EXHIBIT 1.1
UNDERWRITING AGREEMENT
BY AND BETWEEN
MEDIA & ENTERTAINMENT HOLDINGS, INC.,
LAZARD CAPITAL MARKETS LLC
AND
LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC.
DATED: __________, 2006
MEDIA & ENTERTAINMENT HOLDINGS, INC.
UNDERWRITING AGREEMENT
New York, New York
____________, 2006
Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The undersigned, Media & Entertainment Holdings, Inc., a Delaware
corporation ("COMPANY"), hereby confirms its agreement with Lazard Capital
Markets LLC (being referred to herein variously as "YOU", "LAZARD" or the
"CO-REPRESENTATIVE" and with Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc. (being referred to
herein variously as "YOU," "LADENBURG" or the "CO-REPRESENTATIVE") and with the
other underwriters named on Schedule I hereto for which Lazard and Ladenburg are
acting as Co-Representatives (the Co-Representatives and the other Underwriters
being collectively called the "UNDERWRITERS" or, individually, an "UNDERWRITER")
as follows:
1. PURCHASE AND SALE OF SECURITIES.
1.1. FIRM SECURITIES.
1.1.1 PURCHASE OF FIRM UNITS. On the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and
sell, severally and not jointly, to the several Underwriters, an
aggregate of 9,000,000 units ("FIRM UNITS") of the Company, at a
purchase price (net of discounts and commissions) of $7.44 per Firm Unit
(including discounts of $0.20 per Firm Unit payable to the Underwriters,
as well as the full amount of a $720,000 non-accountable expense
allowance payable to the Co-Representatives that will not be paid to the
Underwriters unless and until a Business Combination (as defined below)
has been consummated by the Company). The Underwriters, severally and
not jointly, agree that they will not seek payment of the discounts of
$0.20 or the $720,000 non-accountable expense allowance referred to in
Section 3.13.2 unless and until a Business Combination has been
consummated by the Company, and the Company agrees that it shall pay
such discounts and commissions only upon consummation of such Business
Combination. The Underwriters, severally and not jointly, agree to
purchase from the Company the number of Firm Units set forth opposite
their respective names on Schedule I attached hereto and made a part
hereof at a purchase price (net of discounts and commissions) of $7.44
per Firm Unit. The Firm Units are to be offered initially to the public
("OFFERING") at the offering price of $8.00 per Firm Unit. Each Firm
Unit consists of one share of the Company's common stock, par value
$.0001 per share ("COMMON STOCK"), and one warrant ("WARRANT(S)"). The
shares of Common Stock and the Warrants included in the Firm Units will
not be separately transferable until 90 days after the effective date
("EFFECTIVE DATE") of the Registration Statement (as defined in Section
2.1.1 hereof) unless the Co-Representatives inform the Company of their
decision to allow
earlier separate trading, but in no event will the Co-Representatives
allow separate trading until (i) the preparation of an audited balance
sheet of the Company reflecting receipt by the Company of the proceeds
of the Offering and the filing of a Current Report on Form 8-K with the
Securities and Exchange Commission (the "COMMISSION") by the Company
which includes such balance sheet and (ii) at least five days have
passed since the distribution of the Units (as defined below) in the
Offering has been completed. Each Warrant entitles its holder to
exercise it to purchase one share of Common Stock for $5.00 during the
period commencing on the later of the consummation by the Company of its
Business Combination or one year from the Effective Date and terminating
on the four-year anniversary of the Effective Date. "BUSINESS
COMBINATION" shall mean any merger, capital stock exchange, asset
acquisition or other similar business combination consummated by the
Company with an operating business (as described more fully in the
Registration Statement).
1.1.2 PAYMENT AND DELIVERY. Delivery and payment for the Firm
Units shall be made at 10:00 A.M., New York time, on the third business
day following the Effective Date (or the fourth business day following
the Effective Date, if the Registration Statement is declared effective
after 4:30 p.m.) or at such earlier time as shall be agreed upon by the
Co-Representatives and the Company at the offices of one of the
Co-Representatives or at such other place as shall be agreed upon by the
Co-Representatives and the Company. The hour and date of delivery and
payment for the Firm Units are called "CLOSING DATE." Payment for the
Firm Units shall be made on the Closing Date at the Co-Representatives'
election by wire transfer in Federal (same day) funds or by certified or
bank cashier's check(s) in New York Clearing House funds, payable as
follows: $____________ of the proceeds received by the Company for the
Firm Units shall be deposited in the trust fund established by the
Company for the benefit of the public stockholders as described in the
Registration Statement ("TRUST FUND") pursuant to the terms of an
Investment Management Trust Agreement ("TRUST AGREEMENT") and the
remaining proceeds shall be paid (subject to Section 3.13 hereof) to the
order of the Company upon delivery to you of certificates (in form and
substance satisfactory to the Underwriters) representing the Firm Units
(or through the facilities of The Depository Trust Company ("DTC")) for
the account of the Underwriters. The Firm Units shall be registered in
such name or names and in such authorized denominations as the
Co-Representatives may request in writing at least two full business
days prior to the Closing Date. The Company will permit the
Co-Representatives to examine and package the Firm Units for delivery at
least one full business day prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Firm Units except upon tender of
payment by the Co-Representatives for all the Firm Units.
1.2. OVER-ALLOTMENT OPTION.
1.2.1 OPTION UNITS. For the purposes of covering any
over-allotments in connection with the distribution and sale of the Firm
Units, the Underwriters are hereby granted, severally and not jointly,
an option to purchase up to an additional 1,350,000 units from the
Company ("OVER-ALLOTMENT OPTION"). Such additional 1,350,000 units are
hereinafter referred to as "OPTION UNITS." The Firm Units and the Option
Units are hereinafter collectively referred to as the "UNITS," and the
Units, the shares of Common
2
Stock and the Warrants included in the Units and the shares of Common
Stock issuable upon exercise of the Warrants are hereinafter referred to
collectively as the "PUBLIC SECURITIES." The purchase price to be paid
for the Option Units will be the same price per Option Unit as the price
per Firm Unit set forth in Section 1.1.1 hereof.
1.2.2 EXERCISE OF OPTION. The Over-allotment Option granted
pursuant to Section 1.2.1 hereof may be exercised by the
Co-Representatives as to all (at any time) or any part (from time to
time) of the Option Units within 45 days after the Effective Date. The
Underwriters will not be under any obligation to purchase any Option
Units prior to the exercise of the Over-allotment Option. The
Over-allotment Option granted hereby may be exercised by the giving of
oral notice to the Company by the Co-Representatives, which must be
confirmed in writing by overnight mail or facsimile transmission setting
forth the number of Option Units to be purchased and the date and time
for delivery of and payment for the Option Units (the "OPTION CLOSING
DATE"), which will not be later than five full business days after the
date of the notice or such other time as shall be agreed upon by the
Company and the Co-Representatives, at the offices of one of the
Co-Representatives or at such other place as shall be agreed upon by the
Company and the Co-Representatives. Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters,
and, subject to the terms and conditions set forth herein, the
Underwriters will become obligated to purchase, the number of Option
Units specified in such notice.
1.2.3 PAYMENT AND DELIVERY. Payment for the Option Units shall
be made on the Option Closing Date at the Co-Representatives' election
by wire transfer in Federal (same day) funds or by certified or bank
cashier's check(s) in New York Clearing House funds, payable as follows:
$____ per Option Unit shall be deposited in the Trust Fund pursuant to
the Trust Agreement upon delivery to you of certificates (in form and
substance satisfactory to the Underwriters) representing the Option
Units (or through the facilities of DTC) for the account of the
Underwriters. The certificates representing the Option Units to be
delivered will be in such denominations and registered in such names as
the Co-Representatives request not less than two full business days
prior to the Closing Date or the Option Closing Date, as the case may
be, and will be made available to the Co-Representatives for inspection,
checking and packaging at the aforesaid office of the Company's transfer
agent or correspondent not less than one full business day prior to such
Closing Date.
1.3. CO-REPRESENTATIVES' PURCHASE OPTION.
1.3.1 PURCHASE OPTION. The Company hereby agrees to issue and
sell to the Co-Representatives (and/or their designees) on the Effective
Date an option ("CO-REPRESENTATIVES' PURCHASE OPTION") for the purchase
of an aggregate of 900,000 units ("CO-REPRESENTATIVES' UNITS") for an
aggregate purchase price of $100. Each of the Co-Representatives' Units
is identical to the Firm Units, except that the warrants contained
within the Co-Representatives' Units (the "CO-REPRESENTATIVES'
WARRANTS") have an exercise price of $7.50 per share of Common Stock.
The Co-Representatives' Purchase Option shall be exercisable, in whole
or in part, commencing on the later of the consummation of a Business
Combination and one year from the Effective Date and expiring on the
five-year anniversary of the
3
Effective Date at an initial exercise price per Co-Representatives' Unit
of $10.00 (125% of the initial public offering price of a Unit). The
Co-Representatives' Purchase Option, the Co-Representatives' Units, the
Co-Representatives' Warrants and the shares of Common Stock issuable
upon exercise of the Co-Representatives' Warrants are hereinafter
referred to collectively as the "CO-REPRESENTATIVES' SECURITIES." The
Public Securities and the Co-Representatives' Securities are hereinafter
referred to collectively as the "SECURITIES." The Co-Representatives
understand and agree that there are significant restrictions against
transferring the Co-Representatives' Purchase Option during the first
year after the Effective Date, as set forth in Section 3 of the
Co-Representatives' Purchase Option.
1.3.2 PAYMENT AND DELIVERY. Delivery and payment for the
Co-Representatives' Purchase Option shall be made on the Closing Date.
The Company shall deliver to the Underwriters, upon payment therefor,
certificates for the Co-Representatives' Purchase Option in the name or
names and in such authorized denominations as the Co-Representatives may
request.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Underwriters as follows:
2.1. FILING OF REGISTRATION STATEMENT.
2.1.1 PURSUANT TO THE ACT. The Company has filed with the
Commission a registration statement and an amendment or amendments
thereto, on Form S-1 (File No. 333-128218), including any related
preliminary prospectus ("PRELIMINARY PROSPECTUS"), for the registration
of the Public Securities under the Securities Act of 1933, as amended
("ACT"), which registration statement and amendment or amendments have
been prepared by the Company in conformity with the requirements of the
Act, and the rules and regulations ("REGULATIONS") of the Commission
under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the
time the registration statement becomes effective (including the
prospectus, financial statements, schedules, exhibits and all other
documents filed as a part thereof or incorporated therein and all
information deemed to be a part thereof as of such time pursuant to
paragraph (b) of Rule 430A of the Regulations), is hereinafter called
the "REGISTRATION STATEMENT," and the form of the final prospectus dated
the Effective Date included in the Registration Statement (or, if
applicable, the form of final prospectus filed with the Commission
pursuant to Rule 424 of the Regulations), is hereinafter called the
"PROSPECTUS." The Registration Statement has been declared effective by
the Commission on the date hereof.
2.1.2 PURSUANT TO THE EXCHANGE ACT. The Company has filed with
the Commission a Form 8-A (File Number 000-__________) providing for the
registration under the Securities Exchange Act of 1934, as amended
("EXCHANGE ACT"), of the Units, the Common Stock and the Warrants. The
registration of the Units, Common Stock and Warrants under the Exchange
Act has been declared effective by the Commission on the date hereof.
4
2.2. NO STOP ORDERS, ETC. Neither the Commission nor, to the best of
the Company's knowledge, any state regulatory authority has issued any order or
threatened to issue any order preventing or suspending the use of any
Preliminary Prospectus or has instituted or, to the best of the Company's
knowledge, threatened to institute any proceedings with respect to such an
order.
2.3. DISCLOSURES IN REGISTRATION STATEMENT.
2.3.1 10B-5 REPRESENTATION. At the time the Registration
Statement became effective and at all times subsequent thereto up to the
Closing Date and the Option Closing Date, if any, the Registration
Statement and the Prospectus does and will contain all material
statements that are required to be stated therein in accordance with the
Act and the Regulations, and will in all material respects conform to
the requirements of the Act and the Regulations; neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, on such dates, does or will contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
When any Preliminary Prospectus was first filed with the Commission
(whether filed as part of the Registration Statement for the
registration of the Securities or any amendment thereto or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such Preliminary
Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions
of the Act and the Regulations and did not and will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The representation and warranty made in this
Section 2.3.1 does not apply to statements made or statements omitted in
reliance upon and in conformity with written information furnished to
the Company with respect to the Underwriters by the Co-Representatives
expressly for use in the Registration Statement or Prospectus or any
amendment thereof or supplement thereto.
2.3.2 DISCLOSURE OF AGREEMENTS. The agreements and documents
described in the Registration Statement and the Prospectus conform to
the descriptions thereof contained therein and there are no agreements
or other documents required to be described in the Registration
Statement or the Prospectus or to be filed with the Commission as
exhibits to the Registration Statement, that have not been so described
or filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property or
business is or may be bound or affected and (i) that is referred to in
the Prospectus, or (ii) is material to the Company's business, has been
duly and validly executed by the Company, is in full force and effect
and is enforceable against the Company and, to the Company's knowledge,
the other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally,
(y) as enforceability of any indemnification or contribution provision
may be limited under the federal and state securities laws, and (z) that
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding
5
therefor may be brought, and none of such agreements or instruments has
been assigned by the Company, and neither the Company nor, to the best
of the Company's knowledge, any other party is in breach or default
thereunder and, to the best of the Company's knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both,
would constitute a breach or default thereunder. To the best of the
Company's knowledge, performance by the Company of the material
provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to
environmental laws and regulations.
2.3.3 PRIOR SECURITIES TRANSACTIONS. No securities of the
Company have been sold by the Company or by or on behalf of, or for the
benefit of, any person or persons controlling, controlled by, or under
common control with the Company since the Company's formation, except as
disclosed in the Registration Statement.
2.3.4 REGULATIONS. The disclosures in the Registration
Statement concerning the effects of Federal, State and local regulation
on the Company's business as currently contemplated are correct in all
material respects and do not omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which they
were made, not misleading.
2.4. CHANGES AFTER DATES IN REGISTRATION STATEMENT.
2.4.1 NO MATERIAL ADVERSE CHANGE. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise specifically stated therein, (i) there
has been no material adverse change in the condition, financial or
otherwise, or business prospects of the Company, (ii) there have been no
material transactions entered into by the Company, other than as
contemplated pursuant to this Agreement, and (iii) no member of the
Company's management has resigned from any position with the Company.
2.4.2 RECENT SECURITIES TRANSACTIONS, ETC. Subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, and except as may otherwise be indicated
or contemplated herein or therein, the Company has not (i) issued any
securities or incurred any material liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any dividend or
made any other distribution on or in respect to its equity securities.
2.5. INDEPENDENT ACCOUNTANTS. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP ("M&K"), whose
report is filed with the Commission as part of the Registration Statement, are
independent accountants as required by the Act and the Regulations. M&K has not,
during the periods covered by the financial statements included in the
Prospectus, provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act.
2.6. FINANCIAL STATEMENTS. The financial statements, including the
notes thereto and supporting schedules included in the Registration Statement
and Prospectus fairly present the
6
financial position, the results of operations and the cash flows of the Company
at the dates and for the periods to which they apply; and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The Registration
Statement discloses all material off-balance sheet transactions, arrangements,
obligations (including contingent obligations), and other relationships of the
Company with unconsolidated entities or other persons that may have a material
current or future effect on the Company's financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or expenses.
2.7. AUTHORIZED CAPITAL; OPTIONS; ETC. The Company had at the date or
dates indicated in the Prospectus duly authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the Prospectus.
Based on the assumptions stated in the Registration Statement and the
Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or contemplated by,
the Registration Statement and the Prospectus, on the Effective Date and on the
Closing Date, there will be no options, warrants, or other rights to purchase or
otherwise acquire any authorized but unissued shares of Common Stock of the
Company or any security convertible into shares of Common Stock of the Company,
or any contracts or commitments to issue or sell shares of Common Stock or any
such options, warrants, rights or convertible securities.
2.8. VALID ISSUANCE OF SECURITIES; ETC.
2.8.1 OUTSTANDING SECURITIES. All issued and outstanding
securities of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; the holders thereof have no
rights of rescission with respect thereto, and are not subject to
personal liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual rights
granted by the Company. The authorized Common Stock conforms to all
statements relating thereto contained in the Registration Statement and
the Prospectus. The offers and sales of the outstanding Common Stock
were at all relevant times either registered under the Act and the
applicable state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such shares of
Common Stock, are exempt from such registration requirements.
2.8.2 SECURITIES SOLD PURSUANT TO THIS AGREEMENT. The
Securities have been duly authorized and, when issued and paid for in
accordance with this Agreement, will be validly issued, fully paid and
non-assessable; the holders thereof are not and will not be subject to
personal liability by reason of being such holders; the Securities are
not and will not be subject to the preemptive rights of any holders of
any security of the Company or similar contractual rights granted by the
Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and
validly taken. The Securities conform in all material respects to all
statements with respect thereto contained in the Registration Statement.
When issued, the Co-Representatives' Purchase Option, the
Co-Representatives' Warrants and the Warrants will
7
constitute valid and binding obligations of the Company to issue and
sell, upon exercise thereof and payment of the respective exercise
prices therefor, the number and type of securities of the Company called
for thereby in accordance with the terms thereof and such
Co-Representatives' Purchase Option, the Co-Representatives' Warrants
and the Warrants are enforceable against the Company in accordance with
their respective terms, except (i) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (ii) as enforceability of any
indemnification or contribution provision may be limited under the
federal and state securities laws, and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
2.9. REGISTRATION RIGHTS OF THIRD PARTIES. Except as set forth in the
Prospectus, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of the Company
have the right to require the Company to register any such securities of the
Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10. VALIDITY AND BINDING EFFECT OF AGREEMENTS. This Agreement, the
Warrant Agreement (as defined in Section 2.20 hereof), the Trust Agreement, the
Services Agreement (as defined in Section 3.7.2 hereof), the Escrow Agreement
(as defined in Section 2.21.2 hereof) and the Registration Rights Agreement (as
defined in Section 2.21.3 hereof) have been duly and validly authorized by the
Company and constitute, and the Co-Representatives' Purchase Option has been
duly and validly authorized by the Company and, when executed and delivered,
will constitute, the valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, except (i) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (ii) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.11. NO CONFLICTS, ETC. The execution, delivery, and performance by
the Company of this Agreement, the Warrant Agreement, the Co-Representatives'
Purchase Option, the Trust Agreement, the Services Agreement and the Escrow
Agreement, the consummation by the Company of the transactions herein and
therein contemplated and the compliance by the Company with the terms hereof and
thereof do not and will not, with or without the giving of notice or the lapse
of time or both (i) result in a breach of, or conflict with any of the terms and
provisions of, or constitute a default under, or result in the creation,
modification, termination or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of any agreement or
instrument to which the Company is a party except pursuant to the Trust
Agreement referred to in Section 2.22 hereof; (ii) result in any violation of
the provisions of the Certificate of Incorporation or the Bylaws of the Company;
or (iii) violate any existing applicable law, rule, regulation, judgment, order
or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or business.
8
2.12. NO DEFAULTS; VIOLATIONS. No material default exists in the due
performance and observance of any term, covenant or condition of any material
license, contract, indenture, mortgage, deed of trust, note, loan or credit
agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not in violation
of any term or provision of its Certificate of Incorporation or Bylaws or in
violation of any material franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
businesses.
2.13. CORPORATE POWER; LICENSES; CONSENTS.
2.13.1 CONDUCT OF BUSINESS. The Company has all requisite
corporate power and authority, and has all necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business purpose as described in the
Prospectus. The disclosures in the Registration Statement concerning the
effects of federal, state and local regulation on this offering and the
Company's business purpose as currently contemplated are correct in all
material respects and do not omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
2.13.2 TRANSACTIONS CONTEMPLATED HEREIN. The Company has all
corporate power and authority to enter into this Agreement and to carry
out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith
have been obtained. No consent, authorization or order of, and no filing
with, any court, government agency or other body is required for the
valid issuance, sale and delivery, of the Securities and the
consummation of the transactions and agreements contemplated by this
Agreement, the Warrant Agreement, the Co-Representatives' Purchase
Option, the Trust Agreement and the Escrow Agreement and as contemplated
by the Prospectus, except with respect to applicable federal and state
securities laws.
2.14. D&O QUESTIONNAIRES. To the best of the Company's knowledge, all
information contained in the questionnaires ("QUESTIONNAIRES") completed by each
of the Company's stockholders immediately prior to the Offering ("INITIAL
STOCKHOLDERS") and provided to the Underwriters as an exhibit to his or her
Insider Letter (as defined in Section 2.21.1) is true and correct and the
Company has not become aware of any information which would cause the
information disclosed in the questionnaires completed by each Initial
Stockholder to become inaccurate and incorrect.
2.15. LITIGATION; GOVERNMENTAL PROCEEDINGS. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the best of the Company's knowledge, threatened
against, or involving the Company or, to the best of the Company's knowledge,
any Initial Stockholder, which has not been disclosed in the Registration
Statement or the Questionnaires.
9
2.16. GOOD STANDING. The Company has been duly organized and is
validly existing as a corporation and is in good standing under the laws of its
state of incorporation, and is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of business requires such qualification, except
where the failure to qualify would not have a material adverse effect on the
assets, business or operations of the Company.
2.17. TRANSACTIONS AFFECTING DISCLOSURE TO NASD.
2.17.1 FINDER'S FEES. Except as described in the Prospectus,
there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder's, consulting or
origination fee by the Company or any Initial Stockholder with respect
to the sale of the Securities hereunder or any other arrangements,
agreements or understandings of the Company or, to the best of the
Company's knowledge, any Initial Stockholder that may affect the
Underwriters' compensation, as determined by the National Association of
Securities Dealers, Inc. ("NASD").
2.17.2 PAYMENTS WITHIN TWELVE MONTHS. The Company has not made
any direct or indirect payments (in cash, securities or otherwise) (i)
to any person, as a finder's fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital to the
Company, (ii) to any NASD member or (iii) to any person or entity that
has any direct or indirect affiliation or association with any NASD
member, within the twelve months prior to the Effective Date, other than
payments to the Underwriters.
2.17.3 USE OF PROCEEDS. None of the net proceeds of the
Offering will be paid by the Company to any participating NASD member or
its affiliates, except as specifically authorized herein and except as
may be paid in connection with a Business Combination as contemplated by
the Prospectus.
2.17.4 INSIDERS' NASD AFFILIATION. Based on the Questionnaires,
except as set forth on Schedule 2.17.4, no officer, director or any
beneficial owner of the Company's unregistered securities has any direct
or indirect affiliation or association with any NASD member. The Company
will advise the Co-Representatives and their counsel if it learns that
any officer, director or beneficial owner of at least 5% of the
Company's outstanding Common Stock is or becomes an affiliate or
associated person of an NASD member.
2.18. FOREIGN CORRUPT PRACTICES ACT. Neither the Company nor any of
the Initial Stockholders or any other person acting on behalf of the Company
has, directly or indirectly, given or agreed to give any money, gift or similar
benefit (other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer or
supplier, or official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or any political party or candidate for office
(domestic or foreign) or other person who was, is, or may be in a position to
help or hinder the business of the Company (or assist it in connection with any
actual or proposed transaction) that (i) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or proceeding, (ii)
if not
10
given in the past, might have had a material adverse effect on the assets,
business or operations of the Company as reflected in any of the financial
statements contained in the Prospectus or (iii) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the
Company. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply with the Foreign Corrupt Practices Act
of 1977, as amended.
2.19. OFFICERS' CERTIFICATE. Any certificate signed by any duly
authorized officer of the Company and delivered to you or to your counsel shall
be deemed a representation and warranty by the Company to the Underwriters as to
the matters covered thereby.
2.20. WARRANT AGREEMENT. The Company has entered into a warrant
agreement with respect to the Warrants and the Co-Representatives' Warrants with
Continental Stock Transfer & Trust Company substantially in the form annexed as
Exhibit 4.5 to the Registration Statement ("WARRANT AGREEMENT").
2.21. AGREEMENTS WITH INITIAL STOCKHOLDERS.
2.21.1 INSIDER LETTERS. The Company has caused to be duly
executed legally binding and enforceable agreements (except (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, (ii) as
enforceability of any indemnification, contribution or noncompete
provision may be limited under the federal and state securities laws,
and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses
and to the discretion of the court before which any proceeding therefor
may be brought) annexed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.25 to
the Registration Statement ("INSIDER LETTERS"), pursuant to which each
of the Initial Stockholders of the Company agree to certain matters,
including but not limited to, certain matters described as being agreed
to by them under the "Proposed Business" section of the Prospectus.
2.21.2 ESCROW AGREEMENT. The Company and the Initial
Stockholders have entered into an escrow agreement ("ESCROW AGREEMENT")
with American Stock Transfer & Trust Company ("ESCROW AGENT")
substantially in the form annexed as Exhibit 10.2 to the Registration
Statement, whereby the Common Stock owned by the Initial Stockholders
will be held in escrow by the Escrow Agent, until the first anniversary
of the Business Combination. During such escrow period, the Initial
Stockholders shall be prohibited from selling or otherwise transferring
such shares (except to spouses and children of Initial Stockholders and
trusts established for their benefit and as otherwise set forth in the
Escrow Agreement) but will retain the right to vote such shares. To the
Company's knowledge, the Escrow Agreement is enforceable against each of
the Initial Stockholders and will not, with or without the giving of
notice or the lapse of time or both, result in a breach of, or conflict
with any of the terms and provisions of, or constitute a default under,
any agreement or instrument to which any of the Initial Stockholders is
a party. The Escrow Agreement shall not be amended, modified or
otherwise changed without the prior written consent of the
Co-Representatives.
11
2.21.3 REGISTRATION RIGHTS AGREEMENT. The Company and the
Initial Stockholders have entered into a registration rights agreement
("REGISTRATION RIGHTS AGREEMENT") substantially in the form annexed as
Exhibit 10.11 to the Registration Statement, whereby the Initial
Stockholders will be entitled to certain registration rights as set
forth in such Registration Rights Agreement and described more fully in
the Registration Statement.
2.22. INVESTMENT MANAGEMENT TRUST AGREEMENT. The Company has entered
into the Trust Agreement with respect to certain proceeds of the Offering
substantially in the form annexed as Exhibit 10.1 to the Registration Statement.
2.23. COVENANTS NOT TO COMPETE. No Initial Stockholder, employee,
officer or director of the Company is subject to any noncompetition agreement or
non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be an Initial Stockholder, employee, officer
and/or director of the Company.
2.24. INVESTMENT COMPANY ACT; INVESTMENTS. The Company has been
advised concerning the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), and the rules and regulations thereunder and has in
the past conducted, and intends in the future to conduct, its affairs in such a
manner as to ensure that it will not become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act and such rules and regulations. The Company is not, nor will the
Company become upon the sale of the Units and the application of the proceeds
therefore as described in the Prospectus under the caption "Use of Proceeds", an
"investment company" or a person controlled by an "investment company" within
the meaning of the Investment Company Act. No more than 45% of the "value" (as
defined in Section 2(a)(41) of the Investment Company Act) of the Company's
total assets (exclusive of cash items and "Government Securities" (as defined in
Section 2(a)(16) of the Investment Company Act) consist of, and no more than 45%
of the Company's net income after taxes is derived from, securities other than
the Government Securities.
2.25. SUBSIDIARIES. The Company does not own an interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business entity.
2.26. RELATED PARTY TRANSACTIONS. There are no business relationships
or related party transactions involving the Company or any other person required
to be described in the Prospectus that have not been described as required.
2.27. LOANS. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇ and Transmedia Corporation have made loans to the
Company in the aggregate amount of $250,000 (the "INSIDER LOANS") substantially
in the form annexed as Exhibits 10.5, 10.6, 10.7, 10.8, 10.14, 10.15, 10.16,
10.17, 10.18, 10.19, 10.20, 10.21, 10.34, 10.35, 10.36, and 10.37 to the
Registration Statement. The Insider Loans do not bear any interest and are
repayable by the Company on the earlier to occur of (i) ________, 2007 or (ii)
the date on which the Company consummates an initial public offering of its
securities.
2.28. AMERICAN STOCK EXCHANGE ELIGIBILITY. As of the Effective Date,
the Public Securities have been approved for listing on the American Stock
Exchange ("AMEX").
12
3. COVENANTS OF THE COMPANY. The Company covenants and agrees as follows:
3.1. AMENDMENTS TO REGISTRATION STATEMENT. The Company will deliver
to the Co-Representatives, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the
Co-Representatives shall reasonably object in writing.
3.2. FEDERAL SECURITIES LAWS.
3.2.1 COMPLIANCE. During the time when a Prospectus is
required to be delivered under the Act, the Company will use all
reasonable efforts to comply with all requirements imposed upon it by
the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the
Public Securities in accordance with the provisions hereof and the
Prospectus. If at any time when a Prospectus relating to the Public
Securities is required to be delivered under the Act, any event shall
have occurred as a result of which, in the opinion of counsel for the
Company or counsel for the Underwriters, the Prospectus, as then amended
or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Act, the Company will
notify the Co-Representatives promptly and prepare and file with the
Commission, subject to Section 3.1 hereof, an appropriate amendment or
supplement in accordance with Section 10 of the Act.
3.2.2 FILING OF FINAL PROSPECTUS. The Company will file the
Prospectus (in form and substance satisfactory to the
Co-Representatives) with the Commission pursuant to the requirements of
Rule 424 of the Regulations.
3.2.3 EXCHANGE ACT REGISTRATION. The Company will use its best
efforts to maintain the registration of the Units, Common Stock and
Warrants under the provisions of the Exchange Act for a period of five
years from the Effective Date, or until the Company is required to be
liquidated if earlier, or, in the case of the Warrants, until the
Warrants expire and are no longer exercisable. The Company will not
deregister the Units, Common Stock or Warrants under the Exchange Act
without the prior written consent of the Co-Representatives.
3.3. BLUE SKY FILINGS. The Company will endeavor in good faith, in
cooperation with the Co-Representatives, at or prior to the time the
Registration Statement becomes effective, to qualify the Public Securities for
offering and sale under the securities laws of such jurisdictions as the
Co-Representatives may reasonably designate, provided that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Company
would be subject to service of general process or to taxation as a foreign
corporation doing business in such jurisdiction. In each jurisdiction where such
qualification shall be effected, the Company will, unless the Co-Representatives
agree that such action is not at the time necessary or advisable, use all
reasonable efforts to file and make such statements or reports at such times as
are or may be required by the laws of such jurisdiction.
13
3.4. DELIVERY TO UNDERWRITERS OF PROSPECTUSES. The Company will
deliver to each of the several Underwriters, without charge, from time to time
during the period when the Prospectus is required to be delivered under the Act
or the Exchange Act, such number of copies of each Preliminary Prospectus and
the Prospectus as such Underwriters may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to you two original executed Registration Statements, including
exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed
consents of certified experts.
3.5. EFFECTIVENESS AND EVENTS REQUIRING NOTICE TO THE
CO-REPRESENTATIVES. The Company will use its best efforts to cause the
Registration Statement to remain effective and will notify the
Co-Representatives immediately and confirm the notice in writing (i) of the
effectiveness of the Registration Statement and any amendment thereto, (ii) of
the issuance by the Commission of any stop order or of the initiation, or the
threatening, of any proceeding for that purpose, (iii) of the issuance by any
state securities commission of any proceedings for the suspension of the
qualification of the Public Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose,
(iv) of the mailing and delivery to the Commission for filing of any amendment
or supplement to the Registration Statement or Prospectus, (v) of the receipt of
any comments or request for any additional information from the Commission, and
(vi) of the happening of any event during the period described in Section 3.4
hereof that, in the judgment of the Company, makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Commission or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will make every reasonable effort to
obtain promptly the lifting of such order.
3.6. REVIEW OF FINANCIAL STATEMENTS. For a period of five years from
the Effective Date, or until such earlier time upon which the Company is
required to be liquidated, the Company, at its expense, shall cause its
regularly engaged independent certified public accountants to review (but not
audit) the Company's financial statements for each of the first three fiscal
quarters prior to the announcement of quarterly financial information, the
filing of the Company's Form 10-Q quarterly report and the mailing of quarterly
financial information to stockholders.
3.7. AFFILIATED TRANSACTIONS.
3.7.1 BUSINESS COMBINATIONS. The Company will not consummate a
Business Combination with any entity which is affiliated with any
Initial Stockholder. In connection with any Business Combination, the
Company will obtain from each of its Initial Stockholders a certificate,
sworn to under penalty of perjury, confirming that none of such
individuals has any affiliation, whether directly or indirectly, with
respect to the potential target business for such Business Combination.
Such certificates will be included in the Current Report on Form 8-K
filed by the Company with the SEC announcing the signing of a definitive
agreement for such Business Combination. Furthermore, the Company will
not consummate any Business Combination unless the
14
Company obtains an opinion from an independent investment banking firm
that the Business Combination is fair to the Company's stockholders from
a financial perspective.
3.7.2 ADMINISTRATIVE SERVICES. The Company has entered into an
agreement ("SERVICES AGREEMENT") with Transmedia Corporation
("TRANSMEDIA") substantially in the form annexed as Exhibit 10.11 to the
Registration Statement pursuant to which Transmedia will make available
to the Company administrative, technology and secretarial services, as
well as the use of certain limited office space, in Dallas, Texas for
$7,500 per month.
3.7.3. COMPENSATION. Except for the repayment of the Insider
Loans, the Company shall not pay any Initial Stockholder or any of their
affiliates any fees or compensation for services rendered to the
Company, prior to, or in connection with, the consummation of a Business
Combination; provided that the Initial Stockholders shall be entitled to
reimbursement from the Company for their reasonable out-of-pocket
expenses incurred in connection with seeking and consummating a Business
Combination.
3.8. SECONDARY MARKET TRADING AND STANDARD & POOR'S. If the Company
does not maintain the listing of the Public Securities on the AMEX or another
national securities exchange, the Company will apply to be included in Standard
& Poor's Daily News and Corporation Records Corporate Descriptions for a period
of five years from the consummation of a Business Combination. Promptly after
the consummation of the Offering, the Company shall take such steps as may be
necessary to obtain a secondary market trading exemption for the Company's
securities in the State of California. The Company shall also take such other
action as may be reasonably requested by the Co-Representatives to obtain a
secondary market trading exemption in such other states as may be requested by
the Co-Representatives.
3.9. INTENTIONALLY OMITTED.
3.10. FINANCIAL PUBLIC RELATIONS FIRM. Promptly after the execution of
a definitive agreement for a Business Combination, the Company shall retain a
financial public relations firm reasonably acceptable to the Co-Representatives
for a term to be agreed upon by the Company and the Co-Representatives.
3.11. REPORTS TO THE CO-REPRESENTATIVES.
3.11.1 PERIODIC REPORTS, ETC. For a period of five years from
the Effective Date or until such earlier time upon which the Company is
required to be liquidated, the Company will furnish to the
Co-Representatives (Attn: ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇) and their
counsel, as reasonably requested from time to time, copies of such
financial statements and other periodic and special reports as the
Company from time to time furnishes generally to holders of any class of
its securities, and promptly furnish to the Co-Representatives a copy of
monthly statements, if any, setting forth such information regarding the
Company's results of operations and financial position (including
balance sheet, profit and loss statements and data regarding outstanding
purchase orders) as is regularly prepared by management of the Company
and (vi) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company as the
15
Co-Representatives may from time to time reasonably request; PROVIDED
that the Co-Representatives shall sign, if requested by the Company, a
Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Co-Representatives and their counsel in connection
with the Co-Representatives' receipt of such information.
3.11.2 TRANSFER SHEETS. For a period of five years following
the Effective Date or until such earlier time upon which the Company is
required to be liquidated, the Company shall retain a transfer and
warrant agent acceptable to the Co-Representatives ("TRANSFER AGENT")
and will furnish to the Underwriters at the Company's sole cost and
expense such transfer sheets of the Company's securities as the
Co-Representatives may request, including the daily and monthly
consolidated transfer sheets of the Transfer Agent and DTC. Continental
Stock Transfer & Trust Company is acceptable to the Underwriters.
3.11.3 TRADING REPORTS. During such time as the Public
Securities are quoted on the NASD OTC Bulletin Board (or any successor
trading market) or the Pink Sheets, LLC (or similar publisher of
quotations) and no other automated quotation system, the Company shall
provide to the Co-Representatives, at their expense, such reports
published by the NASD or the Pink Sheets, LLC relating to price trading
of the Public Securities, as the Co-Representatives shall reasonably
request.
3.12. DISQUALIFICATION OF FORM S-3. Until the earlier of seven years
from the date hereof or until the Warrants have expired and are no longer
exercisable, the Company will not take any action or actions which may prevent
or disqualify the Company's use of Form S-3 (or other appropriate form) for the
registration of the Warrants and the Co-Representatives' Warrants under the Act
(except in connection with a going-private transaction).
3.13. PAYMENT OF EXPENSES.
3.13.1 GENERAL EXPENSES RELATED TO THE OFFERING. The Company
hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at the Closing Date, all expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to (i) the preparation, printing,
filing and mailing (including the payment of postage with respect to
such mailing) of the Registration Statement, the Preliminary and Final
Prospectuses and the printing and mailing of this Agreement and related
documents, including the cost of all copies thereof and any amendments
thereof or supplements thereto supplied to the Underwriters in
quantities as may be required by the Underwriters, (ii) the printing,
engraving, issuance and delivery of the Units, the shares of Common
Stock and the Warrants included in the Units and the Co-Representatives'
Purchase Option, including any transfer or other taxes payable thereon,
(iii) the qualification of the Public Securities under state or foreign
securities or Blue Sky laws, including the costs of preparing, printing
and mailing the Preliminary Blue Sky Memorandum, and all amendments and
supplements thereto, fees and disbursements of ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel for the Underwriters ("▇▇▇▇▇▇▇▇▇▇▇") (such
fees shall be $_____ in the aggregate (of which $_____ has previously
been paid)), (iv) filing fees, costs and expenses (including
disbursements) incurred in registering the Offering with the NASD,
16
(v) fees and disbursements of the transfer and warrant agent, (vi) the
Company's expenses associated with "due diligence" meetings arranged by
the Co-Representatives, (vii) the preparation, binding and delivery of
transaction "bibles," in form and style reasonably satisfactory to the
Co-Representatives and transaction lucite cubes or similar commemorative
items in a style and quantity as reasonably requested by the
Co-Representatives and (viii) all other costs and expenses customarily
borne by an issuer incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this
Section 3.13.1. The Company also agrees that, if requested by the
Co-Representatives, it will engage and pay up to $______ for an
investigative search firm of the Co-Representatives' choice to conduct
an investigation of the principals of the Company as shall be mutually
selected by the Co-Representatives and the Company. If the Offering is
successfully consummated, any such amounts paid to the search firm by
the Company pursuant to the immediately preceding sentence shall be
credited against the Co-Representatives' nonaccountable expense
allowance (described below in Section 3.13.2). The Co-Representatives
may deduct from the net proceeds of the Offering payable to the Company
on the Closing Date, or the Option Closing Date, if any, the expenses
set forth in this Agreement to be paid by the Company to the
Co-Representatives and others. If the Offering contemplated by this
Agreement is not consummated for any reason whatsoever then the Company
shall reimburse the Underwriters in full for their out of pocket
expenses, including, without limitation, its legal fees and
disbursements and "road show" and due diligence expenses. The
Co-Representatives shall retain such part of the nonaccountable expense
allowance previously paid as shall equal its actual out-of-pocket
expenses and refund the balance. If the amount previously paid is
insufficient to cover such actual out-of-pocket expenses, subject to the
preceding sentences, the Company shall remain liable for and promptly
pay any other actual out-of-pocket expenses.
3.13.2 NONACCOUNTABLE EXPENSES. The Company agrees that, in
addition to the expenses payable pursuant to Section 3.13.1, it will pay
the Co-Representatives, upon consummation of a Business Combination, an
additional cash fee equal to 1% of the gross proceeds received by the
Company from the sale of the Firm Units representing a nonaccountable
expense allowance due to the Co-Representatives; provided, however, that
(a) in the event a Business Combination is not consummated, such fees
will be returned to the Company prior to its liquidation or (b) in the
event a Business Combination is consummated, such fees will be credited
against the amount due to the Co-Representatives upon consummation of
such Business Combination.
3.14. APPLICATION OF NET PROCEEDS. The Company will apply the net
proceeds from the Offering received by it in a manner consistent with the
application described under the caption "Use Of Proceeds" in the Prospectus.
3.15. DELIVERY OF EARNINGS STATEMENTS TO SECURITY HOLDERS. The Company
will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth full calendar month following
the Effective Date, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions of Rule
158(a) under Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
17
3.16. NOTICE TO NASD. In the event any person or entity (regardless of
any NASD affiliation or association) is engaged to assist the Company in its
search for a merger candidate or to provide any other merger and acquisition
services, the Company will provide the following to the NASD and the
Co-Representatives prior to the consummation of the Business Combination: (i)
complete details of all services and copies of agreements governing such
services; and (ii) justification as to why the person or entity providing the
merger and acquisition services should not be considered an "underwriter and
related person" with respect to the Company's initial public offering, as such
term is defined in Rule 2710 of the NASD's Conduct Rules. The Company also
agrees that proper disclosure of such arrangement or potential arrangement will
be made in the proxy statement which the Company will file for purposes of
soliciting stockholder approval for the Business Combination.
3.17. STABILIZATION. Neither the Company, nor, to its knowledge, any
of its employees, directors or stockholders (without the consent of the
Co-Representatives) has taken or will take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be expected to
cause or result in, under the Exchange Act, or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Units.
3.18. INTERNAL CONTROLS. The Company will maintain a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary in order to
permit preparation of financial statements in accordance with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.19. ACCOUNTANTS. Until the earlier of five years from the Effective
Date or until such earlier time upon which the Company is required to be
liquidated, the Company shall retain M&K or another independent public
accountant reasonably acceptable to the Co-Representatives.
3.20. FORM 8-K. The Company shall, on the date hereof, retain its
independent public accountants to audit the financial statements of the Company
as of the Closing Date ("AUDITED FINANCIAL STATEMENTS") reflecting the receipt
by the Company of the proceeds of the initial public offering. As soon as the
Audited Financial Statements become available, the Company shall immediately
file a Current Report on Form 8-K with the Commission, which Report shall
contain the Company's Audited Financial Statements.
3.21. NASD. The Company shall advise the NASD if it is aware that any
5% or greater stockholder of the Company becomes an affiliate or associated
person of an NASD member participating in the distribution of the Company's
Public Securities.
3.22. CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters necessary to carry out the provisions of this Agreement and the
transactions contemplated hereby shall have been done to the reasonable
satisfaction to counsel for the Underwriters.
18
3.23. INVESTMENT COMPANY. The Company shall cause a portion of the
proceeds of the Offering to be held in the Trust Fund to be invested as set
forth in the Trust Agreement and as more fully described in the Prospectus. The
Company will otherwise conduct its business in a manner so that it will not
become subject to the Investment Company Act. Furthermore, once the Company
consummates a Business Combination, it will be engaged in a business other than
that of investing, reinvesting, owning, holding or trading securities.
3.24. INSIDER WARRANTS. The Company hereby acknowledges and agrees
that, in the event the Company calls the Warrants for redemption pursuant to the
Warrant Agreement, any Warrants that may be purchased by the Company Warrant
Purchasers pursuant to the Warrant Purchase Letters may be exercised by the
Company Warrant Purchasers by surrendering the Warrant for that number of shares
of Common Stock equal to the quotient obtained by dividing (x) the product of
the number of shares of Common Stock underlying the Warrant, multiplied by the
difference between the Warrant Price and the "Fair Market Value" (defined below)
by (y) the Fair Market Value. The "Fair Market Value" shall mean the average
reported last sale price of the Common Stock for the 10 trading days ending on
the third business day prior to the date on which the notice of redemption is
sent to holders of Warrant.
3.25. AMEX MAINTENANCE. Until the consummation of a Business
Combination, the Company will use commercially reasonable efforts to maintain
the listing by the AMEX of the Securities.
3.26. BUSINESS COMBINATION ANNOUNCEMENT. Within five business days
following the consummation by the Company of a Business Combination, the Company
shall cause an announcement ("BUSINESS COMBINATION ANNOUNCEMENT") to be placed,
at its cost, in The Wall Street Journal. Such announcement shall describe the
consummation of the Business Combination and indicate that the
Co-Representatives were the managing underwriter in the Offering. The Company
shall supply the Co-Representatives with a draft of the Business Combination
Announcement and provide the Co-Representatives with a reasonable opportunity to
comment thereon. The Company will not place the Business Combination
Announcement without the final approval of the Co-Representatives, which such
approval will not be unreasonably withheld.
4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Units, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of the
Company as of the date hereof and as of each of the Closing Date and the Option
Closing Date, if any, to the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof and to the performance by the
Company of its obligations hereunder and to the following conditions:
4.1. REGULATORY MATTERS.
4.1.1 EFFECTIVENESS OF REGISTRATION STATEMENT. The
Registration Statement shall have become effective not later than 5:00
P.M., New York time, on the date of this Agreement or such later date
and time as shall be consented to in writing by you, and, at each of the
Closing Date and the Option Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or shall be
pending or contemplated by the
19
Commission and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction
of ▇▇▇▇▇▇▇▇▇▇▇.
4.1.2 NASD CLEARANCE. By the Effective Date, the
Co-Representatives shall have received clearance from the NASD as to the
amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3 NO BLUE SKY STOP ORDERS. No order suspending the sale of
the Units in any jurisdiction designated by you pursuant to Section 3.3
hereof shall have been issued on either on the Closing Date or the
Option Closing Date, and no proceedings for that purpose shall have been
instituted or shall be contemplated.
4.2. COMPANY COUNSEL MATTERS.
4.2.1 EFFECTIVE DATE OPINION OF COUNSEL. On the Effective
Date, the Co-Representatives shall have received the favorable opinion
of ▇▇▇▇▇▇▇▇▇ Traurig, LLP ("▇▇▇▇▇▇▇▇▇"), dated the Effective Date,
addressed to the Co-Representatives and in form and substance
satisfactory to ▇▇▇▇▇▇▇▇▇▇▇ to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its
state of incorporation. The Company is duly qualified and licensed and
in good standing as a foreign corporation in each jurisdiction in which
its ownership or leasing of any properties or the character of its
operations requires such qualification or licensing, except where the
failure to qualify would not have a material adverse effect on the
assets, business or operations of the Company.
(ii) All issued and outstanding securities of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof are not subject to personal
liability by reason of being such holders; and none of such securities
were issued in violation of the preemptive rights of any stockholder of
the Company arising by operation of law or under the Certificate of
Incorporation or Bylaws of the Company. The offers and sales of the
outstanding Common Stock were at all relevant times either registered
under the Act or exempt from such registration requirements. The
authorized and outstanding capital stock of the Company is as set forth
in the Prospectus.
(iii) The Securities have been duly authorized and, when
issued and paid for, will be validly issued, fully paid and
non-assessable; the holders thereof are not and will not be subject to
personal liability by reason of being such holders. The Securities are
not and will not be subject to the preemptive rights of any holders of
any security of the Company arising by operation of law or under the
Certificate of Incorporation or Bylaws of the Company. When issued, the
Co-Representatives' Purchase Option, the Co-Representatives' Warrants
and the Warrants will constitute valid and binding obligations of the
Company to issue and sell, upon exercise thereof and payment therefor,
the number and type of securities of the Company called for thereby and
such Warrants, the Co-Representatives' Purchase Option, and the
Co-Representatives' Warrants, when issued, in
20
each case, are enforceable against the Company in accordance with their
respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (b) as enforceability of any
indemnification or contribution provision may be limited under the
federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. The certificates
representing the Securities are in due and proper form.
(iv) This Agreement, the Warrant Agreement, the Trust
Agreement, the Escrow Agreement and the Registration Rights Agreement
have each been duly and validly authorized, executed and delivered by
the Company and constitute, and the Co-Representatives' Purchase Option
has been duly and validly authorized by the Company and, when executed
and delivered, will constitute, the valid and binding obligations of the
Company, enforceable against the Company in accordance with their
respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (b) as enforceability of any
indemnification or contribution provisions may be limited under the
federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(v) The execution, delivery and performance of this
Agreement, the Warrant Agreement, the Co-Representatives' Purchase
Option, the Escrow Agreement, the Trust Agreement, the Services
Agreement, and the Registration Rights Agreement and compliance by the
Company with the terms and provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby, and
the issuance and sale of the Securities, do not and will not, with or
without the giving of notice or the lapse of time, or both, (a) to such
counsel's knowledge, conflict with, or result in a breach of, any of the
terms or provisions of, or constitute a default under, or result in the
creation or modification of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company pursuant
to the terms of, any mortgage, deed of trust, note, indenture, loan,
contract, commitment or other agreement or instrument filed as an
exhibit to the Registration Statement, (b) result in any violation of
the provisions of the Certificate of Incorporation or the Bylaws of the
Company, or (c) to such counsel's knowledge, violate any United States
statute or any judgment, order or decree, rule or regulation applicable
to the Company of any court, United States federal, state or other
regulatory authority or other governmental body having jurisdiction over
the Company, its properties or assets.
(vi) The Registration Statement, each Preliminary Prospectus
and the Prospectus and any post-effective amendments or supplements
thereto (other than the financial statements included therein, as to
which no opinion need be rendered) each as of their respective dates
complied as to form in all material respects with the requirements of
the Act and Regulations. The Securities and all other securities issued
or issuable by the Company conform in all material respects to the
description thereof contained in the Registration Statement and the
Prospectus. The descriptions in the Registration Statement
21
and in the Prospectus, insofar as such statements constitute a summary
of statutes, legal matters, contracts, documents or proceedings referred
to therein, fairly present in all material respects the information
required to be shown with respect to such statutes, legal matters,
contracts, documents and proceedings, and there are no statutes or legal
or governmental proceedings required to be described in the Prospectus
that are not described in the Registration Statement or the Prospectus
or included as exhibits to the Registration Statement that are not
described or included as required.
(vii) The Registration Statement is effective under the Act.
To such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or threatened under the
Act or applicable state securities laws.
(viii) To such counsel's knowledge, there is no action, suit or
proceeding before or by any court of governmental agency or body,
domestic or foreign, now pending, or threatened against the Company that
is required to be described in the Registration Statement.
The opinion of counsel shall further include a statement to the effect
that such counsel has participated in conferences with officers and
other representatives of the Company, the Underwriters and the
independent public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus contained
therein and related matters were discussed and, although such counsel is
not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus contained therein (except as
otherwise set forth in the foregoing opinion), solely on the basis of
the foregoing without independent check and verification, no facts have
come to the attention of such counsel which lead them to believe that
the Registration Statement or any amendment thereto, at the time the
Registration Statement or amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or the Prospectus or any amendment or supplement
thereto, at the time they were filed pursuant to Rule 424(b) or at the
date of such counsel's opinion, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading (except that
such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data and
information included in the Registration Statement or the Prospectus).
4.2.2 CLOSING DATE AND OPTION CLOSING DATE OPINION OF COUNSEL.
On each of the Closing Date and the Option Closing Date, if any, the
Co-Representatives shall have received the favorable opinion of
▇▇▇▇▇▇▇▇▇, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Co-Representatives and in form and
substance reasonably satisfactory to ▇▇▇▇▇▇▇▇▇▇▇, confirming as of the
Closing Date and, if applicable, the Option Closing Date, the statements
made by ▇▇▇▇▇▇▇▇▇ in its opinion delivered on the Effective Date.
22
4.2.3 RELIANCE. In rendering such opinion, such counsel may
rely (i) as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are admitted,
to the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to ▇▇▇▇▇▇▇▇▇▇▇) of other counsel
reasonably acceptable to ▇▇▇▇▇▇▇▇▇▇▇, familiar with the applicable laws,
and (ii) as to matters of fact, to the extent they deem proper, on
certificates or other written statements of officers of the Company and
officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company, provided that copies of any such statements or certificates
shall be delivered to the Underwriters' counsel if requested. The
opinion of counsel for the Company and any opinion relied upon by such
counsel for the Company shall include a statement to the effect that it
may be relied upon by counsel for the Underwriters in its opinion
delivered to the Underwriters.
4.3. COLD COMFORT LETTER. At the time this Agreement is executed, and
at each of the Closing Date and the Option Closing Date, if any, you shall have
received a letter, addressed to the Co-Representatives and in form and substance
satisfactory in all respects (including the non-material nature of the changes
or decreases, if any, referred to in clause (iii) below) to you and to
▇▇▇▇▇▇▇▇▇▇▇ from M&K dated, respectively, as of the date of this Agreement and
as of the Closing Date and the Option Closing Date, if any:
(i) Confirming that they are independent accountants with
respect to the Company within the meaning of the Act and the applicable
Regulations and that they have not, during the periods covered by the
financial statements included in the Prospectus, provided to the Company
any non-audit services, as such term is used in Section 10A(g) of the
Exchange Act;
(ii) Stating that in their opinion the financial statements
of the Company included in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published Regulations
thereunder;
(iii) Stating that, on the basis of a limited review which
included a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest
available unaudited interim financial statements), a reading of the
latest available minutes of the stockholders and board of directors and
the various committees of the board of directors, consultations with
officers and other employees of the Company responsible for financial
and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe
that (a) the unaudited financial statements of the Company included in
the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations or are not fairly presented in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements of the Company
included in the Registration Statement, (b) at a date not later than
five days prior to the Effective Date, Closing Date or Option Closing
Date, as the case may be, there was any
23
change in the capital stock or long-term debt of the Company, or any
decrease in the stockholders' equity of the Company as compared with
amounts shown in the ______________, 2006 balance sheet included in the
Registration Statement, other than as set forth in or contemplated by
the Registration Statement, or, if there was any decrease, setting forth
the amount of such decrease, and (c) during the period from
______________, 2006 to a specified date not later than five days prior
to the Effective Date, Closing Date or Option Closing Date, as the case
may be, there was any decrease in revenues, net earnings or net earnings
per share of Common Stock, in each case as compared with the
corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth
in or contemplated by the Registration Statement, or, if there was any
such decrease, setting forth the amount of such decrease;
(iv) Setting forth, at a date not later than five days prior
to the Effective Date, the amount of liabilities of the Company
(including a break-down of commercial papers and notes payable to
banks);
(v) Stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and
other financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding
any questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute an
examination in accordance with generally accepted auditing standards)
set forth in the letter and found them to be in agreement;
(vi) Stating that they have not during the immediately
preceding five year period brought to the attention of the Company's
management any reportable condition related to internal structure,
design or operation as defined in the Statement on Auditing Standards
No. 60 "Communication of Internal Control Structure Related Matters
Noted in an Audit," in the Company's internal controls; and
(vii) Statements as to such other matters incident to the
transaction contemplated hereby as you may reasonably request.
4.4. OFFICERS' CERTIFICATES.
4.4.1 OFFICERS' CERTIFICATE. At each of the Closing Date and
the Option Closing Date, if any, the Co-Representatives shall have
received a certificate of the Company signed by the Chairman of the
Board or the President and the Secretary or Assistant Secretary of the
Company (in their capacities as such), dated the Closing Date or the
Option Closing Date, as the case may be, respectively, to the effect
that the Company has performed all covenants and complied with all
conditions required by this Agreement to be performed or complied with
by the Company prior to and as of the Closing Date, or the Option
24
Closing Date, as the case may be, and that the conditions set forth in
Section 4.5 hereof have been satisfied as of such date and that, as of
the Closing Date and the Option Closing Date, as the case may be, the
representations and warranties of the Company set forth in Section 2
hereof are true and correct. In addition, the Co-Representatives will
have received such other and further certificates of officers (in their
capacities as such) of the Company as the Co-Representatives may
reasonably request.
4.4.2 SECRETARY'S CERTIFICATE. At each of the Closing Date and
the Option Closing Date, if any, the Co-Representatives shall have
received a certificate of the Company signed by the Secretary or
Assistant Secretary of the Company, dated the Closing Date or the Option
Closing Date, as the case may be, respectively, certifying (i) that the
Bylaws and Certificate of Incorporation of the Company are true and
complete, have not been modified and are in full force and effect, (ii)
that the resolutions relating to the public offering contemplated by
this Agreement are in full force and effect and have not been modified,
(iii) all correspondence between the Company or its counsel and the
Commission, (iv) all correspondence between the Company or its counsel
and AMEX concerning the listing of the Securities on AMEX and (v) as to
the incumbency of the officers of the Company. The documents referred to
in such certificate shall be attached to such certificate.
4.5. NO MATERIAL CHANGES. Prior to and on each of the Closing Date
and the Option Closing Date, if any, (i) there shall have been no material
adverse change or development involving a prospective material adverse change in
the condition or prospects or the business activities, financial or otherwise,
of the Company from the latest dates as of which such condition is set forth in
the Registration Statement and Prospectus, (ii) no action suit or proceeding, at
law or in equity, shall have been pending or threatened against the Company or
any Initial Stockholder before or by any court or federal or state commission,
board or other administrative agency wherein an unfavorable decision, ruling or
finding may materially adversely affect the business, operations, prospects or
financial condition or income of the Company, except as set forth in the
Registration Statement and Prospectus, (iii) no stop order shall have been
issued under the Act and no proceedings therefor shall have been initiated or
threatened by the Commission, and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.6. DELIVERY OF AGREEMENTS.
4.6.1 EFFECTIVE DATE DELIVERIES. On the Effective Date, the
Company shall have delivered to the Co-Representatives executed copies
of the Escrow Agreement, the Trust Agreement, the Warrant Agreement and
all of the Insider Letters.
4.6.2 CLOSING DATE DELIVERIES. On the Closing Date, the
Company shall have delivered to the Co-Representatives executed copies
of the Co-Representatives' Purchase Option.
25
4.7. OPINION OF COUNSEL FOR THE UNDERWRITERS. All proceedings taken
in connection with the authorization, issuance or sale of the
Securities as herein contemplated shall be reasonably
satisfactory in form and substance to you and to ▇▇▇▇▇▇▇▇▇▇▇ and
you shall have received from such counsel a favorable opinion,
dated the Closing Date and the Option Closing Date, if any, with
respect to such of these proceedings as you may reasonably
require. On or prior to the Effective Date, the Closing Date and
the Option Closing Date, as the case may be, counsel for the
Underwriters shall have been furnished such documents,
certificates and opinions as they may reasonably require for the
purpose of enabling them to review or pass upon the matters
referred to in this Section 4.7, or in order to evidence the
accuracy, completeness or satisfaction of any of the
representations, warranties or conditions herein contained.
5. INDEMNIFICATION.
5.1. INDEMNIFICATION OF UNDERWRITERS.
5.1.1 GENERAL. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless each of the Underwriters,
and each dealer selected by you that participates in the offer and sale
of the Securities (each a "SELECTED DEALER") and each of their
respective directors, officers and employees and each person, if any,
who controls any such Underwriter ("CONTROLLING PERSON") within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, whether arising out of any action between any of the
Underwriters and the Company or between any of the Underwriters and any
third party or otherwise) to which they or any of them may become
subject under the Act, the Exchange Act or any other statute or at
common law or otherwise or under the laws of foreign countries, arising
out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in (i) any Preliminary Prospectus, the
Registration Statement or the Prospectus (as from time to time each may
be amended and supplemented); (ii) any post-effective amendment or
amendments or any new registration statement and prospectus in which is
included securities of the Company issued or issuable upon exercise of
the Co-Representatives' Purchase Option; (iii) any materials or
information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the
Securities, including any "road show" or investor presentations made to
investors by the Company (whether in person or electronically); or (iv)
any application or other document or written communication (in this
Section 5 collectively called "application") executed by the Company or
based upon written information furnished by the Company in any
jurisdiction in order to qualify the Securities under the securities
laws thereof or filed with the Commission, any state securities
commission or agency, Nasdaq or any securities exchange; or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon and in conformity with
written information furnished to the Company with respect to an
Underwriter by or on behalf of such Underwriter expressly for use in any
Preliminary Prospectus, the Registration Statement or Prospectus, or any
amendment or supplement
26
thereof, or in any application, as the case may be. With respect to any
untrue statement or omission or alleged untrue statement or omission
made in the Preliminary Prospectus, the indemnity agreement contained in
this paragraph shall not inure to the benefit of any Underwriter to the
extent that any loss, liability, claim, damage or expense of such
Underwriter results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability, claim or
damage at or prior to the written confirmation of sale of the Securities
to such person as required by the Act and the Regulations, and if the
untrue statement or omission has been corrected in the Prospectus,
unless such failure to deliver the Prospectus was a result of
non-compliance by the Company with its obligations under Section 3.4
hereof. The Company agrees promptly to notify the Co-Representatives of
the commencement of any litigation or proceedings against the Company or
any of its officers, directors or controlling persons in connection with
the issue and sale of the Securities or in connection with the
Registration Statement or Prospectus.
5.1.2 PROCEDURE. If any action is brought against an
Underwriter, a Selected Dealer or a controlling person in respect of
which indemnity may be sought against the Company pursuant to Section
5.1.1, such Underwriter or Selected Dealer shall promptly notify the
Company in writing of the institution of such action and the Company
shall assume the defense of such action, including the employment and
fees of counsel (subject to the reasonable approval of such Underwriter
or Selected Dealer, as the case may be) and payment of actual expenses.
Such Underwriter, Selected Dealer or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter, Selected Dealer or controlling person unless (i) the
employment of such counsel at the expense of the Company shall have been
authorized in writing by the Company in connection with the defense of
such action, or (ii) the Company shall not have employed counsel to have
charge of the defense of such action, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by
the Underwriter, Selected Dealer and/or controlling person shall be
borne by the Company. Notwithstanding anything to the contrary contained
herein, if the Underwriter, Selected Dealer or controlling person shall
assume the defense of such action as provided above, the Company shall
have the right to approve the terms of any settlement of such action
which approval shall not be unreasonably withheld.
5.2. INDEMNIFICATION OF THE COMPANY. Each Underwriter, severally and
not jointly, agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the foregoing indemnity
from the Company to the several Underwriters, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions
made in any Preliminary Prospectus, the Registration Statement or Prospectus or
any amendment or supplement thereto or in any application, in reliance upon, and
in strict conformity with, written
27
information furnished to the Company with respect to such Underwriter by or on
behalf of the Underwriter expressly for use in such Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereto or
in any such application. In case any action shall be brought against the Company
or any other person so indemnified based on any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereto or
any application, and in respect of which indemnity may be sought against any
Underwriter, such Underwriter shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the several Underwriters by the provisions of Section
5.1.2.
5.3. CONTRIBUTION.
5.3.1 CONTRIBUTION RIGHTS. In order to provide for just and
equitable contribution under the Act in any case in which (i) any person
entitled to indemnification under this Section 5 makes claim for
indemnification pursuant hereto but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Act, the
Exchange Act or otherwise may be required on the part of any such person
in circumstances for which indemnification is provided under this
Section 5, then, and in each such case, the Company and the Underwriters
shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such
proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the initial offering price
appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Underwriters shall contribute in such proportion as is appropriate to
reflect the relative fault of the Company and the Underwriters in
connection with the actions or omissions which resulted in such loss,
claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of the Company and the
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Notwithstanding the
provisions of this Section 5.3.1, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Public Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay in respect of such
losses, liabilities, claims, damages and expenses. For purposes of this
Section, each director, officer and employee of an Underwriter or the
Company, as applicable, and each person, if any, who controls an
Underwriter or the Company, as applicable, within the meaning of Section
15
28
of the Act shall have the same rights to contribution as the
Underwriters or the Company, as applicable.
5.3.2 CONTRIBUTION PROCEDURE. Within fifteen days after
receipt by any party to this Agreement (or its representative) of notice
of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against
another party ("contributing party"), notify the contributing party of
the commencement thereof, but the omission to so notify the contributing
party will not relieve it from any liability which it may have to any
other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party
notifies a contributing party or its representative of the commencement
thereof within the aforesaid fifteen days, the contributing party will
be entitled to participate therein with the notifying party and any
other contributing party similarly notified. Any such contributing party
shall not be liable to any party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party
seeking contribution on account of any settlement of any claim, action
or proceeding effected by such party seeking contribution without the
written consent of such contributing party. The contribution provisions
contained in this Section are intended to supersede, to the extent
permitted by law, any right to contribution under the Act, the Exchange
Act or otherwise available. The Underwriters' obligations to contribute
pursuant to this Section 5.3 are several and not joint.
6. DEFAULT BY AN UNDERWRITER.
6.1. DEFAULT NOT EXCEEDING 10% OF FIRM UNITS OR OPTION UNITS. If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Units or Option Units that all Underwriters have agreed to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
6.2. DEFAULT EXCEEDING 10% OF FIRM UNITS OR OPTION UNITS. In the
event that the default addressed in Section 6.1 above relates to more than 10%
of the Firm Units or Option Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units or Option
Units to which such default relates on the terms contained herein. If within one
business day after such default relating to more than 10% of the Firm Units or
Option Units you do not arrange for the purchase of such Firm Units or Option
Units, then the Company shall be entitled to a further period of one business
day within which to procure another party or parties satisfactory to you to
purchase said Firm Units or Option Units on such terms. In the event that
neither you nor the Company arrange for the purchase of the Firm Units or Option
Units to which a default relates as provided in this Section 6, this Agreement
will be terminated by you or the Company without liability on the part of the
Company (except as provided in Sections 3.13 and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that
if such default occurs with respect to the Option Units, this Agreement will not
terminate as to the Firm Units; and provided further that nothing herein shall
relieve a
29
defaulting Underwriter of its liability, if any, to the other several
Underwriters and to the Company for damages occasioned by its default hereunder.
6.3. POSTPONEMENT OF CLOSING DATE. In the event that the Firm Units
or Option Units to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, you or the Company shall have the right to postpone the Closing
Date or Option Closing Date for a reasonable period, but not in any event
exceeding five business days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment to the Registration Statement or the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Securities.
7. RIGHT TO APPOINT OBSERVER. Until the consummation of a Business
Combination, upon notice from the Co-Representatives to the Company, the
Co-Representatives shall have the right to send a representative (who need not
be the same individual from meeting to meeting) to observe each meeting of the
Board of Directors of the Company; provided that such representative shall sign
a Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Co-Representatives and their counsel in connection with such
representative's attendance at meetings of the Board of Directors; and provided
further that upon written notice to the Co-Representatives, the Company may
exclude the representative from meetings where, in the written opinion of
counsel for the Company, the representative's presence would destroy the
attorney-client privilege. The Company agrees to give the Co-Representatives
written notice of each such meeting and to provide the Co-Representatives with
an agenda and minutes of the meeting no later than it gives such notice and
provides such items to the other directors and to reimburse the representative
of the Co-Representatives for his or her reasonable out-of-pocket expenses
incurred in connection with their attendance at the meeting, including but not
limited to, food, lodging and transportation.
8. ADDITIONAL COVENANTS.
8.1. ADDITIONAL SHARES OR OPTIONS. The Company hereby agrees that
until the consummation of a Business Combination, it shall not issue any shares
of Common Stock or any options or other securities convertible into Common
Stock, or any shares of Preferred Stock which participate in any manner in the
Trust Fund or which vote as a class with the Common Stock on a Business
Combination.
8.2. TRUST FUND WAIVER ACKNOWLEDGMENT.
(a) UNDERWRITERS/CO-REPRESENTATIVES. Except with respect to
the underwriting discounts and commissions and nonaccountable expense
allowance due to the Underwriters only upon successful consummation of a
Business Combination, each of the Underwriters and the
Co-Representatives hereby agree that it does not have any right, title,
interest or claim of any kind in or to any monies in the Trust Fund
("CLAIM"), including those funds being deposited in the Trust Fund
representing a portion of the underwriting discounts and commissions and
the Co-Representatives' nonaccountable expense allowance
30
owed to the Underwriters and Co-Representatives, and waive any Claim it
may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever.
(b) TARGET BUSINESSES AND VENDORS. The Company hereby agrees
that it will not commence its due diligence investigation of any
operating business which the Company seeks to acquire (each a "TARGET
BUSINESS") or obtain the services of any vendor unless and until such
Target Business or vendor acknowledges in writing, whether through a
letter of intent, memorandum of understanding or other similar document
(and subsequently acknowledges the same in any definitive document
replacing any of the foregoing), that (a) it has read the Prospectus and
understands that the Company has established the Trust Fund, initially
in an amount of $_________ for the benefit of the public stockholders
and that the Company may disburse monies from the Trust Fund only (i) to
the public stockholders in the event they elect to convert their IPO
Shares (as defined below in Section 7.6), (ii) to the public
stockholders upon the liquidation of the Company if the Company fails to
consummate a Business Combination or (iii) to the Company after, or
concurrently with, the consummation of a Business Combination and (b)
for and in consideration of the Company (1) agreeing to evaluate such
Target Business for purposes of consummating a Business Combination with
it or (2) agreeing to engage the services of the vendor, as the case may
be, such Target Business or vendor agrees that it does not have any
Claim of any kind in or to any monies in the Trust Fund and waives any
Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Fund for any reason whatsoever.
8.3. INSIDER LETTERS. The Company shall not take any action or omit
to take any action which would cause a breach of any of the Insider Letters and
will not allow any amendments to, or waivers of, such Insider Letters without
the prior written consent of the Co-Representatives.
8.4. CERTIFICATE OF INCORPORATION AND BYLAWS. The Company shall not
take any action or omit to take any action that would cause the Company to be in
breach or violation of its Certificate of Incorporation or Bylaws. Prior to the
consummation of a Business Combination, the Company will not amend its
Certificate of Incorporation without the prior written consent of the
Co-Representatives.
8.5. BLUE SKY REQUIREMENTS. The Company shall provide counsel to the
Co-Representatives with ten copies of all proxy information and all related
material filed with the Commission in connection with a Business Combination
concurrently with such filing with the Commission. In addition, the Company
shall furnish any other state in which its initial public offering was
registered, such information as may be requested by such state.
8.6. ACQUISITION/LIQUIDATION PROCEDURE. The Company agrees: (i) that,
prior to the consummation of any Business Combination, it will submit such
transaction to the Company's stockholders for their approval ("BUSINESS
COMBINATION VOTE") even if the nature of the acquisition is such as would not
ordinarily require stockholder approval under applicable state law; (ii) that,
in the event that the Company does not effect a Business Combination within 18
months from the consummation of this Offering (subject to extension for an
additional six-month
31
period, as described in the Prospectus), the Company will be liquidated and will
distribute to all holders of IPO Shares (defined below) an aggregate sum equal
to the Company's Liquidation Value; and (iii) that this section 8.6 of the
Underwriting Agreement may not be modified, amended or deleted under any
circumstances. The Company's "LIQUIDATION VALUE" shall mean the Company's book
value, as determined by the Company and approved by M&K. In no event, however,
will the Company's Liquidation Value be less than the Trust Fund, inclusive of
any net interest income thereon. Only holders of IPO Shares shall be entitled to
receive liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of capital stock of the Company.
With respect to the Business Combination Vote, the Company shall cause all of
the Initial Stockholders to vote the shares of Common Stock owned by them
immediately prior to this Offering in accordance with the vote of the holders of
a majority of the IPO Shares present, in person or by proxy, at a meeting of the
Company's stockholders called for such purpose. At the time the Company seeks
approval of any potential Business Combination, the Company will offer each
holder of Common Stock issued in this Offering ("IPO SHARES") the right to
convert their IPO Shares at a per share price ("CONVERSION PRICE") equal to the
amount in the Trust Fund (inclusive of any interest income therein) calculated
as of two business days prior to the consummation of the proposed Business
Combination divided by the total number of IPO Shares. If holders of less than
20% in interest of the Company's IPO Shares elect to convert their IPO Shares,
the Company may, but will not be required to, proceed with such Business
Combination. If the Company elects to so proceed, it will convert shares, based
upon the Conversion Price, from those holders of IPO Shares who affirmatively
requested such conversion and who voted against the Business Combination. If
holders of 20% or more in interest of the IPO Shares, who vote against approval
of any potential Business Combination, elect to convert their IPO Shares, the
Company will not proceed with such Business Combination and will not convert
such shares.
8.7. RULE 419. The Company agrees that it will use its best efforts
to prevent the Company from becoming subject to Rule 419 under the Act prior to
the consummation of any Business Combination, including but not limited to using
its best efforts to prevent any of the Company's outstanding securities from
being deemed to be a "▇▇▇▇▇ stock" as defined in Rule 3a-51-1 under the Exchange
Act during such period.
8.8. AFFILIATED TRANSACTIONS. The Company shall cause each of the
Initial Stockholders to agree that, in order to minimize potential conflicts of
interest which may arise from multiple affiliations, the Initial Stockholders
will present to the Company for its consideration, prior to presentation to any
other person or company, any suitable opportunity to acquire an operating
business, until the earlier of the consummation by the Company of a Business
Combination, the liquidation of the Company or until such time as the Initial
Stockholders cease to be an officer or director of the Company, subject to any
pre-existing fiduciary or contractual obligations the Initial Stockholders might
have. To further minimize potential conflicts of interest, the Company has
agreed not to consummate a Business Combination with an entity which is
affiliated with any of its executive officers and has agreed that it will not
consummate any Business Combination unless the Company obtains an opinion from
an independent investment banking firm that the business combination is fair to
its unaffiliated stockholders from a financial point of view.
32
8.9. TARGET NET ASSETS. The Company agrees that the initial Target
Business that it acquires must have a fair market value equal to at least 80% of
the Company's net assets (all of the Company's assets, including the funds held
in the Trust Fund, less the Company's liabilities) at the time of such
acquisition. The fair market value of such business must be determined by the
Board of Directors of the Company based upon standards generally accepted by the
financial community, such as actual and potential sales, earnings and cash flow
and book value. If the Board of Directors of the Company is not able to
independently determine that the target business has a fair market value of at
least 80% of the Company's net assets at the time of such acquisition, the
Company will obtain an opinion from an unaffiliated, independent investment
banking firm which is a member of the NASD reasonably acceptable to the
Co-Representatives with respect to the satisfaction of such criteria. The
Company is not required to obtain an opinion from an investment banking firm as
to the fair market value if the Company's Board of Directors independently
determines that the Target Business does have sufficient fair market value.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Dates and such representations, warranties and
agreements of the Underwriters and Company, including the indemnity agreements
contained in Section 5 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Company or any controlling person, and shall survive termination of this
Agreement or the issuance and delivery of the Securities to the several
Underwriters until the earlier of the expiration of any applicable statute of
limitations and the seventh anniversary of the later of the Closing Date or the
Option Closing Date, if any, at which time the representations, warranties and
agreements shall terminate and be of no further force and effect.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
10.1. EFFECTIVE DATE. This Agreement shall become effective on the
Effective Date at the time the Registration Statement is declared effective by
the Commission.
10.2. TERMINATION. You shall have the right to terminate this
Agreement at any time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, general securities
markets in the United States; or (ii) if trading on the New York Stock Exchange,
the American Stock Exchange, the Nasdaq Stock Market or on the NASD OTC Bulletin
Board (or successor trading market) shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been fixed, or maximum ranges for prices for
securities shall have been required on the NASD OTC Bulletin Board or by order
of the Commission or any other government authority having jurisdiction, or
(iii) if the United States shall have become involved in a new war or an
increase in major hostilities, or (iv) if a banking moratorium has been declared
by a New York State or federal authority, or (v) if a moratorium on foreign
exchange trading has been declared which materially and adversely impacts the
United States securities market, or (vi) if the Company shall have sustained a
material loss by fire, explosion, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act which, whether or not such loss
shall have been insured, will, in your opinion, make it inadvisable to proceed
with the delivery of the Units, or (vii) if any of
33
the Company's representations, warranties or covenants hereunder are breached,
or (viii) if the Co-Representatives shall have become aware after the date
hereof of such a material adverse change in the conditions or prospects of the
Company, or such adverse material change in general market conditions, including
without limitation as a result of terrorist activities after the date hereof, as
in the Co-Representatives' judgment would make it impracticable to proceed with
the offering, sale and/or delivery of the Units or to enforce contracts made by
the Underwriters for the sale of the Securities.
10.3. EXPENSES. In the event that this Agreement shall not be carried
out for any reason whatsoever, within the time specified herein or any
extensions thereof pursuant to the terms herein, the obligations of the Company
to pay the out of pocket expenses related to the transactions contemplated
herein shall be governed by Section 3.13 hereof.
10.4. INDEMNIFICATION. Notwithstanding any contrary provision
contained in this Agreement, any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Section 5 shall not be in any way affected by, such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
11. MISCELLANEOUS.
11.1. NOTICES. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be mailed,
delivered or telecopied and confirmed and shall be deemed given when so
delivered or telecopied and confirmed or if mailed, two days after such mailing
If to the Co-Representatives:
Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Ladenburg ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Copy to:
▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Company:
Media & Entertainment Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman & CEO
34
Copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. Annex, Esq.
11.2. HEADINGS. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
11.3. AMENDMENT. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
11.4. ENTIRE AGREEMENT. This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof, and supersede all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
11.5. BINDING EFFECT. This Agreement shall inure solely to the benefit
of and shall be binding upon the Co-Representatives, the Underwriters, the
Company and the controlling persons, directors and officers referred to in
Section 5 hereof, and their respective successors, legal representatives and
assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provisions herein contained.
11.6. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or
relating in any way to, this Agreement shall be brought and enforced in the
courts of the State of New York of the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient forum. Any
such process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
10.1 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the Company in any action, proceeding or claim. The Company
agrees that the prevailing party(ies) in any such action shall be entitled to
recover from the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
11.7. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one
or more original or facsimile counterparts, and by the different parties hereto
in separate counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute
35
one and the same agreement, and shall become effective when one or more
counterparts has been signed by each of the parties hereto and delivered to each
of the other parties hereto.
11.8. WAIVER, ETC. The failure of any of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of this Agreement.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Agreement shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which enforcement of
such waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
11.9. NO FIDUCIARY DUTY. The Company acknowledges and agrees that
neither the Co-Representatives, the Underwriters nor the controlling persons of
any of them shall have any fiduciary or advisory duty to the Company or any of
its controlling persons arising out of, or in connection with, this Agreement or
the offer and sale of the Securities.
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
MEDIA & ENTERTAINMENT HOLDINGS INC.
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
Accepted on the date first
above written.
LAZARD CAPITAL MARKETS LLC
By:
----------------------------
Name:
Title:
LADENBURG ▇▇▇▇▇▇▇▇ & CO. INC.
By:
----------------------------
Name:
Title:
36
SCHEDULE I
MEDIA & ENTERTAINMENT HOLDINGS INC.
9,000,000 UNITS
--------------------------------------- ----------------------------------------
UNDERWRITER NUMBER OF FIRM UNITS
TO BE PURCHASED
--------------------------------------- ----------------------------------------