JWC Acquisition Corp. 12,500,000 Units1 Common Stock Warrants UNDERWRITING AGREEMENT
12,500,000 Units1
Common Stock
Warrants
Common Stock
Warrants
_________ ___, 2010
Citigroup Global Markets Inc.
As Representative of the several Underwriters,
c/o Citigroup Global Markets Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the several Underwriters,
c/o Citigroup Global Markets Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
JWC Acquisition Corp., a corporation organized under the laws of Delaware (the
“Company”), proposes to sell to the several underwriters named in Schedule I hereto
(the “Underwriters”), for whom you (the “Representative”) are acting as sole
representative, 12,500,000 units (the “Units”) of the Company (said units to be issued and sold by
the Company being hereinafter called the “Underwritten Securities”). The Company also
proposes to grant to the Underwriters an option to purchase up to 1,875,000 additional units to
cover over-allotments, if any (the “Option Securities”; the Option Securities, together
with the Underwritten Securities, being hereinafter called the “Securities”). To the
extent there are no additional Underwriters listed on Schedule I other than you, the term
Representative as used herein shall mean you, as Underwriter, and the term Underwriter shall mean
either the singular or plural as the context requires. Certain capitalized terms used herein and
not otherwise defined are defined in Section 20 hereof.
Each Unit consists of one share of the Company’s common stock, par value $0.0001 per share
(the “Common Stock”), and one warrant to purchase one share of Common Stock (the
“Warrant(s)”). The shares of Common Stock and Warrants included in the Units will not
trade separately until the 52nd day following the date of the Prospectus (unless the Representative
informs the Company of its decision to allow earlier separate trading), subject to (a) the
Company’s preparation of an audited balance sheet reflecting the receipt by the Company of the
proceeds of the offering of the Securities, (b) the filing of such audited balance sheet with the
Commission on a Form 8-K or similar form by the Company that includes such audited balance sheet,
and (c) the Company having issued a press release announcing when such separate trading will begin.
Each Warrant entitles its holder, upon exercise, to purchase one share of Common Stock for $11.50
during the period commencing on the later of thirty (30) days after the completion of an initial
Business Combination or twelve (12) months from the date of the consummation of the Offering (as
defined below) and terminating on the five-year anniversary of the date of the completion of such
initial Business Combination or earlier upon redemption
| 1 | Plus an option to purchase from the Company, up to 1,875,000 additional Units to cover over-allotments. |
As
used herein, the term “Business Combination” (as described more fully in the Registration
Statement) shall mean a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more businesses.
The Company and JWC Acquisition Security Corporation, a corporation qualified as a security
corporation under Massachusetts General Laws and a wholly-owned subsidiary of the Company (the
“Security Corp”), have entered into an Investment Management Trust Agreement, effective as
of __________ ___, 2010, with Continental Stock Transfer & Trust Company (“CST&T”), as
trustee, in substantially the form filed as an exhibit to the Registration Statement (the
“Trust Agreement”), pursuant to which certain proceeds of the Offering will be deposited
and held in a trust account (the “Trust Account”) for the benefit of the Company, the
Security Corp, the Underwriters and the holders of the Underwritten Securities and the Option
Securities, if and when issued.
The Company has entered into a Warrant Agreement, effective as of __________ ___, 2010, with
respect to the Warrants and the Sponsor Warrants (each as defined herein) with CST&T, as warrant
agent, in substantially the form filed as an exhibit to the Registration Statement (the
“Warrant Agreement”), pursuant to which CST&T will act as warrant agent in connection with
the issuance, registration, transfer, exchange, redemption, and exercise of the Warrants and
Sponsor Warrants.
The Company has entered into a Securities Purchase Agreement, effective as of [_________ ___],
2010 (the “Founder’s Purchase Agreement”), with JWC Acquisition, LLC, a Delaware limited
liability company (the “Sponsor”) pursuant to which the Sponsor has purchased an aggregate
of 2,464,286 shares of Common Stock (the “Founder’s Shares”), for an aggregate purchase
price of $25,000. Thereafter, the Company entered into a separate Contribution Agreement with the
Sponsor, dated as of October ___, 2010 (the “Contribution Agreement”), pursuant to which
the Sponsor assigned and surrendered to the Company for cancellation 124,170 Founder’s Shares, so
that the Sponsor was left with an aggregate of 2,340,116 Founder’s Shares. Subsequently,, the
Sponsor transferred an aggregate 23,400 Founder’s shares to ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ (together
with the Sponsor, the “Initial Stockholders”). The Founder’s Shares are substantially
similar to the Common Stock included in the Units except as described in the Prospectus.
The Company has entered into a Sponsor Warrants Purchase Agreement, dated as of August 5, 2010
(as amended on October ___, 2010, the “Warrant Subscription Agreement”), with the Sponsor,
pursuant to which the Sponsor has agreed to purchase an aggregate of 5,333,333 warrants, each
entitling the holder to purchase one share of Common Stock (the “Sponsor Warrants”), for
$0.75 per Sponsor Warrant. The Sponsor Warrants are substantially similar to the Warrants included
in the Units, except as described in the Prospectus.
The Company has entered into a Registration Rights Agreement, dated as of __________ ___,
2010, with the Sponsor and the other parties thereto, in substantially the form filed as an exhibit
to the Registration Statement (the “Registration Rights Agreement”), pursuant
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to which the Company has granted certain registration rights in respect of the Founder’s
Shares and the Sponsor Warrants and the shares of Common Stock underlying the Sponsor Warrants.
The Company has caused to be duly executed and delivered letters by the Sponsor and each of
the Company’s officers and directors, each in substantially the form filed as an exhibit to the
Registration Statement (the “Insider Letters”).
The Company has entered into a letter agreement, dated as of August 5, 2010 (the “Services
Agreement”), with ▇.▇. Childs Associates, L.P., pursuant to which the Company will pay to ▇.▇.
Childs Associates, L.P., subject to the terms of the Services Agreement, an aggregate monthly fee
of $5,000 for general and administrative services, including office space, utilities and
secretarial support from the date that the Units are first quoted on the OTC Bulletin Board until
the earlier of (i) the consummation of a Business Combination or (ii) the Liquidation.
1. Representations and Warranties . The Company represents and warrants to, and agrees with, each Underwriter as set forth
below in this Section 1.
(a) The Company has prepared and filed with the Commission the Registration Statement (file
number 333-168798) on Form S-1, including the related Preliminary Prospectus, for registration
under the Act of the offering and sale of the Securities. Such Registration Statement, including
any amendments thereto filed prior to the Execution Time, has become effective. The Company may
have filed one or more amendments thereto, including the related Preliminary Prospectus, each of
which has previously been furnished to you. The Company will file with the Commission the
Prospectus in accordance with Rule 424(b). As filed, such Prospectus shall contain all information
required by the Act and, except to the extent the Representative shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made
therein. The Company has complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information.
(b) On the Effective Date, the Registration Statement did, and when the Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date (a “settlement
date”), the Prospectus (and any supplement thereto) will, comply in all material respects with
the applicable requirements of the Act; on the Effective Date and at the Execution Time, the
Registration Statement did not and will not contain any 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; and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus (or
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any supplement thereto) in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the Representative specifically for
inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 8(b) hereof.
(c) The Statutory Prospectus does not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however that the Company makes
no representations or warranties as to the information contained in or omitted from the Statutory
Prospectus based upon and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf of any Underwriter
consists of the information described as such in Section 8(b) hereof.
(d) The Company has filed with the Commission a Form 8-A (file number ___-_______) providing
for the registration under the Exchange Act of the Securities, which registration is currently
effective on the date hereof. The Securities have been authorized for quotation, subject to
official notice of issuance and evidence of satisfactory distribution, on the OTC Bulletin Board,
and the Company knows of no reason or set of facts that is likely to adversely affect such
authorization.
(e) The Commission has not issued any order or, to the Company’s knowledge, threatened to
issue any order preventing or suspending the effectiveness of the Registration Statement or the use
of any Preliminary Prospectus, the Prospectus or any part thereof, and has not instituted or, to
the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
(f) (i) At the time of filing the Registration Statement and (ii) as of the Execution Time
(with such date being used as the determination date for purposes of this clause (ii)), the Company
was and is an Ineligible Issuer (as defined in Rule 405).
(g) The Company has not prepared or used a Free Writing Prospectus.
(h) The Company and the Security Corp have been duly incorporated and are validly existing as
corporations in good standing under the laws of the jurisdictions in which each entity is chartered
or organized with full corporate power and authority to own or lease, as the case may be, and to
operate their properties and conduct their business as described in the Statutory Prospectus and
the Prospectus, and each is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction that requires such qualification.
(i) Other than the Security Corp, there are no subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X.
(j) There is no franchise, contract or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an exhibit
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thereto, which is not described or filed as required (and the Statutory Prospectus contains in
all material respects the same description of the foregoing matters contained in the Prospectus);
and the statements in the Statutory Prospectus and the Prospectus under the headings “Principal
Stockholders,” “Certain Relationships and Related Party Transactions,” and
“Description of Securities” insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings. There are no business relationships or related party
transactions involving the Company or any other person required by the Act to be described in the
Registration Statement or Prospectus that have not been described as required.
(k) The Company’s authorized equity capitalization is as set forth in the Statutory Prospectus
and the Prospectus.
(l) All issued and outstanding securities of the Company have been duly and validly authorized
and issued and are fully paid and nonassessable; and none of such securities were issued in
violation of the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The offers and sales of the outstanding Common Stock
and Warrants were at all relevant times either registered under the Act, the applicable state
securities and blue sky laws or, based in part on the representations and warranties of the
purchasers of such shares of Common Stock and Warrants, exempt from such registration requirements.
The holders of outstanding shares of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Securities; and, except as set forth in the Statutory
Prospectus and the Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are outstanding.
(m) All issued and outstanding securities of the Security Corp have been duly and validly
authorized and issued and are fully paid and nonassessable.
(n) The Securities have been duly authorized and when executed by the Company and
countersigned and issued and delivered against payment by the underwriters pursuant to this
Agreement, will be validly issued.
(o) The Common Stock included in the Units has been duly authorized and, when executed by the
Company and countersigned, and issued and delivered against payment for the Securities by the
Underwriters pursuant to this Agreement, will be validly issued, fully paid and non-assessable.
(p) The Warrants included in the Units, when executed, authenticated, issued and delivered in
the manner set forth in the Warrant Agreement against payment for the Securities by the
Underwriters pursuant to this Agreement, will be duly executed, authenticated, issued and
delivered, and will constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in
effect and by equitable principles of general applicability.
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(q) The shares of Common Stock issuable upon exercise of the Warrants included in the Units
have been duly authorized and, when executed by the Company and countersigned, and issued and
delivered against payment therefor pursuant to the Warrants and the Warrant Agreement, will be
validly issued, fully paid and non-assessable. The holders of such Common Stock are not and will
not be subject to personal liability by reason of being such holders; such Common Stock is not and
will not be subject to any preemptive or other similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance and sale of such
Common Stock (other than such execution, countersignature and delivery at the time of issuance) has
been duly and validly taken.
(r) The certificates for the Common Stock are in valid and proper form.
(s) Except as set forth in the Statutory Prospectus and 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.
(t) 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 from its inception through and including the date hereof, except as disclosed in the
Registration Statement.
(u) Neither the Company nor any of its affiliates has, prior to the date hereof, made any
offer or sale of any securities that are required to be “integrated” pursuant to the Act with the
offer and sale of the Underwritten Securities pursuant to the Registration Statement.
(v) The Founder’s Shares are duly authorized, validly issued, fully paid and non-assessable.
(w) The Sponsor Warrants, when delivered upon the consummation of this offering, will be duly
executed, authenticated and issued, and will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general
applicability.
(x) This Agreement has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
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(y) The Trust Agreement has been duly authorized, executed and delivered by the Company and
the Security Corp, and is a valid and binding agreement of each of the Company and the Security
Corp, enforceable against the Company and the Security Corp, respectively, in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(z) The Warrant Agreement has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable against the Company in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(aa) The Founder’s Purchase Agreement has been duly authorized, executed and delivered by the
Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor,
enforceable against the Company and the Sponsor, respectively, in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general
applicability.
(bb) The Contribution Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and
by equitable principles of general applicability.
(cc) The Warrant Subscription Agreement has been duly authorized, executed and delivered by
the Company and the Sponsor, and is a valid and binding agreement of the Company and the Sponsor,
enforceable against the Company and the Sponsor, respectively, in accordance with its terms except
as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally from time to time in effect and by equitable principles of general
applicability.
(dd) The Services Agreement has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable against the Company in accordance
with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(ee) The Registration Rights Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and
by equitable principles of general applicability.
(ff) Each of the Insider Letters executed by the Company, the Sponsor and, to the Company’s
knowledge, each executive officer and director of the Company,
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has been duly authorized, executed and delivered by the Company, the Sponsor, and, to the
Company’s knowledge, each such executive officer and director, respectively, and is a valid and
binding agreement of the Company, the Sponsor and, to the Company’s knowledge, each such executive
officer and director, respectively, enforceable against the Company, the Sponsor and, to the
Company’s knowledge, each such executive officer and director, respectively, in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(gg) The Company is not and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Statutory Prospectus and the
Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940,
as amended.
(hh) No consent, approval, authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions contemplated herein or in the Trust
Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant
Subscription Agreement, the Services Agreement, the Registration Rights Agreement, or the Insider
Letters, except for the registration under the Act and the Exchange Act of the Securities and such
as may be required under state securities or blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in the manner contemplated
herein and in the Statutory Prospectus and the Prospectus.
(ii) The Company is not in violation or default of (i) any provision of its charter or bylaws,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which it is a party
or bound or to which its property is subject, or (iii) any (x) statute, law, rule, regulation, or
(y) judgment, order or decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company; except in the case of
clauses (ii) and (iii) above for any such conflict, breach or violation that would not,
individually or in the aggregate, be reasonably expected to have a material adverse effect on the
financial condition, prospects, earnings, business or properties of the Company, taken as a whole,
whether or not arising from transactions in the ordinary course of business (a “Material
Adverse Effect”).
(jj) The Security Corp is not in violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a
party or bound or to which its property is subject, or (iii) any (x) statute, law, rule,
regulation, or (y) judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the Security Corp.
(kk) Neither the issue and sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof or of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase
8
Agreement, the Contribution Agreement, the Warrant Subscription Agreement, the Services
Agreement, the Registration Rights Agreement, or the Insider Letters will conflict with, result in
a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or the Security Corp pursuant to, (i) the charter or by-laws of the Company
or Security Corp, as applicable, (ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or the Security Corp is a party or bound or to which the Company’s
or the Security Corp’s property is subject, or (iii) any statute, law, rule, or regulation,
judgment, order or decree applicable to the Company or the Security Corp of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or the Security Corp or any of their respective properties.
(ll) No holders of securities of the Company have rights to the registration of such
securities under the Registration Statement.
(mm) The historical financial statements and schedules of the Company included in the
Statutory Prospectus, the Prospectus and the Registration Statement present fairly the financial
condition, results of operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The summary financial data
set forth under the caption “Summary Financial Data” in the Statutory Prospectus,
Prospectus and Registration Statement fairly present, on the basis stated in the Statutory
Prospectus, Prospectus and Registration Statement, the information included therein. The Company
is not party to any off-balance sheet transactions, arrangements, obligations (including contingent
obligations), or other relationships 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. The statistical, industry-related and
market-related data included in the Registration Statement, the Statutory Prospectus and the
Prospectus are based on or derived from sources that the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from which they are
derived.
(nn) No action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company, the Security Corp, or the Sponsor, or the property of
any of them is pending or, to the knowledge of the Company, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby by the Company or the Security Corp or (ii) could
reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in
the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(oo) The Company owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
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(pp) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & Company, P.C. (“▇▇▇▇▇▇▇▇▇”), who have certified certain
financial statements of the Company and delivered their report with respect to the audited
financial statements and schedules included in the Registration Statement, Statutory Prospectus and
the Prospectus, is a registered public accounting firm that is independent with respect to the
Company within the meaning of the Act and the applicable published rules and regulations
thereunder.
(qq) The Company maintains effective “disclosure controls and procedures” (as defined under
Rule 13a-15(e) under the Exchange Act to the extent required by such rule).
(rr) There are no transfer taxes or other similar fees or charges under Federal law or the
laws of any state, or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company of the Securities.
(ss) The Company has filed all tax returns that are required to be filed by it or has
requested extensions thereof (except in any case in which the failure so to file would not have a
Material Adverse Effect) and has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect, except as set forth in or contemplated in the
Registration Statement, Statutory Prospectus and the Prospectus (exclusive of any supplement
thereto).
(tt) The Security Corp has filed all tax returns that are required to be filed by it or has
requested extensions thereof and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect.
(uu) The Company possesses all licenses, certificates, permits and other authorizations issued
by the appropriate federal, state or foreign regulatory authorities necessary to conduct its
business, and the Company has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as set forth in or contemplated in the Statutory Prospectus and the
Prospectus (exclusive of any supplement thereto).
(vv) The Security Corp possesses all licenses, certificates, permits and other authorizations
issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its
business, and the Security Corp has not received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authorization or permit that, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
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(ww) None of the Company, the Security Corp, the Sponsor, or any director, officer, agent,
employee or affiliate of the Company is aware of or has taken any action, directly or indirectly,
that would result in a violation by the Company or, to the knowledge of the Company, such other
persons, of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any “foreign official” (as such term
is defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the Company, the Sponsor and, to the
knowledge of the Company, its directors, officers, agents, employees and affiliates have conducted
the businesses of the Company in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and that are reasonably expected to continue to ensure,
continued compliance therewith.
(xx) The operations of the Company and the Security Corp are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements and the
money laundering statutes and the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company or the
Security Corp with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
(yy) None of the Company, the Security Corp, the Sponsor or any director, officer, agent or
affiliate of the Company is currently subject to any sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and neither the Company
nor the Security Corp will directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of any person currently subject
to any sanctions administered by OFAC.
(zz) None of the Company, the Security Corp, the Sponsor or any officer or director of the
Company has violated: (a) the Bank Secrecy Act, as amended, (b) the Money Laundering Laws, or (c)
the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated
under any such law, or any successor law.
(aaa) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, the Company (i) does not have any material lending or other relationship with any bank
or lending affiliate of any of the Underwriters and (ii) does not intend to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of
any of the Underwriters.
(bbb) All information contained in the questionnaires (the “Questionnaires”) completed
by the Sponsor and, to the knowledge of the Company, the Company’s officers and directors and
provided to the Underwriters as an exhibit to his or her
11
Insider Letter, is true and correct and the Company has not become aware of any information
that would cause the information disclosed in the Questionnaires completed by the Sponsor and the
Company’s officers and directors to become inaccurate and incorrect.
(ccc) Except as disclosed in the Registration Statement, the Statutory Prospectus and the
Prospectus, prior to the date hereof, the Company has not identified any acquisition target and has
not, nor, to its knowledge, has anyone on its behalf, initiated any substantive discussions with an
entity that the Company will acquire in its initial Business Combination.
(ddd) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, there are no claims, payments, arrangements, contracts, agreements or understandings
relating to the payment of a brokerage commission or finder’s, consulting, origination or similar
fee by the Company, the Security Corp, or the Sponsor with respect to the sale of the Securities
hereunder or any other arrangements, agreements or understandings of the Company, the Security
Corp, the Sponsor or any officer or director of the Company or the Security Corp, or their
respective affiliates, that may affect the Underwriters’ compensation, as determined by the
Financial Industry Regulatory Authority (“FINRA”).
(eee) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, neither the Company nor the Security Corp has made any direct or indirect payments (in
cash, securities or any other “item of value” as defined in Rule 5110(c)(3) of FINRA’s Conduct
Rules): (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 person that has been accepted by FINRA as a member of FINRA (a
“Member”); or (iii) to any person or entity that has any direct or indirect affiliation or
association with any Member, within the twelve months prior to the Effective Date, other than
payments to the Underwriters pursuant to this Agreement.
(fff) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, during the period beginning 180 days prior to the initial filing of the Registration
Statement and ending on the Effective Date, no Member and/or any person associated or affiliated
with a Member has provided any investment banking, financial advisory and/or consulting services to
the Company.
(ggg) Except as disclosed in the FINRA Questionnaires provided to the Representative, no
officer, director, or beneficial owner of any class of the Company’s securities (whether debt or
equity, registered or unregistered, regardless of the time acquired or the source from which
derived) (any such individual or entity, a “Company Affiliate”) is a Member or a person
associated or affiliated with a Member.
(hhh) Except as disclosed in the FINRA Questionnaires provided to the Representative, no
Company Affiliate is an owner of stock or other securities of any Member (other than securities
purchased on the open market).
12
(iii) No Company Affiliate has made a subordinated loan to any Member.
(jjj) Except as described in the Registration Statement, the Statutory Prospectus and the
Prospectus, no proceeds from the sale of the Underwritten Securities (excluding underwriting
compensation as disclosed in the Registration Statement, Statutory Prospectus and the Prospectus)
will be paid by the Company to any Member, or any persons associated or affiliated with a Member.
(kkk) The Company has not issued any warrants or other securities, or granted any options,
directly or indirectly to anyone who is a potential underwriter in the Offering or a related person
(as defined by FINRA rules) of such an underwriter within the 180-day period prior to the initial
filing date of the Registration Statement.
(lll) No person to whom securities of the Company have been privately issued within the
180-day period prior to the initial filing date of the Registration Statement has any relationship
or affiliation or association with any Member.
(mmm) No Member intending to participate in the Offering has a conflict of interest with the
Company. For this purpose, a “conflict of interest” means, if at the time of the Member’s
participation in the Offering, any of the following applies: (A) the securities are to be issued by
the Member; (B) the Company controls, is controlled by or is under common control with the Member
or the Member’s associated persons; (C) at least 5% of the net offering proceeds, not including
underwriting compensation, are intended to be: (i) used to reduce or retire the balance of a loan
or credit facility extended by the Member, its affiliates and its associated persons, in the
aggregate; or (ii) otherwise directed to the Member, its affiliates and associated persons, in the
aggregate; or (D) as a result of the Offering and any transactions contemplated at the time of the
Offering: (i) the Member will be an affiliate of the Company; (ii) the Member will become publicly
owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary.
(nnn) The Company has not taken, directly or indirectly, any action designed to or that would
constitute 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 Securities.
(ooo) Except for the Security Corp, the Company does not own an interest in any corporation,
partnership, limited liability company, joint venture, trust or other entity.
(ppp) The Security Corp does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other entity.
(qqq) No relationship, direct or indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director, officer, shareholder, special advisor,
customer or supplier of the Company or any affiliate of the Company, on the other hand, which is
required by the Act or the Exchange Act to be described in the Registration Statement, Statutory
Prospectus or the Prospectus that is not described as
13
required. There are no outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for
the benefit of any of the officers or directors of the Company or any of their respective family
members, except as disclosed in the Registration Statement, Statutory Prospectus and the
Prospectus. The Company has not extended or maintained credit, arranged for the extension of
credit, or renewed an extension of credit, in the form of a personal loan to or for any director or
officer of the Company.
(rrr) The Company has not offered, or caused the Underwriters to offer, the Underwritten
Securities to any person or entity with the intention of unlawfully influencing: (a) a customer or
supplier of the Company or any affiliate of the Company to alter the customer’s or supplier’s level
or type of business with the Company or such affiliate or (b) a journalist or publication to write
or publish favorable information about the Company or any such affiliate.
(sss) Upon delivery and payment for the Units on the Closing Date, the Company will not be
subject to Rule 419 under the Act and none of the Company’s outstanding securities will be deemed
to be a “▇▇▇▇▇ stock” as defined in Rule 3a51-1 under the Exchange Act.
(ttt) The nature of the business, or purposes to be conducted or promoted by the Security
Corp, shall be limited solely to hold and invest in permissible securities as described in the
Prospectus and make distributions to the Company and its Stockholders in accordance with the
provisions in the Trust Agreement and the Prospectus. The charter of the Security Corp is limited
to such purposes and may not be amended or modified except upon the consummation of a Business
Combination.
(uuu) The Security Corp shall not be permitted to (i) merge into or consolidate with any
person or entity or, to the fullest extent permitted by law, dissolve, terminate or liquidate in
whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change
its legal structure, except (a) in connection with the consummation of Business Combination, or (b)
in connection with the redemption of all of the Public Shares in the event Business Combination is
not completed within 21 months from the closing of the Company’s initial public offering (or if
such redemption is not permitted under applicable law, in connection with the liquidation of the
Company); (ii) commingle its assets with the assets of, or participate in a cash management system
with, the Company, the Sponsor, their affiliates, or any other person or entity; (iii) guarantee or
become obligated for the debts of any other person or entity or hold itself out to be responsible
for the debts of another person or entity; (iv) make any loans or advances to any third party,
including the Company, the Sponsor, and each of their affiliates; or (v) pledge its assets for the
benefit of any other person or entity.
Any certificate signed by any officer of the Company or the Security Corp and delivered to the
Representative or counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company or the Security Corp, as applicable,
as to matters covered thereby, to each Underwriter.
14
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the representations
and warranties herein set forth, the Company agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of
$9.80 per Unit, the amount of the Underwritten Securities set forth opposite such Underwriter’s
name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 1,875,000 Option Securities at the same purchase price
per share as the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time on or before the 45th
day after the date of the Prospectus upon written notice by the Representative to the Company
setting forth the number of Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The number of Option Securities to be purchased by each
Underwriter shall be based upon the same percentage of the total number of the Option Securities to
be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as the Representative in its absolute discretion shall make
to eliminate any fractional shares.
(c) In addition to the discount from the public offering price represented by the Purchase
Price set forth in the first sentence of Section 2(a) of this Agreement, the Company hereby
agrees to pay to the Underwriters a deferred discount of $0.35 per Unit (including both
Underwritten Securities and Option Securities) purchased hereunder (the “Deferred
Discount”). The Deferred Discount will be payable from amounts on deposit in the Trust Account
if and when the Company consummates a Business Combination. The Underwriters hereby agree that if
no Business Combination is consummated within the time period provided in the Trust Agreement and
the funds held under the Trust Agreement are distributed to the holders of the Common Stock
included in the Securities sold pursuant to this Agreement (the “Public Stockholders”), (i)
the Underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the trustee
under the Trust Agreement is authorized to distribute the Deferred Discount to the Public
Stockholders on a pro rata basis.
3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and the Option Securities (if the
option provided for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
__________ ___, 2010, or at such time on such later date not more than three Business Days after
the foregoing date as the Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Company or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being herein called the “Closing
Date”). Delivery of the Securities shall be made to the Representative for the respective
accounts of the several Underwriters against payment by the several Underwriters through the
Representative of the purchase price thereof by wire transfer payable in same-day funds to an
account specified by the Company and to the Trust Account as described below in this Section
3. Delivery of the Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company (“DTC”) unless the Representative shall
otherwise instruct.
15
(a) Payment
for the Underwritten Securities shall be made as follows: $124,950,000 of
the proceeds received by the Company for the Underwritten Securities together with $4,375,000 of
Deferred Discount, shall be deposited in the Trust Account pursuant to the terms of the Trust
Agreement and $2,500,000 shall be paid to the order of the Company upon delivery to the
Representative of the Underwritten Securities through the facilities of DTC or, if the
Representative has otherwise instructed, upon delivery to the Representative of certificates (in
form and substance satisfactory to the Representative) representing the Underwritten Securities ,
in each case for the account of the Underwriters. The Underwritten Securities shall be registered
in such name or names and in such authorized denominations as the Representative may request in
writing at least two Business Days prior to the Closing Date. If delivery is not made through the
facilities of DTC, the Company will permit the Representative to examine and package the
Underwritten Securities for delivery, at least one Business Day prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Underwritten Securities except upon tender of
payment by the Representative for all the Underwritten Securities.
(b) Payment for the Option Securities shall be made as follows: $9.80 per Option Security
shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery
to the Representative of the Option Securities through the facilities of DTC or, if the
Representative has otherwise instructed, upon delivery to the Representative of certificates (in
form and substance satisfactory to the Representative) representing the Option Securities (or
through the facilities of DTC) for the account of the Underwriters. The Option Securities shall be
registered in such name or names and in such authorized denominations as the Representative may
request in writing at least two Business Days prior to the Closing Date. If delivery is not made
through the facilities of DTC, the Company will permit the Representative to examine and package
the Option Securities for delivery, at least one Business Day prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Option Securities except upon tender of
payment by the Representative for all the Option Securities.
If the option provided for in Section 2(b) hereof is exercised after the third
Business Day prior to the Closing Date, the Company will deliver the Option Securities (at the
expense of the Company) to the Representative, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, on the
date specified by the Representative (which shall be at least three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against payment by the
several Underwriters through the Representative of the purchase price thereof to the Trust Account
as described above in Section 3(b). If settlement for the Option Securities occurs after
the Closing Date, the Company will deliver to the Representative on the settlement date for the
Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall
be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters propose
to offer the Securities for sale to the public as set forth in the Prospectus (the
“Offering”).
16
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for your review prior to filing
and will not file any such proposed amendment, supplement or Rule 462(b) Registration Statement to
which you reasonably object. The Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed in a form approved by the Representative with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to the Representative of such timely filing. The Company will
promptly advise the Representative (i) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (ii) when, prior to termination
of the offering of the Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iii) of any request by the Commission or its staff for any amendment of
the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the
Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any notice objecting to its
use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by
the Company of any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the issuance of any such stop order
or the occurrence of any such suspension or objection to the use of the Registration Statement and,
upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal
of such stop order or relief from such occurrence or objection, including, if necessary, by filing
an amendment to the Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared effective as soon as
practicable.
(b) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event
occurs as a result of which the Statutory Prospectus would include any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made at such time not misleading, the Company will
(i) notify promptly the Representative so that any use of the Statutory Prospectus may cease until
it is amended or supplemented; (ii) amend or supplement the Statutory Prospectus to correct such
statement or omission; and (iii) supply any amendment or supplement to you in such quantities as
you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered
under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), any event occurs as a result of which the Prospectus as then supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (i) notify the Representative of any such event; (ii) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of
17
this
Section 5, an amendment or supplement that will correct such statement or omission or
effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as
you may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders
and to the Representative an earnings statement or statements of the Company and its subsidiaries
that will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The Company will not make any offer relating to the Units that constitutes or would
constitute a Free Writing Prospectus or a portion thereof required to be filed by the Company with
the Commission or retained by the Company under Rule 433 of the Securities Act.
(f) The Company will furnish to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each
Preliminary Prospectus, the Prospectus and any supplement thereto as the Representative may
reasonably request. The Company will pay the expenses of printing or other production of all
documents relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of the Securities for sale
under the laws of such jurisdictions as the Representative may designate and will maintain such
qualifications in effect so long as required for the distribution of the Securities; provided that
in no event shall the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject.
(h) Except as set forth in Section 5(v), the Company will not, without the prior
written consent of the Representative, offer, sell, contract to sell, pledge or otherwise dispose
of (or enter into any transaction that is designed to, or might reasonably be expected to, result
in the disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to, any other Units, shares of
Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock or publicly announce an intention to effect any such transaction during the
period commencing on the date hereof and ending 180 days after the date of this Agreement;
provided, however, that the Company may (1) issue and sell the Sponsor Warrants, (2) issue and sell
the Option Securities on exercise of the option provided for in Section 2(b) hereof and (3)
register with the Commission pursuant to the Registration Rights
18
Agreement, in accordance with the terms of the Registration Rights Agreement, the resale of
the Founder’s Shares and the Sponsor Warrants.
(i) The Company will not take, directly or indirectly, any action designed to or that would
constitute 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 Securities.
(j) The Company agrees to pay the costs and expenses relating to the following matters: (i)
the preparation, printing or reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the
Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, each Preliminary Prospectus, the Prospectus and all
amendments or supplements to any of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the Securities; (iv) the
printing (or reproduction) and delivery of this Agreement and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the quotation of the Securities on the
OTC Bulletin Board; (vi) the printing and delivery of a blue sky memorandum and the Secondary
Market Trading Survey (as defined in Section 5(ff) hereof), any registration or
qualification of the Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and fees for counsel for the Underwriters relating to such
memorandum, survey, registration and qualification in an aggregate amount previously agreed upon
between the Company and the Representative); (vii) any filings required to be made with FINRA (including filing fees and the reasonable and
documented fees and expenses of counsel for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of the Company (and not the
Underwriters) in connection with presentations to prospective purchasers of the Securities; (ix)
the fees and expenses of the Company’s accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder.
(k) For
a period commencing on the Effective Date and ending at least five (5) years from
the date of the consummation of the Business Combination or until such earlier time at which the
Liquidation occurs, the Company will use its best efforts to maintain the registration of the
Units, Common Stock and Warrants under the provisions of the Exchange Act, except after giving
effect to a going private transaction after the completion of a Business Combination. The Company
will not deregister the Units, Common Stock or Warrants under the Exchange Act (except in
connection with a going private transaction after the completion of a Business Combination) without
the prior written consent of the Representative.
(l) The Company shall, on the date hereof, retain its independent registered public accounting
firm to audit the financial statements of the Company as of the
19
Closing Date (the “Audited Financial Statements”) reflecting the receipt by the
Company of the proceeds of the Offering on the Closing Date. As soon as the Audited Financial
Statements become available, the Company shall immediately file a Current Report on Form 8-K with
the Commission, which Report shall contain the Company’s Audited Financial Statements.
Additionally, upon the Company’s receipt of the proceeds from the exercise of all or any portion of
the option provided for in Section 2(b) hereof, the Company shall immediately file a
Current Report on Form 8-K with the Commission, which report shall disclose the Company’s sale of
the Option Securities and its receipt of the proceeds therefrom.
(m) For
a period commencing on the Effective Date and ending at least five (5) years from
the date of the consummation of the Business Combination Effective Date or until such earlier time
at which the Liquidation occurs or the Common Stock and Warrants cease to be publicly traded, the
Company, at its expense, shall cause its regularly engaged independent registered public accounting
firm to review (but not audit) the Company’s financial statements for each of the first three
fiscal quarters prior to the announcement of quarterly financial information, the filing of the
Company’s Form 10-Q quarterly report and the mailing, if any, of quarterly financial information to
stockholders.
(n) For a period commencing on the Effective Date and ending at least five (5) years from the
date of the consummation of the Business Combination or until such earlier time at which the
Liquidation occurs or the Common Stock and Warrants cease to be publicly traded, the Company shall
retain a transfer and warrant agent.
(o) In no event will the fees payable under the Services Agreement be more than $5,000 per
month in the aggregate.
(p) Other than payments made pursuant to the terms of the Services Agreement and except as set
forth in this subsection, the Company shall not pay the Sponsor or any of the Company’s executive
officers, directors or any of their respective affiliates any fees or compensation for services
rendered to the Company prior to, or in connection with, the consummation of a Business
Combination; provided however, that such officers, directors and affiliates (i) may receive
reimbursement for out-of-pocket expenses incurred by them in connection with activities on the
Company’s behalf to the extent that such expenses do not exceed the amount of available proceeds
not deposited in the Trust Account and the amount of interest income that may be released from the
Trust Account as described in the Registration Statement and (ii) may be repaid loans as described
in the Registration Statement.
(q) The Company will, and will cause the Security Corp to, apply the net proceeds from the
offering received by it in a manner consistent with the applications described under the caption
“Use of Proceeds” in the Statutory Prospectus and the Prospectus.
(r) For a period of 90 days following the Effective Date, in the event any person or entity
(regardless of any FINRA 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, or has provided or
will provide any investment banking, financial, advisory and/or consulting services to the Company,
the Company agrees that it shall provide to FINRA, the Representative and its counsel prior to the
consummation of the Business Combination: (i) the
20
identity of the person or entity providing any such services; (ii) complete details of all
such services and copies of all agreements governing such services; and (iii) justification as to
why the value received by any person or entity for such services is not underwriting compensation
for the Offering. The Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the tender offer materials or proxy statement, as applicable, which the
Company may file in connection with the Business Combination for purposes of offering redemption of
shares held by its stockholders or for soliciting stockholder approval, as applicable.
(s) The Company shall advise FINRA, the Representative and its counsel if it is aware that any
5% or greater stockholder of the Company becomes an affiliate or associated person of a Member
participating in the distribution of the Company’s Securities.
(t) The Company shall cause the Security Corp to cause the proceeds of the Offering to be
held in the Trust Account to be invested only in United States government treasury bills with a
maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7
under the Investment Company Act as set forth in the Trust Agreement and disclosed in the Statutory
Prospectus and 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 not be required to register as an investment company
under the Investment Company Act.
(u) During the period prior to the Company’s initial Business Combination, the Company or the
Security Corp may instruct the trustee under the Trust Agreement that up to an aggregate of
$1,250,000 of interest income (after appropriate reserve for payment of taxes) be released to the
Company solely for the purposes described in the Registration Statement. After an aggregate of
$1,250,000 is released to the Company, any interest income earned on the amounts held in the Trust
Account (net of taxes payable thereon) will remain in the Trust Account until the earlier of the
consummation of the Company’s initial Business Combination or the Liquidation, except as otherwise
provided in this Section 5(u) or Section 5(v). The amount of interest income
permitted to be released from the Trust Account to the Company may be increased by up to $187,500,
if the Underwriters’ over-allotment option is exercised in full. If the Underwriters’
over-allotment option is not exercised in full, but is exercised in part, the amount of interest
income permitted to be released from the Trust Account shall be increased proportionally in
relation to the proportion of the over-allotment option that was exercised by the Underwriters.
Moreover, the amount of interest income that the Company may instruct the trustee under the Trust
Agreement to release to the Company may be further increased, to the extent that there is any
interest accrued in the Trust Account not required to pay income taxes on interest income earned on
the balance then in the Trust Account or franchise taxes, by up to an additional $100,000 if the
proceeds of the Offering held outside of the Trust Account and the funds otherwise released to the
Company to cover its operating expenses in accordance with this Section 5(u) are not
sufficient to cover the costs and expenses associated with implementing the Company’s plan of
dissolution.
(v) If the Company seeks stockholder approval of the initial Business Combination, prior to
the consummation thereof, the Company may instruct the trustee under the Trust Agreement that
amounts necessary to purchase up to 15% of the shares of Common Stock sold as part of the Units in
the Offering (the “Public Shares”) (1,875,000 shares, or 2,587,500
21
shares if the Underwriters’ over-allotment option is exercised in full) at any time commencing
after the filing of a preliminary proxy statement for the initial Business Combination and ending
on the date of the stockholder meeting to approve such initial Business
Combination (such purchases being referred to herein as “Open Market Purchases”) be
released to the Company from the Trust Account. Such Open Market Purchases (i) may be made only in
open market transactions at times when the Company is not in possession of material non-public
information, (ii) may not be made during a restricted period under Regulation M under the Exchange
Act and (iii) shall comply with Rule 10b-18 under the Exchange Act, at prices (inclusive of
commissions) not to exceed an amount equal to (A) the aggregate amount then on deposit in the Trust
Account divided by (B) the total number of Public Shares then outstanding. All Public Shares
purchased in Open Market Purchases shall be immediately cancelled.
(w) The Company will reserve and keep available that maximum number of its authorized but
unissued securities that are issuable upon exercise of any of the Warrants and Sponsor Warrants
outstanding from time to time.
(x) Prior to the consummation of a Business Combination or the Liquidation, the Company shall
not issue any shares of Common Stock, Warrants or any options or other securities convertible into
Common Stock, or any shares of preferred stock that participate in any manner in the Trust Account
or that vote as a class with the Common Stock on a Business Combination.
(y) The Company’s independent directors will review on a quarterly basis all payments made to
the Sponsor, to the Company’s officers or directors, or to the Company’s or any of such other
persons’ respective affiliates.
(z) The Company agrees that it will use commercially reasonable efforts to prevent the Company
from becoming subject to Rule 419 under the Act prior to the consummation of any Business
Combination, including, but not limited to, using its best efforts to prevent any of the Company’s
outstanding securities from being deemed to be a “▇▇▇▇▇ stock” as defined in Rule 3a-51-1 under the
Exchange Act during such period.
(aa) To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will
maintain “disclosure controls and procedures” (as defined under Rule 13a-15(e) under the Exchange
Act) and 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 GAAP 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.
(bb) As soon as legally required to do so, the Company and its directors and officers, in
their capacities as such, shall take all actions necessary to comply with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, including Section 402 related to loans and Sections 302 and 906 related to
certifications.
22
(cc) The Company shall not take any action or omit to take any action that would cause the
Company or the Security Corp to be in breach or violation of each respective entity’s Amended and
Restated Certificate of Incorporation, as amended, or Bylaws, as amended.
(dd) The Company will seek to have all vendors, service providers (other than independent
accountants), prospective target businesses or other entities with which it or the Security Corp
does business enter into agreement waiving any right, title, interest or claim of any kind in or to
any monies held in the Trust Account for the benefit of the Public Stockholders. The Company may
forego obtaining such waivers only if the Company shall have received the approval of its Chief
Executive Officer.
(ee) The Company may consummate the initial Business Combination and conduct redemptions of
shares of Common Stock for cash upon consummation of such Business Combination without a
stockholder vote pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, including the
filing of tender offer documents with the Commission. Such tender offer documents will contain
substantially the same financial and other information about the initial Business Combination and
the redemption rights as is required under the Commission’s proxy rules and will provide each
stockholder of the Company with the opportunity prior to the consummation of the initial Business
Combination to redeem the shares of Common Stock held by such stockholder for an amount of cash
equal to (A) the aggregate amount then on deposit in the Trust Account representing (x) the
proceeds held in the Trust Account from the Offering and the sale of the Sponsor Warrants that are
not released to the Company for Open Market Purchases and (y) any interest income earned on the
funds held in the Trust Account, net of income and franchise taxes payable, that are not released
to the Company to cover its operating expenses in accordance with Section 5(u), divided by
(B) the total number of Public Shares then outstanding. If, however, the Company elects not to
file such tender offer documents, a stockholder vote is required by law in connection with the
initial Business Combination, or the Company decides to hold a stockholder vote for business or
other legal reasons, the Company will submit such Business Combination to the Company’s
stockholders for their approval (“Business Combination Vote”). With respect to the initial
Business Combination Vote, if any, the Sponsor has agreed to vote all of its Founder’s Shares in
accordance with the majority of the votes cast by the Public Stockholders and to vote any other
shares of Common Stock purchased during or after the Offering in favor of the Company’s initial
Business Combination. If the Company seeks stockholder approval of the initial Business
Combination, the Company will offer to each Public Stockholder holding shares of Common Stock the
right to have its shares redeemed in conjunction with a proxy solicitation pursuant to the proxy
rules of the Commission at a per share redemption price (the “Redemption Price”) equal to
(I) the aggregate amount then on deposit in the Trust Account representing (1) the proceeds held in
the Trust Account from the Offering and the sale of the Sponsor Warrants that are not released to
the Company for Open Market Purchases and (2) any interest income earned on the funds held in the
Trust Account, net of income and franchise taxes payable, that are not released to the Company to
cover its operating expenses in accordance with Section 5(u), divided by (II) the total
number of Public Shares then outstanding. If the Company seeks stockholder approval of the initial
Business Combination, the Company may proceed with such Business
23
Combination only if a majority of the shares voted by the Public Stockholders are voted to
approve such Business Combination. If, after seeking and receiving such stockholder approval, the
Company elects to so proceed, it will redeem shares, at the Redemption Price, from those Public
Stockholders who affirmatively requested such redemption. Only Public Stockholders holding shares
of Common Stock who properly exercise their redemption rights, in accordance with the applicable
tender offer or proxy materials related to such Business Combination, shall be entitled to receive
distributions from the Trust Account in connection with an initial Business Combination, and the
Company shall pay no distributions with respect to any other holders or shares of capital stock of
the Company in connection therewith. In the event that the Company does not effect a Business
Combination by eighteen (18) months from the date of the consummation of the Offering, the Company
will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten (10) business days thereafter, redeem 100% of the Public Shares, at
a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest but net of franchise and income taxes payable (less up to $100,000 of
such net interest to pay dissolution expenses), divided by the number of then outstanding Public
Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable
law, and subject to the requirement that any refund of income taxes that were paid from the Trust
Account that is received after the redemption shall be distributed to the former Public
Stockholders, and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve
and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. Only Public Stockholders holding
shares of Common Stock included in the Securities shall be entitled to receive such redemption
amounts and the Company shall pay no such redemption amounts or any distributions in liquidation
with respect to any other shares of capital stock of the Company.
(ff) In the event that the Company desires or is required by an applicable law or regulation
to cause an announcement (“Business Combination Announcement”) to be placed in The Wall
Street Journal, The New York Times or any other news or media publication or outlet or to be made
via a public filing with the Commission announcing the consummation of the Business Combination
that indicates that the Underwriters were the underwriters in the Offering, the Company shall
supply the Representative with a draft of the Business Combination Announcement and provide the
Representative with a reasonable advance opportunity to comment thereon, subject to the agreement
of the Underwriters to keep confidential such draft announcement in accordance with the
Representative’s standard policies regarding confidential information.
(gg) Upon the consummation of the initial Business Combination, the Company will pay to the
Representative, on behalf of the Underwriters, the Deferred Discount. Payment of the Deferred
Discount will be made out of the proceeds of this offering held in the Trust Account. The
Underwriters shall have no claim to payment of any interest earned on the portion of the proceeds
held in the Trust Account representing the Deferred Discount. If the Company fails to consummate
its initial Business Combination within eighteen (18) months from the date of the consummation of
the Offering, the Deferred Discount will not be paid to the Representative and will, instead, be
included in the Liquidation distribution of the proceeds held
24
in the Trust Account made to the Public Stockholders. In connection with any such
Liquidation, the Underwriters forfeit any rights or claims to the Deferred Discount.
(hh) During such time as the Securities, Common Stock and Warrants 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 Representative, at its expense, to the extent reasonably available,
such reports published by FINRA or the Pink Sheets, LLC relating to price and trading of the
Securities, Common Stock and Warrants, as the Representative shall reasonably request. In addition
to the requirements of the preceding sentence, for a period of 18 months from the Closing Date, the
Company, at its expense, shall provide the Representative a subscription to the Company’s weekly
Depository Transfer Company Security Position Reports.
(ii) The Company shall engage ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP to deliver to the
Representative on or before the Effective Date, a written report detailing those states in which
the Securities, Common Stock and Warrants may be traded in non-issuer transactions under the Blue
Sky laws of the fifty (50) States (the “Secondary Market Trading Survey”).
(jj) The Company will endeavor in good faith, in cooperation with the Representative, at or
prior to the time the Registration Statement becomes effective, to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as the Representative may
reasonably designate, provided that no such qualification shall be required in any jurisdiction
where, as a result thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. Until the earliest of (i)
the date on which all Underwriters shall have ceased to engage in market-making activities in
respect of the Securities, (ii) the date on which the Securities are listed or quoted, as the case
may be, on the New York Stock Exchange, the NYSE American Stock Exchange or the Nasdaq Stock Market
(or any successor to such entities), (iii) a going private transaction after the completion of a
Business Combination, and (iv) the date of the liquidation of the Company (the period from the
Effective Date to such earliest date, the “Blue Sky Compliance Period”), in each
jurisdiction where such qualification shall be effected, the Company will, unless the
Representative agrees that such action is not at the time necessary or advisable, use all
reasonable efforts to file and make such statements or reports at such times as are or may be
required to qualify the Securities for offering and sale under the securities laws of such
jurisdiction.
(kk) During the Blue Sky Compliance Period, the Company shall promptly take such action as may
be reasonably requested by the Representative to maintain secondary market trading in such other
states as may be reasonably requested by the Representative.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be,
shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any settlement date
25
pursuant to Section 3 hereof, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Prospectus, and any supplement thereto, have been filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP, counsel for the
Company to have furnished to the Representative their opinions, dated the Closing Date and
addressed to the Representative in the form attached as Exhibits A-1 and A-2 hereto.
(c) The Representative shall have received from ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the
Representative, with respect to the issuance and sale of the Securities, the Registration
Statement, the Statutory Prospectus, the Prospectus (together with any supplement thereto) and
other related matters as the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Representative a certificate of the Company,
signed by the Chief Executive Officer and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement each Preliminary Prospectus, the Prospectus and any amendment
or supplement thereto, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct on and as of the Closing Date with the same effect as if made on
the Closing Date and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that
purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the
Statutory Prospectus and the Prospectus (exclusive of any supplement thereto), there
has been no Material Adverse Effect, except as set forth in or contemplated in the
Statutory Prospectus and the Prospectus (exclusive of any supplement thereto).
(e) The Company shall have requested and caused ▇▇▇▇▇▇▇▇▇ to have furnished to the
Representative, at the Execution Time and at the Closing Date, letters, dated
26
respectively as of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representative, confirming that they are a registered public accounting firm
that is independent with respect to the Company within the meaning of the Act and the Exchange Act
and the applicable rules and regulations adopted by the Commission thereunder and that they have
performed a review of the unaudited interim financial statements of the Company as of ________ ___,
2010 and for the period July 22, 2010 (inception) to August 5, 2010, in accordance with Statement
on Auditing Standards No. 100 and stating in effect that:
(i) in their opinion the audited financial statements and financial statement
schedules included in the Registration Statement, the Statutory Prospectus and the
Prospectus and reported on by them comply as to form with the applicable accounting
requirements of the Act and the related rules and regulations adopted by the
Commission;
(ii) on the basis of a reading of the latest unaudited financial statements
made available by the Company, if any; their limited review, in accordance with
standards established under Statement on Auditing Standards No. 100, of the
unaudited interim financial information as of ________ ___, 2010 and for the period
July 22, 2010 (inception) to August 5, 2010; carrying out certain specified
procedures (but not an audit in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance with respect to
the comments set forth in such letter; a reading of the minutes of the meetings, if
any, of the stockholders, and directors of the Company; and inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and events subsequent
to ________ ___, 2010, nothing came to their attention that caused them to believe
that:
(1) any unaudited financial statements included in the Registration Statement,
the Statutory Prospectus and the Prospectus do not comply as to form with applicable
accounting requirements of the Act and with the related rules and regulations
adopted by the Commission with respect to registration statements on Form S-1; and
said unaudited financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of the
audited financial statements included in the Registration Statement, the Statutory
Prospectus and the Prospectus; and
(2) with respect to the period subsequent to ________ ___, 2010, there were any
changes, at a specified date not more than five days prior to the date of the
letter, in the long-term debt of the Company or capital stock of the Company or
decreases in the stockholders’ equity of the Company as compared with the amounts
shown on the August 5, 2010 balance sheet included in the Registration Statement,
the Statutory Prospectus and the Prospectus, except in all instances for changes or
decreases set forth in such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof unless said explanation
is not deemed necessary by the Representative;
27
(iv) they have performed certain other specified procedures as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set forth in
the Registration Statement, the Statutory Prospectus and the Prospectus, including
the information set forth under the captions “Dilution” and “Capitalization” in the
Statutory Prospectus and the Prospectus, agrees with the accounting records of the
Company, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any supplement thereto at
the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is
given in the Registration Statement (exclusive of any amendment thereof), the Statutory Prospectus
and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a prospective change, in or
affecting the financial condition, earnings, business or properties of the Company, whether or not
arising from transactions in the ordinary course of business, except as set forth in or
contemplated in the Statutory Prospectus and the Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii) above, is, in
the sole judgment of the Representative, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Statutory Prospectus and the
Prospectus (exclusive of any supplement thereto).
(g) Prior to the Closing Date, the Company shall have furnished to the Representative such
further information, certificates and documents as the Representative may reasonably request.
(h) FINRA shall not have raised any objection with respect to the fairness or reasonableness
of the underwriting or other arrangements of the transactions contemplated hereby.
(i) The Securities shall have been authorized for quotation on the OTC Bulletin Board, and
satisfactory evidence of such actions shall have been provided to the Representative.
(j) On the Effective Date, the Company shall have delivered to the Representative executed
copies of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the
Contribution Agreement, the Warrant Subscription Agreement and each of the Insider Letters.
(k) On or before the Effective Date, the Representative shall have received the Secondary
Market Trading Survey from ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP.
28
(l) At least one Business Day prior to the Closing Date, the Sponsor shall have caused the purchase price for the Sponsor Warrants to be funded into the Trust Account.
(m) No order preventing or suspending the sale of the Units in any jurisdiction designated by
the Representative pursuant to Section 5(gg) hereof shall have been issued as of the
Closing Date, and no proceedings for that purpose shall have been instituted or shall have been
threatened.
If any of the conditions specified in this Section 6 shall not have been fulfilled
when and as provided in this Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the
Representative and counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representative. Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the
office of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, at One Bryant Park, New
York, New York, 10036, unless otherwise indicated herein, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to Section
10 hereof or because of any refusal, inability or failure on the part of the Company to perform
any agreement herein or comply with any provision hereof other than by reason of a default by any
of the Underwriters, the Company will reimburse the Underwriters severally through the
Representative on demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter, each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act and each affiliate of each Underwriter against
any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus or in any amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
29
damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based upon (i) any such
untrue statement or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of any Underwriter through the Representative specifically for inclusion therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described in the last sentence of Section 8(b) hereof, (ii) the use of any
Preliminary Prospectus or the Prospectus in violation of any stop order or other notice received by
any Underwriter indicating the then current Preliminary Prospectus or the Prospectus is not to be
used in connection with the sale of any Securities, or (iii) an Underwriter otherwise failing in
its prospectus delivery obligations. This indemnity agreement will be in addition to any liability
that the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representative specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in addition to any
liability that any Underwriter may otherwise have. The Company acknowledges that the statements
set forth (i) in the last paragraph of the cover page regarding delivery of the Securities and (ii)
under the heading “Underwriting”, (w) the list of Underwriters and their respective roles and
participation in the sale of the Securities, (x) the sentences related to concessions and
reallowances and sales to discretionary accounts, (y) the paragraphs related to stabilization,
syndicate covering transactions and penalty bids, and (z) the sections related to state blue sky
information, in the Preliminary Prospectus and the Prospectus constitute the only information furnished
in writing by or on behalf of the several Underwriters for inclusion in the Preliminary Prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will
not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided, however, that
such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees,
30
costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld, delayed or conditioned), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Company and the Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively “Losses”) to which the
Company and one or more of the Underwriters may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the Underwriters on
the other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among underwriters relating to
the offering of the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for any reason,
the Company and the Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative fault of the Company
on the one hand and of the Underwriters on the other in connection with the statements or omissions
that resulted in such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each case as set forth
on the cover page of the Prospectus. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information provided by the Company on the
one hand or the Underwriters on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions of this paragraph
(d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of such
31
fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an Underwriter
within the meaning of either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under this Agreement, the
remaining Underwriters shall be obligated severally to take up and pay for (in the respective
proportions that the amount of Securities set forth opposite their names in Schedule I
hereto bears to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities that the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate amount
of Securities that the defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the underwritten Securities, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the Securities. If within
one Business Day after such default relating to more than 10% of the Underwritten Securities the
remaining Underwriters do not arrange for the purchase of such Underwritten Securities, then the
Company shall be entitled to a further period of one Business Day within which to procure another
party or parties reasonably satisfactory to you to purchase said Underwritten Securities. In the
event that neither the remaining Underwriters nor the Company purchase or arrange for the purchase
of all of the Underwritten Securities to which a default relates as provided in this Section
9, this Agreement will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business Days, as the
Representative shall determine in order that the required changes in the Registration
Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute discretion of the
Representative, by notice given to the Company prior to delivery of and payment for the Securities,
if at any time prior to such delivery and payment (i) trading in the Company’s Units, Common Stock
or Warrants shall have been suspended by the Commission, the Company shall not have obtained
authorization for quotation of the Common Stock, Warrants, or Units on the OTC Bulletin Board or
successor trading market, or trading in securities generally on the New York Stock Exchange or
quotation on the OTC Bulletin Board (or successor trading market) shall have been suspended or
limited or minimum prices shall have been established on such exchange or trading market, (ii) a
banking moratorium shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the Representative, impractical or
inadvisable to proceed with the offering
32
or delivery of the Securities as contemplated by the
Statutory Prospectus or the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors, employees, agents or controlling
persons referred to in Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent
to the Representative, will be mailed, delivered or telefaxed to the Citigroup Global Markets Inc.
General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to (617) [_______] and confirmed to
it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇
and mailed, delivered or telefaxed to (▇▇▇) ▇▇▇-▇▇▇▇ and confirmed to the Company’s counsel at
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and
their respective successors and the officers, directors, employees, agents and controlling persons
referred to in Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale of the Securities pursuant
to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand,
and the Underwriters and any affiliate through which it may be acting, on the other, (b) the
Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the
Company’s engagement of the Underwriters in connection with the offering and the process leading up
to the offering is as independent contractors and not in any other capacity. Furthermore, the
Company agrees that it is solely responsible for making its own judgments in connection with the
offering (irrespective of whether any of the Underwriters has advised or is currently advising the
Company on related or other matters). The Company agrees that it will not claim that the
Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary
or similar duty to the Company, in connection with such transaction or the process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company and the Underwriters, or any of them, with respect to the subject matter
hereof.
16. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State
of New York applicable to contracts made and to be performed within the State of New York.
33
17. Waiver of Jury Trial. The Company hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
18. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience only and shall not affect the
construction hereof.
20. Definitions. The terms that follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by law to
close in New York City.
“Commission” shall mean the Securities and Exchange Commission.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or
becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule
405.
“Liquidation” shall mean the distributions of the Trust Account to the Public
Stockholders in connection with the redemption of shares of Common Stock held by the Public
Stockholders pursuant to the terms of the Company’s Amended and Restated Certificate of
Incorporation, as amended, if the Company fails to consummate a Business Combination.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in
paragraph 1(a) above and any preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information.
“Prospectus” shall mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time.
34
“Registration Statement” shall mean the registration statement referred to in
paragraph 1(a) above, including exhibits and financial statements and any prospectus and prospectus
supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time
and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Registration Statement, as the case may be.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule
405”, “Rule 415”, “Rule 424”, “Rule 430A” and “Rule 433” refer
to such rules under the Act.
“Rule 430A Information” shall mean information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
“Rule 462(b) Registration Statement” shall mean a registration statement and any
amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the
registration statement referred to in Section 1(a) hereof.
“Statutory Prospectus” shall mean (i) the Preliminary Prospectus dated __________ ___,
2010, relating to the Securities and (ii) the Time of Delivery Information, if any, set forth on
Schedule II hereto.
[remainder of page intentionally left blank]
35
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
| Very truly yours, | ||||||
| JWC Acquisition Corp. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Citigroup Global Markets Inc.
| By: | |||
| Name: | |||
| Title: | |||
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
| Number of Underwritten Securities to be | ||||
| Underwriters | Purchased | |||
Citigroup Global Markets Inc. |
||||
Total |
12,500,000 | |||
SCHEDULE II
TIME OF DELIVERY INFORMATION
EXHIBIT A