
Company’s expenses associated with “due diligence” meetings arranged by the
Representatives including a videotape or powerpoint presentation;
ix)
costs
of
placing “tombstone” advertisements in The Wall Street Journal, The New York
Times and a third publication to be selected by the Representatives not to
exceed $10,000; and
x)
all
other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section 3(s).
t) The
Representatives may deduct from the net proceeds of the Offering payable to
the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in Section 3(s) to be paid by the Company to the Representatives
and
others. If all of the conditions precedent for the Company to consummate this
offering have been met and the Company refuses to consummate this Offering,
then
the Representatives shall retain such part of the nonaccountable expense
allowance, described below in Section 3(u), previously paid, if any, as shall
equal its actual out-of-pocket accountable expenses and refund the
balance.
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u) The
Company further agrees that, in addition to the expenses payable pursuant to
Section 3(s), on the Closing Date it will pay to the Representatives a
nonaccountable expense allowance equal to one percent (1.0%) of the gross
proceeds received by the Company from the sale of the Firm Units (less any
amounts previously paid) by deduction from the proceeds of the Offering
contemplated herein.
v) 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.
w) 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)-(b) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
x) 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 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.
y) Neither
the Company, nor, to its knowledge, any of its employees, directors or
stockholders (without the consent of the Representatives) 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 Firm Units.
z) 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.
aa) 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 ▇▇▇▇▇▇
or other independent public accountants reasonably acceptable to the
Representatives.
bb)
The
Company shall, on the date hereof, retain its independent public accountants
to
audit the financial statements of the Company as of the Closing Date (“Audited
Financial Statements”) reflecting the receipt by the Company of the proceeds of
the initial public offering. As soon as the Audited Financial Statements become
available, the Company shall immediately file a Report on Form 8-K with the
Commission, which Report shall contain the Company’s Audited Financial
Statements.
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17
of 38
cc) The
Company shall promptly 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.
dd) 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.
ee) 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.
ff)
Except
as
provided in the Prospectus with respect to issuances to the Company’s Advisory
Council, from the Effective Date, and for a period of one hundred twenty (120)
days thereafter, the Company shall not, without the prior written consent of
the
Representatives, issue, sell, offer to sell, grant any option for the sale
of,
to otherwise dispose of, directly or indirectly, any equity securities or other
securities convertible into, exercisable for, or exchangeable for equity
securities except with respect to the Offering. Further, from the Effective
Date, and for a period of one hundred twenty (120) days thereafter, the Company
shall not designate or issue any of its “blank check” preference shares prior to
or in connection with the proposed Business Combination without the prior
written consent of the Representatives.
|
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:
a) The
Registration Statement has been declared effective on the date of this
Agreement, 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 such purpose shall have been instituted or shall
be pending or contemplated by the Commission and any request on the part of
the
Commission for additional information shall have been complied with to the
reasonable satisfaction of ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the
Underwriters.
b) By
the
Effective Date, the Representatives 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.
c) No
order
suspending the sale of the Firm Units in any jurisdiction designated by the
Representatives pursuant to Section 3(f) hereof shall have been issued on or
before either the Closing Date or the Option Closing Date, and no proceedings
for that purpose shall have been instituted or shall be
contemplated.
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d) (i) On
the
Closing Date, the Representatives shall have received the favorable opinion
of
Cozen ▇'▇▇▇▇▇▇, PC (“Cozen ▇'▇▇▇▇▇▇”) counsel to the Company, dated the Closing
Date, addressed to the Representatives and in form and substance satisfactory
to
▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP to the effect that:
(1) The
Company has been duly incorporated and is validly existing as a corporation
and
is in good standing under the laws of its jurisdiction of incorporation. The
Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which it has certified to us that it owns
or
leases any properties or maintains employees, except where the failure to
qualify would not have a material adverse effect on the Company.
(2) All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; except as described in
or
expressly contemplated by the Registration Statement, there are no outstanding
rights (including, without limitation, pre-emptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any shares
of
capital stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to
the
issuance of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options. The authorized
common stock conforms in all material respects 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 commons tock, exempt from such registration requirements. The
authorized and outstanding capital stock of the Company is as set forth in
the
Prospectus.
(3) The
Securities have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable. 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 Certificate of Incorporation,
as amended, of the Company. When issued, the Representatives’ Purchase Option,
the Representatives’ Series A and Series B Warrants and the Series A and Series
B 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 Series A and Series B
Warrants, the Representatives’ Purchase Option, and the Representatives’ Series
A and Series B Warrants, when issued, in each case, are enforceable against
the
Company in accordance with their respective terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (b) as enforceability of any
indemnification or contribution provision may be limited under the federal
and
state securities laws; and (c) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. The certificates representing the Securities are in due and
proper form.
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(4) The
execution, delivery and performance of this Agreement, the Warrant Agreements,
the Representatives’ Purchase Option, the Escrow Agreement and the Trust
Agreement, 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 Certificate of Incorporation, as amended,
of
the Company; or (c) to such counsel’s knowledge, violate any United States
statute or any judgment, order or decree, rule or regulation applicable to
the
Company of any court, United States federal, state or other regulatory authority
or other governmental body having jurisdiction over the Company, its properties
or assets.
(5) 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 federal or state statute or regulation required
to
be described in the Prospectus is not described as required, nor, to such
counsel’s knowledge, 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.
(6) 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.
(7) 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.
ii) In
addition, Counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent registered
public accounting firm 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), on the basis of the foregoing (relying
as
to materiality to a large extent upon facts provided by officers and other
representatives of the Company) no facts have come to the attention of such
counsel which should lead them to believe that either the Registration Statement
at the time it became effective (including the information deemed to be part
of
the Registration Statement at the time of effectiveness pursuant to Rule
430A(b)), 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 not misleading or that the Prospectus as of its date and
as
of the Closing Date contained or contains an untrue statement of a material
fact
or omitted 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 (it being understood that such counsel
need
express no opinion with respect to the exhibits (other than with respect to
the
summaries thereof contained in the Registration Statement and Prospectus, and
as
expressly provided herein), financial statements and schedules and other
financial and statistical data included in the Registration Statement or
Prospectus).
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e) On
the
Option Closing Date, if any, the Representatives shall have received the
favorable opinion of Cozen ▇'▇▇▇▇▇▇, dated the Option Closing Date, addressed
to
the Representatives and in form and substance reasonably satisfactory to
▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, confirming as of the Option Closing Date, the
statements made by Cozen ▇'▇▇▇▇▇▇ in its opinion delivered on the Closing
Date.
In
rendering its opinion under Sections 4(d) and (e), Cozen ▇'▇▇▇▇▇▇ (i) shall
not
be required to provide any opinions as to matters involving the application
of
laws other than the laws of the United States and in jurisdictions in which
they
are admitted; and (ii) as to matters of fact, to the extent they deem proper,
on
certificates or other written statements of officers of the Company and officers
of departments of various jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company, provided that copies
of
any such statements or certificates shall be delivered to the Underwriters’
counsel if requested.
f) At
the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, the Representatives shall have received a letter,
addressed to the Representatives and in form and substance satisfactory in
all
respects (including the non-material nature of the changes or decreases, if
any,
referred to in clause (iii) below) to the Representatives and to ▇▇▇▇▇▇▇▇ &
▇▇▇▇ LLP from ▇▇▇▇▇▇ 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 June 30, 2006 balance sheet included in
the
Registration Statement, other than as set forth in or contemplated by the
Registration Statement, or, if there was any decrease, setting forth the amount
of such decrease, and (c) during the period from June 30, 2006 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;
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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);
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.
g) At
each
of the Closing Date and the Option Closing Date, if any, the Representatives
shall have received a certificate of the Company signed by the Chairman of
the
Board or the Chief Executive Officer 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 (i) the Company has performed all covenants
and agreements 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; (ii) the conditions set forth
in
Section 4(g)(i) hereof have been satisfied as of such date; (iii) 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;
(iv) they have carefully examined the Registration Statement and the Prospectus
and, in their opinion (A) as of the Effective Date, the Registration Statement
and Prospectus did not include any untrue statement of a material fact and
did
not omit 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; and (B) since the Effective Date no event has occurred
which should have been set forth in a supplement or otherwise required an
amendment to the Registration Statement or the Prospectus; and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to their knowledge, no proceedings for that purpose have been instituted
or
are pending under the Act. In addition, the Representatives will have received
such other and further certificates of officers of the Company as the
Representatives may reasonably request.
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h) At
each
of the Closing Date and the Option Closing Date, if any, the Representatives
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 copies of the
Certificate of Incorporation, as amended, of the Company attached thereto 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.
i) 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 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 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 omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
j) On
the
Closing Date, the Company shall have delivered to the Representatives executed
copies of the Escrow Agreement, the Trust Agreement, the Warrant Agreements,
all
of the Insider Letters and lock-up letters executed by the officers and
directors and their affiliates in such form acceptable to the
Representatives.
k) On
the
Closing Date, the Company shall have delivered to the Representatives executed
copies of the Representatives’ Purchase Option.
l) All
proceedings taken in connection with the authorization, issuance or sale of
the
Securities as herein contemplated shall be reasonably satisfactory in form
and
substance to the Representatives and to ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and the
Representatives shall have received from such counsel a favorable opinion,
dated
the Closing Date and the Option Closing Date, if any, with respect to such
of
these proceedings as the Representatives may reasonably require. On or prior
to
the Effective Date, the Closing Date and the Option Closing Date, as the case
may be, counsel for the Underwriters shall have been furnished such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this Section
4,
or in order to evidence the accuracy, completeness or satisfaction of any of
the
representations, warranties or conditions herein contained.
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|
5)
|
INDEMNIFICATION
|
a) Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by the
Representatives that participates in the offer and sale of the Securities (each
a “Selected Dealer”) and each of their respective directors, officers and
employees and each person, if any, who controls any such Underwriter
(“controlling person”) within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all loss, liability, claim, damage
and expense whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, whether
arising out of any action between any of the Underwriters and the Company or
between any of the Underwriters and any third party or otherwise) to which
they
or any of them may become subject under the Act, the Exchange Act or any other
statute or at common law or otherwise or under the laws of foreign countries,
arising out of or based upon any untrue statement or alleged untrue statement
of
a material fact contained in (i) any Preliminary Prospectus, the Registration
Statement or the Prospectus (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments or any new
registration statement and prospectus in which is included securities of the
Company issued or issuable upon exercise of the Representatives’ 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, OTCBB (or successor
trading market), Pink Sheets, LLC, 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. 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(g) hereof. The Company agrees
promptly to notify the Representatives 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.
b) If
any
action is brought against an Underwriter, a Selected Dealer or a controlling
person in respect of which indemnity may be sought against the Company pursuant
to Section 5(a), such
Underwriter or Selected Dealer shall promptly notify the Company in writing
of
the institution of such action and the Company shall assume the defense of such
action, including the employment and fees of counsel (subject to the reasonable
approval of such Underwriter or Selected Dealer, as the case may be) and payment
of actual expenses. Such Underwriter, Selected Dealer or controlling person
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter, Selected Dealer or controlling person unless (i) the employment
of
such counsel at the expense of the Company shall have been authorized in writing
by the Company in connection with the defense of such action; (ii) the Company
shall not have employed counsel to have charge of the defense of such action
in
a timely fashion as reasonably determined by the Underwriter, Selected Dealer
or
controlling person; or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the Company (in which
case the Company shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events the
reasonable fees and expenses of not more than one additional firm of attorneys
selected by the Underwriter, Selected Dealer and/or controlling person shall
be
borne by the Company. Notwithstanding anything to the contrary contained herein,
if the Underwriter, Selected Dealer or controlling person shall assume the
defense of such action as provided above, the Company shall have the right
to
approve the terms of any settlement of such action which approval shall not
be
unreasonably withheld.
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c) 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, Registration Statement or Prospectus or any amendment
or
supplement thereto or in any such application. In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5(b).
d) 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(d),
no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Public Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages that such Underwriter has otherwise been required to pay in respect
of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the Company,
as applicable, and each person, if any, who controls an Underwriter or the
Company, as applicable, within the meaning of Section 15 of the Act shall have
the same rights to contribution as the Underwriters or the Company, as
applicable.
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25
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e) Within
fifteen days after receipt by any party to this Agreement (or its
representatives) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof
is
to be made against another party (“contributing party”), notify the contributing
party of the commencement thereof, but the omission to so notify the
contributing party will not relieve it from any liability which it may have
to
any other party other than for contribution hereunder. In case any such action,
suit or proceeding is brought against any party, and such party notifies a
contributing party or its representatives of the commencement thereof within
the
aforesaid fifteen days, the contributing party will be entitled to participate
therein with the notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any party seeking
contribution on account of any settlement of any claim, action or proceeding
effected by such party seeking contribution on account of any settlement of
any
claim, action or proceeding effected by such party seeking contribution without
the written consent of such contributing party. The contribution provisions
contained in this Section are intended to supersede, to the extent permitted
by
law, any right to contribution under the Act, the Exchange Act or otherwise
available. The Underwriters’ obligations to contribute pursuant to this Section
5(e) are several and not joint.
|
6)
|
DEFAULT
BY AN UNDERWRITER
|
a) 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.
b) In
the
event that the default addressed in Section 6(a) above relates to more than
10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within
one
business day after such default relating to more than 10% of the Firm Units
or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one business
day within which to procure another party or parties satisfactory to you to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
will terminate without liability on the part of the Company (except as provided
in Sections 3(s) 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.
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c) 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)
|
RIGHT
TO APPOINT REPRESENTATIVES
|
For
a
period of five years from the Effective Date, upon notice from the
Representatives to the Company, the Representatives shall have the right to
send
a representative (who need not be the same individual from meeting to meeting)
to observe each meeting of the Board of Directors of the Company; provided
that
such representative shall sign a Regulation FD compliant confidentiality
agreement which is reasonably acceptable to the Representatives and its counsel
in connection with such representative’s attendance at meetings of the Board of
Directors; and provided further that upon written notice to the Representatives,
the Company may exclude the representative from meetings where, in the written
opinion of counsel for the Company, the representative’s presence would destroy
the attorney-client privilege. The Company agrees to give the Representatives
written notice of each such meeting and to provide the Representatives with
an
agenda and minutes of the meeting no later than it gives such notice and
provides such items to the other directors, and reimburse the representative
of
the Representatives for his reasonable out-of-pocket expenses incurred in
connection with its attendance at the meeting, including but not limited to,
food, lodging and domestic transportation, and provided that any expenditures
over $2,500 must be pre-approved in writing by the Company.
|
8)
|
ADDITIONAL
COVENANTS OF THE COMPANY
|
a) The
Company hereby agrees that until the Company consummates a Business Combination,
it shall not issue any shares of Class B Common Stock or any options or other
securities convertible into shares of any class of Class B 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 Class B Common Stock on a Business
Combination.
b) The
Company hereby agrees that it will not commence its formal due diligence
investigation of any operating business which the Company seeks to acquire
(“Target Business”) or obtain the services of any vendor unless and until the
Target Business or the vendor executes a waiver letter in the form attached
hereto as Exhibit
A and
Exhibit
B,
respectively; provided that the Company may still enter into an agreement with
any such parties if it believes that the engagement would be in the best
interest of the Company’s stockholders. Furthermore, each officer and director
of the Company shall execute a waiver letter in the form attached hereto as
Exhibit
C.
Page
27
of 38
c) 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 the Representatives and will not allow any amendments to, or waivers of,
such Insider Letters without the prior written consent of either of the
Representatives.
d) The
Company shall not take any action or omit to take any action that would cause
the Company to be in breach or violation of its Certificate of Incorporation,
as
amended. Prior to the consummation of a Business Combination, the Company will
not amend its Certificate of Incorporation, as amended, without the prior
written consent of either of the Representatives.
e) The
Company shall provide counsel to the Representatives 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.
f) The
Company agrees that:
i) Only
holders of the Class B Common Stock are entitled to vote in connection with
a
proposed Business Combination;
ii)
Two-thirds
of the Company's Board of Directors, including its two Class I Directors,
Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, must approve a Business Combination before
it
can be submitted to Class B Common stockholders for a vote;
iii)
Prior
to
the consummation of any Business Combination, the Company will submit such
transaction to the Class B Common 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;
iv)
With
respect to the Business Combination Vote, the Company shall cause all of the
Initial Stockholders to vote, all of the shares of Class B Common Stock owned
by
them immediately prior to this Offering in accordance with the vote of the
holders of a majority of the Class B Common Stock acquired in this Offering;
v) The
Company will proceed with a Business Combination only if, at the meeting to
approve the Business Combination, the holders of a majority of the Class B
Common Stock, present in person or by proxy at the meeting, vote in favor of
the
Business Combination and Class B Common stockholders owning less than 20% of
the
outstanding Class B Common Stock vote against the Business Combination and
exercise their conversion rights described in the Prospectus;
vi)
in
the
event of an approved Business Combination, each outstanding share of Class
B
Common Stock will automatically convert into a share of common stock unless
the
holder votes against the Business Combination and exercises its conversion
rights described in the Prospectus;
Page
28
of 38
vii)
Following
the completion of a Business Combination, the Company will have only one class
of common stock outstanding;
viii)
In
the
event the Company is unable to complete a Business Combination within the
specified period, $8.08 per share of Class B Common Stock held in the Trust
Fund, plus a pro-rata share of the interest earned on the Trust Fund in excess
of the lesser of $1,200,000 or 50% of such interest, will be distributed to
the
Class B Common stockholders, and the Company will be dissolved, in each case
after compliance with the Delaware law.
g) 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 3a5l-1 under the Exchange Act during such
period.
h) 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.
i) 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 fair market value 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.
j) The
Company agrees that, until the consummation of a Business Combination as
contemplated in the Prospectus, in the event that it intends to engage any
person or entity, regardless of NASD association or affiliation, to assist
it in
its search for a merger candidate or to provide any other merger and acquisition
services, the Company will, prior to such engagement (a) provide the following
information to the Representatives (i) complete details of all services and
copies of agreements governing said services and (ii) any documents or materials
reasonably requested by the Representatives, such that the Representatives
may
provide to the NASD a justification as to why the person or entity providing
the
merger and acquisition services should not be considered an “underwriter and
related person” as defined in Rule 2710(a)(6) of the NASD Conduct Rules; (b)
make proper disclosure of such arrangement or potential arrangement in the
Registration Statement; and (c) and cooperate with the Representatives in
submitting such information to the NASD for review and approval.
k) The
Company agrees that until the consummation of a Business Combination as
contemplated in the Prospectus, it will use its best efforts to comply with
the
rules and regulations under the Exchange Act with respect to (a) the furnishing
and content of proxy statements related to the Business Combination; and (b)
the
requirements and filing deadlines for current reports on Form 8-K.
Page
29
of 38
|
9)
|
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 Dates 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 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.
|
10)
|
EFFECTIVE
DATE OF THIS AGREEMENT AND
TERMINATION
|
a) This
Agreement shall become effective on the Effective Date of the Registration
Statement.
b) The
Representatives shall have the right to terminate this Agreement at any time
prior to any Closing Date (i) if any domestic or international event or act
or
occurrence has materially disrupted, or in the Representatives' opinion will
in
the immediate future materially disrupt, general securities markets in the
United States; (ii) if trading on the OTC Bulletin Board (or successor trading
market) shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been fixed, or maximum ranges for prices for securities shall have been required
on the OTC Bulletin Board or by order of the Commission or any other government
authority having jurisdiction; (iii) if the United States shall have become
involved in a new war or upon a material increase in major hostilities; (iv)
if
a banking moratorium has been declared by a New York State or federal authority;
(v) if a moratorium on foreign exchange trading has been declared which
materially adversely impacts the United States securities market, (vi) if the
Company shall have sustained a material loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in the Representatives'
opinion, make it inadvisable to proceed with the delivery of the Units; (vii)
if
any of the Company’s representations, warranties or covenants hereunder are
breached, and if not otherwise qualified by materiality, there is a material
adverse effect; or (viii) if the Representatives 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 Representatives’ judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Units or to enforce
contracts made by the Underwriters for the sale of the Securities.
c)
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(s)
hereof.
Page
30
of 38
d) 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
be
effected by, such election or termination or failure to carry out the terms
of
this Agreement or any part hereof.
|
11)
|
MISCELLANEOUS
|
a) Notices.
All
notices, requests, and other communications shall be in writing and deemed
to be
duly given if sent by confirmed facsimile transmission, email or receipted
overnight courier (such as Federal Express) addressed to the other party at
the
address as set forth below:
|
If
to the Representatives:
|
Newbridge Securities Corporation
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Director Investment Banking
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
I-Bankers
Securities Incorporated
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇@▇-▇▇▇▇▇▇▇.▇▇▇
Westminster
Securities Corporation
▇▇▇
▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
With
Copy to:
|
▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇
▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
|
||
|
If
to the Company:
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary and General Counsel
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
Copy
to:
|
|
Cozen
& Connor
The
Army and Navy Building
▇▇▇▇
▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
|
Page
31
of 38
Any
party
may change the address for receipt of communications by giving written notice
to
the others.
b)
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.
c)
Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
d)
Waiver.
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.
e)
Successors
and Assigns.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representatives, 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.
f)
Severability.
The
respective agreements, representations, warranties, indemnities and other
statements of the Company, its officers and directors and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them
pursuant to this Agreement, shall remain in full force and effect, regardless
of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or the Company or any of its respective officers,
directors and shall survive delivery of and payment for the Securities.
g)
Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Florida, without giving effect to conflict of laws. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, relating in any way to this Agreement shall be brought and enforced
in
the courts of the State of Florida of the United States of America for the
Southern District of Florida, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon the Company may be served
by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
11 hereof. Such mailing shall be deemed personal service and shall be legal
and
binding upon the Company in any action, proceeding or claim. The Company agrees
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.
Page
32
of 38
h)
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.
i)
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.
[Signature
Page to Follow]
Page
33
of 38
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.
|
MIDDLE
KINGDOM ALLIANCE CORP.
By:
________________________________
Print
Name: _________________________
Title:
_______________________________
|
Accepted
on the date first above written:
NEWBRIDGE
SECURITIES CORPORATION
Acting
severally on behalf of itself and as one
of
the
Representatives of the several Underwriters
named
in
Schedule I annexed hereto
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
I-BANKERS
SECURITIES INCORPORATED
Acting
severally on behalf of itself and as one
of
the
Representatives of the several Underwriters
named
in
Schedule I annexed hereto
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
WESTMINSTER
SECURITIES CORPORATION
Acting
severally on behalf of itself and as one
of
the
Representatives of the several Underwriters
named
in
Schedule I annexed hereto
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
Page
34
of 38
SCHEDULE I
180,000
Series A Units
3,000,000
Series B Units
|
Underwriter
|
Number
of Series A Units to be Purchased
|
Number
of Series B Units to be Purchased
|
|
Newbridge
Securities Corporation
|
||
|
I-Bankers
Securities Incorporated
|
||
|
Westminster
Securities Corporation
|
||
|
TOTAL
|
180,000
|
3,000,000
|
1
Plus options to purchase an additional 27,000 Series A Units and 450,000
Series B Units to cover overallotments.
EXHIBIT
A
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Gentlemen:
Reference
is made to the Final Prospectus of Middle Kingdom Alliance Corp. (“Middle
Kingdom”), dated _______________, 2006 (“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 Middle Kingdom has established the
Trust
Fund, initially in an amount of $__________ for the benefit of the Class B
Common Stockholders and that Middle Kingdom may disburse monies from the Trust
Fund only (i) to the Class B Common Stockholders in the event of the redemption
of their shares or the liquidation of Middle Kingdom; or (ii) to Middle Kingdom
after it consummates a Business Combination.
For
and
in consideration of Middle Kingdom agreeing to evaluate
[_______________________] (the "Company") for purposes of consummating a
Business Combination with it, the Company 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 (“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 Middle
Kingdom and will not seek recourse against the Trust Fund for any reason
whatsoever.
I
certify
that I am duly qualified and authorized to act on behalf of the Company as
the
officer signing any instruments, customary or incident, relating to and with
respect to this Waiver Letter.
|
[NAME
OF COMPANY]
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
|
EXHIBIT
B
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Gentlemen:
Reference
is made to the Final Prospectus of Middle Kingdom Alliance Corp. (“Middle
Kingdom”), dated __________, 2006 (“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 Middle Kingdom has established the
Trust
Fund, initially in an amount of $________________ for the benefit of the Class
B
Common Stockholders and that Middle Kingdom may disburse monies from the Trust
Fund only (i) to the Class B Common Stockholders in the event of the redemption
of their shares or the liquidation of Middle Kingdom; or (ii) to Middle Kingdom
after it consummates a Business Combination.
For
and
in consideration of Middle Kingdom engaging the services of
[_______________________] (the "Vendor"), the Vendor 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 (“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 Middle
Kingdom and will not seek recourse against the Trust Fund for any reason
whatsoever.
I
certify
that I am duly qualified and authorized to act on behalf of the Vendor as the
officer signing any instruments, customary or incident, relating to and with
respect to this Waiver Letter.
|
[NAME
OF VENDOR]
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
|
EXHIBIT
C
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Gentlemen:
The
undersigned officer or director of Middle Kingdom Alliance Corp. (“Middle
Kingdom”) hereby acknowledges that Middle Kingdom has established the Trust
Fund, initially in an amount of $____________ for the benefit of the Class
B
Common Stockholders and that Middle Kingdom may disburse monies from the Trust
Fund only (i) to the Class B Common Stockholders in the event of the redemption
of their shares or the liquidation of Middle Kingdom; (ii) to Middle Kingdom,
and with respect to the Deferred Discount, to the Representatives, in each
case
after Middle Kingdom consummates a Business Combination; and (iii) to Middle
Kingdom in an amount equal to one-half of the interest earned on the Trust
Fund
(prior to the payment of any federal or state taxes due by the company) up
to a
maximum of $1,200,000 subject to the terms and conditions of the Trust
Agreement.
The
undersigned hereby agrees that he or she does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund (“Claim”)
and hereby waives any Claim he or she may have in the future as a result of,
or
arising out of, any contracts or agreements with Middle Kingdom 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.
|
By:
___________________________________
Print
Name: ____________________________
Title:
__________________________________
|